Strategy Process

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VideoArticle Title/ Author(s)/Managerial Abstract
Hakonsson, Eskildsen, Argote, Monster, Burton, & Obel on emotions and team decisions. | SMJ Video AbstractEXPLORATION VERSUS EXPLOITATION: EMOTIONS AND PERFORMANCE
AS ANTECEDENTS AND CONSEQUENCES OF TEAM DECISIONS
Døjbak Håkonsson,Dorthe; Jacob Kjær Eskildsen, Linda Argote, Dan Mønster, Richard M. Burton,Børge Obel
We analyze performance and emotions as antecedents and consequences of team strategic decisions to explore a new routine versus exploiting an existing one. In a laboratory study, we examine team decision making over time and draw causal inferences about the relationships among team emotions, team performance, and explore–exploit decisions. We use self‐report data to measure team emotions, and validate results with psychophysiological data. We find that declines in performance increase the likelihood that teams decide to explore new routines rather than exploit existing ones. We also find a marginal positive effect of positive emotions, as measured by both self‐report and psychophysiological data, on team decisions to explore a new routine. Further, teams successful at implementing new routines report increased positive emotions, as measured by the self‐report data. This relationship is fully mediated by performance change.
If You Want to Innovate, Follow These 5 Steps | SMJ Video AbstractHow innovators reframe resources in the strategy-making process to gain innovation adoption
Kannan-Narasimhan,Rangapriya
How do innovators from lower levels of an organization gain approval for their innovations especially when their ideas do not readily fit their organization's strategy? To explore this question, we conducted 138 interviews with innovators and their decision makers in 14 firms based in Silicon Valley. We find that successful innovators shape a story supporting their innovation by rethinking their firm's current and potential resources. They then use this story to convince decision makers that their innovation creates unique competitive advantage. Contrary to conventional wisdom, decision makers approved such innovations even without external validation, solely based on the innovators' success in depicting their reorganization of the firm's resources.
Time and Space in Strategy Discourse: Implications for Intertemporal Choice | SMJ Video AbstractTime and Space in Strategy Discourse: Implications for Intertemporal Choice
Crilly,Donal
Executives often prioritize maximizing immediate returns over investing to build a long‐term competitive advantage. How they think about the future offers one explanation for this short‐termism. This article distinguishes two ways of framing the future with implications for decision‐making. Are we approaching the future (the ego‐moving frame) or is it approaching us (the time‐moving frame)? As long as executives have confidence in their ability to achieve forecasted results, they focus on long‐term returns in their decision‐making when they recognize the advent of the future as inevitable (the time‐moving frame). In contrast, though executives use the ego‐moving frame to show that they are active agents, they weigh future returns less heavily when framing the future in this way .
Cognitive Flexibility and Adaptive DecisionMaking | SMJ Video AbstractCognitive flexibility and adaptive decision-making: Evidence from a laboratory study of expert decision makers
Laureiro-Martinez,Daniella; Stefano Brusoni
Humans are creatures of habits. We tend to prefer known courses of action over new ones. In many cases, habits are good. However, when things change in unpredictable ways, the past may not be good guidance for the future. We argue that “cognitive flexibility”—the ability of understanding when to rely on habits vs. when to explore new courses of action—enables managers to switch from a “fast” decision mode, based on habits, to a “slow,” more deliberate decision mode that facilitates the exploration of new courses of action. Managers high in cognitive flexibility reflect on the situation at hand, recognize and value diversity in viewpoints, and integrate such diversity in their own decision processes. By valuing diversity, they are more likely to overcome inertia.
Laureiro-Martinez, Brusoni, Canessa, Zollo - Neuroscience & explore-exploit | SMJ Video AbstractUnderstanding the exploration–exploitation dilemma: An fMRI study of attention control and decision-making performance
Stefano Brusoni; Daniella Laureiro-Martínez, Nicola Canessa, Maurizio Zollo
From Necessity to Opportunity: Scaling Bricolage | SMJ Video AbstractFrom necessity to opportunity: Scaling bricolage across resource‐constrained environments
Christian Busch; Harry Barkema
How do organizations emerge, survive, and scale in resource-scarce environments? Traditional scaling models tend to rely on considerable financial resources and companies often struggle to adjust to diverse contexts. In contrast, we identified and studied an organization in Sub-Saharan Africa that we argue used simple rules to scale bricolage—making the best out of what is at hand—successfully in diverse low-resource contexts. Our paper provides a novel conceptual model of scaling bricolage: a low-cost replication process of heuristics, enabling fit with a diversity of local environments, as well as cross-unit innovation and learning.
On the effects of authority on peer motivation | SMJ Video AbstractOn the Effects of Authority on Peer Motivation: Learning from Wikipedia
Klapper,Helge Jan Dirk; Markus Reitzig
When managers use their (legitimate) power to take decisions on behalf of their staff, they risk setting back employees and making them detach from the firm. This danger is particularly salient whenever highly motivated teams of staff autonomously work on corporate problems and are used to governing themselves. Examples range from skunkwork initiatives within traditional firms to entire team‐based organizations, such as Valve or Zappos. When and how managers can add value by resolving conflicts within and across these teams once their self‐organization fails is what we study in this article. Inspired by data from Wikipedia, we suggest that managers should not intervene prematurely, benefit from visible competence, and are respected most for their actions by specialized peers who recently joined the organization.
Kauppila, Bizzi and Obstfeld: Connecting and Creating | SMJ Video AbstractConnecting and Creating: Tertius Iungens, Individual Creativity, and Strategic Decision Processes
Kauppila,Olli-Pekka; Lorenzo Bizzi, David Obstfeld
To innovate, managers are often advised to make strategic decisions based on changes in their external business environment. Our research suggests that managers should also consider how strategic decision‐making enables the social processes through which employees generate creative ideas essential to organizational innovation. Our results show that employees who bring people in their network and their diverse ideas together (i.e., the tertius iungens [TI] orientation) tend to improve creative performance. However, for those employees is it easier to develop creative ideas when strategic decisions are comprehensive and slow? Paradoxically, when top managers consider a narrower range of options and act more quickly to respond to challenges in the external environment, they risk constraining the social processes that lead to creativity within the organization.
Rockart & Dutt on competitive advantages from learning | SMJ Video AbstractThe rate and potential of capability development trajectories
Scott F. Rockart; Nilanjana Dutt
This paper examines differences in the rate and potential of firms' capability development trajectories. Capability development trajectories are the paths over which firms' capabilities change with experience and other activities. While prior research focused on factors affecting capability development rate (the fraction of the gap between a firm's current and potential capability eliminated with each unit of activity), we argue that capability development trajectories also differ in potential (the maximum capability level a firm could achieve through repeating a given set of activities over time). We develop and estimate a formal model of capability development, showing that larger underwriting projects lead to a lower rate of improvement toward higher potential capabilities, and derive implications for research on industry dynamics and the nature of competitive advantage.
A universe of stories: Mobilising narrative practises during transformative change | SMJ Video AbstractA UNIVERSE OF STORIES: MOBILIZING NARRATIVE PRACTICES DURING TRANSFORMATIVE CHANGE
Di Stefano,Giada; Elena Dalpiaz
How can storytelling be used to influence acceptance of an ongoing organizational transformation? In this article, we try to answer this question by examining how, over three decades, Italian company Alessi documented its transformation from a manufacturer of kitchen steel utensils to a producer of a variety of household objects purchased also for their symbolic value. The leader behind Alessi's transformation, Alberto Alessi, orchestrated such storytelling effort, targeting employees, customers, retailers, and visitors to Alessi exhibitions. Our findings uncover how stories can be used to win audiences’ endorsement of change through narrative practices aimed at: (a) constructing a collective memory of change, (b) depicting change as a novel but coherent departure from the past, and (c) portraying change as a transcendent endeavor.
Strategic Concepts as MicroLevel Tools in Strategic Sensemaking | SMJ Video AbstractStrategic concepts as micro-level tools in strategic sensemaking
Jalonen,Kari; Henri Schildt, Eero Vaara
Our analysis helps to understand the role of strategic concepts, that is, specific words or phrases with established and at least partly shared meanings, in an organization's strategy process. We show how adopting the concept “self‐responsibility” helped managers in a city organization to make sense of environmental challenges and to promote change. Our analysis highlights how such concepts involve ambiguity that can help managers to establish common ground, but can also hinder implementation of specific decisions and actions if it grows over time. We suggest that under environmental changes, development of new strategic concepts may be crucial in helping managers to collectively deal with environmental changes and to articulate a new strategic direction for the organization.
Decision Weaving: Forming Novel, Complex Strategy in Entrepreneurial Settings | SMJ Video AbstractDecision weaving: Forming novel, complex strategy in entrepreneurial settings
Timothy E. Ott; Kathleen M. Eisenhardt
Strategy formation is central to why firms seize novel opportunities while others fail. By comparing three venture-pairs, we develop a fresh framework for strategy formation in nascent markets where strategy is both novel and complex: Decision weaving. Effective strategists: (a) use sequential focus (not parallel) to learn about successive focal strategic domains, (b) pause at learning plateaus to consolidate that knowledge about a focal domain, and (c) use stepping stones to make progress in background domains without losing focus. These behaviors enable both fast, effective learning, and evolving yet holistic understanding of an emerging strategy. More importantly, these behaviors set the stage for rapid and profitable scaling (i.e., growth).
The Power of Powerpoint: A Visual Perspective on Meaning Making in Strategy | SMJ Video AbstractTHE POWER OF POWERPOINT: A VISUAL PERSPECTIVE ON MEANING MAKING IN STRATEGY
Knight,Eric; Sotirios Paroutis, Loizos Heracleous
The purpose of this study is to understand how strategists use visual information (specifically in PowerPoint slides), and its effects on the strategy process. We find that strategy conversations are influenced by the techniques strategists use to create slides, which in turn shape the kinds of follow‐up actions taken. The implications are that: (a) PowerPoint slides can be designed to help tackle complex issues, for instance, when participants have divergent opinions or in politically sensitive situations, and (b) those who craft and edit PowerPoint slides strongly influence the direction of the strategy. The skillful use of PowerPoint is therefore crucial in allowing managers to shape the nature and speed of strategy engagements.
Chris Liu discusses geography, power, & organizational forums. | SMJ Video AbstractGeography and power in an organizational forum: Evidence from the U.S. Senate Chamber
Christopher C. Liu; Jillian D. Chown
Rita McGrath discusses Ian MacMillan |SEJ Video AbstractThe Academic Entrepreneur: A Biographical Sketch of Ian C. MacMillan's Contributions to Establishing the Field of Entrepreneurship
Rita Gunther McGrath
Ian C. MacMillan, originally from Africa, is a seminal figure in forging the contours of the present-day field of entrepreneurship. He was the first to empirically explore topics such as venture capital decision making; entrepreneurial networks; cultural influences on entrepreneurial behavior; and many issues in corporate venturing. Through the creation of vibrant, global, scholarly networks, the founding of the Journal of Business Venturing, his dedication to training and mentoring the next generation of scholars, and establishing the first large-scale systematic global data collection in the field, Mac has made an irreplaceable contribution to the well-established field that entrepreneurship has become. He and his students have been acknowledged as having made significant breakthroughs in our understanding of entrepreneurial phenomena, recognized by a burgeoning number of awards and testaments to scholarly recognition. He argues that the challenge for future researchers will be to tackle big, messy problems that do not lend themselves to the popular methodologies employed by academia today.