Strategic Practices: An Activity Theory Perspective on Continuity and Change

Paula JarzabkowskiAston Business School

This paper draws upon activity theory to analyse an empiricalinvestigation of the micro practices of strategy in three UK universities. Activitytheory provides a framework of four interactive components from which strategyemerges; the collective structures of the organization, the primary actors, in thisresearch conceptualized as the top management team (TMT), the practical activitiesin which they interact and the strategic practices through which interaction isconducted. Using this framework, the paper focuses specifically on the formalstrategic practices involved in direction setting, resource allocation, and monitoringand control. These strategic practices are associated with continuity of strategicactivity in one case study but are involved in the reinterpretation and change ofstrategic activity in the other two cases. We model this finding into activity theory-based typologies of the cases that illustrate the way that practices either distributeshared interpretations or mediate between contested interpretations of strategicactivity. The typologies explain the relationships between strategic practices andcontinuity and change of strategy as practice. The paper concludes by linking activitytheory to wider change literatures to illustrate its potential as an integrativemethodological framework for examining the subjective and emergent processesthrough which strategic activity is constructed.

INTRODUCTION

A study of micro strategy may be located within the growing body of researchupon ‘practice’, which focuses upon how people engage in the doing of ‘real work’(Cook and Brown, 1999, p. 387). Practice scholars examine the way that actorsinteract with the social and physical features of context in the everyday activitiesthat constitute practice. The practice concept has recently penetrated the strategy

Journal of Management Studies 40:1 January 20030022-2380

© Blackwell Publishing Ltd 2003. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA.

Address for reprints: Paula Jarzabkowski, Aston Business School, Aston University, Birmingham B4 7ET,UK (P.A.Jarzabkowski@aston.ac.uk).

literature as strategy as practice, recommending that we take strategists and theirwork seriously (Whittington, 2002). Strategy as practice endeavours to explain howmanagerial actors perform the work of strategy, both through their social inter-actions with other actors and with recourse to the specific practices present withina context (Hendry, 2000; Whittington, 1996, 2002). There is an important dis-tinction between practice and practices. Practice embraces the interactions andinterpretations from which strategic activity emerges over time. References to strategy as practice in this paper are thus specifically referring to the patterns ofinteraction and interpretation involved in the strategic activity pursued by our case studies. Practices are those habits, artefacts, and socially-defined modes ofacting through which the stream of strategic activity is constructed (Turner, 1994;Whittington, 2001). Practices may thus be seen as the infrastructure through whichmicro strategy and strategizing occurs, generating an ongoing stream of strategicactivity that is practice.

This paper focuses upon the role of strategic practices in the construction ofstrategy as practice. We analyse how strategic practices are implicated in sustain-ing or changing patterns of strategic activity over time. The paper is in three sec-tions. In the first section an activity theory framework is established as the basisfor analysis because of its emphasis on the role of practices in constructing practical activity. In the second section we present data on the specific strategicpractices used in three UK universities, Warwick University, London School ofEconomics and Political Science (LSE) and Oxford Brookes University. In the finalsection, the activity theory framework is used to analyse the relationship betweenstrategic practices and continuity or change in each case.

BUILDING AN ACTIVITY THEORY FRAMEWORK

In this section a conceptual framework of activity theory is developed in Figure 1and used to explain the three key contributions of activity theory to a study ofstrategy as practice. First, we highlight the focus upon practical activity. Second,the activity theory concept of practices as mediators between constituents is dis-cussed. Finally, we examine the way that activity theory may be used to explaincontinuity and change at the activity system level.

Activity theory conceptualizes psychological development as a process of socialinteraction within particular historical and cultural contexts (Vygotsky, 1978). Inter-action provides an interpretative basis from which individuals attribute meaning totheir own and others actions and so are able to engage in shared activity (Vygotsky,1978; Wertsch, 1985). Shared activity is practical, in that it is conducted with anoutcome in mind (Engestrom et al., 2002). The context of practical activity isdefined as an activity system (Engestrom, 1993). An organization may be consid-ered an activity system comprising three main constituents, actors, collective socialstructures, and the practical activities in which they engage (cf. Blackler, 1993).

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In this paper, the university is defined as an activity system comprising three keyconstituents of interaction, the top management team (TMT) as key actors, theorganizational collective structures and the strategic activity pursued. While notthe only strategic actors, the top team, for reasons of formal position and accessto power and resources, are important to strategic action (Child, 1997; Finkelsteinand Hambrick, 1996; Hambrick and Mason, 1984; Pettigrew, 1992; Whittington,1992, 1996). Therefore, this paper identifies the TMT as key actors in strategy aspractice. The TMT interacts with collective organizational structures compris-ing history, culture, and those ‘other actors’ who contribute to strategic activity(Weick and Roberts, 1993). The top team and the collective structures engage instrategic activity as a form of shared endeavour (see Figure 1). We now explainthe activity theory concepts of shared activity and the mediating role of practicesillustrated in Figure 1.

A focus upon practical activity is the first contribution of activity theory to ouranalysis. Practical activity is the site of interaction in which actors engage withtheir contexts over time. Here activity theory extends other forms of social theorythat deal with the interaction between actor and context by adding the practicalactivity dimension in which interaction occurs (Blackler, 1993). Other social theo-ries tend to predicate interaction upon agency, for example structuration (Barnes,2000; Giddens, 1984), or upon social structure (cf. Bohman, 1999; Bourdieu, 1990)or focus upon reciprocity that obscures interaction and conflates the two (Archer,1995; Clark, 2000). However, in activity theory practical activity is posited as theessential site for analysing interaction between actors and collective structures.Practical activity is comprised of a series of actions but it is a more historically

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TMT actors

Mediation throughstrategic practices

Collectivestructures

Strategic practices permit shared activity

Strategicactivity

Stra

tegi

c pr

actic

es p

erm

it

inte

ract

ion

with

the

othe

rStrategic practices perm

it shared activity

Figure 1. The activity system in which strategy as practice occurs (arrows indicate the mediatingproperties of strategic practices)

situated and collective notion than any single action. Rather, a stream of actionsis invested with meaning and purpose through the ‘taken-for-granted and highlycontextualized rationale’ (Spender and Grinyer, 1996, p. 30) of the activity system.In Figure 1, practical activity is posited as strategic activity; activity that arises fromthe interactions of TMT actors and collective structures over time and affects theuniversity as a whole to the extent that it also becomes an important constituentof the activity system.

The second key point of activity theory for our analysis is its interpretation ofthe practices through which actors and collective structures interact in practicalactivity. Activity theory suggests that interaction arises through the technical andpsychological tools that actors use to engage with their environments (Engestrom,1993; Kozulin, 1990). The use of such tools is practical, being oriented towardsconstructing activity. For example, strategic actors may use tools to coordinate andmanage the material resources of strategy as well as to generate meaning fromand impose meaning upon the context in which strategy is conducted. Tools thus have a practical purpose in enabling organizational constituents to engage instrategic activity. However, activity theory does not conceptualize tools as primar-ily the instruments of any particular constituent, such as the TMT. Rather, toolsare conceptualized as instruments of mediation between the varied purposes andinterests of constituents. These ‘tools’ of interaction and mediation may be definedas the practices through which strategy is constructed. In Figure 1, arrows are usedto indicate the properties of practices in enabling interaction and shared strategicactivity between not necessarily consensual constituents of an activity system.

Blackler (1993) enhances our understanding of the practices by which an activity system mediates between the different interests of constituents. In orderto function as a system, different organizational constituents require a means ofinteracting with each other sufficiently to produce strategic action. Blackler sug-gests that this mediating function is similar to the notion of formal operating pro-cedures through which the constituents of an organization may reach agreementon the actions to be pursued (cf. Cyert and March, 1963). The formal operatingprocedures are underpinned by tacit, habitual and inexplicit routines that provide‘effective vehicles for truce between groups’ (Blackler, 1993, p. 877). Due to theiraccompanying tacit, habitual routines of behaviour, such procedures are pervasivein distributing and perpetuating the interpretative rationale in which practicalactivity occurs and so are likely to be highly persistent over time (cf. Nelson andWinter, 1982). If we identify strategic practices as formal operating procedures, itis possible to capture not only the formal but also the habitual and social modesof acting through which strategic activity is constructed.

One of the enduring problems for social theory and for theories of the firm ishow a social system can be prone to both repetitive reconstitution of practice, thatis, to continuity, and also have the capacity for change. While any definitive answerto this problem is beyond the scope of this paper, a third key contribution of activ-

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ity theory is the way it can be used to examine and explain continuity and changein the patterns of activity within an activity system. The interpretative rationalethat underpins practical activity is a powerfully situated construct with a ‘long his-torical half-life’ (Engestrom et al., 2002) that is associated with continuous patternsof practice. Despite this persistence, activity theory is essentially a learning theorythat has provided a foundation for theories of knowledge creation (Blackler, 1995),learning within communities of practice (Brown and Duguid, 1991; Lave andWenger, 1991) and organizational renewal (Spender and Grinyer, 1996). An activ-ity system is able to reconceptualize the interpretations underpinning practicalactivity, so opening ‘an expanded repertoire of possible actions and goals’(Engestrom et al., 2002). Changing systemic interpretations about the nature ofactivity are thus associated with changes in practice.

The capacity for change in practice arises from the interaction between actor,collective and practical activity. Since the constituents of the system may not holdsimilar interpretations, the rationale for strategic activity is beset by contradictionsand is innately contested. Some contradictions may be largely latent, occurringonly for some constituents but not surfacing as a contested interpretation of activ-ity at the system level. These sub-system aggravations are likely to occur and beresolved without any change to the collective rationale for activity. However, whenthere are contradictions and contested interpretations between constituents, thesegenerate system level tensions that provide an opportunity for changing interpre-tations about activity (Blackler, 1993; Engestrom et al., 2002).

Practices are often seen as predisposing continuity in patterns of strategic activ-ity (Cyert and March, 1963; Nelson and Winter, 1982). However, if practices areviewed as mediators between constituents of an activity system, we can under-stand their relationship with change. Practices enable constituents to interact witheach other in shared practical activity, generating continuity (Greenwood andHinings, 1988; Miller and Friesen, 1984). When interactions with other con-stituents and shared activity break down due to contradictions and contested interpretations, practices serve as mediators between the competing views ofconstituents to effect changes in practice. Practices may be used to mould thecontext of activity, to leverage new patterns of activity, and to reconceptualize therationale in which activity occurs. As new patterns of activity arise, this may createtensions with the old practices, leading to their modification or alteration. Ofcourse, the practices are historically and culturally situated and have a collectivelyunderstood status, so there are always likely to be residues of the past in changedpatterns of activity. However, even inherited practices may be used to mediatebetween constituents in modifying or leveraging new patterns of strategic activity.

Our primary focus in this paper is the practices that mediate between con-stituents in constructing strategy as practice. As indicated by the arrows in Figure1, the practices enable the TMT and collective structures to interact with each

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other and to engage in shared strategic activity. Internal arrows illustrate the medi-ating properties of practices when contradictions arise between existing strategicactivity, collective interests and TMT interests. The activity system may be main-tained in essentially continuous patterns of interaction and activity or these patterns may undergo change, depending upon the way that practices are used to mediate interactions and strategic activity over time. Drawing upon Blackler(1993), key strategic practices are identified as those formal operating proceduresinvolved in direction setting, resource allocation, and monitoring and control.While these are not the only practices from which strategic action is constructed,they are theoretically valid within the strategic management literature and areinnately ‘practical’ being concerned with the doing of strategy (cf. Garvin, 1998;Grant, 1988; Simons, 1994).[1] Formal procedures have a dual function as bothmaterial infrastructure and social artefacts that leads to our definition of them asstrategic practices involved in the construction of strategy as practice.

While activity theory may be used to conceptualize continuity and change inan activity system, particularly through its focus on the relationships between prac-tical activity and practices, this approach is still largely theoretical. For example,Blackler (1993) is critical because activity theory provides an integrative frame-work for understanding system level continuity and change but provides weakexplanations for how these occur. First, it has not been used to explain the originsof contradictions in the activity system. Secondly, it does not explain what sustainsthese contradictions and thirdly it does not show the ways in which change occursfrom them. In this paper we use the activity theory framework developed in Figure1 to explore how practices are involved in interaction and how they mediatebetween organizational constituents in constructing strategic activity. We use thisframing to explain how and why contradictions arise and change occurs in ourthree case studies.

CONDUCTING STRATEGY RESEARCH IN UNIVERSITIES

Universities are identified as increasingly important sites for the study of strategicaction (Ferlie, 1992; Gioia and Thomas, 1996). In OECD countries generally and in the UK specifically, annually decreasing levels of public funding from 1980onwards have been associated with market-driven competition, termed the quasi-market (le Grand, 1991). In this competitive and non-munificent environment,universities have undergone strategic change (Gioia and Chittipedi, 1991; Gioiaand Thomas, 1996) and adaptation to diverse environmental demands (Sporn,1999). The impact of competition is seen in strategic behaviour such as the riseof entrepreneurialism in order to maximize public funding and gain additionalresources from commercial activities (Clark, 1998). Universities are, therefore, arelevant and somewhat neglected context for the study of strategic action.

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Universities also have some unique characteristics that may be particularly interesting for a study of strategic action. They have traditionally been portrayedas professional bureaucracies (Mintzberg, 1979), loosely coupled systems (Weick,1976), or organized anarchies (Cohen and March, 1974). From this perspective,universities are pluralistic organizations with multiple goals that are not neces-sarily compatible with a corporate centre or an overarching strategic direction.However, a feature of competitive environments, such as that experienced by universities over the last 20 years, is the tendency to move from pluralistic to centralized forms of organization (Khandwalla, 1973; Mintzberg, 1979). Earlyfindings on the effects of new public management in UK universities suggest thatthey may indeed be becoming more managed and more influenced by businessprinciples (see Deem, 1999–2000). While principles of collegiality and professionalautonomy still apply, it appears theoretically valid and practically relevant in thecurrent university environment to focus upon strategic action as a university levelconstruct and to gather data from the perspective of ‘manager academics’ (Deemand Johnson, 1999). We therefore adopt a top team perspective in this study.

RESEARCH METHOD

Conducting the research in a single sector, UK universities, minimized potentialvariance occasioned by cross-sectoral comparisons. Theoretical sampling criteriaguided the selection of individual cases on the basis of apparent contextual dif-ference in history, origin and market position (cf. Yin, 1994). While not constitut-ing in all respects ‘polar types’ (Pettigrew, 1990), the three contextually distinctivecases, Warwick, LSE, and Oxford Brookes, were seen as appropriate to address-ing the topic (see Table I).

Longitudinal in-depth case studies were conducted at each site over a seven-year period, 1992 to 1998 inclusive, six years of retrospective and one year ofreal-time data collection. Data were collected from five main sources; interviews,observation, ethnographic data, documents, and archival data (see Appendix).These sources were designed to counteract the bias potentially resulting fromrelying upon a single data source (Denzin, 1989; Eisenhardt, 1989), particularlywhere retrospective analysis is involved (Golden, 1992). Multiple sources alsofurnish the breadth of information needed to develop a relatively holistic pictureof strategy as practice ( Jick, 1979; Pettigrew, 1990).

A total of 49 open-ended interviews were held with all current TMT membersand, where pertinent to specific strategic actions studied, some former TMTmembers and non-TMT members. Interviews lasted, typically, 90 minutes, ofwhich 44 were audio-taped, the remaining five being reconstructed within 24hours from detailed notes (cf. Eisenhardt, 1989). While uniform prompts were usedto ensure consistency, open-ended interviews were adopted to encourage partici-

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pants to ‘engage in a stream of consciousness’ (Gioia and Thomas, 1996, p. 374),reflecting upon the issues they perceived as important (cf. Langley, 1989).Interviews investigated both retrospective and current strategic actions and practices.

Serial observations of 51 strategic level meetings across the cases, averagingapproximately two hours per meeting, were conducted throughout the year of real-time data collection. Sustained observation enabled the identification of ongoingpatterns of activity and the meaningful practices associated with those patterns(Barley, 1995). Background that enhanced the interpretation of observations wasaccessible through committee minutes, interviews, and informal discussion withparticipants.

Data of an ethnographic nature were collected to achieve greater familiaritywith locally meaningful informal processes and routines (Van Maanen, 1979). Pre-and post-meeting observations provided an opportunity for observation, as didother general on-site interactions. Additionally, the senior Pro-Vice-Chancellor(PVC) at Warwick and the senior Deputy-Vice-Chancellor (DVC) at OxfordBrookes were shadowed for one week each. Given the time constraints of theresearch, a week enabled greater familiarity with practices and informal interac-tions at the top team level (cf. Mintzberg, 1973). At LSE shadowing was not under-taken as the fieldwork on that site involved whole day visits to the Planning Officein the senior management wing, next to the communal coffee machine visited by

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Table I. Demographic characteristics of sites

Characteristics Warwick LSE Oxford Brookes

Date established 1965 1895 School of Art: 1865Polytechnic: 1970University: 1992

Type1 Campus Civics, Redbricks, NewFederal

Market position/ Top 10 University Top 10 University Top new Universityacademic Research-led institution Research-led institution Teaching-led institutionreputation

Total income, 138,706 73,783 65,2081996/97, £,0002

Student numbers 11,947 8,311 10,1811997/983

Note:1 Type refers to the 5-category typology used for site selection: 1. Ancients; 2. Civics, Redbricks and Federal; 3.Campus; 4. New; and 5. Technological (O’Leary, 1997).2 Source: HESA statistics, May, 1998.3 Source: HESA statistics, September, 1999.

all senior management and their support staff. As trust grew, ethnographic databecame available through informal discussion, eavesdropping and observation.

Minute books from key strategic committees for the period 1992 to 1997 inclu-sive were the principal source of archival data. These were supported by otherdocuments such as annual reports, annual accounts, academic databases, strategicplans, audit documents, and university calendars. Such data were used to anchorand inform the data collection process, developing extensive processual analysesof strategic activities, both for reconstructed events and to complement real-timedata with antecedent material (Golden, 1992).

The above data sources resulted in a rich qualitative data set which was sub-jected to a thematic analysis, progressively moving from very broad categories tokey themes and constructs (Miles and Hubermann, 1994). Data were arranged ona coding tree with four branches. The central analytic question examined how topteams do strategy in UK universities. A first concern was simply to document what

strategy, longitudinally tracing those actions that might be considered strategicbecause of their importance to the institution as a whole. This formed the firstbranch of the coding tree. A second branch of the tree dealt with identificationof the top team and their involvement in strategic actions. These questionsinvolved considerable iterations with the data to extract actors and actions andmerging of coding trees to trace patterns of involvement. In order to understandthe practices used to engage in strategic action and their implications in strategicoutcomes, a third branch was developed for coding processes of direction-setting,resource allocation and monitoring and control. The final branch identified spe-cific practices involved in these processes, such as formal procedures, committees,and planning mechanisms.

As analysis progressed, induction overlapped strongly with deduction in orderto theoretically validate the data that consistently appeared pertinent across tri-angulated sources (Orton, 1997; Pettigrew, 1997). There is no inevitability incoding schema since the assumptions of the investigator will guide selection of thephenomena of interest. At this stage, activity theory increasingly met the require-ments of analysis, deriving an explanation of different patterns of doing strategyfrom the different practices in each case study. This interpretation of the data alsoexplained the different patterns of continuity and change in strategic activity thatwere uncovered. Throughout this process Nud*ist, a software package that enablescomplex, multiple and fine-grained coding of mass qualitative data, was an invalu-able tool. Using Nud*ist, the 4521 coded items, ranging from one line to one A4page in length, were coded, compared, contrasted and then re-coded at least onceand often up to five times as induction and deduction converged upon a point ofsaturation (cf. Eisenhardt, 1989).

While subjectivity is inevitable in such analysis, it is also important to refrainfrom misinterpreting data through researcher or informant bias. Therefore, threetechniques were used; triangulation, inter-coder reliability checks and validation

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from participants. Triangulation avoids the potential bias of a single data sourceand assists in constructing more complete and accurate analyses through con-verging sources of evidence (Eisenhardt, 1989; Jick, 1979; Yin, 1994). Inter-coderreliability checks, were performed to confirm the consistency of the coding schema(Fox-Wolfgramm, 1997). The coding tree and construct definitions were explainedto two doctoral students who were unfamiliar with the data. A data sampleretrieved directly from the Nud*ist files and in no way altered from that used bythe investigator was then given to the two co-analysts. The sample comprised 10per cent of the complete data set and covered constructs and issues from eachbranch of the coding tree and each data source. Upon evaluation, coding in thesample was found to be between 97 and 100 per cent reliable from both co-analysts. The high consistency of this evaluation and the typical nature of the dataexamined helped to verify the reliability and robustness of the analysis. Finally,results of the analysis were fed back to TMT participants to check consistency ofinterpretations, which helped to validate the findings. A combination of stronglytriangulated data, inter-coder reliability checks, and validation from participantssignificantly limited the possibility of researcher bias.

DATA AND PRELIMINARY ANALYSIS

In this section, we present within-case data. There is a brief description of the topteam and the strategic actions pursued by each university. Formal proceduresinvolved in direction setting, resource allocation and monitoring and control arethen described. We explain how these procedures enable the TMT to interact withother constituents in constructing strategic activity and show how contradictionsand changes arise in the cases.

Case 1: Warwick University

Warwick is a research-led university with a reputation for entrepreneurial activitybecause it generates 65 per cent of gross income from commercial sources (Clark,1998). This reputation is a dominant and guiding interpretative framework forstrategic activity and it is widely shared by the TMT; ‘There is a lot of sharedunderstanding between members of the team in terms of the entrepreneurialculture and the innovative culture’ (Senior PVC). These interpretations and asso-ciated patterns of strategic activity remained continuous throughout this study.

TMT. The top team comprises nine members of whom the VC, the Senior PVCand the Registrar constitute an inner core. The TMT is characterized by stablerole composition and relatively long tenure to the extent that six members havebeen on the team in excess of five years and the Registrar for 29 years. The majorchange in the TMT during this study was the inception of a new VC in 1993.

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Strategic actions. From 1992 to 1998, Warwick consistently pursued goal-orientedactions related to research excellence, income-generation, capital expansion, andgrowth of the Science faculty. Key research actions undertaken were: responses tothe 1992 and 1996 Research Assessment Exercises (RAE); the 1994 WarwickResearch Fellows’ initiative to grow the research community; and action from1994/95 onwards to stimulate research grant and contract income in response todeclining performance. There was rapid expansion of capital works in the earlierphase of this study, stabilizing from 1996 onwards as the operating surplus becamemore constrained. At this time the focus on income-generating activities, alwaysstrong, increased. Growth of the Science faculty occurred through capital infra-structure, appointment of research staff, and growth in student numbers. This cul-minated, towards the end of the study, in a successful bid to develop a medicalschool. While a number of exogenous and endogenous factors were influential,such as a new VC and new actions such as the medical school and the researchfellows’ initiative, patterns of strategic activity remained consistent with goalsthroughout the period of analysis.

Key practices in constructing continuity in patterns of strategy as practice. Three main com-mittees were identified as the formal operating procedures serving strategic inter-action: the Strategy Committee, Estimates and Grants Committee (E&G) andEarned Income Group (EIG). Together these committees are responsible for thekey strategic activities of strategic planning, financial decision-making, incomegeneration, resource allocation, and monitoring and control (see Table II). Thethree committees have overlapping top team membership and are chaired by thethree inner core members of the TMT. The top team thus have dominant accessto the practices that distribute interpretations of desirable strategic activity.

Resources are distributed through Strategy Committee as part of the annualfinancial planning process. This committee is supported by E&G for academicresource allocation and EIG for income generation. Resource allocation throughE&G is used to shape organizational growth and retrenchment according to topteam prioritization of departmental needs (see Table II). As resources are in principle zero-based, departments bid to E&G for staff replacement or growth.Redeployment of resources is common, such that most positions during the period of real-time observation reverted to a junior post and on three occasionsresulted in no post being granted. These practices establish a competitive dynamicwithin the institution, which is perceived as beneficial; ‘Because of the thrivingatmosphere of the place, [academic staff] get ahead of their contemporaries’(Registrar).

Competition for resources is balanced by a strong focus upon income genera-tion and profit sharing. EIG manages all income generating activities, includingacademic areas of revenue such as full fee paying courses (see Table II). This his-torical practice arises from Warwick’s ‘save half/make half ’ response to the funding

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cuts of the early 1980s. Warwick saved resources through committees such as E&Gand made income through EIG. Profits generated through EIG activities con-tribute to a central resource pool that is allocated in accordance with top team priorities. Profit-sharing mechanisms between the centre and departments, includ-ing a ‘super surplus’ retained by high income generating departments, reinforcean entrepreneurial identity and increase the power of financially viable depart-ments in their relationship with the TMT; ‘Earned income activities give youautonomy, flexibility and a stronger link. You’re more of a stakeholder’ (PVC).Top slicing of profits enables the TMT to finance strategic initiatives and cross-subsidize lower income-generating departments.

Monitoring and control operates through the formal committees, which offermaterial sanctions and rewards for strategically oriented behaviour. Strategy Committee monitors the performance of activities against trends and forecasts,supported by EIG quarterly accounts and annual ‘Challenge’ meetings (see TableII), in order ‘to bulk up the better income streams and minimise or curtail less pro-ductive ones’ (Finance Officer). Strategy Committee also monitors academic goalattainment, as this is associated with financial performance. E&G performanceanalyses feed into Strategy Committee and are used to monitor and inform deci-sions on academic resource allocation. These practices embed and sustain theentrepreneurial and competitive rationale for activity and encourage performancethat meets strategic goals; ‘We’re not going to tolerate second rate anything’ (Pro-Chancellor).

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Table II. Function of strategic committees at Warwick University

Committee Function

Strategy • Develops the financial planCommittee • Makes strategic decisions relating to growth, development, and resource allocation

• Considers action plans• Monitors implementation and performance in the main areas of university

strategic action

Earned • Manages and monitors all non-state grant sources of income, known as earnedIncome income activities comprising some 65% of gross incomeGroup • EIG conducts quarterly monitoring of the four categories of activity: academic-(EIG) driven; spin-off; stand-alone; and self-financing and conducts an annual

‘Challenge’ review

Estimates • A centralized system of resource allocation interacting directly with academicand Grants departments using a ‘zero-based’ model whereby departments must apply for the(E&G) filling of vacant posts with resources transferable according to central priorities

• Traditionally, where posts are granted, the position reverts to a junior post, actingas a savings device and, indirectly, a source of embedding cultural values

• Shapes the university by implementing growth, retrenchment and efficiency gains

Direction setting is tacitly present at the TMT and organizational levels. It ispredominantly focussed upon maintaining and enhancing research excellence,income generation and capital expansion, which are key points in the strategicplan. While TMT members do not talk about the strategic plan during decision-making, analysis of actions from 1992 to 1998 indicates that they are consistentwith the plan. Such directions are common assumptions underpinning the finan-cial planning process at Strategy Committee and the associated resource alloca-tion and monitoring and control through E&G and EIG. Directions are embeddedwithin and reinforced by practices that accord power, autonomy and profit to thosedepartments that embrace established directions.

The formal committees mediate highly consistent interaction between the topteam actors and university community over strategic activity. The habitual rou-tines underpinning interaction are referred to by the top team as the ‘strong centre,strong department’ model of acting, ‘You’ve got this strong department there, thisstrong centre here and there is a kind of a balance’ (Academic Registrar). The topteam or centre is ‘strong’ because of its hold over resources, income-generation,and overall strategic positioning of the University. Balance is attained becausedepartments gain ‘strength’ through strong leadership combined with excellentperformance in research ranking and income-generation, so maintaining power intheir relationships with the centre. The formal operating procedures and associ-ated routines thus encourage constituents to collaborate in interpretations of desir-able strategic activity. At Warwick there are few contradictions or contestedinterpretations at the system level, which accounts for the continuity in patternsof strategic activity observed over the period of this study.

Case 2: London School of Economics and Political Science (LSE)

LSE is a research-led social science institution with a reputation for academicautonomy that members refer to with pride, implying that it has a symbiotic rela-tionship with research excellence; ‘We recruit very good people because it is a free,non-coercive atmosphere which is highly conducive to research’ (Pro-Director).The symbiosis of excellence and autonomy is both socially embedded and presentin formal practices to avoid overt power structures; ‘There is a long tradition atLSE of checks and balances . . . to marginalize power’ (Pro-Director). This patternof activity was undergoing change during the period of this study through chang-ing uses of existing practices.

TMT. The TMT expanded in 1998 to four members from a formerly three-member team. Of these, only the Secretary (Registrar equivalent) has been on thetop team longer than two years. Although both were internally selected, the Pro-Director for external affairs commenced in 1996/97 and the Pro-Director forinternal affairs in 1998. A new Director arrived in 1997.

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Strategic actions. Documented strategic goals are related to research excellence,maintaining the full range of social sciences, income generation, and developmentof capital infrastructure. However, analysis provides evidence of strategic drift anddissonance between espoused intent and action, particularly during the earlierperiod of this study. For example, despite a policy of zero growth, student numberswere over target by between 200 and 400 each year from 1994 to 1998/99, par-ticularly in high fee-paying subject areas. Such drift is counter to policy, distortingthe ethnic balance and social science composition of the School and overtaxingthe capital infrastructure; ‘Every year we say we won’t let the numbers change andwe do’ (Senior Academic).

The culture of the School is resistant to commercial activities as these are inter-preted as diluting academic endeavour: ‘The old LSE types [are] not given to com-mercially induced whims or undermining of academic standards’ (SeniorAcademic). It has, therefore, been difficult to implement income-generating activities. However, coincident with the appointment of a new Director in 1997,a number of overarching strategic initiatives are being implemented; ‘There is nodoubt that he is embarked upon a radical programme of change here’ (SeniorAdministrator). For example, the School has undergone a professional marketingcampaign designed to increase visibility and enhance income generating capacity.There is thus increasingly shared strategic activity between the top team and theorganisational collective in the latter part of the study.

Key practices in constructing change in patterns of strategy as practice. Four main com-mittees were identified as the formal operating procedures serving strategic inter-action: Standing Committee, Finance Committee, Academic Planning andResource Committee (APRC), and Academic Board (see Table III). While theDirector chairs the latter two, the top team do not act together as the primaryplayers on any main strategic and financial planning committee. Indeed, the TMTdo not formally manage resource allocation. Resources are authorized by theFinance Committee and allocated by APRC, a collegial body comprised of pro-fessorial and non-professorial staff. This practice has origins in the avoidance ofovert power structures. APRC was developed in 1992 specifically to mediatebetween the strategic goals of the former Director and the goals of the academicstaff. In keeping with power avoidance, APRC itself lacks any clear system ofauthority relying upon non-cash formulae, known as Minimum Staffing Levels(MSLs), to allocate resources. These were introduced in 1992/93 in an attempt toshape the School’s growth through self-monitoring behaviour. However these prac-tices proved inflationary and partially responsible for the strategic drift in studentnumbers, highlighting the contradictions between interpretation, action andintent. As a result formulae have been refined in 1998 into a system of Opera-tional Pounds Per Point (OPPP) to better monitor resource utilization. While theTMT do not formally control resources, they have a tacit, negotiated access to

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resources; ‘One has the opportunity to command resources but . . . only in a waythat you persuade people’ (Pro-Director).

Monitoring and control are part of the five yearly APRC reviews but these areweakly sanctioned. That is, strong performers in research, student recruitment,and income-generation do not receive greater tangible rewards and lesser per-formers are not penalized. However, the weak formal sanctions are balanced bystrong normative sanctions. For example, the recent transparent dissemination ofdepartments’ performance in resource utilisation under the OPPP illustrates therole of practices in changing interpretations. Referred to as a form of ‘re-integrative shaming’ (Senior Academic), non-cash formulae are a collegial methodof control intended to encourage normative compliance with strategic goals (cf.Langley, 1989); ‘We’re disciplining ourselves in order not to be disciplined fromthe outside’ (APRC member). There is thus a subtle change in the use of existingpractices that is modifying perceptions of appropriate strategic activity.

Direction setting is emergent, with the strategic plan describing as much as pre-

scribing strategic action. Neither Standing Committee nor APRC set directionsalthough the former approves the strategic plan while the latter makes recom-mendations to the Academic Board for approval. The Academic Board, whichcomprises the whole academic body, is influential in vetoing strategic actions thatdo not comply with the collegial culture. For example, Academic Board activelyresisted the strategies of the previous Director; ‘It proposed a series of resolutionswhich altered the way in which his vision would be handled. They blocked it inthat sense’ (Senior Administrator). As directions gain sufficient recognition throughthe various committees, they attain formal status as strategic goals.

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Table III. Function of major strategic committees at LSE

Committees Function

Standing • Acts as a governance body, authorizing, and legitimating strategic actionsCommittee relayed to it by the top team and APRC

Academic • Collegial committee that is influential in either authorizing or vetoing strategicBoard actions recommended by APRC

Academic Collegial body which makes recommendations to Academic Board regarding:Planning and • 5 yearly departmental reviews, to determine their resource allocationResource • develops and refines non-cash resource allocation formulae (MSLs and OPPP)Committee • student number and fee-level planning(APRC) • annual resource distribution exercise for recurrent and non-recurrent resources

• interfacing with other strategic committees such as the Finance Committee,reporting to Standing Committee and receiving reports from other committees

• medium-term future planning of the shape and size of the university

Finance • Determines the resources available for academic or other strategic endeavour,Committee after running and maintenance costs but does not allocate these resources

However, strategic activity is becoming more purposive under the current Director. While many of the strategies he champions are compatible with those ofthe former Director, he is more influential because of personal characteristics suchas academic credibility as a leading scholar in the social sciences. Additionally heis skilled in leveraging the practices necessary to support strategic action at LSE;‘You don’t move things in this place by being managerial. You find champions forthings who will work with the grain of the School to secure change’ (Secretary).While the strategic practices, by tradition, are intended to mediate between thetop team and the long-standing collective structures in accounting for differentperceptions of strategic activity, the top team are able to deploy the practices toinfluence behaviour. For example:

Because of this collegiate structure there is really relatively few areas that theDirector can get his way, other than by persuasion. (APRC member)

[However] If the Director comes to the committees and says, I’ve got this whizscheme, it’s brilliant, it’s going to revolutionize the School and I want a quarterof a million for it, it’s very hard for the APRC and the Finance Committee totell him to get lost. (Another APRC member)

As the TMT use practices to influence interpretation of appropriate strategic activity, they progressively change interpretations of those practices. For example,in many discussions the establishment of APRC was explained as ‘a rope torestrain’ different LSE constituents ‘and you can’t push issues with a rope’ (APRC13/10/98). However, with changing uses and interpretations, APRC is increas-ingly a practice that has been appropriated by the top team to influence activity,as per the following exchange:

TMT 1: The role of the APRC is to do what we want to do. That’s what it’sthere for. It does what we want in my opinion.

TMT 2: I don’t think it thinks of itself in that way and it certainly didn’t behavethat way for a period of time.

TMT 1: It’s much better now.TMT 3: Yes, much better now.TMT 1: I don’t mind it too much because we can always do what we want and

get people to agree to it. (Investigator feedback report, July 1999)

The top team managed to generate support for changing strategic activity by con-vincing interested parties of the desirability of that activity; ‘We get other peopleto think that they want what we want’ (Director). In order to secure this changein interpretations of activity, the top team had to work within the existing prac-tices. The previous Director also attempted to change strategic activity. However,

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he failed to adequately utilize existing practices to mediate with School con-stituents, reinforcing contradictions that obscured change. In the later part of thestudy, existing practices were used by the TMT to mediate between contradictions,distribute changing interpretations of the rationale for action, and so increase par-ticipation in shared strategic activity. This is associated with a changing interpre-tation of the practices themselves.

Case 3: Oxford Brookes University

A former polytechnic, Oxford Brookes is one of the leading ‘new’ universities inthe UK. The University has a reputation for teaching excellence, having pioneeredmodular programmes in the 1970s, and this is reflected in student-centred activity; ‘Commitment to the students was tangible’ (Former Senior DVC).However, a series of changes such as incorporation as an autonomous body in1989 and attainment of University status in 1992 have provided a focus for changein the rationale for strategic activity; ‘Brookes as a whole wanted to mature andmost universities tend to see research as being the way in which to mature’ (Headof Department). This has resulted in some contradictions since ‘It doesn’t knowwhether it wants to be a teacher [or] a researcher’ (PVC).

TMT. The TMT expanded in 1998 from a four-member to a six-member team.Two members of the team have been at Oxford Brookes since the early 1980s,while the Senior DVC was replaced in 1994. The current VC commenced in 1997and two new PVC posts were initiated in 1998.

Strategic actions. Strategic intent and actions in the earlier part of this study werelargely focused upon financial viability and building capital infrastructure, whilstmaintaining the teaching reputation. During this period the University consoli-dated its student funding levels at 17.3 per cent above the sectoral average and purchased a new campus site. Since 1998, strategic actions have been influenced by sectoral changes in funding formulae, which resulted in a 12.3 percent decrease in state funding per student unit of resource for Oxford Brookes.This equates with a growth of 800 un-funded student places. To meet this objective, a range of actions was implemented involving partnerships with higher education colleges and industry that could deliver education withoutincreasing on-campus student numbers. These actions are broadly consistent withthe history of innovation in teaching and learning and maintaining financial via-bility. They are being rapidly implemented to the extent that the University hasmet its growth targets in half the time agreed with the state funding body. However,building the research profile is harder to progress as it contradicts former inter-pretations of strategic activity; ‘strategically we couldn’t be a research University’(Former VC).

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Key practices in constructing change in patterns of strategy as practice. Practices at OxfordBrookes have been in a state of change during the period of this study as part ofthe drive to develop a more purposive University direction. Four main commit-tees were identified as involved in strategic interaction; Board of Governors, Vice-Chancellor’s Advisory Group (VAG), Academic Board, and Strategy and PlanningCommittee (SPC), of which VAG is the most influential, comprising the TMT;‘It’s really where we set the agenda. That’s the core executive team and that’swhere we decide what sort of policies we are taking through; what we want to do’(VC).

Governance procedures for former polytechnics prior to incorporation left themwith relatively under-developed formal procedures for self-administration (Bastin,1990; McNay, 1995). In 1994 the University undertook a review of strategic prac-tices and organizational directions called ‘Agenda for Brookes’ on the premise that‘we can’t be content with where we are now’ (Former DVC). This move was fur-thered in 1995/96 with a more accountable strategic and financial planning prac-tice, the strategic planning cycle, which is now the dominant practice integratingTMT, organizational collective and strategic activity within a single annual processthat is monitored by the TMT at every stage. As part of the planning cycle, deci-sions go to Board of Governors for approval and to other bodies, mainly Acade-mic Board and its sub-committee, Strategy and Planning Committee (SPC), forinformation dissemination and to comply with University governance regulations(see Table IV).

While directions originate in response to external stimuli or internally emergentissues, they must be incorporated within the strategic planning cycle to be actioned.

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Table IV. Function of major strategic committees at Oxford Brookes University

Committee Function

Board of • Responsible for the administrative and management accountability of theGovernors institution, particularly in terms of financial audit

VCs Advisory • Core executive body that deals with strategic and operational decisions andGroup (VAG) actions, including setting the parameters of the strategic plan and managing

and monitoring the planning cycle

Academic Board • Formally responsible for approving the strategic plan. However, in practice,is mainly a forum for canvassing opinion and input on areas of ‘academicterritory’

Strategy and • A sub-committee of the Academic Board that is responsible for consideringPlanning (SPC) the strategic plan and making recommendations to Academic Board

Strategic • The major coordinating mechanism, integrating strategic directions,planning cycle implementation, resource allocation, monitoring and control in a single,

annually cyclical procedure

The top team develop the financial and physical parameters of the plan at VAG,prioritizing strategic actions and setting performance targets. Such initiatives arediscussed, legitimated and sometimes shaped in interactions between the top teamand the Board, who play a role in monitoring strategic directions. The strategicplanning cycle is then used to disseminate strategic directions as guidelines fordepartmental budgets and operating plans. Once in the plan, actions tend to berepeated over successive years providing that they meet performance goals.

Resources are allocated through the strategic planning cycle to the 31 schoolsand departments termed ‘budget centres’. While budget centres have control ofspending within their allocation, at the corporate level the resource allocationmodel emphasizes financial viability. ‘The budget model penalizes schools because,if they don’t recruit to target, then their budget is reduced’ (DVC). For example,in 1995/96 the planning cycle identified problems of student recruitment in adepartment. This was monitored over successive years, resulting in closure in1998/99 because of failure to meet targets. While the planning cycle is an effec-tive resource allocation practice for implementing financial and human resourceefficiency gains in order to meet the University’s response to declining statefunding, it also highlights contradictions in generating research activity; ‘If youinvest resources and time [into research], you actually detract from the amount ofresources and time you’re putting into the learning and teaching’ (DVC). This con-tradiction was leading to increasing dissatisfaction with the resource allocationpractices at the close of data collection; ‘Unless research pays, you’re not going toget some Schools giving it enough attention’ (PVC).

Monitoring and control are also incorporated within the strategic planningcycle. Each budget centre submits an annual appraisal of achievements to planand these are discussed at annual strategic planning meetings with the TMT.Appraisal is increasing formalized with the 1998/99 planning cycle incorporating13 new statistical performance indicators in six priority areas. ‘The indicatorsdrawn up emphasize those key indicators which Senior Management Team cur-rently consider the most important for benchmarking performance internally andexternally’ (Planning Cycle, 1998/99). As central direction and control increases,the budget centres seek sanctions and rewards that are tied to performance indi-cators. For example, in the 1996/97 planning meetings, a budget centre Head‘sought University support in handling the problem of under-performing staffwithin the context of clear disciplinary procedures’ (Planning cycle minutes,1996/97). These changes are indicative of a changing interpretative rationale thatlegitimizes and reinforces changes in strategic activity, sometimes referred to as‘The Winning Approach [which] is about a whole range of activities that a schoolhas to score well on’ (Senior DVC).

The strategic planning cycle is a powerful practice for distributing an increas-ingly consistent interpretation of desirable strategic activity based upon account-ability and financial viability. The view that is most prevalent in this strategic

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interaction is that of the top team. However, strategic activity itself plays a strongpart in interpreting appropriate behaviour. Once an action has been developedand can be measured, it is perpetuated, decreased or increased in accordance with performance indicators. Thus, the resource allocation, direction-setting and monitoring and control practices become more firmly embedded each year as constituents’ interactions become aligned around a set of activities. For example:

The planning cycle has got embedded in the University culture . . . people havesaid, I want more direction. More central direction. (Departmental Head)

While at the top:

This year in the planning process we’ve tried to be a little more directive at thecentre to provide leads. (VC)

The practices generate interaction between constituents that is moving the Uni-versity from a ‘them and us culture’ (VC) to ‘a closer collegiality where we all pulltogether for survival’ (DVC). While such practices create shared activity in someareas, such as teaching partnerships, they may restrict conceptualization of newareas, such as research activity.

FURTHER ANALYSIS AND DISCUSSION

The analysis and discussion is in two parts. First we explain the dynamic rela-tionship between strategic practices and continuity or change in strategy as prac-tice. Secondly, we discuss the implications of our study for theory and practice.

Activity Theory Typologies: The Dynamics of Strategic Practices and Strategy as Practice

The three cases show different patterns of strategy as practice, from continuity atWarwick to the greatest degree of change at LSE. Drawing upon our initial con-ceptual framework in Figure 1, these patterns of continuity and change are devel-oped into six activity theory typologies in Figure 2, showing earlier and later phasesof the cases. The thickness of lines is intended to illustrate the relative distribu-tion and degree of dominance over practices that enable interaction and sharedstrategic activity. Arrows indicate changes in distribution of and dominance overpractices, and hence in activity during this study.

We now use these typologies to discuss how strategic practices distribute sharedinterpretations, predisposing continuity, or mediate between contradictions aboutstrategic activity, occasioning change. The analysis indicates that contradictionsare grounded within the internal dynamics of the organization, arising from ten-

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sions over past and desired future activity. Our study may thus be located withinbroad teleological and dialectical change theories that conceptualize change associally constructed through changing interpretations as an organization departsfrom its current order (Van de Ven and Poole, 1995). The current order representspast interpretations and activities that may be strongly embraced by some con-stituents because the past accords them power or security whereas other con-stituents, particularly those comprising new entrants, may be less bound by thepast or perceive benefits in new activity, generating internal contradictions thatprovide an opportunity for change.

The typologies at Warwick illustrate practices that are dominated by the TMTbut also distribute coherent interaction with the collective about shared strategicactivity. These practices and patterns of interaction and activity remained consis-tent throughout the period of study. Continuity at Warwick is premised upon threemain attributes of the activity system. First, there are low contradictions betweenthe organization’s past and future activity because of the interpretations of successassociated with the strategic practices. For example, the ‘save half/make half ’ prac-tices of resource allocation and income generation developed in the 1980s arestrongly associated with financial success by the institution as a whole. Change

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Warwick Oxford Brookes LSE

TMT Actors TMT Actors TMT Actors

Earlierphase Practices Practices Practices

CollectiveStructures

StrategicActivity

CollectiveStructures

StrategicActivity

CollectiveStructures

StrategicActivity

Laterphase

TMT Actors TMT Actors TMT Actors

Practices Practices Practices

CollectiveStructures

CollectiveStructures

StrategicActivity

StrategicActivity

StrategicActivity

CollectiveStructures

Figure 2. Activity system models of the three cases (bold text and thicker lines denote distributionof practices and arrows denote movement)

occurs when there is a gap between interpretations arising from past experienceand those required for new activity (Louis, 1980). However, no such gap occurredbecause current and future interpretations of activity remain strongly embeddedin the historical practices. Since the University is successful and has not suffereda significant performance downturn, the historical practices are likely to be per-petuated and to constrain reconceptualization of existing activity (cf. Donaldson,1999; Leonard-Barton, 1992).

Second, continuity is predisposed because of wide spread commitment by con-stituents to the existing interpretations of entrepreneurial activity (cf. Greenwoodand Hinings, 1988). In Figure 2, the relative thickness of lines indicates that prac-tices, while dominated by the TMT, distribute consistent interaction and promoteshared strategic endeavour across the activity system. The practices of directionsetting, resource allocation, and monitoring and control support routines of inter-action between a ‘strong centre and strong departments’. This interaction is inter-preted as conferring strength through shared endeavour because if constituentscollaborate in strategic activity they all share in the benefits. Thus the top teamrefers to the other constituents as ‘stakeholders’ and share profits with those con-stituents who partake in the prevailing view. The more that constituents contributeto the shared activities of income generation and research excellence, the greaterstrength they attain within the activity system. Constituents are thus encouragedto endorse and utilize existing practices, so sustaining the belief that ‘the acade-mic strength of the University is growing as a direct result of its financial success’(Treasurer).

Finally, the practices support power relationships and dependencies within theWarwick activity system. As chairs of the three committees, the top team haveprimary access to the practices by which interpretations of activity are distributed.They are, therefore, the constituent with the most control over interpretativeframeworks (Lukes, 1974; Ranson et al., 1980) and, hence, over strategic choiceand change (Pettigrew, 1973, 1985). However, the situation at Warwick is not ashegemonous as these views suggest. The practices impart shared power depen-dencies in which strong departments maintain and gain power in their relation-ships with the centre because of their capacity to command scarce resources(Pfeffer and Salancik, 1978), whereas lesser performers are more subject to centralcontrol (cf. Hackman, 1985). As indicated by the slightly thicker line in Figure 2,the top team is the most dominant player but is also dependent upon the otherconstituents to attain desired strategic activity. The practices help to maintain con-tinuity of power dependencies through mobilisation of resources and associatedinteractions around a common set of goals and interests.

This finding is compatible with other studies of Warwick, such as that of Clark(1998), which find a strong entrepreneurial identity distributed throughout the uni-versity, in part by the structuring mechanisms. However, while practices that mobi-lize and exploit internal resources are one facet of entrepreneurialism, other

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entrepreneurial characteristics, such as exploration and change were not in evi-dence in this study (cf. Hitt et al., 2001). The issue, therefore, is not the degree towhich Warwick is actually ‘entrepreneurial’ but that the entrepreneurial interpre-tation of activity is widely distributed, providing commitment to existing patternsof behaviour. This commitment arises because practices generate coherence andalignment amongst constituents about interpretations, power relationships andstrategic activity (cf. Greenwood and Hinings, 1988; Miller and Friesen, 1984).Practices that permit alignment thus appear essential components for maintainingsystem continuity. However, the findings at Oxford Brookes and LSE show thatpractices are also instrumental in supporting the internal dynamics of change, notonly through the development of new practices but also through changing inter-pretations of existing practices.

In the early typology of Oxford Brookes, thickness of lines indicates that thepractices were dominated by the top team and generated relatively weak interac-tions with the collective about shared strategic activity. During the study, practicesof direction setting, resource allocation and monitoring and control becamestronger, delivering more coherent interactions that were dominated by financiallyviable strategic activity. Change is based upon three main attributes of interactionwithin the activity system. First the origins of change lie in the contradictionsbetween the organization’s past and future activity. As the institution moved to anincorporated body in 1989 and University status in 1992, it was seeking new direc-tions and activities based on an impression that ‘we can’t be content with wherewe are now’ (Former DVC). This changing identity stimulated an examination ofstrategic practices in the 1994 Agenda for Brookes, indicating a departure fromthe current order. However, there were contradictions over the nature of the neworder since some constituents embraced research as the way to mature as a uni-versity, yet this countered former strategic intent. The University has contradic-tions between its past and future because ‘it doesn’t know whether it wants to bea teacher [or] a researcher’. These contradictions are not polarized between con-stituents. Rather, they are being articulated within both the TMT and the schoolsand departments, indicating a systemic build up of contradictions and changinginterpretations.

Secondly, changing interpretations over desirable activity were reflected in thedevelopment of new practices. Due to governance structures prior to incorpora-tion, the University had relatively under-developed internal strategic practices atthe outset of the study, thus new practices could be instigated without displacinglong standing institutional infrastructure. In 1995 the University instigated a newpractice, the strategic planning cycle, to provide an integrative framework of direc-tion setting, resource allocation and monitoring and control. The new practicerapidly engaged with contradictions by enabling constituents to synthesize inter-pretations and develop more unitary frameworks of activity. This is a form oflinear convergence, in which the formal practices are invested with authority to

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implement strategic activity (Langley, 1989). For example, as the top team usedthe planning cycle to provide more central direction each year, so the schools anddepartments requested greater central direction within the planning cycle eachyear, illustrating that both sides invested power in the practices as mediators ofactivity. The strategic planning cycle was able to embed quickly because of its ori-entation towards shared practical activity, as evidenced by the speed with whichstrategic actions based on achieving greater financial viability were actioned usingthe new practice. Evidence of synthesis around strategic activity may be seen inthe move from a ‘them and us culture’ to ‘a closer collegiality where we all pulltogether for survival!’

Thirdly, contradictions are partially resolved because the practices provide aninfrastructure for generating shared strategic activity. However, particular types ofactivity that are largely consistent with former intent, such as teaching and learn-ing innovation and financial viability, dominate these practices. Strategic activityis thus an important constituent of the activity system that has a tendency towardsa self-perpetuating relationship with the practices (cf. Cyert and March, 1963;Donaldson, 1999). That is, activities that enter the planning cycle tend to be repro-duced as long as they are able to meet performance targets. This illustrates howpractices are culturally embedded and have a ‘long historical half-life’ (Engestromet al., 2002). The thick line and arrow in the later phase of Figure 2 indicate howpractices integrated the activity system around financially viable strategic activity.It appears, however, that the dominance over practices by financially viable teach-ing and learning activity has not allowed contradictions over research activity todevelop.

Despite the practices, contradictions over research activity persist. For example,top team actors express dissatisfaction that the practices do not sufficiently supportresearch activity ‘unless research pays’ and acknowledge that there are contradic-tions about where resources and time should be invested. Currently, new statisti-cal performance indicators are being incorporated into the planning cycle in anattempt to create stronger relationships between the practices and the whole rangeof desired activity. Although contradictions over research activity had not beenresolved at the close of data collection, their persistence suggests that they mightbecome the source of sufficient tension to generate further change.

The typologies of LSE illustrate the most change in patterns of practicethroughout the study. There are three main components to the changes evidencedat LSE. First, contradictions arose over TMT-initiated activity because of power-ful historical interpretations about the relationship between academic autonomyand strategic activity, which were strongly embraced by the collective structures ofthe organization. As illustrated in the early phase in Figure 2, the collective struc-tures dominated the practices, marginalizing interaction with the top team andconstraining strategic activity. These patterns are historical and deeply embeddedin the practices, described as ‘checks and balances . . . to marginalize power’,

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which is perceived as symbiotic with interpretations of academic excellence.Strategic activity is assumed to emerge from non-systemic academic endeavour.There is thus a long established historical pattern of practice that does not endorseshared strategic activity, with contradictions polarized between different constituents.

Paradoxically, the second component of change lies in the development of prac-tices such as APRC that were intended to preserve the status quo but which actu-ally helped to surface contradictions, change constituents’ interpretations ofpractices, and so generate changes in strategic activity. Changing interpretationswere gradual, beginning with modifications of existing practices to better accom-modate tensions in the system. For example, MSL non-cash resource allocationformulae were established to gain constituents’ collaboration in efficiency gainsand income generation and developed into OPPP to increase self-monitoringbehaviour. While these self-monitoring practices were initially inflationary andcounter to intent, they helped to accentuate and build awareness of contradictionsin the system as the gap between actual practice and desired practice becameevident. The inherent contradictions in the practices as they stretched to accom-modate past interpretations and future goals enabled them to serve as mediatorsbetween constituents, in the process reinterpreting their own role in the institu-tion. For example, the APRC changed from ‘a rope to restrain’ authority to a topteam perception that its role ‘is to do what we want to do’.

This leads to the third component of change at LSE, which is the dialecticalbasis of changing interpretations and activity (cf. Bartunek, 1984; Hardy andClegg, 1996; Van de Ven and Poole, 1995). As indicated by the arrow in Figure2, the change in practice has come about by a changing power balance from thecollective to the top team in access to and influence over the strategic practices.The practices embody contradictions that illustrate a dialectic between con-stituents about interpretations over activity, which are apparent to skilled playersinside the system. For example, the top team is aware that, despite not havingformal control over resource allocation, they are able to ‘command resources . . .in the way that you persuade people’. These contradictions inherent in the prac-tices enable them to be leveraged to generate changing interpretations of the prac-tices and the activities they endorse.

However, analysis does not show that power accrues to a dominant coalition.Rather, there is a changing power balance within the institution that has elementsof synthesis between past and future. The top team recognize that, despite theirgreater influence over APRC, it does not ‘think of itself ’ as a top managementtool. The practices maintain balances of systemic power. The top team is able toinfluence other constituents ‘to think that they want what we want’ but this is anegotiated process of interaction that requires accommodation of the interests ofthe other constituents. While practices serve as tools for controlled collegiality (cf.Langley, 1989), the top team is also bound by systemic considerations of interac-

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tion. Indeed, while changes at LSE were figure headed by a socially skilled topteam leader, he did not cause them since contradictions over change were in evi-dence from the start of the study. Rather, an appropriate leader arrived at a timewhen there was sufficient systemic build up of tensions over activity to occasionchange.

Implications for Theory and Practice

The main implications of our study are now discussed. First we discuss the rela-tionship between strategic practices and continuity or change in patterns of prac-tices arising from our typologies. Secondly, we explain how this study has extendedcurrent uses and applications of activity theory. Finally we draw out the practicalimplications of this study.

Relationship between strategic practices and continuity or change in strategy as practice. A dis-tinctive contribution of this study is the concept of strategic practices of directionsetting, resource allocation and monitoring and control as distributors and medi-ators of the interactions through which constituents pursue strategic activity. Whilethe finding of continuity at Warwick is much as the literature on such practicessuggests (for example, Cyert and March, 1963; Henderson and Clark, 1990;Nelson and Winter, 1982), our empirical study is of interest because it shows howcontinuity is constructed through alignment of actors, collective structures andactivity, coordinated through the strategic practices. Warwick is, therefore, on acontinuous or inertial track where social movement is based upon maintaining andincreasing coherence in the system (Miller and Friesen, 1984). While inertial movement is assumed to be the most common organizational track, there are few empirical studies of these phenomena, of which most are retrospective andexamine failure arising from inertia (Greenwood and Hinings, 1988). Our studyof Warwick illustrates how continuity is sustained through dynamic relationshipsbetween interaction and activity, distributed and sustained through the strategicpractices.

However, the findings at LSE and Oxford Brookes show that practices are alsoinstrumental in supporting the internal dynamics of change by surfacing andmediating between contradictions over an organization’s past and future activity.It appears, therefore, that behavioural theories of the firm may dwell overly onthe path dependent and routinized nature of strategic practices (for example, Cyertand March, 1963; Nelson and Winter, 1982). In such views, change is unlikely tooccur without some significant external input to the organisation. Yet in two ofour cases the origins of change cannot be attributed principally to traditionalchange stimuli, such as performance downturn, exogenous shock or a new topteam member (for example, Donaldson, 1999; Gersick, 1991; Tushman and

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Romanelli, 1985). Indeed, while all three cases had a new leader during the periodof study, none of these ‘caused’ change, although at LSE new leadership acceler-ated change. We should therefore be cautious about assuming that change is afunction of new top management as presumed in some literature (for example,Starbuck et al., 1978; Tushman and Romanelli, 1985). Rather, changes in man-agement may also arise out of changing interpretations and systemic needs. Thisimplies a more emergent approach to the selection of new top management inrelationship to the internal dynamics of change, which, while beyond the scope ofthis study, might provide a basis for future research.

Both new and inherited practices may be used to mobilize change because ofinternal contradictions within an organization. The distribution of, and access to,practices indicates contradictions within a system. Lower levels of distribution,as in the early phases at LSE and Oxford Brookes, indicate that interpretations of activity are not widespread, generating contradictions in which interactionbetween constituents and shared strategic activity are disrupted (cf. Weick andRoberts, 1993). In these situations, new practices were devised or existing prac-tices modified and reinterpreted in order to mediate between constituents in theconstruction of strategic activity. Therefore, as activity theory suggests, contradic-tions are inherent activity system properties that are important to change (cf.Feldman, 2000; Van de Ven and Poole, 1995). However, we have a small sampleof cases. At least one other typology might occur, in which contradictions arisebut practices are not accessible by, and therefore unable to mediate between con-stituents, leading to unresolved change opportunities (cf. Greenwood and Hinings,1988). While beyond the scope of this study, future research might examine thedegree to which our typologies are typical of other change situations and wherethey might be extended.

Contributions to and applications of activity theory. Strategy theory has increasinglycalled for gestalt approaches that capture micro interactions and so furnish moreholistic explanations of strategy creation (cf. Hamel, 2001; Mintzberg, 1979;Mintzberg et al., 1998; Pettigrew, 1990). Activity theory provides a framework forexamining interactions between actors, collective structures, and strategic activity.While these aspects of strategy are not new in themselves, activity theory’s con-tribution is as an integrative framework for understanding the role of strategicpractices in relation to continuity or change of activity.

Our study thus contributes to the nascent and under-explored body of researchthat examines how practices structure the subjective and emergent processes ofstrategic activity. Many studies in this area focus upon the verbal, discursive andsymbolic interactions involved in the construction and change of strategic activity(for example, Barry and Elmes, 1997; Hendry, 2000; Knights and Morgan, 1991).Activity theory integrates these tacit forms of interaction with formal operating

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procedures, providing stronger links between the social and the formal practicesthrough which strategy is constructed. Our study is distinctive in focusing uponthe systemic participation in, and mediating role of practices of direction setting,resource allocation, and monitoring and control, which have been viewed canon-ically as control mechanisms through which top management can leverage strate-gic change (e.g. Simons, 1994). Our focus upon these practices as mediators of interactions and contradictions highlights their role in the systemic and emer-gent construction of strategic change. An activity theory framework provides adynamic view of strategic practices and their role in organizational continuity orchange.

This study has also extended the empirical application of activity theory byaddressing some of the weaknesses that Blackler (1993) has identified in its currentuses. We have examined in greater detail the origins and maintenance of systemlevel contradictions and conceptualized these as contradictions between an orga-nization’s future and the residues of its past. In our typologies, these contradictionsare initially maintained by the practices. As the practices become overly stretchedin attempting to accommodate past and future, change occurs, either through thedevelopment of new practices, as at Oxford Brookes, or the reinterpretation ofexisting practices, as at LSE. Our focus upon practices as distributors of past and future interpretations and mediators of interaction between constituents has explained how contradictions may lead to systemic change. We have thus pro-vided a simplified conceptual model of the activity system in Figure 1 and anempirically grounded explanation of that model in the analysis and discussion ofFigure 2. The model and typologies may serve as a platform for future applica-tion of activity theory to the micro practices involved in constructing strategicaction.

Implications for practice. This study’s explanation of the role of strategic practices incontinuity or change also has practical implications. Practitioners may examinethe degree to which their strategic practices enable interaction between the dif-ferent parts of the organization in constructing shared strategic activity. Widelydistributed and accessible practices are more likely to provide continuous collec-tive strategic activity, while disrupted or weak interaction may arise because ofcontradictions within the organization over goals and activity. These contradic-tions can be powerful sources of change depending upon the way that strategicpractices are able to surface the contradictions and mediate between constituentsto derive new patterns of strategic activity. Therefore, rather than strategic prac-tices being used to minimize contradictions, as often occurs, they need to accom-modate and mediate between constituents in order to promote more collectivecapacity for change. Since contradiction and mediation are important componentsof change, distributed and participative approaches to the use of practices are indi-cated more than managerial uses of practices as levers of change.

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CONCLUSION

Strategy as practice is concerned with how strategy emerges from the interactionsbetween actors and their contexts. Interaction suggests theoretical approaches thatmove beyond strategy as phenomena predicated upon the cognition of the indi-vidual or arising largely from external structural considerations. Strategy as prac-tice examines both structure and individual as they engage in the daily activitiesthat comprise their practice context. Through a focus upon strategy as practicalactivity, we may understand both the continuous performance of strategic workand its evolving nature as patterns of activity are reinterpreted. Thus, micro studiesof strategy as practice contribute to our understanding of the internal complexi-ties of organizational positioning, as much as economic industry analyses con-tribute to our understanding of external positioning. Further micro studies ofstrategy are, therefore, important for extending the field of strategic managementresearch.

NOTE

[1] Other interpretations of practices, not used in this paper, may arise from different theoreticalframings, as with the practices of discourse, which may be viewed from a critical Foucaldianperspective (Knights and Morgan, 1991), as strategic narratives (Barry and Elmes, 1997), or asformally documented discourse (Hendry, 2000).

APPENDIX

A summary of the data sources across cases is presented in Table A.I.

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Table A.I. Summary of data sources across cases

Data source Warwick LSE Oxford Brookes

Interviews 20 open-ended interviews @ 90 minutes 18 open-ended interviews @ 90 minutes 11 open-ended interviews @ 90 minutes each,each, with each TMT member, 2 former each, with each TMT member, 4 APRC with each TMT member, 2 former TMT members and 2 non-TMT members. Repeat members, 4 senior officers, Director’s members, Departmental Head, repeat with 2interviews with 5 TMT members executive assistant, 3 senior academics, TMT members

repeat with 2 TMT members

Meeting • Strategy Committee – 7 • Academic Planning and Resource • Vice-Chancellors’s Advisory Group (VAG) –observations • Earned Income Group (EIG) – 6 Committee (APRC) – 7 3

• Estimates and Grants Committee (E&G) • Standing Committee – 2 • Board of Governors – 2– 5 • Academic Board – 1 • Planning Process meetings with departments

• Other working party for actioning a • Convenors meeting – 1 – 2strategic issue – 1 • Other administrative and collegial • Academic Board – 1

committees – 6 • Other meetings used by TMT for consultativepurposes – 6

• Strategy Day between TMT and Board – 1

Ethnographic • 1 week shadowing Senior PVC • Pre- and post-meeting observation • 1 week shadowing Senior DVC• Pre- and post-meeting observation • General on-site data where I sat in the • Pre- and post-meeting observation• General on-site data, particularly informal Planning Office, next to the general coffee • General on-site data, mostly informal chats

discussion when the opportunity arose – at machine; handy for informal discussion, pre and post-meetings and also opportunism;least 7 times in detail and many brief chats which occurred on every visit being in the right place at the right time

Documentary • Minutes of Strategy Committee, 1992 to • Minutes of APRC and Academic Board, • Planning Cycle documentation since– archival 1998 1992 to 1998 inception in 1995/96 through to 1998/99and other • Minutes of all meeting attended • Minutes of Standing Committee and • Major strategic issue reports and summaries

• Annual reports; audit documents; strategic Planning Team, 1997 to 1998 from 1993plans; academic databases; university • Minutes of all meetings attended • Coopers and Lybrand report, 1988calendars; briefing papers; memoranda • Audit documents; strategic plans; • Minutes of all meetings attended and minutesand minutes of major 1994 strategic university calendars; briefing papers; of strategic-planning TMT meetings, notinitiative; sectoral documents handbook for department heads; sectoral attended

documents • Supporting planning documentation; annualreports and accounts; sectoral documents

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