Christoph Lechner

We examine an intriguing paradox regarding whether interdependencies in an organization's activity system enable or hinder strategic renewal, i.e., the incremental process through which an organization continuously adapts to the environment and explores opportunities to invoke change in its activity choices and outputs. One research stream, the "inertial view", argues that the pervasiveness of interdependencies among activities increases inertia, which inhibits strategic renewal. Another research stream, the "adaptive view", argues that the pervasiveness of interdependencies among activities allows for a rich flow of resources and information, which enables strategic renewal. In this paper, we argue that both views provide important insights but arrive at conflicting conclusions because they focus on different dimensions of interdependency. To resolve this paradox, we distinguish between an activity system's interdependency patterns and interdependency rules. We propose that the dimensions of the interdependency pattern set the context in which the dimensions of the interdependency rules guide the exchange of resources and information among interdependent activities. Integrating these two components of an activity system's interdependency design leads to a "dual understanding" of interdependency as both pattern and rule and helps explain how the inertial forces of interdependency patterns may be overcome by putting appropriate interdependency rules in place.

Realising corporate growth remains a challenging task for most firms. In this paper, we examine how multi-unit corporations can effectively coordinate the evolution of their growth initiatives. Based upon research on coordination, we identify four ideal modes that corporations can adopt as a means to dealing with their growth ambitions. We label these four: agenda-setting, context-setting, directing and self-organising. We show how these coordination modes represent different options for corporate management and have different implications for the role split between top managers and managers on subsequent levels. We illustrate them by using primary and secondary data from 51 corporations based in Europe, North America and Asia. Each mode is connected with particular managerial challenges and is most effective in combination with specific context factors. Practitioners can use these insights to deliberately apply an appropriate coordination mode for their growth initiatives.

This study extends both traditional contingency approaches to organizational control as well as the fledgling, and largely conceptual, literature on more holistic control approaches by examining whether and to what extent formal and informal controls interact with each other in their influence on performance outcomes. In particular, we examine whether formal and informal controls act as complements or substitutes for each other, as well as whether such an interaction will be more or less pronounced in the context of higher degrees of exploration. Our empirical findings from an analysis of 184 strategic initiatives conducted by firms across a variety of industries provide support for the benefits of a complementary use of formal and informal controls, but also suggests that the degree of exploration at least partially moderates this effect, and thereby contribute to a more com-prehensive understanding of organizational control.

This study extends both complexity literature and research on exogenous shocks by examining how firms' ex-ante complexity attributes influence immediate and long-term performance in the presence of specific environmental stimuli and whether this effect varies according to type of stimulus. Taking a sample of publicly-traded U.S. bank hold-ing companies, and drawing on the activity systems view of the firm, we propose that three system-wide complexity attributes- (1) concentration, (2) task complexity, and (3) opacity of activities-influence performance outcomes after exogenous shocks. We propose that those effects differ by type of shock, i.e. whether the shock relaxes (deregulation) or tightens environmental constraints (market shock) and study the Gramm-Leach-Bliley-Act in 1999 and the financial crisis with the bankruptcy of Lehman Brothers in 2008 respectively. We find partial support for our hypotheses.