The Founder's Legacy: Hangover or Inheritance?
| Author | E. Ogbonna,L. C. Harris |
| Published date | 01 March 2001 |
| DOI | http://doi.org/10.1111/1467-8551.00183 |
| Date | 01 March 2001 |
Introduction
It has been argued that one of the key challenges
facing contemporary management is the develop-
ment of market-led strategic change (Harris and
Ogbonna, 2001). However, much extant theory
argues that a wide range of forces impede
strategic change (see for example, Boeker, 1989;
Judson, 1996). These issues have led contemp-
orary theorists to contend that, in many cases,
commitment to strategies endure over time
(Geletkanycz, 1997; McCarthy, Schoorman and
Cooper, 1993) to the extent that the organization
may become strategically ‘inert’ (Huff, Huff and
Thomas, 1992; White, Abbey and Barnett, 1994).
Research into these issues has tended to con-
centrate on theoretical discussions or descriptive
studies designed to discover the extent to which
past strategies endure over time or restrict cur-
rent strategic options (for example, Kelly and
Amburgey, 1991; Tushman and Romanelli, 1985).
Interestingly, such research largely focuses on
Chief Executive Officers (CEOs) and often ignores
the influence of the founder. Furthermore, the
empirical examination of how founding strategies
become internal legacies which influence and
impact on the effectiveness of future strategic
decision-making is frequently overlooked.
With the exception of a small survey by Boeker
in 1984 (later reported in Boeker, 1989), few studies
have combined the study of strategic inertia and
the legacy of the founder of an organization. The
present study was initiated partially in response
to the suggestion of Boeker (1989, p. 511) that
further research is required to develop ‘a better
understanding of strategic change and the circum-
stances under which either inertia or adaptation is
likely’. Indeed, the extent of the debate pertain-
ing to the level of managers’ strategic choice
provides a justification for the current focus on the
influence of the founder on subsequent strategy.
British Journal of Management, Vol. 12, 13–31 (2001)
© 2001 British Academy of Management
The Founder’s Legacy:
Hangover or Inheritance?1
E. Ogbonna and L. C. Harris
Cardiff Business School, Colum Drive, Cardiff CF10 3EU, UK
email: Ogbonna@Cardiff.ac.uk
The legacy of organizational founders is a comparatively under-studied topic. Through
two in-depth case studies, this article explores the factors which influence whether
founding strategic visions, objectives or decisions influence present-day strategic
choice. Furthermore, the study identifies and explores a number of factors which
influence whether a strategic legacy is categorized as either an inheritance or a hang-
over. The article begins with an overview of existing research into the role of the
founder, commitment and strategic inertia, which suggests that additional research is
required to clarify the legacy of company founders. After a review of the research
design and methodology adopted for the study, the findings of two case studies are
presented. The findings suggest that the initial establishment of a strong organizational
culture, continuing perceptions of success as well as successive family control all
contribute to an adherence to the founding strategy, mission or objectives. In addition,
the study indicates that the flexibility of the original strategy and environmental issues
impact on the extent to which the strategic legacy is classified as an inheritance or a
hangover. The article culminates in a series of conclusions and implications.
1The authors wish to express their gratitude to Professor
Gerard Hodgkinson and the anonymous Associate
Editor and reviewers whose detailed and constructive
comments helped in restructuring this article.
This study aims to advance existing theory
through (1) identifying and exploring which
factors influence whether the founding strategic
vision, objectives or decisions influence present-
day strategic thinking or actions and (2) assessing
what factors influence whether this ‘strategic
legacy’ helps or hinders the organization. As is
discussed later in this article, a ‘strategic legacy’ is
defined as the enduring influence of the initial
strategy of the founder of an organization over
the actions of successive strategic decision-
makers. As such, evidence of a strategic legacy is
often uncovered in enduring espoused doctrines,
visions, strategic objectives, aims, beliefs and
cultural values (see Harris and Ogbonna, 1999;
Pettigrew, 1979; Schein, 1992; ).
A review of existing literature indicates the
requirement of the discussion of three issues.
First, it is necessary to clarify the role of an
organizational founder in creating visions, object-
ives and strategies which may become enduring
over time. Second, a discussion of the mainten-
ance of strategic decisions by individuals and
organizations is presented. Finally, the literature
review concludes with a brief overview of the
limited research which combines the study of
strategic change and the influence of the founder.
The role of the founder
Within the strategic management and entre-
preneurship literatures, it is generally accepted
that the emergence of organizations has much to
do with the entrepreneurial spirit of founders
which drives them to create their vision in a
tangible form (Darazsdi, 1993). Adopting a
biological analogy, Reynolds and Miller (1992)
analyse the ‘gestation’ of a new firm and suggest
that a firm is ‘born’ when: the founder exhibits
tangible personal commitment; gains financial
support; recruits employees, and; makes the first
sale (although Carter, Gartner and Reynolds
(1996) argue that the sequence and importance of
these activities is subject to debate). From an
organizational culture perspective, Schein (1991)
notes that organizational formation involves four
main stages. First, an entrepreneur detects a
potential gap in a market and identifies a way in
which this gap may be filled. Next, the founder
shares the idea either to elicit support or to
instigate action. Third, the tangible artefacts of
the organization are established and finally the
organization begins to operate. In this way, the
founder of an organization transforms their vision
into a tangible creation whose culture will largely
reflect the personal beliefs of the founder. Thus,
two of the main roles of the founder of a company
are (1) the creation of a vision leading to a
strategy and (2) the establishment of an organiza-
tional culture largely reflecting their philosophy.
These two roles are discussed below.
Schein’s (1991) view of organizational forma-
tion emphasizes the critical nature of the
establishment of a vision (most commonly articu-
lated and disseminated to other organizational
members via a founding strategy). Indeed, Schein
(1991) argues that the success of a new enterprise
is dependent upon this vision, which in turn is
reliant on the characteristics of the founder (such
as, the extent of market-sensing and foresight).
El-Namaki (1992) contends that in order for a
strategic vision to provide a sound base for com-
pany strategy, the vision should be characterized
by a number of conditions (including coherence,
uniqueness, feasibility and power). As such, the
rationale for a founding vision is linked to a num-
ber of organizational ‘imperatives’ for the founder
(Tregoe et al., 1989). These ‘imperatives’ include
the need: to attune the organization to environ-
mental conditions (Schein, 1991); to articulate
and establish a form of competitive advantage
(El-Namaki, 1992); to communicate strategic
direction to subordinates and for the founder to
control the destiny of their creation (Daily and
Dalton, 1992).
An important issue arising from the above
discussion is the nature of the relationship
between organization culture and strategy.
Although a detailed discussion of this is beyond
the scope of this study (interested readers are
referred to a recent review by Ogbonna and
Whipp, 1999), it is useful to provide a brief over-
view as this may have some bearing on later dis-
cussions. Whilst some researchers have argued
that culture and strategy are mutually dependent
variables which interact within a dynamic
process (Ogbonna and Whipp, 1999; Schwartz and
Davies, 1981), there is significant support from
the ‘founder-centred’ literature that initial organ-
izational strategies are moulded by the vision,
philosophy and beliefs of founders (see Boeker,
1989; Daily and Dalton, 1992; Schein, 1991). Hence,
although it is recognized that organizational strategy
14 E. Ogbonna and L. C. Harris
To continue reading
Request your trial