Optimal distinctiveness: Broadening the interface between institutional theory and strategic management

CITATION

Zhao, E. Y., Fisher, G., Lounsbury, M., & Miller, D. (2017). Optimal distinctiveness: Broadening the interface between institutional theory and strategic management. Strategic Management Journal, 38(1), 93-113. doi:10.1002/smj.2589

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ABSTRACT
Research summary: Attaining optimal distinctiveness—positive stakeholder perceptions about
a firm’s strategic position that reconciles competing demands for differentiation and
conformity—has been an important focal point for scholarship at the interface of strategic management
and institutional theory. We provide a comprehensive review of this literature and situate
studies on optimal distinctiveness in the broader scholarly effort to integrate institutional theory
into strategic management. Our review finds that much extant research on firm-level optimal distinctiveness
is grounded in the strategic balance perspective that conceptualizes conformity and
competitive differentiation as a trade-off along a single organizational attribute. We argue for a
renewed research agenda that draws on recent developments in institutional theory to conceptualize
organizational environments as more multiplex, fragmented, and dynamic, and discuss its
implications for core strategic management topics.
Managerial summary: This article aims to provide managers with a more comprehensive and contemporary
view of how firms can become optimally distinct—being different enough from peer
firms to be competitive, but similar enough to peers to be recognizable. We aim to equip managers
with an understanding of firms as complex, multidimensional entities, and encourage them
to identify and orchestrate various types of strategic resources to reconcile conformity versus differentiation
tensions, address the multiplicity of stakeholder expectations, and aptly modify their
positioning strategies in order to succeed in dynamic environments


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