Strategic management, the theory of the firm, and digitalization: Reintroducing a normative perspective

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Abstract

The theory of the firm, as we know it from the literature, focuses on the boundary question. Recently, the idea of ecosystems, an organizational arrangement that lies somewhere between the firm and the market poles, has been promoted as an adequate response to the ongoing trend of digitalization (Jacobides, Cennamo, & Gawer, 2018). What is missing in the extant literature is an answer to or reflection on the normative question of what role business firms should or could play in modern societies, where major (“grand”) challenges such as climate change, poverty, migration, and rising inequality are seen (George, Howard-Grenville, Joshi, & Tihanyi, 2016). Thus, a core element of the traditional theory of the firm has been neglected, with the consequence that its social relevance is no longer evident. We focus on the strategic management discipline, with an aim to reintroduce the lost normative perspective and to provide a guideline for future theorizing about business firms as well as guidelines for practice. The three cornerstones of our framework are (de-) growth, sustainability, and digitalization. We emphasize the digitalization angle and elaborate on what we call the “common good orientation” of digitalization, using the key terms “internet as a commons”, “open-source”, and “cooperative platforms”.

Keywords: Strategic Management, Grand Challenges, Digitalization, Growth, De-Growth, Sustainability, Theory of the Firm

Authors’ individual contributions: Conceptualization — D.z.K.-A.; Writing — Original Draft — D.z.K.-A. and T.S.; Writing — Review & Editing — D.z.K.-A. and T.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: We express our gratitude to Steffen Lange for allowing us to draw Section 4 of this article on a chapter from the book “Smart Green World. Making Digitalization Work for Sustainability”, co-authored by Steffen Lange and Tilman Santarius.

JEL Classification: M10, M14, L1, L2

Received: 11.03.2021
Accepted: 24.05.2021
Published online: 27.05.2021

How to cite this paper: zu Knyphausen-Aufseß, D., & Santarius, T. (2021). Strategic management, the theory of the firm, and digitalization: Reintroducing a normative perspective. Corporate & Business Strategy Review, 2(1), 41-53. https://doi.org/10.22495/cbsrv2i1art4