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   Source : Handbook of Strategy and Management   

Strategic Issues Associated with Teleology

Of the four change theories, teleology has been the most frequently used theory by strategy scholars and practitioners. This is not surprising as the field of strategic management is presupposed on the assumption that humans are purposeful with a capacity to make strategic choices. Indeed, these approaches underlie most models of strategic choice and goal setting. These models include what Mintzberg and his colleagues label as the positioning, design and planning schools of thought (Mintzberg et al., 1998). It also includes Allison's (1971) Model I that ascribes rationality to purposeful actors pursuing goals and objectives as they attempt to make consistent value maximizing choices within specified constraints. Indeed, these assumptions have been used by many game theorists in the field of strategy to model strategic behaviors (Schelling, 1960; Camerer, 1991; Postrel, 1991; Saloner, 1991).

Common to rational models of choice is a synoptic view of strategic decision making. In such a perspective thinking is separated from doing as decision makers apply a rational calculus to make optimal choices. However, because decision makers have limited information processing capabilities, most rational choice models accept Simon's (1957) perspective of bounded rationality.

The adaptive learning school is an important extension of this basic teleological model (March and Simon, 1958; March and Shapira, 1987; Levinthal and March, 1981; Lant and Mezias, 1992; Mezias, 1988). Changes in organizations are viewed as movements towards a desired purpose, goal, function, or aspiration. The ability of an organization to meet the aspirations of top managers has an impact on their risk preferences and, consequently, on how the firm might behave in the short run. In the long run, organizational decision makers may adjust their aspiration levels based on the organization's long run performance capabilities.

Those employing strategy theories around teleology often describe the genesis of novelty as being serendipitous (Garud and Karne, 2001). Variations from existing plans and standards of measurement are ‘mistakes’ that only by chance become successful. This is the benign side of such theories. A more pernicious side is evident when an application of these theories results in the active resistance to any deviations from existing standards (Garud and Rappa, 1994; Christensen, 1997). In doing so, practitioners may stamp out the very sources of novelty.

Perspectives on organizational change based on teleology possess many strengths. Most important is that they provide a way of thinking of change as being purposeful, one based on a rational calculation of contexts and contingencies. However, the emphasis on rationality places a heavy burden on strategists to have a comprehensive view of the many contingencies that they may encounter in the future (Simon, 1957). They may also assume that interdependent actors will subscribe to the same set of goals and react to the same set of stimuli and information - see Zajac and Bazerman (1991) for situations with games between interdependent parties with competitive blind-spots. Social construction (Berger and Luckmann, 1967; Latour, 1987; Law, 1992; Callon, 1986) and enactment (Weick, 1979) theories relax these assumptions and adopt an interactionist perspective in which organizational purposes and meanings emerge from shared reflections among decision makers.

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