Strategy as a matter of beliefs: the recorded music industry reinventing itself by rethinking itself

Managerial and organizational cognition studies the ways cognitions of managers in groups, organizations and industries shape their strategies and actions. Cognitions refer to simplified representations of managers’ internal and external environments, necessary to cope with the rich, ambiguous information requirements that characterize strategy making. Despite the important achievements in the field, many unresolved puzzles remain as to this process, particular as to the cognitive factors that condition actors in framing a response to a discontinuity, how actors can change their models in the face of a discontinuity, and the reciprocal relation between cognition and action. I leverage on the recent case of the recorded music industry in the face of the digital technology to study these issues, through a strategy-oriented study of the way early response to the discontinuity was constructed and of the subsequent evolution of this response. Through a longitudinal historical and cognitive analysis of actions and cognitions at both the industry and firm-level during the period in which the response took place (1999-2010), I gain important insights on the way historical beliefs in the industry shaped early response to the digital disruption, on the role of outsiders in promoting change through renewed vision about important issues, and on the reciprocal relationship between cognitive and strategic change.

Continuity and Change in New Products

This doctoral dissertation is triggered by an emergent problem: how can firms reinvent themselves? Continuity- and change-oriented decisions fundamentally shape overtime the activities and potential revenues of organizations and other adaptive systems, but both types of actions draw upon limited resources and rely on different organizational routines and capabilities. Most organizations appear to have difficulties in making tradeoffs, so that it is easier to overinvest in one of them than to successfully achieve a mixture of both. Nevertheless, theory and empirical evidence suggest that too little of either may reduce performance, indicating a need to learn more about how organizations reconcile these tensions. In the first paper, I moved from the consideration that rapid changes in competitive environments increasingly require firms to be “ambidextrous” implementing organizational mechanisms and structures that allow continuity- and change-oriented activities to be engaged at the same time. More specifically, I show that continuity- and change-related decisions can’t be confined either inside or outside the firm, but span overtime across distinct decision domains located within and beyond the organizational boundaries. Reconciling static and dynamic perspectives of ambidexterity, I conceptualize a firm’s strategy as a bundle of decisions about product attributes and components of the production team, proposing a multidimensional and dynamic model of structural ambidexterity that explains why and how firms could manage conflicting pressures for continuity and change in the context of new products. In the second study I note how rigorous systematic evidence documenting the success of ambidextrous organizations is lacking, and there has been very little investigation of how firms deal with continuity and change in new products. How to manage the transition form a successful product to another? What to change and what to keep? Incumbents that deal with series of products over time need to update their offerings in order to have the most relevant attributes to prospect clients without disappoint the current customer base. They need to both match and anticipate consumers’ preferences, blending something old with something new to satisfy the current demand and enlarge the herd by appealing to newer audiences. This paper contributes to strategic renewal and ambidexterity-related research with the first empirically assessment of a positive consumer response to ambidexterity in new products. Also, this study provides a practical method to monitor overtime the degree to which a brand or a firm is continuity- or change- oriented and evaluate different strategy profiles across two decision domains that play a pivotal role in new products: product attributes and components of the production team.