Theoretical contribution

The aim of this dissertation is to make a contribution to the current understanding of strategic learning as a source of competitive advantage by answering the fol-lowing main research question: What is the role of strategic learning in a firm’s success? This question is approached from different perspectives in five articles which each make distinct contributions and have their own research questions.

The first article seeks to answer the question: What are the components reflecting strategic learning and how can strategic learning be measured? This research question is motivated by the prevailing lack of clarity around the strategic learn-ing concept. The prior literature also lacked a multidimensional measurement tool that could be used to assess such higher-order learning. The main contribution of this article is the identification of the four interrelated sub-processes of strategic learning. These are knowledge creation, dissemination, interpretation and imple-mentation. Obtaining this kind of clarity on the sub-processes is critical for under-standing and defining the concept of strategic learning. Compared to previous studies that have often concentrated on strategic learning from mistakes (e.g., Anderson et al. 2009; Covin et al. 2006; Green et al. 2008; Mueller et al. 2012), this study opens up the concept to other broader sources of knowledge. The se-cond contribution is the development and validation of an instrument to measure these four distinct sub-processes of strategic learning. The developed strategic learning instrument was built on the body of knowledge in organizational learning and strategy and has undergone rigorous methodological validation. Consequent-ly, it provides a tool that can be used to evaluate and manage strategic learning in both research and practice. The results of Article 1 have important methodologi-cal implications as well. By applying the methods such as content validity index (Polit et al. 2007) and the item-sorting process (Hinkin 1995) that are well estab-lished in other fields but rarely used in organizational learning and management studies, the study highlights the usefulness of these methods in the rigorous measurement development process. This article is important to the dissertation because it paves the way for the four subsequent studies that utilize the developed

measure to shed light on the role of strategic learning for firm performance. The paper is published in The Learning Organization.

The second article builds on two important research questions: 1.) Does strategic learning mediate the relationships between exploration strategy, exploitation strategy, and a firm’s profit performance? and, 2.) Does a firm’s exploitation strategy moderate the exploration-strategic learning relationship? The empirical findings of this study confirmed that in order to gain performance benefits from exploration and exploitation strategies firms need to learn strategically. Strategic learning functions as a knowledge integration mechanism that enables the entire organization to benefit and use exploratory knowledge that is often produced in more specialized tasks. In addition, the present study shows that the strategic learning process spreads and integrates exploitative knowledge in and between organizational sub-units increasing its usefulness and value. The results also re-vealed that exploitation moderates the relationship between exploration strategy and strategic learning. This result provides interesting initial evidence of the lim-its of a firm’s learning capabilities. It also reminds us that although both explora-tion and exploitaexplora-tion strategies are necessary in organizaexplora-tions, they must be care-fully managed, because too high a level of exploitation can exhaust a firm’s capa-bility to learn from explorative behaviors.

Together these results have important implications especially for strategic entre-preneurship literature (e.g., Hitt et al. 2001; Ireland et al. 2003). The study en-hances the current model of strategic entrepreneurship by revealing that strategic learning is an essential part of strategic entrepreneurship and therefore should be firmly integrated into the strategic entrepreneurship domain. The strategic-level learning concept used in the study could potentially be utilized in future attempts to refine and strengthen the strategic entrepreneurship perspective. Furthermore, the basic ambidexterity theorem, the need for simultaneous opportunity-seeking and advantage-seeking behaviors and their inherent complementarity, has re-ceived relatively little critical attention. In fact, Schindehutte and Morris (2009:

243) state that this assumption “under-emphasizes the potential trade-offs be-tween the two in a dynamic environment”. By examining the moderation effect of exploitation on the exploration–strategic learning relationship, this study empiri-cally shows that exploration and exploitation strategies support each other to a certain extent. However, when applied to a very high degree, exploitation starts to diminish the effect of exploration on strategic learning. This finding extends the current discussion on the complementarity of these two strategies as it confirms the existence of what are here termed “exploitation traps”. An exploitation trap—

a situation in which a high level of exploitation starts to diminish the value of learning from exploration—signals that developing strategic learning in

ambidex-trous organizations demands careful management, and that such organizations would benefit from emphasizing exploration a little more than exploitation in their strategic behavior. Thus, the study is among the first that actually details the optimum level of exploration and exploitation. The paper is published in the Stra-tegic Entrepreneurship Journal.

The third article contributes to the entrepreneurship and organizational learning literatures by answering the following questions: What is the relationship between EO, strategic learning, and firm performance and how does firm age and size af-fect those relationships? This study was motivated by the notions that the capabil-ity of organizations to be innovative and change their core features in response to changing environmental conditions decreases as core rigidities and inertia in-crease. These develop when firms grow larger and age (Hannan & Freeman 1984;

Leonard-Barton 1992; Wales et al. 2011). The first contribution of this article stems from the empirical finding that the relationship between EO and strategic learning is more curvilinear for larger and more established companies than for smaller and younger ones. This finding challenges the linearity assumption inher-ent in most studies linking EO to learning (e.g., Anderson et al. 2009; Wang 2008). By demonstrating the context-specific inflection points beyond which EO starts to affect strategic learning, the study provides explanations for why the lev-el of EO needs to be high in established companies targeting strategic change and subsequent performance. In summary, the more general implication for EO and learning literature is that these phenomena involving the component of strategic change are more complex than had been assumed previously. This finding makes a value-added contribution to the EO literature because it accounts for a wide range of inconsistent and apparently paradoxical findings in the EO-learning liter-ature.

The second main finding of this study contributes to the strategic learning litera-ture by evidencing that the performance benefits of strategic learning depend on the maturity of the firm. Larger and older companies benefit from incorporating strategic learning in their organizations whereas strategic renewal might even be harmful for younger and smaller companies. This result helps to reveal undiscov-ered aspects of strategic learning and offers a more critical view of organizational learning; one that is more mindful of the potential of learning for different types of companies. In closing, the results indicate that the organizational context in which EO and learning takes place affects the potential benefits of these process-es. Thus, the study responds directly to Crossan and Berdrow’s (2003: 1104) invi-tation that “Future research may be able to identify different patterns of organiza-tional learning and the contexts in which they are most effective.” At the time of

writing, the paper is in its third review round for the British Journal of Manage-ment.

The fourth article addresses the question: How does strategic planning and strate-gic learning interact to generate profit performance? By shedding light on the interplay between learning and planning the study positions itself at the heart of Mintzberg´s argument that successful strategies are a combination of emergent and planned strategies. The study first provides evidence in support of this notion by revealing that strategic learning positively moderates the relationship between strategic planning and performance. This finding contributes to the strategic plan-ning literature by establishing that the dichotomous debate surrounding planplan-ning and more emergent views of strategy formation is not relevant, and advocating that attention should instead be directed toward their coexistence. The second finding reveals interesting characteristics of this relationship as it reveals that the interaction is, in fact, non-linear; meaning that in high levels of planning the moderating effect of strategic learning becomes negative. This finding indicates that learning capabilities might be limited when stretched. Leavy (1998: 464) warns that “there is a danger that the high level of interest in the notion of learn-ing in the strategy field will lead to an uncritical perspective that all learnlearn-ing is virtuous”. This study contributes to the organizational learning literature by ex-panding on the insufficiency of firms’ learning capabilities. Taken together, the main implication is the notion that increased planning and learning efforts corre-spond to more desirable outcomes up to a point, but after that inflection point, more planning does not lead to additional value for strategic learning and may actually produce less desirable results. This result together with the results from Article 2 and Article 3 provides evidence that the prevailing theoretical perspec-tive that learning is a rather straightforward phenomena and always virtuous is somewhat misleading, as strategic learning might have unanticipated or even un-desired outcomes especially owing to its limited nature. To this end, it is hoped that the somewhat counterintuitive hypotheses that take into account the more complicated nature of learning, will pave the way for a more critical perspective on organizational learning. At the time of writing, the article is in the publishing process.

The last article of this dissertation (Article 5) has implications especially for man-agement practice. The research question: What are the success factors related to strategic learning practices necessary for survival and prosperity in the IT indus-try?, aims to analyze best practices that can be used to develop strategic learning.

The software industry in Finland has recently evidenced the growth of many new promising software companies. These firms have interesting organizational char-acteristics and best practices that funnel them toward strategic learning. By

intro-ducing some of these practices, the article contributes to the practice-based theo-rizing on knowing and learning in organizations by taking the research closer to the point at which action is generated in routine organizational life and knowledge comes to life. This paper will be published in a book entitled, “Strategic Man-agement in Small and Medium Enterprises: Theory and Practice”.

In addition to the implications of the individual articles, the dissertation as a whole provides insights into the scholarly exploration of strategic learning. The primary theoretical implication of this dissertation is the acknowledgement of the important role strategic learning plays in the success of organizations. The re-search illustrates that strategic learning plays a central role in converting explora-tive and entrepreneurial behaviors into successful organizational action. Strategic learning can be understood as an enabling mechanism through which the strategic knowledge generated by entrepreneurial behaviors disseminates through the or-ganization and reaches strategic decision makers empowered to act on that knowledge. In addition to its mediating role, strategic learning has an important moderating role particularly in organizations that rely on formal strategic plan-ning. A second theoretical implication of this work is that there are theoretical and empirical grounds to view strategic learning as a limited resource with restricted applicability. As such, by viewing strategic learning from a critical perspective this dissertation establishes that strategic learning should not be thought of as a homogeneously productive process across all organizations, but instead different contingency factors should always be considered.