Human Relations 2008 Regnér 565 88

Strategy-as-practice and dynamiccapabilities: Steps towards a dynamicview of strategyPatrick Regnr

A B S T R AC T This article identifies an essential research area where a strategy-as-

practice approach can make important contributions to the strategic

management field: the dynamic process through which organizational

assets are developed. It compares strategy-as-practice and dynamic

capabilities perspectives and demonstrates how the former may

complement the latter in analyzing activities that underpin and may

create and modify organizational assets. Several distinct features of

the practice approach are identified as fertile ground for examining

the micro-foundations of strategy dynamics. It is demonstrated how

activity configurations, socio-cultural embeddedness, co-evolution,

social interactions, the inclusion of multiple strategists and an

awareness of the importance of imagination can complement the

dynamic capabilities perspective and may provide suggestions for a

dynamic view more generally.

K E Y WO R D S dynamic capabilities dynamic view of strategy strategicmanagement strategizing strategy-as-practice

Introduction

A strategy-as-practice approach (Johnson et al., 2003; Whittington, 2006)has the potential to play an important role in the future development of adynamic-strategy view. Even if such a view is still remote, it seems unlikely

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DOI: 10.1177/0018726708091020

Volume 61(4): 565588

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that strategy practices, including their actors, cognitive frames, language andartifacts, can be ignored in its development. Thus, an analysis of the micro-foundations of strategy dynamics and their inherently social and culturalembeddedness would provide a potentially significant contribution to generaland critical issues in strategic management.

Strategic management theories have proposed grounds for competitiveadvantage (Barney, 1986, 1991) and there are in-depth, detailed descriptionsof strategy development (Johnson, 1987; Pettigrew, 1985). However, there arelimited accounts of the dynamics involved in the build-up, development andchange of organizational assets (i.e. resources and capabilities) that providefor competitive advantage (Cockburn et al., 2000; Regnr, 1999). Thesedynamics, together with challenges of creativity and chance, are essential incapturing the dynamics of strategy (Porter, 1991). There is thus a need tounderstand not only possible covariations between certain structural proper-ties and performance, but also the detailed mechanisms involved in theirshaping (Bromiley, 2005). While extant works on dynamic capabilitiesaddress the question of how organizational assets are created and modified(Eisenhardt & Martin, 2000; Winter, 2003) the underlying organizational andmanagerial activities and mechanisms still remain unclear.

The objective of this article is to examine how the strategy-as-practiceapproach may complement the current dominating perspective on strategydynamics, which emphasizes dynamic capabilities (e.g. Eisenhardt & Martin,2000; Winter, 2003). Research within that area has remained surprisinglysilent on the very processes and activities at its center. While some studies inthe relevant literature (Eisenhardt & Martin, 2000; Teece et al., 1997) haveemphasized organizational processes, they have engaged less with the detailedactivities these entail, and with how people perform such activities. Thus, thepurpose here is to describe and examine how a practice approach to strategycan complement work on dynamic capabilities and support future develop-ments of a more dynamic view of strategy generally. It follows calls to relatethe strategy-as-practice approach to other research streams (Johnson et al.,2007) and is thus in line with articles that have evaluated its complemen-tarity to other theories (see Ambrosini et al., 2007; Campbell-Hunt, 2007).Specifically, Johnson et al. (2003) emphasize that the strategy-as-practiceapproach may inform strategy content research resource and capabilitiesviews in particular. There is, however, still little research attempting toestablish this link; that is, the connection between individual-level or group-level activities and organizational-level assets.

This article thus explores how the strategy-as-practice approach canprovide insights into the micro-foundations of the dynamic process through

Human Relations 61(4)5 6 6


which organizational assets are created or modified. This core aspect ofstrategy dynamics concerns how these assets that may provide for competi-tive advantage are built up over time in terms of adaptation, combinationand transformation. In other words, it focuses on the long-term dynamicprocess that generates competitive advantage, rather than the causes of thisprocess at a given point of time (see Porter, 1991). While, for reasons ofcomparison, this article employs the common term competitive advantageto refer to those firms that consistently earn more, an alternative focus onbetter-than-average performance (Bromiley, 2005) would not change thebasic reasoning. The article identifies several key features in the practiceapproach that complement work on dynamic capabilities and may haveimplications for the development of a dynamic-strategy view in general:activity configurations, socio-cultural embeddedness, co-evolution, socialinteractions, multiple strategists roles and co-existing strategy logics. Theevaluation of these key characteristics and their implications is valuablebecause it provides a basis for cumulative additions to our understanding ofthe dynamic process, through which unique organizational assets that mayprovide for competitive advantage are developed.

The terms used here refer to common terms found in writings ondynamic capabilities and strategy-as-practice. The term dynamic capabilitiesincludes organizational-level capabilities that may change (ordinary) capa-bilities (Winter, 2003), while organizational assets is a common term forresources and capabilities (Amit & Schoemaker, 1993). Practices refers togeneral and shared organizational-level routines or capabilities that actorsdraw on (Whittington, 2006) and employ (e.g. strategic planning, intelligencegathering), while activities here refers to particular individual-level actions;what actors actually do and work with when making strategy (e.g. makingstrategic plans, gathering intelligence, etc.).

The point of departure of the article is an overview of the two per-spectives. This shows that while dynamic capabilities work emphasizesorganizational-level capabilities, the strategy-as-practice approach hasimportant characteristics that might be of help in advancing the analysis ofprocesses and activities that underpin those capabilities. Divergent andconvergent properties of the two perspectives are compared. Next, therefollows a review of current and potential contributions of the practiceapproach, which may complement the dynamic capabilities perspective in anexamination of the dynamic build-up of organizational assets. Finally, impli-cations for strategy dynamics in general are pointed out, conclusions aredrawn and future research is discussed.

Regnr Strategy-as-practice and dynamic capabilities 5 6 7


Comparing strategy-as-practice and dynamic capabilities perspectives

A dynamic-strategy view needs to move beyond simple correlations betweenvariables and must explain the mechanisms of how certain conditionsinteract to produce certain organizational assets (Bromiley, 2005; Tsoukas& Knudsen, 2002). Strategic management research (Ghemawat & Pisano,2001; Porter, 1991) has examined diverse criteria for a dynamic-strategytheory, which must deal with the fundamental question of how added valueand organizational assets are built up over time and how competitive advan-tage can be sustained under threats of imitation. In addition, it needs tosimultaneously cope with the organization and its environment and handleendogenous and exogenous change and, finally, provide room for innovativeaction and chance. The challenges in evaluating the strategy processes thatthese criteria imply are vast, as they involve multiple dimensions ofcomplexity, including inter-connectedness and inter-temporality betweendifferent units of analysis and inter-relationships between many diverseactors (see Peteraf & Shanley, 2006).

The dynamic capabilities perspective (Eisenhardt & Martin, 2000;Helfat, 1997; Teece et al., 1997; Winter, 2003) which builds on evolution-ary economics (Nelson & Winter, 1982) can be described as a weak versionof the resource-based view that somewhat relaxes assumptions regardingrationality and equilibrium (Levinthal, 1995). Its primary interest is howhigh-level routines or dynamic capabilities (e.g. alliancing, product andprocess innovation, strategic planning) govern the rate of change ofordinary or operational capabilities (and dynamic ones) and thus may createand modify organizational assets. While this perspective has started toattack strategy dynamics, it has so far been primarily concerned withstrategy content and largely avoided examining the detailed processes andactivities that underpin capabilities; it has thus concentrated on their useand exploitation on the organizational level. Organizational-level capa-bilities are essential in any examination of strategy dynamics, but they needto be linked to individual-level and group-level activities and interaction ifwe are to understand their origins, the way they change over time, and theunderlying social (and possibly causal) processes and mechanisms.

The strategy-as-practice approach (Johnson et al., 2003; Whittington,2006) builds on social theory in general (Bourdieu, 1990; Giddens, 1984;Sztompka, 1991) and its practice turn in particular (Schatzki et al., 2001).It regards strategy as an ongoing activity and accomplishment somethingpeople and firms do rather than have (Jarzabkowski, 2004) and thusemphasizes the day-to-day activities of people on multiple organizational



levels (Johnson et al., 2003). While currently this is more of a generalapproach to examinations of various strategy-making phenomena ratherthan a specific strategy view focused on strategy dynamics its emphasis onthe ongoing interrelationships between organizational-level practices andindividual activities (Whittington, 2006) provides for an analysis of strategybuild-up and development. Its focus on detailed and concrete constant activi-ties that strategy processes are made up of, including continuous social andcognitive interactions, makes it suitable for this purpose. It has the potentialto move beyond organizational-level (dynamic) capabilities, allow for anexamination of the micro-foundations underlying those, and thus advance adynamic view of strategy overall.

Table 1 summarizes the differences and similarities between the twoperspectives. They are both under development and their characteristics arebased on exemplary articles and scholars in each respective area rather thana specific core view or theory. A comparison reveals that they differ since theybuild on diverse root disciplines; the one on social theory (e.g. Jarzabkowski,2004; Johnson et al., 2003) and the other largely on evolutionary economics(e.g. Teece et al., 1997; Winter, 2003). Consequently, one perspective isprimarily concerned with the social practice of strategy and day-to-daystrategizing activities, while the other above all focuses on aggregateorganizational-level routines and capabilities. However, there are severalconvergent qualities as well. Both perspectives explicitly emphasize stable,path-dependent and patterned processes (Jarzabkowski, 2004; Winter, 2003)and are characterized by commonality when it comes to the importance ofthe historical and localized conditions under which strategy develops. Thisimplies an understanding of strategy-making as a process that is highlysituation-specific and thus restricts the number of strategic alternatives in theshort run (Jarzabkowski, 2004; Teece et al., 1997).

It has been noted elsewhere that sociological and economics-basedperspectives of strategic management can greatly enrich each other (Baum &Dobbin, 2000) and several scholars have encouraged associations betweendiverse approaches to strategy (Amit & Schoemaker, 1993; Johnson et al.,2003; Peteraf, 2005). At this pre-paradigmatic stage, strategy (dynamics)research could only benefit from the use of several perspectives and lenses,and contemporary evaluations show that much strategic managementresearch is interlinked, spanning different disciplines and fields (Baum &Rao, 1998). While recognizing the benefits of the strategy-practice approach,and the promising research agenda within it, it is suggested that the develop-ment of individual theories is not only critical, but that it might be strength-ened if related to questions raised in other theoretical perspectives as well.Specifically, the strategy-as-practice approach, with its focus on activities and




Tabl

e 1

Com

pari

son

of s

trat

egy-

as-p

ract

ice

and

dyna

mic

cap

abili

ties

pers

pect

ives

Cont

rast

ing

char

acte

ristic

s

Pers

pect

iveRo

ot d

iscip

line

Repr

esen

tativ

e Re

pres

enta

tive

artic

les

and

Fund

amen

tal

Gen

eral

leve

l M

anag

eria

l rat

iona

lity

Out

com

esc

hola

rsau

thor

s in

stra

tegi

c m

anag

emen

tin

tere

stof

ana

lysis

assu

mpt

ion

Stra

tegy

-as-

Soci

al t

heor

y Bo

urdi

eu,

Balo

gun

et a

l.(2

003)

;St

rate

gy-

Act

or le

vel:

Boun

ded

by

Succ

ess

of

prac

tice

Gid

dens

,H

endr

y (2

000)

;m

akin

g as

a

activ

ities

and

hi

stor

ical

in

divi

dual

Jo

as,

Hen

dry

& S

eidl

(20

03);

soci

al p

ract

ice

thei

r in

ter-

and

curr

ent

prac

tices

Scha

tzki

,Ja

rzab

kow

ski (

2004

);re

latio

nshi

p w

ith

prac

tices

Szto

mpk

aJo

hnso

n et

al.

(200

3);

orga

niza

tiona

lR

egn

r (2

003)

;Whi

ttin

gton

(20

06)

leve

l pra

ctic

es

Dyn

amic

Ev

olut

iona

ryN

elso

n &

A

dner

& H

elfa

t (2

003)

;St

rate

gy-

Firm

leve

l:R

atio

nal

Firm

ca

pabi

litie

sec

onom

ics

Win

ter,

Die

rick

x &

Coo

l (19

89);

mak

ing

as a

hi

gher

-leve

l pe

rfor

man

cePe

nros

e,Ei

senh

ardt

& M

artin

(20

00);

mea

ns t

o ro

utin

es d

evel

opin

gSc

hum

pete

r,H

elfa

t (1

997)

;m

akin

g pr

ofit

low

er-le

vel

Teec

eTe

ece

et a

l.(1

997)

;Win

ter

(200

3)ro

utin

es

Com

para

ble

char

acte

ristic

s

Pers

pect

iveSp

ecifi

c un

it of

Pr

oces

s fo

cus

Cont

extu

al im

port

ance

Man

ager

ial

Path

St

rate

gy a

s Ch

ange

an

alys

isfo

cus

depe

nden

cysit

uatio

nal

capa

city

Stra

tegy

-as-

Prac

tices

Con

tinuo

us p

roce

sses

H

isto

rica

l and

loca

lized

(pr

imar

ily

Act

or b

ehav

ior

Hig

hSt

rate

gy a

s Lo

wpr

actic

ein

ter

ms

of p

ract

ices

soci

al a

nd c

ultu

ral c

onte

xt)

in a

ctiv

ities

situ

ated

act

ivity

Dyn

amic

C

apab

ilitie

s/C

ontin

uous

pro

cess

es

His

tori

cal a

nd lo

caliz

ed

Man

ager

ial b

ehav

ior

Hig

hSt

rate

gy a

naly

sis

as

Low

capa

bilit

ies

rout

ines

in t

erm

s of

rou

tines

(pri

mar

ily e

cono

mic

con

text

)in

pro

cess

esun

ique

and

situ

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nal


interaction at people-level, may assist in uncovering micro-foundationalmechanisms underlying the organizational-level construct capabilities; thatis, how social mechanisms involving actors, activities and artifacts maydevelop and change organizational assets.

There are several critical questions concerning the where, what, whoand how of strategy dynamics, in which the strategy-as-practice approachmight complement the dynamic capabilities perspective and consequentlymay offer suggestions for a dynamic view in general. First, we should startwith the general question of whether unique organizational assets are builtup through strategy formulation or formation processes (Mintzberg, 1990).Works on dynamic capabilities (explicitly or implicitly) emphasize topmanagement decisions and strategy formulation (see Adner & Helfat, 2003;Teece et al., 1997) in line with strategy content views (although sometimesacknowledging the role of organizational learning). This is in contrast to thestrategy-as-practice approach, which regards formulation and implemen-tation as frequently inseparable, and that strategic management is a moregeneral undertaking (Johnson et al., 2003). This idea allows for a moredetailed analysis of alternative inter-temporal associations, which indicatehow actors, activities and structures are related to strategy outcomes; theseinclude more linear associations, as in strategy formulation, as well asdialectical ones, cyclical ones and so on, which have been described inwritings on strategy formation. Second, the practice approach can assist inanalyzing multiple actors in strategy-making besides top management andconsequently interconnections between actors and organizational levels. Thisis something that evolutionary economics (which the dynamic capabilitiesperspective builds on) has not paid much attention to (Gavetti & Levinthal,2004). A third issue, central to a dynamic view of strategy, is the relativeinfluence of contextual factors. While writings on dynamic capabilities haveemphasized historical paths (Teece et al., 1997), they have not moved muchbeyond classes of organizational assets and types of capabilities. Thestrategy-as-practice approach can help in broadening the analysis of context to include the influence of social, cultural and cognitive contexts(Jarzabkowski, 2005). The relative weight of structural conditions versusindividual agency is a fourth crucial issue in determining the build-up oforganizational assets and the exogenous-versus-endogenous influence onthem. Even though the constraining role of structure and recursive role ofpractices are important in the strategy-as-practice approach, this approachstill allows for change and adaptive behavior (Jarzabkowski, 2004). This isan area where dynamic capabilities, which are based on evolutionaryeconomics, encounter a serious problem, since managerial agency is down-graded to something of a trivial function (Gavetti & Levinthal, 2004;



Salvato, 2003). Fifth, we should pose another critical question, which, likethe two questions preceding it, addresses a similar issue. It concerns thespecific mechanisms through which organizational assets are generated.While the dynamic capabilities perspective essentially builds on environ-mental selection, interactive strategizing (i.e. how organizational membersinteract in the context of shaping a strategy), is central in the strategy-as-practice approach (Jarzabkowski, 2005). This latter view thus provides fora possible identification of micro-mechanisms in strategy development.Finally, an analysis of endogenous change is essential for a dynamic view ofstrategy. Whereas dynamic capabilities are directed at changing operationalcapabilities, imagination and creativity are not part of them (Winter, 2003).Quite the opposite is true in the strategy-as-practice approach, which recog-nizes that practices and routines involve besides stability an element ofvariability and change (Jarzabkowski, 2004) and that agential creativity caninterpenetrate and endogenously change them (Feldman, 2000). Hence, thisapproach might shed some light on the role of imagination in a dynamicview.

The brief review above demonstrates the differences in explicit orimplicit assumptions between the strategy-as-practice and dynamic capa-bilities perspectives with regard to strategy process (see Table 2). Most funda-mentally, the former approach emphasizes the importance of agency andsocial interactions among practitioners on different organizational levels in asocial context, which allows for an analysis of the mechanisms that generatecertain organizational assets. In contrast, the latter approach focuses onevolutionary selection and organizational-level aggregate processes, which, incomparison, are shaped more by an economic context. The former may thuscomplement the latter and provide suggestions for a dynamic view of strategymore generally: 1) strategy dynamics as a general enterprise that includesformulation as well as formation in a configuration of multiple factors; 2)actors on multiple organizational levels, besides top management; 3) strategygeneration, embedded in social and cultural contexts besides economic ones;4) agents that can actively engage in, interpenetrate and change practices androutines; 5) interactions among organizational members, and between thoseand external actors; and finally, 6) individuals with a potential to creativelyand innovatively guide and shape strategy. In brief, a strategy-as-practiceapproach appears to be especially appropriate in capturing the micro-foundations of the dynamic build-up of organizational assets. These sugges-tions, which are based on the strategy-as-practice approach, are examined in the next section together with exemplary strategy-as-practice works (i.e. empirical studies positioned as such work. However, several other studiesmay be relevant see Johnson et al., 2007).



The strategy-as-practice approach and strategy dynamics

Formulation versus formation activity configurations

The original Harvard Business School perspective (Learned et al., 1965)emphasized a holistic managerial role. The process perspective in thestrategy-as-practice approach is more akin to this general managers job(Johnson et al., 2007). It includes formulation as well as formation aspectsof strategy and, hence, it emphasizes the details of strategizing and organiz-ational learning. It specifically focuses on multiple, mutually constitutivemanagerial activities through which strategy is formed (Jarzabkowski, 2005),including manifold dimensions of practice, practices and practitioners (Jarzabkowski et al., 2007; Whittington, 2006). Rather than focus on


Table 2 Process characteristics in the strategy-as-practice and dynamic capabilitiesperspectives

Process Strategy-as-practice perspective Dynamic capabilities perspectivecharacteristics

Focal unit Contextually determined practices Value-generating capabilities

Strategy focus Embedded practices Dynamic capabilities

Basic character Strategy in day-to-day practices Organizational coordination (strategizing) (and learning)

Actors Multiple: management at diverse Primarily top managementlevels and more peripheral actors

Context Socially and culturally embedded Asset positions (technological,(social, cognitive, language/ financial, structural, etc.)symbolic, artifacts, etc.)

Control Co-evolution between structural Selection mechanismsproperties and actors/agents

Basic Social interactions within and Firm-level coordination and mechanisms between internal (and external) combination of routines/systems

actors and groups and environmental selection

Novelty Actors novel engagements in Chance variation (possibly input practices (recombination of managerial from below)

practices, imagination, chance) and contexts

Success Diffusion of practices, success of Firm performancedefinition practices and practitioners


individual practices or capabilities that might generate unique organizationalassets (such as strategy formulation in terms of planning, analyzing, etc.),this perspective emphasizes the function of those in a larger configuration ofmultiple factors. It may thus be suggested that activity configurations thatinvolve specific combinations of certain actors, socio-cultural contexts,cognitive frames, artifacts and structural properties, besides diverse practices,are a more useful unit of analysis since they emphasize the significance ofinter-linkages and interdependencies among these in the process of strategyformation over time. This highlights the dynamic interrelationship amongdifferent factors at different times and is in line with the reasoningexpounded in past studies on complementarities in management, whetherbetween strategy and structure (Chandler, 1962), or between diverse manu-facturing practices (Milgrom & Roberts, 1990) or more generally betweenwhichever variables affect performance (Roberts, 2004). It shows thatdiverse factors, in combination rather than individually, provide for betterperformance (see Levinthal, 1995). A focus on activity configurations simplyextends these ideas by including complementarities between a wider set ofactors, activities and structures and their specific nature and sequence atdifferent times. The critical advantage of using this unit of analysis, ratherthan individual practices and capabilities, is that it permits a fine-grainedexamination of specific ingredients, which in combination may build neworganizational assets. For example, when in-house incubators, new ventureunits, etc., are set up, particular actors, activities, artifacts, structures andeven languages are pooled together in an effort to shape entrepreneurshipand possibly create and/or modify organizational assets. This contrasts withcombinations that rather promote the maintenance and refinement of currentassets. Compared to previous discussions about configurations in strategicmanagement, here the focus is on the micro-activities that they comprise,rather than on broad classifications of such activities (see Mintzberg, 1990).

Research in the strategy-as-practice area has already identified bundlesor configurations of capabilities and routines (core micro-strategies) thatprovide for capability accumulation and strategy build-up (Salvato, 2003).Similarly, other studies have started to map configurations of variousroutines or capability-shaping-activities. For example, diverse tacit routineshave been mapped as grounds for organizational success and competitiveadvantage (Ambrosini & Bowman, 2002) and similar cognitive mappingtechniques have been used to identify competencies in a major UK multi-national organization (Johnson & Johnson, 2002). Moreover, it has beenobserved that a creative type of activity configuration including a col-lection of experimental and ad hoc types of practices, peripheral actors andcontexts, and loose knowledge structures has a tendency to promote



strategy creation and unique organizational assets (Regnr, 2005a). Thefocus on activity configurations may capture strategy as something immanentin purposive action that draws on broader (both historically and culturally)tendencies and predispositions, rather than as individual purposeful action,as traditionally conceived in strategy content and process research (Chia &Holt, 2006; Chia & MacKay, 2007). In sum, instead of analyzing discretestrategy-formulation practices or dynamic capabilities, the strategy-as-practice approach has the potential to examine specific combinations of thesethat in conjunction with other factors (contextual, cognitive, structural, etc.)may form unique organizational assets over time.

Top management versus other actors multiple strategists

Although the strategy theorists views of strategists have successively shiftedfrom the individual CEO to the CEO who has teamed up with planning units,and to general management as a whole, the upper echelons of organizationshave often explicitly or implicitly remained at the center of attention and thisremains true for much of the work on dynamic capabilities. In contrast, thestrategy-as-practice approach explicitly recognizes that a diverse set of actorsmight be involved in the development of new strategies and the accumulationof organizational assets (see Burgelman, 1983; Regnr, 1999), and thatmiddle managers may be highly influential (Balogun & Johnson, 2004; Floyd& Wooldridge, 2000). Hence, according to the latter approach, strategiesand new organizational assets can be generated at different organizationallevels at the top, but also among middle managers and at the periphery orin a subpart of the organization. What is more, they involve broader groupssuch as consultants, regulators and consumers (Mantere, 2005). Theinclusion of multiple strategists allows for organizational heterogeneity,where diverse actors may reflect over capabilities and may encourage theendogenous change of such capabilities (see Feldman & Pentland, 2003).Accordingly, a recent study (Regnr, 2003) applied insights from the strategy-as-practice approach and identified middle- and lower-level managers at theperiphery (rather than top managers at the center) of four multinationalcompanies as instrumental in generating new, innovative strategies andorganizational assets. Even in situations where top managers are central tostrategy development, the interaction with others in the organization isfundamental (Jarzabkowski, 2003). In sum, the strategy-as-practiceapproach has the power to analyze not only the abilities of top managers forstrategic change, but those of diverse heterogeneous actors and groups thatare both internal and external to a company or organization.



Individual versus interwoven practices socio-cultural embeddedness

So far it has been argued that a focus on multiple and mutually supportiveactors, activities and structures in activity configurations, and the inclusionof actors on multiple levels could complement the dynamic capabilitiesperspective and add knowledge to a dynamic view of strategy more generally. In addition, the embeddedness of strategy development in social,symbolic and material contexts, besides economic ones, needs to beconsidered in examinations of strategy dynamics.

The essential function of social structure and institutions for practiceis fundamental in social theory (Bourdieu, 1990; Giddens, 1984). Also,specific social contexts of human coexistence and arrangements of diversefactors (Schatzki, 2002), including objects and material entities (Pickering,1995), are intrinsically interwoven with practices. Consequently, strategy-making is a situated activity that depends on specific contextual con-figurations (Jarzabkowski, 2004; Whittington, 1992). Such configurationshave a potential influence on how strategies are dynamically built since theydetermine practices in terms of their applicability, possibilities for change andmodification, and of the basis for competitive advantage. This is in accord-ance with previous research, which has demonstrated how specific insti-tutional and cognitive contexts influence strategy (DiMaggio & Powell,1983; Oliver, 1997; Stinchcombe, 1965; Weick, 1979) and how new assetsand knowledge development are contextually dependent (Tsoukas &Vladimirou, 2001). The use of practices may thus vary, depending on internal(and external) context and time and this has consequences on the outcomeof a strategy.

It has been empirically illustrated within the strategy-as-practiceapproach how social order and frameworks of meaning, in terms of struc-tural and interpretative legitimacy, respectively influence strategy-making(Jarzabkowski, 2005). In addition, the significance of everyday innovationsingrained in specific localized settings that involve shared knowledge hasbeen illustrated (Johnson & Huff, 1998). Likewise, an investigation ofmiddle managers demonstrates the important role of sense-making andsense-giving in interaction with external stakeholders for the implementationof strategic change (Rouleau, 2005). A recent study observed that strategycreation is embedded in certain types of social structures, including knowl-edge structures, which has significant implications for strategy outcome. Thestudy showed that strategy activities were deeply rooted in these two diversemanagerial contexts and locations . . . involving different signals, symbolsand knowledge (Regnr, 2003: 66) with different consequences for strategydevelopment. Another study has demonstrated how institutionalized macro-level conditions, in terms of common meanings and norms, may encourage



strategizing opportunities created by individual firms and actors by means ofbeliefs and activities that deviate from such norms on the micro-level(Jonsson & Regnr, 2006). In brief, the practice approach has the capacityto specify the socio-cultural embeddedness that is integrated with an abilityto shape strategies and organizational assets (Jarzabkowski, 2005; Johnsonet al., 2003; Seidl, 2007). It supplements the emphasis dynamic capabilitiesplace on the economic context and promises a more dynamic process-viewby analyzing how certain combinations of institutions, cognitions, emotionsand aspirations unite over time to determine organizational and managerialactivities and in the end organizational assets.

Structures versus agents strategic co-evolution

While contexts and structures can constrain and enable strategy-making in significant ways, their balance versus organizational and managerialadaptation and agency is of prime interest to a dynamic view of strategy.What drives the dynamic build-up of unique organizational assets struc-tural properties and/or individual actors? While prevailing organizationalassets and initial conditions can be critical (Teece et al., 1997), actors do actpurposely and proactively (March, 1994; Weick, 1995). The strategy-as-practice approach has its foundation in structuration theory and variantsthereof (Giddens, 1984; Sewell, 1992), and thus in an understanding ofactors structural restraints as well as intentional abilities. As a result, it ispossible for it to synthesize the constraining and enabling sides of capa-bilities and practices. As Jarzabkowski (2004: 543) observes in an evaluationof the practice approach: . . . there is an ongoing and developmental tensionbetween recursive and adaptive behaviours. With this foundation insynthetic efforts in social theory to fuse structural properties and agentialactivities (Schatzki, 2002), the practice approach provides a possible startingpoint for a co-evolutionary view (Lewin & Volberda, 1999) of strategydynamics. It could potentially demonstrate how the two co-evolve over timeand causally interact, and thus, how they influence each others ability topersist and change and, in the end, form unique organizational assets. In linewith this reasoning, recent work on routines has challenged traditionalconceptions of them in organizational theory and strategy, and emphasizedthe agential qualities of such routines, including individual actors who reflectover them and have the potential to change them (Feldman, 2000; Feldman& Pentland, 2003).

Along these lines and addressing the question of strategic change,although building on Luhmann (1995) and not structuration, Hendry andSeidl (2003) show that a practice approach can potentially explain what type



of mechanisms and practices may enable an organization to disregard itsprevailing routines and structures, analyze and reflect upon them instead, andin the end change strategies and organizational assets. Another relevant studyin the practice area is an empirical inquiry into the micro-foundations ofcompetitive advantage that illustrates how the engineering of strategicevolution involves the intentional identification and recombination of routinesthat have historically guaranteed adaptation (Salvato, 2003) and, conse-quently, involves adaptation and selection in co-evolution. In sum, the practiceapproach would thus argue that unique organizational assets and, in the end,competitive advantage grow out of structural properties dynamically inter-penetrated by agents. This emphasis on individual-level and group-levelendogenous change of practices and capabilities thus supplements the focuson organizational-level capabilities.

Environmental versus hierarchical selection social interactions

Embedded activity configurations involving multiple strategists determinedby structure, as well as agential influences in co-evolution, have hitherto beendiscussed. However, the qualities of this development process in terms ofmechanisms have not been elaborated on so far. While environmental, as wellas hierarchical selection systems (Burgelman, 1991; Nelson & Winter, 1982),and several descriptive accounts (e.g. Johnson, 1987; Pettigrew, 1985) havebeen suggested, it is less certain what specific mechanisms relate organiz-ational capabilities and markets (linking resource and factor markets) toform unique organizational assets. Even though this relationship is a definingproperty of strategic management, and interactions between actors andgroups in and outside the organization are essential to its development, westill know rather little about it. The practice approach is particularly usefulfor examining this type of relationship, since it specifically emphasizes inter-actions and thus may assist in investigating how they shape unique organiz-ational assets. This focus on strategic interactions is connected totransactional perspectives where the unit of analysis is the dynamic trans-actional or relational process itself, rather than the constituent factors itinvolves (see Abbott, 1995; Emirbayer, 1997). It follows that the prime factorin this view of strategy build-up would be the specifics of dynamic interactionmechanisms between (and among) structural properties and agents in action(see Barley & Tolbert, 1997).

The significance of purposive face-to-face social interactions betweentop managers and other actors for strategy-making in terms of interactivestrategizing has been empirically established by Jarzabkowski (2005). Hoon



(2007) has examined interaction patterns between senior and middlemanagement in strategic conversations within committee settings and showshow they promote understanding and integration of disparate strategyobjectives and issues. Likewise, another study has demonstrated thatprocesses of social interaction influence organizational and managerialschema change (Balogun & Johnson, 2004). In addition, interactions instrategy meetings (Jarzabkowski & Seidl, forthcoming) and linkages betweenstrategists talk and rhetoric and strategy outcomes have been demonstrated(Samra-Fredericks, 2003). While the practice approach has produced fewstudies to date that specifically focus on dynamic interactions (see Balogun& Johnson, 1998, 2004 for notable exceptions) and strategy build-up, itpromises to reveal how organizational assets emerge from individual andgroup activities and interactions. This provides a valuable complement to thefocus on dynamic capabilities since it has the potential to yield detailedaccounts of the micro-mechanisms at work.

Repeated patterns versus imagination co-existing strategy logics

For the most part both creativity and chance remain unexplored in exam-inations of strategy development, which is not surprising given their elusivecharacter. Still, their absence from the relevant literature is challenging forstrategy dynamics since it has been argued that it is exactly creativity andimagination that a processual and dynamic view of strategy needs togetherwith an account of the role of chance (Porter, 1991; Tsoukas & Knudsen,2002). Whereas initial conditions, and thus chance, may have an influenceon dynamic capabilities, imagination and creativity are not a part of thosefactors (Winter, 2003). In contrast, the strategy-as-practice approach has thepotential to address the question of creativity and imagination. This isbecause this approach is characterized by the fundamental recognition of asocially constructed world, is founded in social theory and, what is more,builds on theories that more explicitly celebrate human creativeness (Joas,1996; Sztompka, 1991). Novel combinations of routines are made possibleby the reflections of actors on existing routines (Feldman, 2000) and histori-cal investments in experience and practice may promote improvisation(Weick, 1998). Thus, by focusing on how actors and organizations combinepast attributes of practices and enactment of contexts with trials of new onesit would, perhaps, be feasible to capture the role of creativity, imaginationand even chance in strategy dynamics. Change may arise endogenously onthe micro-level; managers may imaginatively engage in a practice or routineand form beliefs regarding an anticipated future (see Feldman, 2000;



Feldman & Pentland, 2003). Research in the strategy-as-practice approachmay thus locate actors involved in practices or capabilities that shapeorganizational assets and, hence, identify sources of creativity.

An interesting example within the strategy-as-practice approach isSalvatos (2003) study referred to above. It shows that the build-up ofstrategy and strategic innovation can draw on core stable routines whilealso including an intentional and imaginative managerial role and that thosediverse strategy logics thus can co-exist (see Regnr, 2005a). Likewise,exploration-oriented strategy processes have been empirically identified instrategic innovation: inductive strategy-making involves exploratorystrategy practices or routines as well as ad hoc problem-solving (exper-iments, informal scanning, trial and error, tryouts, etc. see Regnr, 2003).Compared to established and traditional practices (deductive strategy-making practices), it seems that this type of strategy process might have ahigher potential to capture events attributable to serendipity and chance innew opportunities besides promoting imagination (Regnr, 2005b). Hence,while the strategy-as-practice approach only recently started to enter intothe complex and delicate aspects of creativity and imagination (and chance),the focus on multiple and heterogeneous actors and their interactions mayassist in the analysis of those elements.

Conclusions and implications

While there clearly is a call for a practice-based approach of strategy(Jarzabkowski, 2004; Johnson et al., 2003), such an approach needs to besensitive to core issues and themes in the strategic management field andmust identify research areas where it might provide new insights that willadd to the great body of knowledge accumulated to date. The central thesisin this article is that the strategy-as-practice approach provides a suitablecomplement to the dynamic capabilities perspective with regard to activi-ties that underlie organizational assets, and may provide for their creationand modification. In its advancement, this approach thus provides a fertilebasis for examining and explaining the dynamic process through whichunique organizational assets are developed. The introduction of thestrategy-as-practice approach into the context of this critical research areaseems timely. Over the years, the focus of the strategic management fieldhas slowly but steadily developed (in research as well as in practice) froma focus on long-term plans to shorter-term ones, from emphasizing solelythe top management to the inclusion of other levels, from the formal to themore informal, and from stable to changing conditions. If this general



tendency is anything to go by, a practice approach seems quite appropriatesince it has the capacity to capture the latter categories mentioned above.

The identification of key features in the strategy-as-practice approachthat may complement the dynamic capabilities perspective may also havesome implications for the future development of a dynamic view of strategyoverall. This approach may explicate how interactions between certain actorswithin certain socio-cultural and cognitive contexts surrounded by certainartifacts may generate a particular kind of behavior and in the end particu-lar strategy outcomes. Ultimately, it may be possible to determine howspecific actors, structures, and activities in combination, rather than indi-vidually, complement each other in particular activity configurations andprovide for competitive advantage. Activity configurations may thus be seenas an integrating arena for the various key characteristics discussed in thisarticle.

Figure 1 provides a general illustration of how unique organizationalassets may be generated in relation to the issues discussed. Activity configur-ation is a unit of analysis that consists of events which involve a synthesis ofactivities by actors in organizations and of the status of product and/or factormarkets in terms of industry and resource structures (and in terms of societalregulations). It involves interactions between organizations and amongactors on different levels, including the potential for creative and chanceimpetus. Hence, agents and structures determine an arena of agency andactivities that includes the social fabric of cognitive frames, language and


Activity configurations: socio-culturally embedded (cognitive, language, artifacts, etc.)

Structure (resource, industry, regulatory, etc.)

Agents (top and middle management, periphery, etc.)

New/modified organizational assets

Competitive advantage

Figure 1 Practice determinants of competitive advantage


artifacts. This process may generate organizational assets that, in turn, havethe potential to promote competitive advantage.

This is an everlasting co-evolutionary process of interaction betweenstructural properties and agential actions, where activity configurations at acertain time shape future activity configurations. Thus, this process includesinter-temporal linkages between actors, structures and outcomes. Therenewal capacity that resides in evolving activity configurations provides aconceptual lens for examining the dynamic build-up of assets. The strategy-as-practice approach thus examines the detailed inner workings of organiz-ational mechanisms and how certain socially embedded agents and structuresin combination rather than individually may generate competitive advantage.This is in contrast to strategy content research, which only examinescompetitive advantage once that has been created (and many process views,which only study the aggregate process behind it).

The salient features of activity configurations as described aboveappear to fulfill the resource-based criteria of competitive advantage; theyare idiosyncratic, rare and inimitable (Barney, 1991). They incorporate awhole collection of intertwined and mutually constitutive situated factors,which in conjunction promote the accumulation of organizational assets.Thus, any time lags in terms of imitation seem to be sufficient for competi-tive advantage. It does not seem plausible that firm heterogeneity, whichprovides for competitive advantage, would be created through the individ-ual application of highly dispersed practices and dynamic capabilities, likestrategic planning, alliancing, and so on. It is more likely that it would arisethrough unique combinations of such practices, structures and agents inactivity configurations. This implies that dynamic capabilities might be idio-syncratic in their specific and detailed contexts even though not in general(Eisenhardt & Martin, 2000). Situated in an activity configuration, practicesor capabilities may thus involve social complexity that ensures inimitability(Barney, 1991).

When it comes to the criteria that define a dynamic strategy view (seeGhemawat & Pisano, 2001; Porter, 1991), the illustration provided in thisarticle of how strategy-as-practice may assist such a view includes severalcrucial ingredients: firm and environment elements, demonstrates how newstrategy is built up over time, shows how contextual, cognitive and behav-ioral interlocking may promote inimitability and provides accounts of howthe creative engagements of actors in practices or capabilities may facilitatethe endogenous change of such practices and capabilities. This very briefevaluation shows that the strategy-as-practice approach may have somepotential to capture strategy dynamics, but future research needs to deter-mine the numerous pieces and details that remain as yet incompletely studied.



The ideas offered in this article follow those of scholars who strive tobridge economics and behavioral approaches in their studies of strategy(Amit & Schoemaker, 1993; Levinthal & Myatt, 1992). In addition, theycomplement existing insights regarding strategy dynamics in the dynamiccapabilities literature and simultaneously develop the strategy-as-practiceapproach. In this sense, the article addresses a central challenge in this newarea of research the challenge of broadening the scope of research andlinking it more thoroughly to core themes in the strategic management disci-pline. While not claiming to be superior to previous research, this articlenonetheless proposes an alternative and complementary angle from whichthe complex problems of strategy dynamics could be explored. In addition,it addresses repeated calls for reconciliation between strategy content andprocess directions (Peteraf, 2005; Pettigrew, 1992) since the manifestation ofstrategy as a perpetual process of activity configurations in an amalgamationof structural and agential properties illustrates an apparent fusion of suchproperties.

The strategy-as-practice approach takes practitioners and theirengagement in practices and contexts seriously, but it seems premature toprovide any definite normative conclusions regarding the creation andmodification of organizational assets. The situated character of strategy-making as sketched here could in fact prove to be problematic, since it seemsrather complex to identify activity configurations ex ante. On the otherhand, it is probably what would be expected from higher-order strategicchange capacities (which, if easily identified and dispersed, would not be asvaluable). However, cruder categories of complements, or combinationsbetween certain activities, cognitive frames, language, artifacts, etc., thatmay possibly turn into valuable activity configurations (and may have doneso historically) could perhaps be identified. For example, entrepreneurialunits that combine certain activities, actors and structures in an alternativeembeddedness (new venture units, incubators, etc.) may be set up in antici-pation of strategy dynamics that will generate unique organizational assetsand competitive advantage. Consequently, it seems that management needsto consider the complementary effects of activities, actors and structures,including their socio-cultural embeddedness, rather than try to managethese aspects individually.

This article is only a first attempt at an outline of how new strategiesand unique organizational assets are built through practices in activityconfigurations. It simply includes some of the initial ingredients that maycomplement extant work on dynamic capabilities and may be of importancein the future development of a dynamic view of strategy in general. Manychallenges lie ahead in the effort to specify individual ingredients, systematize



them into a comprehensive whole and achieve more theoretical clarity in acoherent and complete view. A pertinent critique is that a practice approachapplied to strategy dynamics tries to explain too much and therefore achievesless than the dynamic capabilities perspective; hence, specific issues concern-ing core factors and their interrelationships need to be more carefullyexamined. It is thus evident that plenty of additional theoretical and empiri-cal work is needed if we are to understand the true dynamics of strategy. Whenit comes to activity configurations, a goal of future research might be to mapempirically different types of configurations over time, and determine theirspecific character, as well as any similarities and differences between them andbetween the configurations of different organizations in the build-up oforganizational assets.

Acknowledgements

The author would like to thank Julia Balogun, Paula Jarzabkowski, and DavidSeidl for their important editorial support and three anonymous reviewers fortheir helpful and constructive comments on earlier drafts of this article.

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Patrick Regnr is Associate Professor of Strategic Management at theInstitute of International Business, Department of Marketing andStrategy, Stockholm School of Economics (SSE). His research interestsare located at the intersection between behaviorally based strategyprocess perspectives and economics based strategy views and rests onthe conviction that the separation between strategy process and contentresearch is artificial. His research is focused on strategy creation andchange and includes origins of strategy, strategy renewal, strategiclearning, exploration/exploitation trade-offs and strategic managementin practice. His current research efforts focus on processes, practicesand perceptions underlying organizational capabilities. He received hisPhD based on his published dissertation Strategy creation and change incomplexity: Adaptive and creative learning dynamics in the firm (SSE, 1999)and his work has appeared in edited books on strategic management,Advances in Strategic Management and Journal of Management Studies,amongst others. He has provided policy advice to non-for-profit, publicand private organizations.[E-mail: [email protected]]



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