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Research on strategic industry groups provides numerous examples of the tensions between theory and methodology in strategic management research. After an initial explosion of largely non-theoretical, methods-driven studies led to mounting criticisms, researchers recognized the need for more theoretical guidance concerning the nature of groups and their potential influences on firm performance. This refocusing on theory has produced different research streams, each with its own methodological concerns. This chapter reviews these developments with the objective of understanding how researchers balance theory and methods in current research.

In this reply to the articles about “Multi-level Issues for Strategic Management Research: Implications for Creating Value and Competitive Advantage” (Drnevich and Shanley, this volume), we consider and applaud the applications of our ideas presented by Mackey and Barney (this volume) and Peteraf (this volume). We also note three general issues that arise from considering the two articles together: (1) the complexity of multi-level constructs of management; (2) the importance of strategic decision processes (and process approaches to strategy) in a multi-level approach; and (3) the need for dynamic approaches to bridge temporal periods in crafting strategic theories.

Most research issues in strategic management are essentially problem focused. To one extent or another, these problems often span levels of analysis, may align with different performance metrics, and likely hold different implications from various theoretical perspectives. Despite these variations, research has generally approached questions by taking a single perspective or by contrasting one perspective with a single alternative rather than exploring integrative implications. As such, very few efforts have sought to consider the performance implications of using combined, integrated, or multi-level perspectives. Given this reality, what actually constitutes “good” performance, how performance is effectively measured, and how performance measures align with different perspectives remain thorny problems in strategic management research. This paper discusses potential extensions by which strategic management research and theory might begin to address these conflicts. We first consider the multi-level nature of strategic management phenomena, focusing in particular on competitive advantage and value creation as core concepts. We next present three approaches in which strategic management theories tend to link levels of analysis (transaction, management, and atmosphere). We then examine the implications arising from these multi-level approaches and conclude with suggestions for future research.

1. INNOVATION IN ORGANIZATIONS: A MULTI-LEVEL PERSPECTIVE ON CREATIVITY

Jay Barney is a Professor of Management and holds the Bank One Chair for Excellence in Corporate Strategy at the Max M. Fisher College of Business, The Ohio State University. He received his undergraduate degree from Brigham Young University, and his master's and doctorate from Yale University. He taught at the Anderson Graduate School of Management at UCLA and Texas A&M University before joining the faculty at Ohio State in 1994, where Professor Barney teaches organizational strategy and policy to MBA and Ph.D. students.

Welcome to the second volume of Research Methodology in Strategy and Management. This book series’ mission is to provide a forum for critique, commentary, and discussion about key research methodology issues in the strategic management field. Strategic management relies on an array of complex methods drawn from various allied disciplines to examine how managers attempt to lead their firms toward success. The field is undergoing a rapid transformation in methodological rigor, and researchers face many new challenges about how to conduct their research and in understanding the implications that are associated with their research choices. For example, as the field progresses, what new methodologies might be best suited for testing the developments in thinking and theorizing? Many long-standing issues remain unresolved as well. What methodological challenges persist as we consider those matters? This book series seeks to bridge the gap between what researchers know and what they need to know about methodology. We seek to provide wisdom, insight, and guidance from some of the best methodologists inside and outside the strategic management field.