The Routinization of Paradox Management: Managing Recurrent Tensions in Dual Business Models
The objective of our study is to uncover the micro-processes of managing repeated episodes of tensions occurrence between product and service business model. By contrasting 10 national subsidiaries, we find that whereas the unsuccessful subsidiaries pursue a bargaining process to tension management that preserves the dualism between the two business models, the successful subsidiaries upgrade from an initial synergistic process to a subsequent routinized process of tension management, which allows them to move towards a duality. Rather than bargaining for compromises between diverging interests, the successful subsidiaries engaged in promoting common overarching goals, resolving the conflict of interest, and promoting the identification of synergies. As trust in the success of the synergistic process grows, organizational members begin to learn how to resolve conflicts without their leader’s active mediation. They jointly generate and implement routines for the proactive identification of latent tensions,...