Organizational process, strategic content and socio-economic resources: small enterprises in East Germany, 1990-94

This conceptual foundation is also convenient in co-evolution theory, showing how 'external' and 'internal', micro and macro events are reciprocally constituted. The way that Child surveyed the strategy literature also emphasized its processual and cyclical nature. First, there is a need to look at strategies as evolving in a process of construction and reconstruction. Such construction also extends to the 'constraints' that place bounds on the development of strategy. Constraints are 'hard' when they are considered unchanging by the actors themselves, and they are 'soft' when they are tentatively explored, negotiated and enacted. In the case of a positive feedback from outcomes on choices made, strategy, constraints and the socio-organizational patterns that hold these in place become durable. A world which is at first better analysed following the 'evolutionary theory of the firm', then becomes more suitable for the application of 'contractarian approaches' mentioned above. Learning may, thus, either make initially open action congeal into institutions or it may unfreeze institutions and lead on to a new configuration.

Interactionist theory building thus brings together institutional theory, organizational learning, the resource-based approach and strategy theory. This advance has also implied an interest in process. The first detailed and elaborate statement of an interactionist and structurationist framework was provided by Hrebiniak and Joyce (1985). These authors did allow for differences in the degree of both choice and constraint. The extent of both constraint and choice could vary, and combinations of both high and low constraint with high and low choice were admitted. In a simple four-part table, these combinations were identified as fundamentally different options.

The deployment of substantive strategies and the creation or existence of industrial-economic environments were considered as linked to combinations of different extents of choice and constraint. Such combinations encapsulate the action logic inherent to the organizing process, and are linked to market forms, concrete strategy types and economic and social results, which are coterminous with the creation or annihilation of resources.

Let us recall some of the central graphical representations presented by Hrebiniak and Joyce in order to show and explain their framework. Since high and low constraints and choice were postulated to be combined freely, they could be visualized in the four parts of Table 1.

The action logic of Quadrant I is marked by the combination of low strategic choice with a high amount of environmental determinism. In the framework the authors use, this does not mean that 'the environment' simply 'is deterministic'; it is, instead, enacted to be suck In this situation, the authors conclude, firms will compete on the selling price, rather than on more qualitative parameters; they will therefore emphasize a strategy of cost leadership; markets will be relatively contestable and open for new competitors, since the absence of strategic choice will help to simplify and standardize business recipes; and there will be little possibility for innovation. This situation of relatively free and perfect competition is also the classic field for applying population ecology modelling.