25
Historiographical Analysis

Short Description

Historiographical analysis applies a common research methodology used in history studies to strategy analysis. It attempts to understand strategic issues relative to their origins and evolution in order to more clearly understand the present. Historiography seeks to identify and interpret events that have occurred, as opposed to merely reporting them.¹ By placing the present in an historical perspective, historiographical analysis may also beneficially frame future strategic considerations.

Background

Commonly described as "the history of history," historiography is almost as old as history itself. Since time immemorial, humankind has engaged in communicating and preserving their historical records, first through oral tradition and later through written documentation. Initially, the recording of history was done without any systematic consideration of the process of recording history. By the nineteenth century, however, the related field of historiographical analysis was fully articulated to specifically address two issues related to the recording of history:²

• The actual process of historical writing
• Methodological and theoretical issues related to this process

Historians inherently ask many questions about the past, and they try to answer these questions through their research. To accomplish this, historians must learn how to read a wide variety of historical records for argument (how to know what other writers are arguing; how to ask historical questions; and also how to uncover, gather, and assess the soundness of historical sources). Historiographers are ever conscious of the "four Cs" of context, causes, continuity, and change.³

In the 1960s, Alfred duPont Chandler was one of the first economic historians and strategists to popularly apply historiography to the study of strategic management. Using this analytical approach, Chandler developed a theory of strategy and structure, as well as a theory explaining the rise of managerialism and business enterprise in America.⁴

Since these early developments, advances in the application of historiography to the field of strategic management have been erratic—the majority of research has been directed toward the academic study of management and policy. Nonetheless, historiographical analysis represents a promising analytical process that offers many unique insights into competitive behavior and competition. It can be of good value in developing insights that complement strategic decision making.

Strategic Rationale and Implications

Humans by nature are interested in making progress—they build their cultures with tales from the past of how they have triumphed over adversity, enhanced their conditions and lifestyles, and made advances in technology. Society's focus on constant advancement means that we tend to dismiss or forget the historical perspective. The primary purpose for using historiographical methods for competitive or strategic analysis is to build business theories that revisit the past in order to explain current strategic issues and competitive conditions. Although the technique is neither necessary nor sufficient in the entire strategic analysis or planning process, it can greatly enhance the analyst's understanding of context and activity and provide insights into one's firm or industry.

An important fundamental premise underlies the application of historiography to strategic analysis. This premise is that understanding the origins of strategic issues and their evolution through time provides a foundation from which to guide today's strategic analysis.⁵ Historiographical analysis asks the question: "Why have strategic issues and competitive conditions developed so as to arrive at their current state?" The answer to this question is essential to properly frame strategic analysis and often provides clues as to optimal courses for present or future action. Often, the underlying forces driving change are closely related to historical precedents. In this way, historiographical analysis can be viewed as a tool that uses knowledge of the past to examine the present as well as to help project the future. For example, understanding the origins and evolution of a path-dependent source of competitive advantage (that is, how the history of a competitive advantage can be explained disproportionately by particular events or actions that occurred in the past) can be greatly facilitated through this type of analysis.

R.S. Goodman and E.V. Kruger have identified several areas where historiographical analysis provides for the rigorous development, critique, or defense of propositions or theories. Although their application was designed for the larger field of academic management research, their work is equally relevant to generating competitive theories for circumstances facing individual firms; therefore, several areas where historiographical analysis can assist the analyst in generating descriptive or explanatory theories at the firm level follow:

• Research question development—Historiographical analysis starts with a hypothesis (that is, an in-progress or tentative explanation of some phenomena or problem that can subsequently be subject to investigation and testing) that guides the analysis of corroborating sources of evidence. There is an inherent efficiency in this step that can help you avoid embarking upon a "fishing expedition" through the data and information because, ideally, this will enable you to structure the parameters of the strategic issue before embarking on further research.
• Variable selection and evaluation—Analysts using historiographical analysis face similar limitations to those individuals using other related qualitative techniques. This forces the analyst to carefully validate (that is, establish the relative "soundness" of) the sources of information underlying their analysis. Historiographical analysis methodology is premised on the principle of objective skepticism, which suggests that skepticism is driven by external forces rather than internal bias. This is achieved in two ways. First, historiographical analysis removes bias that often afflicts conventional analysis by insisting on initially viewing all information as credible and valid. This validity is then confirmed or dismissed externally by cross-referencing and triangulation against other evidence generated by primary and secondary sources.
  The breadth of information under the purview of historiographical analysis increases the number and diversity of potential variables that would not normally be considered when using other strategy analysis tools and techniques.
• Theory construction—Historiographical analysis also offers a unique approach to theory construction. As opposed to the deductive approach of most analytical approaches, historiographical analysis incorporates an inductive approach that first proposes a general proposition and then searches for confirming evidence. Inductive approaches can be very appealing for analysts within larger, time-pressed enterprises since they are often guided by decision makers who need to be convinced of the facts and shown the underlying logic using evidence they can easily relate to.
• Hypothesis generation—Investigating the historical development of strategic issues and competitive conditions encourages a holistic inclusion of all of the relevant factors and their interrelationships with each other. Thorough research requires that your investigative net be cast as wide as possible to allow the diversity of sources to generate multiple hypotheses. This process results in a more complete analysis.
• Formulation of conclusions—Based on the corroboration from the various primary and secondary sources, a conclusion (that is, the generalized proposition articulated at the start of the analysis) can be more effectively supported.

Table 25.1 summarizes the strategic rationale of using historiographical analysis to build theories based on the past to explain the present and frame the future.

Table 25.1
Applicability of Historiography to Management Research⁶

Strengths and Advantages

Historiographical analysis broadens the analytical scope of strategic analysis. The diversity of information sources embraced by historiography often presents management with perspectives and insights routinely ignored by other strategy analysis tools and techniques. In this respect, historiography extends the mental envelope of managers by asking new questions or approaching old questions in different ways.

As a refined qualitative method of analysis, historiography provides a richer means for illuminating the relationship between contexts, causes, continuity, and changes. As such, it focuses on explaining important developments in the competitive marketplace by requiring you to study alternative evolutionary patterns of activity and behavior, either topically or chronologically. This keeps you from automatically falling back on their pre-conceived notions or commonly held industry recipes that could limit the development of superior future options for enterprise action.

The analytical development and subsequent managerial decision-making processes are also improved by several positive principles inherent in the historiographical approach, particularly through skepticism and strategic challenge:

• Skepticism—Historians, the individuals who most commonly apply this technique, by nature and training accept that history can never be completely recaptured. Therefore, they exist with competing accounts and interpretations of facts, making them skeptical of the contents and objectivity of different competing sources. Employing historiographical analysis encourages you to adopt the mindset of rigorous objective skepticism.
• Strategic challenge—Historiographical theories cannot be proven in the way we scientifically assess mathematical proofs or related physical phenomena, and that is, ironically, one of the greatest strengths of historiographical analysis. As such, established theories are under constant pressure from newer historiographical theories with greater explanatory power. This critical perspective acts to constantly challenge peoples' assumptions underlying the firm's or competitor's strategy.

Weaknesses and Limitations

One of the primary criticisms of historiographical analysis is its perceived lack of objectivity. Much of the process involves the individual's selection of facts designed to support subjective theories that are not easily amenable to testing through rigorous statistical analysis. In fact, many observers object to referring to the final product of historiographical analysis as theory and instead perceive it to be a close cousin to narrative. However, before dismissing historiographical analysis on this basis, you should consider the confidence that society places on scientific proof; perhaps the only difference between historiographical analysis and other perceptively more robust analyses is the quantification of uncertainty and subjectivity rather than its elimination.

Historiographical analysis is also viewed in many corners as suffering from "prior hypothesis bias." This bias refers to one's tendency to be lulled toward sources or data that support our hypotheses and ignore or minimize data that doesn't. The tendency to act in this way needs to be actively combated, and good historiographers are taught to apply techniques that will lessen this potential problem.

Another weakness of historiographical analysis relates to the dependence its validity has on one's view of history. Several common philosophical views of history include the linear view, the circular view, and/or the chaos perspective. The linear view posits that history is one long continuum of progress with very few points of commonality. Conversely, the circular view suggests that history is a series of overlapping patterns resulting in many points of commonality—it is best described by the karmic phrase "What goes around comes around." The chaos view asserts that history is totally random with no points of commonality. Obviously, one's philosophical view of history will impact his or her evaluation of the worth of historiographical analysis. The circular view would seem to offer the strongest validation of the purpose of historiographical analysis to learn from the past. However, the common occurrence of discontinuities or "disruptions" challenges this view.

Historiographical analysis is sometimes derided for its lack of structure. Indeed, the process approach can appear very loose. Linear thinkers often reject this flexibility, suggesting that the broad scope of induction embraced by historiographical analysis leads to an inefficient and inconclusive analysis. This generalization is also seen as a major flaw of historiographical analysis; that is, the analytical product cannot be used as a universal principle.

A final caution regarding the use of historiographical analysis: Problems can arise if the analyst uses the conclusions to predict the future rather than to better understand the current position. History has demonstrated a tendency to frequently repeat itself, although these repetitions are never perfect or exact to prior occurrences. Business analysts know this from their own experience with technology. Not only do advances in technology change how we do things, it changes what we do now and in the future. For Kodak and Fuji, a historiographical analysis highlighting the importance of film quality could lead these firms astray if it means they fail to recognize that digitization has been rendering their chemically based products obsolete. This weakness is overcome when analysts fully recognize the purpose of historiographical analysis and use it in conjunction with other strategy building techniques outlined in this book.

Process for Applying the Technique

Unlike other more scientific disciplines, historiographical analysis does not begin with a theory from which testable hypotheses are developed. In contrast to the traditional scientific method, historiographical analysis begins with a general proposition and seeks corroborating support from a diverse array of sources using methodologies from many other disciplines. The far-reaching nature of the technique requires that the analyst should attempt to become both widely and well read. The Case Study, for example, provides a sample of historiographical analysis as applied to the retail industry.

Step 1—Develop a General Proposition

The first step, then, in the historiographical process is to develop a general proposition about a strategic issue or competitive condition. Some examples of such general propositions are the following:

• Underlying factors responsible for the prevalence of alliances in a particular industry
• Specific reasons for the industry leader's success with a particular type of technological platform
• Determination of the dependency of certain strategic assets or capabilities that a competitor owns or controls

This short list underscores the broad scope of historiographical analysis. The competitive issues potentially under its purview are very expansive and can incorporate influences from any number of areas.

Step 2—Collect Primary Information

The next step is to seek out primary sources of information. Primary sources include eyewitness accounts and accounts from people who were close to the action along various points of the issue's development. These sources are viewed as the "first draft of history" because of their firsthand nature (that is, they come "straight from the source," not from or through a second source, such as a reporter) and consistency with the oral tradition that started the historiograhical discipline. As such, they are often the most valuable source of information because of the limited potential for distortions. These primary sources may come directly to you from participants or observers, be captured in eyewitness accounts and surveys, be found in published speeches (in written or multimedia formats) by participants at or about the time that the event occurred, or come from experiments or possibly from original photographic records and the like.

Step 3—Collect Secondary Information

Next, you need to seek out secondary sources of information about the issue under analysis. Typical sources of information include newspapers, the Internet, magazines, corporate publications, annual reports, analyst reports, trade publications, academic cases, and so on. These accounts can be considered as the "second draft" of history because they represent the attempt of various individuals to reconstruct the historical evolution of the various issues through their own interpretations and lenses.

Both primary and secondary sources then undergo critical analysis in order to determine authenticity. It is important for you to remain as objective as an historian at the outset of the analysis. This means you must initially assume that all sources are neutral and valid; that is, all of the information gathered from primary and secondary sources is expected at the outset to represent what it purports to represent. This reduces the chances of introducing personal bias into the analysis.

At this point, the distinction between primary and secondary sources can serve as a valuable external and objective legitimacy filter in order to test the validity of the sources. Points of apparent inconsistency can be cross-referenced between primary accounts and secondary accounts. Similarly, different sources within each source category can be checked against each other for accuracy. After this procedure has been completed, you will have answers to several pertinent questions. Is the information authentic? Is it legitimate and known to be true? Are the sources free from any perceived, known, or actual bias?

Step 4—Select the Best Sources for the Third Draft

Next, you select those sources that best address the general proposition developed at the start of the historiographical process. These sources then represent the raw material for the "third draft of history," the analysis of the evolution of an issue developed as intelligence—not for public consumption but as an analytical input to the strategic decision-making process. This requires a critical analysis of all the sources in an attempt to find common threads or continuities in the often-messy web of data that has been culled from the valid primary and secondary sources. These threads are then woven into a theoretical tapestry that sufficiently supports or explains the original proposition.

Step 5—Reporting

Consider this process as the reverse of building a standard logical argument. Normally, arguments are first built on a set of assumptions or premises that support a conclusion. Logic assumes that if premises are valid, then the conclusion that they support is valid. Instead of this standard deductive approach, historiographical analysis employs an inductive methodology. It starts with a conclusion with respect to the general proposition and attempts to secure facts from various sources that satisfactorily explain its origin and historical evolution. Through historiographical analysis, you will gain a much richer appreciation of the present conditions and characteristics of a strategic issue. As a result, a much wider perspective of possible parameters strengthens the analysis of current and future strategy.

Figure 25.1 The historiographical process

Thus, the process of historiographical analysis can be seen as securing, validating, and, most importantly, understanding facts. The interrelationships between the facts provide the foundation from which to build business theories. This process should be continuous because history is continuous and evolving. After all, any theory is only as good as its explanatory power. A continuous process ensures that theories are revised as conditions change and issues evolve. New theories should be advanced, and old theories should be challenged. Much of this ongoing analysis should be done formally, but a significant amount can also be done informally. Historiographical analysis embraces a wider range of subject areas and analytical disciplines than most strategic management tools.

Hence, you will be well served by reading from as many different sources as possible. Often the most obscure source will provide the most colorful threads needed to weave the theoretical tapestry into the firm's next business idea. In order to increase the possibility of this happening, you should try to gather as many different sources of information, ideas, and perspectives as possible. The resulting mental percolation is often the instigation for unexpected flashes of insight that randomly occur, say, during sleep or while taking the daily shower!

Case Study—Australian Menswear Retailer

Gowing Brothers had been a prominent competitor in the Sydney menswear market since 1868. Its success in the volatile menswear market led two researchers to employ historiographical analysis to answer the question, "What leads to retail success over extended time periods?" After looking at 22 case histories of longstanding North American retailers, three critical success factors (CSFs) (see Chapter 18, "Critical Success Factor Analysis," for more about this technique) were identified for the retail industry. These CSFs were as follows:

1. Clear market positioning—This required the outlet to emphasize value, service, and quality in a clearly identified retail segment.
2. Distinct periods of expansion or modernization—From 1850–1920, retail expansion focused on larger facilities. From 1915–1935 and 1946–1960, modernization was pursued through new store designs and structural layouts, new technology, improved merchandise management processes, more sophisticated marketing, and improved human resource management.
3. Strong capabilities allowing excellent operational management of the retail mix—This included focusing attention on customer, staff, and vendor relationships; technology; finance; human resources management; and sales support.

The two researchers started by analyzing primary and secondary sources of information. The primary sources included interviews with the Director and the Marketing Manager. Some secondary sources included annual reports, ledger accounts, company archives, and newspaper and press clippings. After compiling their data, the researchers put together a detailed chronology highlighting the significant decisions that were made throughout the company's history. The following were identified as the critical decisions (see Figure 25.2).

Figure 25.2 Critical decisions in Gowings' retail history

Each of these decisions were put into a historical context relative to what rivals were doing in the same timeframe. They were then used to assess critical success factors 1 and 2, as shown previously. Part of this analysis included the strategic implications of the "road not taken"—that is, the decision not to expand into the Sydney suburbs, which were growing rapidly throughout the end of the twentieth century, as several rivals had done at more than one juncture. When it came time to assess CSF number 3, the researchers took a close look at some specific capabilities that fell under the "operations" umbrella, including advertising and promotion, customers, staff and vendor relations, information systems, and financial capability.

After evaluating the fit with the framework, the researchers came to the following conclusion:

• Flexibility as opposed to constancy of market positioning was determined to be a moderate CSF (CSF 1).
• Expansion and modernization were determined to be a strong CSF (CSF 2).
• Operational management was determined to be a medium to strong CSF (CSF3).

As you can see, the framework was found to have a close but not perfect fit to Gowings' experience.

This historiographical analysis also generated some important implications. The study highlighted the significance of a clearly defined market position and the ability to respond to dynamic market conditions. Clearly, many retailers respond too slowly to market conditions. Organizational capabilities related to good relationships with customers, staff, and vendors were also identified, and, last but not least, CSFs specific to retail categories (for example, niche retailer versus budget chain) were identified as several unique capabilities. Even after only one iteration, this historiographical model yielded several significant insights and a formal framework to critically analyze the retail strategy of specific companies.⁷

FAROUT Summary

Figure 25.3 Historiographical analysis FAROUT summary

Future orientation—Low to medium. The focus of the analysis is on using knowledge of the past to explain the present. Projecting this analysis to the future is less valid.

Accuracy—Low to medium. Any violations of the critical assumption of recurring historical patterns reduces accuracy. Additionally, this model doesn't handle discontinuity or environmental turbulence very well.

Resource efficiency—Medium. Reliance on secondary sources will significantly increase resource efficiency.

Objectivity—Low. The analysis is heavily dependent on qualitative analysis and selective judgment.

Usefulness—Medium to high. Offers unique insights not offered by other tools and techniques.

Timeliness—Medium. Highly dependent on the complexity of the phenomena and length of time under study. A historiographical analysis can be conducted in a relatively short period of time or can take substantial time when there are a large number of interacting actors and actions to consider.

Related Tools and Techniques

• Analysis of competing hypothesis
• Blindspot analysis
• Critical success factor analysis
• Industry analysis
• Issue analysis
• Linchpin analysis
• Stakeholder analysis
• STEEP analysis
• Strategic group analysis

References

Chandler, A.D. Jr. (1962). Strategy and Structure: Chapters in the History of the American Industrial Enterprise. Cambridge, MA: MIT Press.

Chandler, A.D. Jr. (1977). The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Harvard University Press.

Goodman, R.S., and E.V. Kruger (1988). "Data dredging or legitimate research method? Historiography and its potential for management research," Academy of Management Review, April, 13(2), pp. 315–325.

Iggers, G.C. (1987). Historiography: An Annotated Bibliography of Journals, Articles, Books, and Dissertations. Santa Barbara, CA: ABC—Clio Inc.

Lawrence, B.S. (1984)."Historical Perspective: Using the Past to Study the Present," Academy of Management Review, April, 9(2), pp. 307–312.

Miller, D., and B. Merrilees (2000). ''Gone to Gowings—An analysis of success factors in retail longevity: Gowings of Sydney," The Services Industries Journal, January, 20(1), pp. 61–85.

Rampolla, M.L. (2001). A Pocket Guide to Writing in History, 3^rd edition. Boston, MA: Bedford/St. Martins.

Startt, J.D., and W.D. Sloan (2003). Historical Methods. Northport, AL: Vision Press.

Wulf, W.A. (1997). "Look in the spaces for tomorrow's innovations," Association for Computing Machinery. Communications of the ACM, February, 40(2), pp. 109–111.

Endnotes

¹ Goodman and Kruger, 1988.

² Iggers, 1987.

³ Rampolla, 2001.

⁴ Chandler, 1962 and 1977.

⁵ Startt and Sloan, 2003.

⁶ Adapted from Goodman, R.S., and E.V. Kruger (1988).

⁷ Adapted from Miller, D., and B. Merrilees (2000).