IntroductionIt has been argued that one of the key challen.docx

Introduction
It has been argued that one of the key challenges
facing contemporary management is the develop-
ment of market-led strategic change (Harris and
Ogbonna, 2001). However, much extant theory
argues that a wide range of forces impede
strategic change (see for example, Boeker, 1989;
Judson, 1996). These issues have led contemp-
orary theorists to contend that, in many cases,
commitment to strategies endure over time
(Geletkanycz, 1997; McCarthy, Schoorman and
Cooper, 1993) to the extent that the organization
may become strategically ‘inert’ (Huff, Huff and
Thomas, 1992; White, Abbey and Barnett, 1994).
Research into these issues has tended to con-
centrate on theoretical discussions or descriptive
studies designed to discover the extent to which
past strategies endure over time or restrict cur-
rent strategic options (for example, Kelly and
Amburgey, 1991; Tushman and Romanelli, 1985).
Interestingly, such research largely focuses on
Chief Executive Officers (CEOs) and often ignores
the influence of the founder. Furthermore, the
empirical examination of how founding strategies
become internal legacies which influence and
impact on the effectiveness of future strategic
decision-making is frequently overlooked.
With the exception of a small survey by Boeker
in 1984 (later reported in Boeker, 1989), few studies

have combined the study of strategic inertia and
the legacy of the founder of an organization. The
present study was initiated partially in response
to the suggestion of Boeker (1989, p. 511) that
further research is required to develop ‘a better
understanding of strategic change and the circum-
stances under which either inertia or adaptation is
likely’. Indeed, the extent of the debate pertain-
ing to the level of managers’ strategic choice
provides a justification for the current focus on the
influence of the founder on subsequent strategy.
British Journal of Management, Vol. 12, 13–31 (2001)
© 2001 British Academy of Management
The Founder’s Legacy:
Hangover or Inheritance?1
E. Ogbonna and L. C. Harris
Cardiff Business School, Colum Drive, Cardiff CF10 3EU, UK
email: [email protected]
The legacy of organizational founders is a comparatively under-
studied topic. Through
two in-depth case studies, this article explores the factors which
influence whether
founding strategic visions, objectives or decisions influence
present-day strategic
choice. Furthermore, the study identifies and explores a number
of factors which
influence whether a strategic legacy is categorized as either an
inheritance or a hang-
over. The article begins with an overview of existing research
into the role of the
founder, commitment and strategic inertia, which suggests that

additional research is
required to clarify the legacy of company founders. After a
review of the research
design and methodology adopted for the study, the findings of
two case studies are
presented. The findings suggest that the initial establishment of
a strong organizational
culture, continuing perceptions of success as well as successive
family control all
contribute to an adherence to the founding strategy, mission or
objectives. In addition,
the study indicates that the flexibility of the original strategy
and environmental issues
impact on the extent to which the strategic legacy is classified
as an inheritance or a
hangover. The article culminates in a series of conclusions and
implications.
1 The authors wish to express their gratitude to Professor
Gerard Hodgkinson and the anonymous Associate
Editor and reviewers whose detailed and constructive
comments helped in restructuring this article.
This study aims to advance existing theory
through (1) identifying and exploring which
factors influence whether the founding strategic
vision, objectives or decisions influence present-
day strategic thinking or actions and (2) assessing
what factors influence whether this ‘strategic
legacy’ helps or hinders the organization. As is
discussed later in this article, a ‘strategic legacy’ is
defined as the enduring influence of the initial
strategy of the founder of an organization over
the actions of successive strategic decision-

makers. As such, evidence of a strategic legacy is
often uncovered in enduring espoused doctrines,
visions, strategic objectives, aims, beliefs and
cultural values (see Harris and Ogbonna, 1999;
Pettigrew, 1979; Schein, 1992; ).
A review of existing literature indicates the
requirement of the discussion of three issues.
First, it is necessary to clarify the role of an
organizational founder in creating visions, object-
ives and strategies which may become enduring
over time. Second, a discussion of the mainten-
ance of strategic decisions by individuals and
organizations is presented. Finally, the literature
review concludes with a brief overview of the
limited research which combines the study of
strategic change and the influence of the founder.
The role of the founder
Within the strategic management and entre-
preneurship literatures, it is generally accepted
that the emergence of organizations has much to
do with the entrepreneurial spirit of founders
which drives them to create their vision in a
tangible form (Darazsdi, 1993). Adopting a
biological analogy, Reynolds and Miller (1992)
analyse the ‘gestation’ of a new firm and suggest
that a firm is ‘born’ when: the founder exhibits
tangible personal commitment; gains financial
support; recruits employees, and; makes the first
sale (although Carter, Gartner and Reynolds
(1996) argue that the sequence and importance of
these activities is subject to debate). From an
organizational culture perspective, Schein (1991)
notes that organizational formation involves four

main stages. First, an entrepreneur detects a
potential gap in a market and identifies a way in
which this gap may be filled. Next, the founder
shares the idea either to elicit support or to
instigate action. Third, the tangible artefacts of
the organization are established and finally the
organization begins to operate. In this way, the
founder of an organization transforms their vision
into a tangible creation whose culture will largely
reflect the personal beliefs of the founder. Thus,
two of the main roles of the founder of a company
are (1) the creation of a vision leading to a
strategy and (2) the establishment of an organiza-
tional culture largely reflecting their philosophy.
These two roles are discussed below.
Schein’s (1991) view of organizational forma-
tion emphasizes the critical nature of the
establishment of a vision (most commonly articu-
lated and disseminated to other organizational
members via a founding strategy). Indeed, Schein
(1991) argues that the success of a new enterprise
is dependent upon this vision, which in turn is
reliant on the characteristics of the founder (such
as, the extent of market-sensing and foresight).
El-Namaki (1992) contends that in order for a
strategic vision to provide a sound base for com-
pany strategy, the vision should be characterized
by a number of conditions (including coherence,
uniqueness, feasibility and power). As such, the
rationale for a founding vision is linked to a num-
ber of organizational ‘imperatives’ for the founder
(Tregoe et al., 1989). These ‘imperatives’ include
the need: to attune the organization to environ-
mental conditions (Schein, 1991); to articulate

and establish a form of competitive advantage
(El-Namaki, 1992); to communicate strategic
direction to subordinates and for the founder to
control the destiny of their creation (Daily and
Dalton, 1992).
An important issue arising from the above
discussion is the nature of the relationship
between organization culture and strategy.
Although a detailed discussion of this is beyond
the scope of this study (interested readers are
referred to a recent review by Ogbonna and
Whipp, 1999), it is useful to provide a brief over-
view as this may have some bearing on later dis-
cussions. Whilst some researchers have argued
that culture and strategy are mutually dependent
variables which interact within a dynamic
process (Ogbonna and Whipp, 1999; Schwartz and
Davies, 1981), there is significant support from
the ‘founder-centred’ literature that initial organ-
izational strategies are moulded by the vision,
philosophy and beliefs of founders (see Boeker,
1989; Daily and Dalton, 1992; Schein, 1991). Hence,
although it is recognized that organizational strategy
14 E. Ogbonna and L. C. Harris
may exert some influences on culture, it is gen-
erally believed that organization culture is a
broader concept which informs both the process
of strategy formulation and the resulting strat-
egy itself (see for example Shrivastava, 1985;
Thompson and Wildavsky, 1986).

Research evidence on the role of organiza-
tional founders range from studies which
celebrate the role of founders in creating endur-
ing cultural legacies to those researches which
are highly critical of this assumption. Studies
grounded in entrepreneurial research tend to
accord a significant importance to the ability of
founders to mould the cultures and strategies of
their organization. For example, Boeker (1988)
has observed that founders play an important role
not only in creating the initial visions and
strategies of their organizations, but also in
shaping the nature of the consensus (read culture)
around which future strategies are developed.
Similarly, Schein (1983) found that in the three
organizations he studied, the personal assump-
tions of the founders became shared by other
organizational members and remained widely
held even after the companies had grown
dramatically and undergone numerous changes in
leadership. Further, there are numerous examples
of organizational founders who have become
legends and whose values are said to continue to
dominate the cultures of the organizations they
founded (see for example, the discussion of Herb
Kelleher of Southwest Airlines in Quick, 1992).
Indeed, this pervasive influence can remain long
after the founder has left the company (perhaps
the most famous examples of this are Bill Hewlett
and Dave Packard of Hewlett-Packard fame).
In contrast to much theorizing within the
strategic management and entrepreneurship
literatures, organizational-culture theorists are
generally more critical of the role which is
frequently attributed to organizational founders

in the creation of enduring cultural legacies. For
example, Martin, Sitkin and Boehm (1985)
provide a critical evaluation of the studies which
portray organizational founders as creating what
they describe as a ‘personal form of organiza-
tional immortality’ (Martin, Sitkin and Boehm
1985, p. 99). They argue that such studies tend to
adopt monolithic views of culture in which culture
is defined in unitary terms. They note that such an
approach frequently focuses on identifying
organization-wide consensus wherein the values
of top management are assumed to be sacrosanct
and shared by all organization members.
Contemporary culture theorists have noted
that the search for organization-wide consensus is
not only elusive but could also ‘blind’ researchers
to the important differences which underlie
culture within a single organization. Indeed, the
perspective of many ‘founder-centred’ studies
is said to be characteristic of what Martin (1992)
labels ‘integrative’. In this sense, it has been
argued that as these studies search for shared
meanings in organizations, they frequently
ignore the conflicts and contradictions which may
be evident (Martin, Sitkin and Boehm, 1985). In
contrast, Martin (1992) presents two other per-
spectives of culture (‘differentiation’ and ‘frag-
mentation’) to suggest that ambiguity, conflict
and subcultural differences are more accurate
representations of organizational life. This view is
consistent with the findings of other researchers
(see Alvesson and Berg, 1992; Rowlinson and
Proctor, 1999).

Furthermore, the ‘founder-centred’ studies in
the strategy and entrepreneurship literatures
have been criticized for their uncritical accept-
ance of official accounts of organizational history.
Indeed, many culture theorists note that the focus
of many ‘founder-centred’ studies on retro-
spective accounts of organizational history fail to
give due consideration to the construction and
reconstruction of such history over time (see
Alvesson, 1993; Rowlinson and Proctor, 1999). In
particular, it is argued that these studies may
suffer from social cognition biases such as
‘salience’, ‘attribution’ and ‘self-enhancing’ biases
(Alvesson, 1993; Martin, Sitkin and Boehm
1985).
Interestingly, the review of the strategy, organ-
izational culture and entrepreneurship literatures
reveals a number of inconsistencies. In particular,
whilst strategy and entrepreneurship researchers
generally accept the notion that strategies endure
and that founders or influential CEOs exert a
significant influence long after they have left
the organization, culture writers are more
equivocal. Prominent culture commentators such
as Pettigrew (1979) and Schein (1991) argue that
founders create a sustained cultural legacy whilst
other more critical culture writers argue that the
influence of founders is overstated (see Martin,
Sitkin and Boehm, 1995; Rowlinson and Proctor,
1999).
The Founder’s Legacy: Hangover or Inheritance? 15

Notwithstanding the perspective adopted in the
examination of the influence organizational
founders, it is clear that a change in leadership
constitutes a critical transition for any organ-
ization, but especially when the company founder
leaves or is replaced. Rubenson and Gupta (1992)
find that a number of factors influence a
founder’s decision to step aside. However, suc-
cession by other family members is comparatively
rare. Indeed, recent research finds that only 30%
of family concerns remain family-controlled for
more than one generation and that fewer than
one in ten remain family-controlled beyond the
second generation (Ket de Vries, 1993). Morris
et al. (1997) explain the low levels of continuing
family control through their finding that suc-
cessful family transition depends on a wide variety
of factors including the preparation of heirs,
family relationships and planning activities.
Boeker and Goodstein (1993) conduct a study
of the factors influencing whether Chief
Executive successors are chosen from inside or
outside the organization. Their research is
particularly relevant in the study of the succession
of company founders since newly founded firms
are frequently family owned and managed.
Despite the findings of Willard, Krueger and
Feeser (1992) that no significant performance
differences exist between founder-managed and
professionally-managed companies, Boeker and
Goodstein (1993) find that organizational per-
formance is a key determinant of successor
choice, although they note that a variety of factors
moderate this relationship. Consistent with the
earlier findings of Pfeffer (1981), Boeker and

Goodstein (1993) conclude that firm ownership
significantly affects successor choice in that firms
largely owned by ‘insiders’ are less likely to
replace their CEOs with external personnel. This
implies that organizational founders are more
likely to pass succession to insiders (such as
family members who work within the company)
as this increases the likelihood of a continuation
of the founder’s objectives and strategies.
Founders, commitment and strategic
inertia
Brockner (1992, p. 39) defines escalation of
commitment as ‘the tendency for decision makers
to persist with failing courses of action’. Brockner
(1992) claims that although self-justification
explanations have proved the more popular,
other theoretical formulations (such as prospect
theory or decision dilemma theory) may provide
equal or greater insights. In a study of reinvest-
ment decisions, McCarthy, Schoorman and Cooper
(1993) analyse the influence of four ‘predictors’ of
escalating commitment and find that escalation
bias is likely if entrepreneurs: are company
founders; have business partners; expect to use
their own skills; and are overconfident.
Theories examining the phenomena of indi-
viduals’ escalation of commitment are comple-
mented by research conducted into top managers’
commitment to the status quo (see Geletkanycz,
1997; Hambrick, Geletkanycz and Fridrickson,
1993). In contrast to escalation of commitment
theory (which pertains to increased commitment)

commitment to the status quo focuses on that
which Hambrick, Geletkanycz and Fridrickson,
(1993, p. 402) define as ‘belief in the enduring
correctness of current organizational strategies
and profiles’. In a large-scale study of top man-
agement, Hambrick, Geletkanycz and Fridrickson
(1993) conclude that firm and industry tenure,
as well as organizational performance, influence
top executive commitment to the status quo. In
a later study, Geletkanycz (1997) extends her
earlier work with Hambrick et al. (1993) through
the finding that executive openness to change is
influenced by national culture. Thus, Geletkanycz
(1997) and Hambrick et al. (1993) both conclude
that in certain circumstances managers tend to
prefer maintaining the status quo to strategic
change.
Whereas the theories discussed earlier focus on
the commitment of individuals, Huff, Huff and
Thomas, (1992, p. 55) propose that the concept of
strategic inertia encompasses ‘personal commit-
ments, financial investments and institutional
mechanisms’. As such strategic inertia is a wider
concept than individual commitment (see Huff
and Huff, 1995; Tushman and Romanelli, 1985)
and is more akin to what economists call
organizational ‘lock-in’ (see Arthur, 1989). Huff,
Huff and Thomas (1992) contend that the forces
of strategic inertia, manifested in organizational
commitment to current strategies, are influenced
by environmental pressures. Such pressures may
result in cumulative organizational stress which
is viewed as the mismatch between the organ-
izational demands and opportunities faced, and

the capacity to respond. Hence, it is these forces
of stress and inertia which determine whether
strategy is renewed.
Whilst, the majority of research into escalation
of commitment, commitment to the status quo
and organizational inertia focus on CEOs or
top management, Boeker (1989) conducts one of
the few studies which combine the analysis of
the effect of the founder and organizational strat-
egic choices. Boeker (1989) reviews the strategic
change literature and identifies two strands of
research which categorize organizations as either
inertial or adaptive. In contrast to Huff, Huff and
Thomas (1992) and White, Abbey and Barnett
(1994), Boeker (1989) views inertial strategy as
those strategic choices first adopted by the
organization, exerting a constraining influence on
subsequent strategy making. In this way, Boeker
(1989) proposes that the founding circumstances
and history of an organization influence the
future development of strategy. In a small study
of a comparatively young industry (semiconductor
production), Boeker (1989) identifies the con-
ditions which can either impose constraints or
create opportunities for subsequent strategic
actions. These conditions range from the extent to
which the organization adopts a dominant initial
strategy, the ways through which power and
influence are distributed across the organization,
the nature of ownership and management and the
level of effort made by the founder to develop a

consensus around a given strategy.
Methodology
This study aims to explore which factors influ-
ence whether the founding strategic vision, object-
ives or decisions influence current-day strategic
thinking or actions and assess the factors which
influence whether the strategic legacy results in
positive or negative present-day performance.
The current study can be viewed as ‘integrative’
(Martin, 1992) in that the focus is on the impact
of the philosophy and actions of the founder.
However, as stated earlier, this research is
designed to overcome some of the limitations
of extant integrative studies through explicitly
acknowledging the complexities of retrospectively
examining organizational history (see Rowlinson
and Proctor, 1999). Further, to minimize the
methodological problems of historical data
collection, various research tactics were adopted
(for example, the notation of precise document
sources within the confines of organizational
anonymity).
The objectives of this study are achieved
through two case studies which provide both
depth and reliability (see, for example, Harris
and Ogbonna, 1998; Marchington and Harrison,
1991; Sturdy, 1992). The two case companies in
question were selected for a number of reasons,
including: their long history in the same business
field; their record of single-family ownership; and
other practical considerations such as comparable
company size and number of employees.

Yin (1994) maintains that the unique strength
of the case-study method is derived from the
ability of the method to encompass a variety of
data sources. Consequently, in order to establish a
detailed view of the dynamics of the two case
organizations a variety of research methods were
utilized.
First, a total of 124 in-depth semi-structured
interviews were conducted with a range of em-
ployees at a variety of levels of the organizational
hierarchy (each interview lasting between one
and two hours). All interviews were audio
recorded and transcribed.
Second, in contrast to the general trend in
organizational culture research to focus exclu-
sively on either interviews or observational
techniques (see Rowlinson and Proctor, 1999),
this study incorporates the review of archive data.
Whereas some organizational culture literature
relies on oral history (see Alvesson and Berg,
1992), Rowlinson and Proctor (1999) warn that
the anthropological roots of organizational cul-
ture have imposed traditions which, whilst suit-
able for the study of illiterate tribes, may be
inappropriate in modern organizations. Conse-
quently, to gain an insight into the history of
the case companies, data were collected via the
examination of company documentation and
archives. This included the study of: communiqués;
agendas; minutes from board meetings; admin-
istrative documents; formal studies; trade press;
strategy records; employee handbooks; financial
records; training materials; service records;

personnel records; and personal records (many
of the listed forms of archives dating several
generations). A list of the material referenced
in this article is included at the end of this
article.
Whilst recognizing that some publicly available
archives may well reflect the biases of public
relations personnel (see Ott, 1989), this seems
unlikely in the two case studies presented.
Neither of the two companies’ archives were
catalogued, and they had certainly not been
systematically edited. Indeed, the scattered but
voluminous nature of the archives in both com-
panies led to major difficulties in limiting docu-
ment review.
Whilst every effort was taken to ensure that the
methods of data collection were as reliable and
valid as possible (see the tactics recommended
by Yin, 1994), the design and methodological
approach of the study also act as constraints. In
particular, through focusing on the organizational
founder it could be argued that the study mirrors
the weaknesses of other studies (for example,
Pettigrew, 1979) in that the importance of the
founder is ascribed with elevated importance
(see Alvesson, 1993; Alvesson and Berg, 1992;
Martin, Sitkin and Boehm, 1985). Furthermore,
through retrospectively recounting company history
it could be argued that the study imposes a false
or misleading narrative structure (Rowlinson and

Proctor, 1999). Nevertheless, whilst recognizing
that methodological choices act as constraints,
earlier retrospective analyses of organizational
culture (for instance, Pettigrew, 1979) and strategy
(for example Bourgeois and Eisenhardt, 1988)
have provided incisive contributions.
The companies in question have expressed the
wish to remain anonymous, as have the personnel
who participated in interviews or discussions.
Consequently, a number of details have been
changed to avoid company or person identifica-
tion. The guarantee of anonymity precludes the
adoption of techniques to facilitate verification
(see Evans, 1997; Rowlinson and Proctor, 1999).
Nevertheless, whilst recognizing that, as with all
studies, the current study is constrained by its
methods, through providing illustrative verbatim
quotations and referring to particular archive
sources it is argued that a verisimilitudinous
account is presented.
Findings
The case study of Temple Stores and Abbey
Stores (pseudonyms) led to the emergence of two
important findings. First, a number of factors
were found to have influenced whether current-
day strategic objectives, decisions or actions had
been affected by the initial strategic choices of
the company founders. As stated earlier, this
continuance was labelled a ‘strategic legacy’ and
is defined as the enduring influence of the initial
strategy of the founder of an organization over
the actions of successive strategic decision-

makers (frequently apparent in the continuing
espousal of founders’ visions, missions, objectives
and beliefs). Second, a range of factors were
found to influence whether the legacy of the
founder resulted in a present-day negative effect
(that which this study labels a ‘strategic hang-
over’) or a positive influence (that which this
study labels a ‘strategic inheritance’).
Prior to a discussion of the results of the study,
it is worthwhile presenting a brief overview of the
founding and current visions, objectives and
strategies of both companies. The companies
have allowed some organizational details to be
published, specifically that both companies are
medium-sized retailers, have a strong family his-
tory, are named after their founders and that
Abbey’s Stores principally focuses on clothing
retailing while Temple Stores concentrates on
food retailing.
Unfortunately, due to the time periods in-
volved, little documented evidence exists of the
very early phases of the two companies. Temple
Stores bears the name of Mr Temple who in the
1890s formed a partnership with Mr Church.
The partnership prospered to the extent that it
was able regularly to open shops. Mr Church
married the eldest of Mr Temple’s daughters.
Mr Church gradually handed over the reins
to the eldest of his four sons, who in turn
passed the reins to his son, who was succeeded
by his son, who was succeeded by his younger
nephew.
Temple Stores is one of the oldest existing

multiple retailers still in private hands and was
one of the first multiple retailers in the UK.
Established in the late 1880s, there was once a
Temple Stores in virtually every town in Region
A, with the company owning 156 stores in the
mid-1960s. At present, Temple Stores is some-
what smaller with 58 branches concentrated in
Region A and a Central Support Office (Head
Office) located in City AA. The 1990s have seen
annual sales reach a plateau at around £50
million. As such, whilst Temple Stores fits the
description of a large grocery retailer, in com-
parison to the major food retailers the company
is very small, and in terms of sales it has fared
particularly badly during the 1990s.
The review of Board Meeting minutes (for
example Board Meeting Quarter Two 1923;
Board Meeting Quarter One 1927; Board
Meeting Quarter Three 1931) find recorded
statements that Temple Stores was founded with
a ‘vision’ of promoting the name of ‘Temple’ in
every town in Region A. The extent of this
espoused founding vision was such that Board
Meeting minutes and internal communiqués (such
as the Christmas Magazines of 1929 and 1934)
strongly espoused the objective of establishing a
family-controlled firm with outlets on the high
street of each town within this region. The found-
ing vision and objectives of Mr Temple are largely
replicated in the present-day formal strategy docu-

ments of Temple Stores (as detailed in the stra-
tegic plans of 1993, 1995, 1998) which still prioritize
family-controlled operations and advocate a low-
cost market penetration approach designed to lead
to growth via new store openings.
Abbey Stores was founded in the 1880s by
Mr Abbey. Changes of fortune, together with two
World Wars, saw the company and family settle in
City B. The current Employee Handbook (1998)
notes that Mr Abbey was known as the ‘guv’nor’.
He later passed control of the company to his
nephew the late Mr George Abbey (still called
Mr George by long-serving staff) who subse-
quently handed control of the company on to his
son, who in turn was succeeded by his son (the
present Mr Abbey).
In the early 1960s the company had a modest 19
branches, many still in traditional indoor markets.
However, since then Abbey Stores has grown
considerably, seeing the number of the company’s
stores increase rapidly and many stores modern-
ized or relocated from market outlets to large
modern units. In the 1990s Abbey Stores acquired
40 new stores which are maintained as separate
outlets administered from the central offices of
the company. The growth in the number of Abbey
Stores has resulted in expansion beyond the
traditional boundaries of Region B with most new
branches being opened in other regions. Presently
the Abbey Stores Group runs 142 stores under
the Abbey Stores fascia and 58 other branches
under different fascias. The increase in company
size has also meant a change in the location of the

company’s central office so that at present the
company operates from a Support Centre in
City B whilst maintaining a distribution centre in
City B.
Abbey Stores was founded with a strong family
orientation, with what business strategy re-
searchers would label an organizational ‘mission’
of providing a steady and stable income for a
family from what the current Employee Hand-
book (1998) calls a ‘humble background’ (humble
argued by current family members to refer to
lower-middle class roots contrasting with the cur-
rent affluence and societal position of the family).
The strategic objective was once again growth.
However, the founder believed that growth was
best achieved by careful and prudent decision-
making leading to an appropriate level of growth
within company capabilities. This strategic ap-
proach was within a cultural framework which
emphasized the stewardship principle, providing
stable employment to workers and steady income
to family members (as evident in one surviving
‘Policy Document’, 1937). Today, the strategy of
the company is strikingly similar to the founding
strategy. For example, the Chairman’s statement
in the 1997 Annual report praised the efforts of
managers for the way in which they had exploited
growth opportunities without exposing the com-
pany to undue risks.
Factors influencing whether the founder
establishes a strategic legacy
In both Temple and Abbey Stores, evidence was
found to indicate that many aspects of the vision

and objectives of the two founders had been
continued by successive managements. The con-
tinued adherence to founding visions, objectives
and tactics was such that this could be labelled a
strategic legacy for both companies. Whilst both
companies experienced a legacy, the precise
character of the legacy varied. In Temple Stores,
the legacy appeared to be principally perpetuated
in the form of relatively precise objectives of
maintaining family control and growth. In con-
trast, in Abbey Stores, the founding legacy was
perpetuated in the form of a growth objective
within the confines of a cautious strategic
approach. This concept of ‘strategic legacy’ is
consistent with the findings of Goodstein and
Boeker (1991), Schein (1983) and White, Abbey
and Barnett (1994).
Whilst a range of factors appeared to exert an
influence, the strength of the created organ-
izational culture, perception of company success
and continuing family control emerged as
particularly important. Each of the three factors
appeared to encourage the occurrence of a
strategic legacy. Nevertheless, it is important to
note that the research design adopted precludes
definitive causal claims. Hence, for example,
whilst evidence emerged that continuing family
control influenced the continuation of the found-
ing strategy, it is possible that the relationship
between family control and the strategic legacy is
dynamic and/or mutually reinforcing.

Strength of organizational culture created. To
explore the founding cultures of the two com-
panies, discussions were held with long-serving
organizational members, and private company
records and archives were examined. Particularly
insightful private records included the work
diaries and notebooks of Temple and Abbey
family members (ranging from 1938–1954 and
1979–date) and internal management reports and
memoranda, some of which dated as far back as
the 1920s. The examination of these documents
suggested that in the cases of both Temple and
Abbey Stores, the founders of the two companies
had established what may be described as a
particularly ‘strong’ organizational culture. For
example, the personal work notebook of
Mr Church in 1944–1945 claims that a newly
opened outlet was failing to conform to what he
calls the ‘Temple way’, constituting an ‘un-
acceptable insubordination’ requiring immediate
corrective action. Similarly, in Abbey Stores, the
internally reported Branch Manager Report of
1941 praises the approach of certain managers for
keeping the spirit of the ‘guv’nor’ alive and extols
others to adhere to this ‘best practice’.
In many ways, this cultural strength appears to
have provided the medium of carrying the
strategic legacy of the founders. Indeed, as is
illustrated later, many of the strong cultural
beliefs espoused by the company founders are
still in evidence today, suggesting the longevity
and strong nature of many aspects of the com-
pany’s culture. A strong culture refers to the
extent to which facets of culture (beliefs, assump-

tions, values and cultural artefacts) are deeply
held and widely shared among organizational
members. It should be noted that various writers
on culture have utilized a range of labels to refer
to cultural ‘strength’ with comparatively little
difference between the conceptualizations. Such
labels include: Sathe’s (1983) ‘thickness’; Louis’s
(1985) ‘psychological penetration’; Ouchi and
Price’s (1978) ‘homogeneity’; and Schall’s (1983)
‘congruence’. Despite differing labels, these con-
ceptualizations consistently suggest that a strong
culture provides the overarching framework in
which strategy occurs (see Ogbonna and Whipp,
1999).
Newspaper cuttings (largely from regional
newspapers kept by various company clerks from
1900–date), farewell/retirement speeches and
statements published internally via the annual
company newsletter (for example Christmas
Magazine, 1934) and interviews with the descend-
ants of Mr Temple suggest that Mr Temple
established a strong culture. This culture appears
to constitute a framework within which the
founding vision and strategic objectives became
enshrined. Thus, whilst the culture that emerged
contained beliefs pertaining to strategic choices,
in addition it also reflected a myriad of other
values and assumptions. However, whilst it is
arguable that all founders create a culture,
through vociferously and forcefully promoting
the founding vision and objectives among his
successors, Mr Temple appears to have intention-
ally established a strong cultural belief system
with a view to ensuring continued adherence to

his founding objectives. A (now retired) senior
manager remembers:
‘What the original Mr Temple wanted is embedded
in the very fibre of this company. I can remember
my first boss [a direct descendant of the original
Mr Temple] talking to me about how his father
was always going on and lecturing him on his duty
to the company – you know – keeping faith with
vision of a store in every town – you must have
heard that a thousand times!’ (Retired Senior
Support Centre Manager, aged 69, 43 years’
service)
Indeed, a review of the minutes of board
meetings finds that even after the original
Mr Temple officially retired he regularly con-
tinued to attend meetings, frequently ‘suggesting’
his preferred courses of action. For example,
during one board meeting (Quarter Two, 1923),
Mr Temple made a closing statement at the end of
each agenda item which often contradicted his
son (the CEO) and twice reversed earlier
decisions. This behaviour is consistent with the
finding of Daily and Dalton (1992) on the strong
desire of founders to control the destinies of their
creations. Indeed, descendants of Mr Temple
describe him as a strict authoritarian who was not
accustomed to, and did not tolerate, dissent
among family members or employees. Archive
memoranda bear testimony to a blunt, arguably

rude, style of leadership that was scathing of non-
conforming employees or family members.
For example, the first memorandum of 1924
(2 January) contained no fewer than 14 ‘orders’
and publicly criticized six branch managers for
‘tardiness’.
The impact of Mr Temple’s actions was the
acculturation of family members and employees
to the extent that present-day evidence indicates
the continued adherence to many of the founding
doctrines of Mr Temple. Notwithstanding a
somewhat tarnished image, it is generally
considered that Mr Temple was a remarkable
leader who achieved considerable financial
success in a comparatively short period of time.
The current CEO (a descendant of Mr Temple)
states:
‘Mr Temple had an admirable vision of the future
of this company and made sure that this was
passed from generation to generation. To my
knowledge not one generation has disagreed – the
tactics may have changed a little but the objectives
are still the same.’ (Chief Executive Officer, aged
47, 14 years’ service)
Evidence of the existence of a founder-inspired
strong culture (in line with the suggestions of
Schein, 1991) was also found amongst employees.
Notably, store-level employee values were remark-
ably consistent given the geographic isolation
of outlets with many company-specific values
expressed in ways which suggest deep cognitive
entrenchment. An illustrative example of such
cultural entrenchment may be found in the

company-specific values of shopfloor employees
toward customer service. Present-day shopfloor
employees describe the company-espoused view
of customer service:
‘I know that others [other retail companies] don’t
do it but here its always been “Yes, Sir” and “No,
Madam”. It’s the Temple way – treating the
customers with respect – I guess it comes from the
days when it wasn’t self-service and the Store
Manager knew everybodys’ name.’ (Shopfloor
employee, aged 46, 8 years’ service)
‘Some of the new girls take ages to get it right.
Here we treat customers special – not like Tesco
or Asda. Our boss says we should talk to the
customers as if we were talking to the Queen –
respectful like.’ (Shopfloor employee, aged 24,
3 years’ service)
These values are remarkably close to the docu-
mented views of the founder who espoused
especially deferential customer service in his ‘1929
Address to Managers’ reported in the Christmas
magazine of the same year. Similarly, present day
employees of Temple Stores commonly believe
that customers ought to be treated in what is a
particularly servile manner, with more ‘modern’
service widely regarded as ‘inappropriate’.
In contrast, in Abbey Stores, surviving com-
pany and personal (family) records are con-
cordant with press accounts which consistently
portray Mr Abbey as a charismatic and con-
sultative leader (two separate newspaper inter-

views reported in the company magazines of 1923
and 1927 and verified with the local newspaper
archive) each use the term ‘charismatic’ or
‘charisma’ in describing Mr Abbey). Mr Abbey’s
management style appears to have allowed
employees scope and flexibility to carry out their
duties within broad guidelines. This view is sup-
ported by documentary evidence of ‘Updates to
Recommended Practice’ (an occasional internal
circular to branch managers) during 1956–1963
which appear to allow store managers increasing
decision-making autonomy over such issues as
staffing and stock levels and provided individual
head-office managers broad control over major
issues such as budget setting. The founder’s style
of management and leadership appears to have
been organizationally-absorbed in what current
family members describe as a ‘strongly paternal-
istic’ culture with company managers and execu-
tives culturally charged with the stewardship of
the company. Family members and long-serving
employees argue that the culture arising from the
actions and espoused beliefs of the founding
Mr Abbey became widely accepted as appropri-
ate and are claimed still to thrive today. A Senior
Support Centre Manager illustrates a widely-held
view:
‘Successive family owners have followed the
doctrines of Mr Abbey and over the years Abbey
Stores has thrived. I don’t think you’ll find many

dissenting voices here – we know what’s good for
Abbey Stores.’ (Senior Support Centre Manager,
aged 56, 24 years’ service)
At the shopfloor level, the culture established by
the founder (Mr Abbey) also appears to have
been perpetuated (see Sathe, 1983). This is
particularly clear in the way in which Mr Abbey
ran the company’s ‘flagship’ store (which at the
time was the ground floor of the company’s
headquarters). Consistent with management
practice during that era, Mr Abbey advocated
minimal customer interaction by front-line
employees. Indeed, in the company magazines of
1923 and 1927 it is stressed that customers are in
a hurry and do not require ‘unnecessary’ con-
versation. Interestingly, these beliefs are still
evident today, although such views now clash with
contemporary management orthodoxy (see Harris
and Ogbonna, 2001). Illustratively, a shopfloor
worker claims:
‘Customers don’t want you to chat, what they want
is for you to run-at-it [serve quickly] none of this
buggering about with “how are you?” and “isn’t it
a nice day?”’ (Shopfloor worker, aged 36, 7 years’
service)
These beliefs appear to be perpetuated by store
management. A store manager who rose from the
shopfloor to a management position refers to her
training:
‘The ideal employee is one that works hard at
getting things on the [shop]floor. Some of them
with experience in other companies need to be

trained not to spend hours rabbiting away with
customers – just serve ’em quickly and move on.
That’s the way I was trained and that’s what I now
expect.’ (Store Manager, aged 37, 5 years’ service)
Clear similarities exist today with observation
of employees in different stores finding that em-
ployees consistently treat customers with min-
imum service often subsequently suggesting that
speed of service was more important than
‘unnecessary’ interaction.
These findings are generally consistent with
extant theory. Indeed, it is arguable, that by
definition, a culture which is ‘strong’ (that is,
widely shared and deeply held) is likely to
continue. Thus, given that strategy may be viewed
as a product of the values of a culture (see, for
example, Thompson and Wildavsky, 1986), a
founder’s strategy arising out of or carried by a
strong culture is likely to become a legacy (in the
form of vision, objectives or doctrines) for future
managements.
Perceptions of company success. The second
factor which appeared to exert a strong influence
over whether the ideals, aims, philosophy or
strategy of the founder endured centred on
company success. However, in this case, focusing
solely on objective performance measures is
potentially misleading. Whilst a number of studies
have concluded that success is an important
determinant of the continuance of strategy (see
Teece, Pisano and Shuen, 1997; White, Abbey
and Barnett, 1994), this study finds that frequently

it is the perception of success which influences
the endurance of a legacy rather than actual or
objectively measured performance. Similarly to
Boeker and Goodstein (1993) who find that
high performance is associated with internal CEO
succession, case-study data suggests that the
founder is likely to establish a lasting legacy
when succeeding managers perceive the founding
objectives, strategy or values to be enduringly
successful.
A retrospective internal accounting report of
1942 indicates that the performance of Temple
Stores was particularly good during the first
50 years of the company’s existence with the
company experiencing comparatively high growth
rates (in terms of store openings) and fair profit
margins. Indeed, company documentation (the
Employee Handbook 1993 but omitted in later
versions) accurately notes that at one point (in
the 1950s) Temple Stores had an equal number of
stores to Sainsbury’s which is now one of the most
successful food retailers in the UK. However,
company financial accounts for the last fifteen
years, note a gradual but steady fall in sales and
profit figures. Surprisingly, despite documentary
evidence of weak performance, many managers
of Temple Stores still perceive the company as
relatively ‘successful’ in the way that it has coped
with a turbulent competitive environment. A
Senior Support Centre Manager illustrates a
widely held view amongst managerial staff:
‘We’ve had a rough time over the last few years
but I think we have been successful in the way
we’ve got through it.’

And later:
‘While the last few years haven’t been easy,
considerable scope still exists to continue acquir-
ing new branches.’ (Senior Support Centre
Manager, aged 47, 16 years’ service)
Similarly, a shopfloor employee claims:
‘I know that sales ain’t exactly hitting the roof but
I reckon that we’re doin’ alright. I mean, times are
hard but there’s talk of some light at the end of the
tunnel – they’re going to open up some new stores
soon – that’ll get us on the right track.’ (Shopfloor
employee, aged 35, 6 years’ service)
It is interesting to note that even where con-
ventional measures of organizational perform-
ance indicate a lack of success, executives may
still feel that the company is relatively ‘success-
ful’, escalating their commitment to the existing
strategy despite evidence of organizational stress
(Huff, Huff and Thomas, 1992). This is particu-
larly interesting when considered in the light of
recent findings which suggest that managers
may gauge inaccurately the performance of their
organization (see Dess and Robinson, 1984;
Venkatraman and Ramanujam, 1986). This find-
ing is concordant with the earlier research of
White, Abbey and Barnett (1994) on strategic
inertia and provides support for the recent

claims of Sull (1999) that strategic inertia has
the potential to destroy previously successful
companies.
The review of present and available past
financial records (from 1900–1997), coupled with
interview data, suggests that Abbey Stores has
encountered more stable competitive conditions
and has experienced less spectacular but more
consistent growth in terms of sales, profits and
branch growth. Examination of past management
records (such as the Branch Managers’ Report of
1941 and company magazines of 1986 and 1994)
suggest that successive managers have generally
perceived the company as successful (albeit
unspectacularly so). A Support Centre Manager
echoes the views of many managers when he
concludes:
‘Abbey Stores has been doing really well for the
last hundred years and has been doing extremely
well for the last twenty years – there is no reason
to radically change the aims of the company. Why
change things when they are going well?’ (Support
Centre Manager, aged 47, 9 years’ service)
This view is largely consistent with the opinions of
shopfloor employees. Illustratively, a shopfloor
employee argues:
‘When something is working, don’t fuck it up.
We’re doing well and to keep us doing well all we
gotta do is keep it going – slow and steady – that’s
the trick!’ (Shopfloor employee, aged 41, 12 years’
service)

Whilst third parties could interpret company
performance differently (see later), internal
management views of success appear to exert a
pervasive influence. The finding of the import-
ance of perceived comparative success is con-
sistent with the ‘decision dilemma’ of Boeker
(1989) in that commitment was found to escalate
due to the lack of negative feedback.
Continuing family control. The third factor
which consistently emerged as influencing
whether the founding vision, strategy and
objectives are maintained was continuing family
control. In the cases of both Temple Stores and
Abbey Stores, successive managing directors
were direct descendants of the company founder.
An examination of archival information (for
example the minutes of board meeting and
various policy and strategy documents) suggests
that in both companies successive managing
directors have continued to advocate the main-
tenance of major components of the strategy and
many of the objectives of the company founder
long after the founder had died. Illustrations of
this are the statements emphasizing the need for
family control in the personal notebooks and
diaries of succeeding family owners (the best
example in the case of Temple Stores being the
personal notebooks of Mr Church in 1935 and
a good example in Abbey Stores being the
diaries of Mr Abbey in 1948). Indeed, this is
not surprising since analysis of interview data
and personnel records suggest that, for both
companies, the company founder trained their
successors, inculcating their values regarding the
strategic direction of the company, a process

which the successors have duplicated down the
generations. The current Chief Executive Officers
(and descendants of their company founder) refer
to their experiences:
‘I was taught the business by the previous Chief
Exec. who in turn was trained by their predecessor
right the way back through the family to the
founding [Mr] Temple. I will do the same for my
successor – passing on the traditions and expect-
ations are part of the job.’ (Chief Executive Officer
Temple Stores, the great, great, great nephew of
the founder, aged 47, 14 years’ service)
‘My father brought me up to run the company –
throughout all my schooling it was known that this
is what I’d end up doing – it wasn’t something I or
anybody else questioned.’
And later,
‘Many people say that I’m just a younger version
of my Father.’ (Chief Executive Officer Abbey
Stores, the great, great nephew of the founder,
aged 57, 34 years’ service)
These findings are consistent with the conclusions
of Boeker and Goodstein (1993) and White,
Abbey and Barnett (1994) who note the tendency
for organizations to appoint CEOs who are
similar to predecessors. However, in the present

study, it would appear that founding CEOs not
only sought to appoint successors with similar
strategic orientations as themselves but had the
additional desire to appoint family members
inculcated and committed to the maintenance of
the founder’s original strategic direction.
A review of the available minutes of Senior
Management Meetings from 1920 to date suggests
that previous managing directors of Temple
Stores had endeavoured to maintain control over
key decision-making powers within the company.
Employment records and trade press releases or
stories revealed that for each generation, the
eldest sons of the family owners were brought
into the company at an early age. These sons
invariably became the next generation of
managing directors or CEOs. One article from a
newspaper cutting in 1948 held in the company
archive quoted the then CEO of Temple Stores as
saying that ‘an all-round knowledge of the
business by family members was important for
their continuing control of the business’. The
desire to maintain family control is eloquently
expressed by the current CEO of Temple Stores:
‘Temple Stores has been passed from generation to
generation, we’re proud of that. I’m not going to
relinquish control of key areas and wipe out that
tradition – all companies have taboos and that’s
one that is made clear right from the start.’ (Chief
Executive Officer, aged 47, 14 years’ service)
It appears that a similar situation of successive
family managements has also occurred in the case
of Abbey Stores (as noted in the current

Employee Handbook, 1998). Previous managing
directors have typically been the son or nephew
of the preceding managing director. However,
interestingly, for the first time in the company’s
history no direct relative of the current Managing
Director is presently employed by the company.
The maintenance of control by the same family
appears to have perpetuated the continuance of
many aspects of the founding visions, strategies
and objectives. However, an important difference
lies in the way in which control is viewed. Temple
Stores enforce a rigid system of in-family control
and typically believe that externally appointed
managers neither have the commitment nor the
vision to achieve the objectives that successive
family leaders have sought to achieve. Hence, a
Senior Support Centre Manager and family mem-
ber of Temple Stores, refers to the current family
managers claiming:
‘The beauty of our top management is flexibility.
They can turn their hand to anything.’ (Support
Centre Manager, aged 34, 6 years’ service)
Similarly, a Store Manager illustrates the consist-
ency of this belief:
‘What gives us an edge is the versatility of the top
management team – most of them can swap jobs
and take over each other’s departments just like
that!’ (Store Manager, aged 42, 10 years’ service)
In contrast, Abbey Stores have recognized that
total family operational control is unrealistic in
contemporary business and have maintained

family control via ownership while relinquishing
certain aspects of operational control. A newly
appointed Senior Support Centre Manager of
Abbey Stores notes that:
‘I was brought into the company with the explicit
terms of reference to make us customer oriented.
To my mind half the job was done. Mr Abbey and
the other directors had recognized the problem
and realized that they didn’t have the experience
or the skills so they got someone that did.’ (Senior
Support Centre Manager, aged 37, 2 years’ service)
In both companies, successive managements
have maintained family control and aided the
perpetuation of what started as the founder’s but
have now become the family’s visions, strategies
and objectives. Evidence suggests that there is a
commonly espoused desire to continue the trad-
ition of family ownership and control. However,
while this is taken literally in Temple Stores,
Abbey Stores has recently adopted a more flex-
ible stance of maintaining ownership and some
control while relinquishing some elements of
responsibility. The focus of this study now switches
to the impact of the limited strategic choice which
may arise from a founders’ strategic legacy.
Factors influencing whether the founder’s strategic
legacy results in a present-day strategic hangover
or inheritance

The preceding evidence indicates that both com-
panies continue to experience a strategic legacy
which acts as a constraint on the extent of
strategic choice. For present purposes, a con-
venient gauge of the impact of a strategic legacy is
the present-day objective financial performance
of the organizations concerned. Future analyses
could broaden this focus to less tangible indicators
(such as customer loyalty) or other quantifiable
factors such as market share.
In the current cases, contemporary evidence
suggests that the present-day performance of both
companies is significantly different. Whilst the
internal managers of both companies perceive that
their company is performing well, the trade
press, third-party cross-industry analyses and the
authors review of internal and competitor financial
records over the last five years indicates that in
‘real terms’, Temple Stores is performing poorly
whilst Abbey Stores is currently performing
well. However, whilst evidence of limited strategic
choice was found in both companies, the study
finds that the flexibility of the strategic legacy and
environmental factors both impact on the per-
formance implications of the founder’s strategic
legacy. Clearly, the impact of the flexibility of the
original strategy and environmental effects are
highly linked and interconnected. Indeed, it could
be argued that flexibility can only be expressed
in terms of the environment. Nevertheless, this
study proposes that merely concentrating on the
environment underplays the nature of strategic
choice which in some cases may arise from or be
limited by a founding strategy. It is for these

reasons that the strategic legacy of Temple Stores
is classified as a ‘strategic hangover’ while the
legacy of the founder of Abbey Stores is classified
as a ‘strategic inheritance’. The remainder of this
section is dedicated to reviewing these issues.
Flexibility of the original strategy. This study
finds that the consequence of a strategic legacy is
strongly linked to the flexibility of that legacy. It is
useful at this point to delineate between the
earlier discussed concept of cultural strength and
strategic flexibility. Cultural strength refers to the
extent to which cultural facets (for example
beliefs) are deeply held and widely shared among
organizational members. In contrast, in this
instance, ‘flexibility’ refers to the extent to which
the founding strategic vision and objectives are
versatile and open to broad interpretation.
Hence, organizations may exhibit infinite com-
binations of cultural strength and strategic
flexibility.
Where a strategic legacy is versatile and open
to broad interpretation, executives are able to
adapt to prevailing environmental conditions. In
contrast, where the objectives of the founder are
rigid and inflexible and yet still adopted by
successive managements, the legacy is likely ulti-
mately to result in a strategic hangover. These
issues are illustrated in both case companies.
In board meetings and on many publicly
reported occasions, the founder of Temple Stores
extolled the need to establish a Temple Store in
every town in a defined geographical region and

maintain family control at all costs. In internal
strategy, policy and procedural documentation,
this aim has been unquestioningly adopted by
generations of Temple Stores family owners and
managers. The inflexibility of this legacy is
apparent in the views of the current CEO:
‘Our objective has always been a store in every
town in Region A. It’s quite clear. The same with
keeping Temple Stores run by a Temple – that’s
not really something open to interpretation –
either they are family or not.’ (Chief Executive
Officer, aged 47, 14 years’ service)
This reaction can be classified as ‘detached’
involvement in the strategy process (Bowman and
Kakabadse, 1997), in that, the current CEO is
constrained by the strength of the strategic legacy
but yet content. The result is a detachment from
strategic issues and a focus on operational tactics.
The objective to open a store in every town is clear
and yet inflexible in the face of changing market
factors (see later). As mentioned earlier, company
financial records suggest that the strategy was
initially successful but became counter-productive
after successive family owners overstretched the
company, eventually forcing Temple Stores to
downsize.
In the case of Abbey Stores the legacy of the
founder, passed down through the generations of

family owners, centred on the desire for sales
growth tempered by the need for paternalism and
prudence. While the desire for growth in Abbey
Stores was equally as strong as the growth
imperative of Temple Stores, a review of board
meeting discussions of strategic choices indicate
that the requirement of ‘prudence’ appeared to
act as a safeguard against rash development
(indeed, the word ‘prudent’ often appears in the
minutes of such meeting – for example, during the
board meetings of Second Quarter 1987; First
Quarter 1996). In this sense, the company watch-
word of prudence appears to provide an inbuilt
inheritance of strategic flexibility. That is, the
growth objective was tempered by a responsive-
ness to the prevailing business environment to the
extent that growth was only undertaken if such
growth was believed to be appropriate, timely and
sustainable. A Senior Support Centre Manager
comments:
‘I wouldn’t say that we are sticking rigidly to
Mr Abbey’s original strategy – his view of where
the company was going wasn’t like that – it wasn’t
that fixed.’
And later:
‘Yes, you could say that paternalism has been
important since this company has begun. But our
duty towards employees is tempered by our own
watchword of prudence. I mean there is no point
in giving employees everything they want and the
business going bust!’ (Senior Support Centre
Manager, aged 59, 22 years’ service)

Store managers also mirror this belief:
‘ “Prudent growth” sums us up – nothing too hasty
– a more balanced approach to growing – slow but
steady.’ (Store Manager, aged 27, 3 years’ service)
Interestingly, the mention of ‘prudence’ and
‘paternalism’ in the above quotations indicates an
anachronistic use of language reminiscent of
earlier dynasties.
Thus, the flexibility of the original strategy is
important in influencing whether a strategic
legacy results in a hangover or an inheritance.
This is clearly related to the finding (discussed
below) of a link between environmental con-
ditions and the present-day performance conse-
quences of the founder’s strategic legacy.
Environmental Issues. The second critical factor,
which was found to be linked to the consequences
of a strategic legacy, was the environment. Clearly,
the maintenance of a strategic direction regard-
less of environmental conditions is potentially
disastrous as the stress between strategy and
environmental conditions increases and the
organization becomes less and less suited to a
changed environment (Huff, Huff and Thomas,
1992). This relationship is inevitably linked to the
flexibility of the strategic legacy discussed
previously (as flexible strategic legacies may be
adaptable enough to cope with the adverse effects
of changing environmental conditions). However,
given that an organizational environment is
frequently turbulent and unpredictable, it is
arguable that luck or chance plays a significant

role in determining whether a founder’s strategic
legacy has a positive or negative present-day
performance consequence.
In the case of Temple Stores the company
enjoyed rapid growth in the 1960s and 1970s and
significantly increased the number of branches
whilst maintaining stable profit margins. The
initial objectives of the founder dictated that the
company should endeavour to increase its
number of stores at all cost. This objective suited
the competitive conditions of the food retailing
industry during that period (Harris and Ogbonna,
2001) and was relatively successful up until the
1970s. However, the 1980s and 1990s were charac-
terized by turbulent environmental conditions
which were wholly inconsistent with rapid growth
in branch numbers. Unfortunately, the Temple
family adhered to the founder’s practice of
rapidly acquiring outlets and even intensified
their efforts. Financial records reveal that this
inconsistency was matched by a marked decline in
financial performance which eventually led to the
near collapse of the company. A Senior Support
Centre Manager of Temple Stores concludes:
‘The sixties and seventies were a good time for
Temple stores. The market was growing and the
North was booming – we were opening up to
fifteen stores a year.’

And later:
‘The recessions of the eighties and the com-
petition of the nineties have not been easy. I don’t
think there has been a year without branches
closing.’ (Senior Support Centre Manager, aged
58, 23 years’ service)
While Temple Stores have encountered envir-
onmental conditions in the food retailing industry
which have conflicted with their strategic legacy,
the competitive environment for Abbey Stores, in
the clothing retail sector, has been less turbulent
(Harris and Ogbonna, 2001). Perhaps not sur-
prisingly, financial accounts and organizational
records reveal that Abbey Stores has experienced
comparatively steady profit and sales growth
leading to a gradual increase in branches. A long-
serving Senior Support Centre Manager of Abbey
Stores claims:
‘I don’t think there has ever been time when
trading conditions have been very bad or very
good. That’s not to say things have always
been easy and that we have never had bad
years. It’s quite strange though – we seem to fair
much better during the bad times!’ (Senior
Support Centre Manager, aged 59, 22 years’
service)
An analysis of the clothing retailing industry finds
that, in general terms, the sector has been subject
to comparatively stable trading conditions when
compared to the food retailing industry (Harris
and Ogbonna, 2001). Thus, while no claims are
made of the appropriateness of the legacy of

Abbey Stores, a review of their past and present
environmental conditions indicates that trading
conditions have not overly stressed the strategic
legacy of Abbey Stores.
Overall, evidence suggests that environmental
conditions play an important role in countering
strategic choices. Temple Stores had encountered
an adverse competitive environment which
conflicted with their strategic legacy and resulted
in near company collapse. In contrast, the
strategic legacy of Abbey Stores had not been
tested by extreme environmental conditions but
has proved to be an inheritance evidenced by
continuing corporate success.
Conclusions and implications
To summarize, this article details a review of the
literature pertaining to the impact of a founder
on the maintenance of an organization’s vision,
strategy and objectives. This review includes an
analysis of contemporary research into the role of
a founder in the creation of an organizational
culture, escalation of commitment and manage-
ment commitment to the status quo. After a brief
discussion of the adopted research design and
methodology, the findings of two in-depth case
studies are presented. These findings document
and discuss a range of issues which influence
whether the founding strategic vision, objectives
or decisions influence present-day strategic think-
ing or actions. Furthermore, two main factors are
identified as influencing the consequence of a
strategic legacy. The remainder of this article is
dedicated to the presentation and discussion of

the implications of these results.
The findings of this study suggest a number
of contributions and implications. First, existing
literature indicates that organizations frequently
appoint new CEOs who are similar in their
background and perspective to past CEOs. This
commonly leads to strategic inertia (for example,
Huff, Huff and Thomas, 1992; White, Abbey and
Barnett, 1994). However, this study finds that
current strategy may be derived from the strategic
actions of the organizational founder and not just
past CEOs. Hence, strategic visions and object-
ives may be passed from generation to generation
long after the demise of the founder. Thus, whilst
previous studies have generally looked at strategy
issues over one or two generations (for example
Boeker, 1989), this study examines the strategic
legacies of the founders of organizations dating
back over 100 years. Therefore, an important
contribution of this study is derived from the
historical evidence it provides on the present-day
impact of founders’ strategic decisions which go
back several generations.
These findings and implications highlight some
of the inconsistencies between (largely) separate
organizational research literatures and traditions.
Whilst organizational strategy theorists prin-
cipally agree that some form of strategic inertia is
likely to occur in most organizations and that the
founder’s strategy is likely to endure (see Boeker,
1989), more critical organizational culture theorists
are less accepting of the view that the founder’s

vision is perpetuated (see, for example, Martin,
Sitkin and Boehm, 1985). Whilst it is generally
agreed that organizational culture and strategy
are highly linked (see, for example, Ogbonna and
Whipp, 1999), it would appear that in relation to
founders, the theories of strategy and culture
writers flourish in comparative isolation. Although
the present study partly redresses this imbalance,
future strategy and culture researchers would
clearly benefit from the study of a wider, more
eclectic theory base rather than simply accepting
a single literature. This is not to suggest that a
single literature is wrong, but rather infers that
diverse literatures should be studied critically in
relation to each other. Through such a process,
stronger theories are likely to emerge and
develop.
An interesting issue centres on the relative
influence of the strategic decisions of company
founders in comparison to the decisions of non-
founding but influential CEOs. Whilst past
studies (such as Boeker and Goodstein, 1993)
find that the strategic choices of past CEOs may
exert considerable influence, the current study
suggests that the company founders may exert a
more pervasive underlying influence. This leads
to the suggestion that retrospective analysis of
company strategy should focus on what could be
labelled ‘dynasties’ of strategy rather than the
terms of office of individuals. That is, retrospective
analyses should deconstruct past strategy into
‘strategic dynasties’ which should represent

periods of strategic inertia attributable to specific
individuals or traceable to particular strategic
choices. Hence, an implication of this study is that
the creator of a strategic dynasty (be they com-
pany founder or subsequent influential CEO)
may leave a strategic legacy which could poten-
tially result in a strategic inheritance or hangover.
Interestingly, the present study also alludes to
differentiation in the character or nature of the
strategic legacy of the founder. In Abbey Stores
the legacy passed from generation to generation
was largely communicated in the form of a
general strategic approach (albeit with a growth
objective) whilst in Temple Stores the legacy was
principally remembered in the form of a more
precise growth objective. This may indicate that in
different circumstances, a strategic legacy may
vary in terms of focus, content and manner of
communication. That is, depending on the par-
ticular organizational and environmental contin-
gencies of the time, aims, objectives, approaches,
tactics or even philosophies could be perpetuated
via any number of media from stories to symbols
to strategy documents. When coupled with the
previously discussed concept of strategic dynasty,
this raises the possibility for the cultural and
strategic deconstruction of an organization’s
history in a manner which reveals the overlay of
different legacies and dynasties each of which
may vary in the manner of communication. Thus,
historical research could uncover insights into the
composition of organizational cultures through
revealing, for example, an aim-based strategic
legacy from the founder matched with a tactic-

based legacy from a subsequent influential CEO
and an approach-based legacy from the current-
day Managing Director.
Furthermore, the results of this study indicate
that the creation of a strong organizational
culture may not necessarily be desirable. This
contradicts much existing managerial literature
and practice which espouses the virtues of devel-
oping and maintaining a strong organizational
culture (DiTomaso, 1987; Weiner, 1988). Such
writers have frequently preached that the per-
formance of an organization is linked to the
strength of the culture in that a strong culture is
characterized by uniformity in values which
reduces unpredictability and increases conformity
to the espoused ideals. However, the findings of
this study are generally consistent with more
recent academic research. That is, the appropriate-
ness of a culture is dependent on favourable
environmental conditions. Hence, two organiza-
tions may have similarly strong cultures but both
may experience radically different performance.
Indeed, contemporary theory argues that in the
long run it can be problematic to assume that
cultural strength leads to increased performance
as little evidence exists to justify this assumption
(Hopfl, Abbey and Spencer, 1992). This study
contributes to this stream of thought through the
finding that a strong culture increases the
probability of an enduring strategic legacy which
may result in a strategic hangover. Thus, while a
strong culture may lead to increased performance
in the short term, any association between
cultural strength and performance should be
regarded as tenuous at worst and time specific at

best. Similarly, in contrast to extant theory per-
taining to the limited level of culture perpetuation
(for example Sathe, 1983), this study finds that
within family-owned firms, generations of the
controlling families tend to perpetuate the ideals
of the founder to the extent that the culture
becomes stronger and strategic inertia becomes
more likely.
These issues are linked to the implication that
the actions of an organizational founder have the
potential to result in unintended consequences
for an organization long after the founder has left
the company. Whereas past studies have tended
to examine the likelihood of strategic inertia, this
article has examined the performance implica-
tions of this issue. Where circumstances conspire
to lead to a strategic legacy (influenced by the
strength of the created culture, maintenance of
family control and continuing perceptions of suc-
cess), it is inherently logical that the impact of the
legacy may be positive and/or negative (depend-
ing on the flexibility of the original strategy and
environmental factors). Thus, the actions of a
company founder many decades ago may result
in consequences which, while not necessarily
intended, profoundly affect the survival of that
organization. In the case of Temple Stores, the
strategic legacy was inflexible, which when
compounded by environmental factors nearly
resulted in the dissolution of the company. In

contrast, the strategic legacy of Abbey Stores was
flexible and provided a guiding philosophy for the
company which may be construed as a strategic
inheritance.
An important contribution of this study can be
derived from the findings pertaining to the
maintenance of the vision, strategy and objectives
of the founder. Whereas past studies have identi-
fied organizational performance and the estab-
lishment of a strong founding strategy as the key
factors in determining the continuance of the
founder’s strategy, the findings of this study cast
doubt on the reliability of such claims. Indeed, the
use of in-depth case-study techniques found that,
consistent with decision dilemma theory (Boeker,
1989), top management perceptions of success
were found to exert strong inertial forces whilst
objective measures of performance appeared less
important. This study suggests that whilst a strong
strategy influences strategic inertia, it is possible
that the root cause of the continuance of a
strategic direction may be a strong organizational
culture established by the founder of the com-
pany (an issue particularly pertinent in the case of
family firms).
Much of the preceding discussion is relevant to
both theorists and practitioners. However, a
number of implications are particularly applicable
to management practice. One such implication
centres on the need for executives to develop an
appreciation of the strategic past of their com-
panies. Given evidence of the existence and per-
formance consequences of strategic legacies, it is
possible to suggest that strategy formulators

should include an historic audit of the strategy of
their organization as part of the strategic planning
process. This process may help to minimize the
consequences which can arise from a negative
strategic legacy. Furthermore, such an analysis
may assist in formally documenting the rationale
for past and current strategic decisions which
should prove valuable to current and future
strategists. Underlying these managerial implica-
tions is the suggestion that managers and
executives accept their limitations as generators
of genuinely innovative strategy and accept that
issues such as the escalation of commitment and
increased commitment to the status quo may
greatly affect their willingness to make, and even
their ability to recognize, strategic choices. As
such, management awareness of the potential
impact of a strategic legacy is crucial.
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