RESOLVING THE PARADOX OF INTERDEPENDENCY AND STRATEGIC RENEWAL IN ACTIVITY SYSTEMS

We examine an intriguing paradox regarding whether interdependencies in an organization's activity system enable or hinder strategic renewal the incremental process through which an organization continuously adapts to the environment and explores opportunities to invoke change in its activity choices and outputs. One research stream, the "inertial view," argues that the pervasiveness of interdependencies among activities increases inertia, which inhibits strategic renewal. Another research stream, the "adaptive view," argues that the pervasiveness of interdependencies among activities allows for a rich flow of resources and information, which enables strategic renewal. In this article we argue that both views provide important insights but arrive at conflicting conclusions because they focus on different dimensions of interdependency. To resolve this paradox, we distinguish between an activity system's interdependency patterns and interdependency rules. We propose that the dimensions of the interdependency pattern set the context in which the dimensions of the interdependency rules guide the exchange of resources and information among interdependent activities. Integrating these two components of an activity system's interdependency design leads to a "dual understanding" of interdependency as both pattern and rule and helps explain how the inertial forces of interdependency patterns may be overcome by putting appropriate interdependency rules in place.