COMPETITIVE ACTION IN DIFFERENT ARENAS OF MANAGEMENT IN THE FINNISH GROCERY TRADE 1991-2005

Abstract

Competitive action in different arenas of management in the Finnish grocery trade 1991-2005 Jukka I. Mattila, Helsinki School of Economics Ph.D Student since 2003-, estimated final date 2011 jukka.mattila@hse.fi Organizational performance and competition constitute a paradox, which has been left unnoticed by the researchers. Organizational performance is based on competitiveness, an abstract construct which is the connecting force of managerial action and organizational development. However, competitiveness is defined ex ante and it is realized and made visible only in action and reaction in the markets in competition. Thus, organizational performance is a measure of ex post validity, which has little predictive power to forthcoming tests of sustaining the demands of the future markets. Almost anything can be used as a determinant of organizational performance. Although useful for stated purposes, both practically and theoretically, such measures in isolation do not give a clear picture of the constituents the behavior, the competitive action in the field. (Saviotti & Krafft 2004, 2) According to Teulings (1986), Tainio et al. (1983), managers have to deal with differing logics of action, which are dispersed into separate arenas of management. The arenas apparently involve their own particular rules, norms basic problems, and conditions. They each represent divergent spheres, with their own logic and condition for managerial action. The added value and competiveness of the firm is produced by different mechanisms and by different processes at the differentiated arenas. I propose three arenas of management as follows: 1) The institutional arena, where the management meets legislative constraints as well as other institutional forces of the environment. 2) The capital and ownership arena in which the management meets the challenges of ownership. 3) The Business and operations arena, in which the task of the management is to find and improve possibilities of selling goods and services. In this paper, I use the idea of managerial arenas to show how different logics of management have dominated certain management arenas in the Finnish Grocery trade between 1991 and 2005. The data consists of 12 CEO interviews of the 4 Finnish food retail groups. The time frame long enough to notice the changes in the context (the business environment) and in the focal companies and the reciprocal interrelationship of the two. The analytical approach is a case study design, which has borrowed methods of historical inquiry. (Üskiden & Kieser 2004)