Sociological Foundations of Strategic Management

Strategic management is, at its core, about how managers can transform environmental factors along with internal organizational resources to make decisions. These decisions should be based on goals and plans of action for reaching them.  The overarching goal is to guide the organization into the future in a dominant competitive position.

Given the importance of the environment in decision-making, sociology was a natural field for strategic management to draw on. The study of sociology centers around human social actions and social structure.

In 2004, W. Richard Scott published an article reviewing 50 years of organizational sociology. It this article, he detailed how the field has changed over time:

  • During the early 20th century, the study of organizational sociology came from the engineering orientation (Taylor 1911, Fayol 1919/1949).
  • During the 1920s, the focus was on the historical view (Weber 1924/1968).
  • By the 1930s, social scientists focused on unofficial, informal patterns of cooperation, shared norms and conflicts .
  • Then in the 1940s there was a shift in unit of analysis to organization (Barnard 1938, Selznick 1948). Researchers also looked at the paradox of manipulation and embeddedness.
  • The 1950s brought the Carnegie-Mellon School of thought typified by bounded rationality (Simon), and the Columbia School, which focused on unintended consequences of purposive action (Merton).
  • The 1970s, researchers focused on perfect rationality vs. irrationality.
  • And the 1980s brought a higher level of anlaysis (organizational population, organizational fields, and networks).

Since strategic management requires the understanding of the environment, many theories used place a strong focus on it. Some of the most relevant are:

  • Contingency Theory: Galbraith 1973, Pfeffer 1982
  • Resource Dependence Theory: Pfeffer & Salancik 1978
  • Organizational Ecology: Stinchcombe 1965, Hannan & Freeman 1977
  • Neo-institutional Theory: Meyer & Rowan 1977, DiMaggio & Powell 1983
  • Networks: Granovetter 1985
  • Social Movements: David, Morrill, Rao and Soule 2008 (Review)
  • Organizational Identity: Dutton, Dukerich & Harguail 1994
  • Categories and Classification: Zuckerman 1999, Hsu 2005

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