Table of Contents

Handbook of Research on Strategy and Foresight

Handbook of Research on Strategy and Foresight

Elgar original reference

Edited by Laura Anna Costanzo and Robert Bradley MacKay

Drawing together a collection of 29 original chapters, the Handbook makes an invaluable contribution to theory and practice by stimulating disciplined, rigorous and imaginative enquiry into the relationship between strategy and foresight. Leading scholars in the field of strategic management are brought together to offer innovative and multi-disciplinary perspectives on the past, present and future of strategy formation and foresight. In so doing, they challenge research in four key areas: strategy and foresight processes; strategy innovation for the future; understanding the future; and strategically responding to the future.

Chapter 27: Addressing Path Dependency in the Capabilities Approach: Historicism and Foresight Meet on the ‘Road Less Travelled’

Swapnesh K. Masrani and Peter McKiernan

Subjects: business and management, strategic management


Swapnesh K. Masrani and Peter McKiernan Introduction This chapter challenges the commonly held notion in the capabilities approach, arising out of an overemphasis on path dependency, that capability development follows a single path-dependent route, which is determined positively by interrelatedness among existing technologies. It queries the fascination especially within the empirical literature with examining a single, successful choice. The chapter argues, like Penrose (1959) and Hamel and Prahalad (1994), that a firm seldom considers only one strategic capability development route. Often, a route is chosen from a bounded option set, anchored by the ‘do-nothing’ default. This is supported by empirical case evidence, which also suggests that, in some instances, technological interrelatedness is not a major factor influencing the development of capabilities from the available options. The chapter is structured as follows. First, we review key literature in the capabilities approach (that is, Barney 1991; Teece et al. 1997) and describe how, in an attempt to ‘engage’ with history, path dependency has played a central role in its theoretical construct. We then argue that an attempt by strategy researchers to equate ‘serious’ engagement with history by using only the notion of path dependency is highly erroneous. In particular, three issues of concern are identified, namely, a myopia in strategic choice, causal bias and efficiency assumption. Second, we review how historians have addressed these problems, with a view to incorporating these suggestions into an empirical study. A key historicist technique is to examine the multiple options that were available...

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