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Strategising and the routines of governance

An empirical analysis of practices in an international engineering consultancy rm
Peter Smith
The University of Auckland Business School, Auckland, New Zealand

Strategising and the routines of governance 149

Yvon Dufour
Faculte dadministration, Universite de Sherbrooke, Sherbrooke, Canada, and

Ljiljana Erakovic
The University of Auckland Business School, Auckland, New Zealand
Purpose This paper uses the strategy-as-practice perspective to explore the relationship between practices and organisational routines of governance in pluralistic contexts. The purpose of this paper is to explore empirically how strategising activities and organisational actions interact. It discusses and illustrates the relationship between strategising and organising through routines of governance, and in particular the use of board papers. Design/methodology/approach This research is based on a single longitudinal soft case study. The researchers collected both primary and secondary data. Primary data collection took place from the end of 2004 until early in 2008. Primary data collection occurred through three main methods: interviews, meeting observations, and shadowing of participants; six participants were each shadowed for a working week (ve days), and another participant was shadowed for three days. Interviews were held with 20 participants and typically lasted for between one and two hours. The interviews and meetings resulted in over 150 hours of audio recordings. In addition, notes of shadowing covered 420 hours. Findings The rst section of this paper presents the theoretical foundation before describing the research method. A discussion then explores the relationships between one of the specic strategising practices the creation of board papers and formal organisational routines of governance. The conclusion suggests that in professional service rms, informal practices that provide feedback are important in ensuring the stability and continuity of formal organisational routines. Originality/value The links between micro, meso, and macro levels that is to say, between actors, organisational actions, and institutional eld practices have already been broadly investigated. However, much of the research remains theoretical rather than empirical in nature. Furthermore, although researchers have been increasingly interested in strategising within organisations featuring multiple goals, diffuse networks of power, and knowledge-based work processes, a deep understanding of practices in these organisations is still underdeveloped. Keywords Corporate governance, Corporate strategy, Organizational culture, Strategy-as-practice, Strategizing, Organizational routines, Sense making, Sense giving, Sense testing, Boards of Directors Paper type Research paper

Introduction This paper uses the strategy-as-practice perspective ( Jarzabkowski, 2004; Whittington, 1996) to explorer the relationship between practices and organisational routines of governance in pluralistic contexts. On the one hand, recent work using

Asia-Pacic Journal of Business Administration Vol. 3 No. 2, 2011 pp. 149-164 q Emerald Group Publishing Limited 1757-4323 DOI 10.1108/17574321111169830



the strategy-as-practice perspective has been concerned with the linkages between the micro, meso, and macro levels (Whittington et al., 2004), that is to say, between the actors praxis, organisational actions, and institutional eld practices. On the other hand, researchers have also been increasingly interested in strategising within pluralistic contexts; those organisations featuring multiple goals, objectives, diffuse power and knowledge-based work processes (Denis et al., 2007, p. 179). To some extent, all organisations can be described as having pluralistic contexts. However, some types of organisations exhibit greater plurality in their contexts than others, as usually is the case in professional service rms (Denis et al., 2007). Recent work exploring professional service rms through the lens of pluralistic contexts (Denis et al., 2007; Fenton and Jarzabkowski, 2006) have provided promising insights into understanding the role of practices in professional service rms. The objective of this paper is to explore how the activities of strategising interact with organisational actions. The next section outlines the theoretical foundation before describing the research method. The subsequent section describes how one specic strategising practice the creation of board papers and the concomitant formal organisational routines interact. Finally, the discussion and conclusion suggests that informal practices based on feedback are important in ensuring the stability and continuity of formal routine. The theoretical foundations Within the strategy-as-practice perspective, the concept of practice is used to connect the micro- to macro-level, the organisational to the institutional, and actions to outcomes ( Jarzabkowski, 2003, 2004, 2005; Johnson et al., 2007; Whittington, 1996, 2004, 2007). One helpful schematic that illustrates the relationship between strategy content and strategy processes at the individual, organisational, and institutional levels through practices is presented (Figure 1). Whittington et al. (2004) contend that the relationships between the institutional strategies and practices and the actors content and process episodes links V1 in bold as well as the links between strategy praxis and the organisational strategies and processes links V2 in bold are important research topics but they are insufciently investigated by strategy-as-practice researchers. The three central components (Figure 2) of the strategy-as-practice perspective are practitioners, practices, and praxis (Whittington, 2002). The concept of praxis is relatively straightforward. It refers to the totality of an individuals socially meaningful actions and the contexts in which they occur, or in other words the workers, their tools, and their work of strategy. For Sztompka (1991), praxis is the dynamic intersection between social structures and individual action as played out, for example, in bureaucracies (Brown, 1978). It is an active constituting process, accomplished by, and consisting in, the doings of active subjects (Giddens, 1976, p. 121, emphasis added). As such, in contrast to theory and mere thinking, praxis encompasses the whole of human action (Reckwitz, 2002, p. 249). Dening practice is less straightforward and more challenging. Because of practice theorists divergent objectives, there is neither a unied practice approach (Barnes, 2001, p. 2) nor a universally accepted denition. Even so, there are common features to practice theory to which most authors cohere. First, most authors agree that any practice such as cooking or strategising represents a set of elements,

Institutional strategies: e.g. conglomeration

Processes H3
Institutional practices e.g. planning

Institutional field practices

Strategising and the routines of governance



Organizational strategies: e.g. diversification

V1 H2

Organizational processes: e.g. strategic change


Organizational actions

Actors content routines: e.g. coordination

Actors process episodes: e.g. away days


Activities/ Strategy praxis


Source: Adapted from Whittington et al. (2004)

Figure 1. An exploded map of strategic management


Praxis Situated, socially accomplished flows of activity that are strategically consequential for the direction and survival of the group, organization, or industry.

C B Practices Cognitive, behavioral, discursive, motivational, and physical practices that are combined, coordinated, and adapted to construct praxis. Practitioners Actors who shape the construction of practice through who they are, how the act and what resources they draw upon.

Source: Jarzabkowski et al. (2007)

Figure 2. Strategising as the nexus of praxis, practices, and practitioners


and one cannot reduce a practice to any single element (Schatzki, 2001; Turner, 1994). Thus, Reckwitz (2002, p. 249) describes practice and the elements that it encompasses as:
[. . .] a routinized type of behaviour which consist of several elements, interconnected to one another: forms of bodily activities, forms of mental activities, things and their use, a background knowledge in the form of understanding, know-how, states of emotion and motivational knowledge.


Second, practices are contextual; they are what Suchman (1987) describes as situated action. Third, practices are a set of resources on which actors skilfully draw; actors do not simply follow the rules laid down by convention and practices, they are seen not as simple automata, but as artful interpreters of practices (Whittington, 2006, p. 615). Next, practices are not static, they are dynamic; they are reproduced and they change (Vygotsky, 1978), they are in a permanent state of construction and becoming (Sztompka, 1991). Finally, practices are social phenomena. For many practice theorists, the elements of practices those activities, forms of thinking, and so on are not characteristics or features of the individual; rather, they are processes in which the individual participates (Giddens, 1984). The social nature of practices is evident in the work of Barnes (2001, pp. 17-18) who sees practices as being accounts of order and agreement [. . .] [between] active members, members who reconstitute the system of shared practices by drawing upon it as a set of shared resources. One signicant disagreement between theorists is in regard to the location of practices. The debate, typied by Schatzki (1996, 2002, 2005) and Rouse (2007), on one hand and Turner (1994, 2007a, b, c) on the other hand, revolves around the question of whether practice should be understood to be located in some sort of supraindividual place such as the social or is no more than what exists within individual brains and bodies (Turner, 2007b, p. 112). Specically, Turner argues against the need for practices to have a shared or social nature in order to be explained. As illustrated in Table I, Turner (2002, 2007c) is drawing on non-social mechanisms when he contends that practices can be understood using individual, rather than as social, or collective concepts. For example, whilst others might see language as being evidence of a shared practice, for Turner, the high degree of similarity between
Social Cognitive/social Paradigms, Weltanschauungen, presuppositions, structures of consciousness or meaning, collective consciousness, systems of collective representations, tacit knowledge, the rules model in conversational analysis, the Searle of speech acts, etc. Sub-cognitive/social Skills, habitus, mores, forms of life and lifeworld, etc. conceived as collective, (perhaps tradition in an Oakeshottian sense, probably in Shilss sense), Kripkes rules, collective intentions Source: Turner (2007b) Non-social Cognitive/non-social Articial intelligence rule and symbolic representational model without sharing of rules

Table I. Social and non-social notions of practices

Sub-cognitive/non-social Habits, skills, etc. as the tacit part of an ensemble in which there are explicit parts (activities, rituals, performances, etc.) that the individual adjusts to

individuals use of language is a function of the high levels of feedback both formal and informal that individuals receive as they learn the practice of language. Gioia and Chittipeddis (1991) classic work provides a helpful explanatory framework (Rouleau, 2005) to understand strategising based on the notions of sensemaking and sensegiving. They regard sensemaking as the ongoing and retrospectively focused process whereby individuals interpret and construct their reality (Weick, 1995), whereas sensegiving is the process of attempting to inuence the sense-making and meaning construction of others toward a preferred denition of organizational reality (Gioia and Chittipeddi, 1991, p. 442). These two processes are seen as cycles of actors cognition and action (Weick et al., 2005) and have explanatory power in connecting micro and macro levels of analysis (Gioia and Chittipeddi, 1991). Given that the relationship between an individuals strategising and the routines of the rm are important in understanding the performance of the rm (Johnson et al., 2003), the challenge, taken up in this paper, is to demonstrate empirically how such linkages are effectuated. Importantly, sensemaking and sensegiving can be seen as mechanisms for developing, or learning, ones own view of the world. Method This research is based on a single longitudinal soft case study (Braa, 1995; Braa and Vigden, 1999). Such an embedded case study is consistent with the strategy-as-practice perspective, and provides the contextual richness (Glaser and Strauss, 1967) that is necessary (Weick, 2007) when investigating the constructs of practices and routines. The engineering consultancy rm Gamma[1] was investigated. It is a multi-disciplinary engineering consultancy rm that employs over 2,000 professional staff. The rm has 12 traditional discipline-based business units, such as civil, chemical, and structural, and a number of multi-disciplinary market-facing business units such as Food and Beverage, Airports, and Environmental Services. In addition, the rm provides pan-disciplinary business units including planning, risk management, and cost management. Gamma has substantial activities in three countries and has carried out major work in over 50 other countries. In addition, the Gamma has long-established joint ventures with large engineering consultancies on both sides of the Atlantic. As a result, in some of the regions in which Gamma operates it competes with rms with whom it collaborates in other regions. Since being founded early in the twentieth century, Gamma has grown and has evolved a number of interlocking boards of directors that form a complex governance hierarchy. As a relatively small multi-national rm, the managers of the rms business units struggle with conicting goals as they seek further internationalisation. Often, managers push these conicts upwards to be addressed by the various boards of directors. The researchers collected both primary and secondary data. Primary data collection took place from the end of 2004 until early in 2008. Primary data collection occurred through three main methods: interviews, meeting observations, and shadowing of participants. Six participants were each shadowed for a working week (ve days), and another participant was shadowed for three days. Interviews were held with 20 participants. The interviews typically lasted for between one and two hours. The interviews and meetings resulted in over 150 hours of audio recordings. In addition,

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notes of shadowing covered 420 hours. The variety and range of the participants is shown in Table II Data from the interviews, observations, and shadowing were used to develop case descriptions (Yin, 1984). Broadly, the analytical process was one of data reduction through categorisation, building abstractions, and developing concepts and theories (Bower and Gilbert, 2005; Creswell, 1994; Miles and Huberman, 1984). Data This paper focuses on the routines and practices associated with the development of board papers at Gamma. Board papers are documents presented to the rms boards of directors requesting a decision or outlining a problem. As such, they are an important component in of the rms routines of governance. This section rst outlines the current governance structure of the rm. It then describes the formal routines surrounding the use of board papers before exploring the development of a specic board paper. In the companys 2004 Annual Report, the chairman was able to announce that the corporate restructuring of the rm, Project-C, was complete and that it had created a number of new subsidiaries and new boards. From a governance perspective, Project-C split the principal operating company into a holding company and a number of subsidiary companies. According to the CEO, the intent behind Project-C was to protect the assets held by the company, to provide a training ground for up-and-coming new board members, and to spread the workload carried by the main board onto the newly created subsidiary boards. The change resulted in six managing directors MD Asia, MD Australia, MD International, MD Non-infrastructure, MD Infrastructure, and MD Corporate that report to the CEO. Although the rm had more than 200 shareholders in 2004 and over three times that number by 2007 Gamma has only had ten voting shareholders since the 1950s. In 2004, these were the chairman, the CEO, the group CFO, the six managing directors, and a former managing director. The CEO noted that power is held by the voting shareholders, and that:
You have to sell your shares when you leave employment. You [also] have to sell your shares this is not too PC this next statement when you reach a certain age [56]. That was the Shareholder Agreement that came out before the human rights [legislation] and all the rest. And if you havent got a vote, you havent got any power. We, the board, or if you like the partners of the day, or whatever, have a small number of management shares. And they have the vote, and therefore the authority (CEO).


Top management Level Governance team Roles CEO, executive chairman Table II. Primary participants in this research




Board members, General managers, technical directors, managing business development directors managers

Senior associates, Consultants section managers, associates, BYT bright young thingsa

Note: This term is used by a number of people in the rm to describe those younger members under 35 who are seen as future leaders of the rm

Prior to Project-C, all major decisions were made by the board. Although Project-C had resulted in the creation of subsidiary boards, real power still remained with the main board. In many ways the change in structure has not really altered the locus of decision making; all that has happened is that people have been moved around:
And even 5 years ago, certainly 10 years ago when I came back from overseas, the business was still run effectively by the board. It still is, you know. The board made all the decisions, everything got referred up and thats how it ran. And I think whats happened in the last 5 years, certainly, is that weve moved things around (Business Unit Manager I3).

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According to the CEO and other senior managers, the subsidiary boards are a training ground for future main board members. The need for such training is related to the fact that there Gamma has no non-executive board members. The changes from Project-C were seen by the board members as permitting the newly created subsidiary boards to focus on a smaller range of issues; but to do so in more depth. In practice, according to a number of the MDs, focusing on a smaller range of issues in more depth resulted in the subsidiary boards becoming overly operational in their focus. As the subsidiary boards consist entirely of producing-managers, board members nd it hard to focus on the strategic issues that face the rm and instead they dive into the operational details (Director of HRM). So, in 2006, a new group, the Gamma Management Group (GMG), was formed to focus on the groups strategy. The GMG has become the groups de facto board, and most senior managers, when referring to the board in fact mean the GMG. The formal routines of governance According to the CEO, many of the reports prepared for the rms clients are also summarised by managers at Gamma into board papers for their clients boards. Managers at Gamma understand that the size of a board paper is contextually dependant, and that some clients have different expectations as to the size of a board paper. In discussing the relative amount of effort and details needed for a board paper, two managers compare the work needed to justify a job to clients boards:
BD Manager: What sort of job would you do for 300k? Marketing Director: That would be a three page paper in Infrastructure [BU]. BD Manager: But for Airports [BU] that would be a 25 page brief.

Besides writing board papers for their clients, managers at Gamma also write board papers for their own boards consider and act upon. Often, the source of board paper is an individuals dissatisfaction with the status quo (Director of HRM):
Someone, usually an executive person, me or an MD whos on the board, or for that matter the GMG because its now in existence says Ive had a gutful [sic] of this. And instead of protesting, they write a considered paper. And say, This is what I think the policy should be, this is how we should go forward. This is why. This should be the outcome. This is whats not happening and so on. And that forces discussion. And usually a paper route like that will result in a change immediately (CEO).

At Gamma, there are a number of formal aspects of board papers. First, there is a formal routine and concomitant timeline for the submission of papers. Board papers must be with the Personal Assistant to the CEO ve days before the board meeting. The agenda for the board is then nalised, and the agenda together with the board



papers are e-mailed to the board members ahead of the scheduled board meeting. Second, board papers follow a standard template. This template shows who is responsible for the paper that is, who is putting it forward; a one or two paragraph summary of the paper; what action is required that is a decision is needed; and where in the agenda the board paper will appear. However, there are also ambiguities in the formal process. For example, although the template species the much of the format of board papers, the size of board paper is not explicitly stated. When asked to produce a paper for the board, the rms bright young things frequently create documents that are 20-30 pages long. However, senior managers seek brevity. Typical of those managers, one indicated that, I usually try to keep them to two pages, maximum (MD Transportation). In this regard, the CEO outlines his expectations:
The other thing is that those MDs need to have is the ability to sensibly report executive type summaries. Lets not get a 30 page paper and at the end of the day Im thinking God almighty what was the key elements Im meant to take out of this? Do I read 30 pages, or can I read a page and a half (CEO).

The board has accepted substantial resource redeployments based on short board papers. In discussing the creation of a market facing business unit that represented a major commitment to one of the rms top-ten clients:
Tony [a business unit manager] presented a board paper a one pager and subsequently a draft strategic plan to the board. At the meeting, things were going well, and Tony was surprised that there was not more interest in what his plan said. Then [the MD Corporate] said, You dont intend to integrate the disciplines into Airports. E.g. project management. Tony considers that the MD Corporate is always a bit ahead of the rest [of the board members]. Yes says Tony. A very exciting discussion then ensued. Tonys view is that you just need to keep saying it enough and eventually people will come round. Much in the same way as Tony has come round to thinking about it in the same way as the Executive Chairman (i.e. he originally suggested moving the necessary project managers into the business unit). This is the way it is working with the MD Infrastructure, Tonys boss. He is slowly coming onboard with the plan [that disciplines are integrated into the Airports BU] (Marketing Director).

Board papers are just one part of a formal routine of governance in the rm. They are a well-tried component of the decision-making processes within Gamma, for both internal use, and for use by clients. Board papers do not come to the board unannounced. Ahead of receiving the formal board paper, the general content of any board paper is known to most board members, and some board members will know much of the surrounding detail associated with the issue. Although board papers are put forward by individual managers, consultation does take place between managers before and during the creation of a board paper. Such consultation, per se, is not a requirement for gaining legitimacy. For example, one manager:
Having printed out a copy [of a board paper] he takes it to a colleague who isnt there. He then takes it to his leader who isnt in his ofce either. Its times like this when one has to make an executive decision [to submit the paper] (Field notes on BD Manager, quotations as shown).

Later, whilst working on another paper, the same manager is once again unable to get feedback on it from his MD:
I have no problems with executive decisions. My view is to get input if I can and if I cant [I make the decision to submit the paper] (BD Manager).

This pattern, of seeking comment on a board paper, is evident in all of the board papers that were observed at Gamma. In the following section, this feature is described in more detail. The praxis and practices of producing a board paper As already noted, at Gamma there is a formal timeline associated with board meetings and board papers. In the illustrative example that follows, the marketing director wanted to have a board paper on the agenda of the next board meeting. Consequently, he needed to get his completed board paper to the CEOs Personal Assistant in ve days time on a Friday morning to meet the normal deadline for all board papers going forward to the next board meeting. The context surrounding this board paper is that Gamma is a long-established rm and is one of the largest providers in its domestic markets. According to the HR director, because of its position in the market place, the historic attitude of some long-time organisational members is that the organisations we want as clients know who we are and naturally they include our rm when asking for tenders. The unspoken corollary is if a potential client doesnt know who we are, then we probably dont want them. This view of the world plays out in Gammas logo; when going past a major construction project in which the rm is involved, Gammas logo is so understated that it is hard for anyone who does not know Gamma to recognise that the rm is participating in the project. With continued expansion into international markets where the rm is not well known the logo is seen by international managers, and by the bright young things as being ineffectual. Thus, the purpose of the marketing directors board paper was to seek funding to update the rms logo. The paper was also to argue that, consequently, much of the rms marketing and branding collateral should be updated. Several months before, the board had rejected a similar proposal by the marketing director on the same issue; at that meeting board members had requested a new paper containing more data and detail before deciding on the proposal. With ve days to go before the board paper needs to be submitted, the marketing director began his week by reviewing the timeline for completing his paper with his personal assistant and with his marketing manager. They discussed at length at what time of day they could expect the board to discuss the paper, and how much time the board would have to spend discussing the paper. They also reviewed the various informal meetings that were scheduled throughout the week, where the marketing director intended to get feedback from selected board members on the draft paper. The rst of these meetings was held later that morning. It got off to a rather difcult start when the managing director being consulted found out that the marketing director did not have a draft board paper for him to review. The MD began by pointing out that the executive chairman did not expect a substantial launch campaign for the new branding, and that any launch should be low key. He then indicated that the previous board meeting had been scheduled for only an hour and a half, but that it lasted for six hours because of the lengthy discussions that took place on budget constraints. The marketing director picked up the MDs message; later on, when his marketing manager asked if the branded car park signs would also need to be replaced, the marketing director replied: The MD just said theyve had a six hour meeting talking about budget constraints, so take the hint. The marketing director remained sensitive to the budgetary constraints when the discussion with the MD moved onto issue of new

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business cards. Noting that The CFO will complain about [us] being proigate if complete new stocks of cards are ordered, he suggested that new business cards with the new logo and design should only be printed when individuals ran out of their old cards. However, the MD said that although costs need to be contained, GMs and above will get new cards from day one. The discussion then moved onto the cost of new signs for the buildings occupied by Gamma. As the marketing director was telling the MD that backlit signs would cost $10,000 each, for a total of $80,000, the MD interrupted saying No. However, they kept talking as they decided which buildings would really need new signs and the ` -vis the likelihood of signs being vandalised, before returning security of the signs, vis-a to the issue of costs and tactics to get the board approval:
MD: Dont tell them [the board] the relative cost of light boxes versus ordinary signs [$10,000 versus $3,000]. Marketing Director: The budget is 120 k, but it looks as if the real cost will be 70-80k. MD: If you think it is going to be 60 k, tell them youve got it down to 100 k, and you hope to get it for less. Competitive bids. If youre spending $120 k the CEO will want to know that you arent doing it on a sole-source basis.

Later on, as the marketing director was dictating the draft board paper he decided to position the change to the logo not as new branding, but rather as a modest brand refresh as he thought that would be less controversial. He further commented that, we need to be weaselly[2] about signage before dictating, The branding refresh will require new signage for Gamma globally. Next, the marketing director went to see the CEO for a planned meeting, but he was not there. Talking to the CEOs personal assistant who manages the boards agenda, he found that the CEO expected the board paper to be dealt with in less than 15 minutes. At the request of the personal assistant, the marketing manger agreed to bring the nal draft of his paper at 9:00 on Friday, so that she could see if it would t in the available time. The personal assistant said, If it looks as if it will not t into the timeslot, the CEO will make a call as to whether it is in or not. The marketing director had wanted to bring a second paper to the same board meeting regarding competition from an overseas rm but the personal assistant did not think that it would t in the agenda. As he dropped the idea of a second board paper, the marketing director commented, to no-one in particular, that Operational matters always drive out the strategic at board meetings. During the week, the marketing director continued to consult with organisational members, even if they would not be part of the decision making process. For instance, he made sure that the graphic artist was comfortable with the new colours that were to be used:
I dont want to put something to the board that Matt [who is preparing the style manual] hasnt bought into. Send a copy to Matt. And Ill check he is happy [. . .] I dont want to get offside with him (Marketing Director).

He also showed an example of the new building signage to the rms property manager who had been with the company for over 30 years but who was uninvolved in the board. The property manager reassured the marketing manager saying I cant see a problem with that [new signage].

The following day, the marketing director prepared a one page executive summary of the current four-page draft board paper. The summary was for a second meeting with the CEO. The timing of the meeting was tight as the CEO was due to y out of the country, although he would be returning for the board meeting. In explaining the purpose of the meeting, the Marketing Director commented:
Im just going to run through it with the CEO. It doesnt have to be perfect. After I see the CEO, well make the changes that are needed. [The CEO] can say in or out to whatever he wants [on the board agenda]. Its strange that the board asked for all this information on the new logo, but now they dont have time to look at it. Well thats okay, Im ready to roll and I dont really need them. Ill make the decision. Practically, we have a log jam at the board. Ive only got 15 minutes [at the board meeting]. Ill ask the CEO to empower me to make the decision, in terms of the launch.

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Although the marketing director was prepared to make an executive decision, he decided to revise the paper, from things we are telling you to items for approval so as to clarify the decision required from the board. Before his meeting with the CEO, the marketing director received a call from the CEOs personal assistant to say that the CEO was running late, and asked how much time the marketing director really needed with CEO. He replied Ill take what time I can get. My plan is to give him this [board paper] and then go through it with the MDs one-on-one [before the board meeting]. During the meeting with the CEO, it soon became apparent that the CEO was not interested in most of the details that the board members had asked for. For example, in talking about the colour palette for the new logo, the CEO conversation was:
CEO: Ive moved on from colour. Im not trying to cut you down, but I wonder if the board needs all this paperwork. Marketing Director: I agree, I dont think they need all this detail. But, they asked for it. You can make an executive decision [to include it all or not]. CEO: On the stationery design which I havent seen are we happy it is legally[3] okay? Are the signatures on the emails okay? Marketing Director: Well the Corporate MD has made the decision that the business cards will just have Gamma on them and not the specic [subsidiary] company. CEO: The legal advice is probably 100% correct, but practically useless. Marketing Director: As chairman if we just get them to say that the decision should be made and sign it off subject to any feedback from the board. CEO: We dont want a pyrrhic victory at the board meeting. Ive not forgotten last years response to the conference paper. So we put it [the board paper] in [the agenda] and the chairman looks for approval. CEO: If this doesnt get approved then we will need to schedule it again. Marketing Director: But it must be approval because we need stationery, we need signage. CEO: So there isnt too much time.


Marketing Director: The MD Corporate is obsessed by details. So the board should recognise that it will go okay. CEO: Yes he is obsessive.


After the meeting, the CEOs personal assistant again made the marketing director nail down when he would have the completed paper and the copies needed for the board, and checked again that it will t into the allocated time slot. With the board paper now due the next morning, the marketing director continued to revise his board paper, reducing the number of pages and appendices. The following morning, his personal assistant printed out the nal version and took to the CEOs personal assistant just in time to meet the deadline for inclusion at the following board meeting. At the board meeting, there was little discussion resulting from the marketing directors board paper, and when the chairman sought approval of the paper agreement to proceed with the brand refresh, and the low key launch of the new logo was given. Discussion As a practice, the creation of board papers is a strategic activity. With their emphasis on change, and the attendant level of decision making, board papers are consequential ( Jarzabkowski, 2005; Johnson et al., 2003) both in nature and intent. Thus, at Gamma, the production of board papers is a form of strategising. As a form of practice, the other important aspect of board papers is that they provide an explicit link between micro level activities of managers, and organisational actions. In this case-board papers connect managers strategy praxis to both organisational strategies such as the creation of a new market facing business unit and organisational processes such as strategic change (Whittington et al., 2004). Repeated cycles of sense giving and sense making are clearly evident in the creation of board papers at Gamma. In the vignette with Tony, sense giving is taking place (Gioia and Chittipeddi, 1991); the executive chairman engaged in sense-giving with Tony regarding the need to have disciplinary specialists in the new business unit. Likewise, Tony then did the same with both the board and his immediate MD. It is evident that, as illustrated, the sense-giving process is not one of justication. Rather the process is one of making people believe that the desired state of affairs is the way the world is. Sense making is also evident as the marketing director comes to terms with the fact that his board paper needs to t within a 15-minute window. Importantly, these cycles of sense making and sense giving include not only board members, but also those who will have no direct impact on the papers acceptance or otherwise. For instance, in the examples given, these include the CEOs personal assistant, the graphics designer and the property manager. Given the nature of the consultation undertaken by the marketing director, it is hard to conceive of it as an attempt to build legitimacy, or just as an attempt to get people used to the views represented in the paper. Although, in many cases managers sought to consult, they did not stop progressing the board paper if they were unable to consult. It is our core contention that during such consultations the authors of board papers in Gamma were undertaking a process of testing their own sense making; they were engaging in what we are calling sense testing. As an actor makes sense of various events, possibly with the aid of sense-giving from others, we suggest that the actors will sometimes test their own sense-making. This testing may take place with

the original sense giver, as in the case of the marketing director and his MD in regards to the reprinting of business cards. It may also take place with some other person who might reasonably be expected to have a nuanced understanding, as in the case of the CEOs personal assistant who could be expected to understand the CEOs perspective. This was also the case with the property manager who has been with the company a long time and can judge how the paper ts with the context of the history of the rm. We further contend that sense testing plays a role in learning, and that it is in a feedback mechanism for such learning. This view of the learning of practices implies differential levels of skills may exist with regard to a practice. In this way, we differ from Whittington (2006) and others who seem to presuppose that actors are competent in the practices upon which they draw. Our view is, nevertheless, consistent with those who see practices as being in a permanent state of creation and development (Sztompka, 1991; Turner, 1994, 2002, 2007b; Vygotsky, 1978). It is perhaps with the views of Turner (2002, 2007b, c) that our work resonates the most. We see little need for social explanations of practices (Table I), and instead nd sufcient explanatory power in the non-social explanations that are based on learning by an individual. Returning to sense testing, it is also important in another way. It has been argued that the notion of truce (Nelson and Winter, 1982) is necessary in explaining how formal routines are not derailed by actors divergent interests, such as those that exist, within pluralistic contexts (Denis et al., 2007). Actors can disrupt formal routines by either circumventing rules, or by working to rule (Becker, 2004). Thus, the notion of an implicit truce between those requiring the execution of a routine and those who execute the routine obviates the need for explicit bargaining every time a formal routine is to be followed. However, the state of truce is not absolute. Pentland and Feldman (2005) contend that truce is relative term, and that the potential always exists for a routine to be revised each time it is executed. We see sense-testing as a mechanism that maintains truce without a need to move into explicit bargaining. In this way, sense-testing is a way of maintaining the order (Barnes, 2001) of formal routines. Conclusion Using data from single longitudinal soft case study of an international engineering consultancy rm, the paper has examined how board papers are used in the formal routines of governance. The paper has produced a number of emergent ideas that help to explain the role of a specic practice the creation of board papers in relation to more macro levels within the rm. First, unlike other studies on practices, this research does not rely on the notion that practices are shared in the everyday meaning of the word. Rather, support is found for Turners (1994, 2002, 2007b) iconoclastic argument that a shared component is not required in explaining practices. Instead, this paper demonstrates that a feedback process, called sense-testing, acts as part of social learning that helps to explain the relationship between strategising and organising in the routines of governance as illustrated at Gamma. Second, the paper suggests that informal practices runs alongside formal routines of governance, and that it is these informal practices that allow a state of truce to be maintained. Without a state of truce, the formal system would breakdown, either through excessive rigidity or because of excessive exibility. These informal practices provide a feedback mechanism that maintains sufcient

Strategising and the routines of governance 161



plasticity in the formal routines. Third, whilst the traditional mechanisms of sense-making and sense-giving play an important role for strategy-as-practice perspective, a third mechanism sense testing provides a crucial feedback and feed-forward path. It is our contention that sense-testing provides both a feedback and feed-forward component. It acts to inhibit non-congruent aspects of practices, and reinforces congruent aspects. Sense testing allows actors to try out their understandings, whilst at the same time making other actors more receptive those understandings.
Notes 1. For reasons of condentiality, the name and locations of the rm have been changed so as to preserve its anonymity. 2. To be intentionally misleading. 3. These comments are in relation to using the name Gamma as opposed to the legal name of subsidiary companies, and whether such a move put the subsidiaries at risk of contagion should one subsidiary company fail.

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