Paradox Theory examined by GREITM researchers

In the midst, of deciding the direction of a company, managers, and CEOs need to constantly choose between paths, this means, for example, choosing between collaboration or control; Individual-collective; flexibility, and efficiency; exploration-exploitation, and profit-social responsibility. One path gets chosen over the other, as generally while the organization moves in a direction it is not moving towards another. This decision-making problem creates tensions between two opposite poles that are permanently juxtaposed in the day-to-day of businesses, this means, organizational management is constantly experiencing paradoxical situations. 

Foundational work on paradox in organizations emerged starting in the late 1970s and 1980s. A variety of disciplines, including Eastern philosophy (Taoism, Confucianism), Western philosophies (Hegel, Heraclitus), psychodynamics (Jung, Adler, Frankel), psychology (Schneider, Watzlawick), political science (Marx, Engel), communications and sociology (Taylor, Bateson), and negotiations and conflict resolution (Follett). Recent research has advanced toward a new definition of the paradox’s theory, analyzing the relationship between many tensions, understood as two opposing elements. In short, a paradox is defined by Marianne Lewis (2011, the author behind the composition of the paradox theory, as “contradictory yet interrelated elements that exist simultaneously and persist over time”, yet embedded in this definition you can notice two elements of paradox. First, the “tensions” and the “responses” to those tensions.
 

The Framework

What kind of contradictory yet interrelated elements? To answer this question, we need to understand that tensions are formed from different avenues. This has categorized tensions into four big groups: 1) performing tensions happen when leaders or stakeholders disagree upon goals and strategies; 2) organizing tensions emerge when there are differences defining how to operate; 3) belonging tensions occur when identity, roles, and values are the object of conflict, and 4) learning tensions surface when organizations get embedded in the implementation of change, and stress emerge between old and new knowledge.

Furthermore, the author has created a model to understand how tensions affect performance inside organizations. It is important to understand that tensions are first latent; differences have the potential to be transformed into salient tensions. Plurality, scarcity, and change, are triggers that turn latent tensions into salient tensions. In a second stage, actors involved, lay hands on their own capabilities for the management of tensions, such as emotional equanimity or instability, and their own organizational inertia to preserve routines or when in presence of dynamic capabilities to manage change. The responses of the actors involved in tensions turn into vicious or virtuous cycles. In the end, the ability to manage these tensions between paradoxical concepts or choices, spur short-term successes that eventually add up to long-term sustainability for the organization. 
 

Discussion of Paradox 

At first, scholars describe that the origins of paradox come from the transition between the early (organizational) theories, based on the notion that there is one best way, to the contingency theory, which states that choices depend on the situation. This perspective focuses more on understanding the passage to a new perception of time, as more linear and quantitative, and starts to consider the change as a predominantly episodic experience. Moreover, several different discussions of the paradox theory have emerged in the last 20 years, for example, effective managers split tensions and choose the pole that best aligns strategy with structure, and in coordination roles, the tensions found are connected with internal organizational factors and external environment. In addition, conversations about innovation; change; communication and rhetoric; Identity, and leadership, are revised using the paradoxical perspective as well.

This contingent theory approach explores conditions for selecting among competing demands. Whereas that paradox theory assumes that tensions persist within complex and dynamic systems and that, although choosing between competing tensions could aid short-term performance, long-term sustainability requires continuous efforts to meet multiple, divergent demands.
 

Applications in our group

Our research group is currently studying the paradox theory as a theoretical lens to understand tensions in the relationship of actors in entrepreneurship. Research in governance and orchestration of ecosystems, and startup relationship between entrepreneurs and incubators or accelerators, require different perspectives to understand complex variables. Specifically, our researchers Katalina Soto and Moritz Stahl, are reviewing the relationships regarding entrepreneurship. The first is between public administration and the actors involved in ecosystems from emerging economies; the latter is connecting entrepreneurs and the orchestrators of the incubator where they are developing. 

Authors: Katalina Soto & GREITM editorial team

Bibliography
Lewis, M. W. (2000). Paradox : Toward a More Exploring Guide Comprehensive. Academy of Management Review, 25(4), 760–776.
Smith, W. K., & Lewis, M. W. (2011). Toward a Theory of Paradox: a Dynamic Equilibrium Model of Organizing. Academy of Management Review, 36(2), 381–403. https://doi.org/10.5465/amr.2011.59330958
Sundaramurthy, C., & Lewis, M. (2003). Control and collaboration: Paradoxes of governance. Academy of Management Review, 28(3), 397–415. https://doi.org/10.5465/AMR.2003.10196737