The Origins of Strategic Practice: Product Diversification in the American Mutual Fund Industry

Michael Lounsbury, Huseyin Leblebici

Research output: Contribution to journalArticlepeer-review

Abstract

Although strategy research has systematically investigated the organizational antecedents and consequences of diversification behavior, little attention has been paid to the role of larger institutional forces. Institutional researchers have aptly demonstrated how broader cognitive, normative and regulative structures affect organizational practices, but have not focused a great deal on how institutional forces shape strategic action. Building on recent efforts to develop more sociological perspectives on strategy, we show how institutional changes driven by the professionalization project of money managers in the mutual fund industry facilitated the widespread use of product diversification as a routinely used organizational strategy. Implications for strategic management research are discussed.

Original languageEnglish (US)
Pages (from-to)65-90
Number of pages26
JournalStrategic Organization
Volume2
Issue number1
DOIs
StatePublished - Feb 2004

Keywords

  • diversification
  • institutional theory
  • mutual funds
  • professionalization

ASJC Scopus subject areas

  • Business and International Management
  • Education
  • Industrial relations
  • Strategy and Management

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