The Dynamics of Organizational Routines in a Startup: The Ereda Model

• Published date: 01 December 2016
• Date: 01 December 2016
• DOI: http://doi.org/10.1111/emre.12080

The Dynamics of Organizational Routines in a

Startup: The Ereda Model

STEFANIA MARIANO

1

and ANDREA CASEY

2

1

IKI-SEA, Bangkok University, Bangkok, Thailand

2

The George Washington University, Washington, DC, USA

We propose a model of the dynamics of organizationalroutines developed from a three-year qualitative grounded

theory studyin a startup web-based open sourcetechnology organization. At the microlevel, the model describesfive

primary responses to newly formed routines: extension, replacement, elucidation, distortion, and avoidance

(EREDA). Each mode isdetermined by both the degree of comprehension and the perceived value, and we propose

that interrelated cyclesof learning and forgettingprocesses –what we labelas knowledgeshaping –may help explain

the variation of routines over time. We draw implications from these findings for theory and practice and offer

suggestions for future research on the dynamicsof organizational routines.

Keywords: organizational forgetting; organizational knowledge; organizational learning; organizational routines;

qualitative grounded theory study

Introduction

Organizational routines are crucial to stability (Cyert and

March, 1963) as well as organizational change (Feldman

and Pentland, 2003). The current academic debate on

organizational routines is vibrant and multifaceted

(Feldman, 2000; Miller et al., 2012; Pentland et al., 2012;

Rerup and Feldman, 2011; Salvato and Rerup, 2011;

Schulz, 2008). Since the first publication on routines within

the context of system stability and rationality (Weber,

1978), and the work of the Carnegie Mellon School on

how routines reduce complex search and facilitate

simplification (March and Simon, 1958), attempts to define

and understand routines have appeared in numerous

contributions. Cyert and March (1963) contextualized

organizational routines within the learning debate, where

organizations respond to external triggers modifying the

use (or reuse) of specific routines. Similarly, Levitt and

March (1988) considered the embeddedness of experiential

learning into existing routines, pointing out the key role of

routine-based learning in organizational learning. With the

work of Nelson and Winter (1982), the interest in

organizational routines intensified significantly. They

defined routine from an evolutionary theory perspective

as ‘a repetitive pattern of activity’andaddresseditasan

organizational gene and an essential ingredient of

organizational life and survival (Nelson and Winter,

1982, p. 97).

Consistent with the articulation of routines –which

includes key elements such as repetition, a recognizable

pattern of actions, a certain number of participants, and

actions that must be interdependent –is the definition

proposed by Feldman and Pentland (2003, p. 95) as

‘repetitive, recognizable patterns of interdependent

actions’, where actions represent ‘the things that actors

do’(Pentland et al., 2012, p. 1484) in specific places and

times (Feldman and Pentland, 2003) and may range from

accomplishing a task to integrating work or processes.

The first attempts to connect individual skills and

organizational routines were the works of Cohen (1991)

and Cohen and Bacdayan (1994) on the storage of routines

into procedural memory conceptualized as a repository of

individual actions. Subsequent attempts began including

agency in the conceptualization of organizational routines,

with the most representative work being that of Feldman

and Pentland (2003) on the interaction between two key

aspects of routines: the ostensive (structure) and the

performative (agency) aspects. According to their

reconceptualization, the ostensive aspect regards the

representation of the routine or abstract idea, for example

‘hiring process’(Becker, 2004; Feldman and Rafaeli,

2002), while the performative aspect regards the actions

taken, that is, how the routine is carried out by individuals

at specific times and places. This explains the existing

Correspondence: Stefania Mariano, IKI-SEA, Bangkok University,Rama

4 Road, Klong-Toey, Bangkok 10110, Thailand Tel: +662 350-3500

#1421 Fax: +662350-3671 E-mail stefania.m@bu.ac.th

European Management Review, Vol. 13, 251–274, (2016)

DOI: 10.1111/emre.12080

©2016 European Academy of Management

contradictions between routines that are effortfully

reproduced and routines that are mindlessly accomplished

(Becker, 2004) and also contributes to the explanation of

the incremental, idiosyncratic, and ongoing change of

routines (Feldman and Pentland, 2003) caused by internal

micro dynamics driven by the outcomes of previous

performed iterations (Becker, 2004; Feldman, 2000,

2003; Howard-Grenville, 2005).

More recent theorizations propose the study of

organizational routines from a micro-foundation

perspective, with specific attention to the individual-level

antecedents that influence the internal evolution of

organizational routines and to those individual actions,

processes, structures and causal mechanisms that guide

social interactions within organizations (e.g., Felin and

Foss, 2005).This new perspective is informedby previous

debates in the philosophical and sociological fields

regarding the explanatory roles of individuals and

collectives in social theories (e.g., Coleman, 1964;

Lazarsfeld and Menzel, 1970) and questions the high

degree of automaticity in behavior proposed by previous

theorizations pointing out the apparent need to constantly

build, scrutinize, review, and enforce routines within

organizations. Therefore, it ‘becomes important, even

pressing, [to study the micro-foundations] when we step

down to the level of firms’(Foss et al., 2012). Recent

attempts to study organizational routines from a micro-

foundation perspective include, for instance, explorations

of the role of intentions, intermediaries, and interactions

(Bapuji et al., 2012) and the adaptability (Miller et al.,

2012), coevolution (Rerup and Feldman, 2011), stability

and change (Arolesand McLean, 2016) and remembrance

of routines (Cohen, 2012), even though these works are

built upon very different conceptualizations and adopt

quite diverse definitions of micro-foundations.

While scholars have shed light on certain aspects of

organizational routines, we still know very little about

lower-level antecedents of organizational routines, with

much work still needed to better understand, among other

things, the characteristics of individual actions and their

traits and cognitive frames; the personal values and

psychological dispositions in the evolution of routines’

antecedents and hi erarchy of routine s (Foss et al., 2012);

the micro-processes through which routines develop and

change over time (Friesl and Larty, 2013); and the

progression of emotional and cultural components in the

evolution of knowledge and routines. As more clearly

stated by Foss et al. (2012, p. 186), ‘The factors placed

at the level of individuals and their interaction, deserv[e]

close scrutiny ’since they may help unpack those

dynamics that explain patterns of behavior (Foss et al.,

2012), as well as the antecedents of organizational

phenomena to inform managerial practices and

organizational performance (Felin et al., 2012; Foss,

2009; Foss et al., 2012; Pfeffer, 2009).

This study contributes to the discussion of

organizational routines from a micro-foundation

perspective, aiming to highlight the antecedents of

individual actions that could help explain the variation

of routines overtime in a startup organization.The startup

context represented the best research setting for our study

because changesin organizational routinesare particularly

evident in the earlystages of new organizations (Feldman

and Pentland, 2003). Observing performance of routines

that are newly formed offers an opportunity to better

understandthe dynamics of routines in these new contexts

(Lervik et al., 2005). Additionally, since we had a chance

to explore the dynamicsof organizational routinesat three

points in time over a three-year period, this study also

offers insightsrelated to internal knowledgedynamics that

may help explain the v ariations of routines ov er time

(Feldman and Pentland, 2003; Salvato and Rerup, 2011).

This study was guided by three research questions:

How do individuals respond to newly formed routines in

a startup web-basedopen source technologyorganization?

What antecedents govern these responses? What internal

dynamics connected to individual act ions could help

explain variations of routines over time? At the micro

level, we found five primary shaping responses to newly

formed routines (i.e., extension, replacement, elucidation,

distortion, and avoidance), classified according to two

specific antecedents (i.e., degree of comprehension and

perceived value). Our findings further propose that the

degree of comprehension was related to incompatibility

and accessibility issues, while perceived value played a

role in employees’perceptions of the benefits of newly

formed routines as supervised by managers, who helped

the regulation, reinforcement, and alignment of these

newly formed routines. Furthermore,our findings suggest

that interrelated cycles of learning and forgetting

processes –what we label as knowledge-shaping

processes –may help explain variations of organizational

routines over time(Feldman and Portland, 2003; Pentland

et al., 2012). In this study, we defined organizational

learning as ‘a change in the organization’s knowled ge that

occurs as a function of experience’(Argote, 2013, p. 31;

see also Fiol and Lyles, 1985), and we defined

organizational knowledge as valued information that

becomes embedded in practices and routines.

Organizational learning thus occurs when these practices

and routines have changed (Davenport and Prusak,

2000; Gherardi, 2006; Miner and Haunschild, 1995). We

defined organizational forgetting as the loss of

organizational knowledge (Martin de Holan and Phillips,

2004; see also Rao and Argote, 2006; Mariano et al.,

2015).

Due to the nature of grounded theory studies, the

related theories that inform the phenomena explored in

this study areincorporated in the discussionsection of this

paper. Therefore, this paper is structured in three parts.

252 S. Mariano and A. Casey

©2016 European Academy of Management