Strategic Learning: A Route to Competitive Advantage?

256 Pages·2014·3 MB·English

CHARLOTTA SIRÉN
Strategic Learning: A Route
to Competitive Advantage?
ACTA WASAENSIA 297
BUSINESS ADMINISTRATION 119
MANAGEMENT AND ORGANIZATION

III
Julkaisija Julkaisupäivämäärä
Vaasan yliopisto Toukokuu 2014
Tekijä(t) Julkaisun tyyppi
Charlotta Sirén Artikkelikokoelma
Julkaisusarjan nimi, osan numero
Acta Wasaensia, 297
Yhteystiedot ISBN
Vaasan yliopisto ISBN 978–952–476–527–5 (painettu)
Kauppatieteellinen tiedekunta ISBN 978–952–476–528–2 (pdf)
ISSN
Johtamisen yksikkö
ISSN 0355–2667 (Acta Wasaensia 297, painettu)
PL 700
ISSN 2323–9123 (Acta Wasaensia 297, pdf)
65101 VAASA
ISSN 1235–7871 (Acta Wasaensia. Business
administration 119, painettu)
ISSN 2323–9735 (Acta Wasaensia. Business
administration 119, pdf)
Sivumäärä Kieli
255 Englanti
Julkaisun nimike
Strateginen oppiminen: Tie yrityksen kilpailuetuun?
Tiivistelmä

Emergenttiin strategianäkemykseen ja strategian, yrittäjyyden ja organisaation oppimisen kirjalli-
suuden teoreettisiin käsitteisiin rakentuen, tämä väitöskirja pyrkii empiirisesti edistämään mainit-
tua kirjallisuutta vastaamalla seuraavaan kysymykseen: Mikä rooli strategisella oppimisella on
yrityksen menestymiselle? Tätä kysymystä käsitellään viidessä toisiinsa nitoutuvassa artikkelissa,
joissa strategisen oppimisen ilmiötä tarkastellaan suomalaisista IT-alan yrityksistä kerätyn määräl-
lisen aineiston valossa.

Keskittymällä strategisen oppimisen määrittelyyn ja sitä tarkastelevan mittariston rakentamiseen
ja validointiin, väitöskirjan ensimmäinen artikkeli tarjoaa sekä strategiatutkijoille että yritysjoh-
dolle työkalun strategisen oppimisen arviointiin ja johtamiseen. Toinen artikkeli laajentaa ambi-
dekstrisyyden kirjallisuutta tutkimalla empiirisesti strategisen oppimisen merkitystä yrityksen
eksploraatio ja eksploitaatio strategioille. Kolmas artikkeli haastaa johtamis- ja yrittäjyyskirjalli-
suudessa valloillaan olevia lineaarisuuden oletuksia osoittaen, että organisaation muutosjäykkyy-
teen liittyvät tilannetekijät vaikuttavat strategisen uudistumisen prosessiin. Neljäs artikkeli esittää,
että strategisella oppimisella on tärkeä rooli yrityksissä, jotka tukeutuvat strategiseen suunnitte-
luun. Viides artikkeli tarjoaa käytännön näkemyksiä strategisesta oppimisesta esitellen parhaita
käytäntöjä lupaavien suomalaisten ohjelmistoalan yritysten keskuudessa.

Tulokset osoittavat, että strategista oppimiskyvykkyyttä organisaatioissaan rakentamaan ja hyö-
dyntämään kykenevät yritykset menestyvät parhaiten. On olemassa useita tekijöitä, kuten muutos-
jäykkyyteen liittyvä yrityksen ikä ja koko sekä strategisen oppimiskyvykkyyden rajoittuneisuus,
jotka yrityksen johdon täytyy ottaa huomioon saavuttaakseen parhaimman hyödyn strategisen
tason organisaation oppimisesta. Väitöskirja edistää tieteellistä keskustelua tutkimalla empiirisesti
onnistuneeseen strategiseen oppimiseen kytköksissä olevia reunaehtoja ja tilannetekijöitä, jotka
määrittävät strategisen oppimisen merkitystä yritysten menestystekijänä.

Asiasanat
Strategia, strateginen oppiminen, dynaamiset kyvykkyydet, organisaation oppiminen,
emergentti, eksploraatio, exploitaatio, yrittäjämäinen orientaatio, suorituskyky, IT-ala

V
Publisher Date of publication
Vaasan yliopisto May 2014
Author(s) Type of publication
Charlotta Sirén Selection of articles
Name and number of series
Acta Wasaensia, 297
Contact information ISBN
University of Vaasa ISBN 978–952–476–527–5 (print)
Faculty of Business Studies ISBN 978–952–476–528–2 (online)
ISSN
Department of Management
ISSN 0355–2667 (Acta Wasaensia 297, print)
P.O. Box 700
ISSN 2323–9123 (Acta Wasaensia 297, online)
FI–65101 VAASA, Finland
ISSN 1235–7871 (Acta Wasaensia. Business
administration 119, print)
ISSN 2323–9735 (Acta Wasaensia. Business
administration 119, online)
Number Language
of pages
255 English
Title of publication
Strategic learning: A route to competitive advantage?
Abstract

Building on the emergent view of strategy identification and on theoretical concepts from strategy,
entrepreneurship and organizational learning literatures, this dissertation empirically seeks to con-
tribute to this arena by answering the following research question: What is the role of strategic learn-
ing in firm success? This question is addressed in five interconnected articles whose conceptual
development is supported by statistical analysis based on data collected from Finnish software firms.

In the first article, the conceptualization of strategic learning along with a validated scale provides
both strategy researchers and organizational leaders with a valuable tool to evaluate and manage
strategic learning. The second article extends the ambidexterity literature by empirically examining
the importance of strategic learning for firms’ exploration and exploitation strategies. The third arti-
cle challenges the assumptions of linearity inherent in the majority of management and entrepreneur-
ship studies by showing that contingency factors related to inertia influence the strategic renewal
process. The fourth article suggests that strategic learning has an important moderating role in organ-
izations that rely on strategic planning. In order to provide practical insights, the fifth article sheds
light on the best practices among some promising Finnish software companies.

The results indicate that those software companies able to build and leverage strategic learning capa-
bilities in their organizations are those that subsequently perform best. There are, however, many
factors such as inertial forces related to age and size and the limited nature of strategic learning ca-
pabilities that need to be carefully considered and managed in order to maximize the benefits from
such higher-order learning. This dissertation hopes to advance scholarly conversations by examining
and empirically testing the boundary conditions and contingencies relating to successful strategic
learning that is recognized as a vital component of firms’ success.

Keywords
Strategy, strategic learning, dynamic capabilities, organizational learning, emergent,
exploration, exploitation, entrepreneurial orientation, performance, IT industry

VII
ACKNOWLEDGEMENTS
Before enrolling on the PhD program at the University of Vaasa I was (and still
am) an entrepreneur. When I started in the program, I thought that I could never
love doing research as much as I love entrepreneurship because these two are in
every way so different. However, soon after starting the project I realized that the
passion I feel towards research is like that I feel towards entrepreneurship. The
key role what emotions play in both of these journeys, the unforgettable experi-
ences (both ups and downs) that have defined me as a person, the freedom and
responsibility that comes along, the opportunity to develop my abilities and to
understand myself, and the opportunity to grow and establish myself as a person,
intertwines in these processes in an unique way. I feel extremely privileged that I
have been given the opportunity to explore both of these worlds at a relatively
young age. A successful reconciliation of these two processes and especially the
completion of one step in the academic world—the finishing of my PhD—would
have never been possible without the help, trust and support from many people
and organizations. Therefore and before all, I would like to thank from the bottom
of my heart all of those who have helped me in any way during my PhD journey.
First, my deepest gratitude goes to my supervisor Professor Marko Kohtamäki for
his devotion to this process. His sense of direction challenged me to go beyond
the obvious. I wish to thank the two official pre-examiners of this dissertation,
Professor Matthias Fink from Johannes Kepler University, Austria, and Professor
Erno Tornikoski from Grenoble Ecole de Management, France for their insightful
comments on my manuscript in addition to their expertise in the field of strategy,
entrepreneurship and organizational learning from which I have greatly benefitted
when I have developed my own research. Your work has greatly inspired me.
I have had a privilege to work with many great people. Professor Riitta Viitala,
Professor Jukka Vesalainen, Professor Andreas Kuckertz, Professor Pasi Malin,
Dr. Vivianna Fang He, Professor George Solomon, Professor Sheetal Singh, Dr.
Seppo Luoto, Dr. Niina Koivunen, Professor Ken Parry, Professor Timothy
Kiessling, Professor Minna Rollins, Jukka Kohtanen, each of your willingness to
share knowledge and help has been exceptional. In addition, a special thank you
is addressed to Professor Teemu Kautonen. Your excellent statistics course and
willingness to help in statistical challenges was vital to my accomplishment. I am
excited to work in your team in the future. From the University of Vaasa depart-
ment staff I want particularly to thank Dr. Henri Hakala. It has been a great pleas-
ure to work with you, I have really appreciated our inspiring discussions,
joint research and the conference trips we have made. I also owe a special
thank you to Professor Joakim Wincent who has been a true inspiration to my
VIII
career as an academic and a great mentor. I am looking forward our collaboration
in future. Further, I would like to thank Andrew Mulley and the Academic Edit-
ing team helping with the copy editing processes of the dissertation and articles.
In addition to great colleagues, my beloved friends have been a tremendous
source of fun and relaxation during free time. Thank you especially Vivianna,
Inka, Reetta, Asta and Petra, for supporting me.
During my doctoral studies, several institutions and foundations have supported
my research. I thank the Finnish Graduate School of Management and Infor-
mation System Studies (GRAMIS/KATAJA), the South Ostrobothnia Regional
Fund (Etelä-Pohjanmaan Kulttuurirahasto), the Foundation for Economic Educa-
tion (Liikesivistysrahasto), the Evald and Hilda Nissi Foundation, and the Vaasa
University foundation for their financial support that allowed me to focus on re-
search and present my results at international conferences.
My greatest gratitude is to my family; to my parents Maarit and Esko Sirén and to
my loving Juho. You have been both interested in and supportive of everything I
have undertaken in my life. You have encouraged me to explore the world and
pursue my dreams. By having faith in me, you have made me believe that achiev-
ing them is possible. Juho – without you I would have changed into a book, thank
you for keeping me in the real world. You are the balance of my life.

Vaasa, March 15, 2014
Charlotta Sirén
IX
Contents
ACKNOWLEDGEMENTS ................................................................................... VII
1 INTRODUCTION ............................................................................................ 1

1.1 Background ............................................................................................. 1

  1.2 Research gaps .......................................................................................... 3

1.3
  Research questions and study objectives ................................................ 7

1.4
  Structure of the dissertation ..................................................................... 9

2 THE
 ORETICAL BACKGROUND OF STRATEGIC LEARNING ............. 10

2.1 Strategic learning rooted in emergent strategies ................................... 10

  2.2 Strategic learning as a dynamic capability ............................................ 13

2.3
  Strategic learning and the relationship to other related concepts .......... 14

  2.3.1 Strategic learning and absorptive capacity ............................. 15

  2.3.2 Strategic learning and explorative learning ............................ 16

2.3.3
  Strategic learning, single-loop, double-loop learning and

  deuteron learning .................................................................... 17

2.3.4
  Strategic learning and knowledge management ..................... 18

3 METHODO
  LOGY ......................................................................................... 20

3.1 Research strategy and underlying philosophical assumptions .............. 20

  3.2 Research design ..................................................................................... 22

3.3
  General characteristics of the Finnish software industry ...................... 24

3.4
  Empirical data collection ....................................................................... 26

3.5
  Measures and operationalization ........................................................... 28

3.6
  Data analysis ......................................................................................... 36

  3.6.1 Analysis methods .................................................................... 37

3.6
  Quality assessments: reliability and validity ......................................... 39

3.6.1
  Reliability ................................................................................ 40

  3.6.2 Validity ................................................................................... 41

4 ARTICLE
 SUMMARIES .............................................................................. 45

4.1 Unmasking the capability of strategic learning: a validation study ...... 45

  4.2 Exploration, exploitation, performance and the mediating role of

  strategic learning: escaping the exploitation trap .................................. 47

4.3
  Fighting inertia: Benefits of entrepreneurial orientation and strategic
learning for large and mature firms ....................................................... 49

4.4
  Stretching strategic learning to the limit: The interaction between
strategic planning and learning ............................................................. 51

4.5
  Strategic learning for agile maneuvering in high technology SMEs .... 53

5 DIS
 CUSSION AND CONCLUSIONS .......................................................... 55

5.1 Theoretical contribution ........................................................................ 55

  5.2 Implications for practice ........................................................................ 59

5.3
  Limitations and future research suggestions ......................................... 63

5.4
  Conclusions ........................................................................................... 68

REFER
 ENCES ..................................................................................................... 69
X
Figures
Figure 1. A framework integrating the tested antecedents, moderators, and
performance outcomes of strategic learning ...................................... 8
Figure 2.
  Strategy formation in dynamic environments (adapted from
Mintzberg & Waters 1985: 271) ...................................................... 11

Figure 3.
  Procedures for developing a measure of strategic learning (adapted
from Yi 2009) ................................................................................... 46

Figure 4.
  Illustration of the focus in Paper 1 ................................................... 47
Figure 5. Illustration of the focus in Paper 2 ................................................... 48

Figure 6.
  Illustration of the focus in Paper 3 ................................................... 51

Figure 7.
  Illustration of the focus in Paper 4 ................................................... 52

Figure 8.
  Illustration of the focus in Paper 5 ................................................... 54

Table
Table 1. Research characteristics and methodologies used in the articles ........... 39

Abbreviations
ACAP Absorptive capacity
CFA Confirmatory factor analysis
CR Composite reliability
DC Dynamic capabilities
EFA Exploratory factor analysis
EO Entrepreneurial orientation
ICT Information and communications technology
IT Information technology
KM Knowledge management
OLS Ordinary least squares (regression)
NACE European classification of economic activities
PLS Partial least squares (modeling)
RBV Resource-based view (of the firm)
SME Small and medium sized enterprise
TOL Toimialaluokitus (Standard Industrial Classification used in Finland)