Research Approach

This thesis makes an attempt to use strategic management theory in business history literature. This is in line with the suggestions made for a greater engagement between the two (Hannah 1984; Hendry 1992; Jeremy 2001). In particular, this study employs the lens of capabilities approach to examine the strategic response of individual firms in the DJI. This section discusses the broader epistemological issues arising from the use of theory in historical research.

Traditionally, business history research, especially on the British industrial decline, has assumed a high degree of objectivity in its analysis. Researchers have seldom acknowledged an element of subjectivity that is associated with the application of theoretical lens and interpretation of archival material. This has probably occurred because much of literature has drawn their analytical frameworks from Economics, where a positivistic approach is dominant. For example, the crux of debate between Lazonick (1983) and Sandberg (1974) with regards to the performance of cotton industry is how institutional framework can help to overcome the limitations of neoclassical economics in the examination of British industrial decline (Lazonick 1983: 582-583). This section discusses the epistemological issues that are associated with conducting a historical research, especially those arising from the application of theory in history and interpretation of archival material. These two issues and their implications for this research are discussed in turn below:

a) Application of theory in history. In management, Zald (1988; 1996) has extensively discussed problems arising out of the unrelenting emphasis on building universal theories. Turning his attention to the significance of history, Zald (1988) argues that management

theories ‘do not explain the transformation of organizations in a historical context’ (p. 82). Underlining the significance of historical context, Zald argues that although it is commonly acknowledged that a number of public institutions today differ from the ones in nineteenth or eighteenth century, very few studies have actually made an attempt to understand ‘how we got from there to here’ (p. 83). In other words, modern theories have often promoted the ‘dogma of universality’. Therefore, Zald makes an argument examining the implication of ‘time and place’ on organizations. As an illustration of this approach, Zald cites Chandler’s (1962) study which examines the ‘transformation of organisations in a historical context’. Similarly for Kieser (1994), teasing out the subtleties in wider socio-cultural and economic context in history is central in understanding the organizations in different countries (p. 609).

However, Zald (1996) acknowledges the analytic independence of examining organisation’s history without examining it within its wider external context. Therefore, on the one hand there is a need to understand the change in societal context on organisations, Zald also accepts that ‘organisations have histories’ (p. 257). The primary concern of the latter is to examine ‘processes or change in particular organizations or particular events in organisations’ (p. 257). He further acknowledges that scholars may have to ‘inevitably limit their attention’ and pursue them independently. However this does not lead to their conceptual independence. Thus he argues that in so far as organizations are historical entities, ‘pathways of particular organizations are shaped by their larger context’ (p. 257).

In both instances, Zald (1988) warns against treatment of historical context as mere background. Therefore he is not satisfied with Chandler’s assumption that the introduction of divisional form of operating as a ‘necessary and efficient’ outcome and calls for even greater attention to the context through a ‘complex and historically contingent’ account (p. 83). The emphasis should thus be on teasing out the ‘complexity, uniqueness, and contingency’ that are embedded in historical context (Zald 1996: 343).

Hence, teasing out the impact of events that are specific to ‘time and place' on organizations is an important aspect which should be considered when using theory in a historical study. Although Zald (1988), Kieser (1994) Jeremy (2001) and Usdiken and Kieser (2004) have suggested different approaches to apply theory in history, in the spirit of simplification, these can be summarised and grouped under two major categories i.e. those falling within broader

positivistic social science program, albeit with some variants, and those proposing a radical reorientation towards humanistic tradition.

i) This approach remains within the broader ‘social scientific’ tradition, although with either strong or weak purpose to enforcing theoretical ideology. In the first1method the primary aim is to the focus on theory building. The use of history is principally to confirm or refine highly generalised theories. History also acts as a testing ground for general concepts. Alternatively, ideal types of model are juxtaposed with cases in history and any similarities or differences are identified and seen to contributing to the understanding of theory. Although theory can be used to explain past events, the final goal is to contribute to further development of abstract theories. Such application of theory could lead to ‘arbitrariness’ in selection of historical events because the focus tends to be on fitting them to the theoretical models. The second2method is different from the first method in that universal theory building is not the primary objective. The aim is to make greater effort to engage with the historical analysis. It recognises that current organisation forms are shaped by past and heavily influenced by wider societal context. Instead of treating current structures and forms as inevitable, it recognises the multiplicity of options in history by combining a weak form of conjectural analysis and explicit generalisations. In particular, it engages with issues such as ‘process of organisational change, development of organisational forms and varieties across societal settings, path dependencies and continuities in organisations’. The final generalisations can take two forms: it can either lead to ‘historical theories of organisation’ or the explanations can be limited in time. Although contemporary theoretical tools can be used, the main objective is to gain deeper understanding of historical events.

ii) This approach moves away from the ‘scientific’ tradition of management studies and calls for its fundamental redirection.3It challenges the social scientist framing of discipline and seek to tackle the epistemological concern about how past is researched. There are two major strands in this approach. The first strand is a narrative approach. It recognises that the ‘fictional’ element is intrinsically tied in examination of historical events and processes.

1

Usdiken and Kieser (2004) terms this ‘Supplementarist’ approach.

2_{Usdiken and Kieser (2004) terms this ‘Integrationist’ approach.} 3_{Usdiken and Kieser (2004) terms this ‘Reorientationist’ approach}

Hence, it proposes a closer association with the linguistic traditions in the study of organisational issues (Rowlinson 2004; Clark and Rowlinson 2004). The second strand draws on studies of Foucault. The crux of this approach assumes knowledge and power to be behind the much popularised notions such as efficiency, equity or humanity (McKinlay and Starkey 1997: 2). As a result, it aims to trace the ‘emergence and constitution’ of modern practices and tease out the complex interplay of power and knowledge in the process (p. 2).

In keeping with the research objectives, this thesis takes the first approach and remains rooted within the broader social science tradition. Although a theoretical framework (capabilities approach) is used to examine historical events and process (strategic response during decline of the DJI), there is an element of ‘supplementarist’ approach. However, the aim is not to test this theory in a historical context. The main purpose is to attain better insight into historical debates concerning the decline of DJI in particular and British textile industry in general. It also engages with the notion of path-dependency by identifying problems associated with it and attempting to address them by using strategies proposed by historians.4 This study also recognises the role of conjunctural factors in shaping historical phenomena. As a result, in order to understand the strategic response of firms, this study: i) explores factors other then those normally associated in path dependencies and ii) also investigates the role of collective strategies in shaping the strategic response of individual firms and industry in general. The final generalisations derived from this study are both limited in time and also contribute to theory development. They are limited in time in that explanation on the nature of strategic response and factors that influenced them hold significance only for the period under study. Contribution to theoretical development comes from the use of capabilities approach to examine the cases, especially to the Helfat and Peteraf’s (2003) model. Therefore, by cross- fertilising research ideas between business history, strategic management and history, the approach of this thesis leans more towards the ‘integrationist’ approach.

b) Objectivity and interpretation in history. The issue of objectivity and interpretation are perennial topics in historical debates. They also gain importance with the application management theory in historical analysis.

According to Rowlinson (2004), management researchers who make an attempt to engage with history by remaining in the broader social scientist tradition tend to regard history as ‘repository of facts’ (p. 10). These ‘facts’ are often used to refute or approve particular theoretical positions as long as the researcher interprets them correctly. However, this line of reasoning typifies a post-modernist critique of a ‘half-hearted’ attempt to engage with history. Interestingly, this debate is inter-twined with the longstanding debate on the significance of objectivity and interpretation in history.

Renke (1983) exemplifies the traditionalist approach where objectivity is central to historical pursuit. For him, a historian’s principal task is to ‘present actually what happened’ (p. 5). Therefore, history is both science and an art; science is in ‘collecting, finding and penetrating’ and the art is in ‘portraying what is found’ (p. 33). As a result, the researcher should investigate ‘genuine information’ and strive to find the ‘real motives’ behind events (p. 41). Although Renke acknowledges the possibility that objectivity may be influenced by the historian’s personal ideology, he argues that historians should strive to maintain their ‘impartiality’ at all times (p. 42). For Renke, a historian’s sole purpose is to examine the facts and ‘penetrate to the bottom of their existence to portray them with complete objectivity’ (p. 42). A similar position is adopted by Elton (1969). For Elton, a study of history is a ‘search for truth’ (p. 70). Elton recognises the problems with this connotation. He acknowledges that an exercise in search for truth appears to resemble the method of natural scientists. While scientists can verify their reconstructions by repeating an experiment, thus lending them objectivity, historians are unable to recreate the past (p. 72). Furthermore, he acknowledges that it is possible that a researcher may select a problem that suits him and include himself in the final interpretation (p. 72-3). However, Elton argues that objectivity in history stems from the fact that the subject matter is independent of an individual and is a ‘dead reality’ (p. 73). Although a researcher may not be able to develop an exhaustive knowledge of history, it does not alter the fact that ‘it is the knowledge of a reality, of what did occur’ and not some imagery event that the historian is concerned with (p. 73). Hence, even though the past cannot be recreated completely, it does not mean that there is no historical truth (p. 74). The purpose of historians is therefore to immerse themselves in search for this truth.

On the other hand, Carr (1964) proclaims as a matter of factly that ‘history is interpretation’ (p. 18). He argues that history can seldom claim to be ‘pure’ (p. 17). A historian examines his subject after carefully selecting from available facts. Using the metaphor of fish in a ‘vast and sometimes inaccessible ocean’, Carr argues what historian will catch will depend partly on chance and partly on what ocean he chooses fish’ (p. 18). As a result, history largely becomes an interpretation of the historian. This interpretation is also subject to difficulty because the researcher is required to understand the minds of the subjects under study who lived in periods where completely different sets of rules, values and customs existed (p. 18). It becomes hard for a historian to completely relate to different situations. As a result, whatever insight is attained of the past, it is only made possible through the ‘eyes of present’ (p.19). This idea is stretched further by White (1998). White argues that historians are forever faced with reminding their readers that their characterisations are only tentative owing to the incomplete nature of historical records (p. 16). A historian therefore is never able to completely recreate the past and thus has to resort to a dose of ‘verbal fiction’, akin to the practice followed in literary writings (p. 16). Furthermore, how a given historical situation is to be portrayed depends on how a historian constructs it’s ‘plot structure’ and endows it with meanings that he wishes the story to convey (p. 19). As a result, history becomes a product of an ‘unholy union between history and poetry’ (p. 17).

Clearly, the positions discussed above represent a polarised view on the subject. Evans (1997) makes an attempt to reconcile these debates. Evans acknowledges that the selection of materials by historians do get influenced by certain beliefs and theories with which they associate themselves (p. 249). Consequently any reconstructions of past is only partial, but he asserts that it is nonetheless true (p. 249). He argues that any element of poetry and imagination that enters the historical characterisation is ‘disciplined by facts’ (p. 251). Nonetheless, he thanks post-modernists for bringing the issue of subjectivity to the forefront and force historians to be self-critical and aware of the limitations of their methods (p. 248). Although, he cautions against conflating objectivity with neutrality and acknowledges that objectivity does not tantamount to neutrality (p. 252). In an effort to practice a credible history, Evans suggests that all historians need to ‘develop a detached mode of cognition, a faculty of self criticism’ and an ability to understand differing view points. (p. 252). His position is summarised by the following:

“…I will look humbly at the past and say despite them all: it really happened, and we really can, if we are very scrupulous and careful and self- critical, find out how it happened and reach some tenable though always less then final conclusions about what it all meant.” (p. 253).

Keeping in line with the broadly social scientist approach adopted in this thesis (as discussed above in first point), this thesis adopts the position articulated by Evans. This research expresses belief in the reality of past and the possibility of reconstructing it through patterns, albeit with a light dose of imagination, through linkages to the available facts. The reality of past is in the form of the threat of international competition, strategic responses of individual firms and collective strategies. The reconstruction in this research takes the form of case- studies (discussed in the next section). The facts are sourced from archival material and interviews. However, it acknowledges that the selection of archival material was driven by the research question, availability of records and the choice of theoretical framework. Hence, the final analysis and conclusions are subject to these assumptions.