Winning hearts and minds: Field theory and the three dimensions of strategy

The three dimensions of strategy

Strategy research—and to some degree social movement theory as well—portrays organizations as resource-accumulating machines. The ultimate measure of success is financial performance. Another way to conceptualize organizations is as social actors whose primary function is to manage the impressions and perceptions of their various audiences. Their ultimate goal is to maintain positions of dominance. Resource accumulation depends on the ability of an organization to gain favorability and esteem. Shaping public perceptions about why one organization deserves favor is key, then, to long-term survival. But there exists an alternative and more long-term rationale for shaping public perceptions: for organizations to gain positions of prominence and power in society, they must be able to influence the rules of the game and the cultural norms and belief systems that shape who wins and who does not.

Social movements, of course, have a stake in this game as well. Social movement organizations are groups of people engaging collective action for the purpose of instituting social and political change. They target firms, governments, universities, and other institutions for change, and tailor their tactics to the specific vulnerabilities of each of these institutional domains (Walker, Martin, and McCarthy, 2008). While firms often seek to uphold current rules, social movement activists seek to destabilize this system and change which actors win and lose. Movements are often formed by actors who see themselves as disadvantaged by the current system, but they may also be formed by people in more privileged positions who wish to push for innovations and new identities.

What role does strategy have in this conflict-ridden view of the world? In our estimation, strategy can be conceptualized as having three dimensions. We take inspiration from the ideas of Max Weber (1922 [1978]) in his classic essay on “Class, Status, and Party” in order to understand the features of strategy. We argue that strategy research has focused almost exclusively on financial performance (“class,” in Weber’s resource-based view of economic positions) and management’s role in shaping it. However, Weber’s conceptualization suggests that firms ought to be at least as concerned with prestige or esteem (“status”) or on the relative leverage of various stakeholders and policymakers upon firms’ actions (“party”). Both of the latter strategic motivations, we note, are generally collapsed into the diffuse aggregate category of “non-market strategy” in much contemporary management research, but this seems hardly to do justice to the critical importance of these dimensions to the long-term survival and effectiveness of a firm.

We note that research at the intersection of social movements and organizational theory, especially those studies that conceptualize strategic action in a field-theoretic perspective, highlight all three of these dimensions of strategy (but with a somewhat heavier emphasis on status relative to the other two). Actors attempt to mobilize resources in order to either defend an incumbent position or to open up opportunities as an insurgent, and they also utilize their symbolic resources and inherent cultural standing to persuade audiences that their view of the world is ultimately the correct view. Additionally, they seek to locate points of leverage that may be used to empower supporters and preempt the challenges of opponents. Such a perspective can just as easily be applied to the actions of social movement organizations as it can to the actions of firms; activists also try to develop tactics that help them undermine the symbolic resources of their opponents and persuade their audiences of the moral superiority of their claims. Ultimately, the success of both types of actors depends greatly on their ability to shape the perceptions of the broader public.

Thus, we find three major limitations in strategy research. First, it is far too focused upon firm performance at the expense of understanding strategic elements of relative status and sources of power/vulnerability. Second, its perspective is often far too short term and does not pay enough attention to all three of the aforementioned aspects of strategy, especially in the context of the “long game” of business maneuvering. Third, it downplays the extent to which businesses’ capacities for accumulating resources, maintaining reputations, and obtaining political leverage are all subject to conflict with other actors whose own relative position depends on their ability to convince the public of their alternative ideologies and worldviews.

Taking into account these three dimensions of strategy gives us a more holistic view of strategy. Financial performance, the standard focal outcome for strategy scholars, may only be a loosely connected and distant result for many of the strategic actions businesses take; firms are frequently motivated by the linked needs to enhance their relative status and to exert greater power. If actors are to maintain positions of high status, power, and influence or if they are going to shape the social order, they must be able to strategically manage the public perceptions around the valence and prioritization of social issues. If influencing public perceptions is core to strategy, then it makes sense that strategies and tactics are much more contentious than usually considered by strategy scholars. They are more than just tools for accumulating resources and creating market value. Firms’ tactics are tools for sustaining power relations. Activists’ tactics, in contrast, are disruptive and intended to unsettle firms’ strategies for building and maintaining status and power.

Field theory and understanding strategy

We believe that field theory gives us a framework for contextualizing the three dimensions of strategy. In particular, we draw inspiration from Fligstein and McAdam’s (2012) notion that actors of all types, but activists and firms in particular, are embedded within strategic action fields. We also rely on the intuition of Martin (2003) who argued that “individual action” can be explained by actors’ “position vis-à-vis others” within their field (p. 1). These compatible conceptualizations of fields provide insights about what might motivate the strategic action of firms and activists. First, a field-theoretic approach emphasizes that every domain of interaction is structured around shared but often contested “understandings about the purposes of the field, relationships to others in the field (including who has power and why), and the rules governing legitimate action in the field” (Fligstein and McAdam, 2012: 9).

Movements seek to redefine the rules of the game that govern behavior and interaction within firms’ domain of activity. Their ultimate objective is to change individuals’ behavior and to change the cultural landscape in which firms seek economic advantages. Tactical interplay, as when an activist group boycotts a firm or an industry and business actors respond by attempting to neutralize the boycott, must be contextualized within the broader transformative agenda of that movement (King, 2008). Firms, typically as field “incumbents,” are motivated to maintain the rules of the field and to preserve the order that privileges them.

A second, equally important insight from a field-theoretic approach is that relative position matters. Actors are motivated to maintain or gain a stronger position within their primary field of interaction. This motivation applies to both firms and activists. Field position is multifaceted and encompasses reputation, status, identity, and power. Although financial performance may be one input into field position, it is not the only determinant. Firms, of course, seek to enhance their economic position through market growth, but they also seek to enhance their relative status and power. They try to thwart attempts by activists when they perceive that the interests of movements undermine the very order that gives them power, status, and economic advantage. Similarly, activist groups seek to develop their reputations as potent actors capable of shifting political outcomes (Rohlinger and Brown, 2013). They constantly define and refine their identities as they seek to distinguish themselves from other advocacy groups that occupy similar positions as their own. Thus, many actions can be understood as attempts to jockey for status position or attempts to construct a positive reputation among key audiences.

Positions matter in another way. An actor’s position in the field shapes how they perceive and interpret the rules that create order and coherence to the field. An incumbent is much more likely to be supportive of those rules that gave that actor a dominant position, whereas less successful firms in an industry may see those rules as binding or outdated. Similarly, their reactions to challengers depend greatly on their current field position. Even actors that share fairly similar positions in a field may interpret the actions of competitors or challengers in very different ways because of their unique identities or reputations (Waldron et al., 2012).

For example, one firm may see activist pressure as a constraint on its autonomy, while another may see it as an opportunity for growth or differentiation from competitors. Thus, positions within the field create heterogeneous responses to activist pressures. Similarly, activists who share a common ideological orientation may differ in how they seek to interact with firms in an industry in part because of their distinct positions within their social movement field. One activist group may eagerly seek to establish collaborative relationships with incumbents, whereas another may brush aside cooperative opportunities and instead emphasize a more confrontational approach. Similarly, firms’ relative positions in the field shape which types of coalitions they seek and the particular agendas they pursue.

A third insight that should not be forgotten is that both the field’s rules and field position are largely dependent on public perceptions. The reputations and status of actors are collective perceptions. And the legitimacy of rules also rests on public beliefs and values. Actors within fields, then, try to shape the cultural understandings that a field’s participants and audiences have. Both types of actors are invested in either altering those perceptions to make rule changes more likely or to defend those rules. Similarly, actors are motivated to augment their own position (i.e. reputation, status, and power) by gaining favor with the audiences of their primary field.

Of course, earlier approaches acknowledged that both challengers and incumbents seek to maintain their position through coalition and alliance building, preempting opponents, and making plays in multiple “games” simultaneously through robust action (Fligstein, 2001; Padgett and Ansell, 1993). But despite the theoretical apparatus that was suggested in these earlier conceptual pieces, only more recently have scholars taken up the challenge to provide empirical evidence to evaluate such expectations. Given the scholarly interests of this journal’s readers, we highlight below some of the empirical problems brought to light by a field perspective on business strategy.

Empirical questions and problems for strategy research

In the interest of understanding the ways that firms themselves are strategic players seeking to advance their interests and shape public perceptions, we highlight the opportunity for scholarship to further conceptualize and evaluate the role of business in transforming fields in a fashion somewhat similar to how social movements operate. Although, of course, businesses generally represent privileged interests in society that do not have the built-in structural disadvantages of most activist groups, nonetheless, it is clear that firms must make constant efforts to maintain their brands, reputations, positions relative to industry peers, policymakers, consumers, and local community audiences. And, on a more concrete level, firms do at times resort to social movement tactics themselves when pressured by reputational challenges, protest, controversy, and/or threatening regulation.

Actors are usually working on a variety of agendas across multiple institutional domains. A firm’s response to activist pressures reflects its position within these fragmented contentious fields. Consider the decision by a firm to take political action and decide upon a tactic to deploy in doing so. We argue that such a decision cannot be seen as a simple binary option placed before a company as a unitary actor. Just as a firm’s judgment that it should offer a particular employee benefit, enter into a new corporate responsibility agreement, or depose a CEO reflects the relative power of diverse contending parties both within and outside the firm, the decision to engage in a particular form of political action also reflects ongoing struggles between actors who have divergent stakes in maintaining or changing the firm’s public character, identity, and external linkages. Others have suggested that similar organizational processes shape firms’ lobbying activities (e.g. Martin, 1995; Walker and Rea, forthcoming).

Moments when a firm’s lobbying or Political Action Committee (PAC) contributions become public and upset certain key secondary stakeholder groups make such contending pressures clear. Consider the following recent examples in which a corporate political actions have backfired: (1) The controversy surrounding the 2010 revelation that Target’s PAC was funding a Minnesota gubernatorial candidate seen as antigay; (2) boycotts of Coca-Cola, Kraft, and other firms who were identified as members of the American Legislative Exchange Council (ALEC), a conservative lobbying group believed to have been influential in pressuring state legislatures to vote in favor of polarizing voter ID and “stand your ground” laws; (3) ongoing boycotts of Koch Industries brands such as Brawny paper towels in the wake of revelations about the Koch family’s vast political activities by New Yorker columnist Jane Mayer. In each of these cases, a firm’s attempt to reshape the political environment pressed up against its efforts to be seen as a neutral player in the marketplace, leading to public contention and strife. The social control of industry, then, is not merely about a society regulating how a firm provides goods or services, but is about all aspects of the business-society interface (Zald, 1978), including how a firm presses for its interests and tries to mold society accordingly.

Studies that investigate the mobilization of corporate support in civil society indicate that the decision about how and when businesses seek to reshape their field environment is also one that reflects firms’ field positions and the diverse contending interests they face. One of us (Walker, 2009, 2010, 2012, 2014) has, in fact, shown in his research precisely how this takes place. Reputations are, at their core, evaluations by peers about a firm’s relative standing and distinctiveness within the field, and these shape how a firm responds when faced with protests or other public controversies about the company’s practices. Walker (2014: Chapter 5) investigates which Fortune 500 firms will make efforts to mobilize political support among members of the mass public by hiring a consultant specializing in such grassroots mobilization strategies, finding that corporate reputations serve as a key moderating variable.

Of course, field position ultimately shapes how organizations respond to perceived threats and attempt to shape their environment (King, 2008). McDonnell and King (2013) showed that firms’ field standing primes them to respond to activists’ threats by engaging in prosocial action to protect themselves from potential damage to their reputations. Prominent firms that have a history of doing prosocial activities, however, are less likely to respond to activist threats this way, since they believe that they are already buffered against such challenges. Thus, field position helps to condition corporate political and prosocial actions. Moreover, firms intend these types of actions to shape public perceptions and to promote their own agenda.

Other research (Lee and Romano, 2013; Walker, 2014: Chapter 7) shows that corporate campaigns to build public support must also be attentive to firms’ strategic positions vis-a-vis the mass public, given that corporate campaigns in civil society are often easily dismissed as being outside the public interest (i.e. “astroturf,” or “fake” grassroots without an authentic citizen base). Therefore, the most effective such efforts tend to be those that look more like grassroots citizen campaigns, with transparency about sources of support and the ability to generate (seemingly or actually) independent activism on behalf of the company.

All of these accounts point the way toward understanding how business elites engage in skilled maneuvers to manipulate fields of action, and that they do so in ways that are constrained by the actions of other players (social movements, policy elites, competitor firms and industries, consumer groups, and more) and also by their own knowledge of which repertoires of action are “thinkable” and perceived to be effective (Fligstein, 1997).

Concluding thoughts

Strategy scholars, we argue, have much to gain from field theory. First and foremost, we argue that strategy research would benefit from taking the more holistic approach we have advocated here, particularly by being more attentive to overlooked dimensions of organizational status and power. We maintain that the vibrant body of research on strategic interactions between social movements and businesses—as well as the mediating roles played by consumers, certifiers, political elites, and the mass public—offers vital insights into all three of these dimensions of organizational strategy, particularly in how field position influences key decisions and skilled actions by players on both sides. Firms, activists, policymakers, and other field actors are both learning from one another in such interactions. Firms often realize new market opportunities, alter their reputations, and recognize new ways of mobilizing effective political action in response to internal and external activists. And movements, in turn, adapt to the strengths and vulnerabilities of firms to raise their own status, leverage, and resources.

Strategy research, of course, has long considered the various ways in which firms’ actions shape financial performance. Field theory compels us to examine other strategic outcomes that matter to firms, namely, striving to attain and maintain field position and shaping the public perceptions that underlie field stability. Firms, of course, care about how their actions might immediately affect profitability and market value, but they also have a long-term interest in shaping the “rules of the game” that determine how they make a profit or create value. Moreover, many of the struggles in their field of action are ideological. They strive to promote an ideological worldview that meshes with their own needs for power and attention.

Field theory also sensitizes us to consider the various types of actors, including activists and other political actors, that firms must attend to as they seek to maintain their current field position. This perspective moves beyond the narrow lens of portraying firms’ actions as being either motivated by market or non-market environments, and instead embeds the various motivations in a complex web of relationships between government actors, other firms, organized activists, and local community actors. The relative positions that these actors have to one another shapes how they respond strategically to changes in their environment. The perspective also emphasizes that ultimately, all of these actors depend on public perceptions in order to act autonomously and enhance their long-term well-being. We believe that our approach offers a more holistic set of tools for understanding the richness, depth, and diversity of organizational strategic action.