Beyond the Boardroom: Why the Practice Perspective Wins
Mainstream strategy models, such as Porter’s Five Forces,
often explain as little as 4% to 18% of the variance in firm profitability.
This leaves a massive "82 percent to 96 percent" gap that Strategy-as-Practice
(SAP) attempts to fill by viewing strategy as an activity that is socially
accomplished.
However, SAP faces valid criticisms. A major critique is
that the field has become too focused on "articulated
strategies"—those formally defined by top management—which risks making it
a mere subset of traditional research rather than a radical alternative.
Scholars argue that researchers often default to studying the "usual
suspects," such as CEOs and middle managers, while overlooking the
strategic impact of frontline actors like engineers or tour guides.
Additionally, SAP researchers face a "dilemma" in balancing the depth
of ethnographic data with the breadth and diversity required for robust
findings.
Despite these hurdles, I consider the practice perspective
more beneficial for understanding organizational reality. While mainstream
literature focuses on what managers should do as rational actors, SAP
explores what they actually do in their day-to-day work. By
"humanizing" strategy, we move "inside the process" to
examine the three Ps: Practitioners (the people), Praxis (the flow of work),
and Practices (the tools and routines used).
The practice view reveals that strategy is
"strategic-in-use". Mundane actions—such as tweaking a spreadsheet,
crafting a specific email, or setting a meeting agenda—are not just
administrative; they aggregate into consequential patterns of action. By using
field immersion to identify these "hunches," we see how strategy is
"breathed into life". Ultimately, this people-centric lens provides a
far more comprehensive grasp of how organizations actually function and
survive.
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