Thriving on contradiction: Toward a dialectical alternative to fit‐based models in strategy (and beyond)

Research Summary While the established, coherence view of internal fit provides a compact representation of firms and strategy, it also discounts the strategic benefits of tensions and contradictions, and downplays strategy creation and change. Here, we develop a novel dialectical alternative to fit‐based models of strategy. Within our model, contradictions and tensions serve as a key engine for strategic renewal and transformation. If carefully harnessed through what we call “disciplined incoherence,” contradictions can help firms establish and change their strategies and business models, adapt to and shape their environment, and enhance and sustain their competitive advantage. We offer a dynamic, endogenous view of how configurations are generated, transformed, and maintained, and present a processual alternative to current strategy models that are grounded in equilibrium and coherence assumptions. Managerial Summary Prior thinking suggests that firm strategies should focus on achieving fit between the firm's different elements such as activities, organizational structures, and policies, and that tensions and inconsistencies should be eliminated or minimized. We argue that this view overlooks the important role of contradictions in fostering innovation and competitive advantage and driving strategic change and renewal. Conflicts and contradictions pose their own risks. Yet, given the potential for their firms to thrive on contradictions, managers and strategists should neither dismiss these challenges nor be paralyzed by them. Instead of stamping out tensions and contradictions, managers can apply a process of “disciplined incoherence” where they relinquish some control while drawing on organizational arrangements and their own creativity and skills to allow contradictions to develop.