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From implementing strategy toembodying strategy

Linking strategy, identity andintellectual capital

Anna RylanderRoyal Institute of Technology, KTH Syd, Design and Health,

Haninge, Sweden, andJoe Peppard

Cranfield School of Management, Cranfield, Bedford, UK

Keywords Corporate strategy, Corporate identity, Knowledge organizations, Intellectual capital

Abstract For most knowledge-intensive companies at present, the business environment wherethey compete is complex, characterized by rapid change and uncertainty. Employees and otherintangible resources (i.e. intellectual capital) generally represent the most critical resources in thevalue creation process. Crafting strategy in such contexts is not helped by conventional models andtools of strategy. The assumptions which underpin many of them do not hold in the presentcompetitive environment, making them at best irrelevant, but at worst leading to the developmentof strategies that can put the success of a company in jeopardy. Newmetaphors for describing thesecompanies and their competitive realities, as well as tools for navigating in them, are required, ifthe strategy discipline is to remain relevant for practitioners. In this paper, it is suggested that theintellectual capital perspective can provide a bridge to the practical application of a vision- andvalues-based strategy through the notion of embodying strategy in organizational resources. Aconceptualization of strategy, that links strategy, identity and intellectual capital, more suitable toknowledge-intensive companies competing in uncertain environments, is introduced and described.

IntroductionConsider the predicament of Videsti. This company was established in 2000and represents the merger of Viscom and Digital Innovations. This merger sawthe bringing-together of Viscom’s strengths in broadcasting and audio-visual(AV) systems design and integration and Digital Innovations’ expertise andexperience in the Internet, telecommunications, and systems integration. Thesynergies were expected to lead to a considerable impact on value creation.During the early days of the merger, the focus of senior management’sattention was to successfully integrate the employees of both companies. Thenew company also embarked on a process of expanding its range ofconsultancy services in order to enhance its knowledge base in the rapidlyevolving “digital media landscape”. Research and development (R&D) activityalso increased with a view to developing commercial products, as this wouldultimately result in a higher valuation of the company by the capital markets.The extent of the company’s activities was considerable, ranging from theinstallation of AV equipment in the Sandy Lane Hotel in Barbados, to the

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Journal of Intellectual CapitalVol. 4 No. 3, 2003pp. 316-331q MCB UP Limited1469-1930DOI 10.1108/14691930310487789

construction of an on-air TV studio, editing facilities, incoming lines (viamicrowave and satellite), and automated play-out of pre-compiledprogramming for CNBC, a cable and satellite broadcaster based in HongKong, to designing the online betting exchange Betaq.com

The objective of the newly merged company is to become a player in thefledgling domain of interactive digital TV (IDTV). They saw this space asenabling them to leverage their skills and knowledge in TV broadcasting, theInternet (both fixed and wireless) and telecommunications. The companysought to develop a strategy to position themselves in this competitive spaceand then, through planning activities, to galvanize employee actions behindthis strategy. With this objective, a strategy process was initiated. Thecompany engaged the authors to work with the senior management team toconstruct and shape a strategy for growth. However, early in the process, itbecomes very clear that developing this strategy was going to prove moredifficult than initially envisaged. For a start, the competitive space wasimpossible to define, as it was emergent and changing almost on a daily basis.Many forces were shaping the industry, including the regulatory framework,customer adoption and technology developments and these were continuallyevolving. For example, during the early days of the strategy process ITVDigital went bankrupt and the UK government announced that it was pushingout the date for turning off the analogue signal by two years, further delayingthe arrival of IDTV. In addition, standards would have to be developed andagreed among many players – broadcasters, film and programme makers,cable companies, and personal video-recorder (PVR) manufacturers. While thevision of IDTV and the services that it would support, from video-on-demandto communication to commerce to delivering public services right into thesitting-rooms of households, is appealing, reaching that end goal is not likely tobe a smooth path and will take many years.

In such an environment, what is strategy anyway? The traditionalmilitaristic view of strategy that has dominated thinking in the field ofstrategic management, and indeed framed the view of strategy held byVidesti’s senior management team, is unhelpful. As Videsti came to discover, itis not possible to construct a strategy in the conventional understanding of thenotion; strategy is not about being directive and planning. In this paper, wedevelop the arguments that, for knowledge-intensive companies, strategyshould have a behavioural underpinning to guide knowledge workers ratherthan providing a directive strategic plan. We then present a differentconceptualization of strategy and a framework for linking the vision-basedstrategy to day-to-day management.

Strategy management: a discipline in crisis?The field of strategic management is dominated by models and theories thathold little relevance for practitioners in guiding action in knowledge-intensive

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companies competing in turbulent environments. In addition, the assumptionswhich underpin many of the traditional tools of strategy do not hold true,making them at best irrelevant, but at worst leading to the development ofstrategies that can put the success of a company in jeopardy (Courtney et al.,1997). If we are going to progress the field of strategy, we need to revisit theseassumptions and explore their implications and relevance in the presentenvironment. We also need to understand the conditions under whichorganizations compete and create novel approaches to meet these newdemands. However, a limitation to this quest is the dominance of researchapproaches to knowledge production that are inappropriate, given theontological nature of strategy and the strategic management discipline, and donot produce practically relevant knowledge. To address this deficiency, GaryHamel, in a keynote address to the 2001 Strategic Management Conference,strongly espoused the need for strategy researchers and academics to “get theirhands dirty”. The emerging “Strategy as Practice” School within the strategicmanagement discipline emphasizes the requirement for this practical aspect tostrategy and the need to understand what really happens in the strategyprocess[1].

The assertion that the traditional models and theories and the assumptionsthat underpin them are no longer valid for the current competitive conditions isnot new (Bettis and Hitt, 1995; Campbell and Alexander, 1997; Courtney et al.,1997; Coyne and Subramanian, 1996; Eisenhardt and Brown, 1998; Hamel,1998; Markides, 1999; Normann, 2001). Approaches to strategy formulationascribe to top managers almost “superhuman powers that enable them toidentify sources of competitive advantage and then to direct their business tosecure strategic objectives” (Alvesson and Willmott, 1995). The industrialorganization, which provided the bedrock for the development of most“theories of the firm”, is no longer an appropriate vehicle to use in many of thepresent business environments. More critical from a practice perspective,theories, while useful in explaining ex post what happened, are weak in guidingaction. For example, resource-based theory (RBT), in vogue for the past twodecades, illustrates the relationships between input resources andcompetencies and the performance of the firm. However, it fails to show howto mobilize, marshal and manage those resources to create value (Ambrosiniand Bowman, 2001; Haanes and Fjeldstad, 2000; Peppard and Rylander, 2001).

At present, strategy is under attack from uncertainty. For manyknowledge-intensive organizations, the competitive environment they face isradically different from that assumed by many models of strategy, which arebased on a microeconomic model of industry. There seems to be no single newtheory or model emerging that covers all the areas under attack. For example, todeal with the central ingredient of knowledge, a knowledge-based theory of thefirm is being formulated. However, rather than being a formal theory, in the truesense of the word, it is a set of assumptions and observations about the nature of

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knowledge and its role in production (Grant, 1996). This, of course, may bebecause there is no single set of assumptions that are valid for all organizationsin all situations. Organizations competing in stable, mature industriesproducing industrial goods may very well still benefit from classic strategymodels and processes. However, for Videsti and many otherknowledge-intensive organizations, the following set of conditions shapestheir competitive environment:

. The marketplace is evolving and immature and its boundaries areunclear. The concept of industry, so critical to the operational oftraditional tools of strategy, is inappropriate in these contexts.

. Rapid rate of change and technological innovation mean organizationshave to be agile and flexible – in terms of both strategy and structure.The disruptive impact of technology and faster time-to-obsolescencecharacterises these competitive spaces.

. Markets and their operating environments are becoming more complex astraditional industries converge and the supply of products and servicesincreases in diversity. Shorter product/service lifecycles, blurring of thedistinction between products and services, more discerning andknowledgeable customers all add to the increasing complexity of thecompetitive environment.

. The increasing importance of intangibles as key value drivers. Currently,many companies are knowledge-intensive and dependent on theiremployees for their success. This also calls for an organization that isbuilt so as to support the creative process of these individuals as well asthe conversion of ideas into marketable products or services.

. There is a high percentage of knowledge and information components inproducts and services. Neither are well understood nor adequately dealtwith in traditional strategy models.

These conditions have been identified by many researchers (see, for example,Eisenhardt and Brown, 1998; Williamson, 1999) and their implications areprofound. Their implications for strategy analysis, processes and outcomesinclude the following:

. Requirement for a proactive rather than reactive approach to competingin competitive spaces (Hamel, 1996; Hamel and Prahalad, 1994).Organizations need to drive the development – and definition – of themarket (if they have the resources) or identify the drivers (in terms of bothcompanies and trends).

. Uncertainties and rapid change mean that a planning approach tostrategy does not function in most cases, and that the distinction betweenformulation and implementation is unsustainable (Mintzberg, 1990).Kanter (2002) suggested that companies that want to outpace the


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competition throw out “the script” and improvise their way to newstrategies.

. Industry value chains are being replaced by more complex valuenetworks (Normann and Ramırez, 1993; Parolini, 1999; Stabell andFjeldstad, 1998). Consequently, organizations are required to carve outroles in a network of players, often opting for competition, rather thanseeking a profitable position among competitors in a clearly definedmarket.

. Organizations have to look to their internal resources for sources ofcompetitive advantage in an uncertain market (Barney, 1991; Collis andMontgomery, 1995). In a knowledge-intensive company, this often meanscompetence and other intangible assets such as brands, intellectualproperty or relationships. In this environment, innovation and the abilityto propel ideas to market quickly become crucial.

. Values and beliefs and vision become critical when people are the keyvalue drivers, as they guide and align the behaviours of employees(Collins and Porras, 2000; Davidson, 2002).

Yacht racing provides a useful metaphor for describing the role of “strategy” inthese emergent competitive spaces. In this sport, man and boat pit themselvesagainst the ocean and weather as they strive to conquer their rivals in the raceto be first across the finishing line. Competition is a battle not only withcompetitors, but also against the elements. The strategy of each boat cannot beplotted out in advance, but will depend on the conditions and the position ofcompeting boats. The crew must be able to sense these ever-changingconditions and respond to them in real-time. Weather forecasts can give someguidance as to the likely weather and sea conditions, but this is an inexactscience. In the middle of the ocean, conditions can change very quickly. Askipper can make a decision to follow a particular route, even though it may notbe the most direct, in the hope of getting more favourable conditions and thusgreater speed in the long term – although this is not guaranteed. Despite all thetechnology now available, success is still about skills and knowledge. Theskipper and her crew have to be fast and flexible in responding to changingconditions. This requires a common language and code of conduct within theteam. A completely new team that has never sailed together before is unlikelyto be as successful in responding in a rapid and coherent way as a team withlong experience of sailing together that has established a common value systemand patterns of communication and action.

This metaphor of the yacht pitting itself against the elements as well ascompetitors may be a more appropriate metaphor for the presentknowledge-intensive company, living with uncertainty rather than adoptinga militaristic perspective. But, if this is the case, we also need to rethink the roleof strategy.

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Reconceptualizing strategy in uncertain environmentsIn the context described in the earlier sections, the role of a strategy is not toprovide a pre-defined course of action. Given the high level of uncertainty andrate of change, the heavy dependence on people in creating value, we proposethat the key role for strategy is providing a common vision of what theorganization is to achieve, and a purpose or fundamental reason for being. Itshould also provide managers with a shared context for decision-making and toguide the behaviours of all employees.

A frequent theme in the strategic management literature during the 1990swas the challenge to manage the balance between stability and flexibility(Lindgren, 2002). The strategy should be able to allow for change whenenvironmental or internal conditions change and it should also permit enoughdiscretion for employees to be innovative and improvise whilst still movingtowards the same goal, following the same codes of conduct. A detailedstrategic plan would at best become irrelevant, at worst guide actions towardsthe wrong goals, given that environmental conditions would have changed,probably before the ink is even dry. Strategy, in this context, is not a pointconcept, but a process. It needs to be reviewed and modified regularly based onchanging conditions in the environment. This can be a very challengingprospect and it can be difficult for employees to cope with these changes. Underthese circumstances, what will hold the organization together and be relativelystable is the values and beliefs held by the members of the organization.Employees are bounded by what they know and what they value; they aresensitive to the norms of what is appropriate behaviour (Kogut and Zander,1996). The vision, providing the organization with some form of goal(s), be it ata high level, towards which to strive, should also be robust enough towithstand turbulence in the environment. From an external perspective, theorganization must cultivate a reputation. Reputation is something that isearned through past actions and its core values are not easily changed. Theytherefore have to reflect the vision and purpose. Figure 1 shows how thisconcept of strategy can be expressed. A practical application of this model canbe found in Peppard and Rylander (2002).

Crucial for the strategy to work in practice is consistency and alignmentamong the “three corners” and the values they represent. There are three key“processes” linking the three value sets[2]. Leadership is critical to link thevision, which often is developed by top management, with the values andbeliefs held by the employees. Here, the role of leadership is to act as aninterpreter and negotiator (picking up signals from employees as they relate totheir ideas for the vision and explain and instil a clear understanding of thevision among the employees), engaging employees in framing corporateambitions, and acting as role model, living with the values of the organization.Positioning is the “process” of communicating the vision and purpose andexplaining the value of the offering to the outside world. Communicating the


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vision, which implies keeping a dialogue with external stakeholders as opposedto merely advertising the product or service, is especially important inuncertain markets. Products can easily become obsolete, but the vision shouldbe more long-term and enduring. It is also important to point out thatcustomers are not the only target group for the communication. Potentialemployees, partners, suppliers, standard-setting committees and industrygroups may be equally important in certain stages of the development. Finally,“production” is the “process” of creating and delivering value to customers (andother stakeholders), which in the case of service companies is highlyinteractive, and the outcome (value delivered as perceived by the customer) willstrongly reflect the values, beliefs and behaviour of the employees.

If strategy is about providing a common vision and context in an uncertainenvironment, then the process for developing it is not about following a linearprocess based on detailed data collection and rigorous analysis of these data. Itis about having strategic conversations among the management team,establishing a common language to explore internal and external issues, andabout sense-making of events and trends in the environment. The process hasto be circular and iterative as it tests ideas and has to make sure that they arewell understood and accepted by all involved.

A relatively established position today is that strategy forknowledge-intensive companies in turbulent environments should be basedon vision and values, and does not benefit from detailed strategic planning. Butthere has been nothing to replace the concept of planning – how do youactually “make the vision happen”? As pointed out by Collins and Porras(2000), it is very important to stop and think about vision. But, even moreimportant, we have to align the organization to preserve the core ideology (itscore values and core purpose) and stimulate progress toward the envisioned

Figure 1.Representation ofstrategy forknowledge-intensivecompanies in uncertainenvironments

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future, not merely write a statement. Although the visionary companies inCollins and Porras’ study (i.e. widely admired, successful companies that havebeen premier institutions in their industries for more than 70 years, yieldingextraordinary long-term returns to their shareholders) tended to write mission,vision, purpose and values statements more than the comparison companies,this is by no means a key to success in implementing them – it is just one ofmany steps on the way. Indeed, most vision and mission programmes seem tofail to deliver on their proclamations (Davidson, 2002).

Linking strategy to identity and intellectual capital inknowledge-intensive companiesAs opposed to most theories in strategic management, the intellectual capital(IC) perspective emerged from work by practitioners as a language andframework for visualising and managing intangible assets. Managers werestruggling with the lack of relevance of traditional, accounting-based tools thatthey saw as inappropriate for managing intangible resources (Bontis andNikitopoulos, 2001). The aim of the IC perspective is to provide a balanced andholistic view of the company, which includes all value-creating resources acompany has at its disposal to create value. These include financial ormonetary capital, physical capital and intellectual capital, usually divided intohuman, organizational and relationship capital (Peppard and Rylander, 2001).Its usefulness is illustrated by its widespread adoption by practitioners as wellas academics, since it first entered the management literature in the late 1990s(Bontis, 1996, 1998, 1999, 2001, 2002; Bontis and Fitz-enz, 2002; Bontis et al.,1999, 2000, 2002; Brooking, 1996; Choo and Bontis, 2002; Edvinsson andMalone, 1997; Roos et al., 1997; Stewart, 1997; Sveiby, 1997).

The model shown in Figure 2 describes the linkages between “the strategy”(as represented in Figure 1) and the resources, using the terminology of the ICperspective, that are to be mobilized to “make the strategy happen”.

Figure 2.Mobilizing resources to

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This model illustrates the concept of “identity” as providing the integrativemechanism between the high-level, abstract vision and the organization’sresources. It also provides the starting-point for the “strategy process” as aniterative and continuous process. The identity is something that already existsand reflects the values and beliefs held by the employees and thereforeprovides the context for what vision is feasible in reality.

As noted by many management and social thinkers (Castells, 2000; Gergen,1991), identity and identification are becoming increasingly important forindividuals and organizations in general, in an increasingly abstract, dynamicand complex world where traditional social structures are breaking down.Identity is particularly important for knowledge-intensive companies. Theambiguity of knowledge and knowledge work (i.e. difficulties in assessingknowledge, what knowledge workers do and the results of their work) createsabilities to deal with rhetoric, regulate images and manage relationships andinteractions with clients central for knowledge-intensive companies. Thisimplies that controlling and securing work and organizational identities are avital part of management (Alvesson, 2001). In addition, Normann (2001) arguesthat the increasing lack of boundaries and definition in the physical worldparadoxically requires us to think more rather than less of boundaries. If we areto keep our sense of identity and purpose, we must have a sense of what andwho we are. Kogut and Zander (1996) suggest that what makes anorganization’s boundaries distinctive is that the rules of coordination and theprocess of learning are situated not only physically in locality, but alsomentally in an identity. As organizations are forced to continuously reshapethemselves in this world of increasing abstraction, they need to search foridentity more in values, capabilities and principles than in their physicalmanifestations (Normann, 2001). Also interesting to note is that the link toorganizational identity, so critical in the present turbulent environments, is notdiscussed at all, or even assumed in the industrial organization literature onstrategy (Burgi and Roos, 2002).

Most theoretical developments on organizational identity within theorganizational science literature take Albert and Whetten’s (1985) definitionof identity as the point of departure. They have defined identity as that which iscentral, enduring, and distinct about an organization’s character, and note thatcore features of identity are presumed to be resistant to ephemeral or faddishattempts at alteration, because of their ties to the organization’s history. Thisview does not consider the influence of the environment on the organizationalidentity. Recently, however, there has been much debate about theinterconnectedness among identity, culture, image and reputation(Kowalczyk, 2001), putting the definition of Albert and Whetten into question.For example, Hatch and Schultz (1997) assert that culture, identity and imageform three related parts of a system of meaning and sense-making that definesan organization to its various constituencies. Furthermore, they argue that,

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increasingly, the actions and statements of top managers simultaneously affectorganizational identity and image, partly due to the increasing levels ofinteraction between organizational members and suppliers, customers,regulators and other environmental factors, as well as the multiple roles oforganizational members who act both as “insiders” (i.e. as employees) and“outsiders” (e.g. as customers, community members and/or members of specialinterest groups). Research by Dutton et al. (1994) has shown that a person’swellbeing and behaviour are affected by how both organizational members andoutsiders view the organization. When members believe that outsiders see theorganization in a positive light, they “bask in the reflected glory” of theorganization, which may translate into desirable outcomes such as greaterco-operation and citizenship behaviours. Perceived negative views by outsiders,on the other hand, may lead members to experience negative personal outcomessuch as depression and stress, which in turn could lead to increased competitionamong members and reduced effort in the long term. Balmer and Greyser (2002)proposed that any organization has five different identities (actual,communicated, conceived, ideal, and desired) and these have to be reviewedand regularly managed to avoid potentially harmful misalignments. Goia et al.(2000) argue that there is a close reciprocal relationship between organizationalidentity and various forms of image, and that this is becoming increasinglyimportant as companies compete in complex and turbulent environments and asthe role of the media in organizational life becomes more pronounced.Furthermore, they contend that this ongoing interrelationship betweenorganizational identity and image leads to a certain degree of instability ofthe identity which is actually adaptive in facilitating organizational change. Theapparent durability put forth in earlier theories on organizational identity issomewhat illusory according to this view, and is actually contained in thestability of the labels used by organizational members to express what theybelieve the organization to be. But the meaning, or the interpretation, of theselabels changes so that the identity is actually mutable (Goia et al., 2000).

This recent, more flexible view of identity is more appropriate for theknowledge-intensive companies under focus in this paper and allows us to linkidentity to the outside world. In Figure 2, identity is portrayed as a bondingmechanism that encompasses the values and beliefs held by outsiders as wellas organizational members. Note that we use the word reputation to denote thecollective judgements by outsiders of an organization’s actions andachievements (Fombrun, 1996). Not only do the values and beliefs held bythe organizational members impact what vision is likely to be successful, butalso the values and beliefs about the organization held by relevant stakeholdersoutside the organization. This is to avoid confusion of the many connotations ofthe word “image”, which has been the subject of many differentconceptualizations and definitional debate, and is often referred to as theway organizational members believe, or desire, others to view the organization.


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“Making strategy happen”: from implementing strategy toembodying strategyIn the previous section, we highlighted the link between a vision- andvalues-based strategy (outlining what and where the company wants to be inthe future) and the concept of identity (what the company is) as a flexiblesystem reflecting and integrating the values and beliefs held by internal andexternal stakeholders. The identity acts as an “interpreter” and “translator” ofthe vision and purpose within the context of changes in the external (andinternal) environment, and thus provides a means of making sense of the visionand provides the guidelines or “codes of conduct” for knowledge workers.Scholars have well attested the idea that organizational identity acts as aperceptual screen that affects individual members’ information processing andinterpretation of issues (Brown and Starkey, 2000). Karreman and Alvesson(2001) argue that, because the identity or self-image of a person offersguidelines for action, organizing can be portrayed as constructing andmaintaining identities to facilitate collective action.

The trouble for managers is, of course, that identity, as described in thispaper, while affecting how knowledge workers behave and view themselves,the organization and stakeholders, cannot be directly managed – promptingthe question “how are identities constructed and how can they be changed?”According to Dowling (2002), to improve a company’s image[3], one has toidentify the major factors that combine to influence how people perceive anorganization. In essence, these are the set of activities that influence everyaspect of how a typical organization communicates with both its internal andexternal stakeholders. This view is similar to that of many corporatecommunications departments, influenced by Olins’ (1989) view of “corporateidentity”, focusing on how the “central idea” of a company is presented to itsvarious constituents[4]. Karreman and Alvesson (2001) take the view thatidentity is socially constructed and suggest that identities are developed,maintained and reconfigured through accounts; taking the form of narration orconversation. The emphasis is on social interactions and negotiations ofmeaning in groups. Ashforth and Mael (1989) assert that managers have avested interest in managing symbolic interactions to impart their view of theorganization’s identity. Symbolic interactionism holds that meaning is notgiven, but evolves from the verbal and non-verbal interactions of individuals.Symbolic management involves the use of stories and myths, distinctivelanguage and metaphors, traditions and rituals, physical setting, rewards andstatus symbols, and so on to shape the interpretation of given jobs by corporatemembers (Ashforth and Kreiner, 1999).

Because of the complexity and pervasiveness of the concept of identity,different scholars and practitioners focus on different aspects, and the aboveare just a few examples. But they highlight the importance of communicationand interactions in their different forms for the emergence of organizational

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identity. This implies that, to influence identity, organizations need to managenot only their formal corporate communications, but also symbols as well asthe settings in which social interactions (internal as well as external) occur. Thelatter may be particularly important to understand for knowledge-intensivecompanies because personal relationships is a means of reducing ambiguity(i.e. in knowledge-intensive contexts, people tend to stick with actors they knowwell in the absence of the availability of competition parameters such as priceand quality) (Alvesson, 2001).

The IC perspective provides a helpful and practical framework fordescribing all the resources at an organization’s disposal and can therefore behelpful for managers in addressing the concept of identity – and resources canbe managed or at least influenced. Many of the most critical resources in aknowledge-intensive firm are IC resources; structures, processes, systems,culture, brands, competencies, relationships and so forth, and they all influencesocial interactions and can carry symbolic meaning. The physical resources(particularly the physical environment, products and other physicalmanifestations of the organization’s output) support (or indeed hinder) the ICresources and can be powerful media for communicating the identity.

Embodying strategy means mobilizing IC and physical resources to supportand facilitate the construction of identity. This implies supporting behavioursand reflecting values rather than providing a set of directions. How can wetailor processes and structures to influence interactions? How do relationshipswith external stakeholders impact identity? The physical resources “frame” theIC resources. Architecture enables people to meet in a certain space, for acertain purpose, in a certain context. But rather than being a neutral, impartialbackdrop for social relations, the physical environment places socialrelationships in a context (Gillespie, 2002). Spaces form importantconstituent parts of settings, comprising both the social and physicalenvironment, which influence, or even constrain, our behaviour. Along with aparticular setting comes a series of social norms and expected behaviours(Lawson, 2001). How is the identity affected by the setting? How can changes ofsettings impact organizational identity?

The notion of embodying strategy in organizational resources implies a newapproach to strategy and its implementation and may raise more questionsthan it answers.

What are the interrelations between identity, IC and physical resources?How is identity reflected in IC resources? In physical resources? How does theexisting identity impact IC resources? How do IC and physical resources relateto each other in the construction of identity? However, this may be a moresuitable approach for knowledge-intensive companies in uncertainenvironments than less dynamic processes such as the traditional concept ofstrategic planning, and we believe that it could provide a fruitful area forfurther research.


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ConclusionsThe increasing lack of practical relevance of the strategy discipline reflects thedifferences between the underpinning assumptions and principles of traditionalstrategic management theory and the reality of the present day’sknowledge-intensive companies competing in dynamic and uncertainenvironments. This misfit between theory and practice calls for newconceptualizations of strategy – reviewing what strategy is, why and how todo it in the present context. For new approaches to be successful, they have toprovide a link between theories aimed at understanding an increasingly abstractand complex organizational environment and practical tools that operationalizethe theoretical implications and make them accessible to managers.

In this paper, we have suggested a model that bridges a vision- andvalues-based strategy (a theoretical construct) with the IC perspective (apractitioner based framework with a diverse set of managerial tools formeasuring and managing the organization’s intangible resources alreadydeveloped and widely used) with the concept of organizational identity.Identity is seen as a bonding mechanism between the elements of strategy, asexpressed in Figure 1, as well as between the future and the present day, andfinally between the abstract vision and the resources. We suggested replacingthe focus on a planned implementation, inappropriate for knowledge-intensivecompanies competing in uncertain environments, with the notion of“embodying” strategy, which implies enshrining shared values and beliefsthat guide behaviours through managing organizational resources.

We believe that the approach we have presented in this paper addresses thetheory-practice gap, and can provide a fruitful platform for further researchexploring the linkages between “strategy” and its operationalization inknowledge-intensive organizations through empirical studies. As pointed outby Albert et al. (2000), it is because identity is so problematic – and yet socritical to how and what one thinks, feels and does in organizations – that thedynamics of identity need to be better understood.

Notes

1. See www.strategy-as-practice.org; also, the Journal of Management Studies has a specialissue on this theme in Winter, 2002.

2. We use “process” for lack of a better word for describing the overall collection of activities,planned or improvised, intended or unintended, that can be categorized under the threeheadings.

3. Corporate image in Dowling’s terms is “the global evaluation (comprising of a set of beliefsand feelings) a person has about an organization” (2002, p. 19). It includes the views of alldifferent stakeholders, including employees, and is therefore close to the view of identitytaken in this paper.

4. The focus according to this view of “corporate identity” is on managing the visual elementsthat can play a part in helping stakeholders identify the organization such as name, logo,company buildings, office decor, signage, stationery, uniforms and so on.

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Further reading

Abell, D.F. (1999), “Competing today while preparing for tomorrow”, Sloan Management Review,pp. 73-81.


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