The Specialist Strategy

Following Steiner George A. , “Why and How to Diversify,” California Management Review, no. 4 (Summer 1964): 11–17, I use the term diversify in its most general sense, defined as “entry into new product lines, processes, services or markets” (p. 11). In the context of this paper, diversification is implied by any action that makes an organization less specialized.

The claim that diversification is an adage of conventional strategic theory is a strong but defensible statement. The clearest example of such theorizing is found in Steiner's assertion that “in the long run, an organization must diversify or die,” (p. 12) Steiner, Ibid. More common in the strategic literature are strong assertions about the unattractiveness of specialism: “concentrating on a single business does pose a major business risk,” Thompson A. Strickland A. , Strategy and Policy (Plano, Texas: BPI, 1981), p. 70. See also footnote 4.

Chandler Alfred , Strategy and Structure (Cambndge, MA: MIT Press, 1962).

Greiner Larry , “Evolution and Revolution as Organizations Grow,” Harvard Business Review 50: 37–46; Scott B. R. , “Stages of Corporate Development, Part I” Working Paper

Dearing Jim , “And For the Record—The Rise of the Small Labels,” PSA Magazine (April 1983), p. 60.

Compaine Benjamin J. , ed., Who Owns the Media? (New York: Harmony, 1979).

Coser Lewis A. Kadushin Charles Powell Walter W. , Books: The Culture and Commerce of Publishing (New York: Basic, 1982).

Pine Victoria , “Making Books,” The Berkeley Monthly 13, no. 2 (1982): 19–31.

Porter , op cit.

Porter's list of the determinants of fragmented industries is longer, but these three factors are the major ones.

Hannan Michael T. Freeman John , “The Population Ecology of Organizations,” American Journal of Sociology 82(1977): 929–964.

Freeman John Hannan Michael T. , “Niche Width and the Dynamics of Organizational Populations,” American Journal of Sociology 88(1983): 1116–1145.

Hirsch Paul , “Processing Fads and Fashions by Cultural Industry Systems: An Organization-Set Analysis,” American Journal of Sociology 77(1975): 639–659.

Carroll Glenn R. , Publish and Perish: Organizational Mortality in the Newspaper Industry (Greenwich, CT: JAI, forthcoming).

Miles Snow , op. cit.

Described by Lerner David , “For the Record …” Express 4, no. 44 (1982): 1–11.

Of course, one's evaluation of Arhoolie depends on the criteria invoked to measure success. For the owner of Arhoolie, success is the ability to earn a decent living doing something that he wants to do for such a long time. More mercenary criteria may lead to a less positive evaluation.

For discussions of institutional rationality, see Meyer John Rowan Brian , “Formal Structure of Organizations as Myth and Ceremony” American Journal of Sociology 83(1977): 340–363; DiMaggio Paul Powell Walter W. , “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Field,” American Sociological Review 48(1983): 147–160.

Pfeffer Jeffrey , “Management as Symbolic Action: The Creation and Maintenance of Organizational Paradigms,” in Cummings L. L. Straw B. M. , eds., Research in Organizational Behavior, Vol. 3, (Greenwich, CT: JAI, 1981).

Porter , op. cit.

Small Business Administration, op. cit.