1 Introduction
2 Theoretical background
2.1 Path dependence and self-reinforcing mechanisms
2.1.1 Coordination effects
2.1.2 Complementarity effects
2.1.3 Learning effects
2.1.4 Adaptive expectation effects
2.2 Path dependence and agency
Dimension | Weak view | Strong view |
---|---|---|
Front end | ||
Back end | ||
Awareness and control of the processual dynamics | Known and principally in actors’ managerial control | Largely hidden and increasingly beyond actors’ managerial control over time |
Underlying ontology | Insider | Outsider |
Agency orientation | Projective, practical evaluative | Iterational, habitual |
Author(s) | Key concepts | Key finding | Role of agency |
---|---|---|---|
Koch (2008) | Branch, strategic patterns and paths, strategic choice | Within a branch, self-reinforcing dynamics can stabilize a specific strategic pattern. By marginalizing the managerial leeway (the range and scope of strategic choice) over time, path-dependent processes hence impair incumbents’ strategic responsiveness to environmental changes | Describes the process through which agency is marginalized |
Koch et al. (2009) | Contextual factors, complexity, decision making processes | Contextual factors impact path-dependent processes and the probability of lock-in. In recurrent decision making under conditions of positive feedback, higher complexity significantly increases the risk of becoming locked-in by adversely affecting information processing | Shows how contextual conditions influence the risk of losing agency |
Koch (2011) | Strategic path inscription, mechanism and pattern inscription, organizational body, and context | Over the course of time, a strategic path becomes inscribed into an organization. One can distinguish between mechanisms inscription (i.e., how deeply a mechanism is inscribed into the ‘body’ of an organization) and pattern inscription (i.e., the extent to which the associated strategic pattern is inscribed in the wider organizational context of formal and informal structures, governance, and power) | Reveals how the organizational inscription of a path further limits agency |
Schreyögg et al. (2011) | Business model, environmental shifts | A successful business model may be subject to self-reinforcing dynamics and ultimately become locked-in. As a result, in the face of an environmental shift, organizations find it exceedingly difficult to abandon or renew the logic of their once thriving but now maladapted business model | Describes the limits to agency in the lock-in |
Burger and Sydow (2014) | Network dynamics, relational practices | Inter-organizational networks can (collectively) become path-dependent and thus gradually move from flexibility to rigidity, and ultimately to lock-in. In this process, the self-reinforcing formation and routinization of informal relational (bargaining) practices play a key role | Shows how even collective agency can be marginalized over time |
Rothmann and Koch (2014) | Strategic lock-in, horizontal and vertical creativity | Even locked-in organizations are not impassive but use all their creative potential to maintain and restore an inadequate strategic path. Creative efforts tend to follow (i.e., horizontally expand) and not reverse (i.e., vertically overcome) the logic of the underlying pattern | Reveals that agency in the lock-in stage is constrained to horizontal creativity |
Schmidt and Braun (2015) | Inter-organizational complementarities, cospecialization, bounded and asynchronous change | Self-reinforcing inter-organizational complementarities (cospecialization) can provide relational advantages but also inhibit a strategic network’s adaptability. Initiatives to unlock and overcome the resulting path-dependent cooperation pattern are likely to fail due to the bounded and asynchronous nature of such change attempts | Reveals the spatial and temporal limits of mobilizing collective agency |
Wenzel (2015) | Strategic premises, feedback processing, stabilization | In the face of environmental change and disconfirming feedback, path-dependent organizations stabilize their existing strategic premises and thus pathologically perpetuate their paths even in times of severe crises | Shows how agency is restricted and limited to path reproduction |
Wenzel et al. (2017) | Strategic patterns and paths, technological change, series of critical events, destabilization | External events, such as technological change, can break a strategic path by destabilizing the underlying self-reinforcing mechanisms. However, overcoming path dependence ultimately requires a subsequent critical event that also destabilizes a path’s strategic pattern | Demonstrates the limited role of agency by highlighting the impact of change-inducing external events |
Petermann et al. (2019) | Organizational hierarchy, authority, evolutionary dynamics | Hierarchical authority can effectively suppress, slow down, and stop evolutionary self-reinforcing organizational dynamics. However, in the long run, the power of emergent path-dependent processes tends to overrule the efficacy of formal hierarchical order and control | Indicates that the effectiveness of agency in the form of hierarchical authority is temporally limited |
Our study | Agency, mechanisms interruption, pattern unwinding, scope for maneuver | Organizations can escape from constraining path dependence when, triggered by an external impetus, they leverage the reflexivity gained to address and interrupt the logic of the underlying self-reinforcing mechanisms. This interruption gradually rewinds the inscribed path-dependent pattern and results in a regaining of scope for maneuver | Shows how agency takes the form of interrupting the logic of the path’s underlying self-reinforcing mechanisms |
3 Methods and data
3.1 Research design and case selection
3.2 Data collection and analysis
4 Findings
4.1 CameraCorp
4.1.1 Diminished scope for maneuver
“The then management was not able to establish confidence at CameraCorp that we could run a new digital system as well as high-end mechanical and optical systems in parallel. (…) At CameraCorp if you wanted to change the smallest detail, then it created the greatest uproar. Even if it had been just a single screw. The people replied, ‘It is not possible,’ and they would resist” (Production Worker).
4.1.2 Regaining scope for maneuver
“If [name of investor] had not come, we would have never been able to depart from our established routine. We would have been extinct. (…) A major shareholder pushed us in a certain direction. Unfortunately, the company by itself was not able to perceive the situation. The firm simply tried to hold on using life-saving measures. Nobody had the guts to go in this or that direction” (Chairman of the Works Council).
“In the past, optical performance constituted the ultimate objective. (…) The impact [of electronics] has clearly changed. We electronics technicians are already involved in the product specification phase. From the start, we have interdisciplinary teams” (Head of Electronics).
“What [name of investor] had done was to push towards digital technology. That means that CameraCorp not only provides the mechanics and the optics—and other [firms] do the electronics. He defended the position that: ‘Someday, a camera will be an electronic device with nice components all around. You consequently have to master electronics’”(Head of Digital Imaging).
Diminished scope for maneuver | Regaining scope for maneuver | ||
---|---|---|---|
Self-reinforcing mechanism | Mechanism materialization | Mechanism interruption | Representative quotes |
Coordination effects | Well-tuned informal (interdepartmental) interaction rules and principles geared towards developing high-end opto-mechanical cameras | Dissolving ingrained coordination rules by resetting working processes and R&D priorities | “In the past, optical performance constituted the ultimate objective. (…) The impact [of electronics] has clearly changed. We electronics technicians are already involved in the product specification phase. From the start, we have interdisciplinary teams” (Head of Electronics) |
Complementarity effects | Complex bundle of interrelated routines and resources favoring complementary (technical) choices in camera development and use while rejecting deviating ones | Opening up the established cluster of routines and (technical) relationships by deliberately accepting the resulting misfit costs | “It proved difficult to stay with the 35 mm ‘Kleinbild’ format. The knot that we cut was simply to use a smaller [imaging] sensor” (Head of Digital Imaging) |
Learning effects | Exploitation and further refinement of proven (opto-mechanical) camera development and production procedures | Undermining exploitative learning by shifting resource allocation to novel explorative, specifically digital, learning domains | “It was decided that we would no longer develop new analog products but fully commit to digital” (Head of Camera Development) |
Adaptive expectation effects | Taken-for-granted assumption that the company stands for technical purism and opto-mechanical craftsmanship | Shaking up ingrained assumptions by engaging in selective activities challenging the perceived ‘retro image’ | “From the very first moment [the new investor] stated that we needed to go into digital technology, and that this was the future of the photo industry. From that point the development prevailed. However, it took some time (…) until everybody had reframed” (Chairman of the Works Council) |
4.2 EnergyCorp
4.2.1 Diminished scope for maneuver
4.2.2 Regaining scope for maneuver
“start to develop courses, teach courses […]. So the short-term [response] was running a lot of people through courses using that as a mechanism to select the best out of those, I think the number is around 4,300 people through the training, and employed about 800 or 900 of them” (Executive; U.S. Headquarters).
“Once we had exhausted our resources in a short time period, that we were not having much success with qualified candidates in the Midwest or the Southeast, that was when the decision was made, then we have got to invest ourselves through an apprenticeship program, and we have got to invest, let’s invest locally” (HR Director; U.S. Subsidiary).
“And then we said, okay, now where do we get […] a pipeline of workers to be able to fill the jobs inside the factory and again, we looked around and said, well, actually [Name of city of location] has good community colleges, good high schools, how could we mobilize some of the resources there […]? And that is where we kind of made the link to the apprenticeship program we were already using and German companies were already using so successfully in Germany in terms of reaching already down into the high schools and getting some of the students ready for, let’s say a vocational career” (President and CEO; U.S. Headquarters).
“I was always, it was my management and HR who said, ‘why don’t we have an apprenticeship program like this?’ So I was always focusing on this program and questioning why we do not have that. But there was also a good explanation for why we do not have that. Because when you look at this, no one else in the United States is doing this” (Production Manager; U.S. Subsidiary).
“There was still some resistance. It was something that had not been done here before. I think most managers think there are plenty of people out there on the streets who can do what they need for them to do, and that is not the case” (Training Manager; U.S. Subsidiary).
“And I went in 2002, 2003, when we followed this American model, ramp down, ramp up, ramp down and up, and it took us, because it is not good, because it has a tremendous impact on productivity, it has a tremendous impact on non-conforming situations, a lot of non-conforming situations […]. And then is when we laid people off. We are still probably recovering from that because we let skilled workforce go which we had trained over ten years, or longer, twenty years, they do not come back, we are starting all over. And now we are going to try that differently, you know, when we go through peaks and valleys, we have adjusted our manpower, it is all a question of management” (Production Manager; U.S. Subsidiary).
“The barriers can be overcome. I think we have shown that they can absolutely be overcome. But that does not mean that we just continue to accept the barriers. What we are going to do is to fight to break them down, to make it more effective and efficient the way we do [apprenticeships]” (Executive; U.S. Headquarters).
Diminished scope for maneuver | Regaining scope for maneuver | ||
---|---|---|---|
Self-reinforcing mechanism | Mechanism materialization | Mechanism interruption | Representative quotes |
Coordination effects | Formal and informal rules that embed and favor flexible on-the-job training | Interrupting the formal and informal rules supporting recruitment and training of unskilled and semi-skilled labor, and envisioning path-deviating future | “There has been a lot of discussion in the U.S. about a skills gap, and I think we have a little bit of a different view, is we do not see the skills gap, we actually see a training gap. And it is something that as companies we have got to invest in” (Executive; U.S. Headquarters) |
Complementarity effects | Complementary relationship between hire-and-fire approach and fitting low investments in training | Undermining existing complementarities between labor market and training, and following a new approach | “It is not in the U.S. at all. That is why this is getting so much press, is because in the U.S. they think it is unique. And I think it all boils down to the company investing upfront in the employee. That whole concept is new to the U.S.” (Director of Operations; U.S. Subsidiary) |
Learning effects | Continuous investments in hiring from the external labor market and offering training on the job | Establishing channels for learning of apprenticeship model by engaging in knowledge exchange with headquarters | “I think what we try to do, and that is why the training manager has done several stints across the pond in Germany to learn the apprenticeship ways and then blend them in on the American side” (HR Director; U.S. Subsidiary) |
Adaptive expectation effects | Taken-for-granted view that education and training involves either a college degree or flexible on-the-job training | Working toward overcoming taken-for-granted assumption that apprenticeship is locked-out | “In fact, what I did with my counterpart in Germany is that he and I went to Washington and we actually met with the Department of Labor and the Department of Education, and we just had discussions about this, on what we are doing, and tried to educate” (Executive; U.S. Headquarters) |