A MODEL OF ORGANIZATIONAL TRANSFORMATION: THE INCORPORATION OF ORGANIZATIONAL IDENTITY INTO A STRUCTURATION THEORY FRAMEWORK Yolanda Sarason University of New Mexico Anderson School of Management Albuquerque, New Mexico 87131-1221 (505) 277-7108 • ABSTRACT Giddens' theory of structuration (1979, 1984) is drawn upon to develop a conceptual model of organizational transformation which explains organizational differences in terms of organizational identity and the recursive relationship between agents and structure. INTRODUCTION A fundamental question in strategic research is 'why do firms differ?' (Rumelt, Schendel and Teece, 1991). Answers to this question have been offered by evolutionary economics (Nelson, 1991; Nelson and Winter, 1982), the resource based view of the firm (Barney, 1991) and the strategic choice perspective (Child, 1972). While each perspective offers an explanation of firm differences in aggregate, none is able to explain 'why this strategy for this particular firm?' This paper argues that structuration theory offers strategic management a theoretical framework to understand strategic transformation. Integrating concepts about organizational identity into a structuration theory framework has the further potential of yielding insight as to why a firm adopts a particular strategic path.^ STRUCTURATION THEORY Anthony Giddens' (1979, 1984) structuration theory is beginning to have a growing influence in management science. Principles of structuration have been applied at the organizational level (Ransom, Hinings and Greenwood, 1980; Pettigrew, 1987) and as an explanation to industry level activity (Huff, Stimpert and Huff, 1994). Applications of structuration theory have yielded insight into organizational culture (Riley, 1983) and technology transfer (Orlinkowski, 1992; Desantis and Poole, 1994). Whittington's (1992) recent review of this work concludes that while Giddens is beginning to be used, the potential contribution of structuration theory "has still not been put fully into action" (pg. 707). M would like to thank Anne Huff for not only introducing me to Giddens, but for a continuing dialog in the application of structuration theory to strategic management. This paper has been improved by her thoughtful comments and insights. The theory of structuration was developed by Anthony Giddens (1976, 1979, 1984, 1991) to fill what he saw as a gap in social theory. In addition to drawing from Giddens' writings, the discussion will also draw from the interpretations of Giddens' offered by Huff, Stimpert, & Huff (1994), Dear and Moos (1994), Orlinkowski (1992), and Clark (;i990). The focus of the theory is reciprocal interaction of human actors and organizational structure. The central idea is that human actors or agents are both enabled and constrained by structures, yet these structures are the result of previous actions by agents. Structural properties of a social system consist of the rules and resources that human agents use in their everyday interaction. These rules and resources mediate human action, while at the same time they are reaffirmed through being used by human actors or agents. This reciprocal relationship between agency and structure is central to structuration theory and is expressed as the "duality of structure". As Giddens describes: In seeking to come to grips with problems of action and structure, structuration theory offers a conceptual scheme that allows one to understand how actors are at the same time the creators of social systems, yet created by them....It is an attempt to provide the conceptual means of analyzing the often delicate and subtle interlacing of reflexively organized action and institutional constraint (Giddens, 1991; 204). The following discussion highlights the central aspects of structuration theory, with explicit attention given to the contribution each aspect of the theory can make to the field of strategic management. Components of the model that are to be investigated in this paper are indicated by letter (from A to F) which refers to a model of strategic transformation illustrated in Figure 1. FIGURE 1 MODEL OF STRATEGIC TRANSFORMATION Antldpatad and Unanlldpalad Conaaquanoas (C) ABsnt (A) KnovMgaMllty Aqam tasL Aoam Agant Aqant' StivadMMi 3lOra«ilz«llon<l SiantHy (D) 3t S AcOcn Policy and Pi'ooMuraa, Invaslment. 3lvaral1lc«llon. Stratagy (F) (B) Org«fn2al)Qrnl ^ucua Routinaa • and Rasourcss LUhadiniMrfadgtd, Conditon* 47