OLOF BRUNNINGE OLOF BRUNNINGE OLOF BRUNNINGE Organisational self-understanding Organisational self-understanding and the strategy process and the strategy process Organisational Strategy dynamics in Scania and Handelsbanken self-understanding and This thesis investigates the role of organisational self-understanding in strategy processes. The concept of organisational self-understanding denotes members’ the strategy process understanding of their organisation’s identity. The study illustrates that strategy processes in companies are processes of self-understanding. During strategy ma- king, strategic actors engage in the interpretation of their organisation’s identity. Strategy dynamics in Scania and Handelsbanken This self-understanding provides guidance for strategic action while it at the same time implies understanding strategic action from the past. Organisational self-understanding is concerned with the maintenance of in- stitutional integrity. In order to achieve this, those aspects of self-understanding that have become particularly institutionalised need to develop in a continuous manner. Previous literature on strategy and organisational identity has put too much emphasis on the stability/change dichotomy. The present study shows that it is possible to maintain continuity even in times of change. Such continuity can be established by avoiding strategic action that is perceived as disruptive with regard to self-understanding and by providing interpretations of the past that make developments over time appear as free from ruptures. Self-undertsanding is hence an inherently historical phenomenon. Empirically, this study is based on in-depth case studies of strategy processes in two large Swedish companies, namely the truck manufacturer Scania and the bank Handelsbanken. In each of the companies, three strategic themes in which 027 JIBS Dissertation Series No. organisational self-understanding has become particularly salient are studied. JIBS Dissertation Series ISSN 1403-0470 ISBN 91-89164-57-1 No. 027 OLOF BRUNNINGE OLOF BRUNNINGE OLOF BRUNNINGE Organisational self-understanding Organisational self-understanding and the strategy process and the strategy process Organisational Strategy dynamics in Scania and Handelsbanken self-understanding and This thesis investigates the role of organisational self-understanding in strategy processes. The concept of organisational self-understanding denotes members’ the strategy process understanding of their organisation’s identity. The study illustrates that strategy processes in companies are processes of self-understanding. During strategy ma- king, strategic actors engage in the interpretation of their organisation’s identity. Strategy dynamics in Scania and Handelsbanken This self-understanding provides guidance for strategic action while it at the same time implies understanding strategic action from the past. Organisational self-understanding is concerned with the maintenance of in- stitutional integrity. In order to achieve this, those aspects of self-understanding that have become particularly institutionalised need to develop in a continuous manner. Previous literature on strategy and organisational identity has put too much emphasis on the stability/change dichotomy. The present study shows that it is possible to maintain continuity even in times of change. Such continuity can be established by avoiding strategic action that is perceived as disruptive with regard to self-understanding and by providing interpretations of the past that make developments over time appear as free from ruptures. Self-undertsanding is hence an inherently historical phenomenon. Empirically, this study is based on in-depth case studies of strategy processes in two large Swedish companies, namely the truck manufacturer Scania and the bank Handelsbanken. In each of the companies, three strategic themes in which 027 JIBS Dissertation Series No. organisational self-understanding has become particularly salient are studied. JIBS Dissertation Series ISSN 1403-0470 ISBN 91-89164-57-1 No. 027 OLOF BRUNNINGE Organisational self-understanding and the strategy process Strategy dynamics in Scania and Handelsbanken Jönköping International Business School P.O. Box 1026 SE-551 11 Jönköping Tel.: +46 36 15 77 00 E-mail: [email protected] www.jibs.se Organisational self-understanding and the strategy process – Strategy dynamics in Scania and Handelsbanken JIBS Dissertation Series No. 027 © 2005 Olof Brunninge and Jönköping International Business School ISSN 1403-0470 ISBN 91-89164-57-1 Printed by Parajett AB, 2005 Acknowledgements I owe thanks to many people who have contributed to this research. First and foremost, I would like to thank my supervisors Leif Melin and Per Davidsson from JIBS as well as Hamid Bouchikhi from ESSEC for giving me feedback on my work and encouraging me during a long process. Leif’s inspiring lectures during my undergraduate studies triggered my interest in research. He has been very supportive during all my years as a doctoral student. Per has shown an incredible ability to give quick, helpful and challenging comments on large amounts of text. Hamid has provided valuable input from an identity expert’s perspective. I am also grateful to all my present and former colleagues at JIBS. You have made life enjoyable both professionally and personally. My special thanks go to Leona Achtenhagen who given me extensive and valuable feedback, as well as to my co-authors on other projects during my years as a doctoral student: Miriam Garvi, Helena Gustafsson and Mattias Nordqvist. I also want to acknowledge my gratitude to Ann Cullinane and Teresa Horgan who have proofread the manuscript and to Susanne Hansson for her assistance with copy-editing it. This research would not have been possible without the openness I experienced at Scania and Handelsbanken. A great number of individuals at the two companies were willing to share their time, experience and knowledge with me. Kaj Lindgren at Scania and Anna Ramberg, Lars O Grönstedt, Lars Lindmark and Anders Ohlner at Handelsbanken have opened many doors and helped me preparing and organising my field work. Christina Alin, Anna-Lena Engdahl and Helene Lindstedt helped me with arranging meetings and many other practical issues. Katrin Hjalmarsson and Inger Toyler helped me digging in company archives. Deborah Channon and Derek Burgess organised some exciting days at Scania and Handelsbanken in Great Britain. Cecilia Edström, Lennart Francke and Anders Lundström have given me extensive feedback on parts of my manuscript. Last but not least all interviewees and other employees I met during my vists to the companies have made a valuable contribution to this dissertation project. Big thanks to all of you! Besides my employment at JIBS, I am grateful for financial support from Marknadstekniskt Centrum (MTC) that has financed the data collection for this dissertation. Despite all support I have received, responsibility for any shortcomings in the thesis is of course mine alone. Finally, Åsa-Karin and Oliver, I cannot express in words how much I love you! Psalm 106:1 Jönköping, April 2005 Olof Brunninge Abstract This thesis investigates the role of organisational self-understanding in strategy processes. The concept of organisational self-understanding denotes members’ understanding of their organisation’s identity. The study illustrates that strategy processes in companies are processes of self-understanding. During strategy making, strategic actors engage in the interpretation of their organisation’s identity. This self-understanding provides guidance for strategic action while it at the same time implies understanding strategic action from the past. Organisational self-understanding is concerned with the maintenance of institutional integrity. In order to achieve this, those aspects of self- understanding that have become particularly institutionalised need to develop in a continuous manner. Previous literature on strategy and organisational identity has put too much emphasis on the stability/change dichotomy. The present study shows that it is possible to maintain continuity even in times of change. Such continuity can be established by avoiding strategic action that is perceived as disruptive with regard to self-understanding and by providing interpretations of the past that make developments over time appear as free from ruptures. Self-understanding is hence an inherently historical phenomenon. Empirically, this study is based on in-depth case studies of strategy processes in two large Swedish companies, namely the truck manufacturer Scania and the bank Handelsbanken. In each of the companies, three strategic themes in which organisational self-understanding has become particularly salient are studied. Table of Contents 1 Introduction ................................................................................... 1 1.1 Making a strategy for Finarom .................................................................... 1 1.2 Strategy by self-understanding?................................................................... 2 1.3 Organisational identity – a lens for understanding strategy making? .......... 3 1.4 Organisational self-understanding and strategy........................................... 4 1.4.1 Organisational self-understanding as a lens for understanding strategy processes............................................................................... 4 1.4.2 Previous work on strategy and identity .............................................