The Ephemera of Success: Strategy, Structure and Performance in the Forestry Industries

Explanations of success and failure in management learning : What can we learn from Nokia's rise and fall

International audience; In this paper, we study the changing explanations of success and failure over the course of a firm's history. We build on a discursive approach that highlights the role of narrative attributions in making sense of corporate performance. Specifically, we analyze how the Nokia Corporation was framed first as a success and later as a failure and how these dimensions of performance were explained in various actors' narrative accounts. In both the success and failure accounts, our analysis revealed a striking black-and-white picture that resulted in the institutionalization of Nokia's metanarratives of success and failure. Our findings also reveal a number of discursive a…

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Research on corporate decline and turnarounds as well as the strategic use of history have so far remained two separate research fields. We integrate these two fields with a thought experiment, proposing ways in which strategists can work with, and through time in managing and turning around declines. Our thought experiment involves two very different types of analogies: a textual one from Philip K. Dick’s science fiction novels, on the one hand, and a visual one from Einsteinian relativity science, on the other hand. Inspired and informed by these different conceptualizations of the past and time, we develop four forms of backward strategizing to successfully manage a struggling corporatio…

Research on Evolution and the Global History of Pulp and Paper Industry: An Introduction

The underlying assumption in the economic history of industries is the deterministic nature of the industry life cycle. That is, industries are assumed to follow a specific life cycle characterized by stages of nascence, growth, maturity and decline apparent in firm numbers, production volume and technological activity. This introduction gives an overview to the theme of this volume: the analysis of the birth, growth, maturity, and finally the decline of the mechanized pulp and paper industry from its inception in the early nineteenth century Europe to its current situation and future prospects in developing markets in Southern America and other regions.

History in Process Organization Studies : What, why and how

A Evolução Da Indústria De Papel Global

Supõe-se que as indústrias sigam um ciclo de evolução específico, caracterizado pelos estágios de nascimento, crescimento, maturidade e declínio, evidentes em números de empresas, volume de produção e atividade tecnológica. A indústria de papel e celulose não constitui exceção a esta regra. Muito pelo contrário. A história destas linhas de negócio parece seguir uma evolução dependente de uma trajetória semelhante em qualquer país considerado. Condicionada pelo crescimento do mercado, pelos recursos e tecnologia disponíveis, a indústria de papel e celulose passou por estágios de crescimento, maturação e até mesmo declínio em numerosas economias maduras. nonPeerReviewed

Towards a routine-based view of interfirm rivalry

Although organizational routines have attracted increasing attention in strategy and organization research, they have received surprisingly limited attention in competitive dynamics scholarship. Our essay seeks to advance a routine-based view of interfirm rivalry by bridging the competitive dynamics and routine literatures. We put forward a conceptual model of the routine-based view of interfirm rivalry that is centered on “competitive action routines.” The model clarifies the roles that managers play in driving a firm’s competitive behavior, challenges the assumption of routine-based rigidity in competitive behavior, and adds nuance to our understanding of managerial cognition in competiti…

Economic Degrowth and the Collapse of Institutional Order: Theory and Propositions

Integrating insights from new institutional  economics and studies on the collapse of past empires, we sketch a process model that links economic degrowth to the collapse of institutional orders. Our thought experiment starts from emphasizing the importance of institutions and enforcement mechanisms in maintaining a sufficient level of economic activity to sustain public costs. We flip this established logic and elucidate the negative role of economic degrowth in the weakening of the public sector’s ability to enforce institutional rules. Internal and external shocks further shake the stability of the institutional order and, at some point, individuals’ belief in institutional rules and nor…

Institutional Path Dependence in Competitive Dynamics: The Case of Paper Industries in Finland and the USA

Prior research on competitive dynamics has failed to offer tools to understand distorted patterns of competition that emerge from distinct institutional and historical contexts. Our analysis suggests that a joint effect of institutional rules, governance structures, and shared cognition plays a pivotal role in firm-level competitive behavior and capability development. We show how globally significant market positions can result from specific institutional arrangements between firms and governments, especially if coupled with interfirm contractual commitments. Our results call for more attention to these interfirm commitments that are built on formal rules and governmental support, but whos…

Temporality and firm de-internationalization : Three historical approaches

This paper contributes to process-oriented international business research by showing how three distinct historical approaches can enrich theoretical understanding concerning temporality in firm de-internationalization. First, we show how comparative historical analysis unleashes the causal structure of the process and provides explanatory understanding of the temporal grounding of the mechanisms driving the process. Second, we explicate how interpretive history reveals the embeddedness of de-internationalization in the prevailing spirit of the time. Finally, we consider how poststructuralist history enables us to focus on the strong subjectivity of individuals in which multiple temporaliti…

The fall and the fragmentation of national clusters: Cluster evolution in the paper and pulp industry

Abstract A common expectation in evolutionary cluster studies is that national clusters engage in competitive interactions that lead to a continuous stream of changes in global dominance. Our fuzzy-set analysis on the evolution of the paper and pulp industry demonstrates that globalization has dramatically changed this situation. National clusters have largely faded away; the value chain dominance is now held by technology suppliers who are global hubs in majority of identifiable business activities in the focal industry. Our results imply that when industrial decline is accentuated by industrial concentration in some part of the value chain the national clusters may lose their importance.

The Challengers: Kymmene, United Paper Mills, and Metsäliitto

Firms attempt to adapt themselves through their business strategies to the present and forthcoming (institutional and technical) environments. Whether these strategy choices are planned or implemented is the classic question in business history and strategic management. It is generally agreed that the basic aims of a firm is to be profitable (at least over the long term) and to survive. These basic assumptions seems to fit most of the current, publicly owned companies, but when we are dealing with e.g. governmental owned or cooperatives, this seemingly clear picture becomes fuzzy. This article aims to analyse three major Finnish forestry industry companies, namely Kymmene, United Paper Mill…

Ideology in Vicarious Learning-Related Communication

Organizations often learn vicariously by observing what other organizations do. Our study examines vicarious learning–related communication through which individuals share their observations with other organizational members. Most students and members of present-day organizations would expect that this communication is driven by a prodevelopment logic—that communication serves the purpose of organizational improvement and competitiveness. Our unique historical evidence on learning-related communication over multiple decades shows that the subjective and collective attitude toward prodevelopment communication may be ideologically conditioned. Prodevelopment communication is the norm in capit…

Evolving Management Ideas

This chapter reviews the different conceptualizations of ‘the’ historical development of management ideas. It focuses on three approaches to the evolution of research on management ideas: (1) mainstream, (2) embedded, and (3) critical alternatives. The mainstream is the most dominant approach, both in research and in textbooks of management, while the embedded approach is increasingly popular among institutionally oriented researchers. A key suggestion is that it is also important to find and follow less researched avenues in the evolution of management ideas, such as the critical alternatives approach, drawing on forgotten and marginalized discourses. The authors explicate limitations and …

Institutional Path Dependence in Competitive Dynamics: The Case of Paper Industries in Finland and the USA

Prior research on competitive dynamics has failed to offer tools to understand distorted patterns of competition that emerge from distinct institutional and historical contexts. Our analysis suggests that a joint effect of institutional rules, governance structures, and shared cognition plays a pivotal role in firm-level competitive behavior and capability development. We show how globally significant market positions can result from specific institutional arrangements between firms and governments, especially if coupled with interfirm contractual commitments. Our results call for more attention to these interfirm commitments that are built on formal rules and governmental support, but whos…

Institutional Logic of Business Bubbles: Lessons from the Dubai Business School Mania

In this essay, we integrate institutional and business bubble perspectives to build a theoretical explanation for the growth and subsequent decline of the business school sector in Dubai during the period 2002–2012. The motivation for our research-based essay stems from the question: “How is it possible that the world’s top business schools simultaneously judged the market so badly and collectively invested in activities that, in retrospect, were far from economically rational and more closely resembled euphoria and mania?” Furthermore, we ask: “Why did business school leaders decide to enter the overcrowded Dubai market in particular, precipitating its boom-and-bust cycle? Our novel integr…

Taking historical embeddedness seriously : Three historical approaches to advance strategy process and practice research

International audience; Despite the proliferation of strategy process and practice research, we lack understanding of the historical embeddedness of strategic processes and practices. In this paper, we present three historical approaches with the potential to remedy this deficiency. First, realist history can contribute to a better understanding of the historical embeddedness of strategic processes; in particular, comparative historical analysis can explicate the historical conditions, mechanisms, and causality in strategic processes. Second, interpretative history can add to our knowledge of the historical embeddedness of strategic practices, and microhistory can specifically help to under…

The Evolution of Global Paper Indutry

Industries are assumed to follow a specific life cycle characterized by stages of nascence, growth, maturity and decline apparent in firm numbers, production volume and technological activity. Pulp and paper industries not exceptions to this rule. Quite the contrary. The history of these lines of business seems to follow similar path dependent evolution in any given country. Constrained with market growth, available resources and technology, pulp and paper industry has experienced stages of growth, maturation, and even decline in a numerous mature economies. nonPeerReviewed

The Nanoeconomics of Firm‐Level Decision‐Making and Industry Evolution : Evidence from 200 Years of Paper and Pulp Making

Research summary We explore the qualitative differences in entries and exits over time. Using qualitative and quantitative data on 96 firms over 200 years, we study industry evolution from the perspective of individual decision‐making situations. Our historical and statistical analyses reveal the vital role of technology investments in determining firm outcomes, and the technological, institutional and governance dynamics that lead firms to invest or to abstain. Our main theoretical and methodological contribution concerns the importance of the multiplicity of firm‐level rationalities and decisions as fundamentals in theorizing on industry evolution. Managerial summary What determines firm …

Corporate business model transformation and inter-organizational cognition: the case of Nokia

This article distinguishes between a firm’s corporate business model and business models of its various business units. Our aim is to provide new insights into how executives’ cognitive processes can influence corporate business model transformation decisions. We focus especially on top managers’ recognition of inter-organizational cognitions, that is, such cognitions about the firm and its businesses that are shared by the top managers and stakeholders of the firm in the industries and communities where it operates. We support our theoretical work with an historical case study of Nokia’s corporate business model transformation between 1990 and 1996, which proved highly successful. We find …

Path Dependence of Power Relations, Path-Breaking Change and Technological Adaptation

We study the path dependence of technological systems and power relations inside companies. While the existing literature suggests power relations and technology to be path dependent and influenced by each other, interactions across these evolutionary processes remain poorly understood. We studied the history of four retail firms over 40 years, applying event structure analysis to explicate key dynamics. Companies exhibited two episodes of converging path dependency, where power relations further increased technological inertia. In each case, power initially concentrated outside the central headquarters. Path-breaking change led all firms to centralize power and implement networked IT syste…

Varieties of State Aid and Technological Development: Government Support to the Pulp and Paper Industry, the 1970s to the 1990s

Countries promote the development of pulp and paper industry through industrial, technology and innovation policy measures. Direct interventions and regional and environmental policies, together with more general governmental measures on trade negotiations, taxation, labour policies, and infrastructure development (e.g. roads, energy) have also had an impact on shaping the geographical location of and investments in the pulp and paper industry. This chapter presents an historical overview of government support on pulp and paper industry in the Organisation for Economic Co-operation and Development (OECD) countries from roughly the 1970s to the 1990s. As the earlier literature suggests, in c…

The curse of agility : The Nokia Corporation and the loss of market dominance in mobile phones, 2003–2013

We investigate how and why the Nokia Corporation failed to develop a successful strategic response to the threats of Apple and Google in the smartphone business and instead worsened its situation through several badly timed decisions. We identify key choices in technology and organisational design that jointly constituted sufficient cause for the abandonment of the mobile phone business. By focusing on choices instead of attributes (e.g. fear or hubris), we make progress in strategic failure research and simultaneously emphasise the strength of oral history methods and the philosophy of history as fruitful starting points for such an inquiry. peerReviewed

The Evolution of Pulp and Paper Industries in Finland, Sweden, and Norway, 1800–2005

In this chapter, we study Finland, Sweden and Norway as examples of countries with small firm populations without intense domestic competition. This has enabled firms to build certain organizational capabilities while neglecting others. The basic story-line in the Nordic paper industry evolution is that a few firms that emerged as industrial populations were (a) built on to exploit abundant raw materials (timber, water, labor); (b) focused to a large extent on exporting their products; and (c) relied on cooperation between competitors to success in competition with the large firms populations of Britain and Germany – the two main markets for Nordic paper industry products.

The anatomy and causal structure of a corporate myth: Nokia by the book

In this paper we conceptualise explanations of company-specific commercial performance as corporate myths. To improve our understanding of anatomy and causal structure of corporate myths, we analyse publications that deal with Nokia’s historical transformation from a lossmaking 1980s conglomerate to a focused and successful telecommunications company in the early 1990s. From a corpus of related literature, 89 causal arguments are identified and analysed in terms of the logic of the arguments employed. The analysis shows that (1) most existing analyses offer either a specific or a biased explanation for Nokia’s success; (2) very few explanations are either plausible or logical; (3) it is mos…

Strategy and business history rejoined : How and why strategic management concepts took over business history

Scholars at the intersection of business history and strategic management have argued for the relevance and importance of historical methods in the study of strategic management of organizations. We flip this argument and ask about the role of strategic management concepts in the study of business history. We analyze volumes of Business History and Business History Review and a representative sample of business history books using a comprehensive set of keywords, each related to a specific sub-discourse in strategic management. Our results show that as scientific communities, business history and strategic management have become increasingly similar in their conceptual overlap. This study c…

Strategic renewal : Can it be done profitably?

Industry transformation requires strategic renewal at the level of individual firms. Executives then face the dilemma of choosing renewal paths in the face of uncertainty over the competitive environment of the future, and hence the profitability of potential strategies. This dilemma motivates us to study industry transformation from the perspective of strategic renewal among 208 large firms in the global pulp and paper industry. The findings of our qualitative comparative analysis show that only a minority of firms in our sample succeeded in profitable proactive renewal. Content-wise, there were similarities in the pursued strategies over the wider population, but only a few maintained sup…

Global Demand for Paper Products: 2006–2050

Our aim is to formulate and present global demand forecasts for several paper products for the main regions of the world for the period 2005-2050. Our forecasts, while based on standard regression modeling, differ from existing ones in that they are based not only on historical observed consumption patterns and projections of economic growth, but also take into account changes in the demographic constitution of countries and regions, and incorporate the assumption that beyond certain level economic prosperity (here in terms of GDP per capita) does not translate into increased demand for paper products. Our key results are threefold. First, the demand for paperboard and hygiene products will…

Evolution of Competitive Strategies in Global Forestry Industries: Introduction

Thinking about industry decline : A qualitative meta-analysis and future research directions

We analyze historical and longitudinal research focusing on industry decline. Our analysis suggests that the literature’s general reliance on a few meta-theoretical arguments has important consequences for how decline is framed and explained. We identify four meta-theoretical clusters in the literature: politics and market dynamics are seen as exogenous factors with deterministic features, whereas technology and management capabilities are framed as firm-internal failures with causally questionable explanations of how firm-level characteristics explain industry-level decline. We propose that it is important to understand the limitations of distinct meta-theoretical arguments for an enhanced…

The past and future of evolutionary economics: some reflections based on new bibliometric evidence

The modern wave of ‘evolutionary economics’ was launched in 1982 with the classic study by Nelson and Winter. This paper reports a broad bibliometric analysis of ‘evolutionary’ research in the disciplines of management, business, economics, and sociology over 25 years from 1986 to 2010. It confirms that Nelson and Winter's book (An evolutionary theory of economic change, Harvard University Press, Cambridge, MA, 1982) is an enduring nodal reference point for this broad field. The bibliometric evidence suggests that ‘evolutionary economics’ has benefitted from the rise of business schools and other interdisciplinary institutions, which have provided a home for evolutionary terminology, but it…

The Evolution of the Global Paper Industry: Concluding Remarks

This concluding chapter summarizes the findings of the volume, and combines those findings with a comparative life-cycle perspective. We demonstrate how pulp and paper industry companies have emerged and exited in different countries. We highlight technology, raw materials, markets and products as factors explaining changes in industry structure and dominance. We demonstrate that industrial growth and the accumulation of technological knowledge require a certain maturity of political systems, regulation, and organization of research and development. Likewise, similarities between regions that lose their competitive advantage are characterized by saturation of demand, thereby weakening incen…