Perspectives on Strategic Change

The workshop from which this book derives was funded by CNR, Italy.

Perspectives on Strategic Change

Edited by Luca Zan Stefano Zambon Andrew M. Pettigrew

k J w Kluwer Academic Publishers Boston/Dordrecht/London

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Library of Congress Cataloging-in-Publication Data

Perspectives on strategic change/edited by Luca Zan, Stefano Zambon, and Andrew M. Pettigrew.

p. cm. Includes index. ISBN 0-7923-9326-0 1. Organizational change —Europe —Congresses. 2. Strategic

planning —Europe —Congresses. 3. International business enterprises — Europe — Management — Congresses. 4. Personnel management —Europe —Congresses. 5. Organizational change — Europe —Case studies —Congresses. I. Zan, Luca. II. Zambon, Stefano. III. Pettigrew, Andrew M. HD58.8.P473 1993 658.4'012 - dc20 92-44914

CIP

Copyright © 1993 by Kluwer Academic Publishers

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Kluwer Academic Publishers, 101 Philip Drive, Assinippi Park, Norwell, Massachusetts 02061.

Printed on acid-free paper.

Printed in the United States of America

Contents

Introduction ix Luca Zan, Stefano Zambon, and Andrew M. Pettigrew

1 Strategy, Change, and the Strategic Approach: Making Sense in Process 1 Luca Zan and Stefano Zambon

Commentary by Chris Hendry

2 Management of Internationalization 43 Jan Johanson and Jan-Erik Vahlne

Commentary by Dietger Hahn

3 Barriers to Internationalization 79 Peter J. Buckley

Commentary by Arnaldo Canziani

4 Networks and Internationalization: Managing Complexity Through Knowledge 107 Enzo Rullani

Commentary by Stuart Macdonald

5 Human Resource Management and Strategic Change: The Italian Case 149 Arnaldo Camuffo and Giovanni Costa

Commentary by Jeremy F. Dent

vi CONTENTS

6 Institutionalist Explanations: A Special Case of Strategic Fit? 181 Arndt Sorge

Commentary by Peter Senker

7 Integrating Operational and Strategic Knowledge Bases for Competitive Performance 205 Sten Jonsson

Commentary by Bruno Bernardi

8 Introducing Market-like Mechanisms in the Public Sector: The Case of the National Health Service 235 Ewan Ferlie, Liz Caimcross, and Andrew M. Pettigrew

Commentary by Gerard de Pouvourville

9 Assessing Recent Changes in the Role of Government in the Economy 257 Giorgio Brosio

Commentary by Brian J. Loasby

10 Strategic Divestment in the Public Sector: Patterns from France and Great Britain 277 Taieb Hafsi, Jan J. Jorgensen, and Christian Koenig

Commentary by Stefano Zamagni

11 An Assessment of Perspectives on Strategic Change 313 Andrew H. Van de Ven

About the Authors 325

Index 329

Perspectives on Strategic Change

INTRODUCTION Luca Zan, Stefano Zambon, Andrew M. Pettigrew

This book has developed from an international research workshop organ­ized by the Dipartimento di Economia e Direzione Aziendale, University of Venice, and the Centre for Corporate Strategy and Change, Warwick Business School, University of Warwick. The purpose of the workshop was to foster the growth of a European network of scholars and to help create a "European perspective" in studying strategic change. The ten chapters in this book were first presented in Venice in May 1991 and have been substantially revised since then. The ten commentaries on the chapters are in most cases substantial developments of the oral responses made at the workshop, as indeed is the final review chapter by Andrew Van de Ven.

The theme of this book, the study of strategic change processes, remains as theoretically alive and empirically real in the 1990s as it did in the 1980s. For many organizations in the European and North American context, the 1980s was an era of radical change. In this respect there is a wide array of examples. Structural changes in old industries such as coal, shipbuilding, steel, and heavy engineering led to a great employment loss and the impoverishment of certain regional economies that had remained dependent on those industries. But it was not just the old industries that

X INTRODUCTION

experienced major change during the 1980s. Changes in patterns of regu­lation in various sectors, pressures from national and international econ­omic and political groupings, and, of course, the rising competitive force from economies such as Japan and East Asia have all brought pressure for change in industry sectors from chemicals, to cars, to investment banking and book publishing and many others.

Managerial responses to the above pressures have included divestment and managed decline, changes of ownership through an era of mergers and acquisitions, structural and employment change to more sharply defined accountabilities associated with the search for fixed cost reduction, and attempts at market growth through internationalization.

If anything, the 1990s have witnessed even greater pressures for change both from an intensification of some of the forces mentioned above and also from some additional pressure points and opportunities. For instance, in Western economies the recession of the early 1990s is deeper than most commentators dared imagine, and the climb out of recession has been slower than anticipated. This time around a different set of industries (service as forcibly as manufacturing) and geographical areas have been affected by restructuring and employment loss.

But the really significant changes in the 1990s have to be seen on a wider canvas than the preoccupation of any single nation state. In Eastern Europe and the former Soviet Union there are the enormous challenges posed by simultaneous political, economic, and organizational adjustment. For the EEC (European Economic Community) countries there are the opportunities created by the 1992 Single European Act with the potential of a vast market of 320 million plus people, as compared with 243 million in the United States and 122 million in Japan. The Commission also seeks to encourage cooperation between European multinationals in order to increase their market power vis-a-vis Japanese and U.S. com­petitors, pursuing a conscious and institutional oligopolistic policy at the European level.

If the 1992 initiative provides opportunities for large European firms, it also presents them with a large change agenda. This agenda includes restruc­turing through mergers, acquisitions, joint ventures, and other strategic alliances, as well as internal rationalization and efficiency improvements. The pressure will be to meet not just national or European standards, targets, and competitive domains, but world ones in terms of product development, production efficiency, technological investment, quality of service and product, human resources, and organizational capabilities.

Traditional sources of complexity and change for large international firms arising from exchange rate fluctuations, political instabilities, changes

INTRODUCTION XI

in host nation regulations, and competitive rivalries in geographically dispersed and culturally different markets have now been given added force by distinctive pressures. Thus Bartlett and Ghoshal (1989) argue that, first, the accelerating pace of change will draw more companies beyond their national boundaries (the impact of 1992 being a case in point). Second, the growing complexity of interorganizational relationships between companies and their stakeholders will require firms to discover novel ways to manage across less rigid corporate boundaries.

However, strategic change in the 1990s needs to be addressed beyond the limits of the national and international activities of private sector firms. Drives for economy, efficiency, effectiveness, and even excellence in the public services have brought a new managerialism to public sector administration in many European countries, as a response to the general crisis of welfare policies. Among the results there have been programs of privatization of former public assets, attempts to allocate resources and meet customer needs through internal market rather than planning mechanisms, and the wholesale restructuring of large bureaucratic organ­izational forms. In this sense, capabilities to link macro and micro change agendas seem to be at the core of the implementation task in public sector change (Pettigrew, Ferlie, and McKee, 1992).

This cursory examination of private and public sector strategic change should have reminded us not only of some important recent trends but also the multilayered and multilevelled nature of studying and intervening in strategic change processes. Thus far we have alluded to interdependent forces perhaps triggered by one level (the supranational body, for example, the European Commission) requiring consequential policy making and action at national and regional economic level, and thence simultaneously at the firm and within-firm level. Equivalent issues are raised in public sector change where policy is often centrally constructed at the national level, possibly informed by supranational rules and standards, and then forced down on lower tiers such as regions or districts. The result is often great variability in the rate and pace of change at lower tiers.

Some problematic issues in studying strategic change

There is now endless scope for the social scientist interested in analyzing economic and social change processes, all of which involve individual decisions, organization behaviors, structures and evolution of firms and industries — in a word, the "strategies" of actors. However, there are also many theoretical and methodological problems in doing so, which are

Xll INTRODUCTION

shared by different disciplines dealing with strategic change. Some of the problems are conceptual and definitional. What is meant by strategy? What operational boundaries are to be put around the phrase strategic change? When indeed is a change strategic and when is it not? Is change to be explored using the event, the episode, or the decision as the unit of analysis, or should change be explored as a continuous process over time? What is the role and significance of time in the analysis of any process, and how and why does the analyst make judgments about when to begin and end the analysis? How does one link antecedent conditions to present circumstances and the emerging future, and to what extent do our frame­works cope with the irreversibility of most of the economic and social phenomena? What theory or theories of process are to account for the direction and pace of change, and what is the relative importance of context and action in explaining any observed patterns in the process of change? How are environment and context to be brought into any change analysis, and what levels of context are deemed appropriate? For instance, is the firm to be understood just in the setting of its sector, or in addition by embedding firm and sector patterns in national and international economic and political trends? If multiple levels of analysis are to be used, what implications does this have for the chosen time series to explore any interconnections between, for example, firm, sector and economic trends?

It is our impression that different disciplines coping with change did and do encounter a similar set of intellectual challenges, which then cut across scientific boundaries as historically perceived. In our opinion, three major problematic issues of an interdisciplinary nature must be addressed in the study of change. Though distinct in character, they are nonetheless logically intertwined and can be identified in the following.

1. Location in space-time settings has always been one of the most relevant topics in the economic and organizational debate. To be sure, in the German and Italian idealistic philosophical tradition, time and space were jointly considered as expressions of the dynamic of complex phenom­ena. However, the two dimensions have been often emphasized disjunc­tively in the economic and organizational literatures dealing with change. The space dimension assumed a particular emphasis, for instance, in the long-lasting debate on contingency perspectives in the organizational field and also in most of the economic theories of international trade which move from the uneven distribution of national endowments. However, an even larger number of theoretical approaches assign a pivotal role to the time dimension. Consider, for example, in economics, the spreading rel­evance of path dependency and of the "evolutionary theory of the firm," as well as some institutional approaches and other heterodox views in

INTRODUCTION Xll l

economic thought compared to the orthodoxy of the neoclassical. (For a critical discussion see Eichner, 1983; Langlois, 1986; and to some extent Zappa, 1957.) The establishment of business history as a distinct research area, the diffusion of longitudinal approaches in organizational studies, and the emerging "process view" in the field of strategic management (see, for instance, Normann, 1977; Mintzberg, 1978; for an Italian per­spective see Rispoli, 1982; Di Bernardo and Rullani, 1985; Faccipieri, 1988; Zan, 1990) are further signals of the growing attention paid by scholars to the time variable in the study of change.

2. The role of the actor within representations of economic and organ­izational dynamics is a second issue of increasing interdisciplinary concern in studying change. There are several analytical perspectives in those fields which can offer relevant examples of the crucial role of subjectivity and intersubjectivity in change processes. For instance, this seems to be the case both in the game theory approach — increasingly used in econ­omics and other social sciences — and in the organizational decision-making debate (from Simon onwards). The growing diffusion of management studies itself may be seen as a further corroboration of the acquired centrality of the actor, and is a scientific manifestation of the more general shift from the "invisible" to the "visible hand" in the capitalistic economy. In this respect, the fundamental influence of the actor's knowl­edge in change processes has been pointed out both in economics (e.g., Schumpeter, von Hayek, and in general the Austrian School: for a critical review see Loasby, 1976), and in cognitive approaches to individual and organizational behavior and enactment processes (e.g., Weick, March, Olsen, and so on).

3. The interdependency between elements and phenomena in the process of change, and the increasing scientific awareness of it, are a third problematic issue that may be identified. Once again several examples can be quoted: the diffusion of the systemic view in social sciences and in particular in organization theory and in management studies; the dialectal relationship between actor and system (e.g., Crozier and Friedberg, 1977) and between actors and institutions; and the spreading recognition of the complexity of organized activities resulting from the interdependency between multidimensional variables. As an implication, the problematic status of causal nexuses is more and more widely recognized (cf. Zan and Zambon in this book). In economic thought a similar epistemological concern can be found in the call for overcoming what is usually referred to as the "ceteris paribus" stratagem. As the Italian economist Demaria (1934, p. 8) clearly put it, "a logical indeterminism arises in defining causes in a time-space continuum."

XIV INTRODUCTION

Though each of the above-mentioned issues is problematic per se, the real intellectual challenge is to take them into account altogether in studying economic and organizational phenomena and dynamics. This implicitly requires a scientific attitude able to combine different theoretical perspectives and insights.

Even if not centred on change processes, a relevant and recent example of such an attitude is given by Cyert and March (1992, ch. 9). According to them, the debate on the theory of the firm which followed the first edition of their "behavioral theory" is amenable to three theoretical conceptual catalyzers — bounded rationality, imperfect environmental matching, and unresolved conflict between actors.

An interesting proposal of such a pluralistic attitude focused on the method for analyzing strategic change is that adopted by the Centre for Corporate Strategy and Change, University of Warwick (Pettigrew, 1985, 1990). Such an approach to studying change is to encourage a form of research that is contextualist and processual in character. A contextualist analysis of a process such as change draws on phenomena at vertical and horizontal levels of analysis and the interconnections between those levels through time. The vertical level refers to the interdependences between higher or lower levels of analysis upon phenomena to be explained at some further level: for example, the impact of a changing socioeconomic context on features of intraorganizational context and interest-group behav­ior. The horizontal level refers to the sequential interconnectedness among phenomena in historical, present, and future time. An approach that offers both multilevel or vertical analysis and horizontal-historical analysis is said to be contextualist and processual in character.

In summary, there are four key points characterizing the Warwick approach. The first is the importance of embeddedness, studying change in the context of interconnected levels of analysis. Thus explanations of the changing relative competitive performance of firms should be linked to sectoral and economic change (Pettigrew and Whipp, 1991). A source of change is the asymmetries between levels of context, where processes at different levels of analysis are often observed to have their own momen­tum, rates, pace, and trajectory. Thus the rate and trajectory of change in an industrial sector characterized by significant boundary changes may be much faster than the sensing adjustment pathways of individual firms to the regrouping of the sector. Equally well, the analyst of change has to recognize that activities at some levels of context may be more visible and rapid than at other levels, and thus in the short-term sources of change may appear unidirectional, while in the longer term a multidirectional pattern may appear.

INTRODUCTION XV

The second background assumption about contextualism is the import­ance of revealing temporal interconnectedness, analyzing how antecedent conditions shape the present and the emerging future. For instance, the human resource inheritance of many firms may affect the rate and pace of business strategy change if the business change requires significant adjust­ments in the knowledge base of the firm (Pettigrew, Hendry, and Sparrow, 1989). However, history is to be understood not just as events and chronology; there may be deeper pathways if the analyst searches for structures and underlying logics. But in the search for such deeper struc­tures the risks of determinism have to be avoided. No assumption of predetermined timetables, of ordered and inevitable sequences of stages, can be made. Trajectories of change are probabilistic and uncertain because of changing contexts.

The third background assumption relates to the role of context and action. Here the key starting point is that it is not a question of nature or nurture, or context or action, but context and action. Context is not just a stimulus environment but a nested arrangement of structures and processes where the subjective interpretations of actors perceiving, comprehending, learning, and remembering help shape process. Thus processes are both constrained by contexts and shape contexts, either in the direction of preserving or altering them. In the past structural analyzes emphasizing abstract dimensions and contextual constraints have been regarded as incompatible with processual analyzes stressing action and strategic con­duct. Here an attempt is being made to combine these two forms of description and analysis: first of all, by conceptualizing structure and context not just as a barrier to action but as essentially involved in its production (Giddens, 1979; Ranson, Hinings, and Greenwood, 1980) and, second, by demonstrating how aspects of structure and context are mobilized by actors and groups as they seek to obtain outcomes important to them (Pettigrew, 1985; Pettigrew, McKee, and Ferlie, 1988; Ferlie and Pettigrew, 1990).

The fourth central assumption is about causation. Within the holistic and multifaceted treatment of change in the Warwick approach, causation is neither linear nor singular. There is no attempt to search for the illusory single grand theory of change, or indeed of how and why a single independent variable causes, or even impacts on a dependent or outcome variable. Changes have multiple causes and are to be explained more by loops than lines: " . . .the shifting interconnectedness of fused strands," as Mancuso and Ceely (1980) put it. For instance, in Pettigrew and Whipp (1991) the real issue explaining relative competitive performance is not just the isolation of the five features of environmental assessment, human

XVI INTRODUCTION

resources as assets and liabilities, managing strategic and operational change, leading change, and coherence, but rather the convergent inter­actions and interconnected loops among the five features, in the firm over time. Moreover, processual analyses of change are greatly assisted by the requirement to explain the links between the processes in context and some outcome features. Whether the outcome is the relative performance of a sample of firms, or differential pace of change, the focus on outcomes provides a key anchor point in studies where complexities of data collection, conceptualization, temporal analysis, and explanation abound.

The structure and themes of this book

What is intellectually distinctive and additive about this book? First of all, the unifying theme, the study of strategic change processes in context, is being approached from a range of disciplinary perspectives and national intellectual traditions. The chapters are authored by economists, organ­ization theorists, sociologists, accountants, and scholars from the inter­disciplinary fields of international business, business strategy, and human resource management. To this diversity is added a mixture of national intellectual traditions emanating from the Anglo Saxon, German, French, Italian, and Scandinavian countries. Too often, we believe, big thematic issues such as strategic change are approached from the myopia of individual disciplines or the implicit and unstated assumptions of a particular national intellectual heritage.

Second, the contributors in the book attempt with varying degrees of explicitness and depth to grasp on the one hand some of the key theoretical, epistemological, and methodological issues, and on the other hand some of the empirical evidences in studying change. The first perspective is most deliberately stressed by Zan and Zambon in the opening chapter of the book. But also other chapters deal with conceptual and epistemological questions. For instance, Buckley engages with theoretical debates about the nature of the internationalization process. Ferlie, Cairncross, and Pettigrew consider a range of theoretical approaches to conceptualize the nature of quasi or internal markets. Brosio addresses some of the con­troversial theoretical assumptions in the privatization debate. Jonsson reflects on theories of knowledge creation, learning, and change; and Rullani, among other things, offers an extended theoretical discussion of the role of knowledge and networks in the theory of internationalization. On the other hand, the book also contributes empirical data from a number of studies completed or under way in North America and Europe.

INTRODUCTION XV11

Thus Hafsi, Jorgensen, and Koenig compare the objectives, antecedents, and processes of development of privatization strategies in France and the United Kingdom. Camuffo and Costa present original empirical findings on the links between business and human resource change in a number of Italian firms. Meanwhile Sorge uses a range of international comparative data from the UK, Germany, and France to debate the relative merits of contingency, neocontingency, and institutional theories, and Johanson and Vahlne combine conceptual discussions of the nature of the inter­nationalization process with empirical evidence from the behavior of two Swedish firms. Finally, Andrew Van de Ven raises some fundamental theoretical and methodological issues about the analysis of change and innovation from the large-scale empirical work carried out in the United States on the Minnesota Innovation Research Program (MIRP).

The final contribution of this book is provided by its substantive focus on three key areas of strategic change. These are in turn the international­ization processes of firms, the development of human resources, and public sector change. These three areas of substantive focus were chosen because of their widespread empirical relevance and because of their obvious policy relevance. Furthermore, the fact that the research in all three areas raised important questions about the context, content, and process of strategic change was also an essential part of the rationale for their inclusion. Indeed, one of the distinctive features of the book is the attempt to gather around three substantive areas scholars from a range of social science disciplines, thereby highlighting interconnections between phenomena and theoretical traditions in treating strategic change.

Chapter 1 by Zan and Zambon sets the tone for the book by raising some fundamental theoretical and epistemological questions about the concepts of strategy and strategic change. Moving from strategic manage­ment literature, they point out two underlying characterizations of the strategic approach, the systemic and the interactionist view. The inter­twining between these two leads to questioning the causation principle, as well as the prescriptive power of strategic management studies and of management literature in general. An interpretation of strategy as a conceptual category for making sense in process is suggested as appli­cable not only to management studies but also — opening up the perspec­tive — to a broader set of economic and organizational disciplines dealing with change.

Chapters 2, 3, and 4 pick up our first substantive theme, the inter­nationalization processes of firms. Johanson and Vahlne are representation of the long tradition of international business research at the University of Uppsala and the Stockholm School of Economics. They portray entry

XV111 INTRODUCTION

into foreign markets as a gradualist process that involves the constant interplay between knowledge acquisition and development and the resource commitments that evolve often unpredictably from activity-based learning. They are clear that internationalization should be studied as a continuous process and not as a decision event. Their empirical evidence leads them to conclude that the contexts and processes of internationalization are complex, ambiguous, and continuously changing in unpredictable ways. Planning methodologies are unlikely to be sensitive enough or flexible enough to cope with the realities of managing internationalization.

In Chapter 3 Buckley combines a synthesis of the empirical findings on barriers to internationalization, with some clear statements about the requirements for an analysis of internationalization that involves the study of processes across multiple levels of analysis and over time. Through­out his chapter Buckley is questioning about incremental and phase models of international development. Buckley concludes that the formi­dable task that remains in internationalization research is the formu­lation of internationalization as a process, where change is not costless, feedback relationships between key variables are not fully specified, and management is formulated not as point-of-time decision making, but as sequential development.

In Chapter 4 Rullani offers an extended theoretical discussion, with illustrations from Italian research and writing, on the role and func­tions of networks in internationalization. Like Johanson and Vahlne, Rullani places the construction, utilization, and development of networks and knowledge (scientific, technical, managerial, and practical) at the center of any understanding of internationalizing. Rullani echoes some of Buckley's barriers to internationalization but makes a distinctive con­tribution to the book by linking the economic function of networks to phases of industrial evolution and integrating into his argument the epistemology of complexity.

Chapters 5,6, and 7 present our second substantive theme, the develop­ment of human resources. In a chapter interesting for the clarity of argument and illustration, Camuffo and Costa contend that human resource management (HRM) activities have played a constitutive more than an instrumental role in delivering strategic change in large Italian enterprises such as Fiat, Benetton, and Marzotto. Again the firm is portrayed as an actor in networks engaging in markets for skill and knowledge, where organizational knowledge circulates through personal relations by means of sets of rules and incentives.

Sorge in Chapter 6 draws on the empirical data from a series of cross-national studies of the introduction of computer numerically controlled

INTRODUCTION xix

machine tools and micro electronics into manufactured products in Britain and Germany in order to test a neocontingency proposition. The contingent proposition was an attempt to link societal differences in organizing and in generating human resources to particular product market strategies. He concludes that the contingent proposition is not supported by the data yet also argues that a neocontingent approach is inevitable in positing relationships between markets, business strategies, organizations, and human resources.

In Chapter 7 Jonsson presents a largely theoretical argument for the strategic role of learning capability in influencing the competitive perform­ance of organizations. He argues we need to know much more about how organizations learn under conditions of complexity, multiple causality, and limited understanding of their environments. The fundamental role of trust in such processes is stressed. His approach calls for a "modest" intervention methodology in studying change and emphasizes the dialogue between holders of different logics. Again the learning-from-doing meta­phor pervades the chapter: "the only way to get to know who we are is to act and thereby elicit the reactions of our environment."

Public sector change is the final substantive theme developed in the book. In Chapter 8 Ferlie, Cairncross, and Pettigrew use the case of the British National Health Service to raise important conceptual and empirical questions about the form and creation of internal markets in the public sector. Traditionally public sector resources and services have been allo­cated on the basis of planning mechanisms operated through line managerial hierarchies. The latest reforms in the British health care system have created a process of managed competition between groups of purchasers and providers of health care. The Ferlie, Cairncross, and Pettigrew chapter considers in turn transaction cost theory, neoclassical market views, notions of unregulated and regulated relational markets, and the operation of pseudo markets as conceptual candidates to capture the reality of how public sector markets work in practice. The chapter concludes by raising further questions about how the introduction of an internal market may have far-reaching implications for the way in which strategic change processes come to be understood in the public sector.

In Chapter 9 Brosio discusses the changing role of Western countries' governments in national economies since the eighties. While empirically a major policy trend emerged toward a dramatic reduction of the role of the State in the economy, in the area of theory the assumptions and rationales of this wave are not yet completely investigated. In this respect Brosio does not uncritically defend this policy fashion and its intellectual bases; indeed he highlights some of the conceptual inconsistencies and

XX INTRODUCTION

controversial issues in such a debate. In particular, he argues that unantici­pated consequences of the "ideology" of privatization may result in natural monopolies, potentially leading to a transfer of monopolistic rents, with no positive impact on efficiency.

The divestment or privatization of public sector assets is specifically analyzed in Chapter 10 by Hafsi, Jorgensen, and Koenig. Drawing on the empirical trends in the public sector during the eighties, they compare and contrast the French and British experiences which can be seen as the two forerunners of this policy. They explore and discuss both the macro and micro processes of change in each country, linking them with the respective context in which they occur, and commenting on the results of the two logics of privatization. Finally, implications for further research in this area are pointed out.

Van de Ven offers the final comment on the chapters in this book. Aiming at a synthesis of its major contributive aspects, he suggests that in general three different ways of representing the process of change can be identified: a logical explanation of causal relationships between variables over time, a category of concepts related to actions of individuals and organizations, and a sequence of events describing "how" changes occur over time. Moving from a detailed discussion of these process models, the author argues that most of the chapters in this book lie within the third approach, which he finds the most promising for future developments. He concludes by pointing out some of the fundamental issues of research design in studying processes, derived from the important experiences carried out in the Minnesota Innovation Research Program.

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INTRODUCTION XXI

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