Self-Reinforcing Processes in and among Organizations

J. Sydow, G. Schreyögg, J. Sydow, G. Schreyögg

• Publisher: Palgrave Macmillan
• Year: 2013
• Print ISBN: 9781349352074, 9780230392823
• eBook ISBN: 9780230392830
• Topic: Business
• Subtopic: Business General
• Index: Business

Management and organization research has rediscovered individual agency, innovation and entrepreneurship. As such, there is a risk of overlooking the power of self-reinforcing processes in and among organizations. This volume redirects attention to these processes, including: escalating commitment, organizational imprinting and path dependence.

Part I

Path Dependence by Self-Reinforcing Processes

2

Self-Reinforcing Mechanisms in Organizational Fields: The Development of an Innovation Path in the Car Industry

Uli Meyer

1 Introduction

Is it possible to identify mechanisms in the social sphere? While it is true that the social sciences cannot proffer deterministic processes like those described in physics or engineering, the concept of mechanisms can, nevertheless, also be applied usefully to identify and analyze patterns in the social world. This chapter examines the concept of mechanisms in general and self-reinforcing mechanisms in particular as pivotal to an understanding of inter-organizational dynamics. In addition to demonstrating how the study of organizations can profit from the concept of mechanisms, I also show how such mechanisms unfold at the level of organizational fields.

The development of new technologies in the car industry is taken as an example here. Today, most innovation activities take place within, or even between, organizations (Powell, Koput, and Smith-Doerr, 1996). Especially innovation processes for complex technologies are distributed across a wide range of organizations. As a result, specific “organizational fields” (DiMaggio and Powell, 1983) focused on technology development emerge. These fields are postulated to be the source of powerful mechanisms which lead to the diffusion and stabilization of specific forms of technology development. Such innovation paths reinforce specific forms of technology and exclude others. In this chapter I especially highlight the role of inter-organizational structures in organizational fields, while also looking at the engineering profession, and relations between the field and its wider societal context in the development of self-reinforcing dynamics. I show how a variety of inter-organizational self-reinforcing mechanisms emerge and begin to stabilize and support the development of an innovation path. This chapter contributes to discussion of the dynamics of organizational fields and expands discussion of self-reinforcing social mechanisms to include this level of analysis. In broader terms, the following thoughts are intended as a contribution to innovation theory. Innovation is portrayed as distributed inter-organizational activity, and self-reinforcing mechanisms as strong stabilizers of new technological trends.

2 Social mechanisms

It is a well-known impossibility that the social sciences may someday identify social patterns with the same claims to universality offered by the natural sciences. Different explanations have been given for this disparity: unintended consequences (Merton, 1936, p. 898), the complexity of causal relations (Balog, 2008, p. 80; Weber, 1988), bounded rationality (Simon, 1947), or the inherent contingency of all social phenomena (Windeler, 2001, p. 36). At their core, these concepts are all merely different designations of the same phenomenon, that is, the overwhelming complexity of social phenomena, which defies description using universally valid laws. Nonetheless, this should and cannot be an excuse for social scientists to throw up their hands and abandon the search for patterns and generalized statements in the social world. The concept of “social mechanisms” is one attempt to continue this search. It intends to identify patterns in social dynamics and structures, even if their predictability is more elusive than that of certain natural phenomena.

One disadvantage of the term “mechanism” is its mechanistic and deterministic connotations. This is exactly what social processes are not. But even with this shortcoming, the concept can be utilized in a productive way. The justification is pragmatic: in many contexts, the concept of “mechanisms” has already been used without any mechanistic over- or undertones in order to describe patterns in social phenomena (Elster, 1989a; Hedström and Swedberg, 1996, p. 282; Scott, 2008, p. 51).

The “self-fulfilling prophecy” is one of the best-known social mechanisms: “The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a new behavior which makes the originally false conception come true” (Merton, 1948, p. 195). Merton illustrates this mechanism’s effect with the example of a bank that goes bankrupt because of rumors about its bankruptcy. Because of the rumors, concerned customers withdraw their money from the bank, which in turn boosts the rumors and prompts additional customers to withdraw their money. At some point, this vicious cycle results in so many customers withdrawing their money that the bank – until then prosperous – actually does go bankrupt.

Social mechanisms are discussed as concrete and comprehensible descriptions of how, under given circumstances, certain processes and events lead to a specific outcome (Bunge, 1997, p. 439). They are recurring processes which link specific starting conditions to a specific result (Mayntz, 2005, p. 207). Social mechanisms describe ways in which things commonly happen (Elster, 1989b; Pierson, 2004, p. 6), that is regularities and patterns in social processes. They are situated somewhere between pure descriptions and universal laws (Hedström and Swedberg, 1996, p. 282). To retain these properties, social mechanisms have to be applicable to a variety of situations (McAdam, Tarrow, and Tilly, 2001, p. 24).

Describing social mechanisms is an attempt to provide explanations of social phenomena without reducing them to statistical correlations (Abbott, 1992; Hedström and Swedberg, 1996, p. 287; Mahoney, 2001, p. 577; Pentland, 1999, p. 719). Statistical correlations show relations, but cannot explain them (Bunge, 1997). If one considers sociology as an attempt to understand and explain social actions, as Max Weber did (1980, p. 1), the search for and identification of social mechanisms is an important aspect of the development of social theory (Pentland, 1999, p. 711). Mechanisms are “causal explanations” (Weber, 1980, p. 5) that permit explanations of phenomena by identifying lower-level dynamics (Scott, 2008, p. 121; Stinchcombe, 1991, p. 367). In Merton’s bank example, these dynamics result from the uncoordinated, individual decisions of the customers, which lead to the unintended consequence of bankruptcy.

When generating causal explanations, descriptions of social mechanisms attempt to offer a “causal reconstruction” (Mayntz, 2002) of social phenomena. A historical narrative (Mayntz, 2005, p. 205) can be taken as one starting point from which generalizations of specific processes and dynamics can be derived (Mayntz, 2005, p. 207; Pierson, 2004, p. 6).

Self-reinforcement – the type of mechanisms discussed in this book – is one example of such a general description. It is too general to be applied directly to specific cases, but it can be used to search for the particular characteristics exhibited by this type of mechanism in a specific case (Mayntz, 2005, p. 222). Self-reinforcing mechanisms can be identified in many contexts. The diffusion of organizational forms (DiMaggio and Powell, 1983, p. 148; Meyer and Rowan, 1977) and scientific findings (Fujimura, 1988) may already have a self-reinforcing form. Another famous example of self-reinforcement is path dependence in technology development. The example of the typewriter (David, 1985) – a commonly used example for this kind of self-reinforcing mechanism – can be used to illustrate different levels of abstraction. On a very general level, it can be said that the existence of self-reinforcing mechanisms is responsible for the currently dominant QWERTY layout (Arthur, 1988). On a more tangible level, one can describe the small events that triggered this development, as well as precise self-reinforcing mechanisms (David, 1985, p. 334). Taking one more step in the direction of specificity, a detailed history of the typewriter can be reconstructed. This provides insights into what triggered the specific mechanisms and temporal order in which they started to unfold. The opposite approach – proceeding from the detailed narrative to the abstract mechanism – describes the previously mentioned path towards identifying mechanisms.

In the following, a specific form of mechanism is described: self-reinforcing mechanisms unfolding at the level of organizational fields. This is accomplished with a “mid-range” level of abstraction. This means that while their basic operating principles are presented, a detailed historical reconstruction is not given. The descriptions are based on a case study that I conducted between 2003 and 2009 (Meyer, 2010). The main data sources are 37 qualitative expert interviews with engineers, managers, and researchers at car companies, suppliers, research institutes, universities, and public institutions in Europe and the United States. In addition, I analyzed official and internal documents produced by organizations in the field, participated in conferences, workshops, test drives, and so on. The goal of the case study was to develop a theoretical framework for innovation paths, and to identify and analyze the social dynamics and mechanisms that have led to the development of the specific innovation path in question.

3 The organizational field of Advanced Driver Assistance Systems

Because of their specific properties, contemporary innovation activities are a useful example for an analysis of self-reinforcing mechanisms at an inter-organizational level. Especially research and development (R&D) activities geared toward complex technologies occur across a wide range of organizations and are heavily institutionalized. They represent an intriguing mixture of stability and change: they are institutionalized forms of the search for (technological) change and take place within organizational fields.

I use the case of the development of Advanced Driver Assistance Systems (ADAS) in the automobile industry and give examples of the mechanisms at work in this context, and how they contribute to the development of the innovation path. ADAS are a complex technology developed within an organizational field, which consists of organizations that “in the aggregate, constitute a recognized area of institutional life: key suppliers, resource, and product consumers’ regulatory agencies, and other organizations that produce similar service or products” (DiMaggio and Powell, 1983, p. 148). These systems developed by organizations in a field constitute field-based innovations, which makes them an excellent case for the study of inter-organizational innovation processes. It permits research into how innovation takes place on the level of organizational fields, as well as insights into the dynamics of organizational fields and the self-reinforcing mechanisms active within them.

ADAS assume tasks that are normally considered part of the activity of driving. Today, a wide range of electronic systems is available for almost every new car. Some examples are systems that automatically initiate an emergency stop when the car’s sensors have detected an imminent accident or systems that offer automatic parallel parking. Researchers have already initiated test drives involving fully autonomous cars. One example is the cooperation between Google and Stanford University in which test drives of autonomous vehicles have been taking place in regular traffic since 2009.

The main components of an ADAS are sensors, computer systems, and actuators. Sensors, for example radar scanners, laser scanners, or video cameras, are used to gather data from a car’s surrounding environment; computer systems analyze this data in real time and – if necessary – initiate certain (counter-)measures; actuators translate computing results into action by controlling basic functions such as steering or breaking.

The development of such a system requires a wide variety of knowledge as well as demanding contributions from areas including, but not limited to, automotive engineering, electronics, computer science, sensor technology, and artificial intelligence. No single organization possesses expertise in all these areas.

Today, a fully equipped vehicle can include over a hundred different computer systems. Some systems – like ABS (Anti-Lock Braking System) – are mandatory for new cars in many regions of the world. Car companies present new electronic systems at increasingly shorter intervals. In addition, ADAS are often used as indicators for the innovativeness of car manufacturers. Cars and car brands are evaluated in terms of the quality and quantity of available features. New cars are often advertised by displaying their new and innovative systems.

This important role played by ADAS in today’s car industry is the result of a distinct transformation in the industry’s orientation towards technological development. In other words, it is possible to pinpoint the emergence of an “innovation path” (Meyer, 2010) for ADAS.

Such innovation paths:

– are characterized by a specific form of technology development,

– have gained momentum and inertia,

– take place in an organizational field which constitutes the path,

– show a mix of chance events and purposeful coordination and, last but not least,

– are supported by stabilizing and self-reinforcing mechanisms.

As an outcome of institutionalization, innovation paths are thus expressions of a specific interrelation of stability and change, that is, they express the institutionalization of specific forms of change. As a specific form of technological development, an innovation path is stabilized within its (institutional) context, for example the organizational field. Innovation paths, such as that of ADAS, do not prevent innovations from taking place, but structure and guide them. On a detailed level, these paths present a mixture of planned activities, unforeseen events and unintended consequences. Innovation paths can contribute to the reduction of uncertainty, especially in industries with high rates of innovation. They provide shared perspectives and expectations concerning future developments and technology. The stabilization of one specific path always implies the exclusion of alternative forms of development. This generates the perception of a technological development as being “natural” or inevitable, unfolding according to an inherent logic. Once an innovation path has emerged, its further technological development is path-dependent. Even if a variety of options was initially available, once stabilized, the development is “locked in” to one specific form of technological development (David, 1985). At least to a certain degree, its further development becomes predictable.

Innovation paths are probably most common with complex technologies, which can be described as bundled innovations. One example of this type of technology is ADAS, which is stabilized within a specific field. This field has e...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables
• List of Figures
• List of Contributors
• Introduction
• Part I: Path Dependence by Self-Reinforcing Processes
• Part II: Explaining and Monitoring Self-Reinforcing Processes
• Part III: Research Perspectives and Conclusion
• Index