Pragmatic Strategy

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Pragmatic Strategy

• Dancing with Efficiency, Creativity and Legitimacy

Zhichang zhu
University of Hull Business School, UK
July 2004, Xiamen and Guangzhou, China
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Contents

• Background towards pragmatic strategy
• Strategy what do strategists do and how do they
  do it?
• Firms what are they and how do they differ?

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Background

• What is strategy?
• Why pragmatism, why now?
• Pragmatism East and West

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What is strategy?
Strategy is about envisioning a valued future
for common goodness and realising it with
available resources, workable means and novel
manoeuvre, which is based on profound
understanding of situated particulars and unique
organisational profiles.
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What is strategy?

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What is pragmatism?
The four faces of Confucian pragmatism
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Pragmatism and strategy

• Pragmatism facilitates people to respect, to
  share, to create and to act upon what works, and
  the real world appears to reward what works and
  penalises what does not.
• Practical strategies are generated by ethically
  informed, interested managers who take the
  responsibility skilfully to make timely political
  judgments and situated decisions, with idealistic
  inspirations and realistic manoeuvres, without
  knowing what is to unfold yet able to mobilise
  others working together toward an imagined ideal
  world.
• Strategies and knowledge are validated on the
  consequences of acting upon them.

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Problem 1 the phronetic gap

• Detached
• Reductionist
• Rountinised
• Utopian

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Problem 2 fragmentation

• Theory led
• Boxes syndrome
• Imperialist pluralism

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Boxes syndrome
Generic approaches to strategy (source
Whittington 20013)
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Searching for coherent strategy

• Unifying paradigm
• Good science is conversation
• Conversation needs a vocabulary
• Towards a pragmatic vocabulary

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Tasks at hand

• Practicality
• Coherency

Towards ethical, coherent and effective strategy
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Pragmatism East and West
Moral virtues
??Shili
Intellectual virtues
??Timely balancing
Phronesis
Praktikes
??Wuli
??Renli
Techne
Episteme
Theoretikes
Confucian circular how acting wisely as timely
balancing wuli-shili-renli
Aristotelian hierarchical what practical
wisdom as the highest intellectual virtue
Aristotle vs. Confucius different approaches to
practically wise strategy?
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Learning from differences

• What knowledge vs. how to act
• Articulative reasoning vs. suggestive exemplars
• Hierarchical vs. circular knowledge
• Polarising-and-choosing vs. associating-and-comple
  menting

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Contrasting Aristotelian and Confucian practical
teaching
Aristotelian Practical wisdom Confucian Pragmatism
Underlying question What is practical knowledge? How to act practically wise?
Stylish approach Articulative reasoning Suggestive exemplars
Image of knowledge Hierarchical knowledge Circular wuli-shili-renli
Strategy forward Polarising-and-choosing Associating-and-complementing
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What and how strategists do?
Emergent action
Rational action
Constrained action
Creative network
Conservation
Charismatic leadership
Choice
Crisis
Strategic management
Entrepreneurial action
Confusion
Emergent, rational and constrained actions
(source Hirst 1995).
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WSR acting rationally, creatively and normatively
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WSR


Wu ? Shi ? Ren ?
Objective particulars, resources, constraints Subjective mentalities, schemas, mindscapes Intersubjective values, norms, expectations
Wuli ?? Shili ?? Renli ??
Relating with the world, Patterns of connecting, conditioning, transforming Relating with the mind, Ways of seeing, imaging, communicating, doing Relating with others, Rules of involving, engaging, organising

Shall we?
What is?
How to?
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Timely balance

• The Tao of Haven operates mysteriously and
  secretly (????) it has no fixed shape (??), and
  it follows no definite rules (??) it is so great
  that you can never come to the end of it, it is
  so deep that you can never fathom it (Huai-nan-zi
  (?-122 bc) 9/1/2).
• Po I among the sages was the pure one Yi Yin was
  the responsible one Hui of Liu-hsia was the
  accommodating one and Confucius was the timely
  one (Mencius 5/2/1).
• The Superior Man is in the state of zhong
  (balance) and rung (normality) the small man is
  in the reverse of these states. The superior Man
  exhibits them, because he is the Superior Man,
  and holds to the timely balance the small man is
  the opposite of them, because he is the small
  man, and has no caution (Doctrine of the Mean 2/1
  and 2)

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Timely balance
The bubbling of WSR concerns, issues and problems
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Strategy dancing with efficiency, creativity and
legitimacy

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Does strategy matter?
Structure
Structure
Downwards reduction
Upwards reduction
Agency
Agency
How actors make choices
Why actors do not have choices to make
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A systemic view of reality
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Sources of creativity structure, agency and
action complexities
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ba where structure meets agency
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Why is strategy possible?

• Structure complexity generates emerging
  opportunity
• Agency complexity allows actors exploit
  opportunities in different ways
• Actions complexity brings structure an agency
  into interplay

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Strategy as knowledge-creation
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Theories of the firm
Neoclassical economics
Wuli efficiency theories
Industrial organisation economics Resource-based
theory Planned coordination theory
Behaviourist theory
Shili creativity theories
Renli relationality theories
Entrepreneurship theory Evolutionary
theory Subjectivist theory Knowledge-based theory
Transaction cost economics Team monitoring
theory Principal-agent theory Property-rights
theory Social relation theory
Institutional theory
Postmodernist theory
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The table
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Wuli theories of the firm
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Shili theories of the firm
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Renli theories of the firm
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Theories of the firmdifferent groupings
Nonaka and Zhu Wuli Technological efficiency Production Shili Imaginative creativity Innovation Renli Relational legitimacy Cooperation
Williamson Technological Organisational Organisational
Bounded rationality (?) Opportunism
Foss, Langlois Competence Production oriented Competence Production oriented Governance Exchange oriented
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A WSR view of firms
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The theory of the firm or theories of firms?

• Is the firm a firm?
• Is a firm the firm
• Firms, markets and social models

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What follows? - 1
Wuli efficiency getting the fundamentals right

• Strategic positioning
• Competing on resources
• Creating relationship advantage
• Value chain, value web and business model
• God is in details samurai strategisinig

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What follows? - 2
Shili creativity envisioning a valued future

• Subjectivity and strategy
• Dominant design and innovation
• Creative destruction and dynamic capability
• Living with uncertainty
• SECI an envisioning procces

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What follows? - 3
Renli legitimacy realising shared goodness

• Strategic games
• Contracting opportunism
• Ethical business
• Embedded strategists
• ba a fountain of shared goodness

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What follows? - 4
Strategy in action

• Phronesis as practical knowledge
• Phronesis as pragmatic action
• Phronesis as distributed leadership