Strategy Formation Across Organizational Boundaries: An Interorganizational Process Model
| DOI | http://doi.org/10.1111/1467-8551.12473 |
| Published date | 01 January 2021 |
| Author | Erwin Hettich,Markus Kreutzer |
| Date | 01 January 2021 |
British Journal of Management, Vol. 32, 147–199 (2021)
DOI: 10.1111/1467-8551.12473
Strategy Formation Across Organizational
Boundaries: An Interorganizational Process
Model
Erwin Hettich1and Markus Kreutzer 2
1Institute of Management and Strategy, University of St. Gallen, Dufourstrasse 40a, St. Gallen, 9000,
Switzerland 2Management Group, EBS Business School, EBS Universität für Wirtschaft und Recht,
Gustav-Stresemann-Ring 3, Wiesbaden, 65189, Germany
Corresponding author email: markus.kreutzer@ebs.edu
Strategic decision-makers todayface complex environments with meta-problems that cut
across multiple industries. Single organizations cannot address these meta-problems. As
a result, organizations collaborate with partners, among them also competitors, and com-
monly work together in multi-partner initiatives(MPIs). How these organizations jointly
form an interorganizational strategy(IOS), however, is not well understood. In this paper,
we extend the current strategy process conceptualizations from an intraorganizational
focus of a single rm to an interorganizational process of multiple strategy-making enti-
ties working together.We selected the eMobility sector as our research context to develop
such an IOS process model. Werst developed 25 cases on MPIs in the German-speaking
area based on interviews and desk research, beforewe focused on the eMobility ecology
in the southern part of Germany. We identied 291 MPIs, conducted interviews with 19
central actors, held several workshopsand informal gatherings, and complemented these
data with an analysis of publicly accessible documents. Using an inductive research de-
sign, we developeda process model that unfolds in three phases: initiation, negotiation and
execution.We reveal specic process dynamicsin MPIs to be critical in the formation and
manifestation of IOS.
Introduction
Strategic decision-makers face complex environ-
ments with meta-problems that cut across multi-
ple industries. Single organizations, therefore, face
an increasingly overwhelming environment with
a constrained capacity for appropriate response.
As a result, organizations collaborate with part-
ners, or even competitors, like Daimler and BMW
in mobility services (DaimlerAG, 2014). Such si-
multaneous cooperation and competition between
rms is common practice not only in the auto-
motive industry (Ritala, 2012), and often involves
more than two organizations, both public and pri-
vate, from various industries that work together in
A free video abstract to accompany this article can be
found online at: https://youtu.be/sY12r9LRueo
multi-partner initiatives (MPIs) (e.g. Deken et al.,
2018).
Prior literature emphasizes that interorganiza-
tional strategy (IOS) allows for tackling complex
meta-problems (Huxham and MacDonald, 1992),
including social and ecological issues (Clarke and
MacDonald, 2016), by drawing on a greater va-
riety of perspectives (Seidl and Werle, 2017) and
sensemaking capacity (Hautz, Seidl and Whitting-
ton, 2017), setting standards (Leiponen, 2008), re-
alizing creative initiatives (Windeler and Sydow,
2001) and innovative solutions (Powell, Koput
and Smith-Doerr, 1996) and reaping interorga-
nizational advantages (e.g. Gulati, Nohria and
Zaheer, 2000) single rms cannot achieve.
The relevance of IOS is undisputed. The process
by which multiple partnering organizationsjointly
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commercial and no modications or adaptations are made.
148 E. Hettich and M. Kreutzer
form an IOS is, however, not sufciently well un-
derstood. Strategy processmodels (e.g. Hart, 1992)
predominantly take an intrarm perspective, that
is the emergence and evolution of one organi-
zation’s strategy within its organizational bound-
aries (e.g. Burgelman,1983, 1991, 2002; Mintzberg
and Waters, 1985; Mirabeau and Maguire, 2014;
Quinn, 1978). Building on the premise that struc-
tural and strategic contexts external to a rm be-
come more important (Bower and Gilbert, 2005),
the recent trend of open strategy processes in-
creased the transparency to – and inclusion of –
internal and external actors, but continues to fo-
cus on the development of a single rm’s strategy
(Appleyard and Chesbrough, 2017; Hautz, Seidl
and Whittington, 2017; Whittington, Cailluet and
Yakis-Douglas, 2011).
We want to explore how strategy emerges and
transcends across organizational boundaries (see
Burgelman et al., 2018). Seminal contributions on
IOS include the study by Doz, who took an evo-
lutionary perspective to describe ‘alliances as in-
teractive and iterative cycles of learning, reevalu-
ation and readjustment’ (Doz, 1996: 59) and Ring
and Van de Ven’s (1992, 1994) three-phase model
of IOS – negotiation, commitment and execution.
Their work explored overarching process patterns
as interrelated stages,but at the expense of a granu-
lar view on specic activities and dynamics. We an-
swer the question of how activities, processes and
dynamics unfold in IOS among multiple partners
in MPIs.
After reviewing existing intra- and interorgani-
zational strategy process research, we outline our
method and then present and discuss the nd-
ings we derive from a qualitative study of MPIs
in the broader German-speaking eMobility sec-
tor. We contribute to strategy process research by
capturing the dynamics and activities that emerge
across multiple entities, thus providing a ner-
grained empirical account and narrative explain-
ing the mechanisms and temporal sequences that
help explain process ows (Cloutier and Langley,
2020; Cornelissen, 2017; Langley, 2007). We iden-
tify separable subprocesses and the transitions be-
tween them. Our developed IOS process model
complements intrarm and high-level interrm
process models. We also contribute to research
on multiple partner alliances (MPAs), which pose
idiosyncratic challenges deviating from dynamics
as observed in dyadic alliances (Lavie, Lechner
and Singh, 2007; Thorgren, Wincentand Eriksson,
2011) – in terms of additional information, co-
ordination and monitoring requirements (García-
Canal, Valdés-Llaneza and Ariño, 2003) and the
critical role of intermediaries and third parties
(Heidl, Steensma and Phelps, 2014; Lazzarini,
2015). We also contribute to the resource and es-
pecially the capability-basedview (Schilke, Hu and
Helfat, 2018), as an IOS capability might enable
organizations (MPAs) to outperform other organi-
zations (MPAs) that are less process-capable (Hart
and Banbury, 1994). Lastly, by uncovering activi-
ties and practices in the process of IOS emergence
and embedding them temporally across organiza-
tions, our paper helps bridge the dialogue between
the strategy process and the strategy-as-practice
stream (Burgelman et al., 2018; MacKay, Chia and
Nair, 2020; Mirabeau, Maguire and Hardy, 2018)
and the micro-practices stream (Felin, Foss and
Ployhart, 2015).
Background on strategy process
research
The majority of strategy process research focused
on intraorganizational processes, that is means
whereby a single organization develops its strat-
egy. Mintzberg departed from the classic strategy
conceptualization as a purposefully developed and
delineated plan (e.g. Ansoff, 1965) and dened
strategy as a ‘pattern in a stream of decisions
and actions’ (Mintzberg,1978: 934), thereby stress-
ing the importance of unplanned strategies and
the existence of intended but unrealized strategies.
Bower (1970) highlighted the relevance of actual
resource allocationin his three-stage model of de-
nition, impetus and structural context. Burgelman
(1983) added the selection mechanisms, induced
and autonomous behaviour and strategic context.
Also referred to as the ‘Bower–Burgelman (B–
B) process model of strategy making’ (Noda and
Bower, 1996: 160), it combines the two bottom-
up subprocesses of denition and impetus with
the two corporate-level processes of determin-
ing structural and strategic context. Their think-
ing is built on ‘an intraorganisational ecologi-
cal perspective, following the variation–selection–
retention framework of cultural evolutionary the-
ory’ (Noda and Bower, 1996: 160). Mirabeu and
Maguire (2014) propose a process model that
outlines how emergent strategy either becomes
part of realized strategy through mobilizing wider
© 2021 The Authors.British Journal of Management published by John Wiley & Sons Ltd on behalf of British
Academy of Management.
Strategy Formation Across Organizational Boundaries 149
support for impetus, manipulating the strategic
context and altering the structural context, or be-
comes ephemeral.
Reviews on strategy process in general
(Hutzschenreuter and Kleindienst, 2006) and
strategy-making modes in particular (Hart, 1992;
Hart and Banbury, 1994) show that research
has predominantly focused on intraorganiza-
tional strategizing. Recent studies call for research
that looks beyond organizational boundaries
(Burgelman et al., 2018). Existing IOS studies
mainly built on Doz’s (1996) evolutionary model
of learning, re-evaluation and readjustment, or
Ring and Van de Ven’s (1992, 1994) sequence
of negotiation, commitment and execution, each
assessed in terms of efciency and equity. Other
lifecycle approaches differentiated four stages:
initiation, negotiation, formation and operation
(Das and Teng, 2002; Schilke and Cook, 2013).
Beyond these comprehensive IOS models, few
studies focused on one particular phase and topic;
Deken et al. (2018) studied the initiation phase and
developed a process model of prospective resourc-
ing. Dirks, Lewicki and Zaheer (2009) put their at-
tention on the execution phase and the processes
for relationship repair.
Overall, research offersinsights into the highest-
level IOS stages or particular activities. Our under-
standing of the underlying processes and dynamics
of IOS in MPIs is, however, still fragmented. We
need nuanced insights into the activities, subpro-
cesses and dynamics that form a stage model from
initiation to execution. The elucidation of these
process dynamics is the intended contribution of
our paper.
Methods
Research context
The emerging electric mobility (eMobility) sec-
tor provides us with a revealing setting. The au-
tomobile industry faces an unprecedented trans-
formation that has been introduced by regulatory
pressure to reduce carbon dioxide, new develop-
ments in drivetrain technology and new market
players entering the arena. Incumbent car manu-
facturers move from producing and selling vehi-
cles to creating intermodal and complex mobility
solutions. This demands a larger variety of tech-
nologies, productsand business models, and led to
cross-industry MPIs with different thematic prior-
ities (Kley, Lerch and Dallinger, 2011).
Data sources
To better understand the eld and the activi-
ties and dynamics in such MPIs, we developed
case studies of 25 eMobility MPIs. We sampled
the MPIs based on data access, while attempt-
ing to reach an insightful breadth on the location
(broader German-speaking area), stage (recently
launched and mature), scope of partnerships and
goal diversity. We included large-scale and local
MPIs. A number of MPIs focused on winning
partners, others on implementing or scaling solu-
tions.We varied cases in terms of scope – Tesla and
only a few others included >50 partners. We built
on public sources and conducted interviews in 22
of these MPIs with at least one responsible man-
ager or industry expert to improveour understand-
ing of these initiatives, their members, roles and
activities, and the ongoing IOS-making (Table 1).
Three cases were developed throughdesk research.
Next, we focused on the MPI ecology in south-
ern Germany, a region well known for its lead-
ing brands and dense network in the automobil-
ity space with BMW, Bosch, Daimler and Siemens.
Within this ecology, we identied a total of 291
eMobility MPIs from 2007 to 2015, with the ma-
jority launched in 2011 and 2012. Building on
internal and publicly available documents, press
and media releases and informal talks with in-
dustry experts, we recordedeach initiative’s details
(Table 2). Most initiatives focused on car electri-
cation and battery technology (35%), followed by
demonstration-of-user-acceptance projects (15%)
and charging infrastructure and grid integration
(13%). Others targeted mobility concepts, recy-
cling, education or regional integration (all less
than 5%). The average initiative comprised ve
to six organizations including a publicly owned,
research-oriented organization. Players from for-
merly unrelatedsectors were involved, mainly from
the chemical, energy supply and ICT industry.
Building on the resulting in-depth understand-
ing of the German eMobility MPI ecology, we
conducted a second round of in-depth interviews
with 19 key informants between September 2012
and October 2013 (Table 3). All interviewees were
active in multiple MPIs and could build on a
rich experience in IOS development in the eMo-
bility sector. In these interviews, which lasted on
© 2021 The Authors.British Journal of Management published by John Wiley & Sons Ltd on behalf of British
Academy of Management.
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