Handbook of Organizational Learning and Knowledge Management, Second Edition

Variance Suppression

The condensation process essentially suppresses variance within the organization. As discussed above, organizations increasingly emphasize a goal, structure, and/or set of routines, procedures, and processes, and preclude the consideration of others. This downward spiral toward simplification is likely to be the result of an interaction among several variance suppression processes existing at different levels of analysis, ranging from the cognitive top management level to the organizational field level.

Variance suppression occurs at several levels of analysis (Bettis, 2000). At the industrial and organizational field level, forces of competition and selection (Hannan and Freeman, 1977) and isomorphism (DiMaggio and Powell, 1983) result in increasing homogenization among firms. At the strategic group level (Reger and Huff, 1993), homogenization also occurs as firms in the same industry increasingly share similar beliefs and behaviors (Porac, Thomas, and Baden-Fuller, 1989). At the top management team level, the dominant logic also suppresses variance by directing top management decision making, among many things, into certain heuristics, models, concepts, beliefs, and types of analysis. Therefore, variance suppression is a general phenomenon that is prevalent in many different levels of analysis.

Variance suppression at each of these levels is likely to be interdependent. As discussed in the earlier section, dominant logic tends toward variance suppression ...