The demon in the strategy stream

In strategy today, ‘dynamic capabilities’ is the dominant perspective (Bareto, 2010; Easterby-Smith et al, 2009). Bareto, (2010, 256) cites article search evidence from 1997-2007 to back up this claim which is affirmed by Easterby-Smith et al (2009): ‘If anything, interest in this topic has been increasing, as evidenced by citation counts and the amount of programme time devoted to it at major conferences, such as those sponsored by the Strategic Management Society and the Academy of Management (Easterby-Smith et al, 2009, p. 1). The dynamic capabilities perspective is considered here as the ‘demon in the strategy stream’ because it fails to conceptualize organizations as they really are; as complex living systems (De Geus, 1997). It will be argued that it remains tacitly if not explicitly wedded to the Newtonian ‘clockwork universe’ metaphor (Capra, 1996) which has become entrenched in Western thought (e.g. Helbing, 2009). This is a metaphor which has promoted the idea that managers can tinker with organizations as if they were machines to achieve top down directed premeditated outcomes from change. This notion has long been discredited in the change management literature (e.g. Beer, 1990; Heifetz and Linsky 2002). It has also been long accepted that the strategies which emerge in organizations depend upon factors other than rational analysis, planning and execution. Some aspects of strategy are emergent (e.g. Mintzberg, 1978). The forces which shape the behaviours, decisions and actions of organizational members which contribute to patterns of emergent strategy are complex and neglected within dynamics capabilities reasoning. These forces are complex and can have a powerful influence upon the directions of organizational development. It will be argued that the dynamic capabilities idea that the main role of a manager is to ‘orchestrate’ assets in an analogous manner to the conductor who orchestrates the members of an orchestra, places but a thin veneer over this clockwork universe ‘machine’ metaphor, neglects these fundamental elements and forces shaping the directions of organizational change, marginalizes the human factor and is leading to prescriptions for practice with the potential for damaging consequences. In the organizational literature, the term ‘dark’ is often used to refer to undesirable and potentially destructive behavioural emergences which can arise in organizational settings (e.g. Furnham and Taylor, 2004). For example Conger (1990) used the term to describe ‘the dark side of leadership’, encompassing leadership behaviours which can have a damaging impact upon subordinates (e.g. Bies and Tripp, 1998; Tepper, 2000; Zellars, Tepper and Duffy, 2002) and organizations (e.g. Vredenburgh and Brender, 1998; Kellerman, 2004; Lipman-Blumen, 2005; Einarsen et al 2007; Aasland, et al. 2010). This literature offers an indication of the sorts of damaging consequences which can arise within an organization when managers deploy the type of thinking promoted in the dynamic capabilities literature. In physics, the term ‘dark’ is used without any sinister overtones to refer simply to elements, forces and patterns of movement with properties which can not be understood within the frameworks of conventional Newtonian thought i.e. ‘dark matter’ to account for missing mass in the universe, ‘dark energy’ pushing galaxies apart in defiance of known gravitational forces and ‘dark flows’ of galaxies moving towards some ‘strange attractor’ in an unknown part of the universe.1 The point is that there are dynamic complexities in the universe which Newtonian reasoning can not explain. There are also dynamic complexities in living social systems which are not amenable to understanding using the type of reasoning which dynamic capabilities theorists have hitherto employed. Organizational systems are ‘complex’ as opposed to ‘complicated’ and whatever else they may be they are not orchestras. They have a phenomenology of their own (Nicolis and Nicolis, 2009). They can only be analyzed, or for that matter managed as if they were merely complicated up to a point. As Capra, 1982, p. 101) noted, Newtonian scientific theories ‘are approximations which hold their validity only over a certain range.’ This paper will use the term ‘dark’ in a manner which is similar to that in which it has been deployed in physics to describe the organizational equivalents of dark matter, dark energy and dark flows which are neglected in the dynamic capabilities framework. It uses complexity science concepts to consider dark unpredictable emergences, which are also ‘dark’ in the sense of the term as it is used in the management literature. In particular, it considers how the type of thinking which underpins dynamic capabilities can lead to poor ethical standards in management.