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New-Radical

Cogito Ergo Sum: Exploring Epistemological Options for Strategic

Management

Introduction

Leibnitz (1646-1716) argued that all truths must belong to two logical types, truths of reasoning or truths of fact. Sometimes even scientists and mathematicians forget the difference between the two types of truths. In discussing the nature of mathematical equations that are iterative, Gleick (1993) makes the observation that “Astronomers did not achieve perfection and never would, not in a solar system tugged by the gravities of nine planets, scores of moons and thousands of asteroids, but calculations of planetary motion were so accurate that people forgot they were predictions…Scientists marching under Newton’s banner actually waved another flag that said something like this: Given the approximate knowledge of a systems initial conditions and an understanding of natural law, one can calculate the approximate behavior of the system” (Gleick, 1993, p. 14-15).

 

This assumption lay at the epistemological center of science. Computers rely on the same assumption when guiding spacecraft and economic forecasters also rely on the same assumption. But underneath are a set of equations that are essentially linear. Given a specific starting point the system will unfold the same way each time. Given a slightly different starting point and the system will unfold in a slightly different way. But this is only true when the system is linear.

 

“In practice, econometric models proved dismally blind to what the future would bring, but many people who should have known better acted as though they believed in the results. Forecasts of economic growth or unemployment were put forward with an implied precision of two or three decimal places. Governments and financial institutions paid for such predictions and acted on them…But few realized how fragile was the very process of modeling flows on computers, even when the data was reasonably trustworthy” (Gleick, 1993, p. 20).

 

One of the fundamental reasons for the debate and controversies in the subject of strategic management is that the foundation for the ideas of business strategy was developed by the early management writers and economists in a philosophical environment where businesses were seen as linear systems. However, the dynamic changes in the economic environment, the perceived breakdown of the efficacy of some strategic theory, and an understanding of other systems approaches from the hard sciences, together with philosophical ideas of epistemology and ontology, have led many organisational and management scholars to question whether the linear paradigm is the best framework within which to set the ideas of management (Thompson, 1967; Westley & Mintzberg, 1989; Whittington, 1993; Mintzberg, 1994; Hamel & Prahalad, 1995a 1995b; Camillus, 1996; Hamel, 1996; Kouzmin et al., 1997; Mainwaring, 1997; Mintzberg et al., 1998; Kouzmin & Jarman, 1999; Parker, 2002). Most of the work conducted in the field of strategy has been set in an epistemological paradigm that is essentially Modernist (Parker, 2002, p. 123). But alternative epistemological paradigms exist, within which the ideas of strategic management can be developed, specifically Postmodernism and Critical Theory.

 

The concepts of strategy and planning and how they relate to each other are far from clear. These concepts become even less clear when the epistemological constructs within which these concepts fit are questioned. Classical management theory has developed from Neo-classical economic theory, which is related to concepts of linearity. In this paradigm, causal relationships are established, elements are assumed to be predictable, and concepts such as reductionism are embraced to enable explanations to be simplified. In economic theory and in the Plan/Control Theory of the classicists, the search for stable equilibrium is a significant goal. These are all characteristics of both the Modernist and the Functionalist epistemological paradigms. However, if the fundamental epistemological paradigm is shifted, so that businesses are no longer viewed as cybernetic systems set in a Modernist or Functionalist paradigm, many of the definitional problems of strategic management theory become exacerbated (Stacey, 2000a).

 

Parker (2002, p. 106) describes a Modernist world as one that is “knowable and certain ‘machineries of judgment’ guarantee some form of certainty about the entities and relations within it”. Much of the work of Modernist scholars can be seen as “an attempt to develop knowledge about how we and others should behave through employing some version of the scientific method” (Parker, 2002, p. 106). However, the Modernist concept that all things are knowable is not rational in the Complex Self-adapting System paradigm, within which ideas of emergence are rational. In a complexity paradigm, answers to questions such as what the future might be like, and that are rational in a Modernist paradigm, cannot be known. There are other epistemological paradigms that cannot be constrained by the creation of the system boundaries that are necessary to contain the Positive ideas of the Classical scholars. In the wider literature of organisation theory, several writers have explored the fundamental paradigmatic concepts. Kuhn (1970), a historian of science, explored the development of scientific thought and also the paradigmatic changes that would be necessary to underwrite those ideas. Burrell and Morgan (1993) developed a matrix containing four differentiated paradigms, within which the ideas of the social scientists could be developed. In addition, from the wider perspective of philosophy, further paradigms are accepted; Modernism, Postmodernism, Critical Theory and Critical Realism.

 

Conclusion

Complexity is a phenomenon around which scientists are still building a body of theory, and the ‘scientific method’—a fundamental characteristic of a Modernist epistemology—will not easily provide the mechanisms for solving the problems of complexity. Complex Self-adapting Systems are non-linear, and non-linearity is not a characteristic of the Modernist paradigm. Scholars of strategic management are at an important stage in theory development. Most of the current theories, indeed the foundation/‘bed-rock’ theories of general management, are built on a classical, cybernetic foundation of plan and control, where things are generally predictable. This allows strategists to take short-term planning concepts and apply them to a longer time-frame. If it becomes more accepted in the mainstream of management thinking that Complex Self-adapting Systems Theory is a better framework for developing concepts of managerial behaviour, new foundations will need to be built.

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