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INVITED PAPER Strategic

management
What theories are needed for
strategic management? 433
Gongmin Bao
School of Management, Zhejiang University (Zijingang Campus),
Hangzhou, China

Abstract
Purpose – This paper aims to address challenges in strategic management and tries to find ways to
make a breakthrough. Strategic management theorists and practitioners need new scientific theories. In
the modern turbulent environment, the extant strategic management research (SMR) and strategic
management theories can neither satisfy the practical needs nor the theoretical developmental needs of
strategic management.
Design/methodology/approach – The paper uses critique viewpoints that are unfolded according
to the logic of how theories will satisfy the practical and theoretical needs. Physics and mathematics are
regarded as the most beautiful and perfect scientific research fields, which help predict physical
phenomena such as solar eclipse precisely. Therefore, the paper uses physics and mathematics as
benchmarks to explore how SMR should make efforts to push the research further.
Findings – The paper provides a different viewpoint that will help strategic theorists and
practitioners investigate and understand strategic phenomena more holistically. SMR should
contribute to strategic theoretical and practical progress and not just to the game of academic game
play. For the goal, the paper summarizes and refines the definition of strategic management in an
alternative but practical and innovative perspective, and then delineates the criteria for SMR topic
choice; identifies the dilemmas and challenges the SMR faces; and points out the new approaches the
strategic management researchers should explore.
Originality/value – The paper challenges the mainstream of SMR by identifying the shortcomings,
dilemmas, and challenges of the current SMR, and then highlights new ways to make breakthrough in
SMR. The study will make strategic management scholars rethink their research and do meaningful
research from the perspectives of theoretical contribution and practical guidance.
Keywords Challenges, Strategic management, Criterion of theory, Directions of future research,
Topic choice
Paper type General review

In recent decades, strategic management research (SMR) has made remarkable

progress. As the research undertaken has gone extensively and deeply it has become
quantitative and logical, and the division of the study has become meticulous. At the
same time, the deficiencies of SMR have attracted the attentions of scholars, as SMR has
become less integrative or more fragmented (Miller and Tsang, 2011). In such
circumstances, theorists are very likely to soliloquize and their works become isolated Nankai Business Review
International
Vol. 6 No. 4, 2015
pp. 433-454
This work was supported by the National Natural Science Foundation of China under Grant © Emerald Group Publishing Limited
2040-8749
71172110. DOI 10.1108/NBRI-05-2015-0012
NBRI theoretically from strategic practices, so that some aspects of SMR have had more to do
6,4 with intellectual play than practical reality (Bettis, 2012). Thus, practitioners can often
regard strategists and their theories as useless, suspecting that if you follow their
theories to guide your practice, you will make big mistakes and encounter trouble (Ma,
2014). Moreover, the verification of theories usually is random (Bettis, 2012) the theories
are less precise, and the boundaries or premises of the theories are fuzzy. At the same
434 time, the dominant SMR is still too observant of conventional academic standards,
causing there to be no substantive innovation, or even any substantive progress.
Strategic management is supposed to surmount future challenges. As future
challenges emerge in the turbulent environment, SMR often struggles to keep up with
unpredictable changes, so that strategic management usually has to face the challenges
without SMR support or any theoretical guides (Ma, 2014). In other words, in modern,
dynamic, competitive environments, strategic management is more vital for firms than
ever. Entrepreneurs and insightful strategic management theorists urgently need new
scientific theories to explain strategic phenomena and to guide strategic management
practice. To address these needs, SMR has to reflect critically on past researches and
explore new solutions and directions for improvement.
This paper takes a subversively critical stance to explore the ways SMR and strategic
practical breakthroughs, because it is held that if there is no subversive change, there
can be no breakthrough. The paper proceeds according to the logic of how theories will
satisfy the practical and theoretical needs of enterprises. Physics and mathematics are
regarded as the most beautiful and perfect scientific research fields. They enable us to
predict physical phenomena such as solar eclipses precisely, and therefore, the paper
uses physics and mathematics as benchmarks to explore how SMR should make efforts
to push the research further.
The remainder of this article is organized into five major sections. First, the definition
of strategic management and the choice of topic under consideration are clarified.
Second, the criterion of good theory is discussed from the viewpoint of strategic
management. Third, the dilemmas in SMR are summarized. Fourth, the directions of
SMR are tentatively proposed, and finally, conclusions and the limitations of this study
are presented.

The definitions of strategic management and the choice of topics for

consideration
SMR has grown rapidly since its emergence as an academic field. However, the
definitions of strategic management today are quite diverse (Ketchen et al., 2008;
Ronda-Pupo and Guerras-Martin, 2012). The definition of strategic management affects
the choice of SMR topic, which in turn affects SMR’s contribution. Thus, the definition of
strategic management and the choice of topic for study are paramount in this field.

The definition of strategic management

Strategic management is related to the survival and growth of organizations and
includes two dimensions, i.e. the “overall effect” or the “overall space effect”, which refer
to the survival and/or growth of organizations as a whole, and the “future effects”, which
refer to the survival and/or growth of organizations over the course of time. From the
spatial point of view, the survival and/or growth of an organization has an overall effect
on the organization. Issues on parts of organizations that only affect their survival
and/or growth as a whole are belonged to strategic topics. From the time standpoint, the Strategic
survival and growth of an organization is about its continued existence in the future. management
After summarizing the extant definitions of strategic management, it is not difficult to
find that, although scholars describe or define strategic management with different
vocabularies, such as overall direction, (long-term) objectives, decisions, emergent
initiatives, planning, allocating resources, etc. (Chandler, 1962, p. 13; Ronda-Pupo and
Guerras-Martin, 2012; Nag et al., 2007), almost all of the definitions include two basic 435
dimensions, namely, organizational integrity (as a whole) and futurity (time).
SMR should focus on the issues significantly affecting organizations’ (long-term)
survival and growth as a whole, no matter if the issues are related to marketing,
organization, innovation, technology or business model. Strictly speaking, almost
everything about an organization is related to its whole and future to some degree.
However, only the aspects of the organization that significantly affect the organization’s
survival and growth are sources of SMR. If that were not the case, SMR topics would be
concerned with all of an organization’s management issues and that would alter its
entire raison d’être. That is to say, SMR as an independent research field should focus on
the issues significantly affecting the (long-term) survival and growth of organizations.

Topic choices for SMR

While the guidelines for general management research topic choices have been
discussed extensively, the topic choices for SMR have seldom been presented in
publications. Scholars in management research field often emphasize significance,
novelty, curiosity, scope and actionability as guidelines for topic choices (Colquitt and
George, 2011). However, we argue that not all of the guidelines are suitable for SMR.
Topic choices concerning SMR should focus on the survival and growth of
organizations, and then take other relevant factors into account.
Significance. Applied to SMR, “significance” means that the research confronts or
contributes to addressing a grand challenge to organizational survival or growth
(Colquitt and George, 2011). That is to say, SMR should not only focus on the present
significant issues affecting organizations’ long-term survival and growth, but should
pay a good deal of attention to future significant issues as well. Moreover, it should not
just be concerned with the effect of parts of organizations on organizations’ long-term
survival and growth but also be concerned with the organizations’ long-term survival
and growth as a whole. However, due to cognitive limitations (Levinthal and March,
1993), it is usually difficult to identify long-term challenges to the survival and growth
of organizations and, therefore, current challenges are usually more preoccupying. For
future challenges, few things can be done to avoid them before they happen, though
research into them is badly needed. In this situation, when new challenges arise
suddenly, as there is little ex ante research and preparation, we can do nothing but
helpless.
Novelty and originality. A good research topic should be novel and original (Colquitt
and George, 2011). “Novelty” refers to the quality of being new. The scope of originality,
which requires new topics not to be reproductions, clones, forgeries or derivatives, is
much narrower than novelty is. In management study, “originality” can be classified as
“incremental insight” and “revelatory insight” (Corley and Gioia, 2011). In general, novel
and original research must bridge the gaps between two or more different theories, thus
explaining something between the domains of previous theories, and/or originally
NBRI opening up a new vision of a phenomenon, transforming it by casting fresh light upon it
6,4 (Bacharach, 1989; Fry and Smith, 1987). Therefore, SMR should focus on novel and
original issues concerning the survival and growth of organizations.
Curiosity. “Curiosity” refers to catching and holding attention (Colquitt and George,
2011). It is claimed that there are two approaches to realizing curiosity: interesting and
counterintuitive (Bettis, 2012). First, curiosity is an important driving force for scientific
436 research, but curiosity is not mandatory for scientific topics. A meaningful topic might
not be curious at present, or even in the future. For example, only a few scientists can
understand Einstein’s theory of general relativity and Bolyai-Lobachevskian geometry
to any extent. Most scientists cannot understand these esoteric theories thoroughly, let
alone make a large audience interested in them. However difficult the theories are to
understand, though, that cannot reduce their great significance. Strictly speaking,
scientific research topics do not need curiosity. Of course, just as curiosity should be
required when the topic choice is the popularization of science, it should be when there
is research concerning the popularization of management, because curiosity can attract
large audiences. Secondly, it will be very exciting if issues on organizations’ survival
and growth in future are interesting. However, it might not prove to be the case because
individuals’ interests may change over time. Particularly, as their present interests may
be very different from those of tomorrow, so research topics cannot be chosen according
to potential future interests because they are not knowable yet. Strategic management is
expected to identify and know how to manage future strategic issues, and make
strategic decisions before important events occur, so as to facilitate organizations’
survival and growth and avoid strategic mistakes and risks. That requires SMR to
provide solutions before events occur. Many strategic issues become interesting only
after any relevant undesirable events have happened, so any interest provoked in an
issue is very likely to be a phenomenon of “hindsight”. However, under certain
conditions, SMR cannot and should not wait for issues to become interesting to
audiences. Finally, strategic management is oriented for the future; few individuals have
an informed sense of things that may emerge in the future, nor do they have
counterintuitive sense. To require future-oriented research to be counterintuitive is to
reject the exploration of future challenges. One important reason for the lack of
breakthroughs in SMR might be that the requirement of SMR to be counterintuitive
makes most scholars drop into counterintuitive traps. Therefore, future-oriented SMR
should look beyond curiosity for its fields of study.
Scope. A good theory should have a large scope of utility; even the best topic ideas can
be undermined if their utility scope is too small (Colquitt and George, 2011). However,
having a large scope of utility is not straightforward from the viewpoint of strategic
management. Current broad application meets any current demand; future broad
application meets future demand. Current demand is comparatively easily identified;
future demand is comparatively difficult to identify, though SMR should pay significant
attention to future demand and look beyond present practices. If SMR is led by present
practice, it must struggle to keep up with the changing present practice, the significance
of SMR will be reduced.
Actionability. It is frequently argued that a management research topic should be
actionable or offer insights into managerial practice (Colquitt and George, 2011). One
way to approach the practical criterion is to consider variability in practices that
existing theories cannot explain – that is, the places where our scholarly language or
words fail us (Colquitt and George, 2011). Theoretical investigation should be closely Strategic
related to practice, but the practice can be at present as well as in the future. Not all good management
theories are immediately verified and/or applied, as was the case for both Einstein’s
theory of general relativity and Bolyai-Lobachevskian geometry. Therefore, ideally
speaking, a good theory should be actionable at present or in the future. Because future
challenges for organizations might present them with huge threats to their survival and
growth, research concerning future challenges might be very valuable. In other words, 437
SMR should not always be an afterthought.

The criterion of good theory

A good theory addresses logical, causal relationships among concepts/variables within
a set of boundary assumptions and constraints (Bacharach, 1989). A good theory reveals
the fundamentals of a law or causality and provides the conditions for individuals to
understand the phenomena clearly and precisely (Bettis et al., 2014b). Good theory is the
quintessence of human knowledge. A good topic and research do not guarantee that
good theories will be generated, or even that any theories will be generated (Bettis et al.,
2014a), but a good topic and its research must contribute to our understanding of
strategic issues and phenomena, and particularly contribute to the generation of good
theory. To build good theory is the most important goal of scientific efforts. Building
good theories needs a good criterion to guide theory-building. Currently, the criterion for
good strategic management theory is unclear, which results in present SMR suffering
from shortcomings.
A good strategic management theory should reveal phenomena affecting
organizations’ survival and growth and discover strategic management rules clearly
and precisely, thus providing theoretical bases for strategic management practices.
Currently, the criteria of good theory that scholars have emphasized are: a clear causal
relationship among the variables with a clear boundary (Bacharach, 1989), and
theoretical and practical significance (Colquitt and George, 2011). Scholars seldom
regard simplicity, accuracy, uniqueness and unity as criteria for good theory generation.

Causality and boundary

A good theory is concerned with causality, not with association (Bettis et al., 2014b).
Causality is a universal connection of phenomena through which one thing (the cause)
under certain conditions (sufficient conditions) gives rise to or causes something else
(the effect) (Russell, 1945-1946). The identification of genuine causes is accorded a high
priority because that is viewed as the basis for understanding phenomena and building
an explanatory science (Marini and Singer, 1988). With causal knowledge, it is often
possible to predict events in the future or make new observations and to exercise some
measure of control over events, which makes intervention for the production of desired
effects possible (Marini and Singer, 1988).
A good theory must have a clear causal relationship (the cause and effect) with a clear
boundary that describes the scope and the conditions of necessity and sufficiency within
that relationship works (Bacharach, 1989; Fry and Smith, 1987). Necessity and
sufficiency are the two most important conditions (Mitroff and Silvers, 2013), which
provide the least sufficient conditions to make the effect happen. A good explication of
causal relationship and its applicable boundary has the following nature:
• the structure of the theory is simple;
NBRI • the communication (expression) of the theory is clear; and
6,4 • the description of the object (phenomenon) is adequate (Bacharach, 1989; Fry and
Smith, 1987).

If a theory has no clear necessary and sufficient conditions, its boundaries must not be
clear. A theory without a clear boundary is unable to enlighten practitioners.
438
Utility
A good theory has these application values:
• a better understanding and explanation of the phenomenon (variable) and the
relationship among phenomena (variables);
• increasing human knowledge (scientific usefulness); and
• guiding practice better so as to make practices more efficient and effective
(practical usefulness) (Corley and Gioia, 2011).
The actions of human beings are based on prediction and correspondent decisions
(Bacharach, 1989; Fry and Smith, 1987). Prediction is the foundation of theoretical
guiding practice. Therefore, a better theory must be able to predict more concisely: be
more explanatory and/or predictive than competing theories, and more predictive than
probability estimation and common sense estimation (Bacharach, 1989; Fry and Smith,
1987).

Occam’s razor
Occam’s razor is an imperative principle of parsimony in choosing between competing
theories or hypotheses, which regards that the simplest theory or explanation of a
phenomenon is most likely to be the correct one and should be chosen (Walsh, 1979). The
principle of parsimony is widely recognized by natural scientists (Courtney and
Courtney, 2008), and social scientists also use it in their research (Walsh, 1979; Bettis
et al., 2014b). Because of the complexity of social scientific theory, especially strategic
management theory, it is difficult to compare different theories (Courtney and Courtney,
2008). However, this is not to say that Occam’s razor is impractical in social science and
SMR, it is only to say that using Occam’s razor in this regard may require a great deal of
wisdom and effort.

Unique theory
Theoretical uniqueness is one of the most important criteria of scientific research, as
most scientists regard that only one theory can explain a phenomenon in the most
accurate and simplest way: that is, the best theory is unique. In mathematics and
physics, there are many unique theories (Miller and Tsang, 2011). In social sciences,
particularly in SMR, there are few unique theories. We argue that we cannot say that
there is no unique theory in social science and strategic management, as the
phenomenon of there being few unique theories might result from that the unique
theories have not been found and/or some identical theories are regarded improperly as
different theories.
Occam’s razor is a way to simplify theories and to find unique ones, but it cannot
distinguish between similar theories. In social sciences, especially in SMR, theories are
usually similar or equivalent, such that it is difficult to tell which theories are simpler or
better. However, no matter how complicated the phenomenon is, the theory that can Strategic
briefly and clearly explain the specific phenomenon and its causation should be unique. management
If there are two or more theories that are equivalent in explaining a phenomenon, either
the two or more theories are different extensions of some other more fundamental theory
or they are the same theory that is expressed as different theories. If there are multiple
distinguishable or equivalent theories explaining the same phenomenon, the
troublemakers must be the research methods used and/or the theoretical evaluation 439
methods used.

Unified theory
To infer the effects of a whole from its parts might cause a theory to suffer from a fallacy
of composition (Rowe, 1962; Broyles, 1975). That a theory is true in explaining parts of
a phenomenon does not mean that it will be true in explaining the phenomenon as a
whole. Strategic management emphasizes an understanding of the overall impact on the
survival and growth of organizations. Just to tell the stories of the parts of organizations
is very likely to be misleading. That is to say, strategic management needs unified
theories that connect different theories explaining different parts of an organization to
explain the organizations’ survival and growth as a whole. Therefore, building a unified
strategic management theory must be one of most important goals of SMR.
Scholars have been trying to build unified theories in many research fields, such as
physics (Escultura, 2008), psychology (Henriques, 2003) and marketing (Kulviwat et al.,
2007). Logically, if a phenomenon can be explained by several different theories at
different aspects or levels, the theories must be linked in some way. By the same token,
if there are no linkages between such theories, it is impossible that the theories are linked
together to explain the same phenomenon. In other words, if there is no linkage among
the theories explaining the same phenomenon at different levels and/or aspects, then the
research must have gaps, i.e. the theories have been used wrongly or the linkages among
the theories have not been discovered. For example, in physics, electricity and
magnetism were once seen as two simultaneous phenomena, or as a symbiosis of two
phenomena explained by different theories. Later, they were proved to be two aspects of
an identical phenomenon known as electromagneticism that can be explained by one
theory via a set of equations (Bumstead, 1921). Similarly, statistical mechanics have
linked microscopic molecular motion with the macroscopic thermal phenomenon
(Bumstead, 1921). When theories used to explain one phenomenon are not unified, the
theories cannot explain the phenomenon as a whole, and their predictive abilities must
be weak. The process of building a unified theory will fill the theoretical gaps and
improve the theory’s predictive and problem-solving abilities.

The dilemmas in SMR

Vague boundaries
A good theory must have clear boundaries (Bacharach, 1989; Fry and Smith, 1987).
However, the boundary or the scope of strategic management issues is not clear, as
almost all management issues can be categorized as strategic management issues. SMR
should focus on the issues concerning the (long-term) survival and growth of
organizations. Other issues should not be regarded as being in strategic management
fields. In addition, strategic theories’ applicable scopes are usually not specified clearly
(Miller and Tsang, 2011). Despite the recognized importance of identifying causes,
NBRI relatively little attention has been devoted by scholars to considering what causality
6,4 actually means and how knowledge of causes is acquired (Marini and Singer, 1988). In
other words, management research rarely specifies causes and effects precisely enough
(Miller and Tsang, 2011), such as the necessity and sufficiency of specific causality
(Mitroff and Silvers, 2013), and rarely tells us their precise timing (Mitchell and James,
2001), which makes practitioners difficult to adopt SMR theories. Moreover, dependent
440 variables, independent variables and control variables are chosen arbitrarily; the
theories expressed may alert us to causality running in one direction, but neglect direct
or indirect causal relations running the other way (Miller and Tsang, 2011).

Poor applicability
Strategic management theories’ deficiencies of predictive ability make it difficult for
practitioners to use the theories to guide their practice (Rond and Thietart, 2007;
Levinthal, 2011). Therefore, the usefulness of strategic management theories,
particularly the usefulness of the dominant empirical models and empirically
established theories, is increasingly questioned by thoughtful managers and,
ultimately, by society in general (Bettis, 2012). Although many scholars believe that
theoretical application and theoretical research should be separated, if the theories
cannot be applied, the theoretical research must face the most important theoretical gaps
needed to be filled so as to overarch the theories and practices. If they do not, the
theoretical research risks becoming a game of theoretical invention with little
significance beyond entertaining researchers themselves. In fact, strategic management
is an application-oriented research field; i.e., it is incomprehensible if its research results
cannot be implemented.
Low forecast ability. Prediction is the basis upon which theories guide practice, and
better theories must be more predictive (Bacharach, 1989; Fry and Smith, 1987).
However, strategic management theories are usually less predictive than experiential
and probabilistic estimation, not to mention guiding practice.
There are three main approaches in SMR, which are positivism (empiricism),
interpretation and constructivism (Table AI). Empiricism is the mainstream approach
of SMR. As the empirical models rarely reflect the statuses of the organization entirely,
and the measurements of variables are inaccurate, only a handful of people might be
able to use these models in strategic management practice creatively, so it is often
regarded that strategic management theories are useless. Moreover, because the
empirical theories are based on experience or empirical testing, they can only be applied
to repetitive phenomena. Empirical theoretical studies often lag behind practice and are
labeled as “afterthoughts”. The overemphasis on empirical testing even makes some
scholars look for asterisks rather than good theories (Bettis, 2012). For one-time, or rare,
or non-testable phenomena, empiricism is not applicable, not to mention to provide
theories to predict.
An interpretive perspective is based on the assumption that the understanding of
social behavior must include the meaning that social actors give to what they and others
do (Gephart, 2004). The subjective interpretation of the environment seems to reveal the
“law” under complicated conditions. For one phenomenon in similar or different
contexts, an interpretive perspective usually has different explanations leading to
different theories; such theories have small scopes of application and are rarely used to
predict because every context-dependent phenomenon is unique and unrepeatable.
 Constructivism defines truth as community-based and derived from empirical Strategic
data (Nightingale and Cromby, 2002), which emphasizes generating knowledge and management
meaning from an interaction between experiences and constructing mental models
or psychological machinations (Dickins, 2004; Järvensivu and Törnroos, 2010).
There is no evidence that the predictive ability of constructivism theories is better
than empirical ones because most of the limitations of empiricism are applicable to
constructivism. 441
Zhou effect. A very famous ancient story mentioning an armchair strategist, Kuo
Zhao, shows clearly the difficulty of using strategic theory. In ancient China’s Warring
States period in the state of Zhao, there was a famous general’s son known as Kuo Zhao
who was very adept at learning the art of war. Even the famous general had no
advantage over his son when discussing war strategies with him. In 260 BC, Kuo Zhao
was appointed as a commander to direct the Battle of Changping. However, in spite of
his theoretical superiority, Kuo Zhao was unable to use the theories he had learned
practically and was defeated by the state of Qin (Sima, 2000, pp. 743-745). Zhao’s
dilemma also pertains to today’s strategic theories because professors; PhD, EMBA and
MBA students; and practitioners, who have a good command of strategic management
theories, are usually unable to use their theories to overcome real-world strategic
challenges effectively and efficiently. Thus, business schools are resorting to so-called
case discussions to teach their students because they have no applicable theories to
teach.
The effect of Fu and Wu. The effect of Fu and Wu describes how a good strategy that
cannot be proved before implementation is hard to be trusted and accepted, and cannot
result in good results. In 496 BC, Helv, a king of the Wu state in ancient China, attacked
the state of Yue with his soldiers but was defeated and killed. Before his death, King
Helv urged his son, Fuchai, to take revenge. Succeeding to the throne, Fuchai trained his
soldiers for three years, then defeated the soldiers of the Yue state and forced Goujian,
the King of Yue, to surrender in 494 BC. A senior officer of the Wu state, Zixu Wu, had
repeatedly remonstrated with Fuchai to kill Goujian to extinguish any potential trouble
he might cause (a good strategy). Fuchai, the young King of Wu, did not accept Zixu
Ws’u advice. At last, Goujian, the King of Yue, secretly prepared to rebel, and finally
exterminate the Wu state (Sima, 2000, pp. 466-468). This story illustrates that a good
strategy is often not believed and accepted, and might not result in good results when it
is impossible to be tested before its implementation. This dilemma, consulting
companies are often unable to solve; professors often make mistakes in dealing with;
strategic national mistakes often arise (e.g. the USA and Iraq dual lost Second Gulf War
and the US subprime crisis).
A good theory is simple (Courtney and Courtney, 2008; Bettis et al., 2014b), and a
simple theory is easy to implement. However, most strategic management theories are
not simple, but are rather too complicated. I argue that the reasons why theories cannot
be clarified are:
• the researchers cannot specify the boundaries of their theories;
• the variables and their relationships cannot be identified properly; and
• there are no proper theoretical lenses available to penetrate the phenomena to find
the truth.
NBRI Theories are not unique
6,4 One of the main disadvantages of present SMR is that its theory is not unique, and an
identical phenomenon can be explained by different theories that are not distinguishable
in terms of their correctness and effectiveness. In natural sciences, a widely accepted
axiom is that there can be only one true theory explaining any specific phenomenon
(Miller and Tsang, 2011). In the opposite side it is generally accepted by management
442 theorists that identical phenomena can be explained by different theories (Allison, 1971;
Ghoshal, 2005; Miller and Tsang, 2011). If theories are not mutually exclusive, greater
space is opened up for researchers to create original theories that provide novel
explanations (Miller and Tsang, 2011).
There is no strict logic or theory in guiding theories’ building. Thus, the theoretical
deduction process for SMR is arbitrary; theories used and citations in reasoning are at
will; theory-building is adventitious. To make things worse, few scholars have tried to
re-verify other scholars’ assumptions because that kind of academic contribution is hard
to get published. Therefore, improper theoretical reasoning and improper test processes
have no chance of being identified.
As in natural science, strategic management scholars also test competing hypotheses
to determine the relative merits of alternative theories (Losee, 2005). However, the
conclusions drawn from the arbitrary reasoning of the competing hypotheses derived
from different theories fortuitously (Miller and Tsang, 2011) will very likely be a result
of a chance.

Theories are not unified

One indicator measuring if a theory is mature is whether it forms a unified theory which
can explain the phenomenon comprehensively and accurately. Comparatively, a unified
theory can provide a more accurately consistent prediction than fragmented ones can. In
other words, the fragmented theories used to explain identical phenomena at different
levels and aspects cannot provide a full picture of the phenomenon or a consistent
prediction, their predictive power is inevitably low. At present, SMR suffers because:
• theories are fragmented;
• there is no common language in the same research field (Donaldson, 1995; Miller
and Tsang, 2011);
• the organic links in identical phenomena are fragmented as so-called different
issues, and few scholars have tried to integrate the different issues together
(Mintzberg, 1987; Farjourn, 2002; Gavetti and Levinthal, 2004); and
• the theories are often complementary rather than competing (Miller and Tsang,
2011), but the complementary theories are usually not integrated, leaving gaps in
between the theories.

It is argued that the reason why strategic management theories have not yet been
unified is due to limitations in our recognition of how to explore strategic management
issues effectively. Studies in the strategic management field should learn from the
physics community which has integrated electricity and magnetism as
electrodynamics, and astronomical theory and Newtonian theory as the theory of
general relativity.
Imprecise Strategic
Miller and Tsang (2011) have identified many sources of imprecision in management management
theory, including variable definition and measurement, model specification and theory
testing. However, although it might be right that scholars ascribe the measurement and
test difficulties and imprecisions of management theory to the diversity and complexity
of organizations, to personal volition, to self-fulfilling and self-defeating prophecies and
also to investigational interference (Astley and Van de Ven, 1983; Fabian, 2000; Archer, 443
2000; Downward et al., 2002; Searle, 2001; Numagami, 1998; Miller and Tsang, 2011),
these are not good excuses for the imprecision of strategic management theories.
In fact, the so-called accidental and self-change phenomena are generated by factors
that have not been discovered and understood. Cracking accidental phenomena and
simplifying complex phenomena are the main tasks of scientific research (Morrison,
2012). These difficulties are exactly what we should investigate for SMR but have not
done well yet. If every shortcoming is ascribed to the difficulties that are recognized,
what is the significance of scientific research? The reality of the world does not assure
our access (Miller and Tsang, 2011). Scientific research is expected to create and improve
our abilities to access reality, find new research directions and methods and, thus, lead
to a better understanding of the world in which we exist.

The dominant mainstream is too strong

At present, empiricists rule the SMR field; they decide whether a theory or research is
acceptable according to their empirical criterion which is whether a theory has been
tested. Little attention is paid to the limitations of empirical research, so that there are
few radical innovations in strategic management academia.
Although the Strategic Management Journal and some other Journals do publish
alternative articles, there are relatively few outlets for the alternative, so that most
strategic management scholars have to give up their favorite challenging research,
turning to look for asterisks in empirical research.
Verification is one engine to drive progress in theoretical research because,
ordinarily, only verified theories are deemed to be true. However, a series of limitations
in empirical testing diminishes the significance of that research method. Empirical tests
are usually achieved by statistical regression analysis, which cannot identify causal
relationships. Whereas statistical regression analyses can evaluate the predicted
implications of a theory to some degree, they fail to substantiate or refute a theory’s
causal explanation directly, or to rule out alternative explanations (Bettis, 2012). Due to
the excessive emphasis on statistical tests, there even is the speculative phenomenon
that is to look for the asterisks in, no matter if the relationships truly exist or not (Bettis,
2012). Therefore, it is argued that there is a danger that SMR becomes a victim of its own
statistical traps, because so many scholars must admit that their research is useless but
to create.
Scientific criticism, which judges the merits and faults of research and its consequent
results, is an important force for driving scientific progress. If there is no scientific
criticism, social science may not be able to avoid taking off in wrong directions (Scott,
1978). However, at present, few scientific criticisms are made in SMR. Scholars tend to
adopt a “positive test strategy” to examine instances in which a theory is expected to
hold (Klayman and Ha, 1987, p. 211; Miller and Tsang, 2011). A positive test strategy
leads to inflated confidence in a theory’s corroborating evidence and generalizability,
NBRI and discourages exploration of possible alternative explanations (Miller and Tsang,
6,4 2011). SMR tends to disdain two processes central to scientific endeavor systematically,
namely, the replication of previous findings and the publication of negative findings
(Miller and Tsang, 2011). Critical articles are not easily accepted by the mainstream and
have few outlets for dissemination. Publication is a powerful incentive for opportunistic
behavior (Bettis, 2012). With obvious deficiencies in existing research, for SMR to make
444 progress, we need critiques to reflect past research and to find new methods to produce
radical innovations.

The future directions of SMR

There are many difficulties and challenges for SMR to address, but the difficulties and
challenges also indicate the direction in which strategic management scholars should
strive. Addressing these difficulties and challenges, this paper tentatively proposes that
future SMR should primarily be focused on the following aspects.

Good theoretical evaluative criteria

Theoretically evaluative criteria are the batons by which scholars may be directed and
their efforts channeled. Therefore, the establishment of a good theoretically evaluative
system is vital for theoretical research (Sutton and Staw, 1995; Corley and Gioia, 2011).
Ideally speaking, a good theory reduces uncertainty, just as in mathematics, a formula
with clear variables can give a conclusion based on the variable values. Also, a good
theory should be a system in which all parts that are used to explain the phenomenon
have organic links; otherwise, they would not constitute a whole. Moreover, a good
theory should not just be proven by practice, it must also be supported by indirect
evidence, such as being verified systematically. This means that if its corollaries are not
true, the theory will be rejected.
Theoretical research must focus on explanation and understanding, and should also
pay attention to prediction (Bacharach, 1989; Corley and Gioia, 2011). There are two
main types of explanation: causality and influential relationships. If a causal or
influential relationship cannot be used to predict, then the relationship itself must be
questioned. Without explanation and understanding, there can be no scientific
prediction. A good theory must provide better understanding, sounder interpretation
and more accurate prediction. If theories can only explain phenomena to some degree,
which is not better than competing theories, common sense or simple probabilistic
forecasting, the theoretical research will become a vehicle of entertainment. If a theory
can never be verified, it also does not make sense. Based on the complexity of strategic
management issues, we cannot expect SMR to provide predictions in the way that
astronomic theory predicts eclipses, but SMR should provide theories that are precise
enough to guide practitioners in their strategic management.
Scientific laws refer to causes and effects between certain phenomena and must
always be in effect under specific conditions. The core of a theory is the law; if there is no
law, the result of the research cannot be called a theory (Mumba et al., 2009). A
clarified law must be able to predict, and the mission of theoretical research should be to
reveal laws. To discover scientific laws should be the mission of SMR as well though it
is not widely recognized.
Accurate measurement Strategic
Measurement is the foundation of scientific research. Without accurate measurement, management
there will not be any good research, nor any good theory. Measurement itself is a
scientific research field; much attention should be paid to measurement research, so as to
support SMR. In the physics community, physicists who are distinguished in
measurement can win a Nobel Prize (Karazija and Momkauskait, 2004). However, in the
SMR field, papers on measurement are rarely even accepted for publication. It is high 445
time for a change in that situation.
SMR’s progress depends on the progress in its measurement. In this regard, we have
a long way to go (Nielsen, 2014; Rossi, 2012; Benoit and Foulloy, 2013). There are three
aspects which can improve the measurement in SMR. First, concepts or variables need
to be defined more scientifically and measurably. If the concepts cannot be measured,
then the results of the research need to be questioned. Second, improvements in
measurement need to develop more effective measurement tools, such as new
questionnaires and uuencoding, namely constantly improving the measurement of
scientific concepts through innovative measurement tools. Third, good measurement
needs good standards. SMR needs to standardize its measurement procedures and units
and methods for controlling errors. Only in this way will the results of different research
be comparable, and errors in any research can be identified by repeating the research.

Integrative research
Strategic management scholars have already recognized the need to integrate different
theories (Flippo, 1968), and some scholars have even tried to integrate some theories
(Swanson, 1999; Rajagopalan and Spreitzer, 1997; Barney, 1986). However, previous
efforts can only be described as starting points. There is still a long way to go to achieve
an integrative theory of strategic management (Bettis et al., 2014b).
An integrative theory can contribute to theoretical explanation and prediction:
• integrating different theories that explain strategies at different levels and aspects
will make us find the limitations of different theories;
• help us to understand the relationships among those theories;
• have a full picture of the strategies; and
• elevate the theories’ abilities to explain and predict.

Organizational strategy is focused on the holistic performance of an organization,

particularly its survival and growth. The strategies of organizational functions and
subunits should obey the overall organizational strategies, though those low-level
strategies have different effects. Therefore, a good strategic management theory must
be able to make us understand and guide the organization’s survival and growth
holistically, not to be stop-gap measures. The research on the strategies of
organizational functions and subunits should narrow down, but also should be
connected with each other and be integrated to achieve a holistic strategic management
theory as well, so as to facilitate more comprehensive understanding of organizations’
strategies. Concretely, SMR should identify how to integrate different theories together,
the scope of the integrated theories that can be used, the way to understand strategic
phenomena comprehensively and the advantages and limitations of the integrated
theories presented.
NBRI New methods and logic
6,4 Strategic management issues are usually complicated, dynamic and comprehensive.
Usually, strategic management laws cannot be fully revealed by unique logic and
methodology (Morrison, 2012; Durand and Vaara, 2009). Therefore, it is necessary to
build a system of analytical logic and methods which can be unified and is applicable to
SMR in different levels/fields/aspects. For example, mathematicians use different logic
446 to explain the limited spatial and astronomical phenomena, respectively. Euclidean
geometry, which holds that given a line and a point not on the line, it is possible to draw
exactly one line through the given point parallel to the line, can describe the limited
space in our ordinary lives very succinctly. Bolyai-Lobachevskian geometry, in which
there exist more than one line parallel to a given line through a given point not on the
line, can explain certain spatial phenomena exactly. Riemannian geometry, by which
there exist no lines through the point parallel to the given line, provides the
mathematical base for Albert Einstein’s general theory of relativity, which is widely
accepted as the rule in space (Daniels, 1975; Wren, 1969). The most important nature of
the three geometries is that they are consistent and unified. Learning from mathematics,
we must adopt an open attitude for research logic and methodology, and actively
explore new approaches to explain strategic phenomena, and at the same time, make
efforts to unify the various approaches.
The evolution of organizations is not always linear (Morrison, 2012; Durand and
Vaara, 2009). Super-logic and/or multi-order logic are needed to reflect the non-linear
phenomena. How then may super-logic be developed for strategic management? If our
past empirical research is compared to Euclidean geometry, then non-linear logic is
compared to non-Euclidean geometries, and the non-linear logic is almost untouched at
present.
Another possible direction for SMR is to develop organizational field theory to
describe and explain organizational evolution and its strategic management practice.
Classic field theory describes and explains multiple interactions among multiple
entities, such as the interactions among atoms and electrons in physics. If we imagine
organizations taking the place of atoms and electrons, we might have our strategic
management field theory, though we need to explore the interactions within
organizations in detail. Certainly, strategic management field theory will not be like field
theory in physics (Huggett and Weingard, 1994), and neither will it be like the field
theories in sociology or psychology (Martin, 2003; Burnes and Cooke, 2013). However,
there might be many parallels between strategic management field theory and quantum
field theory; if big molecules are taken to correspond to large organizations, and atoms
are correspondent with medium-sized organizations, electrons, neutrons and protons
might be thought to correspond to different small organizations. All of the entities
interact with each other in a field. However, this interaction is not simple embeddedness
(Gnyawali and Madhavan, 2001), nor is a simple harmonic oscillation (Huggett and
Weingard, 1994), but it must be a complicated interactive evolutionary field, as every
entity in the field has more degrees of freedom than a physical elemental article has.
Although what it will be specifically requires further exploration, one thing that might
be certain is that a strategic management field theory will need the support of new
information technology and/or big data so that the field theory could describe, explain
and predict strategic phenomena more precisely.
 Replaying the history of statistical physics development, to develop macro-statistical Strategic
strategic management theory is imminent. Statistical physics, also known as statistical management
mechanics, is a branch of theoretical physics that develops the macro-phenomenological
results from probabilistic examinations of underlying microscopic systems. By
exploring the statistics of the physical properties of atoms and molecules, statistical
physics has found statistics-based laws of physics and changed the history (Gibbs, 1902;
Bumstead, 1921). Big data generated by modern information technology provide a new 447
platform for SMR and an opportunity for the discovery of new strategic management
laws. Like statistical physics, big-data-based SMR needs to identify the
micro-foundation for big data analysis; needs to redefine and re-develop the
micromanagement variables and management features which are the bases of statistical
analysis; needs to explore new macro- and micro-strategic management variables; needs
to develop new statistical variables, tools and functions, and thereby establish the
bridges between micro- and macro-statistical variables; and discover new strategic
management rules.
Finally, SMR needs to go beyond experience, and particularly needs to find the
scientific predictions beyond experience, so that strategic management will avoid
serious strategic errors and reduce the phenomena of SMR as hindsight. To come up
with scientific predictions beyond experience, SMR needs non-empirical research
paradigms. Not every strategic management issue is testable. For example, if an
historical event were to be replayed, would the successes or errors of the event be bound
to be the same? There can be no definitive answer because history will not be replayed.
However, our empirical SMR may always extrapolate from the experience of past into
the future, mainly based on the assumption that history could be replayed in the future.
It is likely that empirical research cannot solve strategic issues such as the subprime
crisis. Any future subprime crisis will not be like the past subprime crisis, should it
happen. In other words, if something is repeatable, empirical research will be
meaningful with respect to it; if it is not duplicable, empirical research will be
meaningless. Empirical method is one way of verifying theories, so what is the means
for finding new theories? We need progress in empirical logic, and we also need new
scientific logic to make SMR breakthroughs. Of course, it might be a tough job to explore
new logic, as both the discovery processes that resulted in Einsteinian and
Lobachevskian logic were difficult and painful. However, the emergence of a new
scientific logic will shine new light on the research and will be very likely to change the
existing situation, and potentially even change history. Strategic issues are
multilayered; SMR must be multilayered as well. At the level of strategic thinking, we
need a strategic awareness promotion system that enables people to identify strategic
issues accurately and effectively. At the same time, to make SMR more creative and
imaginative, we need open spaces for scientific fantasies, speculations and conjectures
similar to Einstein’s conjectures about black holes and wormholes. At the level of
strategic laws or theories, we expect theoretical paradigms like general relativity to
emerge that might allow us to conduct scientific deduction, measurement and prediction
of phenomena much more accurately.

Division of scientific research

The division of scientific research is a powerful tool to promote scientific research
progress, and the division of SMR is inevitable for it to be able to achieve breakthroughs.
NBRI In the course of management research evolution, scholars gradually specialize in
6,4 marketing, organizational behavior, strategic management and so on, which is really
important for management research’s progress. However, the dominant research model,
which holds that theoretical explorers and theoretical testers are identical, has not
changed. Although publication outlets do not arbitrarily require scholars to test the
theories they propose, only a few scholars can publish their theoretical hypotheses
448 without empirical verification, and few scholars can publish their articles by testing the
hypotheses proposed by other scholars. Even if testing the hypotheses proposed by
other scholars, the test is usually a by-product, or the hypotheses are amended because
theoretical contributions have been overemphasized.
Further progresses in SMR need the division of the theoretical contributors from
theoretical testers. Innovations and breakthroughs in strategic management theory are
arduous tasks and, if scholars do not focus on their theoretical contributions, they might
not be able to produce noteworthy results. Theoretical contributions and theoretical
tests require different skills, expertise and resources. Scholars who are talented in
theoretical contribution might have no resources to test their hypotheses; scholars with
good resources to test hypotheses might have no advantages in hypothesizing.
Therefore, it is overburdening scholars to require them to have good contributions to
theoretical development as well as to theoretical testing. This is why SMR scholars
always emphasize data availability as the premises for their research topic choices,
which causes so many good research topics to be waived because the data are not
available, and many good assumptions cannot be properly tested, and consequently are
rejected by publication outlets. Moreover, if the hypotheses are tested by the same
scholars or teams that propose them, it is not avoidable that the scholars act
opportunistically to protect their theories (Bettis, 2012).
On the one hand, strategic management theoretical research, like theoretical physics,
needs strict abstract analysis of strategic management phenomena to explore or
discover new logic or laws of strategic management. That is, theoretical SMR needs
Einsteinian and Hawking-esque research based on logical reasoning and scientific
conjecture (Karazija and Momkauskait, 2004; Abov, 2006). On the other hand, strategic
management theoretical testing, like experimental physics, is focused on discovering
new phenomena and verifying (new) hypotheses (Sibum, 2004; Karazija and
Momkauskait, 2004; Abov, 2006), which requires professional knowledge and an ability
to improve the measurement and testing techniques continuously.
In physics, both theoretical physicists and experimental physicists can win Nobel
Prizes; in SMR, it is very difficult to publish papers on testing other scholars’ theories,
not to mention to make some scholars to specialize in theoretical testing. Paying less
attention to theoretical testing is a vital flaw of SMR, resulting in the untrustworthiness
of strategic management theoretical testing and the slowness of strategic management
theoretical progress. Verifying strategic management theories is often more difficult
than verifying natural laws, so the division of SMR that make strategic management
theoretical testing an independent research field will help strategic management
scholars to exert their advantages in different research and lessen their opportunistic
behaviors. As the division of theoretical physics from experimental physics has
achieved great physical success, so, we believe, a similar division in SMR will create new
miracle as well.
Theoretical critique and reflection Strategic
SMR needs critical realism to make healthy progress. Critical realism holds to a management
fallibilist epistemology and emphasizes that reality exists independent of its human
conception (Thomsen, 1986; Scott, 1978; Järvensivu and Törnroos, 2010; Miller and
Tsang, 2011). Critical realists believe that there are unobservable events which cause the
observable ones; as such, the social world can be understood only if people understand
the structures that generate such unobservable events (Thomsen, 1986; Scott, 1978; 449
Järvensivu and Törnroos, 2010). Although affirming the possibility of truthful knowing,
critical realists acknowledge that human limitations undermine claims to indubitable or
objective knowledge (Miller and Tsang, 2011). Methodologically, critical research
emphasizes dialogic and dialectical methods (Lincoln and Guba, 2000) as ways to
transcend truths that are taken for granted (Gephart, 2004).
From the perspective of critical realism, SMR could go wrong and needs criticism to
reflect on and prevent potential errors (Thomsen, 1986; Scott, 1978). Criticism weighs a
combination of factors, both for and against any assertion. Its value lies in making us
understand theories more comprehensively and identifying their advantages and
shortcomings from a third standpoint. In fact, without criticism, theoretical research
could not be monitored and alarmed independently and errors and mistakes in
theoretical research would not be detected efficiently.
Good criticism can promote innovation, discover errors and monitor research
progress. However, SMR that is dominated by empiricism has little room for criticism,
which impedes the progress of the research seriously. If this problem is not resolved,
SMR will not be able to progress significantly.

Conclusions and limitations

SMR needs new strategic management theories, particularly needs more accurate and
reliable predictive scientific theories. Now, it is high time to change. Good research need
not necessarily seek to establish causality (Bettis et al., 2014a). However, scientific
research efforts should eventually contribute to discovering and understanding
accurate and reliable causality, because the ultimate goal of scientific research is to find
accurate and reliable causality and improve relevant practical efforts.
Needless to say, in the past decades, SMR has achieved great things, but at the same
time, it has encountered huge difficulties, challenges and opportunities. Addressing
these difficulties, challenges and opportunities, this paper has tentatively proposed six
ways to make a difference:
(1) building good theoretical evaluative criteria;
(2) making measurements accurate;
(3) integrating theories;
(4) exploring new methods and logic;
(5) realizing the division of scientific research; and
(6) criticizing and reflecting on the progress of researches.

Of course, this paper has some limitations too. First, the proposed future directions of
SMR might not be exhaustive. Second, how to achieve in the new directions of SMR
needs to be explored further. Future research might overcome these limitations.
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NBRI Appendix
6,4
Methodology Positivism (empiricism) Interpretive perspective Constructivism

Basic methods Explanation and control
variable: verification
454 and non-falsification
Reasoning logic Verification, deductive,
theory-testing; uncover
facts, compare these to
hypotheses or
proposition
Form of theory Relationship between
variables
Explanation The relationship
between abstract
variables; difficult to
explain complex
phenomena; difficult to
rule out competing
theories; vague borders
Forecasting Difficult to utilize to
predict: necessary but
difficult to specify
boundaries of
application; few
individuals are able to
Table AI. utilize these theories
A comparison of properly
different research
methodsa Source: a
This table is based on Gephart (2004), Järvensivu and Törnroos (2010)
Meaning description and
scenario definition:
understand reality,
construction
Abductive; recover and
understand situated
meanings, systematic
divergences in meanings
‘Law’ in complex
scenarios
The identical
phenomenon has
different interpretations,
multisource theories
The conditions of
applying the theories are
too complex and not
specified, so that it is too
difficult to use them to
predict
Community-based knowledge-creation
through empirical observation
bounded by subjectivity
Abductive; theory-generating and
testing
Structured subjective expression
Based on the interpretation of the
observable, or can be constructed;
subjective boundary
Only emphasizing the role of
subjective experience and
constructible, there are no real
innovatively predictive tools

About the author

Gongmin Bao, PhD, is a Professor at the School of Management, Zhejiang University; Head of the
Strategic Management Team; Deputy Director of the Institute of Organization and Strategy; and
Supervisor in PhD programs of management. Gongmin Bao’s research interest is in strategic
management and innovation management. Gongmin Bao can be contacted at: gbao@zju.edu.cn

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