Deregulation pressures firms to abandon political strategies for market ones

Evidence

The period of time covered in our analysis is from 1999 to 2007. Although determining a critical juncture, which triggers phase II of the model presented in Figure 5.1, might not be an easy task in the case of CPA, a number of researchers and practitioners claim that the move of Germany’s capital from Bonn to Berlin in 1999 marked such a critical juncture and that thereafter business-government relations have emerged into a new phase. The historically strong role of business associations in Bonn started to decrease and especially large-scale enterprises took their role in presenting themselves in the political arena of Berlin (Speth, 2006; Streeck et al., 2006). Furthermore, the time span of our study marks a time of deregulation (e.g. infrastructure, telecommunication) and increased competition due to globalization and fading trade barriers. Therefore, one could expect a shift from non-market (CPA) to market orientation (e.g., customer satisfaction) in many industries. If firms did not redirect their strategy and resources towards more customer and market orientation, this could be interpreted as an indicator for a path-dependent development of CPA. Self-reinforcing mechanisms might be at work. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 387

Categorization

• XREF: Connects to the earlier chapters’ theory of critical junctures and self-reinforcing mechanisms in path dependence.
• SEED: Angle: what a firm’s strategy reveals when its environment makes that strategy obsolete — political strategy as an unexamined inheritance.