Strategic interactions and arenas: A sociological perspective on strategy

Abstract

We offer a view of organizational strategy derived from the strategic interaction perspective in sociology. We apply the perspective to the study of nonmarket strategy and social movements—the subfield of strategy concerned with the interactions between stakeholder activists and firms. The strategic interaction perspective calls on scholars to (1) pay attention to the local interactions occurring in specific arenas and to the direct outcomes of those interactions; (2) focus on the agency that players have in choosing among arenas and in selecting different tactics in those arenas; (3) appreciate the complex motives for engaging in strategic interactions, including emotional connections to particular ideologies or collective identities; and (4) recognize that each interaction involves multiple outcomes beyond the financial, including cultural outcomes. We conclude the essay by deriving broader implications for the field of strategy.

Keywords

conflict interorganizational relations nonmarket strategy social movements stakeholder theory topics and perspectives

In the second issue of Strategic Organization, Martin Ruef (2003) argued for sociology’s relevance to the field of strategy, observing that “sociology points out usefully that strategy is not oriented exclusively toward profit maximization, but to a variety of corporate and personal goals that may interest multiple organizational stakeholders” (p. 247). Some of that promise—of an institutional, cultural, and historically grounded version of strategic theory—has been fulfilled, yet much work remains. We turn to one sociological approach to strategy, originally developed to understand social movements but with aspirations to apply to strategic actors more generally, namely, the strategic interaction perspective (SIP, hereafter; Duyvendak and Fillieule, 2015; Jasper, 2004). SIP traces a variety of players as they strategically engage one another across different arenas. It emphasizes the complex set of motives that players (including organizations) have, the strategies they employ to get what they want, and how those motives and strategies change as they move from one arena to another.

Elements of SIP are already evident in some areas of strategy research, most prominently in nonmarket strategy, which has sought to integrate sociological perspectives on social movements with economics-based models of strategic decision-making (Briscoe et al., 2018; Doh et al., 2012; Lyon, 2018). As it became increasingly obvious that organizational strategy is not limited to market competition, nonmarket strategy emerged as an area of scholarship that focuses on the variety of actors that organizations engage with, including regulators, unions, communities, and other stakeholders. Social movement theory provided nonmarket strategy with a lens for explaining what drives stakeholder mobilization and its consequences for firms and markets. Much of the literature on movements and nonmarket strategy focuses, naturally, on the strategic interactions between activists and their targets—the organizations and industries they seek to change (e.g. Eesley et al., 2016; King, 2008)—and on attempts by companies to create value from those interactions (e.g. Durand and Georgallis, 2018; Hiatt et al., 2018). But SIP, as we describe in this essay, pushes the sociology of strategy further to broaden nonmarket strategy to consider the variety of motivations that underlie strategic behavior across multiple arenas of interaction.

Ironically, the contribution of sociological theories of social movements to strategy research is often misunderstood as overly instrumental (e.g. Lounsbury, 2018; see also, Casasnovas and Ventresca, 2019: Hwang and Colyvas, 2011 for criticisms of agentic views of organizations), even though the promise of sociology was to move away from the formal means-ends rationality once assumed in micro-economics (Ruef, 2003). Calls for the theoretical integration of sociological and economic perspectives are sometimes met with resistance or viewed skeptically (Wang and Lounsbury, 2021) and criticized as relying “on the valorization of strategic action, and all that entails” (Lounsbury, 2018: 370). Although we certainly agree with criticisms that strategic action should not be decontextualized from the institutional, historical, and cultural environments of organizations, we also do not think it necessary or wise to deemphasize strategic action altogether. SIP offers a potential solution, in that its view of strategic players is resolutely cultural, contextual, and agentic, even to the point of including a range of emotions as part of any flow of action (Gould, 2009; Jasper, 1997, 2018). By examining the constant contestation and redefinition of players’ identities and interests, it “problematize[s] the boundaries and interests of both movements and business” (Lounsbury, 2018: 378).

As more scholars have become interested in nonmarket strategy, we need a rich understanding of the arenas outside of markets in which organizations operate. These include the obvious interactions related to regulation and legislation (Fligstein, 2001), but also the complex arenas where status, reputation, and character work occur (Jasper et al., 2020; King and Walker, 2014; Marchand, 1998) and where multi-stakeholder initiatives are prominent (Soundararajan et al., 2019). SIP offers a view of strategy that helps reconceptualize how we think about nonmarket strategy. Strategy, in the language of SIP, involves the tactics and activities that players use to help them get what they want. The strategies players use vary greatly depending on the arena in which they are operating at that moment. We define an arena as “a bundle of rules and resources that allow or encourage certain kinds of interactions to proceed, with something at stake” (Jasper, 2015: 14). Arenas are the places, both inside and outside of organizations, where interactions unfold and strategic decisions are made.¹

SIP offers a theoretical lens that sensitizes scholars to the flexible, cultural, and historically grounded interactions of players and arenas, as well as the strategic dilemmas and decisions they face in those interactions. Strategy—and the tools and actions that it entails—is an inherently social phenomenon. One can conceive of strategy, as we do here, as an important input to and expression of culture (Swidler, 1986). Strategic action and interaction are embedded in and shape the culture, institutions, and fields that constitute various societal domains. But rather than conceive them as merely epiphenomenal, we suggest that strategic interactions constitute the very basis of social and organizational life. Humans and organizations do not act alone, but rather they are always acting strategically toward others, as they seek to get what they want and enlist others in those efforts (Goffman, 1970).²

In this essay, we flesh out the concept of arenas and the dynamics of strategic interaction within them, and then we articulate how this approach can serve as a lens to situate the study of nonmarket strategy and the broader field of strategy research.

Culture and strategic interaction

SIP is part of a broader shift, especially in political sociology, toward an emphasis on agency and the interactions between actors who have complex motivations that cannot be boiled down simply to a drive to capture economic value (Jasper, 1997, 2010; McAdam et al., 2001). Strategic players, in this view, are less calculators and more interpreters and audiences for each others’ words and actions, as well as cultural performers acting with purpose, hoping to have a rhetorical effect on others (Tilly, 2008). They face a number of trade-offs, which they perceive and grapple with as dilemmas, but their decisions are often made through intuitions and emotions rather than careful calculations (Jasper, 2018; Kahneman, 2011). As examples, consider a political advocacy organization deciding the best actions to convince voters to go to the ballot box and cast a vote for its preferred candidate, or the sustainable fashion designer who tries to persuade consumers to pay a premium and buy eco-friendly clothes. Both of these collective efforts require rhetorical strategies to shape others’ views of the world and convince them to take a certain action that has, at best, ambiguous economic value—efforts that inherently involve trade-offs about how best to accomplish these purposes.

The concept of players is meant to capture the subjective world of collective identities, decision-making, culture, and psychology in which agency is embedded, while arenas represent structural constraints such as physical sites, technology, resources flows, as well as laws, rules, and traditions. As is obvious from these lists, structure and agency do not map directly onto players and arenas, and we are keen to deny any such neat distinction. The perspective acknowledges the evolving multiplicity of players in any setting, in contrast to theories that focus on a “social movement” or a “corporation” as a unified actor, and reduce other players to its “environment.” All environments, whether political or institutional, can be decomposed into players doing things to and with each other.

Players “are those who engage in strategic action with some goal in mind” (Jasper, 2015: 10). They can be individuals, but our intellectual interest is more often on compound players—aggregations of individuals that, while never fully contained or unified, are capable of acting with strategic intention (King et al., 2010). Social movements rarely agree on tactics or goals, and so SIP tends to find players within movements, especially organizations, informal groups, but also individuals. Although corporations may seem unified on the surface, they too have various internal players in conflict over strategic objectives. When you look inside any player, you usually find an arena in which individuals and factions vie for influence over the whole. Better put, you can view any compound player as an arena.³ Each compound contains subplayers, which in turn contain subplayers, all the way down to individuals—an insight in line with March’s (1962) description of firms as “political coalitions” vying for influence and control over the organization of which they are a part.

Like March (1962) and other scholars in the Carnegie school, we argue that each player has multiple goals, whose salience shifts in response to opportunities presented by the arena and internal contestation. Each arena has different stakes, and many players are specialists in particular arenas (although they also naturally engage in other arenas due to the internal complexity of most organizations). An expert naturally views their arena as uniquely important and deserving of more of an organization’s attention and resources. For example, a corporate social impact officer views their arena—whether it be the world of philanthropy or sustainability impact—as integral to their organization’s strategy, while others in the organization may view it as trivial or irrelevant. An individual often pursues his or her own goals, those of their division, and those of the broader organization at the same time (and perhaps other goals as well), although there are also likely to be trade-offs among those goals. To complicate matters further, not all goals are explicit, even to the players themselves.

SIP visualizes both players and arenas as repositories of ideas, narratives, and other elements of culture. Like structures, discourses have an effect because players internalize them, use them, and take them into account as they go about their actions. They exploit the norms and rules of arenas when they can. This contrasts with many theories that allow discourses to appear as distinct systems with an unclear relationship to action, or which link discourses and logics to arenas instead of to the players within them, or which conflate systems of meanings and systems of action (Archer, 1996). For a positive example of how to analyze discourse in the context of an arena, consider Hardy and Maguire’s (2010) work on “discursive spaces,” which links discourse to particular players, their motivations, and the strategic actions they took to push institutional change. SIP sensitizes us to the concrete actions that players take to get what they want in pushing particular meanings.

Arenas are governed by different rules and with access to different kinds of resources. The rules may be formal or informal, and players sometimes follow them, and force others to follow them, but they may also reinterpret, violate, and change the rules, creating opportunities for recombination and innovation (Jung et al., 2014). Arenas vary in what resources matter most, in how formalized they are, in the relationships among players (including spectators), and in their relationship to other arenas. We can think of arenas as physical places, with lighting, entrances and exits, founding quotes on the walls, and recording devices, or we can think of them more metaphorically, yet still as “places” where outcomes are generated. They are useful analytic devices because they focus our attention on the specific interactions and strategies that players use in a given moment and place, rather than on the overall structure. In fact, the utility of the arena concept—in our view—is to decompose structure into the interactions themselves.

Most political conflicts attract multiple players, who form alliances, often but not exclusively on two sides of an issue, and who engage others in arenas. SIP encourages us to “telescope” in and out of players, closing in on small groups and individuals but also focusing outward on the larger coalitions (Barberena et al., 2014). For example, although protest groups often specialize in one arena, perhaps lawsuits or occupations, conflicts generally spill across various arenas, entangling players in other arenas. The National Association for the Advancement of Colored People (NAACP), for example, was primarily focused on advancing the civil rights of Black Americans through the legal system, but it often joined coalitions with other civil rights organizations to sponsor protests and mobilize movement participants (Bearman and Everett, 1993).

A lot of strategic action involves the creation, control, or modification of existing arenas (Jasper et al., 2022). The most common move is for a player to seek new access to an arena, as when activist groups seek to shape a corporate or legislative agenda (King et al., 2007). Players can also come to “own” an arena, assuming potential blame or praise for what happens there (Elliott-Negri et al., 2021). One set of powerful players may reduce the stakes of an arena when an opponent gains access to it, creating a kind of “false arena” (Jasper, 2006: 169). Conversely, a player may revive an arena, attracting new attention or resources to it. Protestors may gain a seat on a commission, or unions on a corporate board, using those positions as victories to make their members happy but also taking the opportunity to hold press conferences at which they may be taken more seriously than they had been before. A formal position can help a player command attention and publicity (Amenta and Caren, 2022).

By distinguishing players and arenas, we can see strategic interactions as they move across arenas, as well as observe how players transform as a function of these interactions. Compound players evolve as a result of strategic interactions. Their component parts get reshuffled, go dormant for a period, and are joined to new causes, alliances, and markets. This is true not only of social movements but also of businesses and strategic alliances (Gulati et al., 2012; Van Dyke and McCammon, 2010). Strategic decisions can also become focused on a particular player or set of players within an arena, especially in cases of direct competition or conflict. Take the example of rivalries, in which two players develop animosities toward each other to the extent that they may ignore the prizes available in an arena and prioritize punishing their rival. Jasper (2006) dubs this the “players or prizes” dilemma (p. 149). It happens frequently with movements and their countermovements (Fetner, 2008), but think also of interorganizational rivalries that go beyond typical competition, such as Apple versus Microsoft (Kilduff et al., 2010). As Kilduff et al. (2010) observe, rivalries are a “subjective competitive relationship” with “increased psychological involvement” (p. 945) over the normal competitive relationship. The consequence of a rivalry is heightened emotional involvement with the counterpart.

But rivalries are not unique: emotions and psychological dynamics play a role in every aspect of strategic interaction, shaping players’ goals, team loyalties, personal motivations, tastes in tactics, and the consequences of interaction. During engagements, emotions can offer confidence, a feeling of momentum, fear and disgust, resignation and lethargy, and innumerable other processes that influence the pace, flow, and continuation of strategic interaction. We evaluate and react to others through the fast thinking of feelings. Emotional displays can either attract or deter players from engaging one another in strategic interactions (DeCelles et al., 2020). Culture shapes emotions: what triggers them, how we display them, and how we label and understand our own emotions and those of others. In this way, strategic action is thoroughly cultural and historically embedded.

Beyond shaping arenas and strategic interactions, culture is also centrally involved as a tool that players use and a product of players’ strategic interactions. Conceived of as a tool, culture consists of the repertoire of tactics that players use in their strategic interactions with others (Clemens, 1993). Each player, whether a protest organization accustomed to organizing street rallies or a company rich with impression management responses, has a repertoire of tactics they can draw from in their strategic interactions with other players. For example, some firms respond to reputational crises created by activists by engaging in prosocial actions as a form of impression management (McDonnell and King, 2013). The kinds of prosocial actions they engage in are part of their repertoire. Strategic interactions provide players with opportunities to perform the culture they know.

At the same time, these interactions have cultural consequences. As Nelson and King (2020) argue, strategy is inherently about meaning-making. Each strategic interaction is an attempt to imbue actions with meaning and make some claim over what is happening in an arena. Examples of meaning-making include attempts to legitimate a new identity, to change public perceptions about an issue, or to stigmatize certain corporate behaviors. Even typical corporate strategy, such as a merger or acquisition, is an attempt to lay claim to a particular meaning about the future of a company or market. Or when considering the organization itself as the arena, players often quarrel over the values and very identity of the organization (Golden-Biddle and Rao, 1997). The stakes of any strategic interaction extend beyond crude efforts of profit maximization. In many arenas, changing or maintaining cultural meanings is what motivates players.

Nonmarket strategy as arenas of strategic interaction

Nonmarket strategy research grew out of the political economy tradition to analyze “how a firm’s political environment—the configuration of formal policymaking institutions, regulatory rules, partisan composition and interest group influence—determines the form and efficacy of its non-market behavior” (Henisz and Zelner, 2012: 451; see Baron, 1995, for an early use of the term). Nonmarket behavior is often explicitly political in nature and includes such activities as lobbying, political donations, and voluntary behavior that benefits society, such as charitable giving. Of the various areas of strategy research, nonmarket strategy is already most well-aligned with the SIP, because of its inherent focus on multiple arenas of interaction.

Given its roots in political economy, early work on nonmarket strategy relied on strong assumptions about the rationality of actors and often resorted to market imagery to conceptualize firms’ political environments. This work focused on nonmarket strategy as an outgrowth of firms’ need to compete for political resources, manage political risk, and thereby enhance their market value (e.g. Bonardi et al., 2006; Henisz and Zelner, 2012). The primary purpose of firms’ engagement with nonmarket environments was to translate political resources into market value. This is the sort of instrumentalist view of strategy that sociologists often criticize.

But as sociology, organizational theory, and political science influenced the new subfield, nonmarket strategy embraced more complex motives for firms and relaxed their assumptions about value maximization. Scholars began to recognize that the financial impact of nonmarket strategy is quite uncertain and is only one of many purposes that players pursue (e.g. King, 2008; King and Soule, 2007). For example, although there is evidence that firms’ political activities have implications for their financial performance (e.g. Kim, 2008), the financial impact of activities like lobbying varies by arena and their political capabilities (Werner, 2017). More recently, King and Pucker (2021) refuted the idea that environmental sustainability measures are linked to market value, which forces us to ask, if companies cannot capture economic value (at least not in the short term) from environmental performance, why do they do continue to invest in sustainability? SIP suggests that the motives underlying this kind of strategic investment are more complex and less straightforward than the sole pursuit of financial value.

Increasingly, this research views firms, protestors, government regulators, and other players less as calculating rational actors and more as purposeful, strategic actors trying various ways to achieve multiple objectives. As King and Walker (2014) argue, the executives who run firms are motivated to accrue personal power, status, and wealth, and to shape the world according to their ideological vision (Gupta and Briscoe, 2020). Businesses are not just instruments of economic value creation; they are also ideological structures, carrying with them values and enacting normative commitments about the way they envision the world should be (Gupta et al., 2017; King, 2015).

We theorize nonmarket environments as made up of various arenas, in which players strive to achieve different objectives and enact their values. Those goals may change as players move across arenas.⁴ The distinctions between market and nonmarket goals blur considerably. Consumers, voters, employees, and activists, after all, are often the same individuals simply moving from one arena to another. Firms undergo similar shifts in strategic mind-set as one arena becomes more salient than another.

SIP encourages us to drop our reliance on the concept of “environment” altogether and instead focus on the arenas in which players actively engage in strategic interactions, providing us a more focused view of what players want out of those interactions and what they do to achieve those goals. Specifically, SIP calls on scholars to (1) pay attention to the local interactions occurring in specific arenas and to the direct outcomes of those interactions; (2) focus on the agency that players have in choosing among arenas and in selecting different tactics in those arenas; (3) appreciate the complex motives for engaging in strategic interactions, including emotional connections to particular ideologies or collective identities; and (4) recognize that each interaction involves multiple outcomes beyond the financial, including cultural outcomes. SIP gives equal weight to players and to the various settings in which they interact (Jasper and King, 2020: 11). Our analytic tools should help us follow their actions so that in the end, we can grasp why they took the directions they did.

Implications for strategy research

The SIP is aligned with and complementary to a lot of current work in the field of strategy, including research on strategy-as-practice (Jarzabkowski and Whittington, 2008), process-based views (Langley, 2007), social-symbolic perspectives (Lawrence and Phillips, 2019), actor-network approaches (Steen et al., 2006), field theory (King and Walker, 2014), and perspectives on the role of power and politics (Clegg, 1989). Like SIP, these styles of research emphasize the meso-level dynamics through which strategy is formulated and enacted and performed in the context of other players. Given the plurality of these perspectives, one might ask, what is the value of adding the SIP to the mix? Although the purpose of our essay is not to offer a new theory that replaces these, we suggest several benefits offered from the perspective, especially as they apply to strategy scholars.

First, SIP centers our analysis on interactions in a specific time and place. Large structures, such as institutions and markets, can be broken down into the specific arenas and interactions that constitute them but which also serve as the source of their instability and potential transformation. Rather than abstractly talk about market competition, we can focus on the players with whom there is direct competition and what specifically they are doing about it. For example, an analysis could focus on the temporally evolving actions taken by rival firms seeking to get their products through the regulatory process and to market first.

Rather than conceptualizing institutions as top-down patterns, we can analyze the forums, regulatory agencies, industry associations, and other spaces where players gather to create, reinforce, and change the “rules of the game.” Research of this type would focus on the intensive efforts made by these players to get their way, rather than simply on the final outcome itself (e.g. regulatory change). In short, SIP encourages us to dispense with theoretical language the obfuscates strategic interactions. It builds up from details but does not preclude the development or testing of generalizations about strategy (Duyvendak and Fillieule, 2015). One advantage of SIP is that it allows for testing of middle-range theories about the nature of those interactions. For example, if maintaining or enhancing the status of a firm is one goal of engaging in strategic interactions, SIP creates an opportunity to build on the assumptions of and test propositions from status theory (e.g. Kim, 2012).

Second, the perspective emphasizes players’ complex motives, including emotions, values, and political ideology. Clearly, financial considerations often drive organizations’ and individuals’ behaviors (even social movement organizations), but all players have diverse motives that change in salience as they move from one arena to another. SIP emphasizes those motives, and it takes seriously the idea that players’ actions are connected to motive (although how they act depends as well on what they know how to do). We realize, of course, that we are not the first scholars to think of this, even in relation to firm strategy (e.g. March, 1962), but when one surveys the strategic management literature, a frequent assumption is that organizations are mostly driven by financial motives.⁵ SIP challenges scholars to consider the full complexity of what motivates players and how that changes as they move from one arena to another. Attempted changes in employee culture, new product offerings, and advertisement campaigns, while all outwardly justified as actions meant to enhance the bottom line, may find their origin in executives’ values or beliefs. In this sense, the SIP has a lot in common with the old institutionalism, which emphasized values and purpose as drivers of organizations’ behaviors (Kraatz, 2015; Selznick, 1957). Institutions are not just the context in which interactions happen. They are also profoundly shaped by highly motivated players who seek to strategically mold the rules of the game in a way that aligns with their goals and values.

Third, SIP broadens our understanding of strategy to examine all types of interactions beyond competition. Conflict is a relative of competition, of course, but it manifests very different behaviors. Players may conflict not because they are competing over scarce resources but because they envision different futures for the world. This leads to conflict over legislative policymaking or may lead to internal political squabbles over a firm’s identity. Conflict becomes more intense as players’ interests and identities diverge, leading to sectarianism (Finkel et al., 2020). Our perspective proposes these interactions as a significant source of strategic action. For example, corporations may respond to conflictual interactions with activists by adopting technological innovations that they previously resisted (Carberry et al., 2019; Vasi and King, 2019). SIP opens up the range of strategic behaviors that players engage in and that scholars ought to study.

We end this essay where we began, by noting that SIP offers a unique perspective on culture that is grounded in purposeful meaning-making and the use of repertoires of action. Culture is not just some abstract set of forces or logics, but rather a set of practices, discourse, feelings, and meanings that players use in their efforts to get what they want. As is true with most aspects of the SIP, culture is manifest in concrete ways in the interactions players have with each other. As we have argued, strategy is about meaning-making. We can study strategy as a cultural manifestation that becomes ingrained in actions over time but which also innovates and evolves over time as players encounter new problems to solve in their interactions with others in different arenas.

Footnotes

Acknowledgements

The authors(s) would like to acknowledge participants in the Social Movement and Enterprise Workshop at Northwestern University for their useful feedback on an earlier draft. We also thank the editor, Ann Langley, and the reviewers for their guidance as we wrote this essay.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Brayden G King

Notes

Author biographies

Brayden G King is a political and organizational sociologist who studies the role of social movements in instigating organizational, political, and social change. His research has also examined the reputational and status dynamics that underlie these change efforts. Address: Northwestern University, Evanston, IL, USA. [email: b-king@kellogg.northwestern.edu].

James M Jasper writes about culture and politics, especially the role of emotions as a part of both. His recent work has focused on character work, in Public Characters: The Politics of Reputation and Blame (Oxford, 2020), and on the impacts of social movements across multiple arenas, in Zhelnina A, Jasper JM, Elliott-Negri L, et al. (2022) Gains and Losses: How Protestors Win and Lose. New York: Oxford University Press. He recently retired from the Graduate Center of the City University of New York. [email: jjasper346@gmail.com].

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