Organizations operating in institutionally complex environments

Current studies of institutions are far from limited to neo-institutional theory (Ocasio & Gai, Reference Ocasio and Gai2020). Instead, it has been stated that the institutional logics perspective has contributed to the introduction of a practice-based approach to the study of ‘ongoing institutional variation and change’ (Lounsbury, Steele, Wang, & Toubiana, Reference Lounsbury, Steele, Wang and Toubiana2021, p. 263). Institutional logics comprise societal-level cultural influences on cognition and action and constitute the core components of institutional complexity (Thornton, Jones, & Kury, Reference Thornton, Jones and Kury2005). They delineate the forms of organization and action considered legitimate in a field of activity and can coexist in both cooperative and competitive tension (Cloutier & Langley, Reference Cloutier and Langley2013; Laasch & Pinkse, Reference Laasch and Pinkse2020; Raynard, Reference Raynard2016; Reay & Hinings, Reference Reay and Hinings2009; Zilber, Reference Zilber2011). Recent conceptualizations portray such logics as balanced in different constellations (Goodrick & Reay, Reference Goodrick and Reay2011; Høiland & Klemsdal, Reference Høiland and Klemsdal2022), characterized by different degrees of compatibility and contradiction (Besharov & Smith, Reference Besharov and Smith2014; Smets et al., Reference Smets, Jarzabkowski, Burke and Spee2015), and jurisdictional overlap and settlement (Gümüsay, Smets, & Morris, Reference Gümüsay, Smets and Morris2020; Raynard, Reference Raynard2016). The distinct configurations of institutional complexity inform and impact the strategies of organizations (Besharov & Smith, Reference Besharov and Smith2014; Pache & Santos, Reference Pache and Santos2010), where they may serve as strategic resources (Durand, Szostak, Jourdan, & Thornton, Reference Durand, Szostak, Jourdan, Thornton, Lounsbury and Boxenbaum2013; Laasch & Pinkse, Reference Laasch and Pinkse2020). Granting attention to institutions in strategy research thus contributes to understanding strategic diversity as multiple institutions within a given context leave room for strategic maneuvering of firms (Hung & Whittington, Reference Hung and Whittington2011).

The research has often focused on strategies of responding to institutional complexity as ready-made or rather static solutions chosen at the organizational apex (Smets et al., Reference Smets, Jarzabkowski, Burke and Spee2015). The lion’s share of early research that addressed intraorganizational institutional complexity focused on which elements of multiple logics organizations integrate. Recent research has focused more on uncovering specifically how this is accomplished and by whom (Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, Reference Greenwood, Raynard, Kodeih, Micelotta and Lounsbury2011; Smets et al., Reference Smets, Jarzabkowski, Burke and Spee2015). Thus, a series of practice-near studies addresses how ‘ordinary’ people balance institutional complexity integral to their everyday work (Andersson & Gadolin, Reference Andersson and Gadolin2020; Demers & Gond, Reference Demers and Gond2020; Høiland & Klemsdal, Reference Høiland and Klemsdal2022; Jarzabkowski, Smets, Bednarek, Burke, & Spee, Reference Jarzabkowski, Smets, Bednarek, Burke and Spee2013; Smets et al., Reference Smets, Jarzabkowski, Burke and Spee2015). This paves the way for exploring the character and consequentiality of middle managers’ strategizing for institutional complexity as being socially distributed across an organization.

Strategizing institutional complexity as distributed, situated and emergent practice

Practices with strategic consequentiality can both exist as more macro or societal-wide practices and as microlevel practices that are specific to particular organizational contexts (Burgelman et al., Reference Burgelman, Floyd, Laamanen, Mantere, Vaara and Whittington2018), the latter being the focus of our research. An SAP lens considers the work of strategizing as distributed, socially situated and an emergent activity (Jarzabkowski, Reference Jarzabkowski2005; Jarzabkowski et al., Reference Jarzabkowski, Kavas and Krull2021; Smets, Greenwood, & Lounsbury, Reference Smets, Greenwood, Lounsbury, Golsorkhi, Rouleau, Seidl and Vaara2015). As noted by Jarzabkowski (Reference Jarzabkowski2005), strategy is ‘socially accomplished activity constructed through the actions and interactions of multiple actors’ (p. 7). Vaara and Whittington (Reference Vaara and Whittington2012) further suggest that it comprises ‘the myriad of activities that lead to the creation of organizational strategies. This includes strategizing in the sense of more or less deliberate strategy formulation, (…), and all the other activities that lead to the emergence of organizational strategies, conscious or not’ (p. 299). Engaging SAP inspirations, thus, allows us to consider even quite mundane practices, which are not necessarily considered formal strategy practices, yet which play a role in strategy formation through their consequentiality (Jarzabkowski et al., Reference Jarzabkowski, Kavas and Krull2021). Hence, an SAP lens widens the understanding of what is considered strategic. Organizational participants, then, not only strategize under institutional complexity. They also strategize institutional complexity itself by (re)configuring logic constellations in the dispersed dynamics of organizational strategy formation. The following theoretical conceptualizations orient our investigation of the stated research question.

First, being distributed activity means that strategy formation involves multiple actors’ contributions as a wide organizational activity (Jarzabkowski, Reference Jarzabkowski2005; Jarzabkowski et al., Reference Jarzabkowski, Seidl and Balogun2022; Rouleau & Cloutier, Reference Rouleau and Cloutier2022; Tarakci et al., Reference Tarakci, Heyden, Rouleau, Raes and Floyd2023). Thus, strategizing institutional complexity is not merely in the hands of managers at the top but also local managers, who bring forth but also reformulate strategies (Binder, Reference Binder2007; Birollo et al., Reference Birollo, Rouleau and Teerikangas2023; Birollo & Teerikangas, Reference Birollo and Teerikangas2022; Heyden et al., Reference Heyden, Fourné, Koene, Werkman and Ansari2017). Insights into managers’ balancing of institutional complexity can thereby be widened with recent SAP research demonstrating that strategizing is distributed to also include managers at the middle (Balogun & Rouleau, Reference Balogun, Rouleau, Floyd and Wooldrige2017; Pfister, Jack, & Darwin, Reference Pfister, Jack and Darwin2017; Rouleau, Reference Rouleau2005). They are in a key position to translate logics into action (Olsen & Solstad, Reference Olsen and Solstad2020). Moreover, recent SAP research has suggested that middle managers do not craft strategic responses to institutional complexity in isolation but in ongoing interactions with superiors, peers, and followers (Rouleau et al., Reference Rouleau, Balogun, Floyd, Golsorkhi, Rouleau, Seidl and Vaara2015). It is an ontological premise that strategy thus is a perennially unfinished project (Iszatt-White, Reference Iszatt-White2010). Attention should be directed to the distributed, social accomplishments of strategizing institutional complexity (Jarzabkowski, Kaplan, Seidl, & Whittington, Reference Jarzabkowski, Kaplan, Seidl and Whittington2016; Rouleau & Cloutier, Reference Rouleau and Cloutier2022; Vaara & Whittington, Reference Vaara and Whittington2012). Extending this to the present research, we explore the vertical and lateral dynamics of interactions between middle managers and fellow organizational actors and how this shape distributed, ongoing practices of strategizing of institutional complexity.

Second, strategizing is socially situated in that actors’ strategizing practices are shaped by their situatedness in local social relationships as well as the societal context in which they are embedded, such as, for example, broader institutions (Ericson & Melin, Reference Ericson, Melin, Golsorkhi, Rouleau, Seidl and Vaara2010; Jarzabkowski, Reference Jarzabkowski2005). Relatedly, institutional research connecting individuals to institutional logics has explored the significance of identity (Lok, Reference Lok2010; Toubiana, Reference Toubiana2020) and institutional biography (Bertels & Lawrence, Reference Bertels and Lawrence2016) and how identities of managers have implications for their responses to institutions (Hung & Whittington, Reference Hung and Whittington2011). In the present study, the focus is on the situatedness of middle managers, whose historical and institutionalized status and power relations shape the development of competing practices of strategizing institutional complexity.

Third, SAP scholarship has shown that top-down and bottom-up practices often weave together in ongoing strategy formation (Mirabeau & Maguire, Reference Mirabeau and Maguire2014; Vaara & Whittington, Reference Vaara and Whittington2012). Complicating this further, it has been suggested that managers are inevitably faced with unanticipated emergence, such as when followers and fellow actors counteract or actively reframe intended strategies (Lê & Jarzabkowski, Reference Lê and Jarzabkowski2015). Such unanticipated emergence can involve strategy obstruction, overt/covert confrontation, and critique of strategy, as well as the silent resignation from strategy (Whittle, Mueller, Gilchrist, & Lenney, Reference Whittle, Mueller, Gilchrist and Lenney2016). This is in correspondence with recent institutional research on middle managers having to handle followers’ resistance to novel logics (Kellogg, Reference Kellogg2019; Malhotra et al., Reference Malhotra, Zietsma, Morris and Smets2021). Therefore, we focus on how middle managers, in their strategizing institutional complexity, are faced with everyday struggles and critique from followers and fellow managers.

In summary, there is a need for further empirical research on how strategizing practices dynamically interact and combine in ongoing strategy formation (Burgelman et al., Reference Burgelman, Floyd, Laamanen, Mantere, Vaara and Whittington2018) when facing institutional complexity. We thus combine these conceptual inspirations across SAP and institutional complexity research to analyze how middle managers’ strategizing for institutional complexity occurs through distributed, situated, and emerging practices.

Company strategic response to institutional demands: Incorporating American style

At the time of this research study, Korea was heavily marked by the repercussions of a greater Asian crisis, which resulted in the involvement of financial support and structural reform programs of the IMF. Advancing neoliberal principles, the IMF demanded that Korea opened its financial markets to foreign investment and decentralized the financial sectors of the major conglomerates (Cho, Reference Cho2008). At the same time, Korean chaebols, such as Hyundai, Samsung, and LG, were under heavy pressure to respond to demands of changes in the institutional field up till now governed by logic elements of a strong vertical hierarchy and Confucian emphasis on family-like organizations (Park, Reference Park2004; Rowley & Bae, Reference Rowley and Bae2004). In the aftermath of the Asian economic crisis, the IMF demanded more competitive corporate restructuring and increased flexibility of the labor market (Cho, Reference Cho2008; IMF, 2000). Subsequently, the more typical Korean management practices of seniority-based hierarchies came under institutional demands for change toward more flexible human resource practices. This gave rise to a situation of unsettled field-level prioritization, with jurisdictional overlap and conflicting-yet-compatible, also referred to as, volatile institutional complexity (Raynard, Reference Raynard2016). Thus, Korean companies were exposed to a gradual transition from institutional logics of family-like and social hierarchical organization toward institutional logics of capitalist competition and individual performance, constituting an institutionally complex field (Lee, Reference Lee2003; Park & Kim, Reference Park and Kim2005). Similar logics of family and capitalism have been characterized by Thornton, Ocasio, and Lounsbury (Reference Thornton, Ocasio and Lounsbury2012) drawing on institutional logics on societal and market levels (Alford & Friedland, Reference Alford and Friedland1985; Bhappu, Reference Bhappu2000). Moreover, similar institutional logics are still salient as they have been included in recent studies of institutional and business changes in the Asia Pacific (Chin, Shi, Rowley, & Meng, Reference Chin, Shi, Rowley and Meng2021; Haveman, Joseph-Goteiner, & Li, Reference Haveman, Joseph-Goteiner and Li2023).

The logics were reflected and configured in the ACB Company strategy, being referred to as respectively ‘Korean style’ and ‘American style’ management and organization strategy. These emic terms referred to the organization members perceiving the institutional transition as being of Western influence. Being part of the company’s strategy for gaining legitimacy and survive in the aftermath of the Asian crisis, the two forms of logics were relationally constructed in variable constellations as being in some ways contradicting, in some ways complementary (see also Smets & Jarzabkowski, Reference Smets and Jarzabkowski2013). Inspired by Thornton, Ocasio, and Lounsbury (Reference Thornton, Ocasio and Lounsbury2012) tables of logic characteristics, we provide an overview of the logics and related strategic responses from the top management in ACB in Table 2.

Table 2. Overview of constellations of logics underpinning Korean- and American-style organization in ACB Company

Source: Inspired by Thornton et al. (Reference Thornton, Ocasio and Lounsbury2012).

* See for more detail Table 3.

** See Janelli (Reference Janelli1996).

With regard to the logics underpinning Korean-style form of organization and management, a central aspect of Korean companies had been the seniority-based job-grade system (Bae, Reference Bae1997). This system was based on institutional logics of a Confucian family-like harmonic hierarchy, and, thus, prioritized seniority rather than abilities and performances for specific tasks (Bae & Rowley, Reference Bae and Rowley2002; Chin et al., Reference Chin, Shi, Rowley and Meng2021). Moreover, in accordance with the Korean-style Confucian social system, so-called ‘regular’ employees with permanent contracts were often recruited based on what has been called ‘yongo’, translated to connections related to a shared hometown, school, or family relations (Bae & Rowley, Reference Bae and Rowley2002; Horak, Reference Horak2017; Horak & Taube, Reference Horak and Taube2016; Janelli, Reference Janelli1996). In regard to promotion, such ‘yongo’-based career paths in the organization were rather predictable (Bae, Reference Bae1997; Horak, Reference Horak2017). In ACB Company, ‘yongo’ was exemplified by the company recruiting most ‘regulars’ from the same university.

However, as the institutional logics of Confucian family-like hierarchy was heavily challenged by institutional demands advanced by the IMF, many firms in the Korean organizational field responded by incorporating more flexible employment on short-term contracts (Rowley & Bae, Reference Rowley and Bae2004). Similarly, in ACB Company, there was a growth in temporarily hired employees. This was legitimized by top managers’ reference to becoming a more modern organization where ‘old-time family and friendship-like “Yongo” alliances have been replaced by rational leadership and individual performance’ (top manager).

However, in the ACB Company, it seemed that two employment systems prevailed, where the introduction of flexible, competence-based employment structure was only complementary to the still existing practices of seniority-based hierarchies and hiring of regular employees based on ‘yongo’. For more details on the Korean job-grade system and the new American-style team organization, please see Table 3.

Table 3. Overview of the Korean-style job-grade system and the ACB Company American-style horizontal team organization

Source: Inspired by Bae (Reference Bae1997).

* While being only Fourth grade daeri ‘senior administrative’ due to, for example, a lack of a university education, this Korean-style job-grade position could in some cases be equivalent to the position of team leader in the company’s American-style team organization. This was the case with team leader Kim.

** The Korean-style job-grade position of fourth grade daeri ‘junior administrative’ was still used in the company to distinguish rank among the ‘regular’ employed team members. An example of a ‘junior administrative’ team member was Mr. Hong.

In response to institutional demands for change, the Korean companies also began adopting practices of flatter structures with more employee influence and performance-based evaluation and pay. This again reflected higher salience of capitalist market logics countering the Confucian family-like hierarchical logics (Kim & Park, Reference Kim and Park2003; Oh & Kim, Reference Oh, Kim, Rhee and Chang2002; Rowley & Bae, Reference Rowley and Bae2004). ACB Company followed suit with organizing team structures as part of a strategy integrating individual equity and performance. The company in external and internal strategy communication characterized itself as a modern corporation, which would ensure that ‘every individual staff member can prove his or her capabilities’. A cornerstone of this American-style management was implementing the MBO system for performance appraisal, measuring both managers’ and employees’ individual performance as well as the combined performance of each team and each branch. The official ACB strategy papers expressed that the MBO system should be ‘a system based on performance and expertise; a fair and rational evaluation system’ (internal document). The MBO system was also used for deciding promotions, job-rotations, and gaining bonuses. A top manager from the head office said, ‘It is very effective and very motivating for doing my job and for him to do his job, yes very motivating.’

Nevertheless, ACB Company still wished to sustain logics of Confucian-inspired family-like harmony in the company as expressed in their Korean-style practices. Therefore, in their strategy they still emphasized the family like collectivity, with slogans like ‘ACB company is my life’ and ‘Join the ACB Family’. Also, in the still prevailing company exams for regulars, questions regarding the family-like responsibility for the company were upheld. Yet, they no longer emphasized hierarchical relations but rather ‘hwahap’, translated to horizontal harmony, thus reflecting the transition toward a flatter American-style organization.

Overall, it seemed that despite top leaders’ formal strategy of prioritizing one of two seemingly contradictory logics, they did not entirely replace foundations of former logics. Thus, the company’s strategic response appeared to reflect what has been termed an ‘unsettled’ prioritization of institutional logics (Raynard, Reference Raynard2016). This further left room for local managers’ re-strategizing of complexity as will be outlined in the following.

Middle managers reworking strategies for institutional complexity

In the Suwon branch’s everyday operation, the GM entrusted his three middle managers, Kim, Song, and Park, to ensure that the new American-style strategy for increased performance based on MBO was sustaining the branch’s leading position. However, in doing so, the three middle managers reworked the company strategy by drawing on the institutional complexity to create highly diverse strategies.

The services team leader, Kim, reconfigured the branch strategy by seeking to create MBO results by sustaining some Confucian logic elements of ‘inhwa’ translated to hierarchical harmony. The team leader’s priority of such logic elements seemed to rest on his personal experiences with the up till now Korean-style hierarchy in the company, which a team member emphasized:

This so-called conservatism was being expressed by team leader Kim’s desire for, what in Korean terms is expressed ‘Jeong’, which entails hierarchical responsibilities of ‘sonbae’, superior, taking care of ‘hubae’, subordinate, in return for loyalty and respect. Thus, his re-strategizing of complexity involved creating good MBO results based on ‘Jeong’: The subordinates should do their work according to his commands and in return he would protect and ensure their position in the company. However, team leader Kim’s prioritization of ‘Jeong’ in re-strategizing complexity for the team was in some regard heavily challenged by some of the team members. A regular, ‘yongo’ employee, Song-Nae, directly refused his team leader’s order of taking on the assignment of reclaiming misused cards. This was a difficult and deemed ‘dirty’ piece of work belonging to a temporarily hired employee, who had recently quit his job. As Song-Nae pointed out ‘he [team leader Kim] cannot make me do it since I came in first place in the [company] exam’. This referred to him having obtained the best results in the Korean-style company exams still held annually for regular ‘yongo’ employees. Thereby, team leader Kim’s strategy for obtaining good MBO results through Korean-style management seemed to backfire in the vertical distribution to employees, who, also according to the Korean-style job-position system, outranked team leader Kim. The incident happened during a particularly strained period wherein the service team had been reprimanded for delivering poor MBO results.

When it came to team leader Song’s management of his own marketing team, he strategically leveraged logic elements of the new emphasis on more horizontal structures and individuality. This was in alignment with the ACB strategy of promoting American-style individual performance results and more horizontal relations where each team member should be able to prove their worth. Song for instance made one of the permanently employed team members, Mr. Hong, take care of supervising the team’s assignments. Mr. Hong thus gained more and more responsibility. This was the case when team leader Song, during one of the client meetings with colleagues from the head office, was not present but had instead gone to visit old friends in another branch. Team leader Song argued that he believed each person should do what they did best regardless of formal position:

However, Mr. Hong heavily challenged team leader Song’s leveraging of an American-style horizontal team strategy. At one of the after-work social gatherings (where alcohol let the feelings be more freely expressed), Mr. Hong publicly accused his team leader of not taking good care of the team in accordance with logics of Confucian social and family relations. He openly yelled, ‘You put “bugoerowo” [shame] on us as our team leader not holding up “jeong” [hierarchical responsibility].’

The third team leader Park, managing the sales team, on the one hand, praised the company’s American-style strategy where individual performance and creating good MBO results mattered more than being promoted based on the Korean-style seniority-based job-grade systems. As an example, he did not differentiate between scolding the younger temporary and the older seniority-based regular team members in his efforts to keep the team’s position as the best MBO performing sales team in the company. However, on the other hand, his re-strategizing of institutional complexity also involved a certain emphasis on Confucian-derived logic elements of creating a good family-resembling ‘inhwa’ hierarchical harmony. To him, this involved hosting social gatherings for his team after the numerous forced late-night working hours needed to improve the MBO performance. Team leader Park openly said that the social gatherings were key strategic to create Korean-style family-bonds. He expressed this: ‘My team is the number one team because they also feel pride in that; then they all want to work together, and I encourage that feeling.’ In this way, he managed to develop a combined American–Korean-style compensatory strategy for his team, where the institutional logic of family-resembling harmony was enacted as part of the strategy for keeping the leading team position through high individual performances in accordance with the new American-style company strategy. However, despite the emphasis on harmonious logic elements, Park’s team members expressed doubt that the team leader had the team’s best interests in mind. Rather, they perceived team leader Park as someone advancing his own interest in becoming promoted through the team members’ hard work. A temporarily hired team member explained:

Overall, the findings show how, vertically, the middle managers carried out diverging forms of re-strategizing of the company’s strategic response to institutional complexity. Yet, vertically in relation to their followers, the middle managers were confronted with critique of their re-strategizing as not living up to norms of, for example, taking proper care of subordinates and for reworking strategies to serve own ends. This finding corresponds with understanding strategizing practices as a distributed, social accomplishment, where managers’ strategizing is met by followers’ counter actions (Jarzabkowski et al., Reference Jarzabkowski, Seidl and Balogun2022; MacKay, Chia, & Nair, Reference MacKay, Chia and Nair2021; Rantakari & Vaara, Reference Rantakari, Vaara, Courpasson and Vallas2016; Rouleau & Cloutier, Reference Rouleau and Cloutier2022). Importantly, both middle managers and followers reworked the company strategy based on ‘unsettled’ institutional logics (Raynard, Reference Raynard2016). Below we show that such vertical practices of re-strategizing institutional complexity were further moderated by lateral interactions between middle managers.

Lateral interactions of strategizing with vertical effects on company strategy

The three team leaders strived to create good MBO rankings in accordance with the company strategy. However, in doing so, the team leaders’ strategizing for institutional complexity involved lateral struggles of leveraging own team by compromising the other team’s strategies. These lateral struggles were rooted in a stark competition for scarce middle management promotions. The GM appeared to keep out of the competition as he was already promised a promotion due to his very good ‘yongo’ connections high up in the top management. It was speculated that according to the still prevailing Korean-style job-grade system, either team leader Song or team leader Park would be promoted. Subsequently, team leaders Song and Parks’ divergent re-strategizing of institutional complexity not only concerned their obligation as middle managers to commit to the company strategy, but also became personal means of winning the competition for promotion. As shown below, the lateral dynamics across the three team leaders’ strategizing of institutional complexity fueled further emerging conflicts in the branch.

In team leader Kim’s service team, the lateral dynamics of strategizing transformed into somewhat gendered group conflicts among the team members. Team leader Park and Song were according to the Korean-style job-grade system superior to team leader Kim. This superiority was reflected in their open use of team leader Kim’s female team members to heighten a Korean-style family-like collective harmony in their own teams. Creating such a positive team atmosphere was a part of their team strategies aimed at heightening the team MBO performance. Specifically, the temporarily hired female employees in team leader Kim’s team were invited to numerous parties and social gatherings by either team leader Park or team leader Song. Here, they would have to live up to Korean-style female employee ideals, acting as hostesses taking care that enough food and drinks were ordered and keeping up a good atmosphere (cf. Janelli, Reference Janelli1996). In addition, team leader Song would also ask them to participate in official ACB Card promotions because, as he said, ‘they are more attractive than most of my team members’. Over time, the female employees had a hard time taking care of their job areas after long nights of socializing and doing extra work for the marketing team and, as a result, the team MBO results worsened even further leaving team leader Kim to express his dissatisfaction. However, the other team leaders openly defied him. One day when coming in much too late after a lunch together with the female service team members, team leader Song openly exclaimed, ‘Don’t worry about Mr. Kim, he knows he can do nothing when you are with me.’ Although the female employees apologized to their team leader Kim, they continued taking long lunch breaks and arriving late after night parties, as it became clear that team leader Kim never officially opposed the other two team leaders. In this way, the two team leaders used their Korean-based seniority status to overrule their fellow team leader’s desires and pursue their internal competition to bolster strategizing of institutional complexity in their teams and improve the American-style team MBO results.

Team leader Park did not only use team leader Kim’s employees in his strategy for good team MBO performance results and subsequently his own promotion. He further went on to discredit team leader Song’s emphasis on American-style horizontal relations in his team. This was exemplified when the two team leaders worked on shared tasks such as, for example, a joint venture assignment with a Japanese company. In accordance with his praise of an American-style horizontal organization, Mr. Song would always make sure that Mr. Hong, who spoke Japanese, accompanied him and even presented their marketing approach to the Japanese managers. However, underlining Mr. Hong’s critique of team leader Song in terms of not living up to Korean-style ‘jeong’, hierarchical responsibilities, Mr. Hong and the marketing team was even further disgraced by team leader Park. At the beginning of a meeting with the Japanese business partners, team leader Park said, ‘You must excuse us for letting team leader Song’s “daeri” [junior administrative] present to you our business plan at this honored meeting with you.’ This was considered a masked mocking of team leader Song’s American-style of letting a subordinate handle the collaboration with their highly esteemed Japanese business partners. This incident only worsened the strained relationship between team leader Song and Mr. Hong greatly affecting the team atmosphere. Team leader Park thereby used claims of preserving Korean-style hierarchy to win the internal competition for best American-style team MBO performance with Korean-style hierarchy. The competition between the two team leaders was confirmed by some of the employees. According to them, this no longer merely related to re-strategizing organizational aims of creating good MBO scores but also to ensuring that team leader Park’s team score was better than that of team leader Song.

A team member explained his view on why team leader Park and Song would not work together, even on creating good branch MBO scores:

It seemed that, gradually, team leader Song was the one withdrawing as he appeared to care less and less about his job, coming in late or taking whole days off from the office, and even confiding to the researcher that he hoped to move overseas with his family.

Overall, the team leaders’ lateral struggles over different, yet interdependent recombinations of logics had negative, unanticipated effects on sustaining the company and branch’s strategic aim of continuous high performance. The employees from all three teams were exhausted and a great share of those holding temporary positions resigned, particularly from the sales team.

With team leader Song having given up in the competition with team leader Park, and the service team female employees not attending to their jobs, the service and marketing teams came out with worsened yearly MBO results. However, even team leader Park did not improve his sales team’s results as intended. Although Park had wanted to replace some of his temporary workers with new, harder working employees, the many resignations and difficulties with recruiting and training new employees instead caused delays in the sales team’s collection tasks. Consequently, the Suwon branch lost their status as the best performing branch. Although the GM recommended team leader Park for promotion, he did not receive this and one of the sales team members explained:

This perception was confirmed during a visit from a ‘sangmu’, managing director. The managing director criticized the managers and employees in the branch, particularly sales and marketing teams, for not showing good results. It was emphasized that more was expected of each and one in the branch because they were representing one of the top branches on which the entire ACB Company was much dependent. However, one of the team managers from a neighboring branch blamed the company’s strategic balancing of American-style capitalist with Korean-style Confucian institutional logics as causing some of the competitive problems in Suwon as well as other branches:

This view reflected that the company strategizing for institutional complexity did not as intended lead to a complementary balance of logic constellations of, on the one hand, American-style individual performance and, on the other hand, Korean-style collectivity. Instead, the emerging strategizing practices had consequences of heightened conflict and worsened performance.

To summarize the findings, the middle managers’ re-strategizing of top management’s strategic balancing of ‘unsettled’ institutional demands (Raynard, Reference Raynard2016) had severe and unanticipated consequences for the overall company performance. This was due to the strategy being distributed and reworked throughout the organization in a way that allowed for emergence of diverse strategies of balancing institutional complexity. Specifically, the middle managers’ competing strategies of pursuing own goals by reworking company strategy to harness novel complexity had vertical negative consequences for the overall company strategy. Findings thereby describe how strategizing for institutional complexity is simultaneously shaped by the company strategic apex and emerging from strategizing within everyday interactions of multiple managers at the middle and their followers. This accentuates the need of exploring unanticipated emergence of actors’ ongoing reworking strategy (Lê & Jarzabkowski, Reference Lê and Jarzabkowski2015). In terms of strategic consequentiality (cf. Jarzabkowski et al., Reference Jarzabkowski, Kavas and Krull2021), the company’s strategy of integrating new complementary to old logics to achieve high performance and legitimacy in a period of macro institutional reform was due to the distributed re-strategizing not fulfilled.

Limitations

The study comes with some central limitations. First being a single case study, it does not allow generalization of our findings. Nevertheless, we suggest that future studies of organizations facing institutional reform might investigate the situated, distributed, and emerging practices and consequences of strategically responding to such reforms. Second, the study takes place in a particular Korean context, and other institutional fields might comprise vastly different constellations of institutional logics. Nevertheless, similar ‘unsettled’ field-level prioritization may be found across different fields (cf. Høiland & Klemsdal, Reference Høiland and Klemsdal2022; Raynard, Reference Raynard2016). We therefore suggest that future research investigates the consequences of the vertically and relationally distributed re-strategizing of such unsettled prioritization in other institutional fields of institutional complexity. Finally, we have responded to calls for investigating how complex vertically and laterally dispersed practices may be consequential to the formation of strategies (Jarzabkowski et al., Reference Jarzabkowski, Kavas and Krull2021). However, a shortcoming of our study is that the consequences we trace are rather momentary in time. There is thus a need to investigate the consequences of strategizing for institutional complexity in a longitudinal, processual perspective.

Practice implications

Findings from the study have some practice implications for management and institutional decision-makers. Regarding the latter, while reforms, being financial, political, and/or societal, might forcefully be bestowed upon an institutional field, our findings show the complexity emerging from multiple logics in the field. Such institutional complexity might create severe tensions but also serve as a strategic resource. We therefore suggest that when facing reform, there is a need for managerial and policy decision-makers to pay attention to the myriad of strategic responses from various organizations in the field and multilevel factors contributing to such responses. Here, attention should far from only be given to the top CEO level strategizing but to organizational responses at different levels and in various dynamics of interaction. This is important because understanding such vertical and lateral dynamics of strategizing for institutional complexity might explain why some organizations struggle to sustain their strategic and field-level competitive edge under reforms. Nevertheless, it remains important to pay attention to top management strategies in ‘unsettled’ fields of institutional logics as this might create a particular space for reworking strategies in multiple, yet interdependent, ways. Regarding strategy consequences, attention should not merely be given to the strategic consequences of intended manager activities. Rather, strategizing institutional complexity is in the hands of several actors, who, besides holding formal roles and responsibilities are part of already existing relations and power structures. Here, strategizing not only serves purely organizational ends but as much personal ends to achieve various goals – even through competition. Such situated dynamics of employees and fellow managers’ interactions might therefore induce highly unanticipated, and for the overall company unintended consequences. Overall, we suggest that managers and decision-makers pay careful attention to strategizing for institutional complexity as a rather resource demanding social accomplishment.