Thriving on contradiction: Toward a dialectical alternative to fit‐based models in strategy (and beyond)

Abstract

While the established, coherence view of internal fit provides a compact representation of firms and strategy, it also discounts the strategic benefits of tensions and contradictions, and downplays strategy creation and change. Here, we develop a novel dialectical alternative to fit-based models of strategy. Within our model, contradictions and tensions serve as a key engine for strategic renewal and transformation.If carefully harnessed through what we call "disciplined incoherence," contradictions can help firms establish and change their strategies and business models, adapt to and shape their environment, and enhance and sustain their competitive advantage. We offer a dynamic, endogenous view of how configurations are generated, transformed, and maintained, and present a processual alternative to current strategy models that are grounded in equilibrium and coherence assumptions. Managerial Summary: Prior thinking suggests that firm strategies should focus on achieving fit between the firm's different elements such as activities, organizational structures, and policies, and that tensions and inconsistencies should be eliminated or minimized. We argue that this view overlooks the important role of contradictions in fostering innovation and competitive advantage and driving strategic change and renewal.Conflicts and contradictions pose their own risks. Yet,

An integrative learning approach: combining improvement methods and ambidexterity

“…Another significant aspect of bringing the process to a group level is that the diversity and differences among individuals have the potential to increase group performance, as more knowledge is available in the group (Cohen and Levinthal, 1990). Moreover, the contradictions that may be visualized in the knowledge-sharing process may serve as an engine for renewal and transformation (Farjoun and Fiss, 2022).…”

“…We become aware of differences and work towards creating a common understanding of possibilities and challenges. Thus, contradictions play an important role in driving change and fostering renewal (Farjoun and Fiss, 2022). This step unavoidably needs to engage the entire staff to minimize the risk of emerging defensive behaviour at the workplace when questions on how work is done arise.…”

“…Tacit working processes Lack of courage to visualize working processes Leaders lack understanding of responsibility for organizing learning Eraut, 2000aEraut, , 2000bFarjoun and Fiss, 2022;Nonaka, 1991;Nonaka and von Krogh, 2009 3. How can we work instead?…”

“…Crossan et al (1999) describe the tension between exploration and exploitation as a dynamic interplay between feed-forward and feedback processes of learning, whereas Ellström (2010) refers to the different learning modes as creative and adaptive learning. The interplay between different learning orientations is argued to be fundamental for sustainable development and organizational learning (Crossan et al , 1999; Ellström, 2010; March, 1991), but the findings are ambiguous on how organizations should manage these contradictory approaches (Brix, 2019; Cunha et al , 2019; Farjoun and Fiss, 2022; Gupta et al , 2006; O’Reilly and Tushman, 2008; Raisch et al , 2009). Exploration tends to lead to more exploration and exploitation to more exploitation (Gupta et al , 2006), and the differences in logic tend to hinder simultaneous execution (March, 1991).…”

Exploratory and Exploitative Internationalization: Effects of Social Capital Antecedents and Fit Moderators of Innovation Consequence

“…We argue that a firm's innovation performance can be both positively affected by the choices of exploration and exploitation strategies in its internationalization, but more importantly, the innovative effects of exploratory and exploitative internationalization are subject to a joint consideration of their fit with organizational, strategic, and environmental factors. Contingency scholars have argued that the best way to organize depends on the nature of the environment to which the organization must relate [35], and a decision maker needs to work hard to achieve the alignment between organizational goals and the internal and external environmental conditions [36]. Therefore, we can imagine that the innovation performance of international firms depends on the congruence between the choices of exploratory and exploitative internationalization and the environment, strategy, and firm characteristics.…”