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Strategic decision-making, the theory-based view, and experimentation: State-of-the-art and future direction

Date and time

Monday 14 November 2022 at 14:00 to Friday 18 November 2022 at 19:45

Registration Deadline

Monday 3 October 2022 at 00:00

Location

Online Online

Strategic decision-making, the theory-based view, and experimentation: State-of-the-art and future direction

Course Coordinator: Timo Ehrig, Department of Strategy and Innovation (SI)

Faculty

- Nicolai Foss, CBS  

- Alfonso Gambardella, Universita' Bocconi  

- Jens Schmidt, Aalto University

- Todd Zenger, The David Eccles School of Business  

- Burkhard Schipper, University of California at Davis

- Michael Ryall, Rotman School of Management 

- Erin Scott, MIT Management, Sloan School   

- Scott Stern, MIT Management, Sloan School  

- Timo Ehrig, Department of Strategy and Innovation, Copenhagen Business School

- Others TBA
 
Prereqisites
No distinct prerequisites other than basic knowledge of strategic management research. 
 
Aim
 
The aim of this course is to offer recent, advanced insights related to the theoretical and empirical content of strategic decision-making, the theory-based view (TBV), and experimentation. This topic emerged as a distinct voice in the conversation of strategic management scholars.  Ideally, at the end of the course students can engage in theory-building activities related to this topic. In addition, students can identify suitable empirical methods and approaches for researching the topic.
 
 
Course content

"A good business strategy deals with the edge between the known and the unknown." (Rumelt, 2011) While this is known since Knight (1921), only very recently concrete prescriptions how knowledge can be generated in unknown territory emerged. 

A wave of recent contributions shares the idea that strategist can generate knowledge under uncertainty by acting like scientists (Felin & Zenger, 2017; Gans, Stern, Wu, 2019; Camuffo, Cordova, Gambardella, & Spina, 2020; Zellweger & Zenger, 2021; Felin, Kauffman & Zenger, 2021; Ehrig & Schmidt, 2022), but differ fundamentally in assumptions and methods. 

Thus, fundamental questions are open, and are great opportunities for PhD and postdoctoral research: 

  • Should learning in open-ended worlds in the end follow a Bayesian ideal?  
  • What are the cognitive skills that enable advantage?
  • Will AI fundamentally alter the way in knowledge can be generated under uncertainty? 
  • What is the role of human skill to generate new ideas and hypotheses in the generation of advantages? 
  • How does the TBV alter our understanding of the origins of competitive advantage? 
 
Teaching style
 
Given the high content-to-time ratio, teaching is based on lecturing, illustrations and discussions and its success is predicated on interactive student involvement. 
 
Exam
 
There is no exam at the end of the course. However, to obtain the course certificates the participants are expected to show a high level of preparation and class participation. Minimum 80% attendance is required. The two-page summaries of assigned readings prior to class will not be graded, but students are expected to demonstrate a thorough knowledge of the material. 
 
Learning objectives

The structure of the course is mainly based on interactive lectures by a broad international panel of scholars, all of whom have made important contributions to the topic. 

In addition, there will be the option of participating in one or two paper development workshops, in which students can receive detailed feedback from the faculty-discussant or the course coordinator on how to further develop a specific working paper (previously submitted). Individual preferences for discussants will be considered, but the assignment of papers to discussants will finally be based on availability and fit. 

The course is based on a high level of student involvement. Students are expected to be thoroughly prepared and actively participate in the presentation and discussion of the material. For days 2 to 5, each student is expected to have studied the readings prior to the lectures.

Moreover, two weeks prior to the course, the course coordinator will assign one or two specific readings to individual students. Each student must submit a two-page note criticizing one of the assigned individual readings by November 10 to the course coordinator. During the introduction session, the assigned readings will be discussed in class and students may be expected to present brief (3-minute) summaries to the class. 

Lecture plan

The program is laid out such that it provides a comprehensive view of key research themes in the topic area. All presenters are top-scholars. Many have been flagbearers in the evolution of the field.  Note that not all presenters have yet agreed to participate (and some titles of talks are indicative) (confirmed speakers in bold). 


Week 46, 2022. All times are CET.  

DAY 1:  Introduction 

Monday, November 14, 2022 

14:00- 16:00: Timo Ehrig

Introduction 

Readings: Individual readings will be assigned by the course coordinator to individual students prior to the course. 

In the introduction class, the course coordinator will facilitate a discussion among the students to get a sense of where students stand with respect to the topic and to understand individual interests and agendas. 

16:30 – 17.45: Nicolai Foss

The theory-based view of strategy and how it updates our understanding of the RBV and competitive advantage 

Readings:  
Knight, F. H. (1921). Risk, Uncertainty and Profit. Houghton Mifflin Company: New York. Chapters 7 and 8 in particular.

18:00-19:30: Paper development Workshop (discussants: Foss and Ehrig) 

 
DAY 2: A Bayesian Perspective on Quasi-Scientific Entrepreneurial Decision-Making 

Tuesday, November 15, 2022 

14:00- 15:30: Alfonso Gambardella  

Readings:
- Camuffo, A., Cordova, A., Gambardella, A., & Spina, C. (2020). A scientific approach to entrepreneurial decision making: Evidence from a randomized control trial. Management Science, 66(2), 564-586. 
- Microfoundations of Low-Frequency High-Impact Decisions. Arnaldo Camu, Alfonso Gambardella, Fabio Maccheroni, Massimo Marinacci and Andrea Pignataro

15.45 – 17:15:  Alfonso Gambardella  

18:15-19:15: Paper development Workshop (discussants: Alfonso Gambardella) 


DAY 3: A Cognitive Perspective on Theories and Managerial Decision-Making

Wednesday, November 16, 2022 

14:00- 15:30: Jens Schmidt

16:00 – 17:45: Todd Zenger

Readings: Ehrig, T. & Schmidt, J. (2022) Theory-based learning and experimentation: How strategists can systematically generate knowledge at the edge between the known and the unknown, Strategic Management Journal, https:/​/​doi.org/​10.1002/smj.3381 

Felin, T., & Zenger, T. R. (2017). The theory-based view: Economic actors as theorists. Strategy Science, 2(4), 258-271. 

Felin, T., Kauffman, S., & Zenger, T. (2021). Resource origins and search. Strategic Management Journal. DOI: 10.1002/smj.3350 

18:00-19:00: Paper development Workshop (discussants: TBD) 


DAY 4: Value Capture Theory, Representations and Strategy

Thursday, November 17, 2022  

14:00- 16:00: Michael Ryall 
“Value Capture under Known and Unknown Unknowns”  

Readings: 

1) Brandenburger, A. M., & Stuart Jr, H. W. (1996). Value‐based business strategy. Journal of economics & management strategy, 5(1), 5-24.

 2) MacDonald, G., & Ryall, M. D. (2004). How do value creation and competition determine whether a firm appropriates value?. Management Science, 50(10), 1319-1333.

3) Gans, J., & Ryall, M. D. (2017). Value capture theory: A strategic management review. Strategic Management Journal, 38(1), 17-41.

16:15 – 18:15:  Burkhard Schipper
 “Modelling Value Capture under Known and Unknown Unknowns”  

18:30 – 19:30: Tutorial Michael Ryall  & Burkhard Schipper

Readings: Bryan, K. A. D., Ryall, M., Schipper, B.C. (2021). Value Capture in the Face of Known and Unknown Unknowns. Strategy Science: forthcoming. 


DAY 5: The Paradox of Entrepreneurship and Iceberg Problems

Friday, November 18, 2022 

14:00 - 15:30: Scott Stern and Erin Scott   

Readings: Gans, J. S., Stern, S., & Wu, J. (2019). Foundations of Entrepreneurial Strategy. Strategic Management Journal 40(5): 736-756. 

15:45 – 17:30: Timo Ehrig 

Iceberg Problems 

17:45-19:45: Paper development Workshop (discussants: TBD) 

Readings:  

Bryan, K. A. D., Ryall, M., Schipper, B.C. (2021). Value Capture in the Face of Known and Unknown Unknowns. Strategy Science: forthcoming. 

Camuffo, A., Cordova, A., Gambardella, A., & Spina, C. (2020). A scientific approach to entrepreneurial decision making: Evidence from a randomized control trial. Management Science, 66(2), 564-586. 

Gans, J. S., Stern, S., & Wu, J. (2019). Foundations of Entrepreneurial Strategy. Strategic Management Journal 40(5): 736-756. 

Ehrig, T. & Schmidt, J. (2022) Theory-based learning and experimentation: How strategists can systematically generate knowledge at the edge between the known and the unknown, Strategic Management Journal, https:/​/​doi.org/​10.1002/smj.3381 

Felin, T., & Zenger, T. R. (2017). The theory-based view: Economic actors as theorists. Strategy Science, 2(4), 258-271. 

Felin, T., Kauffman, S., & Zenger, T. (2021). Resource origins and search. Strategic Management Journal. DOI: 10.1002/smj.3350 

Pillai, S. D., Goldfarb, B., & Kirsch, D. A. (2020). The Origins of Firm Strategy: Learning by Economic Experimentation and Strategic Pivots in the Early Automobile Industry. Strategic Management Journal 41(3): 369-399. 

Zellweger, T. M., & Zenger, T. R. (2021). Entrepreneurs as Scientists: A Pragmatist Approach to Producing Value out of Uncertainty. Academy of Management Review: forthcoming.


Course litterature

See Lecture plan.
 
Course registration is binding after the registration deadline.
 
The course is an online course. All times indicated are CET times. 

The course is for PhD students