Paula Jarzabkowski

Strategic practices: An activity theory perspective on continuity and change

Abstract

This paper draws upon activity theory to analyse an empirical investigation of micro strategy,

identified here as strategy as practice, in three UK universities. Activity theory provides a

framework of four interactive components from which strategy emerges; the collective

structures of the organisation, the primary actors, in this research conceptualised as the top

management team (TMT), the practical activities in which they interact and the strategic

practices through which interaction is conducted. Using this framework, the paper focuses

specifically on the formal practices involved in direction setting, resource allocation, and

monitoring and control. Strategic practices are found to be idiosyncratic to the interpretative

context in which they are used and this is associated with different patterns of strategy as

practice in each institution. Strategic practices are also associated with a tendency towards

stability in one case study but are evolving and being reinterpreted in the other two cases.

Drawing upon the activity theory framework, this finding is used to model the tendencies for

continuity or change in the three case studies, depending upon the way that practices either

distribute shared interpretations or mediate between contested interpretations of strategy

within the activity system. This modelling is used to examine the relationships between

strategic practices and strategy as practice in organisational continuity and change.

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Strategic practices: An activity theory perspective on continuity and change

A study of micro strategy and strategising is intrinsically concerned with how people engage

in strategy in micro or localised contexts. Micro strategy is thus related to the growing body

of research upon ‘practice’, which focuses upon how people engage in the doing of “real

work” (Cook and Brown, 1999:387). Practice scholars examine the way that actors interact

with the social and physical features of context in the everyday activities that constitute

practice. The practice concept has recently penetrated the strategy literature as strategy as

practice, recommending that we take strategists and their work seriously (Whittington,

2001a). Strategy as practice endeavours to explain how managerial actors perform the work

of strategy, both through their social interactions with other actors and with recourse to the

specific practices present within a context (Hendry, 2000; Whittington, 1996; 2001a). There

is an important distinction between practice and practices. Practice is a teleological concept

embracing the interpretative rationale in which a firm pursues a stream of strategic actions

over time (Turner, 1994). References to strategy as practice in this paper are thus specifically

referring to the pattern of strategic activity pursued by our case studies. Practices are those

habits, artefacts, and socially-defined modes of acting through which the stream of strategic

action is constructed (Turner, 1994; Whittington, 2001b). These are reciprocal rather than

discrete constructs since practice influences the type of practices that are applicable while

practices constitute the practice that may be undertaken.

In this paper, a study of micro strategy in three UK universities is located within the field of

strategy as practice. We analyse how particular strategic practices are implicated in sustaining

or changing patterns of strategic activity in different contexts over time. The paper is in three

sections. In the first section an activity theory framework is established as the basis for

analysis because of its emphasis on the role of practices in constructing practical activity. In

the second section we present data on the specific strategic practices used in three UK

universities, Warwick University, London School of Economics and Political Science (LSE)

and Oxford Brookes University. In the final section, the activity theory framework is used to

analyse the relationship between strategic practices and continuity or change in each case.

Building an activity theory framework

In this section the basic principles of activity theory are explained and its three key

contributions to our study of strategy as practice are identified. First, we highlight the focus

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upon practical activity. Second, the activity theory concept of practices as mediators between

constituents in the pursuit of shared activity is discussed. Finally, we examine the way that

activity theory may be used to explain continuity and change at the activity system level. The

section concludes by operationalising activity theory for use in this paper.

Activity theory conceptualises psychological development as a process of social interaction

within particular historical and cultural contexts (Vygotsky, 1978). Interaction provides an

interpretative basis from which individuals attribute meaning to their own and others actions

and so are able to engage in shared activity (Vygotsky, 1978; Wertsch, 1985). Shared activity

is practical, in that it is conducted with an outcome in mind (Engestrom et al, 2002). The

context of practical activity is defined as an activity system (Engestrom, 1993). An

organisation may be considered an activity system comprising three main constituents,

individual actors, collective social structures, and the practical activities in which they engage

(cf. Blackler, 1993).

This focus upon practical activity is the first contribution of activity theory to our analysis.

Practical activity is the site of interaction in which actors engage with their contexts over

time. Here activity theory extends other forms of social theory that deal with the interaction

between actor and context by adding the practical activity dimension in which interaction

occurs (Blackler, 1993). Other social theories tend to predicate interaction upon agency, for

example structuration (Barnes, 2000; Clegg, 1989; Giddens, 1984), or upon social structure

(cf. Bohman, 1999; Bourdieu, 1990) or focus upon reciprocity that obscures interaction

between and conflates the two (Archer, 1995; Clark, 2000). However, in activity theory

practical activity is posited as the essential site for analysing interaction between actors and

collective structures. Practical activity is comprised of a series of actions but is, itself, a more

historically situated and collective notion than any single action. It may be seen as the “taken-

for-granted and highly contextualised rationale” (Spender and Grinyer, 1996: 30) in which

specific actions are invested with meaning and purpose. Practical activity is, therefore, a

teleological notion based around purposes and goals. These purposes and goals are situated

within an interpretative framework that constituents construct, participate in, maintain, and

sometimes change.

The second key point of activity theory for our analysis is its interpretation of the practices

through which actors and collective structures interact in practical activity. Activity theory

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suggests that interaction arises through the technical and psychological tools that actors use to

engage with their environments (Engestrom, 1993; Kozulin, 1999). The point of such tools is

that their use is oriented towards the conduct of practical activity. Strategic actors may use

tools to coordinate and manage the material resources of strategy as well as to generate

meaning from and impose meaning upon the context in which strategy is conducted. Tools

thus have a practical purpose in enabling organisational constituents to engage in practical

activity. However, activity theory does not conceptualise tools as primarily the instruments of

any particular constituent. Rather, tools are conceptualised as instruments of mediation,

implying that constituents may have varied purposes and goals between which there is a need

for mediation. Tools are vehicles for the construction of strategic activity, permitting

interaction between not necessarily consensual constituents of an activity system. Since these

‘tools’ are the articles of use for establishing practical activity, they may be defined as the

practices through which the practice of strategy is constructed.

Blackler (1993) enhances our understanding of the practices by which an activity system

mediates between different constituents and reaches sufficiently shared frameworks of

meaning to pursue strategic action. While different organisational constituents may not have

similar views, in order to function as a system, they require a means of conceptualising and

interacting with each other sufficiently to produce action. Blackler suggests that this

mediating function is similar to the notion of formal operating procedures through which the

constituents of an organisation may reach agreement on the actions to be pursued (cf. Cyert

and March, 1963). The formal operating procedures are underpinned by tacit, habitual and

inexplicit routines that provide “effective vehicles for truce between groups” (Blackler,

1993:877). Due to their accompanying tacit, habitual routines of behaviour, such procedures

are pervasive in distributing and perpetuating the interpretative rationale in which practical

activity occurs and so are likely to be highly persistent over time (cf. Nelson and Winter,

1982). This conceptualisation of strategic practices as formal operating procedures is

theoretically sound and empirically helpful in capturing the formal, habitual and social modes

of acting through which strategic activity is constructed. They provide observable phenomena

for examining the patterns of interaction through which the different constituents of an

activity system arrive at strategic activity.

One of the enduring problems for social theory and for theories of the firm is how a social

system can be prone to both repetitive reconstitution of practical activity, that is, to

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continuity, and also have the capacity for change. While any definitive answer to this

problem is beyond the scope of this paper, a third key contribution of activity theory is the

way it can be used to examine and explain continuity and change in patterns of practice

within an activity system. The interpretative rationale that underpins practical activity is a

powerfully situated construct with a “long historical half-life” (Engestrom et al, 2002) that is

associated with continuous patterns of practice in an activity system. However, activity

theory is essentially a learning theory that has provided a foundation for theories of

knowledge creation (Blackler, 1995; Spender, 1996), learning within communities of practice

(Brown and Duguid, 1991; Lave and Wenger, 1991) and organisational renewal (Spender and

Grinyer, 1996). An activity system is able to reconceptualise the interpretative rationale in

which practical activity occurs, so opening “an expanded repertoire of possible actions and

goals” (Engestrom et al, 2002).

The capacity for change arises from the interaction between actor, collective and practical

activity. Since the constituents of the system may not hold similar interpretations, the

rationale for strategic activity is beset by contradictions and is innately contested. Some

contradictions may be largely latent, occurring only for some constituents but not surfacing as

a contested interpretation of activity at the system level. These sub-system aggravations are

likely to occur and be resolved without any change to the collective rationale for activity.

However, when there are contradictions and contested interpretations between constituents,

these generate system level tensions that provide an opportunity for reconceptualisation of the

rationale for action (Blackler, 1993; Engestrom et al 2002).

Practices are often seen as predisposing continuity in patterns of strategic activity (for

example, Cyert and March, 1963; Nelson and Winter, 1982). However, if practices are

viewed as mediators between constituents of an activity system, we can understand their

relationship with change. As mediators, practices enable constituents to conceptualise each

other in terms of the practical activity that should be shared, creating continuity. When

conceptualisations of other constituents and shared activity break down due to contradictions

and contested interpretations, practices serve as mediators between the competing views of

constituents to effect changing interpretations. Practices may be used to mould the context of

action, to leverage new patterns of activity, and to reconceptualise the rationale in which

actions occurs. As new patterns of activity arise, this may create tensions with the old

practices, leading to their modification or alteration. Of course, the practices themselves are

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historically and culturally situated and have a collectively understood status, so there are

always likely to be residues of the past in changed patterns of action, indicating some level of

continuity in the contextual rationale. However, even inherited practices may be used by

constituents to conceptualise the views of other constituents and to mediate between,

leverage, or modify new patterns of action between constituents.

While activity theory may be used to conceptualise continuity and change in an activity

system, particularly through its focus on the relationships between practical activity and

practices, this approach is still largely theoretical. For example, Blackler (1993) notes that,

while activity theory provides an integrative framework for understanding system level

continuity and change, it still provides weak explanations for how these occur. First, it has

not been used to explain the origins of incoherencies in the activity system. Secondly, it does

not explain what sustains inconsistency and thirdly it does not show the ways in which

change occurs from these inconsistencies. In this paper we develop an activity theory

framework to explore how practices are involved in the conceptualisation of different

organisational constituents’ participation in shared strategic activity. We use this framing to

explain how and why contradictions arise and change occurs in our three case studies.

Operationalising activity theory

Activity theory may be operationalised through the identification of a series of analytic

lenses, one of which is the activity system itself; the contextual rationale that provides the

motives and meaning within which strategy as practice occurs. In this paper, the university is

the activity system of interest, comprising three key constituents of interaction, the top

management team (TMT) as key actors, the organisational collective structures and the

strategic activity pursued, mediated by the strategic practices available in each context (see

Figure 1). Strategy as practice is the pattern of interaction between these constituents through

which strategic action emerges.

INSERT FIGURE 1 ABOUT HERE

The top team, for reasons of formal position and access to power and resources, are important

to strategic action (Child, 1997; Finkelstein and Hambrick, 1996; Hambrick and Mason,

1984; Pettigrew, 1992; Whittington, 1992; 1996). While they are not the only strategic actors,

this paper identifies them as key actors and gathers data on strategy as practice from their

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perspective. The TMT interacts with collective organisational structures comprising history,

culture, and those ‘others’ who contribute to strategic activity (Weick and Roberts, 1993).

The top team and these collective structures engage in practical activity as a form of shared

endeavour permitting strategic actions to emerge over time.

However, our primary interest in this paper is the practices that mediate between constituents

in the construction of strategic action. They permit constituents to conceptualise each other

and to engage in practical activity. Drawing upon Blackler (1993), key strategic practices are

identified as those formal operating procedures involved in direction setting, resource

allocation, and monitoring and control. While these are not the only practices from which

strategic action is constructed, they are theoretically valid within the strategic management

literature and are innately ‘practical’ being concerned with the doing of strategy (cf. Garvin,

1998; Grant, 1988; Simons, 1994)1. Formal procedures have a dual function as both material

infrastructure and social artefacts that leads to our definition of them as strategic practices

involved in the construction of strategic activity. While formal procedures are situated to the

extent that they assume case specific meanings, they are also empirically comparable across

cases. That is, different organisations may have either similar or different formal procedures

and, even where they are similar, may use and interpret these procedures in different ways,

providing a robust comparator.

Conducting strategy research in universities

Universities are identified as increasingly important sites for the study of strategic action

(Ferlie, 1992; Gioia and Thomas, 1996). In OECD countries generally and in the UK

specifically, annually decreasing levels of public funding from 1980 onwards have been

associated with market-driven competition, termed the quasi-market (le Grand, 1991). In this

competitive and non-munificent environment, universities have undergone strategic change

(Gioia and Chittipedi, 1991; Gioia and Thomas, 1996) and adaptation to diverse

environmental demands (Sporn, 1999). The impact of competition is seen in strategic

behaviour such as the rise of entrepreneurialism in order to maximise public funding and gain

additional resources from commercial activities (Clark, 1998). Universities are, therefore, a

relevant and somewhat neglected context for the study of strategic action.

1 Other interpretations of practices, not used in this paper, may arise from different theoretical framings, as with the practices of discourse, which may be viewed from a critical Foucaldian perspective (Knights and Morgan, 1991), as strategic narratives (Barry and Elmes, 1997), or as formally documented discourse (Hendry, 2000).

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Universities also have some unique characteristics that may be particularly interesting for a

study of strategic action. They have traditionally been portrayed as professional bureaucracies

(Mintzberg, 1979), loosely coupled systems (Weick, 1976), or organised anarchies (Cohen

and March, 1974). From this perspective, universities are pluralistic organisations with

multiple goals that are not necessarily compatible with a corporate centre or an overarching

strategic direction. However, a feature of competitive environments, such as that experienced

by universities over the last 20 years, is the tendency to move from pluralistic to centralised

forms of organisation (Khandwalla, 1973; Mintzberg, 1979). Early findings on the effects of

new public management in UK universities suggest that they may indeed be becoming more

managed and more influenced by business principles (see Deem, 1999-2000). While

principles of collegiality and professional autonomy still apply, it appears theoretically valid

and practically relevant in the current university environment to focus upon strategic action

as a university level construct and to gather data from the perspective of “manager

academics” (Deem and Johnson, 1999). We therefore adopt a top team perspective in this

study, acknowledging that any viewpoint is partial.

Research method

Conducting the research in a single sector, UK universities, minimised potential variance

occasioned by cross-sectoral comparisons. Theoretical sampling criteria guided the selection

of individual cases on the basis of apparent contextual difference in history, origin and

market position (cf. Yin, 1994). While not constituting in all respects “polar types”

(Pettigrew, 1990), the three contextually distinctive cases, Warwick University, LSE, and

Oxford Brookes University, were seen as appropriate to addressing the topic (see Table 1).

INSERT TABLE 1 ABOUT HERE Longitudinal in-depth case studies were conducted on the TMTs in action at each site over a

seven-year period, 1992 to 1998 inclusive, six years of retrospective and one year of real-time

data collection. Data were collected from five main sources; interviews, observation,

ethnographic data, documents, and archival data (see Appendix A). These sources were

designed to counteract the bias potentially resulting from relying upon a single data source

(Denzin, 1989; Eisenhardt, 1989), particularly where retrospective analysis is involved

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(Golden, 1992). Multiple sources also furnish the breadth of information needed to develop a

relatively holistic picture of TMT processes within context (Jick, 1979; Pettigrew, 1990).

A total of 49 open-ended interviews were held with all current TMT members and, where

they were identified as pertinent to specific strategic actions studied, some former TMT

members and non-TMT members. Interviews lasted, typically, 90 minutes, of which 44 were

audio-taped, the remaining five being reconstructed within 24 hours from detailed notes (cf.

Eisenhardt, 1989). While uniform prompts were used to ensure consistency, open-ended

interviews were important for the interpretative approach taken. Participants were able to

“engage in a stream of consciousness” (Gioia and Thomas, 1996:374), reflecting upon the

issues they perceived as important (cf. Langley, 1989; 1990). Interviews investigated both

retrospective and current strategic actions and practices.

Serial observations of 51 strategic level meetings across the cases, averaging approximately

two hours per meeting, were observed throughout the year of real-time data collection.

Sustained observation enabled the identification of ongoing patterns of action and the

meaningful practices associated with those patterns (Barley, 1995). Background that

enhanced the interpretation of observations was accessible through committee minutes,

interviews, and informal discussion with participants.

Data of an ethnographic nature were collected to achieve greater familiarity with locally

meaningful informal processes and routines (Van Maanen, 1979). Pre- and post-meeting

observations provided an opportunity for observation, as did other general on-site

interactions. Additionally, the senior Pro-Vice-Chancellor (PVC) at Warwick and the senior

Deputy-Vice-Chancellor (DVC) at Oxford Brookes were shadowed for one week each. Given

the time constraints of the research, a week enabled greater familiarity with practices and

informal interactions at the top team level (cf. Mintzberg, 1973). At LSE shadowing was not

undertaken as the fieldwork on that site involved whole day visits to the Planning Office in

the senior management wing, next to the communal coffee machine visited by all senior

management and their support staff. As trust grew, ethnographic data became available

through informal discussion, eavesdropping and observation.

Minute books from key strategic committees for the period 1992 to 1997 inclusive were the

principal source of archival data. These were supported by other documents such as annual

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reports, annual accounts, academic databases, strategic plans, audit documents, and university

calendars. Such data were used to anchor and inform the data collection process, developing

extensive processual analyses of strategic activities, both for reconstructed events and to

complement real-time data with antecedent material (Golden, 1992).

The above data sources resulted in a rich qualitative data set which was subjected to a

thematic analysis, progressively moving from very broad categories to key themes and

constructs (Miles and Hubermann, 1994). Data were arranged on a coding tree with four

branches. The central analytic question examined how top teams do strategy in UK

universities. A first concern was simply to document what strategy, longitudinally tracing

those actions that might be considered strategic because of their importance to the institution

as a whole. This formed the first branch of the coding tree. A second branch of the tree dealt

with identification of the top team and their involvement in strategic actions. These questions

involved considerable iterations with the data to extract actors and actions and merging of

coding trees to trace patterns of involvement. Finally, in order to understand the practices

used to engage in strategic action and their implications in strategic outcomes, the third and

fourth coding branches were developed. The third branch looked at the processes of

direction-setting, resource allocation and monitoring and control. The final branch teased out

specific practices involved in these processes, such as formal procedures, committees, and

planning mechanisms.

As analysis progressed, induction overlapped strongly with deduction in order to theoretically

validate the data that consistently appeared pertinent across triangulated sources (Orton,

1997; Pettigrew, 1997). There is no inevitability in coding schema since the assumptions of

the investigator will guide selection of the phenomena of interest. At this stage, activity

theory increasingly met the requirements of analysis, deriving an explanation of different

patterns of doing strategy from the different practices in each case study. This interpretation

of the data also explained the different patterns of continuity and change in strategic action

that were uncovered. Throughout this process Nud*ist, a software package that enables

complex, multiple and fine-grained coding of mass qualitative data, was an invaluable tool.

Using Nud*ist, the 4,521 coded items, ranging from one line to one A4 page in length, to be

coded, compared, contrasted and then re-coded at least once and often up to five times as

induction and deduction converged upon a point of saturation (cf. Eisenhardt, 1989).

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While subjectivity is inevitable in such analysis, it is also important to refrain from

misinterpreting data through researcher or informant bias. Therefore, three techniques were

used; triangulation, inter-coder reliability checks, and validation from participants.

Triangulation avoids the potential bias of a single data source and assists in constructing more

complete and accurate analyses through converging sources of evidence (Eisenhardt, 1989;

Jick, 1979; Yin, 1994). Inter-coder reliability checks were performed to confirm the

consistency of the coding schema (Fox-Wolfgramm, 1997). The coding tree and construct

definitions were explained to two doctoral students who were unfamiliar with the data. A data

sample retrieved directly from the Nud*ist files and in no way altered from that used by the

investigator was then given to the two co-analysts. The sample comprised 10% of the

complete data set and covered constructs and issues from each branch of the coding tree and

each data source. Upon evaluation, coding in the sample was found to be between 97% and

100% reliable from both co-analysts. The high consistency of this evaluation and the typical

nature of the data examined helped to verify the reliability and robustness of the analysis.

Finally, results of the analysis were fed back to TMT participants in order to help validate the

findings. The progressive nature of this reporting enabled informants to contribute to the

process of refining coding into key themes. A combination of strongly triangulated data,

inter-coder reliability checks, and validation from participants significantly limited the

possibility of researcher bias.

Data and preliminary analysis

In this section, we present within-case data. There is a brief description of the top team and

the strategic actions pursued by each university. Formal procedures involved in direction

setting, resource allocation and monitoring and control, and their tacit and habitual elements

are then described. We explain how these procedures enable the TMT to conceptualise other

constituents, and their relationship to shared strategic activity, using the data to show

contradictions and tensions in interpretation of activity in the cases.

Case 1: Warwick University

Warwick is a research-led university with a reputation for entrepreneurial activity because it

generates 65% of gross income from commercial sources (Clark, 1998). This perception of

the university as entrepreneurial is a dominant and guiding interpretative framework that is

widely shared by the TMT; “There is a lot of shared understanding between members of the

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team in terms of the entrepreneurial culture and the innovative culture” (Senior PVC).

Warwick displayed continuity in its patterns of strategic activity throughout this study.

TMT

The top team comprises nine members of whom the VC, the Senior PVC and the Registrar

constitute an inner core. The TMT is characterised by stable role composition and relatively

long tenure to the extent that six members have been on the team in excess of five years and

the Registrar for 29 years. The major change in the TMT during this study was the inception

of a new VC in 1993.

Strategic actions

From 1992 to 1998, Warwick has consistently pursued goal-oriented actions related to

research excellence, income-generation, capital expansion, and growth of the Science faculty.

Key research actions undertaken were: responses to the 1992 and 1996 Research Assessment

Exercises (RAE); the 1994 Warwick Research Fellows’ initiative to grow the research

community; and action from 1994/95 onwards to stimulate research grant and contract

income in response to declining performance. There was rapid expansion of capital works in

the earlier phase of this study, stabilising from 1996 onwards as the operating surplus became

more constrained. At this time the focus on income-generating activities, always strong,

increased. Growth of the Science faculty occurred through capital infrastructure, appointment

of research staff, and growth in student numbers. This culminated, towards the end of the

study, in a successful bid to develop a medical school. While a number of exogenous and

endogenous factors were influential, such as a new VC and new actions such as the medical

school and the research fellows’ initiative, patterns of strategic activity remained consistent

with goals throughout the period of analysis.

Key practices in constructing the interpretative rationale for strategic activity

Three main committees were identified as the formal operating procedures serving strategic

interaction: the Strategy Committee, Estimates and Grants Committee (E&G) and Earned

Income Group (EIG). Together, these committees are responsible for the key strategic

activities of strategic planning, financial decision-making, income generation, resource

allocation, and monitoring and control (see Table 2). The three committees have overlapping

top team membership and are chaired by the three inner core members of the TMT. The top

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team thus have dominant access to the practices that distribute interpretations of desirable

strategic activity.

Resources are distributed through Strategy Committee as part of the annual financial planning

process. This committee is supported by E&G for academic resource allocation and EIG for

income generation. Resource allocation through E&G is used to shape organisational growth

and retrenchment according to top team prioritisation of departmental needs (see Table 2). As

resources are, in principle, zero-based, departments bid to E&G for staff replacement or

growth. Redeployment of resources is common, such that most positions during the period of

real-time observation reverted to a junior post and, on three occasions resulted in no post

being granted. These practices establish a competitive dynamic within the institution, which

is perceived as beneficial; “Because of the thriving atmosphere of the place, [academic staff]

get ahead of their contemporaries” (Registrar).

INSERT TABLE 2 ABOUT HERE

Competition for resources is balanced by a strong focus upon income generation and profit

sharing. EIG manages all income generating activities, including academic areas of revenue

such as full fee paying courses (see Table 2). This historical practice arises from Warwick’s

‘save half/make half’ response to the funding cuts of the early 1980s. Warwick saved

resources through committees such as E&G and made income through EIG. Profits generated

through EIG activities contribute to a central resource pool that is allocated in accordance

with top team priorities. Profit-sharing mechanisms between the centre and departments,

including a “super surplus” retained by high income generating departments, reinforce an

entrepreneurial identity and increase the power of financially viable departments in their

relationship with the TMT; “Earned income activities give you autonomy, flexibility and a

stronger link. You’re more of a stakeholder” (PVC). Top slicing of profits enables the TMT

to finance strategic initiatives and cross-subsidise lower income-generating departments.

Monitoring and control operates through the formal committees, which offer material

sanctions and rewards for strategically oriented behaviour. Strategy Committee monitors the

performance of activities against trends and forecasts, supported by EIG quarterly accounts

and annual ‘Challenge’ meetings (see Table 2), in order “to bulk up the better income streams

and minimise or curtail less productive ones” (Finance Officer). Strategy Committee also

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monitors academic goal attainment, as this is associated with financial performance. E&G

performance analyses feed into Strategy Committee and are used to monitor and inform

decisions on academic resource allocation. These practices embed and sustain the

entrepreneurial and competitive rationale for activity and encourage performance that meets

strategic goals; “We’re not going to tolerate second rate anything” (Pro-Chancellor).

Direction setting is tacitly present at the TMT and organisational community levels. It is

predominantly focussed upon maintaining and enhancing research excellence, income

generation and capital expansion, which are key points in the strategic plan. While TMT

members do not talk about the strategic plan during decision-making, analysis of actions from

1992 to 1998 indicates that they are consistent with the plan. Such directions are common

assumptions underpinning the financial planning process at Strategy Committee and the

associated resource allocation and monitoring and control through E&G and EIG. Directions

are embedded within and reinforced by practices that accord power, autonomy and profit to

those departments that embrace established directions. The practices thus encourage

constituents to collaborate in interpretations of desirable strategic activity.

The formal committees mediate highly consistent interaction between the top team actors and

university community over strategic activity. The tacit and habitual routines underpinning

interaction are referred to by the top team as the ‘strong centre, strong department’ model of

acting, “You’ve got this strong department there, this strong centre here and there is a kind of

a balance” (Academic Registrar). The top team or centre is ‘strong’ because of its hold over

resources, income-generation, and overall strategic positioning of the University. Balance is

attained because departments gain ‘strength’ through strong leadership combined with

excellent performance in research ranking and income-generation. Strong departments

maintain power in their relationships with the centre because of their capacity to command

scarce resources (Pfeffer and Salancik, 1978), whereas lesser performers are more subject to

central control (cf. Hackman, 1985). The formal operating procedures and the tacit routines

that underpin them thus distribute consistent interpretations of strategically desirable action.

At Warwick there are few system level contradictions or contested interpretations about

strategic activity, which accounts for the continuity in patterns of strategic activity observed

over the period of this study.

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Case 2: London School of Economics and Political Science (LSE)

LSE is a research-led social science institution with a reputation for academic autonomy that

members refer to with pride, implying that it has a symbiotic relationship with research

excellence; “We recruit very good people because it is a free, non-coercive atmosphere which

is highly conducive to research” (Pro-Director). The symbiosis of excellence and autonomy is

embedded in the interpretative rationale of the institution and present in practices that avoid

overt power structures; “There is a long tradition at LSE of checks and balances … to

marginalize power” (Pro-Director). The interpretative rationale and associated strategic

activity were undergoing change during the period of this study, which is associated with

changing interpretations of existing practices.

TMT

The TMT expanded in 1998 to four members from a formerly three-member team. Of these,

only the Secretary (Registrar equivalent) has been on the top team longer than two years with

the Pro-Director for external affairs commencing in 1996/97, the Director in 1997 and the

Pro-Director for internal affairs in 1998.

Strategic actions

Documented strategic goals are related to research excellence, maintaining the full range of

social sciences, income generation, and development of capital infrastructure. However,

analysis provides evidence of strategic drift and dissonance between espoused intent and

action, particularly during the earlier period of this study. For example, despite a policy of

zero growth, student numbers were over target by between 200 and 400 each year from 1994

to 1998/99, particularly in high fee-paying subject areas. Such drift is counter to policy,

distorting the ethnic balance and social science composition of the School and overtaxing the

capital infrastructure; “Every year we say we won’t let the numbers change and we do”

(Senior Academic).

The culture of the School is resistant to commercial activities as these are interpreted as

diluting academic endeavour: “The old LSE types [are] not given to commercially induced

whims or undermining of academic standards” (Senior Academic). It has, therefore, been

difficult to implement income-generating activities. However, coincident with the

appointment of a new Director in 1997, a number of overarching strategic initiatives are

being implemented; “There is no doubt that he is embarked upon a radical programme of

15

change here” (Senior Administrator). For example, the School has undergone a professional

marketing campaign designed to increase visibility and enhance income generating capacity.

There is thus increasingly shared strategic activity between the top team and the

organisational collective in the latter part of the study.

Key practices in constructing the interpretative rationale for strategic activity

Four main committees were identified as the formal operating procedures serving strategic

interaction; Standing Committee, Finance Committee, Academic Planning and Resource

Committee (APRC), and Academic Board (see Table 3). While the Director chairs the latter

two, there is no main strategic and financial planning committee at which the top team act

together as the primary players. Indeed, the top team do not formally manage resource

allocation. Resources are authorised by the Finance Committee and allocated by APRC, a

collegial body comprised of professorial and non-professorial staff. This practice has origins

in the avoidance of overt power structures. APRC was developed in 1992 specifically to

mediate between the strategic goals of the former Director and the goals of the academic

staff. In keeping with power avoidance, APRC itself lacks any clear system of authority

relying upon non-cash formulae, known as Minimum Staffing Levels (MSLs), to allocate

resources. These were introduced in 1992/93 in an attempt to shape the School’s growth. The

aim is to encourage self-monitoring behaviour. However these practices proved inflationary,

and partially responsible for the strategic drift in student numbers, highlighting the

contradictions between interpretation, action and intent. As a result formulae have been

refined in 1998 into a system of Operational Pounds Per Point (OPPP) to better monitor

resource utilisation. While the TMT do not formally control resources, they have a tacit,

negotiated access to resources; “One has the opportunity to command resources but … only

in a way that you persuade people” (Pro-Director).

Monitoring and control are part of the five yearly APRC reviews but these are weakly

sanctioned. That is, strong performers in research, student recruitment, and income-

generation do not receive greater tangible rewards and lesser performers are not penalised, as

this does not accord with the notion of collegiality. However, the weak formal sanctions are

balanced by strong normative sanctions. For example, the recent transparent dissemination of

departments’ performance in resource utilisation illustrates the role of practices in changing

interpretations. Referred to as a form of “re-integrative shaming” (Senior Academic), non-

cash formulae are a collegial method of control intended to encourage normative compliance

16

with strategic goals (cf. Langley, 1989); “We’re disciplining ourselves in order not to be

disciplined from the outside” (APRC member). There is thus a subtle change in the use of

existing practices that is modifying perceptions of appropriate strategic activity.

INSERT TABLE 3 ABOUT HERE Direction setting is emergent, with the strategic plan describing strategic action as much as

prescribing direction. Neither Standing Committee nor APRC set directions although the

former approves the strategic plan while the latter makes recommendations to the Academic

Board for approval. The Academic Board, which comprises the whole academic body, is

influential in vetoing strategic actions that do not comply with the collegial culture. For

example, Academic Board actively resisted the strategies of the previous Director; “It

proposed a series of resolutions which altered the way in which his vision would be handled.

They blocked it in that sense” (Senior Administrator). As directions gain sufficient

recognition through the various committees, they attain formal status as strategic goals.

However, strategic action is becoming more purposive under the current Director. While

many of the strategies he champions are compatible with those of the former Director, he is

more influential because of his personal characteristics. These include academic credibility as

a leading scholar in the social sciences and skill in the iterative leveraging of practices

necessary to support strategic action at LSE; “You don’t move things in this place by being

managerial. You find champions for things who will work with the grain of the School to

secure change” (Secretary). While the strategic practices, by tradition, are intended to

mediate between the top team and the long standing collective structures in accounting for

different perceptions of strategic activity, the top team are able to deploy the practices to

influence behaviour. For example:

Because of this collegiate structure there is really relatively few areas that the Director can get his way, other than by persuasion (APRC member). [However] If the Director comes to the committees and says, I’ve got this whiz scheme, it’s brilliant, it’s going to revolutionise the School and I want a quarter of a million for it, it’s very hard for the APRC and the Finance Committee to tell him to get lost (another APRC member).

As the TMT use practices to influence interpretation of appropriate strategic activity, they

progressively change interpretations of those practices. For example, in many discussions the

17

establishment of APRC was explained as a rope to constrain different LSE constituents, “ and

you can’t push issues with a rope” (APRC 13/10/98). However, with a skilled group of actors

in the TMT, APRC is increasingly a practice that has been appropriated by the top team to

influence activity, as per the following exchange:

TMT 1: The role of the APRC is to do what we want to do. That’s what it’s there for. It does what we want in my opinion. TMT 2: I don’t think it thinks of itself in that way and it certainly didn’t behave that way for a period of time. TMT 1: It’s much better now. TMT 3: Yes, much better now. TMT 1: I don’t mind it too much because we can always do what we want and get people to agree to it. (Investigator feedback report, July 1999)

The top team managed to generate support for a series of strategic actions by convincing

interested parties of the desirability of these actions; “We get other people to think that they

want what we want” (Director). In order to secure this change in the interpretative rationale,

the top team had to work within the existing rationale. The previous Director attempted to

change the rationale for strategic activity. However, he failed to adequately utilise existing

practices to mediate with School constituents, reinforcing tensions and contradictions that

obscured change. In the later part of the study, existing practices were used to mediate

between contradictions, distribute changing interpretations of the rationale for action, and so

increase participation in shared strategic activity. This is associated with a changing

interpretation of the practices themselves.

Case 3: Oxford Brookes University

A former polytechnic, Oxford Brookes is one of the leading ‘new’ universities in the UK.

The University has a reputation for teaching excellence, having pioneered modular

programmes in the 1970s, and this is reflected in a student-centred ethos; “Commitment to

the students was tangible” (Former Senior DVC). There are some contradictions in the

interpretative rationale for activity. For example, the University is described as a “very

friendly University” (PVC) in which “issues are shared and the direction we head off in is not

… dictated by us from the top” (DVC). However there is also “a them and us atmosphere

here” (VC) and frustration that the TMT “may come through with the exciting initiatives

[but] it’s difficult to get academic schools to come on board” (Governor’s Strategy Day).

These tensions have historical origins in the former polytechnic status, in which the top team

18

were accountable for financial viability and so inclined to maintain strong control over

expenditure whilst permitting strategy at the academic level to remain generally autonomous

within financial guidelines (McNay, 1995). However, a series of changes such as

incorporation as an autonomous body in 1989 and attainment of University status in 1992

have provided a focus for change in the interpretative framework and strategic activity.

TMT

The TMT expanded in 1998 from a four-member to a six-member team. Two members of the

team have been at Oxford Brookes since the early 1980s, while the Senior DVC was replaced

in 1994. The current VC commenced in 1997 and two new PVC posts were initiated in 1998.

Strategic actions

Strategic intent and actions in the earlier part of this study were largely focussed upon

financial viability and building capital infrastructure, whilst maintaining the teaching

reputation. During this period the University consolidated its student funding levels at 17.3%

above the sectoral average and purchased a new campus site. Since 1998, strategic actions

have been influenced by sectoral changes in funding formulae, which resulted in a 12.3%

decrease in state funding per student unit of resource for Oxford Brookes. This equates with a

growth of 800 un-funded student places. To meet this objective, a range of actions was

implemented involving partnerships with higher education colleges and industry that could

deliver education without increasing on-campus student numbers. These actions are broadly

consistent with the history of innovation in teaching and learning and maintaining financial

viability. They are being rapidly implemented to the extent that the University has met its

growth targets in half the time agreed with the state funding body. However, a new area of

intent, building the research profile, is harder to progress as it contradicts former

interpretations of strategic activity; “strategically we couldn’t be a research University”

(Former VC). Indeed, current strategic practices do not actively stimulate research; “Unless

research pays, you're not going to get some Schools giving it enough attention” (PVC).

Key practices in establishing and changing the contextual rationale for strategic activity

Practices at Oxford Brookes have been in a state of change during the period of this study as

part of the drive to develop a more purposive University profile. Four main committees were

identified as involved in strategic interaction; Board of Governors, Vice-Chancellor’s

Advisory Group (VAG), Academic Board, and Strategy and Planning Committee (SPC). Of

19

these, the most influential committee is VAG, comprising the TMT; “It’s really where we set

the agenda. That’s the core executive team and that’s where we decide what sort of policies

we are taking through; what we want to do” (VC).

Governance procedures for former polytechnics prior to incorporation left them with

relatively under-developed formal procedures for self-administration (McNay, 1995; Bastin,

1990). In 1994 the University undertook a review of strategic practices called ‘Agenda for

Brookes’. This move towards more accountable strategic and financial planning practices was

furthered in 1995/96 with the implementation of the strategic planning cycle. This is now the

dominant practice integrating TMT, organisational collective and strategic activity within a

single annual process that is monitored by the TMT at every stage. As part of the planning

cycle, decisions go to Board of Governors for approval and to other bodies, mainly Academic

Board and its sub-committee, Strategy and Planning Committee (SPC), for information

dissemination and to comply with University governance regulations (see Table 4).

INSERT TABLE 4 ABOUT HERE

While directions originate in response to external stimuli or internally emergent issues, they

must be incorporated within the strategic planning cycle to be actioned. The top team develop

the financial and physical parameters of the plan at VAG, prioritising strategic actions and

setting performance targets. Such initiatives are discussed, legitimated and sometimes shaped

in interactions between the top team and the Board, who play a role in monitoring strategic

directions. The strategic planning cycle is then used to disseminate strategic directions as

guidelines for departmental budgets and operating plans. Once in the plan, actions tend to be

repeated over successive years providing that they meet performance goals.

Resources are allocated through the strategic planning cycle to the 31 schools and

departments termed ‘budget centres’. While budget centres have control of spending within

their allocation, at the corporate level the resource allocation model emphasises financial

viability. “The budget model penalises schools because, if they don’t recruit to target, then

their budget is reduced” (DVC). For example, in 1995/96 the planning cycle identified

problems of student recruitment in a department. This was monitored over successive years

resulting in closure in 1998/99 because of failure to meet targets. Each year since its

20

inception the planning cycle implements increasingly stringent financial and human resource

efficiency gains in order to meet the University’s response to declining state funding.

Monitoring and control are also incorporated within the strategic planning cycle. Each budget

centre submits an annual appraisal of achievements to plan and these are discussed at annual

strategic planning meetings with the TMT. Appraisal is increasing formalised with the

1998/99 planning cycle incorporating 13 new statistical performance indicators in six priority

areas. “The indicators drawn up emphasise those key indicators which Senior Management

Team currently consider the most important for benchmarking performance internally and

externally” (Planning Cycle, 1998/99). As central direction and control increases, the budget

centres seek sanctions and rewards that are tied to performance indicators. For example in the

1996/97 planning meetings, a budget centre Head “sought University support in handling the

problem of under-performing staff within the context of clear disciplinary procedures”

(Planning cycle minutes, 1996/97). These changes are indicative of a changing interpretative

rationale that legitimises and reinforces changes in strategic activity, sometimes referred to as

“The Winning Approach [which] is about a whole range of activities that a school has to

score well on” (Senior DVC).

The strategic planning cycle is a powerful practice for distributing an increasingly consistent

interpretation of desirable strategic activity based upon accountability and financial viability.

The view that is most prevalent in this strategic interaction is that of the top team. However,

strategic activity itself plays a strong part in interpreting appropriate behaviour. Once an

action has been developed and can be measured, it is perpetuated, decreased or increased in

accordance with performance indicators. Thus, the resource allocation, direction-setting and

monitoring and control practices become more firmly embedded each year as the

interpretations of constituents become aligned around a set of activities. For example;

“The planning cycle has got embedded in the University culture … people have said, I want more direction. More central direction” (Departmental Head), While at the top; “This year in the planning process we’ve tried to be a little more directive at the centre to provide leads” (VC).

This illustrates the subtle interplay between practices and the pervasive change in strategic

activity. The practices of the strategic planning cycle have served to minimise contradictions

21

and enhance consistent interpretations of strategic activity. While such practices create shared

activity in some areas, such as teaching partnerships, they may restrict conceptualisation of

new areas of activity, for example research activity is less attainable.

Further analysis and discussion

In these three cases, there are different patterns of continuity and change in the way that

strategy is practised, from continuity at Warwick to the greatest degree of change at LSE.

Drawing upon our activity theory framing, we model these different patterns of continuity

and change in Figure 2. We maintain that these patterns relate to the role that strategic

practices play in mediating between contradictions and tensions in the system and distributing

a shared rationale for action.

INSERT FIGURE 2 ABOUT HERE

This section is in four parts. First we explain how strategic practices are implicated in

continuity or change through their role in constituents’ conceptualisation of each other and of

shared activity. Secondly we use these explanations to discuss the relationship between

strategic practices and changes in strategy as practice, endeavouring to answer Blackler’s

(1993) questions for activity theory on the origins and maintenance of activity system

contradictions and their role in system level change. Thirdly, we relate our findings and use

of activity theory to wider change literatures, grouping our contributions within teleological

and dialectical classifications of organisational development (Van de Ven and Poole, 1995),

and associated sense-making and power-based theories of change. Finally we conclude with

some implications from the study for theory and practice.

Practices permit conceptualisation of other constituents and shared strategic activity

Warwick is the most stable of the cases, with three centralised committees as the formal

operating procedures for direction setting, resource allocation, and monitoring and control.

These formal operating procedures are supported by tacit routines of interaction grounded in

the notion of a strong centre and strong departments. The top team dominates the practices

that distribute a widely shared entrepreneurial, competitive and successful interpretation of

the institution, as evidenced by the notion of ‘strength’ at the centre and in the departments.

The rationale for action is that, if constituents collaborate in strategic activity, they can all

22

share in the strength. Thus the top team refers to the other constituents as “stakeholders” and

refuse to “tolerate second rate”, with these interpretations supported by formal practices that

grant greater autonomy to, and share profits with, those constituents who partake in the

prevailing view. The more that constituents commit to the shared activities of income

generation and research excellence, the greater strength they attain within the activity system.

In this interpretative rationale, it is easy for departments to commit to the shared activities,

since there is an associated belief that “the academic strength of the University is growing as

a direct result of its financial success” (Treasurer). As shown in Figure 2, there was no overt

contestation at the system level over the practices themselves, the rationales for action, or the

type of strategic activity that should be pursued. Thus, Warwick displayed continuity in its

patterns of practice over the period of the study.

Commitment to shared activity at Warwick is influenced by the success achieved with these

practices. For example, historical practices associated with income generation arise from

responses to the funding cuts of the 1980s and are strongly associated with financial success

by the institution as a whole. The organisation’s interpretation of activity is thus strongly

embedded in the historical practices. This finding is consistent with other studies of Warwick,

such as that of Clark (1998), which find an entrepreneurial identity distributed throughout the

university, in part by the structuring mechanisms. While establishment of practices to

mobilise and exploit internal resources is one facet of entrepreneurialism, other

entrepreneurial characteristics, such as exploration and change were not in evidence (cf. Hitt

et al, 2001). The point therefore is not whether Warwick is actually ‘entrepreneurial’ but that

the entrepreneurial rationale for activity is widely distributed across the system by the

practices, providing continuity of practice over time.

At Oxford Brookes, there was progressive change in the practice throughout the period of this

study. This case is an illustration of a system beset by contradictions and seeking change in

terms of better ways for constituents to conceptualise each other and to establish shared

activity. For example, the University is described as both “friendly” and with a strong “them

and us” culture. The TMT did not want directions to be dictated from the top but also

expressed frustration in getting academic staff on board for initiatives derived at the top.

While there was no initial urgency to change the interpretative rationale, changes in the

external environment highlighted internal contradictions and served as a focal point for

establishing a new interpretation of strategic activity. A new practice, the strategic planning

23

cycle, provided strong cohesion between direction setting, resource allocation and monitoring

and control, offering an integrative framework for the organisation. The practice served as a

means for generating shared activity and more consistent conceptualisations of the other. For

example, the top team used the practices to provide more central direction each year, whilst

the schools and departments requested greater central direction each year. The strategic

planning cycle was able to embed quickly because it was so oriented towards practical

activity. For example, strategic actions based on achieving greater financial viability were

actioned quickly using the new practice. This practice distributed a changing interpretative

framework that was seen as cohesive; “a closer collegiality where we all pull together for

survival” (DVC).

As seen in Figure 2, the practices were initially relatively weak and dominated by the TMT.

They became stronger practices throughout the study, integrating the whole system within a

more collective framework in which particular types of strategic activity came to dominate

the organisation’s interpretations. This is a source of some ongoing tensions and

contradictions. For example, the new practice was able to take account of financially viable

actions that were consistent with past activity but was less instrumental in actions departing

from that activity, such as improving research activity. Thus there is still tension and

contradiction between past and desired future practice. These tensions were in a subdued

form but beginning to be articulated by the top team at the close of data collection, suggesting

that they might beome the source of sufficient tension to generate further change in the

practices to acknowledge new conceptualisations of University activity.

LSE displayed the most change in its patterns of practice throughout the study. This change is

most evident because, rather than the steady progress towards change evidenced at Oxford

Brookes, the institution displayed active resistance to these changes at the outset, even

generating practices such as APRC to resist change. These practices were put in place to

prevent the top team pursuing strategic activity and preserve the autonomy of other

constituents in the institution. The inclination to resistance, tension and contradiction are

historical and deeply embedded in the practices, described as “checks and balances … to

marginalize power”, which is perceived as essential to academic excellence. Thus, there is a

long established historical pattern of practice that does not endorse shared activity.

24

Paradoxically, development of practices in order to preserve the status quo actually helped to

surface tensions, change constituents’ conceptualisations of each other, and generate changes

in strategic activity. Changing conceptualisations were gradual, beginning with modifications

of existing practices to better accommodate tensions in the system. For example, non-cash

resource allocation formulae were developed to gain constituents’ collaboration in efficiency

gains and income generation. While these forms of self-monitoring were initially inflationary

and counter to intent, they helped to accentuate and build awareness of contradictions in the

system. The practices themselves thus embody contradictions, which are apparent to skilled

players inside the system. For example, the top team is aware that, despite having no formal

access to resource allocation, they are able to “command resources … in the way that you

persuade people” (PVC). These contradictions enable the practices to be leveraged to

generate changing conceptualisations between constituents. Contradictions inherent in the

practices generate changing interpretations of the practices and the activities they endorse.

Thus the APRC changed from “a rope to restrain” authority to a top team perception that its

role “is to do what we want to do”. Even within this changed conceptualisation, which

distributes a different interpretative rationale, there are past legacies; for example, the top

team are aware that APRC does not “think of itself in that way”. As seen in Figure 2, the

change in practice has come about by a changing power balance from the collective to the top

team in access to and influence over the practices that distribute interpretations across the

system. As with Oxford Brookes, a new leader of the top team accelerates this but the

elements of change were in place prior to changes at the top.

Our analysis of the three cases suggests some important relationships between strategic

practices and continuity or change in practice. First, practices have a dual role in maintaining

continuity of practice as well as being central to the generation and execution of change in

strategy as practice. Secondly, strategic practices, even those that are inherited, may be

exploited, leveraged and mobilised to generate change in an activity system. We now discuss

each of these in turn.

Strategic practices are central to maintaining continuity in organisations. At Warwick, the

practices delivered continuity in much the way that the literature predicts. That is, formal

operating procedures are presumed to provide a state of agreement between organisational

constituents that is highly stable over successive organisational cycles and resistant to new

conceptualisations of action (Cyert and March, 1963; Nelson and Winter, 1982). To this

25

extent, our findings at Warwick support canonical views of such practices as formal

architectures that become embedded in the organisation and predispose continuity

(Henderson and Clark, 1990). As the University is successful by league table comparators,

and there has been no significant performance downturn during the period of the study, these

practices are even more likely to perpetuate, and to constrain reconceptualisation of, existing

practice (cf. Donaldson, 1999; Leonard-Barton, 1992).

However, the other two cases, each of which is also successful by league table comparators

and not, at least at the outset, undergoing any performance downturn, were both in a state of

change. Thus, such practices also support change within a system. In neither case can the

change be principally laid down to traditional change stimuli, such as performance downturn,

exogenous shock, or the arrival of a new top team member (for example, Donaldson, 1999;

Gersick, 1990; Tushman and Romanelli, 1985). Rather, tensions and contradictions in the

system have arisen primarily from the internal dynamics of the activity system. For example,

at Oxford Brookes the University was beset by contradictions that progressively built their

way towards resolution, with an early indicator of a change in practices arising from the 1994

Agenda for Brookes movement. The gradual build of momentum resulted in a new practice

that could better mediate between constituents and create more shared activity. There is an

underpinning teleology in this movement since the systemic move towards purposive, goal-

oriented activity seems to have increased awareness of tensions and encouraged practices that

might result in shared activity.

LSE also showed a systemic build up towards change arising from tensions and

contradictions within the system. The practices were initially changed in an attempt to resist

change in the activity profile; that is to support and maintain contradictions in the system.

However, these same practices became the instrument through which constituents came to

better conceptualise each other and to share purposive strategic activity. The new practices

permitted tensions to be surfaced and served as mediators, gradually changing the

interpretations associated with their role in order to establish a new rationale for activity.

While these changes were figure headed by a socially skilled top team leader, he did not

cause them. Rather, an appropriate leader arrived at a time when there was sufficient systemic

build up of tensions over activity to occasion change. Therefore, even those practices usually

presumed to provide continuity within an organisation might be used to mobilise change.

26

Origins and maintenance of contradictions and their role in activity system change

This examination of the dynamic relationship between practices and practice contributes to

current uses of activity theory. While activity theory conceptualises change in activity

systems through contradiction and tensions, Blackler (1993) makes three criticisms of its

current applications. First it is unclear on the origins of such contradictions. Secondly, it fails

to explain what sustains contradictions and thirdly, it does not explain how these tensions and

contradictions result in change. Our examination suggests that the answers to these questions

may be found in the dialectic tensions between an organisation’s past and its future and the

role that practices play in mediating between the two. The origins of contradictions are

situated within the history of the institution, particularly in tensions between its past activity

and its current or desired future activity. An activity system can conceptualise change in

activity that may depart from its past because it is a site of interaction that is continually

under construction. As participants move in and out of the system and it evolves over time, so

also can its interpretations of activity develop and change, generating tension between past

and future conceptualisations.

To better explain this concept of contradiction, it is necessary to locate our study within two

broad theoretical approaches to change, teleological and dialectical theories (Van de Ven and

Poole, 1995). Teleological theories are those that view organisational development as goal

seeking or purposive. Teleology provides movement, even where goals may not be achieved

in accordance with intent (Giddens, 1984). As noted earlier, activity theory is essentially

teleological since it is concerned with activity that is oriented towards outcomes, that is,

practical activity. Dialectical theories analyse change as the outcome of tensions between a

minimum of two organisational entities, in which power either swings from thesis to

antithesis or is resolved in a synthesis of some new, shared activity. Since activity theory is

premised on the notion that constituents in an activity system may not share similar

interpretations of activity, and that tensions between interpretations is a source of change, it

also falls within dialectic modes of change. In order to understand the complex dynamics of

change, it is useful to examine the interplay between these broader classifications of the

teleology and dialectics of change (Van de Ven and Poole, 1995).

Teleology and dialectics are both constructivist theories in which change emerges and

unfolds over time as a result of interaction between participants within a system. These types

of change are generated from the internal dynamics of the organisation and may result in

27

changes to past assumptions and frameworks because they seek to depart from the current

order. We propose that the origins, maintenance and resolution of contradictions arise from

this departure from the current order. The current order represents past interpretations and

frameworks that are the outcome of previous goal seeking behaviour. Past interpretations

may be embraced differently by constituents according to the degree to which the past

accords them power or security, or where there are new entrants into the system who are less

bound by the past. The teleology implied in desired future activity represents a tension with

past conceptualisations. The dialectic between past and present places existing practices

under stress since they are attempting to deliver both continuity with the past and also stretch

to accommodate the future. This accentuates build up of tension between the past and the

desired future, bringing internal contradictions to a sufficient level that they result in change.

In an attempt to deal with the tensions new practices may be generated or existing practices

may be exploited and reinterpreted.

This notion of the teleology that draws a firm towards the future, bringing it into a dialectic

tension with its past, explains the changing patterns of action in our cases, illustrated in

Figure 2. At both Oxford Brookes and LSE, contradictions and tensions have their origins in

the historical practices and activities of the institutions. The dialectic between the

interpretations and infrastructure of the past and the teleological pull of the future have

occasioned tensions in the way that constituents conceptualise each other, the organisational

purpose and the desired activity. In both cases there has been an emerging synthesis of new

interpretations and practices that retain vestiges of the past. These changes were more gradual

and unquestioned at Oxford Brookes as the top team and the other constituents used the new

practices to synthesise their perspectives on activity and ways to achieve it. However, to

some extent this lack of questioning also minimised tensions and allowed some past concepts

to remain strongly present in new portfolios of activity. At LSE we see not only the origin but

also the maintenance of inconsistencies because the past provided such a powerful

interpretative rationale. The dialectic involved in change was more evident because the

practices were initially generated to strengthen alignment with the past, so maintaining

systemic contradictions. There was thus a greater build up of tension as the gap between

actual practice and desired practice became more evident. Throughout this process the

existing practices were continuously modified and adjusted, as evidenced by the MSL and

OPPP non-cash formulae, in an attempt to deal with tension, gradually becoming an

28

instrument for pursuing the new activities. Thus tensions within the practices themselves

helped to achieve synthesis at the system level.

This conceptualisation of the origin, maintenance and resolution of tensions and

contradictions in a system, leading to changes in practice, also provides an answer for the

continuity evidenced at Warwick. Warwick is a considerably younger institution than the

other cases (see Table 1), with the existing practices developed early in the organisation’s

history by long serving top team actors, some of whom are still in place. Past interpretations

of entrepreneurialism and their associated practices are pertinent to the desired future goals,

resulting in little systemic tension. At this stage, teleologies associated with the future do not

stimulate a dialectic tension with the past. In order for this to occur, the University would

have to envision a future that could not be served by existing practices, creating tensions and

contradictions that would result in change through their resolution.

The heavy hand of the past is present in the future, explaining the continuities of

organisational practice (Pettigrew, 1990). However, we should not ignore the beckoning hand

of the future in leading us from the past. Between the teleology of its future and the dialectic

conflict with its past an organisation can construct changes in strategic action that are both

purposive and emergent. An activity theory framing can improve our understanding of the

internal dynamics involved in continuity and change of strategic action. Figure 2 illustrates

how the distribution of and access to practices is related to contradictions and tensions within

a system, and so it predisposition towards continuity or change.

Relating activity theory to existing change literatures

Activity theory falls within teleological and dialectic classifications of change, which may be

related to particular constructivist modes of change, such as sensemaking and politics. In this

section we suggest that activity theory provides a methodology for examining some aspects

of sensemaking and political theories of change and a framework for integrating and

extending some of their key concepts.

Sensemaking approaches to change

Sensemaking theories deal with change as a matter of evolving interpretations that arise from

the interaction between actors’ individual schema, organisational schema and new

conceptualisations or frameworks that arise as an organisation pursues new paths of action

29

(e.g. Bartunek, 1984; Gioia and Chittipedi, 1991; Gioia and Thomas, 1996; Isabella, 1990;

Weick, 1979; 1995). Such theories provide an understanding of organisational continuity

because of the stored cognitive recipes through which actors enact the present. Continuity is

more likely in those situations where a shared cognitive framework enables collective activity

(Langfield-Smith, 1992). However, even when continuous, the present is continually re-

accomplished through a set of interacts and double interacts (Weick, 1979), suggesting that

this is effortful behaviour that is not inevitable. Even under continuity, there are ongoing

interacts that have the potential to occasion change. Activity theory is a helpful

methodological tool from this perspective because it positions practical activity as the site in

which to view the interacts in which change may be occasioned.

Opportunities for change in interpretation occur when there is a gap between the schema

arising from past experience and the schema required for new activities (Louis, 1980). In

order for any significant change to occur, there must be a change in the interpretative schema

(eg. Bartunek, 1984; Gioia and Chittipedi, 1991; Isabella, 1990). Much of the sensemaking

literature is grounded in teleological assumptions about this process based upon changing

interpretations between desired future goals and current organisational frames of reference.

For example, Gioia and Thomas (1996) discuss the importance of identity and image in

changing interpretations. Identity is the current state of the organisation as interpreted by

participants, while image is the desired external perception of the organisation. Studies

illustrate that the gap between identity, being present interpretations, and desired image,

being future perceptions of the organisation can be managed to effect change in interpretative

schema leading to organisational change (ibid).

These theories are compatible with our activity theory conceptualisations of change. However

many studies of changing interpretative schema tend to focus upon managerial construction

of the change process, where a new state is envisioned and is implemented by changing

interpretations within the organisation (e.g. Gioia and Chittipedi, 1991; Gioia and Thomas,

1996; Isabella, 1990). The predominance of studies examining managerial influence on

changing interpretations is underpinned by assumptions of change as a planned as opposed to

a negotiated and emergent process. Our study adds to interpretative theories because it

examines changing interpretations as a more dynamic and emergent process in which the

TMT is only one constituent involved in the change process. For example, in two of our cases

there is a synthesis of changing interpretations between the top team and other constituents.

30

Change as a process of power

Assumptions about the role of power in changing interpretations are another reason for the

dominance of studies on managerial influence over sensemaking. (Ranson et al (1980)

provide a valuable link between interpretative theories of change and power balances in the

organisation. They examine the power dependencies and domination associated with

changing frameworks of meaning. Drawing upon the third dimension of power (Lukes, 1974)

they show how organisational infrastructure may be used to legitimate and support the

interpretations of powerful interest groups. This establishes a normative mode of conduct in

which participants are self-disciplining in the belief that the interests of the powerful group

are in their own interests, reflecting the central paradox of power (Hardy and Clegg, 1996).

Since powerful groups and skilled actors have greater access to this infrastructure (cf.

Pettigrew, 1973; 1985), they have more influence over the dominant interpretative schemes in

which particular actions are legitimate.

Our study might be presumed to take similar views since we examine change from a top team

perspective. However, an activity theory framing takes a systemic view of the position of top

team actors and focuses upon the notion of mediation between different constituents, rather

than conceptualising change as the province of a powerful group. Undeniably the top teams

in our three cases have a favoured position in influencing the practices by which

interpretations of desirable strategic activity are distributed. Therefore power can be seen as

control over the choice and change process (Pettigrew, 1985). This approach provides a

particularly acceptable explanation for our observation of a dominant interpretative

framework at Warwick. In the other cases, tensions between constituents over past and future

interpretations arising from politics and resistance to loss of power are a contributing factor.

However, change of interpretations in activity theory arises from the relationships and

contradictions at a systemic level, which are articulated, surfaced and reconceptualised

through the practices. From this perspective power is less the commodity of a group than a

property of the relationships within the activity system.

To this extent, activity theory may be aligned with those theories that analyse power as a

systemic construct built upon participation in a set of discourses and practices (Foucault,

1980; Hardy, 1996; Knights and Morgan, 1991). While activity theory is not in the critical

Foucaldian tradition, it acknowledges participation in and access to practices of systemic

31

construction by all participants and invests power in those practices power according to their

usage in a system. Furthermore, it regards the system as a contested and negotiated situation

with inherent contradictions. Thus our study contributes to the nascent and under-explored

body of research that examines how practices structure the subjective and emergent processes

of strategic action (e.g. Barry and Elmes, 1997; Knights and Morgan, 1991; Hendry, 2000).

Our study is distinctive in focusing upon the systemic participation in, and mediating role of

practices of direction setting, resource allocation, and monitoring and control, which have

been viewed canonically as control mechanisms through which top management can leverage

change (e.g. Simons, 1991; 1994). Through our focus upon practices as mediators of tensions

and contradiction, we surface an under-represented concept in activity theory, the notion of

power. Blackler (1995) makes a valid criticism of the way that activity theory avoids the

issue of power in the interactions between constituents. If however, we relate activity theory

to those strategy and change literatures that examine the power inherent in the practice

infrastructure, this problem can be addressed in future studies.

Implications for theory and practice

Activity theory is a useful methodological framework for understanding the internal

dynamics of organisational continuity and change. It provides an integrative framework for

examining how strategic activity arises from the social interactions between organisational

constituents. Its distinctive contribution in our study lies in the concept of strategic practices

of direction setting, resource allocation and monitoring and control as distributors and

mediators of the interpretative rationale through which constituents pursue strategic activity.

Activity theory permits us to focus upon these infrastructures as interpretative devices that

predispose organisational continuity (cf. Cyert and March, Henderson and Clark, 1990;

Nelson and Winter, 1982). However, activity theory also enables us to understand how

practices may surface the tensions and contradictions between an organisation’s past and

future, so generating organisational change. It appears, therefore, that behavioural theories of

the firm may dwell overly on the path dependent and routinised nature of strategic practices.

In particular, they may be overly concerned with the interaction between agent and structure,

leading to conceptualisations of the firm as continuously reconstituted. In such views, change

is unlikely to occur without some significant external input to the organisation. However, an

activity theory perspective provides a much more dynamic view of strategic practices and

their role in organisational sensemaking, systemic power relationships and organisational

change. Its teleological focus upon practical activity permits a more complex

32

conceptualisation of internal firm dynamics. In the practical activity in which participants

engage it is possible to examine the degree to which there are shared interpretations about

activity or internal contradictions that provide the basis for change.

This study has also extended activity theory by addressing some of the weaknesses that

Blackler (1993) has identified in its current uses and applications. We have examined in

greater detail the origins and maintenance of system level contradictions and conceptualised

these as a tension between the teleology of an organisation’s future and the residues of its

past. The focus upon practices that distribute past and future interpretations and mediate

between constituents’ different perceptions has better explained how contradictions may lead

to systemic change. We have thus provided an empirically grounded explanation of some of

these under-explored areas of activity theory that may serve as a platform for future research.

Our examination of the origin, maintenance and resolution of organisational contradictions

has also highlighted a weakness in activity theory in its under-representation of the power

dynamics involved in system level change (cf. Blackler, 1995). In so doing, we have drawn

relationships between activity theory and sensemaking and political theories of change that

serve to better embed activity theory within wider organisational literatures and extend some

of its current applications. This illustrates the potential of activity theory as an integrative

framework for relating existing approaches in a more complex understanding of the dynamics

of organisational continuity and change.

This study’s explanation of the role of strategic practices in continuity or change also has

practical implications. Practitioners may examine the degree to which their strategic practices

distribute consistent interpretations across different constituents within an organisation.

Consistent interpretations are more likely to provide collective action, while differing

interpretations may arise because of contradictions between organisational goals and current

actions. These contradictions can be powerful sources of change depending upon the way that

strategic practices are able to surface the contradictions and mediate between constituents in

arriving at new patterns of strategic activity. Therefore, strategic practices need to mediate

between rather than minimise contradictions in order to promote greater capacity for change

within an organisation, suggesting a more participative than managerial approach to practices

as levers of change.

33

Conclusion

Strategy as practice is concerned with how strategy emerges from the interactions between

actors and their contexts. Interaction suggests theoretical approaches that move beyond

strategy as phenomena predicated upon the cognition of the individual or arising largely from

external structural considerations. Strategy as practice examines both structure and individual

as they engage in the daily activities that comprise their practice context. Through a focus

upon strategy as practical activity, we may understand both the skilled continuous

performance of strategic work and its evolving nature as patterns of action become obsolete

and are replaced or reinterpreted. Thus, micro strategy, which we have located in the field of

strategy as practice contributes to our understanding of the internal complexities of

organisational positioning, as much as economic industry analyses contribute to our

understanding of external positioning. Micro strategy is, therefore, an important field of

strategic management research requiring further theoretical framing and empirical

investigation.

34

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TMT Actors

Strategic activity

Collective structures

Stra

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es p

erm

it

conc

eptu

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of the

oth

erStrategic practices perm

it shared activity

Strategic practices permit shared activity

Mediation through strategic practices

Figure 1: The activity system in which strategy as practice occurs

(Arrows indicate the mediating properties of strategic practices)

OrganisatCollective

OrganisatioCollective

Earlier phase

Later phase

Figu

(Bold text and thicke

LSE

Strategic Practices

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TMT

Strategic Action

OC

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TMT

OC

Strategic Action

Strategic Practices

re 3: Activity syst

r lines denote distr

Oxford Brookes

TMT

rganisationollective

Strategic Action

OrgaColle

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Strategic Action

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Strategic Practices

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39

Warwick

Strategic Action

nisationctive

TMT

nisationctive

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Strategic Practices

Strategic Action

Strategic Practices

es

ws denote movement)

Characteristics Warwick LSE Oxford Brookes Date established 1965 1895 School of Art: 1865

Polytechnic: 1970 University: 1992

Type2 Campus Civics, Redbricks, Federal

New

Market position/ Academic reputation

Top 10 University Research-led institution

Top 10 University Research-led institution

Top new University Teaching-led institution

Total income, 1996/97, £,0003

138,706 73,783 65,208

Student numbers 1997/984

11,947 8,311 10,181

Table 1: Demographic characteristics of sites

Committee Function Strategy Committee

• Develops the financial plan • Makes strategic decisions relating to growth, development, and resource allocation • Considers action plans • Monitors implementation and performance in the main areas of University

strategic action Earned Income Group (EIG)

• Manages and monitors all non-state grant sources of income, known as earned income activities comprising some 65% of gross income.

• EIG conducts quarterly monitoring of the four categories of activity: academic-driven; spin-off; stand-alone; and self-financing and conducts an annual ‘Challenge’ review.

Estimates and Grants (E&G)

• A centralised system of resource allocation interacting directly with academic departments using a ‘zero-based’ model whereby departments must apply for the filling of vacant posts with resources transferable according to central priorities.

• Traditionally, where posts are granted, the position reverts to a junior post, acting as a savings device and, indirectly, a source of embedding cultural values.

• Shapes the University by implementing growth, retrenchment and efficiency gains.

Table 2: Function of strategic committees at Warwick University

2 Type refers to the 5-category typology used for site selection: 1. Ancients; 2. Civics, Redbricks and Federal; 3. Campus; 4. New; and 5. Technological (O’Leary, 1997). 3 Source: HESA statistics, May, 1998.

40

Committees Function Standing Committee

• Acts as a governance body, authorising, and legitimating strategic actions relayed to it by the top team and APRC.

Academic Board

• Collegial committee that is influential in either authorising or vetoing strategic actions recommended by APRC.

Academic Planning and Resource Committee (APRC)

Collegial body which makes recommendations to Academic Board regarding: • 5 yearly departmental reviews, to determine their resource allocation; • develops and refines non-cash resource allocation formulae (MSLs and OPPP); • student number and fee-level planning; • annual resource distribution exercise for recurrent and non-recurrent resources; • interfacing with other strategic committees such as the Finance Committee,

reporting to Standing Committee and receiving reports from other committees; • medium-term future planning of the shape and size of the University.

Finance Committee

• Determines the resources available for academic or other strategic endeavour, after running and maintenance costs but does not allocate these resources.

Table 3: Function of major strategic committees at LSE

Committee Function Board of Governors

• Responsible for the administrative and management accountability of the institution, particularly in terms of financial audit.

VCs Advisory Group (VAG)

• Core executive body that deals with strategic and operational decisions and actions, including setting the parameters of the strategic plan and managing and monitoring the planning cycle.

Academic Board • Formally responsible for approving the strategic plan. However, in practice, is mainly a forum for canvassing opinion and input on areas of ‘academic territory’.

Strategy and Planning (SPC)

• A sub-committee of the Academic Board that is responsible for considering the strategic plan and making recommendations to Academic Board.

Strategic planning cycle

• The major coordinating mechanism, integrating strategic directions, implementation, resource allocation, monitoring and control in a single, annually cyclical procedure.

Table 4: Function of major strategic committees at Oxford Brookes University

4 Source: HESA statistics, September, 1999.

41

APPENDIX A: Summary of data sources across cases

Data Source Warwick LSE Oxford Brookes Interviews 20 open-ended interviews @ 90 minutes each,

with each TMT member, 2 former members and 2 non-TMT members. Repeat interviews with 5 TMT members.

18 open-ended interviews @ 90 minutes each, with each TMT member, 4 APRC members, 4 senior officers, Director’s executive assistant, 3 senior academics, repeat with 2 TMT members.

11 open-ended interviews @ 90 minutes each, with each TMT member, 2 former TMT members, Departmental Head, repeat with 2 TMT members.

Meeting observations

• Strategy Committee – 7 • Earned Income Group (EIG) - 6 • Estimates and Grants Committee (E&G) – 5 • Other working party for actioning a strategic

issue - 1

• Academic Planning and Resource Committee (APRC) – 7

• Standing Committee – 2 • Academic Board – 1 • Convenors meeting – 1 • Other administrative and collegial committees

- 6

• Vice-Chancellors’s Advisory Group (VAG) - 3

• Board of Governors – 2 • Planning Process meetings with departments

– 2 • Academic Board – 1 • Other meetings used by TMT for consultative

purposes - 6 • Strategy Day between TMT and Board – 1

Ethnographic • 1 week shadowing Senior PVC • Pre- and post-meeting observation • General on-site data, particularly informal

discussion when the opportunity arose – at least 7 times in detail and many brief chats.

• Pre- and post-meeting observation • General on-site data where I sat in the

Planning Office, next to the general coffee machine; handy for informal discussion, which occurred on every visit.

• 1 week shadowing Senior DVC • Pre- and post-meeting observation • General on-site data, mostly informal chats

pre and post-meetings and also opportunism; being in the right place at the right time.

Documentary – archival and other

• Minutes of Strategy Committee, 1992 to 1998 • Minutes of all meetings attended • Annual reports; Audit documents; Strategic

plans; Academic databases; University calendars; Briefing papers; Memoranda and minutes of major 1994 strategic initiative; Sectoral documents.

• Minutes of APRC and Academic Board, 1992 to 1998

• Minutes of Standing Committee and Planning Team, 1997 to 1998

• Minutes of all meetings attended • Audit documents; Strategic plans; University

calendars; Briefing papers; Handbook for Department Heads; Sectoral documents.

• Planning Cycle documentation since inception in 1995/96 through to 1998/99

• Major strategic issue reports and summaries from 1993

• Coopers and Lybrand report, 1988 • Minutes of all meetings attended and minutes

of strategic-planning TMT Meetings, not attended.

• Supporting planning documentation; Annual reports and accounts; Sectoral documents.

42