Reference no: EM132266891

Explanations of Success and Failure in Management Learning: What Can We Learn From Nokia’s Rise and Fall?

Success and failure stories can be seen as present- day corporate mythology. They are common in the popular and academic management literature and play a central role in the business media. Some companies achieve celebrity status complete with a positive reputation and a halo effect, whereas others are framed as losers. Some managers become heroes to admire and emulate, whereas others be- come objects of blame and stigmatization. Manage- ment books and case studies that have traditionally played a central role in business school teaching can be seen as repositories of these corporate narratives. They are often based on clear-cut distinctions be- tween success and failure (Pfeffer & Fong, 2002; Raelin, 2009); they influence how we learn to make sense of successes and failures and are pivotal in management education and managerial practice.

Management books and case studies that focus on success or failure stories provide ideas that man- agement can theoretically use to renew their own strategic practices (e.g., Alfalla-Luque & Medina- Lo ´pez, 2009). However, critical voices have noted that these publications’ prescriptions may contain major cognitive and methodological biases (Denrell, 2003; McLaren & Mills, 2010). Overall, the literature on the rhetorical and discursive aspects of the presentation of corporate success and failure highlights the political and contested nature of such discourses (e.g., Hegele & Kieser, 2001; Kieser & Nicolai, 2005). “Reading managers” are exposed to a host of explanations for successes and failures (Pfeffer & Sutton, 2006), reflecting the views of cor- porations that seek to control their legacy (Kuhn, 2008; Boje, Rosile, Durant, & Luhman, 2004) and management fashions that make some stories more plausible than others (Abrahamson & Fairchild, 1999).

Learning from the successes and failures of other corporations has its problems. In particular, re- search on social psychology suggests that making sense of performance necessarily involves bias. For example, causal attribution theory predicts that people have a tendency to take credit for successes and to blame either external factors or others for failures (Heider, 1958/2013; Kelley, 1973; Weiner, 1985). Management scholars have also examined and found evidence of such tendencies (Gooding & Kinicki, 1995; Salancik & Meindl, 1984; Vaara, 2002). Although most of the research has focused on self- attributions, it has also examined such tendencies in the media (Mantere, Aula, Schildt, & Vaara, 2013). However, with a few exceptions (Mantere et al., 2013), there is a lack of understanding of how spe- cific parties such as the managers themselves, the media, and researchers differ in their constructions and explanations of success and failure. We also lack understanding of how such framings and at- tributions change over time.

In our work here, we focus on the framing and at- tributions of success and failure in the management literature. Although we draw from the insights of attribution theory and related findings, we use a discursive approach to elucidate important ten- dencies in making sense of success and failure (see Brown, 2000; Mantere et al., 2013; Vaara, 2002). We focus on the framings of success and failure and transitions between the two. We examine how something is labeled a success or failure and how the narrative attributions of success and failure are explained in the accounts of different actors. This allows us to develop an understanding of the variety of ways that specific instances of success and fail- ure are constructed and dispersed through popular management literature and the media.

Our research object is the Finland-based telecom group, Nokia. That company can be seen as a re- velatory case that allows us to examine both the predominant framing and explanations of success related to its rise to become a leading global player in the 1990s and 2000s and its fall—in the narrative sense—in the late 2000s and early 2010s. Our analysis is twofold. First, we study how the managers themselves, the media, and researchers developed explanations for the group’s success. Second, we examine how some of these same actors accounted for the group’s failure in more recent years, what types of narrative attributions were involved, and how the transition between success and failure took place.

Our analysis points to the central role of strategic leadership, organizational capabilities, organiza- tional design, and environmental discourses in the accounts of both success and failure. It reveals a striking black-and-white picture in which the ac- tual framings and narrative attributions differ dra- matically from each other in periods of both success and failure. We propose the use of “metanarrative”as a concept to refer to the overall intertextual to- tality of narratives that jointly constitute a widely spread and institutionalized understanding of the success or failure of a corporation and its explana- tions. We find that such metanarratives can be characterized by cognitive and political discursive tendencies, which provide a problematic basis for managerial learning and education.

THEORETICAL BACKGROUND

Success and Failure Accounts As a Basis of Learning and Education

Stories of successes and failures of well-known companies are at the core of the de facto reading lists of practitioners interested in their own pro- fessional development. Most managers do not, for example, read articles in the Administrative Science Quarterly or books from the Oxford University Press(cf. Kieser & Leiner, 2009). Instead, their independent learning and self-education are based on hetero- geneous materials offered, for example, by the business press (Pfeffer & Sutton, 2006) and popular management books (Furusten, 1999). Moreover, due to the extensive use of cases in management edu- cation, business school students are no less exposed to success and failure stories. However, as some scholars have argued (Denrell, 2003), management books and articles based on individual cases and examples can have a potentially problematic role in management learning. In general, the research literature views the pro- liferation of these success or failure narratives in popular management books, Harvard-style cases, company histories, and other forms of narrative material as either a problem that inhibits effective management and management learning (e.g., Pfeffer & Sutton, 2006; Rosenzweig, 2009), or a sign of the political and contested nature of management discourses (Kieser, 1997). For example, the classic study by Barley and Kunda (1992) reveals how vari- ous ideologies of control coevolve with context and practice. On the other hand, scholars study- ing management trends and popular management books assume that trends arise in a sequential manner (i.e., each new one replacing the previous one; Abrahamson & Fairchild, 1999; Benders & van Veen, 2001). Recent research has viewed managerial discourses as a contested terrain in which many different types of “success” or “failure” narratives compete for attention and influence among practicing managers (Scarbrough & Swan, 2001). In this sense, consumers of these narratives have the freedom to choose from a variety of potential narratives of success and failure.

We are not concerned here about the use or con- sumption of success formulas (i.e., the managers who read management books and articles; cf. Kieser, 1997). Instead, we are interested in the question of who produces these stories and what kind of narrative attributions they reflect. Unfortu- nately, studies on management literature, such as the seminal article by Barley and Kunda (1992), have not been very focused in the question of authorship and instead have concentrated more on the structural determinants of the dominant managerial ideolo- gies. An interesting exception is Furusten (1999), who studies Swedish management scholars from a bio- graphical perspective. In analyzing the work and background of Richard Norman and others, Furusten adopts an institutional perspective that emphasizes the author as a mediator between management texts and the wider institutional environment.

Another noteworthy exception is the nascent re- search on corporate myths. Kuhn (2008), for example, studies the proactive and purposeful manner in which GM participated in the textual construction of its public image. Similarly, Boje and his colleagues (Boje, Rosile, Durant, & Luhman, 2004) study Enron as a multilayered, dramatized story-telling organiza- tion. They use Boje’s (1995) earlier research on Walt Disney’s role as an active participant in the building and manipulation of the Disney Corporation’s legacy (see also Hegele & Kieser, 2001) as a framework to understand discursive dynamics in different contexts. Generally, however, management-learning research has given scant attention to authorship in its discur- sive sense. Thus, we have only scattered knowledge about the extent of authorship in the claims made by management books and articles about successes and failures. In particular, we lack empirical evi- dence and theoretical insights to explain attribu- tional and political tendencies in the discourses of success and failure.

Discursive Construction of Success and Failure

Several strands of research have provided insight into how success and failure are constructed and explained. In particular, attribution theory predicts that people attempt to understand the causes of prior events to make sense of their own performance and to manage the future (Heider, 1958/2013; Kelley, 1973; Weiner, 1985). This involves biased tendencies, such as taking credit for success and blaming exter- nal factors and other actors for failure. For example, research in sports and educational psychology has focused on how athletes and students attribute their successes and failures to different causes and found clear biases (Si, Rethorst, & Willimezik, 1995; Bond, Biddle, & Ntoumanis 2001; Gernigon & Delloye, 2003; Locke, 2004). Such tendencies have also been found in the management literature (Bettman & Weitz, 1983; Salancik & Meindl, 1984; Fiol, 1995; Tsang, 2002). However, these tendencies may not be as clear-cut as the attribution theory would seem to suggest. For example, Mantere et al. (2013) find that attributions to failure may be of various kinds and serve different functions with respect to the emotional process of grief recovery (Shepherd & Cardon, 2009) and the cognitive process of self-justification (Kieser & Leiner, 2009, 2011; Staw, 1981).

Although the bulk of this research has focused on managers’ own attributions, recent research has examined the causal attributions made by external parties. Wagner and Gooding (1997) find that when managers receive equivocal information about their own performance, they tend to associate success with the organization and failure with the environ- ment. However, when they receive a similar type of equivocal information about others’ performance, they tend to associate the positive outcomes with the environment and the negative ones with the orga- nization. Similarly, Haleblian and Rajagopalan (2006) argue that causal attributions by board members regarding the causes of success or failure influenced their decisions to replace the CEO. These authors found that the more independent the board members, the less likely they are to make self- serving attributions in favor of the CEO. External evaluations may also involve causal ambiguity (Lippman & Rumelt, 1982; King, 2007), and informational, cultural, and other situational biases can characterize the sense-making dynamics of external observers (Tsang, 2002). Rindova and her colleagues have extensively studied the effects of firm–constituent interactions on firm reputation (Rindova & Fombrun, 1999; Rindova, Williamson, Petkova, & Sever, 2005; Basdeo, Smith, Grimm, Rindova, & Derfus, 2006; Rindova, Petkova, & Kotha, 2007) and identified the antecedents and consequences of corporate “celebrity status”(Rindova, Pollock, & Hayward, 2006). These authors argue that there may be multiple intertwined, self- serving biases in the media, because the media creates a dramatized reality when reporting on industry change and corporate actions.

Also important, in recent years, scholars have become increasingly interested in the discursive or narrative aspects of success and failure (Brown, 2000; Mantere et al., 2013; Vaara, 2002). For example, Brown (2000) examines how people accused of questionable arms deals addressed these accusa- tions by using self-deception, hypocrisy, and scapegoating. Vaara (2002) studied how managers constructed success and failure in their retrospective narrative accounts of mergers and acquisitions and demonstrated how existing discourses provide a variety of means for sense making. Mantere et al. (2013) examine how managers, owners, employees, and the media made sense of entrepreneurial fail- ure by identifying specific narrative attributions: catharsis, hubris, betrayal, and mechanistic explanations. Although mainstream sociopsychological research on attributions has relied on experiments or surveys to establish cognitive patterns, the dis- cursive approach focuses on the linguistic aspect, which allows examination of how successes or failures are framed and how success or failure can be explained in actors’ narrative accounts. This approach is useful because it enables us to examine not only the constructions of success and failure by focal actors such as managers, but also how other actors, such as experts or the media, make sense of success and failure.

RESEARCH METHOD AND ANALYSIS

To understand how managers and other actors make sense of success or failure, we studied publi- cations that focus on the Nokia Corporation. Nokia provides a revealing case for our analysis for several reasons. First, as a pioneer in mobile telephones that became the global market leader in the late 1990s, Nokia has attracted attention from book authors, academics, historians, business scholars, and others interested in the corporation’s “success formula.” Later, at the end of the 2000s, the corporation faced a crisis that led to a new discussion—this time describing and explaining the company’s fail- ure in and exit from the mobile telephone business. Second, the existence of a large number of publications of both Nokia’s success and failure enabled us to identify a corpus of Nokia-specific literature and to collect the extensive material needed for discursive analysis. Third, Nokia is also an important research topic due to its symbolic position in Finnish society.

QUESTION (PICK AT LEAST ONE) Provide a 2 -3 paragraph answer for the one question :

1. Was Nokia faced with a Wicked Problem or an Expected/Definable Problem (explain).

2. Identify 4 Stakeholders for Nokia ... one from each area on the "grid" of High/Low Interest and Power ... and 1 thing for each Stakeholder

3. Identify any Assumptions or Change Barriers that were present at Nokia as described in this case study. What could have been done to change them to "allow" them to change and not fail