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Wise before the event: the creation of corporate fulfilment.


Social anthropologists have generated a considerable literature on the way in which ethnic groups organise their history, in order to use it in the definition of their modern (and often rapidly changing) identity: as the modern identity changes, so the history (as perceived, interpreted and remembered) changes as well. General related work on this theme can be found in the monograph produced as a result of the 1987 annual conference of the Association of Social Anthropologists of Britain and the Commonwealth, entitled History and Ethnicity (see Tonkin et al. 1989). It is the argument of this paper that there are interesting corporate equivalents - that in this, as in many other areas, there are useful analogies to be found between ethnic groups and corporations.

We need to borrow a terminology to discuss this problem. Let us say that when we look at the history of an ethnic group (or nation, ethnicity, identity or whatever) there are broadly two perspectives that we can take. These are 1) historical, 2) structural. The lineage of these terms, in the sense in which they are used here, goes back to the ground-breaking developments in linguistics in the second half of the nineteenth century. A brief exploration of the linguistic analogy is necessary. This may seem obscure in a paper about business corporations. It can be justified on two grounds, however: one, it is intellectually necessary for the development of the argument; two, the issues and people involved lead us immediately back, after a lapse of eighty years or so, to some of the most controversial current developments within the social sciences (broadly, those that flaunt abroad under the title of 'post-modernism').

The Linguistic Analogy

The linguistic analogy: the nineteenth century was a period of great development in comparative and historical linguistics. The idea of an 'Indo-european' family of languages, historically related to a single common ancestor language, was first suggested by William Jones in 1786, and received great scholarly elaboration in the ensuing decades. The modern existing languages (French, German, Polish, English, Irish etc.) were linked, through textual historical material, to a hypothetical common ancestor. Systematic differentiation of the languages over time was demonstrated. Works on grammar, etymology and phonology were produced in profusion. Any modern language could be derived, in rule-governed manner, from its ancestor language. The summit of achievement was the theoretically rigorous work of the group of predominantly German linguistics known as the 'Neogrammarians' (or 'Junggrammatiker; see Brugmann and Delbruck 1886-1916, Lockwood 1969, Ardener 1971), in the last decade or so of the nineteenth century. This established a model for the historical study of language which, while it has been refined, has not been superseded. The over-riding concern throughout this work was historical: today's phenomena were generated from yesterday's; the elements of language existing today were derived in systematic ways from the elements of language existing yesterday. Intelligible continuities were the essence of understanding, the prime object of study and theorisation. This perspective dominated not only linguistics, but also, through evolutionism, most other social sciences as well.

A radical alternative to this perspective was first offered in linguistics, in the work of Saussure (1916, 1964). Saussure did not dismiss the historical perspective, but argued that there was an important alternative. The elements of language should be understood in relation to their history, certainly; they should also be understood, however, in their relationship to one another at any particular period. From this perspective, which we can call 'structural' rather than 'historical', a modern language could be studied in its entirety as such, without imperative reference to historical material.

The most readily accessible illustrations of what is at issue here come from etymology and semantics. Von Wartburg (1969) provides many examples, and one from kinship terminology will serve. Latin distinguished lexically between "mother's brother" ('avunculus') and "father's brother" ('patruus'); in modern French these two relatives share a single term (derived from 'avunculus')-'oncle'. An identical pattern exists for analogous female relatives. Historical linguistics had been primarily interested in the phonological, and to a lesser extent semantic, relationship between 'avunculus' and 'oncle'. 'Oncle' in modern French, however, derives its meaning not from its historical relationship to 'avunculus', but rather from its relationship to the words surrounding it in the modern kinship system. 'Oncle' is 'not tante', 'not pete', and so on through the relevant lexicon. 'Oncle' is in a system of relationships, of 'opposition' to other terms, and it is this system which determines the current 'value' (or meaning, Saussure's 'valuer') of the term. The historical relationship to 'avunculus' remains, of course, and there is an interesting discussion to be had concerning when and why the lexical and jural distinction between 'patruus' and 'avunculus' was effaced. Nevertheless, the imperative relationship, from a Saussurean perspective, is to other elements in the contemporary system: 'each linguistic term derives its value from its opposition to all the other terms' (Saussure 1964, p. 88).

This insight also led Saussure to the view that our classification of social reality was 'arbitrary', not given in the world but socially imposed. 'Oncle' derived its meaning not from its inalienable connection to an objective piece of reality ('mother's brother', or 'mother's brother' and 'father's brother'), but to the system of which it was a part: the system could chop reality up as it chose, creating arbitrary distinctions which then assumed social substance in the perceptions of those who lived within them. It is this aspect of Saussure's thought, more than anything else, which has penetrated social anthropology; a full awareness of the implications of arbitrariness in social classification only slowly developed, through the work of some of Saussure's successor linguists, and through the work of Levi-Strauss. The idea has come to be central, however, to many studies of social classification (and 'classification' is given a very broad definition indeed). It is this idea, moreover, which brings us to some of the most immediate late-twentieth century issues in the social sciences, for it is central (often cruelly bowdlerised and misunderstood) to postmodernism.

The National and Ethnic Analogy

Having glanced at the linguistic analogy, we can try to apply it to the understanding of national and ethnic groups. The nineteenth century was an age in which a great deal of scholarship, not only in linguistics but in many other domains, was predominantly historicist; the overriding concern was to interpret the present in relation to the past, to show how the past explained, justified or generated the present. This was the era of Darwinian evolutionism, and the idea of evolutionism spread not just throughout biological thought but through speculation concerning social history as well: societies, nations, races and cultures were considered to be 'evolving', and a great deal of effort went into constructing evolutionary trees (usually with their authors sitting proudly atop; the work of Herbert Spencer is characteristic). This was also an era of nationbuilding, particularly in Europe and the Americas. National histories were constructed which derived the modern nations from ancient origins, from a founding people whose destiny could be traced: this is the historicism of '1066 and all that', of Hengist and Horsa, of 'nos ancetres les Gaulois', and all the other examples. It was the fate of all 'peoples' worthy of the name, within nineteenth century nationalist historicism, to achieve fulfilment in their own self-determining nation-state. As a matter of fact, since there were not enough states to go round, there was a great deal of contention, both literary and military, over these issues (contention which continues, of course, in many areas). Nevertheless, while commentators might disagree over the details, and take violently opposing views on the use to which a particular piece of history should properly be put, there was a complicity in disagreement - all tended to view the historicist framework as appropriate, and argued within its terms.

Biological and social evolutionism in this context were often perceived to be almost the same thing. A 'race' (a biological matter of flesh and blood, after all) was often perceived to be consubstantial and co-terminous with a nation and a language. Historical linguistic scholarship, to which reference has already been made, was in this context part of the very exercise of nation building. Philologists frequently came to assume major cultural and national importance, their works deriving from, and contributing to, national pride and identity (the German and Scandinavian examples are particularly striking, but the phenomenon was widespread; see, for detail of the various cases, the Great Languages series published by Faber and Faber).

From the linguistic example, we have generated an opposition between a 'historical' and a 'structural' perspective. The nationalist scholarship so far described was overwhelmingly 'historical' in outlook. The structural alternative argues, by contrast, that the identity of the modern nations derives not from their history, but from their relationships to one another on the modern chessboard of politics, economics and demographics. These relationships we can all, using the linguistic term, 'oppositions' (cf. Saussure, above): these oppositions were sometimes realised as acts of metaphorical identity construction, using binary pairs of virtues and vices; they were sometimes realised as violence. From this structural perspective, history no longer determines the modern situation; rather, the modern situation uses history in pursuit of its contemporary claims, selecting here and there, highlighting one thing and suppressing another. If a modern nation wished to annex another, or wished to secede from a greater unit, then there was always material within the store of nationalist genealogy which would allow this to be justified and rationalised. It was not so much that the past created the present - rather, it was the present that created the past.

Examples abound, both from dominant historiographies such as were generated by Nazi Germany, Soviet Russia and the European imperial powers, and from suppressed and marginal historiographies (see Tonkin et al. 1989, Chapman 1992, Gellner 1983, the Walt Disney version of 'Pocahontas' has provided a recent telling indication of the kinds of distortion which are available).

One of the most widely-known anthropological monographs, Evans-Pritchard's The Nuer (1941), provides a model for this problem. Nuer society, as studied by Evans-Pritchard in the late 1930s, was made up of clans and lineages. These intermarried, fueded, and took careful note of their genealogies. The genealogies, in such a situation, had long been assumed to be objective - to represent, that is, a genuine biological lineage of procreation (much as the nineteenth century nation was the ancient race expanded into its modern territories, carrying continuity of blood). Evans-Pritchard showed, however, that the genealogies were not objective, but rather were subject to constant retrospective manipulation, as new political and dynastic issues arose. If a clan wished to secede from an alliance, to make new friends, or to justify hostilities, it rewrote its genealogy.

So too with a nation, and with subordinate groups related to this - ethnicities, identities and the like. Within semantics and etymology, the popular and folk view is commonly historical and historicist; if a non-linguist is asked why a word means what it means, then some attempt at folk-etymology is likely: scholarly amateurs are likely to consult a dictionary to find out what a word used to mean, in order to find out what it really should (correctly) mean today. The historical perspective is valued, that is, over the structural perspective. The structural perspective, if explained, either seems difficult to grasp, or seems to put meaning altogether too much at risk, rendering it insecure and insubstantial. So, too, in the interpretation of national identities. The scholarly amateur, looking for an explanation of Englishness, will look to Roman Britain and the Anglo-Saxon invasions, to Hastings, Agincourt and Trafalgar. The idea that 'Englishness' might be subject to continual small-scale revision with every change of international context would not be welcome, seeming as it does to replace ancient securities with ephemera and uncertainty.

During a period of nation-building (and we might remember that most nations in the world are in such a period, one way and another), a historical perspective accords very well with the project. A historical perspective anchors and justifies contemporary action; it legitimates new claims through old ones, builds modern glory on ancient glory. Within a period of nation-building, argument from a structural perspective can seem inappropriately sceptical, even treacherous. It is not surprising that structural arguments in this area are far less well-developed than historical arguments. In Europe, however, where the nation-state has its longest history and its most deeply embedded examples, there are intellectual strata where the structural argument has been explored. Several circumstances have permitted or required this.

Firstly, some of the nation-states of Europe are old and well-established. This is true for the U.K. (or at least for its centre, England); it is true to a lesser degree for (for example) France, Denmark, Holland. These countries are not only old and well-established; they are also prosperous. In these circumstances, the urgency of the nation-building commitment is lost. Questioning and scepticism become possible, even desirable.

Secondly, Europe has been through two traumatic and destructive wars (commonly dated 1914-18 and 1939-45, although the dates could be variously extended to incorporate the experience of different countries) which can plausibly be blamed upon the nationalist ideology generated by the nation-state. Europe is currently witnessing a brutal war in the Balkans in which the Second World War and the Cold War are playing out their joint consequences, with nationalism again a driving force. In this context, questioning of nationalism and its works became a virtuous and humane, rather than a treacherous or unpatriotic, activity (at least for observers of the conflict, if not necessarily for the participants). There has been an efflorescence of activity, in which histories and their associated identities are rendered mythical, oppressive and contingent.

Thirdly, many nations in Europe have been struggling to assimilate large numbers of immigrants from one-time colonies. The traditional historographies of identity have no way of including these immigrants (although Senegalese children in France have notoriously been taught that 'their ancestors were Gauls'). One way of attempting to get round this problem has been to question the legitimacy of the historical traditions of belonging of the receiving community.

The structural approach, as characterised here, has an apparently sceptical and debunking edge to it. It seems to make history a mere nothing, no longer dependable or real. In this, it is analogous to the structural approach in linguistics, where 'arbitrariness' is often perceived as an attack upon security of meaning and understanding. Ardener has discussed this, in what is probably the most sophisticated rendition to data (1989 a). He begins from the chess analogy. In a game of chess, one can approach the board at any stage of the game, and understand it. One does not need to know how the board came to be as it is. One can reconstruct many different possible 'histories' for the current state. Only one of these is 'true'; all might as well be, if one was not there to watch. This (and the chess analogy comes directly from Saussure) is the extreme existential statement of the contingency of historical reconstruction. Ardener says:

in a sense, all baselines of history are conceptually in this situation: real histories are, in the absence of total documentation (what would total documentation be like?), rearranged by changes in the infinite sequence of successive presents, producing, as with the chess puzzle, histories that did not happen (Ardener 1989a, p. 22-23).

He goes on:

Where is the real world among these possible worlds? Is it worth asking this question? Some have seemed happy enough to do without it - hence the extreme idealist tendencies of many approaches that have otherwise been ready to undertake the specification of the cognitive aspects of human social life. The approaches loosely seen as structuralist were ultimately subject to this criticism. In their strong form they are totally nihilistic in their contemplation of the question of reality. Nevertheless, in a 'post-structuralist' world we can attempt to unpack this anomaly in structural analysis, for its nihilism is technically most evident in the matter of history. In the structuralist frame, history is subject to the same structuring as other narrative, and is ultimately reducible to text (Ardener 1989 a, p. 23).

Ardener advances upon this structuralist nihilism, in a series of arguments whose implications have not yet been realised even in the context of social anthropology. They are cited here not because this paper fully illustrates the issues, but because this paper represents an attempt to begin applying these ideas to the corporate context. This paper alone will not be the end of the story. Ardener looks at the possibility of 'structural' analyses of history:

Let us suppose that such analyses are possible on 'historical' narrative, and there is plenty of evidence that they are, how could they come about?

1) For oral history, 'traditional' history, or the like, we may simply argue that the memory of events has been totally restructured. They have been turned into narrative, and obey the structuring processes of narrative. In effect this is the position taken about the majority of texts that tell a story about the past - before the advent of 'professional' history, or alongside it. It is the uncomplicated structuralist position.

2) A second approach would be to admit the aforementioned, but to propose instead that sometimes events arrange themselves, and individuals fall into relationships that have resemblances to the structure of more mythological narrative [. . .]. This is, however, only another way of conceding in advance that structuralist patterns are coincidences in 'real' history - which does not help the structuralist analysis of any text, which someone, somewhere, is prepared to declare historical. Furthermore, when we are dealing with oral or traditional statements we still cannot separate, by inspection, any fortuitous stretches of structuralized history from the hypothesized total restructuring or 'mythologizing' that is expected to mark a piece of traditional text in any case, and which was after all the original point of structural analysis.

3) So we would be better placed to argue alternatively that structural oppositions are built into history as it happens. There are, indeed, plenty of grounds for saying that the 'memory' of history begins when it is registered. It is encoded 'structurally' as it occurs. The structuring, by this view, is actually part of the 'registration' of events (Ardener 1978). Then we can say that since not all events do survive, but only 'memorable' or 'significant' events (Ardener 1987), the structural processes are not necessarily retrospectively imposed, but are synchronic - all part of the very nature of event-registration [. . .].

Retrospective restructuring simply continues the process, since each restructured event is freshly objectivized and there could be an infinite sequence of rememorizations.

4) Finally, we may go further and say that the relations between persons, and their mutual definitions, actually embody 'structuralist' processes. The relations between parent and child, between lineages, between affines, are self-defining relations of symmetry and opposition [. . .]. The important point is that event-specification begins in one important aspect, in the structuring of relations between persons.

So far in the language of 'structure' I have elicited four levels, and a fifth by implication, which I will summarize not in the order of unpacking but in reverse order:

a) Structures of personal relations, or structures inherent in the mutual self-definition of persons.

b) Structures by which relationships are registered or perceived ('events').

c) Structures through which registered events are remembered.

d) Structures 'imposed' on events, retrospectively (restructuring).

e) Structures of text. This is, for our historical purposes, the implicit fifth level, which is critical for our discussion; for narratives can be structured de novo in. the absence of all the preceding levels. Mythologies, pseudo-histories, are precisely the core materials which originally lent themselves to structural analysis and which are notionally without history at all.

[. . .] if we have no historical documentation, only a narrative, the levels are obliterated and structuralist analysis cannot 'recover' them. All resemble level (e).

There is an empirical and theoretical agenda arising from Ardener's arguments, and work on this agenda has only begun (see, however, Hastrup 1985, 1990, Chapman 1992, Ardener 1987). The potential arbitrariness of historical reconstructions, in relation to 'what really happened', has a close conceptual relationship to the arbitrariness of unit categories, in their relationship to 'reality'. The idea of arbitrary classification and categorisation, socially determined rather than 'reality' determined, has become more or less naturalised within social anthropology; it has, however, been only fitfully and partially realised within business studies. We have, for this reason, preceded this paper with a short statement of the problem of unit categories (Buckley and Chapman 1994). Given the novelty of the considerations raised in this paper, it is perhaps inevitable that many aspects will seem under-discussed; we acknowledge that a great deal remains to be done, both in further exposition of the theoretical aspects of the problem, and in application of the ideas to detailed empirical material.

In order to take the extreme theoretical case, Ardener deals with a social entity which has no documented history at all. This was, we might remember, just the kind of society which social anthropologists long imagined it to be their vocation to study; Radcliffe-Brown had gone so far as to make this definitional - 'in the primitive societies that are studied by social anthropology there are no historical records' (Radcliffer-Brown 1968, p. 3). This absence of historical record was often construed, by anthropologists, as indicative of long-term stability since the stone-age (rather as if the static state of a chess-board between moves were taken as evidence that no moves had ever happened, or ever would). The functionalist and structural-functionalist idioms of social analysis, where all social institutions had the function of contributing to the stability of the whole, encouraged this perception. We might note that this is a real-world case in which complex historical realities were entirely erased, from the baseline of the present, in the perception of an academic body of intelligent people (social anthropologists between about 1920 and 1960) - an arbitrary construction of history indeed! The assumption (or illusion) of changelessness was protected even as the erstwhile primitive societies entered into world economics and politics: changelessness remained their intrinsic pre-contact condition, while change was something that was forced upon them by the differently conditioned societies that had created the modern world. Levi-Strauss (1961) coined the terms 'cold' and 'hot' societies to distinguish between these. The opposition became increasingly untenable, however, and in 1987 Edmund Leach, long a critic of the idea, finally laid it to rest (Leach 1989).

The Corporate Analogy

We can now move, at last, into the corporate realm. This might seem long delayed, given the title of the paper. Nevertheless, this is not a theoretical area which allows one to jump straight in, careless of precedent. The arguments from social anthropology have great potential, and they need to be detailed and understood; there can be no short cut. In this paper, we have left ourselves little space for fully worked out applications of these ideas to corporate analysis, although some indication of the possibilities and problems can be given. The theoretical agenda is not only for the here and now, but for the future. When the issues are difficult and interdisciplinary, an approach of this kind, laborious though it is, seems to be unavoidable.

Before we begin on the enterprise of exploring the structuring possibilities adumbrated by Ardener, we need to make a first step - to argue that corporate history is indeed, in some important sense, arbitrary and relative. If this were not so, then there would be no problem to solve; if objective histories were available, from fully documented pasts, both we and the managers of the companies in question could consult them, and be sure. Ardener's argument, as we have noted, took for illustrative purposes the theoretical extreme of a society which had no documentation. Corporations are not, for the most part, like this; they are amply, although always of course partially, documented. It will be noted, however, that all the possibilities which Ardener describes are available, indeed inevitable, in documented situations. Full documentation is not only empirically unavailable, it is also perhaps logically impossible. We are, when looking at corporate histories, in a permanent state of partial documentation. Structuring processes, simultaneous and retrospective, thus always have a broad field for operation outside the documented areas; even within the documented areas, however, there is plenty of scope for creative forgetting - folders are lost, documents filed and ignored, decisions reinterpreted, while individual memories retire, leave or die. History is selected from to serve the needs of the present. In the corporate context, there can be little doubt of the importance of this. As contingent, unplanned and unpredictable histories unfold, the past is continually restructured in order to make it intelligibly generative of the present. This restructuring can occur entirely in memory, irrespectively of documentation; what use are documents if nobody remembers where they are, if nobody remembers what they were supposed to mean, if somebody is hiding half of them, if nobody has time to look at them?

Retrospective restructuring processes occur at all levels of an organisation, from the day to day lived experience of an individual, through to the construction of corporate history on the grandest scale. All the levels merit separate discussion and ethnographic illustration, and there is only space here for a suggestion of the possibilities.

The authors of this paper have been engaged in a research project in which a small number of companies, in the pharmaceutical and scientific instruments sectors, have been studied (through repeated in-depth unstructured interviews) over time. We have found, in looking at the companies within our sample, that their existential status, as objects in history, is often problematic. As soon as one begins to look back through the history of some of the companies involved (either through interviews or the study of documents), an arbitrariness appears concerning where, precisely, the relevant history should be pursued. Should we pursue a corporate name (the commonest ploy), or a production site, or a majority owner, or an individual manager? Should we pursue the history of the capital, as defined through its ownership, or as defined by its nationality? Should we pursue the history of an activity (and what counts as the same activity, in the whirl of social and technological change?). These different choices rapidly diverge, as one pushes back, into a multitude of possible lineages (and the area available for modern reconstruction of the past is correspondingly large). One manager, whom we interviewed on several occasions over the space of about two years, was working for a different company with a different strategic aim every time we saw him, without his ever moving from his office. This is only an extreme example of a common feature of our interviews.

The lineage of the House of Windsor, and of Queen Elizabeth II, is often drawn up to show direct descent from the 9th century kings of the West Saxons, particularly Alfred the Great and Egbert. This blood lineage is a real one, and represents, we might say, the official corporate history of the House of Windsor. It is easy to forget that there are literally millions of other genealogies tying the same modern royal house to the 9th century, leading back into greater or lesser empirical obscurity, through lines variously disgraced, humble, forgotten, foreign, and so on. It is also easy to forget that probably nearly all of the English are directly descended from one or other or several of its 9th century monarchs. Just suppose, for the sake of the argument, that everybody in 9th century Wessex had the strategic ambition of seeing one of their descendents Queen in London in the year 1996. In a real empirical sense, probably many or most of them succeeded. Nevertheless, history tells us, with an unequivocal voice, that the relevant corporate history leads to Alfred, and that his was, so to speak, the successful strategic vision. In looking at corporate histories, as they are remembered and understood, we confront very similar phenomena. No company is capable of holding in memory the vast range of 'real' history; selection is continually being made. Typically, some combination of continuity of name, of capital ownership (particularly in the case of family companies), and of activity, is presented and understood as providing the relevant historical lineage. Managers will take the researcher down this, when they recount the history of the company. Their own experience may be in other companies that they have previously worked in, of course, and this aspect of their history may well be told and invoked, for comparative purposes. As researchers within the academic conventions of international business study, we typically hold the company to be irreducible as an object of curiosity, and in that sense we too collude in the everyday act of corporate historical reconstruction; we may be interested in the manager's experience in other companies, but we are not obliged to regard it as central; we do not immediately go to the other companies involved, to study them in depth as well; it would be empirically impossible to do so, from a purely practical point of view (and the analogy with genealogical research is again a close one). A manager moving from one company to another, acquires in a sense a new history, a new genealogy, and part of his or her job is to learn this. The entire corporation, however, can acquire new histories, as takeovers, mergers and divestitures change the contemporary structural configuration. These new histories can sometimes require radical learning, radical forgetting. We hear much of the 'learning' organisation; we should bear in mind that organisations are also institutions for 'forgetting', and that this forgetting may itself be structured.

In the last decade or so, we have seen a major change of corporate mind about the need to focus on 'core activities'. In the 1970s and for much of the 1980s, the talk was of diversification, of synergies, and so on. These ideas were invested in, in both a conceptual and a financial sense, by several of the companies that we have studied. One or two could still be said to be in this phase. Others have talked their way out of it entirely, in accord with the 1990s fashion for core business and divestiture. This represents a major strategic and intellectual turn-around. The managers involved in the earlier period invested a great deal of time and money in synergy and diversification; they paid consultants large fees for advice, and this was what the consultants told them to do; it was the right thing to do, as they all told themselves and one another. How to deal with this, with any consistency, when the fashions change? One way is to forget.

A similar problem confronts the senior management of a company that is the target of a contested take-over. Before the takeover, statements are made about corporate activity and strategy which include phrases like 'we will never do x . . .'. After the takeover, when 'x' becomes a major part of corporate activity, a restructuring of memory is required, so that past statements which conflict with modern realities can be effaced. In many cases, the actions of a company that has taken over another company, particularly in contested situations, look very like explicit acts of memory and identity destruction, as the old management of the taken-over company is dispersed, disempowered, or fired. Memory destruction of this kind is familiar enough in international conflict (there is a multitude of examples; for a particularly pointed contemporary example, look at the activities of China in Tibet); the corporate equivalents are less violent, but their intention and outcome bear some resemblance.

All these issues have a bearing on our assessment and understanding of the success of corporate policy. The past is always sufficiently complex to generate a thousand potential histories; it is rich in interpretive possibilities. A manager contemplating success in the present can usually look to the past and find there some prescience which led to this success; random events can be made to seem planned, good luck can be restrospectively cast as strategic thinking. We have already referred to the concept of 'core business', as sustained by procedures of this kind (Buckley and Chapman 1994). The past can be reconstructed to gather success to oneself, and to externalise failure as the result of unexpected contingencies, or the failure of other people, other departments. The literature of strategic management is rich in tautological procedures which allow this kind of definitional success.

The corporate histories that we commonly encounter, while interviewing managers, are largely histories of success. They are histories of continuity (often constructed through real discontinuities of a major kind); continuity implies survival, and survival can usually be construed as success. We have argued that any modern corporate situation has a multitude of potential genealogies, many of which are stories of discontinuity and failure; these are not pursued, not remembered, not realised, not recounted. In this sense, we encounter a sustained 'survivor-bias', in our research into thinking about corporate success. 'Survivor bias' is best known as a problem in large statistical studies. It is a problem in qualitative research as well. We might argue, however, that it is not simply a problem, which research should try to avoid or sidestep; it is, rather, a constitutive feature of corporate life, and should be researched as such. 'Strategy', in what might be called the 'glamour-consultancy' sense, is typically considered to be a plan made in the present, for future action and future success. Thinking about strategy, however, is always necessarily informed by an analysis of what has happened in the past. From the perspective of this paper, we have the picture of a manager, with current success on his hands, looking back to the past to find the moment when he made the well-judged strategic decision which led to this success. This well-judged strategic decision may well be a historical fiction, or at least an arbitrary selection from a welter of decisions which were, in the previous period, conceptually analogous and of equal importance, and wrong. The retrospective structuring, however, allows the sustained creation of the illusion that the future is predictable. This gives to strategic thinking in the present a conceptual solidity that is real enough, in perceptual terms, but built of shadows and mirrors. If we are right about the importance of retrospective restructuring, then this has major implications for our thinking about 'strategy' in general.

We have already made analogous points about the managerial ability to predict and plan transaction costs in intercorporate relationships (see Buckley and Chapman 1995). Transaction cost economics, in one of its guises, judges corporate success as being the result of the optimisation of transaction cost phenomena. How are we to allow such judgement to be made, however, if the corporate histories which confront us are reconstructions, one of whose qualities is precisely that they generate success, retrospectively, from the past?

We have referred to the fervour of nation-building. In a sense, all companies are always in fervent nation-building (or company-building) mode. Reflective scepticism is not encouraged, both on patriotic grounds, and on grounds of time - managers are not paid to be historicans. There are commonly periods when one historical interpretation of events is abandoned in favour of another (as before and after a takeover, for example), but there is always some kind of commitment to the rhetorical creation of success - real detachment and disinterest are institutionally improbable. Historicist interpretations are, therefore, encouraged, and it is always likely, from the circumstances of their generation, that they will be both naive and self-serving. Structural interpretations, of the kind described above, are less likely to be accepted.

We close with some quotations from the pharmaceutical industry magazine, Scrip. The pharmaceutical industry has been through a period of major upheaval, and some of the companies that we have researched have been seriously affected by this. In general, the industry has been moving away from its origins in the chemical industry, and towards alliance with health care service providers. Different companies are at very different phases of this activity, however, and there are many strategic cross-currents, which sometimes seem to carry apparently similar companies in very different directions. Dr. Philip Brown makes some telling comments on this, saying:

These days, I find it very interesting to ask senior executives in pharmaceutical companies whether they understand the rationale for the various mergers and acquisitions that have been taking place in the industry over the past few months. In most cases the answer is no.

Why did Lilly buy PCS for US $4 billion and why did Merck start the ball rolling by buying Medco for US $ 6.7 billion? Most senior executives either claim to be surprised and baffled, or can offer only very incomplete answers. In considering the failure of senior management to understand the rationale behind the current spate of mergers, acquisitions and diversifications, I am reminded of a study undertaken almost fifteen years ago by the late Paul de Haen, founder of the first tracking service of drugs in R & D, in which he attempted to monitor the growth of ten leading pharmaceutical companies over a ten-year period.

He found only one company at that time, I believe it was Upjohn, that he could monitor accurately over the decade in question. All the other companies had changed so much, through acquisition, divestiture, diversification and the like, that at the end of ten years they bore little or no resemblance to the company that had existed ten years before. Importantly, this meant that the actual performance of a business and those who managed it could not be tracked and evaluated with any degree of accuracy or certainty.

One executive, complaining of the pressure from outside the company to do something to offset a pending fall in revenues, said that they were considering a merger to obscure the situation (Brown 1994).

In similar vein:

So why do they merge? The answer has less to do with creation of shareholder value than with corporate egoes, the press, consultants, and fee-driven investment bankers. My prediction therefore is that the shareholder value created by the recent spate of mergers will be hard to measure, mostly negative, or non-existent. The money made will be on the sell-side, as ill-advised buyers overpay. But it won't matter because by the time anyone has enough data to do a conclusive retrospective analysis, those responsible will be long gone and the world will have moved on to other issues (Hovde 1994).

These are rhetorical statements, perhaps, even aphoristic. Nevertheless, they are solidly based in the reality of the industry. They give flesh, quotable and in the public domain, to some of the general issues which have arisen from our own interview data, and which we have discussed in this paper. Detailed empirical examples, of specific cases, are the next step.


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Peter J. Buckley, Professor of International Business and Director of Centre for International Business, School of Business and Economic Studies, The University of Leeds, Leeds, U.K.

Malcolm Chapman, Lecturer in International Business, Centre for International Business, School of Business and Economic Studies, The University of Leeds, Leeds, U.K.
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Title Annotation:International Business Theory: The Nature of the Firm and the Role of Management
Author:Buckley, Peter J.; Chapman, Malcolm
Publication:Management International Review
Date:Jan 1, 1996
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