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doi:10.1093/icc/dth026
Over twenty years have passed since Nelson and Winter put the concept of routines
firmly at the center of the analysis of organizational and economic change. A
growing number of researchers have followed their example since. However,
researchers have not always had the same idea of what routines are and what
effect they have on organizations. Over time, this has left the literature on routines
riddled with ambiguities. For researchers who want to apply the concept of
routines in their research, it is not easy to get an overview of the current thinking
about routines and their effects. This article offers a systematic review of the
literature that has contributed to the theoretical development of the concept of
routines, and of the empirical literature that has applied the concept of routines.
1. Introduction
An Evolutionary Theory of Economic Change (Nelson and Winter, 1982) was a
milestone in the endeavor to develop an evolutionary perspective on the
economy, capable of explaining organizational and economic change. One of the
many important contributions made in the book was to put the concept of
routines center-stage, drawing attention both to the role of routines in the
economy, and the role of the concept of routines in theory. Taken as the central
unit of analysis, routines would help understand how firms and the economy
work, and hold the key for understanding organizational and economic change.
While Nelson and Winter (1982) was not the first work to mention routines, it
provided an important impulse, drawing much attention to the concept of routines
and invigorating research on routines. More than twenty years have passed since.
Many researchers have heeded Nelson and Winter’s (1982) call to put routines
center-stage in their analysis. Despite (or because) its increasing popularity, many
ambiguities and inconsistencies in the literature dealing with routines prevail still
today (Cohen and Bacdayan, 1994; Avery, 1996; Cohen et al., 1996; Reynaud, 1998;
Jones and Craven, 2001). That makes it difficult to get a good grasp of what
routines are, and what effect they have on organizations. It also diminishes the
explanatory power of the concept of routines, and has slowed down progress in
understanding how precisely the concept of routines fits into theories of
organizational and economic change.
In order to provide researchers with an overview of the current
understanding of
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routines, the present paper addresses two questions: what routines are, and what
effect they have on organizations. It offers a systematic review of the literature
that has contributed to the theoretical development of the concept of routines, and
of the empirical literature that has applied the concept of routines. 1
The paper is structured in categories generated from the literature review. I
first present characteristics of routines, then give an overview of the effects
routines have on organizations. In each category, I first present a summary of the
conceptual and then of the empirical research. 2 The concluding section draws
implications for our under- standing of routines and for further research.
2.1 Patterns
As the history of the concept of routines reveals, the notion of ‘patterns’ has
been central to the concept from early on (Becker, 2001), grasping the regularity that
the concept of routines stands for. In 1964, Sidney Winter (1964: 263) defined a
routine as ‘pattern of behavior that is followed repeatedly, but is subject to change
if conditions change’. At about the same time, philosopher Arthur Koestler
defined routines as ‘flexible patterns offering a variety of alternative choices’
(Koestler, 1967: 44).3 The notion of routines as patterns also appears in Nelson and
Winter (1982: 14, 15 and 113), Heiner (1983: 334), Teece and Pisano (1994: 541
and 545), Cohen et al. (1996), Grant
(1996: 115), Sanchez et al. (1996: 7), Teece et al. (1997: 518) and Dyer and Singh
(1998:
665).
If routines are patterns, then what do these patterns consist of? In the literature,
four different terms are used for denoting the ‘content’ of the patterns: action,
activity, behavior and interaction.4 If there are differences between these four
terms in the
1The literature review does not cover the many studies that mention routines in passing. A huge
number of such studies exist which allude to routines but do not contribute to the understanding
of the concept of routines. The literature included here is—to the best of the author’s knowledge—
reasonably comprehensive with regard to studies that are either concerned with making a
contribution to understanding the concept of routines or with applying it. Exceptions most
certainly exist. I do not believe, though, that they will alter the picture drawn here substantially.
2In referencing empirical studies, in many cases I will restrict myself to simply point to studies
that pursue the respective issue. Due to space considerations, I will present only those studies in
some detail, which are most important in establishing support for the point made in the text.
3Note the emphasis on variation in these two early definitions of routines. This aspect subsequently
disappeared when attention focused on the inertia of routines. As Costello (2000: 14) writes: today
‘the variation and openness of routines are often missed’. Only recently has this aspect been
rehabilitated (Feldman, 2000, 2003; Feldman and Rafaeli, 2002; Feldman and Pentland, 2003).
4Action (Cohen et al., 1996; Egidi, 1996; Jarzabkowski and Wilson, 2002), activity (Winter, 1990:
275–276; Dosi et al., 2000: 4; Jones and Craven, 2000; Karim and Mitchell, 2000), behaviour
(Nelson
and Winter, 1982: 14; Winter, 1986; Langlois and Everett, 1994; Langlois and Robertson,
1995;
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literature
economics and business literature, we have met the first source of conceptual
ambiguities. And differences there are indeed. In the economics and business
literature, the terms ‘action’ and ‘activity’ provide the least problem: they are
usually used as synonyms. A difference between the terms ‘action’ and
‘behavior’ is, however, commonly made in the economics and business literature. As
both general dictionaries (American Heritage Dictionary) and management
dictionaries (Cleveland, 1998) indicate, ‘behavior’ is a subset of action. ‘Behavior’ is
distinguished from ‘action’ by the fact that it is observable,5 and that it is understood
as a response to a stimulus. ‘Interaction’ is a subset of ‘action’, referring to such action
that involves multiple actors. The term ‘interaction’ therefore clearly establishes a
distinction between the individual and the collective level. As I describe in Section
2.3, sliding between these two levels in the discussion has haunted the literature on
routines for many years. For reducing the ambiguity surrounding the concept, and for
improving our understanding of routines, clearly distinguishing these dimensions is
an important step. Referring back to the history of the concept of routines can also
reduce conceptual ambiguity. Historically, the term ‘routines’ clearly referred to
recurrent interaction patterns, that is, collective recurrent activity patterns.6 As
opposed to that, recurrent activity patterns on the individual level have been
associated with the term ‘habits’ (Hodgson, 1993b). Also, many empirical studies
document routines as patterns of interaction (e.g. Cohen and Bacdayan, 1994;
Pentland and Rueter, 1994; Zellmer-Bruhn, 1999, 2003; Burns, 2000;
Costello, 2000).
There is, however, an altogether different possibility to answer the question
what the pattern (regularity) consists of. All four alternatives described above are
instances of activity, i.e. routines are understood as activity patterns. As opposed
to that, routines can also be understood as cognitive regularities or cognitive
patterns (Simon, 1947; March and Simon, 1958; Cyert and March, 1963; Cohen,
1991; Egidi, 1992; Delmestri, 1998). Routines would then be understood as rules:
for instance, ‘If {condition A}, then
{do B}’. In the business world, there are many kinds of such ‘if–then’ rules, for
instance, heuristics and rules of thumb (Hall and Hitch, 1939; Katona, 1946),
industry recipes (Spender, 1989), standard operating procedures (Cyert and
March, 1963) and programs (Simon, 1965, 1967, 1977).
Behavioral patterns and cognitive regularities are clearly different. They are
regularities on two different levels, cognition and activity. It is therefore
important to
Montgomery, 1995; Coombs and Metcalfe, 1998; Bessant et al., 2001; Jones and Craven, 2000;
Edmondson et al., 2001; Emery, 2002; Lillrank, 2003; Salvato, 2003) and interaction (Dosi et al.,
1992:
191–192; Teece and Pisano, 1994; Tranfield and Smith, 1998; Gittell, 2002; Zollo et al., 2002).
5Some of the ambiguity introduced at this point therefore refers to the question whether all
routines have to be observable or not.
6Having clarified the differences between the terms ‘action’, ‘activity’, ‘behaviour’ and ‘interaction’, I will
use either the precise term recurrent interaction patterns or—for flow of language—the term
‘behaviour pattern’. Where I use the latter, the reader is asked to keep in mind that in the case
of routines, the precise definition of such a pattern is ‘recurrent interaction pattern’.
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distinguish these two different meanings, both associated with the term
‘routines’ (Cohen et al., 1996; Becker, 2004). The fact that authors sometimes refer
to cognitive regularities, and sometimes to activity regularities when they use the
term ‘routines’ is a major source of confusion. In the present paper, I do not enter
the discussion of what level the term should be applied to, in order to keep focus
(the interested reader is referred to Knudsen, 2002a, 2004; Hodgson, 2003). We
will, however, come back to this problem in the concluding section.
2.2 Recurrence
Recurrence is a key characteristic of routines (Winter, 1990; Cohen et al., 1996;
for empirical studies, see Pentland, 1992; Cohen and Bacdayan, 1994; Pentland
and Rueter, 1994; Egidi and Narduzzo, 1997; Knott and McKelvey, 1999; Costello,
2000; Karim and Mitchell, 2000; Betsch et al., 2001). In fact, one would be hard
pressed to call something happening only once a routine.7
Cohen et al., 1996; Coriat and Dosi, 1998; Lazaric and Mangolte, 1998; Zollo and
Winter, 2002). Routines can be distributed across space, or across the organization—
the multiple actors carrying out the routines belong to different organizational units,
and are located in different places. They are, however, linked by the interaction. It
is important to consider also the knowledge held by the actors involved in carrying
out the routine. To the extent that they are specialists, they will hold knowledge that
is so specialized that the overlap with the knowledge of the other actors will be small.
In the extreme, there will be no overlap. To the degree that this is the case, the
knowledge held by the different actors is said to the dispersed. It does not completely
overlap (Hayek, 1945; Minkler, 1993). In consequence, it is difficult, if not
impossible, to get an overview of the ‘whole’ knowledge held in the organization (cf.
Winter, 1994; Cohen et al., 1996; Zollo and Winter, 2002). Where that is the case, the
dispersedness of knowledge is a driver of uncertainty: actors do not have the
overview of all possible alternatives, and of the factors that influence the probabilities
with which these alternatives lead to certain outcomes. Cohendet and Llerena (2003)
have recently developed a second aspect of the collective nature of routines in more
depth. The multiple actors that are involved in the routine can make up different
kinds of communities. On the one hand, there are hierarchical communities such as
functional communities. These are organized hierarchically, are homogeneous and
share a disciplinary specialization. On the other hand, there are epistemic
communities and communities of practice, which are horizontally defined either by
the production of new knowledge or by a common interest in a given practice.
Importantly, all three kinds of communities provide a different local context in
which routines emerge and learning takes place, leading to routines that strongly
differ in terms of power of replication, of degree of inertia and of search potential
(Cohendet and Llerena, 2003).
Many empirical studies describe routines as collective phenomena (Weick,
1990, 1993; Cohen and Bacdayan, 1994; Pentland and Rueter, 1994; Jones and
Craven, 2001; Edmondson et al., 2001). Empirical studies add considerable detail
to our under- standing of the collective nature of routines. In his analysis of the
documentation of a historical airplane disaster, Weick arrives at the conclusion
that routines can be disrupted when participants in a routine start ‘acting in a
manner that is more individual than collective’ (Weick, 1990: 579). This finding
has profound implications for understanding the relationship between individual
actors and the collective routines they participate in: in order for organizational
coordination not to break down, a fine balance between individual habits and
organizational routines needs to be kept. Empirical research also describes
instances in which routines are dispersed. In experiments in which participants
needed to cooperate in order to win a card game, Egidi found that ‘organizational
procedures (routines) . . . emerge as the outcome of a distributed process
generated by “personal” production rules’ (Egidi, 1996: 303). This
(to the same extent) what you know. Such a definition links to Hayek’s use of the term and is
consistent with the problem he describes (see also Minkler, 1993).
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Feldman and Pentland, 2003). As Winter (1985: 109) put it: ‘Mechanistic
decision making does not necessarily diminish the opportunities for genuine,
deliberate choice.’ From such a point of view, one can then fruitfully ask why
people do or do not change routines. At the same time, the proposed vantage
point also provides an endogenous explanation for the how routines change, for
the role of agency in performing routines, and for the fact that routines can be
simple rule-following behavior at one point of time, but involve adaptive and
creative behavior at another point of time.
from different speeds of different, but interacting routines (Winter, 1975: 109). The
last point is a good illustration how a rich description of the processual
dimensions of routines would allow us to get a better understanding of the
development, stability, and change of routines, and thereby of organizational and
economic change.
The processual nature of routines is the area where empirical research has
made its maybe richest contributions. The following processual characteristics of
routines have been identified in empirical research, in case studies as well as in
experimental research and in simulations: 10 time of impact (cf. Narduzzo et al.,
2000), decay (Weick, 1990; Cohen and Bacdayan, 1994), reaction time (Narduzzo
et al., 2000), delays (Narduzzo et al., 2000), time needed for acquisition (Weick,
1990), whether change takes place in leaps or incrementally (Weick, 1990),
frequency of repetitions (Weick, 1990; Narduzzo et al., 2000; cf. Betsch et al.,
1998), age dependence (Warglien, 1995) and necessary maintenance in order for
routines not to decay (Sherer et al., 1998). Amongst the dimensions identified in
the literature, the frequency of repetition seems to be a particularly important
one. It is, after all, a necessary condition for regularity to occur. Another
dimension that warrants attention appears to be the regularity of the frequency
(regularity of the rhythm of recurrence), or in other words, of interruptions of the
routine. Based on a survey (preceded by a large number of interviews) carried out
in three firms in the US pharmaceutical and medial products industry, Zellmer-
Bruhn (1999, 2003) confirmed the hypothesis that teams experiencing more
interruptions will be more likely to either search for or adopt new routines from
external, rather than internal, sources (Zellmer-Bruhn, 1999, 2003). Time
pressure is a third processual dimension I want to highlight here. Experimental
research in psychology clearly supports the impact of time pressure on the
maintenance of routines. A replication and extension of the original experiments
of Cohen and Bacdayan (1994) found that time pressure increases the likelihood
of routine choices (as opposed to non-routine choices), even when the
inadequacy of the routine was indicated before the choice (Garapin and Hollard,
1999). This experiment consisted in a computerized card game in which the
players had to learn to coordinate their actions to achieve a common goal, without
being allowed to use verbal communication. Similarly, an experimental study in
which participants had to make a series of choices among different fertilizers,
whose attributes were revealed only gradually over a number of trials, found that
prior knowledge gained a stronger impact on choices if time pressure increased,
and could even overrule new evidence (Betsch et al., 1999). These findings
indicate that increased time pressure (and other increased constraints such as
stress) will not only induce falling back on routine responses, but will also lead to
a preference of those routine responses which are rehearsed most often.11 Time
pressure also influences where actors
10Cohen and Bacdayan (1994) and Betsch et al. (1998) are experimental studies, Warglien
(1995) is a simulation study. Narduzzo et al. (2000), Weick (1990) and Sherer et al. (1998) are
case studies of the mobile phone, airline and taxicab industry, respectively.
11Note, however, that in order for the adopted routine to work smoothly, a number of
requirements must be fulfilled. As Weick (1993) points out, routines can fall apart if there is a
lacking sense of
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search for new routines (externally or from within the group involved in the routine).
Zellmer-Bruhn’s (1999) study did not support the hypothesis that time
pressure is negatively related to the adoption of routines from external sources, and
concluded that the effect of time pressure in external search for new routines (as
opposed to developing new routines internally) is unclear. A possible explanation is
that ‘when time is scarce, teams will not devote scarce temporal resources to internal
development of new work routines’, but rather adopt some readily available
routine (Zellmer-Bruhn, 1999: 88–89).
Limits to the transfer of routines to other contexts are the most important
implication of specificity. When removed from their original context, routines
may be largely meaningless (Elam, 1993), and their productivity may decline
(Grant, 1991). Problems with transferability arise because it may not be clear
what is essential about the routines and what is peripheral (Lippman and Rumelt,
1982; Nelson, 1994; Winter and Szulanski, 2001a,b; Szulanski and Winter,
2002); because the routine might be incompatible with the new context (Madhok,
1997); or because it might prove impossible to copy some elements of the routine
due to problems in transferring tacit knowledge (Hill et al., 1990; Grant, 1991;
Langlois and Robertson, 1995; Nonaka and Takeuchi, 1995). An important
consequence of limits to the transferability of routines across different contexts is
that no such thing as a universal best practice can possibly exist (Amit and
Belcourt, 1999). There can only be local ‘best’ solutions. An implication of this
argument is that the possibility of replicating routines inside the firm is improved,
at least to the extent that firms provide somewhat homogenous environments (cf.
Hodgson, 1988; Hill et al., 1990; Kogut and Zander, 1992, 1993).
Empirical research adds detail to the understanding of routines as context-
dependent, embedded and specific. Case studies of the UK National Health
System (NHS) and a chemical manufacturer highlighted the importance of
recognizing the links between routines and ‘higher-order’ assumptions and values
on the one hand, and between cognitive aspects of organization, and
organizational structures and processes on the other (Johnson, 2000). One of the
insights gained in a case study of the establishment of a mobile phone network
was that the nature of the linkages between the cognitive and behavioral levels is
still unclear (Narduzzo et al., 2000), even though individual case studies exist that
document how routines present the structural context for processes such as the
development of corporate strategy (Menuhin and McGee, 2001). A series of
papers that analyze BankOne’s operations in taking over banks illuminates the
process of the replication of routines, and also supports the idea of limits to the
transferability of routines to different contexts (Winter and Szulanski, 2001a,b;
Szulanski and Winter, 2002), amongst other reasons because the knowledge
bound by routines is procedural knowledge. The term ‘procedural
knowledge’ characterizes knowledge of how things are done, which is relatively
inarticulate and encompasses both cognitive and motor activities (Cohen and
Bacdayan, 1994: 554). Finally, empirical studies have supported the notion of the
historical specificity of routines. As explained above, because general rules and
routines always have to be incompletely specified, they always require
interpretation due to which local and historical specificities can develop, leading
to heterogeneity of practices across time and space (Narduzzo et al., 2000).
1988; North, 1990; Barney, 1991; Dosi and Metcalfe, 1991; Bourdieu, 1992; Dosi et
al.,
1992; March, 1994a; Nelson, 1994; Malerba and Orsenigo, 1996; Foss, 1997;
Madhok,
1997; Oliver, 1997; Teece et al., 1997; Coriat and Dosi, 1998; Amit and Belcourt,
1999). Routines build on the past. How they will develop is a function of where
they have started out from (Dosi et al., 1992). Routines may adapt to experience
incrementally in response to feedback about outcomes, but they do so based on
their previous state (Levitt and March, 1988; Cohen et al., 1996).
Recognizing that routines change in a path-dependent manner highlights the
importance of feedback effects. Maybe the most well-known example of
positive feedback effects are competency traps: ‘favorable performance with an
inferior procedure leads an organization to accumulate more experience with it,
thus keeping experience with a superior procedure inadequate to make it
rewarding to use’ (Levitt and March, 1988: 322). Path dependent development of
routines means that because one can get stuck on a path, along which the
routine develops over time, the starting point matters. An additional difficulty in
re-tracing the origin of the routine and ‘re-setting’ the routine to its state at an
earlier point of time is that ‘the experiential lessons of history are captured by
routines in a way that makes the lessons, but not the history, accessible to
organizations and organizational members who have not themselves experienced
the history’ (Levitt and March, 1988: 320). Without knowledge of the reasons, for
which a certain path was taken in the past, it is impossible to reconstruct the path
and the problems to which the routine originally was the solution. Empirical
studies add to our understanding of the path dependent development of routines.
For instance, experiments involving repeated decision making with increasing
availability of information show that path dependence manifests itself because
actors take prior experience into account when making decisions (Betsch et al.,
2001). From their case study of the establishment of a mobile phone network,
Narduzzo et al. (2000) point to one implication of path dependent development:
once local heterogeneity of routines has been established, homogeneity of
practices is very difficult to bring about. Finally, Feldman’s (2000, 2003) studies of
routines at a university housing organization illuminate that change is part of
the very nature of routines. It is endogenous to routines, because whenever
routines are repeated, actors have some influence to perform aspects of the
routine in a different way. Importantly, such change has shown to often be
incremental in the sense that one or a few ‘components’ of routines are changed
at a time (such as the rhythm of recurrence, the participants, etc.). This
explains why routines develop in a path dependent manner over time.
2.8 Triggers
Routines are triggered (Nelson and Winter, 1973; Weiss and Ilgen, 1985; Winter,
1986; March and Olsen, 1989; Gersick and Hackman, 1990; Cohen, 1991;
McKern, 1993; Nelson and Nelson, 2002). Two kinds of triggers can be
distinguished: actor-related triggers and external cues. One form of external cues
are links between routines. For instance, at the end of the budgeting routine in the
marketing department, a routine
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for requesting the approval of the budget for a marketing campaign is triggered
at the finance department. Aspiration levels are a powerful form of actor-related
trigger of routines (Cyert and March, 1963; Levinthal and March, 1981; March,
1994b). Aspiration levels establish a limit, for instance for a particular
performance the actor perceives as adequate and hopes to achieve. Where the
performance is above that limit, actors follow satisficing rather than optimizing
behavior. They are content with their performance and typically will not engage
in endeavors to optimize their performance (Cyert and March, 1963; Levinthal
and March, 1981; March, 1994b). Where performance is below the limit, some
remedial action is triggered. Note that many of the remedies will, in turn, have the
form of routines (think for instance of the remedies available for increasing
sales).12
Empirical studies have identified a number of factors that have an impact
on triggering. An experimental study identified prior activation, the
simultaneous activation of other factors, the strength of association between a
situation and an option (the frequency), and the intensity of reinforcement as
triggers of routines (Betsch et al., 1998). Weick’s (1990) historical study of an
airplane crash concluded that the intensity of stress (associated with the
triggering) is positively correlated with the regression to first learned responses.
To the extent that such responses are routinized, we would expect the intensity
of stress at the point of time of triggering to be correlated with the age of the
routine being triggered. Furthermore, empirical research has added detail on the
type of feedback that acts as a trigger of routines. Experimental results indicate
that negative feedback acts as a more powerful trigger of routines than positive
feedback (Schneier, 1995; Avery, 1996).
12Note the relevance of the discussion of mindlessness vs. effortful accomplishment in Section
2.4 for the issue of triggers.
Organizational routines: a review of the 655
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(Nelson and Winter, 1982). It has been claimed that as coordinating devices,
routines can be more efficient than contracts, so that they could even substitute for
contracts and make them increasingly unnecessary as relationships mature
(Langlois and Robertson, 1995).
Empirical research has started to shed some light on the effect of routines
on coordination. A study of the investment manuals of a sample of major
Swedish firms noted that standards (and standardized routines) are especially
influential for exerting control (Segelod, 1997), one way to bring about
coordination. A possible reason is that routine behavior is easier to monitor and
measure than non-routine behavior (cf. Langlois, 1992). The more
standardized, the easier to compare. The easier to compare, the easier to control.
Knott and McKelvey (1999) conducted an empirical test that compares the
relative value of residual claims and routines in generating firm efficiency, using a
large sample of firms from the US quick printing industry. The study concludes
that routines can be more efficient for coordination and control than residual
claims, contrary to principal-agent theory that has propagated residual claims
as the most efficient solution to the monitoring problem. Focusing on the
question ‘What is the best way for organizations to achieve coordination?’
Gittell (2002) analyzes the performance effects of routines (and other
coordination mechanisms such as boundary spanners and team meetings). The
study analyzes questionnaire data on care provider groups in acute-care
hospitals. It finds that the performance effects of routines were mediated by
relational coordination: routines work by enhancing interactions among
participants, which was found to have positive performance effects.
3.2 Truce
According to Nelson and Winter (1982: 107), organizational performances have
two different aspects: cognitive and governance 13 aspects (cf. also Coriat and
Dosi, 1998). Emphasizing the second aspect, Nelson and Winter (1982: 108) and
Coriat and Dosi (1998) highlight the fact that members are rarely surprised by
each other’s behavior. What are the mechanisms underlying this capacity? One
possibility is that there are no divergent interests that could give rise to
intraorganizational conflicts, another that there is tight control of the behavior of
the members of the organization. Nelson and Winter do not argue for the first
option (1982: 108), nor do they think control alone can explain the smooth
functioning of organizations. Although rule-enforcement mechanisms play a
crucial role in making routine operation possible (Nelson and Winter, 1982: 109),
their role is limited. Because it is always possible to either circumvent rules to
some extent, or to follow written rules by the letter and thereby decrease
performance, control systems leave a zone of discretion. Discretion awards some
bargaining power to those who execute orders. Usually, bargaining is not,
however, employed for each and every order that is to be executed. That
smoothly
13The two ways of governance mentioned in the literature on routines are governance through
control mechanisms and through motivation.
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15Becker and Knudsen (2004) provide a more detailed treatment of the argument presented in
this section.
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3.5 Stability
To the extent that routines recur without much change, they provide stability
(Hodgson, 1993a; Langlois, 1992; Nelson, 1994; Coombs and Metcalfe, 2000;
Amit and Belcourt, 1999). There are two different arguments for why routines
provide stability. The argument of the Carnegie school is that as long as an
existing routine gives satisfactory results, no conscious cognitive problem solving
is triggered to find another way to achieve the task (March and Simon, 1958;
Cyert and March, 1963). The other argument is a cost argument: whenever a
mode of executing a particular task is changed, this entails costs. New
participants need to be identified, and explicit or implicit contracts and
understandings about the actors need to be adjusted (Nelson, 1994).
Stability has important effects on organizations. Stability provides a baseline
against which to assess changes, compare and learn (Langlois, 1992; Postrel and
Rumelt, 1992; Shapira, 1994; Tyre and Orlikowski, 1996). Without a stable
baseline to compare with, drawing inferences from changes is impossible
(Knudsen, 2002a). The stability-providing effect of routines is therefore
important for learning. Stability, furthermore, gives rise to predictability, which
in turn aids coordination (Cyert and March, 1963; Nelson and Winter, 1982;
Langlois and Everett, 1994; Inkpen and Crossan, 1995).
At times, the stability-providing effect of routines does, however, develop into
a pathology. In such a case, routines persist despite negative performance
feedback (Steinbruner, 1974; Heiner, 1983; Kilduff, 1992; Leonard-Barton, 1995;
Rumelt, 1995; Hirshleifer and Welch, 1998). They also lead to inertia. The reason
is not that feedback mechanisms are absent. Routines (due to the interactions they
are composed of) enable feedback, but the feedback is ignored.
The most important empirical finding relating to stability, however, refers to
how change is endogenous to routines themselves. A number of case studies of
work in naval navigation and airline cockpits (Hutchins, 1991, 1995), call centers
and libraries (Pentland and Rueter, 1994), high-tech firms (Costello, 1996, 2000),
mobile phone networks (Narduzzo et al., 2000), housing organizations (Feldman,
2000, 2003), teams of surgeons (Edmondson et al., 2001), the NHS and a
chemical firm (Johnson, 2000), shop floors in the auto industry (Adler et al.,
1999), in software firms (Orlikowski, 2002) and an analysis of the Cuban Missile
Crisis (McKeown, 2001) have concluded that routines are not inert, but typically
change over time. Empirical studies of a housing organization by Martha
Feldman (Feldman, 2000, 2003) have underlined that routines have a great
potential for change due to an internal dynamic—participants responding to the
outcomes of previous iterations of a routine. Organizational routines thus
contribute to both stability and change, and play an important role for
organizational flexibility. Empirical evidence therefore now increasingly
contrasts the idea that routines are inert. Rather, the emerging idea is that routines
often change incrementally. For instance, the decision-making routine for
monitoring the progress of ongoing marketing campaigns might be ‘unchanged’
in that weekly meetings take
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place between the head of the marketing department, the head of the sales
department, and the respective product managers, and follow the same basic steps,
i.e. reviewing and discussing incoming data. At a certain point in time, reports
might be received not in paper form, but in electronic form—an incremental
change in the routine. We know from the literature that artifacts such as
information technology have an impact on the processes that they are used in
(Hutchins, 1991, 1995; Clark, 1997; D’Adderio, 2001, 2003). Even such a
seemingly irrelevant change changes the routine, the pattern of recurrent
interaction, with important consequences. Electronic documents, for instance,
enable automatic search, which makes certain facts much easier to detect. There
are many possibilities for incremental changes, regarding the artifacts involved,
the frequency of repetition, the participants, etc. Changes in all these dimensions
can potentially have an impact on the interaction, and therefore change the
routine further. Such incremental change is an essential characteristic of routines,
and not an anomaly or exception. Over time, a series of such incremental changes
might then add up to some more substantial gradual change. In this way, routines
are capable of adapting to novel circumstances. Moreover, such change is
endogenous, and can be explained by analyzing how routines change
incrementally. As it turns out, the role of actors in responding to, amongst others,
previous recurrences of the routine, is crucial (Feldman, 2000, 2003; Feldman and
Pentland, 2003).
routines also capture collectively held knowledge, i.e. that knowledge, which is
held by the firm, but is more than the knowledge held by its individual members.
Such knowledge could in principle be held in several knowledge repositories, for
instance in documents, databases, artifacts (such as prototypes) and physical
layout. Tacit knowledge, however, can not be held in such repositories.
One contribution of empirical research that helps to understand the role of
routines as knowledge repositories for tacit knowledge is the notion of
declarative and procedural knowledge. As Cohen and Bacdayan (1994: 554) have
explained, the term ‘procedural knowledge’ characterizes knowledge of how
things are done, which is relatively inarticulate and encompasses both cognitive
and motor activities. That definition is very close to Polanyi’s (1967) definition of
tacit knowledge, but adds some precision, namely that motor activities make up
an important part of procedural knowledge. If we interpret the term widely, we
can say that the activity involved in procedural knowledge is not just limited to
cognitive activity. Now, having argued that routines capture the individually held
knowledge at its joints, we can add the argument that they also capture the
collectively held knowledge very well (routines involve multiple actors, see
Section 2.3). Note that a thorough mapping of a routine would also include the
documents and artifacts used. Maybe the best example of such a mapping are
Hutchin’s studies, which describe in detail the artifacts, mnemonics, activities
and interactions involved in navigation of a ship (Hutchins, 1991) and an airplane
(Hutchins, 1995). Various empirical investigations support the idea that routines
store knowledge, including tacit knowledge: case studies into high-tech firms
(Costello, 2000), an analysis of the history of the US bicycle industry (Dowell
and Swaminathan, 2000), experiments (Cohen and Bacdayan, 1994) and case
studies of the replication of best-practice routines after the take-over of banks
(Winter and Szulanski, 2001a,b; Szulanski and Winter, 2002). A further insight
added by empirical research is that changes in the knowledge held in the
organization, for example the creation and articulation of knowledge, have an
impact on the routines in use. As case studies in the French food and steel
industries have illustrated, such changes put the routines and the ‘truce’
surrounding them in question (Lazaric and Denis, 2001; Lazaric et al., 2003).
Interesting findings have also been generated with regard to the dispersedness of
knowledge and the role of routines in dealing with it. Dispersedness of
knowledge means that actors have only a partial overlap of knowledge. The
conclusion of Egidi’s (1996) experimental study was that routines are one way
to deal with such a situation, allowing to re-create missing knowledge due to the
recombination of components of routines. From their study of technicians at a
mobile phone company, Narduzzo et al. (2000) add the insight that routines are
sometimes used as ‘quarry’, that is, they are used as ‘a system of manipulable
elements’, as a ‘structuring resource’ for manipulating the list of activities and
restructuring their position in time. Routines are used as heuristics: instead of
being executed in a precise way, they are followed as a guideline, with a rather
high portion of variation injected (Suchman, 1983).
662 M. C.
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4. Conclusion
The literature review has shown there is a substantial literature that focuses on
routines and attempts to apply the concept of routines in empirical studies of
organizations. Against this background, it is time to assess what has been
achieved. What are routines? And what do we know about the effects routines have
on organizations?
Two different interpretations of the term ‘routines’ are widespread in the
literature: as behavioral regularities and as cognitive regularities. [A third
interpretation of routines as propensities has been (re-)established in the literature
recently.16] In the first case, routines are most precisely described as ‘recurrent
interaction patterns’, as described above. In the second case, routines are seen as
rules, standard operating procedures, etc. One conclusion from the literature
review is that the term ‘routines’ refers to a broad range of regularities in the
economy. Because the term has been used for referring to both cognitive and
behavioral regularities, an important conclusion from the literature review is the
necessity to always be precise which of the two kinds of regularities one refers to.
We will come back to the issue below.
Consensus is discernible regarding the question of the effects of routines on
organizations. Broadly speaking, routines allow organizations to do four things.
First and foremost, routines enable coordination. The capability of routines to enable
coordination builds on the basis of a balance between the interests of the participants
in the routine (the so-called ‘truce’). Triggers play an important role in bringing
about coordination. Second, routines provide some degree of stability of behavior. It
should be clear by now that ‘stability’ is a relative term—it always includes the
potential change that is endogenous to the routine due to the agency of its
participants (Feldman, 2000, 2003). The stability of behavior has the implication that
expectations about the behavior of others can be formed. Third, when tasks are
routinized, these tasks can often be executed in the realm of the sub-conscious,
thereby economizing on limited cognitive resources. Fourth, routines bind
knowledge, including tacit knowledge. Moreover, routines carve a crucially
important aspect of knowledge right at its joints, namely, its application. For this
reason, routines are also considered as the building blocks of organizational
capabilities (Dosi et al., 2000; Winter, 2003).
At this point we should also recall that when Nelson and Winter (1982)
invigorated research on organizational routines, they did so by pointing to the
potential of fitting the concept of organizational routines into the evolutionary
framework. How far have we come along this route of inquiry? It is remarkable
that attempts at actually specifying how routines are varied, selected, and retained,
are very few still. Winter has pursued the issue of the replication of routines
(Winter, 1990, 1995; Winter and Szulanski, 2001a,b;
Szulanski and Winter, 2002; see also Szulanski, 1999; Hodgson and Knudsen,
2003a,b; Knott, 2003; Becker and Lazaric, 2004). Research on how routines are
changed (variation), and how they are selected, has been much thinner on the
ground (see Witt, 2001; Massini et al., 2002). That routines have often been
associated with stability and inertia has probably made it tempting to frame the
discussion in terms of variation despite routines, and has hampered research on the
variation of routines. It has certainly not helped that such an association is also
supported by the every-day meaning of the term in many languages. Research
does, of course, exist that in some way or the other discusses variation in relation
to routines. Only a series of recent publications (Feldman, 2000, 2003; Feldman
and Pentland, 2003; cf. Salvato, 2003) has firmly established that variation and
change are phenomena that are inherent and endogenous to routines, not in
opposition to them. The topic of the selection of routines, finally, has been almost
completely unbreached until recently, at least if we consider studies that focus on
the issue head-on (for exceptions, see Knudsen, 2002b; Plunkett, 2002; Hodgson
and Knudsen, 2003a).
Against this background, it is not surprising that progress on the routines-
portion of
the Nelson and Winter (1982) program has been slow. Speaking for the social
sciences more generally, other attempts at identifying ‘the equivalent of the gene
in the social realm’ and fitting it into an evolutionary theory have also run
into problems, as Hodgson (2003) and Hodgson and Knudsen (2003a,b) point
out. The most notable other candidate is the meme (Dawkins, 1976). Just like the
notion of an organizational routine, definitional ambiguity surrounds the use of
the term ‘meme’, which some authors take to refer to a unit of cultural imitation
(Dawkins, 1976), actively contagious ideas (Lynch, 1996) or the state of a node in
a neuronal network (Aunger, 2002), to name just a few definitions. Just like the
notion of organizational routines, there are different ideas about whether memes
are behavior or instructions for behavior (Blackmore, 1999). Finally, and again
just like the notion of organizational routines, the causal mechanisms by which
ideas lead to behavior are not identified (Hodgson, 2003). Unfortunately, it does
not seem likely that we can expect an easy breakthrough by drawing on ideas
from memetics. We need to turn back to what we know about routines, and
continue to improve our understanding of routines, their effects on organizations,
and how precisely they fit in an evolutionary theory of the economy. Let me draw
some conclusions from the literature review that might be helpful in this
endeavour.
The literature review has identified several sources of ambiguity still haunting
the
concept of routines: (i) the distinction of individual and collective recurrent
activity patterns; (ii) the fact that for some authors, the term ‘routines’ refers
to cognitive regularities (rules) and for others, to behavioral patterns (recurrent
interaction patterns); and (iii) the neglect of agency in the executing of behavior
patterns, or in the process of expressing rules in action.
Let me briefly address each of the three points. (i) Since the authoritative
statement of Dosi et al. (2000), we should all take distinguishing individual
and collective
664 M. C.
Becker
recurrent activity patterns (habits and routines) serious and make sure that we
eliminate this source of ambiguity.
(ii) Unfortunately, the issue is not that simple regarding the cognitive,
behavioral, and propensity-interpretations of the term ‘routines’. The term is used
by many people in many different contexts, and, it seems, to describe many
different ‘things’. The only commonality amongst those is that they have to do
something with repetition or regularity (such as recurrent activity, rules that lead
to recurrent activity, the content of tasks, effects of recurrent activity such as
boredom). It appears that not one individual concept can capture all of them, lest
the concept be so wide that it inevitably lacked sharpness. A possible solution is
to use different terms for referring to behavioral regularities, cognitive
regularities and propensities. A number of arguments are con- ceivable for why
the term ‘routine’ should refer to one or the other. I will not get into this debate
here. Suffice it to note one detail at this point. In the literature, the term ‘routine’ is
increasingly associated with behavior patterns17 (Jones and Craven, 2001; Karim
and Mitchell, 2000; Bessant et al., 2001; Edmondson et al., 2001; Emery, 2002;
Jarzabkowski and Wilson, 2002; Gittell, 2002; Zollo et al., 2002; Lillrank, 2003;
Salvato, 2003). Note that these are empirical studies.18 At the same time, recent
contributions to evolutionary theory in economics argue that routines, if
understood as behavior patterns, do not fit in the evolutionary framework
(Hodgson, 2003; Knudsen, 2002a, 2004; Hodgson and Knudsen, 2003a,b). On
the basis of the literature review, the gap between a behavioral and a cognitive
definition of routines appears to be aligned with a gap between the empirical
studies of routines in organizations on the one hand, and the literature focusing on
developing evolutionary theory on the other. This gap suggests the following
fruitful research questions: if recurrent interaction patterns (‘routines’ as understood
in the empirical literature) are important in organizations, then precisely what is
the role of recurrent interaction patterns in evolutionary theory? Is there a place
for recurrent interaction patterns in evolutionary theory, and precisely what place
is it? What are the mechanisms by which routines (defined in a way that is
consistent with evolutionary theory) are varied, selected and retained? How
precisely do cognitive regularities and behavior regularities relate to each other?
(In other words, how do rules bring about recurrent interaction patterns, and how
do recurrent interaction patterns bring about rules?) Interpreting routines as
propensities to express a certain behavior or thought (Hodgson, 2003; Hodgson
and Knudsen, 2003a,b, 2004) could hold the key to advancing our understanding
of these questions.
On the final point, (iii) the neglect of agency in the carrying out of
recurrent interaction patterns, Feldman’s recent contributions (2000, 2003)
have provided us with a more advanced starting point for addressing the first
question just raised, how
17‘Behavior’ is used here in distinction to the understanding of routines as cognitive regularities,
Acknowledgements
Preliminary versions of parts of this paper have been presented at the DRUID
Nelson and Winter conference, Aalborg, June 2001, and the EAEPE conference,
Siena, November, 2001. The author is grateful to Giovanni Dosi, Geoff Hodgson,
Thorbjørn Knudsen, Witold Kwasnicki, Nathalie Lazaric, Jochen Runde, Dylan
Sutherland, Malcolm Warner, Francesco Zirpoli, participants of the above
mentioned conferences and of the 2002 workshop on Empirical Research on
Routines (Odense, Denmark) for comments and suggestions. I am particularly
grateful to three anonymous referees for their helpful comments and suggestions.
All remaining errors and omissions have been produced without any help. The
article is dedicated to the memory of the late Leonilda Marcheselli, in whose good
company much work on the revision was carried out.
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