Configurational Theory and Methods in Organizational Research: Volume 38

Conventional quantitative research in the social sciences today is largely based on an understanding of analysis that is antithetical to configurational thinking. To analyze a phenomenon is to break it into its constituent parts and then to examine how the parts fit together, a two-step process. A common way of accomplishing the first step – breaking things into parts – is to conceptualize variables that can be used to characterize differences across cases.¹ In conventional quantitative research the second step – examining how the parts fit together – is accomplished primarily through various forms of cross-case analysis using correlational techniques (e.g., multiple regression). Thus, in conventional quantitative research, assessments of cross-case correlational patterns provide the primary basis for statements about how the parts of cases are connected to each other. Quantitatively oriented researchers studying organizations have produced an abundance of such studies, relating specific aspects of organizations to other aspects based on correlations observed across a set of comparable organizations.

The notion of configuration – that the whole is best understood from a systemic perspective and should be viewed as a constellation of interconnected elements – is arguably one of the central ideas of organization studies. Yet, this idea also remains one of the field’s least understood aspects. In this volume and its introduction, we outline a new perspective for understanding configuration. Our starting point is the emergence of set theoretic configurational methods, and especially Qualitative Comparative Analysis (QCA), which provides novel ways for analyzing configurations. Our volume goes beyond introducing a new method to the fields of management and organization, as these methods furthermore offer an opportunity to rethink our understanding of the field and to develop different ways of theorizing the rich complexity of relationships that characterize organizational life. In this introduction, we introduce some of the key themes that differentiate the approach taken here from previous work on organizational configurations and provide evidence for the emerging renaissance of the configurational approach in organizational theory and research.

Qualitative Comparative Analysis (QCA), initiated by Charles C. Ragin, is a research strategy with distinctive added value for organization studies. QCA constitutes in essence two configurational approaches, each grounded in set theory. One approach uses crisp-sets (dichotomous variables) to analyze cases. The other approach uses fuzzy-sets. While the use of fuzzy-sets has been increasing over the last few years, the crisp-set (csQCA) approach is still used in a majority of empirical applications. This chapter discusses in-depth the application of csQCA in organization studies. This chapter starts with a stylized presentation of two dominant research strategies, case-based research and variable-based research, and how csQCA relates to them. Subsequently, csQCA is further introduced and the different applications in organization studies are discussed. This section ends with a brief step-wise “how to” presentation. The chapter then turns to a presentation of the main distinctive strengths of the approach. In the final part, the chapter discusses extensively the main criticisms which have been raised with regard to (cs)QCA and draws out some of the main implications of this discussion.

Although QCA was originally developed specifically for small-N settings, recent studies have shown its potential for large-N organization studies. In this chapter, we provide guidance to prospective researchers with the goal of opening up QCA’s potential for widespread use in organization studies involving large-N settings, both as an alternative and as a complement to conventional regression analyses. We compare small-N and large-N QCA with respect to theoretical assumptions and objectives, processes and decisions involved in building the causal model, selecting the sample, as well as analyzing the data and interpreting the results. Finally, we discuss the prospects for large-N configurational analysis in organization studies and related fields going forward.

This chapter reconstructs the roots of configurational analysis in organization theory and organizational economics, focusing on the elements of configurational thinking that are particularly relevant to organizational design; and outlining some future prospects for a configurational theory of organization design. We detect the presence of configurational ideas in many organization theories and organizational economics approaches. We argue that this, seldom acknowledged, continuity extends and enriches the implications of configurational analysis for organization design. In addition, we define and identify ‘structural heterogeneity’ as an organizational property that can be distinctively studied by configurational analysis, distinguishing between internal heterogeneity – diversity of organizational attributes within one configuration – and external heterogeneity – diversity of organizational configurations under the same environmental conditions. Some of the insights that can be gained through a configurational analysis of structural heterogeneity are illustrated through a fs/QCA study of a multi-industry sample of firms.

In organizational research the object of study is often a process, that is, a complex of events and activities that unfolds over time. In this chapter we focus on temporally ordered configurations, which can be defined as those configurations in which conditions occur in a specific temporal order. We illustrate the aims, characteristics, and limitations of several approaches that have been proposed as tools for the analysis of temporal order. Our illustration involves an analysis of the “gestation activities” of nascent entrepreneurs, that is, persons involved in the creation of a new firm. We aim to identify temporal sequences of gestation activities that generate or allow a successful outcome of the gestation process, while an occurrence of the same activities in another temporal order will not generate or allow that outcome. First we discuss Event Structure Analysis and Optimal Matching and conclude that these approaches cannot provide the kind of analysis that we are aiming at in this chapter. Then we discuss Temporal Qualitative Comparative Analysis, for which our analysis points to technical limitations that constrain its application. We then present and discuss an alternative approach, Temporal Necessary Condition Analysis.

The growing literature on complementarities has drawn attention to how the effects of different organizational structures, practices, and institutions are interdependent. Rather than one best way of organizing, complementarities suggest that the effectiveness of one organizational element may be dependent on the presence or absence of another particular element. Consequently, organizational arrangements often display “multiple equilibria” or what is known as equifinality, whereby multiple pathways may lead to the same or similar outcomes. While being a source of theoretical innovation, the configurational nature of complementarities has posed a number of challenges. This chapter reviews the emerging literature on complementarities to identify a series of conceptual challenges related to understanding complementarities as organizational configurations, and examines the methodological challenges in studying how such elements combine to produce joint effects on performance. The chapter argues that new set-theoretic methods using Qualitative Comparative Analysis (QCA) may present a very useful methodological alternative to studying complementarities. The chapter illustrates this potential by re-analyzing past work by Aoki, Jackson, and Miyajima (2007) on relationships between ownership structure, board structure, and employment practices of listed firms in Japan to show evidence of complementarities associated with hybrid configurations that combine market and relational forms of organization.

Corporate governance research based on agency theory has been criticized for being “under-contextualized,” and for evaluating various governance practices independently. To address both criticisms, we take a configurational approach and show how firm-level governance practices interact with informational asymmetries associated with a firm’s industry. By examining foreign Initial Public Offerings (IPOs) that have chosen to list on London stock exchanges, we demonstrate that an assessment of the firm-level corporate governance configurations is incomplete without taking into account the firm’s industry affiliation. Our use of fs/QCA underscores the possibilities configurational approaches have in advancing theories of corporate governance.

This chapter explores the integrative effects of individual psychology and social context in explaining why managers would behave in socially responsible ways. To identify how factors at different levels of analysis combine to shape attitudes toward social responsibility, I apply fuzzy-set qualitative comparative analysis (fsQCA) to survey and archival data from 335 managers of overseas subsidiaries of three Dutch corporations. Attention to the simultaneous effects of individual psychological factors, the organizational context, and the broader social context offers a configurational perspective on the micro and macrofoundations of social responsibility.

This chapter shows how configurational approaches can be a valuable inquiring system for examining and understanding complex messy phenomena in the area of digital business strategy in turbulent environments such as digital ecodynamics. Digital ecodynamics is defined as the holistic confluence among environmental turbulence, dynamic capabilities, and IT systems – and their fused dynamic interactions unfolding as an ecosystem. With fuzzy-set qualitative comparative analysis (fsQCA) we analyze firm-level field survey data and describe how IT systems, organizational dynamic capability and environmental turbulence simultaneously combine to result in multiple configurations, which have different causal structures to produce competitive firm performance. This equifinality shows how configurational approaches can create new practical insights in digital ecodynamics by suggesting multiple strategic options from which organizations can choose the best solution that fits their context.

This chapter explores how a configurational approach and set-theoretic methods can contribute to a deeper and more nuanced understanding of organizational networks and network relations. This is especially true for the study of “whole networks” of organizations where data collection difficulties often limit the sample size (Provan, Fish, & Sydow, 2007). We present two empirical examples of current research on whole networks, demonstrating how qualitative comparative analysis (QCA) can be used to analyze organizational networks. We then discuss the methodological and theoretical implications of the configurational approach for future organizational network research.

The identification of country-specific advantages for business activities is one of the most crucial issues of strategic management and international business literatures. We address this issue by examining location-specific conditions for a successful generic medicines industry within 24 European countries. The findings of our fuzzy-set qualitative comparative analysis show that there are no necessary conditions for the high performance or absence of the high-performance industry. By revealing the causal complexity related to the issue, however, we show that the high performance or lack of it results from a configuration of conditions. Specifically, we identify two sufficient causal configurations to both outcomes. These findings provide clear implications for generic medicines industry firms who are planning location choices of their operations. In addition, this study provides a methodological advancement to explain and understand which country elements matter more, for what outcomes, and under what conditions.

Transformational leadership has been found to positively influence employee attitudes and behaviors. However, research also has shown that a variety of task and motivational factors lead to similar outcomes. Yet, little research has explored the potential interaction of transformational leadership with these other factors. We utilize fuzzy-set/qualitative comparative analysis to explore the ways these factors may interact to produce positive employee outcomes. Specifically, we found that high levels of employee commitment and performance can be achieved in the absence of a transformational leader through various “bundles” of enriched jobs, challenging goals, and high quality leader–follower relationships.

I have always felt that one of the most important roles that a book chapter can fulfill is effectively setting the stage for future scholars to build on the content of the chapter. This is a particularly important task where doctoral students are concerned, given their status as newcomers to organizational research. Ideally a doctoral student can pick up tips in a book chapter that will facilitate her or him conducting better studies than if s/he had never read the chapter.

In this concluding chapter, we look ahead to future theoretical and methodological directions that emerge from the contributions in this volume and that carry the potential to enrich contemporary organizational research. We furthermore point to some issues that remain unsolved and need to be addressed in future research to further establish the configurational approach in the field of organizational studies, such as the growing need for homogeneity in how the analysis is conducted and results are presented. We argue that the momentum of the configurational approach in organizational research is strong, but that important challenges remain.