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European Management Journal (2015)

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European Management Journal

j o u r n a l h o m e p a g e : w w w. e l s e v i e r. c o m / l o c a t e / e m j

The future of strategic management research: Assessing the quality of

theory borrowing
Thomas P. Kenworthy a,*, Alain Verbeke b,c
a
b
c

Management & Marketing Department, School of Business, University of Dayton, 300 College Park, Dayton, OH 45469, USA
Strategy and Global Management, Haskayne School of Business, University of Calgary, Calgary, Alberta, T2N 1N4, Canada
Universit Libre de Bruxelles Campus du Solbosch Avenue F.D. Roosevelt 42 B-1050 Brussels, Belgium

A R T I C L E

I N F O

Article history:
Received 14 May 2014
Accepted 24 March 2015
Available online
Associate editor: Sabina Siebert
Keywords:
Strategic management
Theory borrowing
Agency theory
Institutional theory
Transaction cost economics

A B S T R A C T

In many business schools, the eld of strategic management has been elevated to the same status as more
traditional subject areas such as nance, marketing and organizational behaviour. However, the eld is
rather unclearly delineated at present, as a result of the heavy usage of borrowed theories, a phenomenon we discuss in this article. For strategic management to become a legitimate subject area, truly at
par with the more conventional elds taught in business schools, we recommend much stronger selectivity when borrowing theories from other areas of scholarly inquiry than management, as the foundation
of empirical work. We propose a new model consisting of seven quality tests to assess whether proper
selectivity is being applied when importing concepts from other elds than management. Our perspective has major implications for both future, evidence-based strategic management research and for the
elds key stakeholders such as strategy teachers, practitioners and policy makers who rely on research outputs from strategy scholars.
2015 Elsevier Ltd. All rights reserved.

Introduction
Modern management research is struggling to combine effectively academic rigour and practitioner relevance. Chia (2014, p. 684)
has argued that a shift is necessary towards common sense scholarship so as to serve well the two above goals. Along the same lines,
Hernes (2014, p. 852) has suggested that scholars must cut loose
the shackles of misplaced scientic ideals and should instead focus
on, the localized, embedded, uid and contingent nature of managerial work.
In the present article, we propose an actionable approach that
should improve both the rigour and relevance of a particular organization and management subeld, namely that of strategic
management (SM), whereby we focus on the development and usage
of appropriate theory to guide research efforts. It has been suggested that: There is nothing so practical as a good theory (Lewin,
1951, p. 169). Van de Ven (1989, p. 486) extended this perspective
as follows: Good theory is practical precisely because it advances
knowledge in a scientic discipline, guides research towards crucial
questions, and enlightens the profession of management.
However, developing theory that is helpful to management is not
necessarily easy to achieve, and this is for at least two reasons. First,

* Corresponding author. Management & Marketing Department, School of Business,

University of Dayton, 300 College Park, Dayton, OH 45469, USA. Tel.: +937 229 3754;
fax: +617 229 3788.
E-mail address: kenworthy@udayton.edu (T.P. Kenworthy).

what actually constitutes rigorous and relevant SM theory is debatable, but presumably it must have some type of predictive and
explanatory capacity that would support a broad area of practice.
A theorys predictive and explanatory power should hold across a
range of empirical phenomena in this area of practice, but such
generalizability may be dicult to establish. Indeed, knowledge creation efforts in SM seldom lead to generally accepted, cumulative
knowledge development, in contrast to what occurs in the hard sciences. Controlled experiments, accurately simulating/replicating
situational contexts from practice are often dicult if not
impossible to achieve, especially when addressing wicked management issues in the SM sphere (see below). Second, irrespective
of a high level of generalizability and cumulative knowledge development, SM theory can inform practice, but the transfer of
concepts and predictive templates from an academic setting to a
managerial environment is not necessarily easy to achieve. SM scholars may develop substantial insights on real world, managerial
phenomena, but few are the equivalent of, e.g., medical experts, who
combine academic research and clinical practice, whereby issues
arising in the latter area of work translate directly into identifying
critical questions and formulating testable hypotheses in the former.
In addition, few SM research outputs are read and used systematically by strategy practitioners. Only a fraction of SM research thus
combines a strong predictive and explanatory capacity, and usefulness as perceived by practitioners, because of the absence of
systematized back-and-forth between research and practice.
The scientic discipline of SM addresses the establishment and
pursuit of a rms long-term goals, as well as the ways in which

http://dx.doi.org/10.1016/j.emj.2015.03.007
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business leaders or managers respond to and shape environmental forces, and orchestrate internal resources. Here, SM theorizing
can be important, to the extent that it allows for better prediction
and explanation of SM choices in clearly specied situational contexts. As a result, the SM practice becomes more intellectualized:
it can be understood not only by being actually engaged in it (learning by doing), but also through the mediating and framing force
of conceptual ideas (Kiechel, 2010).
SM theorizing can be important not only for purposes of immediate applicability in management practice, but also for business
school teaching because it transcends all functional areas of management, and addresses directly the rms long term survival,
protability and growth. However, as noted above, in addition to
the need for some level of predictive and explanatory power, and
for generalizability, effective interaction between scientic research and clinical practice in SM is a major challenge, especially
because of the wickedness of many SM problems, characterized
by discontinuous change, high technical and social complexity, management biases and conicts among multiple stakeholders that are
dicult to resolve (McMillan & Overall, 2015).
Given the above context, we address one specic question in the
present article that we consider critical to supporting the dual objectives of rigour and relevance: should SM scholars engaged in
empirical research, restrict themselves to testing (and possibly extending) eld-specic theories, or is there value in borrowing theories
from other elds of academic inquiry, as the basis of hypothesis formulation and testing? Recently, Oswick, Fleming, and Hanlon (2011)
assessed whether theory borrowing is commonplace in the broader
organization and management theory (OMT) research. They dened
theory borrowing as, the importation of coherent and fully formed
ideas that explain a phenomenon (or phenomena) into OMT from
outside the discipline (p. 319). Oswick et al. (2011) found that approximately two-thirds of OMT research is driven by theories
borrowed from other disciplines. The research revealed theory borrowing from relatively closely related elds such as sociology,
psychology and economics, but also from less proximate elds such
as biology, education, engineering, history, law, linguistics, mathematics, philosophy, and politics. Oswick et al. (2011, p. 328) voiced
serious concerns about the observed imbalance between eldspecic and borrowed theories. One key concern was that the
original nuance of borrowed theories, well understood when used
in their base eld, was in danger of being sacriced when applied
in an OMT context.
Other scholars have echoed such concerns. For example, Suddaby,
Hardy, and Nguyen Huy (2011, p. 237) argue that OMT:
has somewhat awkwardly imported theories, research questions, and methods from foreign disciplines without fully adapting
them to the new context. Rather than treating organizations as
a subject of inquiry in their own right, management theorists
appear to have treated organizations merely as new empirical
sites to test, prove, and tweak old theories.
In the OMT eld, the heavy borrowing practice has come at the
expense of indigenous theory development. Here, Markczy and
Deeds (2009, p. 1079) insist that OMT:
needs to build theories based on our unique position and understanding of management and organizational phenomena
rather than co-opting the theories of economics, psychology or
sociology or even of nance, accounting and marketing.
However, the potential benets of theory borrowing have also
been acknowledged:
organization theory is always empowered primarily by
methods and perspectives from the wider social sciences. Predominantly, it is informed by theories and methods from

anthropology, economics, psychology, and (especially) sociology. Thus, for many scholars, notions such as indigenous theorizing
in organization theory are anathema to the everyday reality of
research practice. (Hassard, Wolfram Cox, & Rowlinson, 2013,
p. 310).
What may therefore ultimately be more important than purity
in indigenous development is that SM scholars would follow an appropriate selection process when contemplating the borrowing of
theories, and would refrain from borrowing those theories that do
not meet a set of straightforward selection criteria (Ferraro, Pfeffer,
& Sutton, 2005).
The early years of SM research1, with SM being a scholarly subeld of OMT, were characterized by a small number of research
outlets publishing predominantly case-based analysis (Hoskisson,
Hitt, Wan, & Yiu, 1999). Today, the SM discipline claims several dedicated journals (Azar & Brock, 2008), and a host of other outlets
regularly publish SM research (e.g., Academy of Management Journal
AMJ, Academy of Management Review AMR, Administrative Science
Quarterly ASQ, Journal of Management JoM, and Journal of Management Studies JMS). The cumulative output of these research
efforts has elicited a variety of comments about the scientic status
and progress of the discipline. Some researchers have reported signicant progress (e.g. Hoskisson et al., 1999), whereas others have
voiced substantive concerns (e.g., Ghoshal, 2005; Jarzabkowski &
Whittington, 2008).
As noted above, our main focus in the present paper is the extent
to which the most frequently tested theories in SM research are indigenous, as opposed to borrowed from other elds.2 A theory can
be dened as:
a collection of assertions, both verbal and symbolic, that identies what variables are important for what reasons, specically
how they are interrelated and why, and identies the conditions under which they should be related or not related.
(Campbell, 1990, p. 65)
As we will demonstrate below, our investigation revealed substantial theory borrowing in SM prompting the development of a
screening model to permit proper selectivity in such borrowing. We
hope that the model (and possible future extensions thereof) will
serve the SM eld in terms of improving both the rigour and relevance of its empirical work. First, the model allows for an ongoing
open door policy to good theory from other elds (Hassard et al.,
2013). Second, it provides a reasoned defence to protect the indigenous body of rigorous and relevant SM theories against invasion
by theories from other elds that bring no value added at best and
negative value added at worst to the SM eld (Markczy & Deeds,
2009; Suddaby et al., 2011).
Explicit theory-driven research in strategic management
In order to examine the nature and extent of theory usage in SM,
we chose to limit our scope with respect to time period and content.
With respect to time period, we began our analysis in 1980 for two
reasons. First, SM arguably became a legitimate academic discipline around 1980 (Azar & Brock, 2008). Second, the long, but
manageable time frame allowed us to capture various trends and
mitigate the inuence of journal editorial policies on the ndings.
With regard to content, we limited our analysis to articles published in seven (out of a set of fteen) dedicated SM journals (Azar

1
Nag, Hambrick, and Chen (2007) provide insight into how the SM eld may be
dened.
2 This question has also been raised in other elds, such as retailing (Brown & Dant,
2009) and purchasing and supply chain management (Chicksand, Watson, Walker,
Radnor, & Johnston, 2012).

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Table 1
Article counts by journal.
Journals

SMJ

JEMS

TASM

LRP

SO

BSE

JBS

Total

Total articles
Total empirical articles
Total theory-driven articles
Theory driven density

1643
1242
382
30.8%

495
145
27
18.6%

604
256
11
4.3%

1703
490
13
2.7%

130
65
25
38.5%

464
254
23
9.1%

278
160
27
16.9%

5317
2612
508
19.4%

Growth of Theory-driven Empirical Arcles

30.00%

Percentage

25.00%
20.00%
15.00%
10.00%

0.00%

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

5.00%

Year

Fig. 1. Growth of theory use in empirical research.

& Brock, 2008) in order to avoid problems associated with identifying relevant articles in more broadly-focused, management
journals. The following seven dedicated SM journals the highest
ranked ones (Azar & Brock, 2008) were included for review: Strategic Management Journal (SMJ, 19802009); Journal of Economics
& Management Strategy (JEMS, 19922009); Technology Analysis &
Strategic Management (TASM, 19892009); Long Range Planning (LRP,
19802009); Strategic Organization (SO, 20032009); Business Strategy & the Environment (BSE, 19922009); and Journal of Business
Strategies (JBS, 19842009).
Identifying articles that made explicit use of theory involved three
key criteria. The rst criterion was that the article had to be empirical in nature utilizing a research method involving observation
and/or experimentation, rather than simulation or pure conceptualization. The second criterion was that the article had to include
at least one predictive hypothesis prior to a discussion of research
method(s). For the most part, research hypotheses were readily identied, often set apart and labelled as, for example, H1. In some cases,
the research hypotheses were formulated more implicitly, as part
of the main text. Such articles were only included in our study if
the related text claried the predictive nature of the statement in
question. The third criterion involved the explicit mentioning of a
theory used in the article. The task of identifying theories (at times,
more than one theory per article) was relatively easy and unambiguous for the most part. We did not attempt to assess whether
hypotheses were correctly derived from the theories utilized,
nor the extent to which the hypotheses were supported, since such
concerns had supposedly been addressed during the reviewing
process.
Finally, each theory that was mentioned explicitly was categorized in terms of its origins. In keeping with Oswick et al. (2011, p.
321), our assessment, of whether or not a given theory is borrowed is determined by whether or not the main proponent(s) is
(are) either located within the [SM] academic community or outside
of it (OMT replaced by SM). The total number of peer-reviewed articles for the seven SM journals was 5317. The total number of
empirical articles was 2612, as shown in Table 1.

The density of theory-driven pieces as a percentage of the total

number of empirical articles was 19.4%, as shown at the bottom of
the Total column of Table 1. In other words, approximately one in
ve empirical articles tested at least one theory-driven hypothesis. The rst theory-driven empirical articles in each journal appeared
in the following years: SMJ 1980; JEMS 1992; TASM 1998; LRP
1989; SO 2003; BSE 1999; and JBS 1990. The growth in explicit theory usage in SM journals is shown in Fig. 1 below. Theorydriven empirical studies are presented as percentages of the total
number of empirical articles over time. Over a thirty-year time
period, theory-driven empirical research in the SM discipline has
grown from close to zero to nearly 25% of all empirical work.
In the above set of theory-driven articles, researchers associated their tested hypotheses in an explicit fashion with specic
theories. On the basis of the theories named by the researchers themselves, we compiled the list of 194 theories in Table 2. These 194
theories do not necessarily represent an exhaustive list of theories used in the SM discipline. It is possible that other theories may
have been explicitly used in SM articles published elsewhere, e.g.,
in non-discipline-specic management and economics journals. We
also acknowledge that substantial overlap may exist among the
several theories named, and that clusters of theories could be composed, based inter alia on commonality in behavioural assumptions,
key drivers of strategic decisions, variables affecting performance,
and so on.
Importantly, the intensity of theory usage displays a highly
skewed distribution. In the seven journals we investigated, only ten
theories were tested more than ten times, and are therefore also
most likely to nd their way to strategy practitioners and to business school teaching. These theories are discussed in the following
section3.

3 In addition to those ten theories, another 184 theories were tested: 138 theories were tested only once; 21 theories twice; 15 theories three times; 2 theories
four times; 3 theories ve times; 1 theory seven times; one theory 8 times; 2 theories nine times; 1 theory ten times.

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Table 2
Theories used in empirical research in strategic management journals (alphabetical order).
Absorptive capacity theory
Active investor hypothesis
Agency theory
Asymmetric theory
Asymmetric theory of joint ventures
Attractionselectionattrition framework
Attribution theory
Barriers to entry theory
Bases of social power
Behavioural agency theory
Behavioural decision theory
Behavioural theory of the rm
Belief systems theory
Career concern hypothesis
Cartel theory
Centre of gravity theory
Cluster theory
Collective action theory
Commitment theory
Competing values framework
Conguration theory
Congruence model of organizational behaviour
Conservative model of innovation
Contestable markets theory
Contextual interaction theory
Contingency theory
Control theory
Cooperative game theory of the rm
Corporate portfolio theory
Cultural dimensions theory
Cultural familiarity theory
Decision usefulness theory of accounting
Density-dependent theory of organizational evolution
Digestibility theory of joint ventures
Dual core model of organizational innovation
Dynamic capabilities perspective
Dynamic Multi-dimensional Performance framework
Economic theory of complementarities
Ecient market theory
Embeddedness perspective
Environmental scanning theory
Equity theory
Ethical decision making theory
Evolutionary theory
Expectancy Theory
External signals theory of regulation
Five forces model
Free cash ow hypothesis
Full range leadership perspective
Galbraith and Nathansons organization
diversication theory
Game theory
Gender socialization theory
Generic strategies theory
Goal theory
Human capital theory
Information integration theory
Information processing theory
Neo-institutional theory
Intergroup theory
Internalization theory
International structural stages model
Jungian theory of psychological type
Knowledge-based theory of the rm
Legitimacy theory
Life course theory

Life-cycle theory
Locus of control theory
Long-purse theory of predation
Loose coupling theory
Management control theory
Managerial discretion theory
Managerial entrenchment hypothesis/Managerial
hegemony theory/Managerial opportunism theory
Managerial succession theory
Managerial welfare hypothesis
Market orientation theory
Mental accounting framework
Merger contingency theory
Mobility barriers theory
Modern portfolio theory
Modernization theory
Modular systems theory
Motivating language theory
Multiple point competition model
Mutual forbearance hypothesis (theory)
Myopic institutions theory
Natural capital theory
Natural resource based view
Network theory
Niche development theory
Niche formation theory
Niche width theory
Optimal contracting theory
Option-pricing model of wage determination
Organizational imprinting theory
Organizational learning theory
Organizational types theory
Path dependence theory
Pecking order theory
Performance-feedback model
Personal construct theory
Politicaleconomical theory
Population ecology theory
Power dependence theory
Price discrimination theory
Procedural justice theory
Property rights theory of the rm
Prosocial behaviour theory
Prospect theory
Psychological contract theory
Real options theory
Reference group theory
Regulatory inuence theory
Relational exchange theory
Relational view
Relative absorptive capacity theory
Renegotiation theory of predation
Reputation theory of predation
Resource based view
Resource based view of diversication
Resource dependence theory
Resource partitioning model
Resource-based theory of market structure and
organizational form
Risk theory
Ritual scapegoating theory
Role-motivation theory of managerial effectiveness
Routine based perspective
Selection hypothesis
Shareholder interest hypothesis
Shareholder wealth-maximization hypothesis
Signal detection theory

The top ten theories: domestic versus borrowed theories

The most frequently used theories, each of which was tested explicitly at least ten times in the theory-driven SM literature, are
shown in Fig.2.

Signalling theory
Situational theory
Social capital theory
Social choice theory
Social exchange theory
Social information processing theory
Social movements theory
Social network theory
Stages model of internationalization
Stages of growth theory
Stakeholder identication and salience
Stakeholder theory
Stewardship theory
Strategic balance theory
Strategic behaviour theory
Strategic choice and environmental determinism
framework
Strategic choice theory
Strategic factor market theory
Strategic issue diagnosis model
Strategic network perspective
Strategic positioning framework
Structural equivalence theory
Structural holes theory
Structural Inertia theory
Structure-conduct-performance theory
Symmetric Learning theory
Technological lock-in theory
Technology adoption model
Theory of competitive behaviour
Theory of competitive rationality
Theory of complex organization
Theory of Core competencies
Theory of heterogeneity
Theory of hypercompetition
Theory of interrm performance differences
Theory of internal labour markets
Theory of multipoint competition
Theory of network incentives
Theory of optimal money burning
Theory of planned behaviour
Theory of private benets
Theory of product diversity
Theory of reasoned action
Theory of reasoned risk taking
Theory of recombinant invention
Theory of relative standing
Theory of retail market structure
Theory of strategic groups
Theory of strategic information systems planning
Theory of the equilibrium structure of a competitive
industry with multiproduct rms
Theory of the market for corporate control
Theory of the multinational corporation
Theory of total quality management
Theory of weak ties
Theory of yardstick competition
Token status theory
Tournament theory
Transaction cost economics
Transformational leadership theory
Uncertainty reduction theory
Upper echelon theory
Value-added hypothesis
Value-based planning theory
Vicious circle theory

Five of the top ten theories, which account for 202 instances of
explicit theory testing originated at least partly from within the discipline of management, with some of the key substantive
contributions to contemporary theory originating from within the
SM eld itself. These ve theories can be considered indigenous

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Most Frequently Used Theories

Resource based view
Transaction cost economics
Agency theory

Theory

(Neo) institutional theory

Upper echelon theory
Resource dependence theory
Contingency theory
Social capital theory
Signalling theory
Stakeholder theory
0

10

20

30
40
50
60
70
Number of Times Used

80

90

Fig. 2. Most frequently used theories in strategic management journals.

theories, even if some foundational elements may have been developed in another discipline: transaction cost economics (e.g., in
the realm of studying diversication, selecting governance modes,
and transferring knowledge), the resource based view, upper echelon
theory, contingency theory and stakeholder theory. As regards transaction cost economics, it could (correctly) be argued that this theory
was rst created in the economics discipline (Coase, 1937;
Williamson, 1975) rather than in management, but a number of SM
thinkers of the past fty years have provided intellectual value added
that has signicantly extended the theory in substantive terms,
whether directly or indirectly. These scholars include, inter alia, Alfred
Chandler (e.g., Chandler, 1962), Jean-Franois Hennart (e.g., Hennart,
1988), Alan Rugman (e.g., Rugman & Verbeke, 2003), Harbir Singh
(e.g., Dyer & Singh, 1998), David Teece (e.g., Teece, 1986), Alain
Verbeke (e.g., Nordberg & Verbeke, 1999), and so on. Following
Williamson (1991), a number of scholars have even argued that
adopting a transaction cost economizing logic can amount to strategy optimization (see, e.g., Nickerson & Zenger, 2004; Verbeke &
Kenworthy, 2008).
The economics discipline accounted for two theories in the top
ten: agency theory and signalling theory. These two theories represent 89 instances of explicit theory testing. The sociology discipline
accounted for three of the ten theories: institutional theory, resource dependence theory and social capital theory. It should be
noted that the second and third theories also have roots in the political science discipline. These three theories account for 53 instances
of explicit theory testing. Overall, the theories originating at least
partly from within the SM discipline account for 59% of explicit
theory usage amongst the top ten theories, with economics and sociology representing 41%. In other words, amongst the top ten
explicitly-used theories, the ratio of indigenous theory to borrowed theory usage instances is 1.42 (202 to 142).
In addition to identifying the frequency of testing the most commonly named theories, it is also useful to explore the disciplinary
origins of all 194 theories included in Table 2, irrespective of frequency of use; see Table 3. Here, the testing of indigenous theories,
i.e., theories derived directly from SM research, represents only 37%
of total explicit theory testing. The elds of economics, psychology and sociology represent approximately 27%, 14% and 13% of used
theories, respectively.
The share of indigenous theory use, representing 59% of testing
among the top ten most frequently used theories, and approximately

37% of all theories tested at least once, suggests signicant success

for a young discipline. Nevertheless, the observed indigenous-toborrowed theory testing ratios also suggest a signicant reliance
on the latter. Borrowed theories can be of great value to young elds
that seek legitimacy (Merton, 1973). Such theories allow a nascent
discipline to project itself as scientic (Hambrick, 2007), but there
are two reasons why this may be sub-optimal.
First, as Markczy and Deeds (2009, p. 1079) suggest, borrowed theories do not emerge from the elds (in this case SMs):
unique position and understanding of management and organizational phenomena. Such theories were not designed to explain
and predict SM phenomena. Second, a key consideration when borrowing theory is the degree of corroboration for the theory. The illadvised borrowing of rational choice theories by the political science
discipline serves as a cautionary tale. Green and Shapiro (1994,
pp. 56) reported that within political science: the stature of rational choice scholarship does not rest on a readily identiable set
of empirical successes and, the case has yet to be made that these
models have advanced our understanding of how politics works in
the real world. Renowned management scholar Jeffrey Pfeffer (1995,
p. 683) reected on Green and Shapiros account and asked: Is what
happened in political science being replayed in organization
science? In the next section, we develop a conceptual model that

Table 3
Disciplinary origins of explicitly tested theories.
Field

Total theories

% of total

Strategic management
Economics
Psychology
Sociology
Biology
Marketing
Communication
Finance
Information systems
Accounting
Cybernetics
Innovation
International business
Law
Public policy

72
52
27
25
3
3
2
2
2
1
1
1
1
1
1

37.11
26.80
13.92
12.89
1.55
1.55
1.03
1.03
1.03
0.52
0.52
0.52
0.52
0.52
0.52

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Table 4
Seven tests to assess the quality of theory borrowing.
Borrowed theorys contributions to its own base discipline
Predictive power
Explanatory power
Absence of strong
competing theories

Does the borrowed theory consistently demonstrate statistically signicant, predictive power in its base discipline?
Does the borrowed theory have practical predictive signicance in its base discipline?
Does the borrowed theory possess substantial explanatory power in its base discipline (that is, how much of the disciplines
phenomena can it explain)?
Are there strong rival theories (providing alternative explanations) in the base discipline?

Borrowed theorys contributions to the borrower discipline

Issues match
Consistency in concepts
Consistency in assumptions
Knowledge t

Are the key phenomena and problems studied reasonably similar in the borrowed theory discipline and the borrower discipline?
Are the key issues central to the borrowed theory also salient within the borrower discipline?
Are the key concepts used in the borrowed theory consistent with and meaningful in the borrower discipline?
Are the key underlying assumptions in the borrowed theory consistent with the underlying assumptions in the borrower discipline?
Is there extant evidence in the borrower discipline to support (or refute) the key propositions of the borrowed theory?
Is there extant evidence in the borrower discipline to support (or refute) the peripheral propositions and logical inferences of the
borrowed theory?
Is there extant theoretical support for the salience of the borrowed theory within the borrower discipline?

allows for critical reection on the proper usage of indigenous theory

versus borrowed theory in SM research.
Balancing indigenous and borrowed theory usage
Authors in various scholarly disciplines have expressed concerns regarding theory borrowing, a practice that may make sense
in the early days of a scientic eld, but perhaps less so in a later
stage. As a scientic eld matures, it should increasingly develop,
and rely upon, its own theories that are informed by insights generated from within the eld4. Such theories describe, explain, predict,
and offer what ought to be with respect to phenomena distinct to
a scientic eld. Hence, priority should be largely given to indigenous rather than borrowed theory.
In order to ensure that appropriate theories are tested suciently, SM journal editors may want to decide upon the share of
journal space they wish to devote to borrowed-theory testing. Even
more importantly, they must decide when borrowed-theory testing
is appropriate, using a valid and coherent set of quality tests. Here,
we propose a model for selecting which theories from outside the
broad eld of management can reasonably be considered good candidates for importation into the SM eld.
The model displayed in Table 4 below provides seven quality tests
to determine when to make use of borrowed theory. It incorporates theory borrowing criteria and responses to concerns from a
number of scholars across the social sciences (Amundson, 1998;
Aigen, 2005; Floyd, 2009; Ilgen & Klein, 1989; Johnson Lutjens &
Tiffany, 1994; Murray & Evers, 1989; Malmi and Granlund, 2009;
Oswick et al., 2011; Truex et al., 2006; Whetten, 2009). Scholars
working in different scientic disciplines have come up with overlapping quality tests, which suggests that the criteria to adopt when
considering theory borrowing are not unique to any one discipline.
The rst set of 3 quality tests in the above model focuses on the
value added that the borrowed theory brings to its own base discipline. The rst test, predictive power, is critical. If a theory cannot
be tested because it does not offer clear predictions, then it lacks
value beyond perhaps describing a set of empirical phenomena. An
example of weak predictive power, in this case related to social
capital theory, is provided by Nobel Laureate Robert Solow (1995,
p. 38, brackets added), who rejects the theory of social capital:
[W]ithout the possibility of distinguishing more from less [social
capital], causal analysis becomes impressionism. Solows statement

4 This does not preclude the use of theories from other elds, assuming that adapting them to SM does not compromise the original integrity of theories (Suddaby et al.,
2011).

means that if the independent variable in social capital theory cannot

be accurately measured, then the theorys predictive power is very
limited. A poor predictive theory in its own base discipline is an even
poorer candidate for borrowing by another discipline.
Explanatory power, the second test, may well be as important as
the theorys predictive power (Popper, 1963). Explanatory power
addresses the sense-making ability of a theory. A theory with strong
explanatory power offers scholars the opportunity to make sense
of data from many studies. This typically implies a strong
generalizability of the theorys predictive power, as well as accuracy of its predictions, across a range of empirical phenomena. If a
theory is found to explain poorly key phenomena in its base discipline, its usefulness in another discipline should be assessed with
scepticism. Gerald Salancik (1995, p. 349) provides an example of
an explanatory power problem, in this case with social network
theory: it requires explaining how the interactions support the
network and the network supports the interactions for organizational and individual purposes. Here, Salancik indicates that social
network theory does not, in his view, provide a sucient explanation for the relationships among critical variables.
The third test, absence of competing theories, prompts a researcher to identify alternative theories addressing exactly the same
key issues, whether or not they have arisen in the same base discipline. According to Blaug (1976, p. 833), competing theories can
account for the same evidence by a different but equally powerful theoretical framework. Blaug (1976) describes the example
of strong rivals for human capital theory, namely the theory of consumer behaviour and screening theory, which appear to explain as
much variance in the phenomena studied as human capital theory.
Here, a human capital theory borrower should carefully employ
provisos when explaining cause and effect relationships, since alternative explanations to the ones provided by the borrowed theory
appear to be just as powerful, even in its own base discipline.
If a theory passes the 3 quality tests above, a set of necessary
conditions is fullled to provide value added in other disciplines.
However, an additional set of sucient conditions must also be
met. Here, the fourth quality test is that the key issues addressed
by borrowed theory should have a clear and intuitively plausible
commonality with phenomena in the borrower eld. The issues
match means inter alia that at least some key variables (reecting
dependent, independent and/or control variables) driving the predictive and explanatory power of the borrowed theory, should be
prominent in both elds.
The fth quality test assesses whether borrowed theory concepts are truly relevant to and consistent with concepts in the
importing eld. This quality test focuses on whether borrowing concepts from another discipline can be considered a creative act,

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Table 5
Strength of the borrowed theory in the base discipline.
Theory

Review studies

Quality test 1:
Predictive power

Agency theory

Jensen and Murphy (1990)

Becker (1976)
Akerlof (1983)
Arrow (1985)
Sen (1987)
Kotowitz (1987)
Doucouliagos (1994)
Salanie (1997)
Donaldson and Davis (1990)
Cornforth (2003)
Van Essen et al. (2012)

Weakness

(Neo-)institutional theory

Perrow (1985)
Perrow (1986)
Powell (1991)
Fligstein (1991)
Tolbert and Zucker (1994)
Tolbert and Zucker (1996)
Selznick (1996)
Barley and Tolbert (1997)
Hirsch and Lounsbury (1997)
Lewin et al. (2004)
Donaldson (2006)

meaning that the imported concepts are not only novel but also
useful (Mayer, 1999), and thus represent more than merely an original act whereby borrowing novel concepts would actually not be
useful.
The sixth quality test for a borrower discipline is to compare the
underlying assumptions in the borrowed theory, with the generallyagreed-upon assumptions in the borrower discipline. As Amundson
(1998) suggests, applying this test may not be easy, because a borrowed theorys underlying assumptions may be viewed as selfevident in the base discipline, and may therefore not be clearly and
fully communicated in any of the canonical literature describing the
theory. However, Amundson (1998, p. 354, brackets added) views
this quality test as critical, since:
The examination of underlying assumptions for t will be a long,
slow, iterative process, but will ultimately lead to greater insights and improved research skills. Because this is an important
long term issue, [borrower eld] researchers simply should do
as well as they can at this, learning along the way from inevitable mistakes and errors.
Finally, the seventh quality test involves the in-depth search for
extant scholarly work in the borrower discipline that addresses the
legitimacy of the borrowed theory. More specically, if prior published evidence strongly rejects the key propositions or predictions
of the borrowed theory, whether explicitly or implicitly, there should
be little reason to pursue this theory further.
For purposes of illustration, we will now apply the above model,
consisting of 7 quality tests, to two theories borrowed from other
elds of scientic inquiry and applied regularly by SM scholars. These
two theories, namely agency theory and institutional theory, also
feature prominently in many inuential SM textbooks taught in business schools. Here, we highlight concerns raised in scholarly analysis
about these borrowed theories. We present the two dimensions of
the quality-testing model, namely the strength of the borrowed
theory in its base discipline (quality tests 13) and the applicability of the theory in the borrower discipline (quality tests 47), see
Tables 5 and 6. The references in these tables mainly consist of
popular review and critique articles, spanning a number of decades,
which means that the challenges identied are not new. We do not
intend to be exhaustive in terms of criticism voiced, but we simply
wish to illustrate how the proposed quality tests could be applied.

Quality test 2:
Explanatory power

Quality test 3:
Competing theories

Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness

Table 5 above illustrates that several scholars have voiced concerns regarding the quality of both agency and institutional theory,
as used in their own base discipline and when applied in another
one. The following two sections briey discuss the main concerns.
Quality testing of borrowed theory in base discipline
Agency theory (AT)
AT purports to describe and prevent/solve conicts between principals (e.g., shareholders) and their agents (e.g., managers). ATs
predictive power (quality test 1) in the context of compensation has
been called into question by economists Jensen and Murphy (1990,
p. 243): Our task is made dicult by the fact that the theory offers
few sharp predictions regarding the form of the contract other than
predicting that wages generally increase with observed output. These
scholars nd that their empirical results are:
inconsistent with the implications of formal agency models
of optimal contracting. The empirical relation between the pay
of top-level executives and rm performance, while positive and
statistically signicant, is small for an occupation in which incentive pay is expected to play an important role. (Jensen &
Murphy, 1990. p. 227)
A number of economists have also challenged ATs explanatory
power5 (quality test 2). A substantive concern is the extent to which
the theory accurately characterizes human behaviour. A fundamental assumption of AT is the strong-form, self-interest-seeking nature
of human beings. This strong form, self-interest-seeking assumption is conducive to mathematical modelling. However, the validity
of the assumption, as well as the generalizability of inferences
derived from using the assumption in theory-testing applications,
has been questioned by, among others, Becker (1976) and Sen (1987).
On this issue, Akerlof (1983, p. 54) states: this assumption is made
for reasons of convenience, not because economists empirically
assume that all persons act only out of selshness. However,
Sen (1987, p. 16, brackets in original) adds in this context: To try
to use the demands of rationality in going to battle on behalf of the

5
ATs predictive and explanatory powers have also been critically assessed by management scholar Sumantra Ghoshal (2005).

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standard behavioural assumption of economic theory (to wit, actual

self-interest maximization) is like leading a cavalry charge on a lame
donkey.
A related substantive concern is the extent to which the theory
accurately characterizes human relations. Arrow (1985, pp. 489)
argues that AT does not perform well in this respect:
the theory tends to lead to very complex fee functions. It turns
out to be dicult to establish even what would appear to be
common-sense properties of monotonicity and the like. We do
not nd such complex relations in realityIn some cases, where
principal-agent theory seems clearly applicable, real-world practice is very different from the modelEven in situations where
compensation systems seem closer in form to the theoretical,
there are signicant differences.
Along similar lines, Kotowitz (1987, p. 550) has argued that:
The nature of the reward schedule is sensitive to the nature of
the information available, the residual uncertainty and the degree
of risk aversion of the agent and principal. This observation is
troubling because incentive contracts observed in reality are generally simple and uniform across a variety of agents and
information sets.
Quality test 3, on the absence of competing theories to study the
same phenomena (whether from inside or outside the base discipline) also appears relevant, as suggested by Table 5. For example,
stewardship theory, from the eld of management, is a direct competitor of AT. Donaldson and Davis (1990, p. 51) argue that this theory
holds that there is no inherent, general problem of executive motivation performance variations arise from whether the structural
situation in which the executive is located facilitates effective action
by the executive. The director primacy model, from the eld of law,
is a second competitor. According to Lan and Heracleous (2010, p.
298) this model considers the board of directors as: a central,
independent decision maker for the rm. It mediates competing interests among the various groups that bear residual risk and have
residual claims over the rm, and it allocates team surpluses. Managerial power theory, which has its roots in law and economics (Berle
& Means, 1932), can also be considered a competing theory. Van
Essen, Otten, and Carberry (2012, p. 2) state that:
At the core of this framework is a direct challenge to the common
assumption within agency theory of optimal contracting, that
is, that boards engage in arms-length transactions with executives over compensation arrangements and that such transactions
help mitigate agency problems by creating compensation practices that more closely align the interests of executives and
shareholders.
Any inuential theory will likely have its critics, but in the case
of agency theory, the point is that even sophisticated students of
the empirical phenomena purportedly addressed by agency theory
have great doubts about this theorys predictive and explanatory
capacity, and several alternative lenses have been identied through
which to frame the same empirical phenomena.
(Neo-)institutional theory (NIT)
NIT purportedly addresses the processes through which social
behaviour and interactions (among individuals, organizations and
even countries) become determined by social structures, which
include elements as varied as, e.g., cultural beliefs, societal and industry norms, and routines such as managerial practices viewed as
legitimate. Initially, the theory focused on processes of organizational isomorphism, with organizations in an institutional eld
becoming increasingly similar, but NIT does account to some extent
for heterogeneity and processes of institutional transformation. In
terms of quality test 1, NIT does not appear to suffer much substantive

criticism, suggesting that the theory does offer real-world predictive

capacity.
In the realm of quality test 2, a number of sociologists have challenged NITs explanatory power6. For example, Powell (1991, p. 183)
has argued that NIT does not suciently explain how and why some
organizations resist external institutionalization inuences. There
is also still a relative lack of organizational agency, which has been
discussed by a number of other prominent sociologists. Perrow
(1986) has expressed concern over the over-socialized nature of NIT
organizations are often cast as passive participants that can only
respond to institutional expectations. Fligstein (1991) offers similar
criticism, via an historical analysis of the structural transformation of American industry, in which he includes power considerations
at the organizational level (i.e. he grants a causal role to the cognitions held by various actors). In fairness to the eld, substantial
recent scholarly contributions have tried to remediate this deciency, e.g., in terms of attributing a greater role to organizational
agency through institutional work (Lawrence, Suddaby, & Leca,
2009).
As regards quality test 3 on the presence of strong competing
theories, it appears there are at least a few contenders. Population
ecology theory, from the elds of biology, sociology and management, is a direct competitor of NIT. According to Lewin, Weigelt, and
Emery (2004, p. 146), population ecology sees organizations as unlikely to change because of forces of structural inertia. Contingency
theory, from the eld of management, is a second rival theory. According to Donaldson (2006, p. 19) contingency theory, holds that
the most effective organizational structural design is where the structure ts the contingencies.
The above, cursory description tentatively suggests that NIT might
be a better contender in terms of its potential value added as a borrowed theory in the SM eld than agency theory, but even it were
found to satisfy fully the rst 3 quality tests above, this still does
not imply that the theory is readily applicable for borrowing by
another eld. For illustrative purposes, we examine the applicability in the strategy eld of AT and NIT (Table 6). We again identify
a number of weaknesses in both AT and NIT when applying quality
tests 47, with institutional theory also doing better on these quality
tests.
Quality testing of borrowed theory when applied in
borrower discipline
Agency theory
The applicability of AT to SM research is debatable from the perspective of each quality test in the model: issues match, consistency
in concepts, consistency in assumptions and knowledge t. Ghoshal
(2005) has focused on the issues match (quality test 4) by arguing
that the issues central to AT are hardly salient in the management
eld. Ghoshal (2005, p. 81) likens AT to a walking stick that is waiting
to be replaced by one that offers more sense-making ability.
With respect to consistency among concepts (quality test 5),
Donaldson (1995) has questioned the degree to which imported AT
concepts are meaningful. Donaldson (1995, p. 168) has cautioned
the eld of management against adopting a narrow view on the
drivers of human behaviour and has argued that management scholars should be: prepared to acknowledge positive rather than just
negative functions for managers.
Various scholars have challenged the notion that AT assumptions would match up with those commonly adopted in management
research (quality test 6). For example, Davis, Schoorman, and

6 NITs predictive and explanatory powers have been called into question by a
number of scholars who are not neo-institutional scientists, namely economists and
management scholars (e.g., Chakravarti, 2012; Davis, 2010; Kraatz & Zajac, 1996).

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Table 6
The applicability of borrowed theory in the adopting discipline.
Theory

Review studies

Quality test 4:
Issue match

Agency theory

Ghoshal (2005)
Donaldson (1995)
Davis et al. (1997)
Lubatkin et al. (2001)
Fontrodona and Sison (2006)
Daily et al. (2003)
Ghoshal (2005)
Bruce et al. (2005)

Weakness

Barley and Tolbert (1997)

Hirsch and Lounsbury (1997)
Kostova et al. (2008)
Dacin et al. (2002)
Bresser and Millonig (2003)
Donaldson (1995)
Hambrick et al. (2005)

Weakness

(Neo-)institutional theory

Quality test 5:
Consistent concepts

Quality test 6:
Assumptions match

Quality test 7:
Knowledge t

Weakness
Weakness
Weakness
Weakness
Weakness
Weakness
Weakness

Donaldson (1997, pp. 234) suggest that it is wrong to assume agent

motivation is the sole driver of performance: There are many
reasons other than poor motivation for agents failing to deliver high
performance for their principals (e.g., low ability, lack of knowledge, and poor information). Lubatkin, Lane, and Schulze (2001)
suggest that AT suffers from an under-socialized view of man and
hence, its assumptions do not match well with the more socially
complex view of organizations held by management scholars.
Fontrodona and Sison (2006, p. 40) go even further with their criticism of AT in arguing that the assumptions of agency theory to
date have been inimical to this concept of the rmwe have analyzed these assumptions and identied their aws.
The degree of knowledge t between AT and management scholarship (quality test 7) has also been discussed by a number of
scholars. Daily, Dalton, and Cannella (2003, p. 375) compiled evidence indicating that AT does not hold up to empirical scrutiny and
that results suggest that alternative theories and models are
needed to effectively uncover the promise and potential of corporate governance. As noted above, in the context of issues matching,
Ghoshal (2005) strongly questioned the existing theoretical support
for the salience of AT in management. In this context of knowledge t, Bruce, Buck, and Main (2005, p. 1503) raised concerns
regarding the managerial relevance of AT:
Different countries patterns of corporate governance in general,
and executive pay in particular, cannot be explained by conventional principal-agent theory alone. Either this must be stretched
to embrace the notion of executives who suspend short-term opportunism, or else stewardship theory (or something similar)
must be used, where appropriate.
(Neo-)institutional theory
The applicability of NIT theory is far from perfect either in terms
of the same four quality tests in the model. With respect to the
matching of issues (quality test 4), Barley and Tolbert (1997, p. 93)
doubt whether the main problems studied in sociology and management are reasonably consistent, largely because the models used
by NIT scholars are underdeveloped in terms of their capacity to
explain the real-world processes of creating, changing and reproducing institutions.
As regards consistency between concepts (quality test 5), Hirsch
and Lounsbury (1997) expressed apprehension about NITs contributions and cautioned against irrelevance because of insucient
attention devoted to the problems of change and managerial action.
Along similar lines, Kostova, Roth, and Dacin (2008, p. 997) contend
that NIT holds little value in international strategic management
research, when multinational corporations (MNC] are involved:

Weakness
Weakness
Weakness
Weakness
Weakness
Weakness

characteristics of MNCs limit the applicability of neoinstitutionalism to these organizations. Although subject to
institutional forces, MNCs have a very different institutional story
that better ts the conditions of equivocality, ambiguity, and
complexity.
The extent to which the assumptions in NIT are consistent with
those in the eld of management (quality test 6) has been widely
debated. For example, NIT assumes the persistence and homogeneity of institutions. However, Dacin, Goodstein, and Scott (2002,
p. 45) nd that:
institutions change over time, are not uniformly taken-for
granted, have effects that are particularistic, and are challenged as well as hotly contested. Thus, we acknowledge that
although institutions serve both to powerfully drive change and
to shape the nature of change across levels and contexts, they
also themselves change in character and potency over time.
NIT also assumes a subjective/relativistic perspective, but Bresser
and Millonig (2003, p. 221) argue that such perspective conicts
with the functionalist lens used by SM scholars.
The nal test included in the model (quality test 7), addresses
knowledge t. Donaldson (1995, p. 127) expresses concern over the
theoretical support for NIT in management, e.g., because empirical research in management does not support NITs focus on the
importance of myths and symbols. Hambrick, Finkelstein, Cho, and
Jackson (2005, p. 343) voice specic concerns about the salience and
generalizability of isomorphism. Based on a historical analysis of
American industries during the 20th century, the authors nd that
a managerially relevant theory must acknowledge and incorporate in its primary iteration that isomorphic pressures sometimes
weaken, thereby fostering heterogeneity among organizations.
Again, NIT appears to fare better than agency theory in the sense
that pressures for homogeneity appear to be consistent with at least
some empirical observations in the management sphere. However,
NIT still exhibits an incomplete understanding of the rm-level quest
for heterogeneity and uniqueness, and the related relative intensity of pressures for homogeneity versus heterogeneity over time,
and the impact thereof on managerial behaviour (see, e.g., Verbeke
& Tung, 2013). Business rms typically do not exist to serve the exigencies of legitimacy, but to achieve survival, protability and growth
through creating value.
Conclusions
The historical roots and the evolution of the SM discipline have
been widely studied. The present paper contributes to this body of

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knowledge by reporting on several key trends regarding SM theory

development and usage. First, explicit theory testing now accounts for approximately 20% of empirical research in the top seven
SM journals. The growth in theory testing, which is at least partly
attributable to shifts in journal editorial policy, supports the view
that the discipline is moving towards a maturity stage.
Second, SM scholars are incorporating theoretical perspectives
from a wide variety of scientic elds in their research. Five of the
top ten most used theories and almost two thirds of all theories
tested in empirical work have been borrowed from outside of the
SM discipline, in the sense that all of the key conceptual innovations and contributors can be found in elds other than SM. SM
journals thus systematically publish a large volume of empirical work
based mainly on borrowed theories, which are then applied only
once or twice, thereby precluding the creation of sucient critical
mass to assess whether such borrowing brings substantive value
added to the eld. The unfortunate tendency of some management journal editors to focus on originality, without applying a
battery of quality tests as proposed in the present paper in order
to assess whether the importation of borrowed concepts makes any
sense, does not bode well for the future.
The ndings with respect to borrowed theory usage in SM are
comparable with those in the broader OMT area (Oswick et al., 2011).
But the observed, clear overreliance on theory borrowing is not recommended, because it comes at the expense of homegrown SM
theories, informed from the outset by SM phenomena. Oswick et al.
(2011) propose a practice of analogical correspondence and conceptual blending as a way forward. Others, such as Alvesson and
Sandberg (2013) and Boxenbaum and Rouleau (2011), suggest that
borrowed theory be used as a critical dialogue-partner or means
of intellectual bricolage, respectively.
Our own intellectual contribution, a screening model for assessing borrowed theory candidates, is intended as a precursor to the
above conceptual and methodological practices. Adopting our screening model gives a tool to SM researchers to examine carefully any
candidate theory prior to borrowing it, in terms of three quality tests
related to its empirical status in its own eld, i.e., its explanatory
and predictive power, and the absence of credible rival theories. Even
if a candidate for theory borrowing were found to be a powerful
contributor in its own discipline, its potential usefulness in SM must
still be determined, in terms of an additional four quality tests: issues
match; consistency in concepts; consistency in assumptions and
knowledge t. If a theory were still viewed as viable at this point,
SM researchers might want to consider the conceptual and methodological practices suggested by Oswick et al. (2011), Alvesson and
Sandberg (2013) and Boxenbaum and Rouleau (2011).
We hope that the ndings presented here, as well as the suggested screening model, will improve the theory borrowing practices
of SM researchers when conducting empirical studies. Proper selectivity in theory borrowing should dramatically improve the
managerial relevance and applicability of the resulting empirical outcomes in the SM eld. Ultimately, the bulk of SM theorizing and
empirical work should be derived directly from observing and studying SM phenomena, not from borrowing concepts derived from the
study of phenomena unrelated to SM practice. Imagine if empirical studies of early human child development were based largely
on theories derived from in-depth analysis of geriatric monkeys. This
is unfortunately the present state of the SM eld in the realm of
theory borrowing.
One gigantic step forward in the SM eld would be to gain some
consensus about the range of acceptable micro-foundations or drivers
of human behaviour to be adopted in SM studies, and which transcend all seven quality tests for theory borrowing. A broad consensus
appears to exist on at least one such micro-foundation, namely that
of bounded rationality (BRat), though there are several variations
on the precise meaning of this behavioural driver. BRat refers to

purposive decision-making and action in a context of imperfect information and limited information processing capacity (Gigerenzer
& Selten, 2002). The importance of BRat as a behavioural driver is
not just its plausibility vis--vis the practice of management, but
the fact that it has been measured and used in numerous empirical studies with substantial explanatory and predictive power.
Reecting on the micro-foundations adopted explicitly or implicitly in candidates for theory borrowing, and assessing these
foundations consistency with some notion of BRat, would provide
not only a partial answer to a number of quality tests, but would
likely also create a valuable bridge for facilitating subsequent knowledge transfer to and application in real world managerial settings.
Can a second micro-foundation be identied that would, similar
to BRat, transcend all seven quality tests for theory borrowing, and
facilitate ultimate usability in managerial settings? Neither variations of unbounded self-interest seeking, nor variations of trust
would appear appropriate candidates. The former do not respect
the simple observation that most organizational functioning, and
especially strategy formation, appears to serve organizational goals,
with self-interest seeking being a constraint, not the heart or soul
of purposive action by the organization (Verbeke, 2003). The latter
do not recognize that trust, and the vulnerabilities created because
of it, can easily be detrimental to organizations, and negatively affect
their chances of survival, protability and growth, which are critical especially in strategy formation (Verbeke & Greidanus, 2009).
The concept of bounded reliability (BRel) would appear more promising, meaning that scarcity of mind would be complemented by
scarcity of making good on open ended promises, much of it triggered by benevolent preference reversal, an often observed
phenomenon in managerial practice (Kano & Verbeke, 2014; Verbeke
& Kenworthy, 2008).
By focusing especially on the need for plausible micro-foundations
when applying the seven quality tests proposed in the present paper,
a promising pathway is opened for theory borrowing that will ultimately serve managerial relevance, and therefore the elds key
stakeholders such as strategy teachers, practitioners and policy
makers.
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