2023.2

Behavioral Strategic Management

Code
ENST52089

Syllabus

Strategy is a human construction (Andrews, 1971:107) and, as such, is influenced by several factors. Thus, strategic choices in organizations are consequences of fully human factors, including imagination, judgment, ideas, prejudices, biases and fatigue and, consequently, such a set of aspects is a growing field of study. Behavioral strategic management applies cognitive and social psychology to the theory and practice of strategic management. It aims to strengthen the empirical integrity and practical usefulness of strategy theory by grounding strategic management in realistic assumptions about human cognition, emotion and social interaction. In this course, we focus on the behavioral trend within strategic management, taking into consideration the following objectives:

  • Providing a behavioral strategic management overview

  • Proposing a knowledge base for future Behavioral Strategy-related projects

  • Contrasting Behavioral Strategic Management with other strategic management trends and schools

  • Reviewing some important works for the area

Assessment criteria

  • Class participation 25%

  • Weekly assignment 25%

  • Research proposal50%

Week 01 - Introduction to Behavioral Strategic Management

Welcome! In this class we are going to cover some basics. To start with, I am going to provide you with a syllabus containing a day-by-day reading list. In addition, I will provide details about the grading system as well as class conduction.

As for the theoretical part, my aim is to give you an overarching view of what the field of Behavioral Strategic Management (BSM) is. To do so, we are going to start with a few papers providing diverging yet complimentary views on the modern take on BSM. For the first class you are to read the following papers (the remaining papers can be found in the syllabus). Please come prepared to engage in the discussions of these papers. Since from this semester on the courses are getting shorter (8 sessions), you will need to be extra responsible for your learning strategies.

Mandatory reading list:

  • Powell, T. C., Lovallo, D., & Fox, C. R. (2011). Behavioral strategy. Strategic Management Journal, 32(13), 1369-1386.

  • Gavetti, G. (2012). PERSPECTIVE—Toward a behavioral theory of strategy. Organization science, 23(1), 267-285.

  • Hambrick, D. C., & Crossland, C. (2018). A strategy for behavioral strategy: Appraisal of small, midsize, and large tent conceptions of this embryonic community. In Behavioral strategy in perspective (Vol. 39, pp. 23-39). Emerald Publishing Limited.

Extra (optional) reading:

  • Schrager, J. E., & Madansky, A. (2013). Behavioral strategy: a foundational view. Journal of Strategy and Management, 6(1), 81-95.

In addition, I firmly believe this book is a must for anyone attempting to gain real knowledge on BSM, as it is probably one of the best books out there. I highly recommend your reading of it throughout the course. It is a very short book and you can read it in as little as weekend if you make an effort (studying it deeply on the other hand would take a while). For this class, if possible, I'd like you to read chapters 1 and 2 (pages 1-36):

  • Bromiley, P. (2009). The behavioral foundations of strategic management. John Wiley & Sons.

EXERCISE:

Try to find one scale for a cause and one for effect in the following website.

Week 02 - Theories of dual processing / decision biases & heuristics

In this class, we are going to take a preliminary view on the most current theories of information processing (a.k.a., the dual processing theories). In addition, we are going to discuss the shortcomings of such dual processing issues - the biases and heuristics.

We are having a guest professor (Dr. Leonardo Vils) that will accompany us in this class. Professor Vils has a long experience in research and practice in issues related to behavior and decision and is part of the CNPq Behavioral Strategic Management Research Group. Please come prepared to discuss!

Mandatory reading:

  • Järvilehto, L. (2015). The nature and function of intuitive thought and decision making. Springer International Publishing. (At least chapter 2, but 3 is also good, and chapter 1 is a nice introduction to the core ideas).

  • Barnes Jr, J. H. (1984). Cognitive biases and their impact on strategic planning. Strategic Management Journal, 5(2), 129-137. (Short, yet very interesting, introductory paper on biases in strategic management).

  • Schwenk, C. H. (1986). Information, cognitive biases, and commitment to a course of action. Academy of Management Review, 11(2), 298-310. (short, but interesting)

P.S.: I know, it is a lot of reading this week, but we are having a guest, and I believe we should be properly prepared to discuss these themes with him.

Additional papers (highly recommeded):

  • Acciarini, C., Brunetta, F., & Boccardelli, P. (2021). Cognitive biases and decision-making strategies in times of change: a systematic literature review. Management Decision, 59(3), 638-652.

  • Zhang, H., Bij, H. V. D., & Song, M. (2020). Can cognitive biases be good for entrepreneurs?. International Journal of Entrepreneurial Behavior & Research, 26(4), 793-813.

  • Das, T. K., & Teng, B. S. (1999). Cognitive biases and strategic decision processes: An integrative perspective. Journal of management studies, 36(6), 757-778.

  • Cossette, P. (2014). Heuristics and cognitive biases in entrepreneurs: a review of the research. Journal of Small Business & Entrepreneurship, 27(5), 471-496.

Class participation / weekly assignments

Throughout this semester, you are going to be exposed to a variety of papers and book chapters dealing with the core concepts of Strategic Resource Management. You are expected to study the papers (and not only skim over the contents) and participate in their discussion.

For each class (except for the first one), you are expected to be ready to conduct a thorough discussion of the paper - the instructor may choose one student randomly to be the coordinator of the session. You should also provide key points (2-page limit) for each paper / chapter provided (bullet points in a Word document, a conceptual map, etc.). The aim of these is to make you fully analyze the papers, critique them and synthesize their content, approaches, results and contributions. In addition, you are expected to provide your own personal understanding of the papers as well as any personal discoveries found. You must submit your analyses at least the day before the class. If you have any personal problems that prevent you from handing in your assignments, please talk to me before the deadline.

The following points may guide you in studying the materials (these were developed by Prof. Makadok, Purdue University):

1) What is the topic of the paper? What is the paper about?

2) What is the central argument of the paper?

3) If the paper aims to make a theoretical or conceptual contribution, then:

a) What is the theory?

b) What is the theoretical paradigm?
c) What are the relevant units and levels of analysis?
d) What are the relevant independent and dependent variables in the analysis?
e) What causal mechanism or mechanisms connect the independent variables to the dependent variables? What are the assumptions underlying that causal connection?
f) Is the theory internally consistent? If not, where are the inconsistencies?
g) What interesting (or at least non-obvious) predictions does the theory make?
h) How does the theory relate to other theories? Does it contradict, support, reinforce, extend, constrain, enlarge, or diminish other perspectives?
i) Is the theory useful? To whom (e.g., researchers or practitioners), and for what?

j) What important theoretical questions remain unanswered?
k) Do you find the theory persuasive? Why or why not?

4) If the paper aims to make an empirical contribution, then:
a) What motivated the study?

b) What is the empirical research question?
c) Are the hypotheses appropriate to addressing the research question?
d) Are the theoretical constructs appropriate for testing the hypotheses?
e) Are the variables appropriate operationalizations of the theoretical constructs?
f) How were alternative explanations controlled for?
g) How were other influences on statistical outcomes controlled for?
h) How was internal and external validity treated?
i) Is the research design appropriate? Could another design have produced more accurate, precise, or powerful results?
j) Are the conclusions and interpretations consistent with the empirical evidence presented?
k) Are the empirical results useful? To whom (e.g., researchers or practitioners), and for what?

l) What important empirical questions remain unanswered?
m) Do you find the evidence persuasive? Why or why not?

You do not have to answer all of these questions, but you should become increasingly aware of them when reading the papers/chapters. You should develop a keen eye for detail and critique and these questions are definitely going to help you in doing so.

Research proposal

The proposal should be developed exclusively for this course and there should be no significant overlaps with any other manuscripts you have developed or are developing for other courses. You may incorporate this proposal into your thesis/dissertation if allowed by your supervisor.

The proposal has to be directly related to strategic management as a broad field of inquiry, but it would benefit the class more if you focused on strategic resource management. You may bring to your proposal aspects from other fields, but strategic management must be the main core of the paper - use your good sense in this or talk to your instructor.

As for style guides, choose from ABNT or APA. APA is currently the preferred style guide for management journals and events, including Brazilian ones. You can find a guide on how to use APA here.

Every class we will spend some time (about 30 minutes or more depending on the need) on both paper-writing skills or discussion of your proposals.

The last day of this course is set apart for presentations. You will need to provide your classmates and instructor copies of your manuscript (a pdf file should be enough) at least 5 days prior to your presentation. You should prepare a short presentation about your paper (max. 15 minutes) along with any visual materials you consider necessary for the discussion (a few slides should suffice).

Here is the template for the final group assignment (paper proposal).

List of all received assignments:

1. Maiara Fossato; Patrícia Kost; Pedro Sanches; Suellen Grum

2. Bruna Bezerra de Menezes; Daniela Silva Lima

3. Agda Picolli Leite; Antonio César Barbarini; Rosemeire Colalillo Navajas; Walter Shuiti Kussano

4. Cléber Silva dos Santos; George Alalou; Luciano de Assis

5. André Lozano Ferreira; Hafid Carvalho; Raquel Botelho; Tatiane Nascimento

6. Daniela Sakashita de Barros; Lidiane Souza; Roberto Ferreira

I would like to continue working on all of these manuscripts so you may have them ready for submitting next year to a nice outlet or an event. Please contact me so we can start working on them, ok?

Week 03 - Biases & heuristics in Strategic Management

Today we are going to explore some papers that deal with biases and heuristics in strategic decision making. Some papers include a perspective of debiasing (i.e., attempting to mitigate or eliminate the effects of biases in decision processes).

From this class forward, a group of students will be responsible for conducting the presentation and discussions of the papers assigned to the class. The papers should be read and analyzed in depth (short presentations will not be accepted).

  • Hristov, I., Camilli, R., & Mechelli, A. (2022). Cognitive biases in implementing a performance management system: behavioral strategy for supporting managers’ decision-making processes. Management research review, 45(9), 1110-1136.

  • Lehr, T., Lorenz, U., Willert, M., & Rohrbeck, R. (2017). Scenario-based strategizing: Advancing the applicability in strategists' teams. Technological Forecasting and Social Change, 124, 214-224.

  • Maitland, E., & Sammartino, A. (2015). Decision making and uncertainty: The role of heuristics and experience in assessing a politically hazardous environment. Strategic management journal, 36(10), 1554-1578.

  • Meissner, P., & Wulf, T. (2016). Debiasing illusion of control in individual judgment: the role of internal and external advice seeking. Review of Managerial Science, 10, 245-263.

21.08.23 - Hafid, André, Raquel, Tatiane

Slides:

1 - 2 - 3 - 4

Week 04 - Overconfidence in Decision-making Processes

Today we will discuss problems related to overconfidence in decision-making processes.

  • Green, E., & Shapira, Z. (2018). Hierarchical sensing and strategic decision-making. In Behavioral Strategy in Perspective (Vol. 39, pp. 123-138). Emerald Publishing Limited.

  • Graf-Vlachy, L. (2019). Like student like manager? Using student subjects in managerial debiasing research. Review of Managerial Science, 13(2), 347-376.

  • Gutierrez, C., Åstebro, T., & Obloj, T. (2020). The impact of overconfidence and ambiguity attitude on market entry. Organization Science, 31(2), 308-329.

  • Schumacher, C., Keck, S., & Tang, W. (2020). Biased interpretation of performance feedback: The role of CEO overconfidence. Strategic Management Journal, 41(6), 1139-1165.

28.08.23 - Bruna Menezes, Daniela Lima

Slides:

1&2 - 3&4

Week 05 - Emotions and Decision-making

Today we will discuss the interpolation of emotions and decision-making processes.

  • Huy, Q. N. (2012). Emotions in strategic organization: Opportunities for impactful research. Strategic Organization, 10(3), 240-247.

  • Cristofaro, M. (2020). “I feel and think, therefore I am”: An Affect-Cognitive Theory of management decisions. European Management Journal, 38(2), 344-355.

  • Treffers, T., Klarner, P., & Huy, Q. N. (2020). Emotions, time, and strategy: The effects of happiness and sadness on strategic decision-making under time constraints. Long Range Planning, 53(5), 101954.

  • Cristofaro, M. (2021). Unfolding irrationality: how do meaningful coincidences influence management decisions?. International Journal of Organizational Analysis, 29(2), 301-321

04.09.23 - Antônio Barbarini, Rose Navajas, Walter Kussano, Agda

Slides:

1-4

Week 06 - Organizational decline, crises and failures

Today we will discuss some bad outcomes of behaviors.

  • Carmeli, A., & Schaubroeck, J. (2006). Top management team behavioral integration, decision quality, and organizational decline. The Leadership Quarterly, 17(5), 441-453.

  • Martins, F. S., Lucato, W. C., Vils, L., & Serra, F. A. R. (2020). The effects of market and entrepreneurial orientation on the ambidexterity of multinational companies’ subsidiaries. European Business Review, 32(1), 4-25.

  • Martins, F. S., Vils, L., Serra, F. A. R., da Silva Junior, W., & Napolitano, D. M. M. R. (2022). Knowledge generation and market orientation during global crises in supply chains. European Business Review, 34(4), 453-470.

  • Loia, F., de Gennaro, D., & Adinolfi, P. (2022). Managerial hubristic-behavioral strategy: how to cope with chaotic and uncertain contexts. Management Research Review, 45(9), 1137-1154.

Optional (suggested reading):

  • Ribeiro Serra, F., Portugal Ferreira, M., & Isnard Ribeiro de Almeida, M. (2013). Organizational decline: a yet largely neglected topic in organizational studies. Management Research: Journal of the Iberoamerican Academy of Management, 11(2), 133-156.

11.09.23 - Patrícia, Pedro, Maiara, Suellen

Week 07 - Behavioral Strategic Management and other Strategic Management approaches

We are going to compare Behavioral Strategic Management with other approaches:

  • Hirsch, P. M., Friedman, R., & Koza, M. P. (1990). Collaboration or paradigm shift?: Caveat emptor and the risk of romance with economic models for strategy and policy research. Organization Science, 1(1), 87-97.

  • Bromiley, P., & Papenhausen, C. (2003). Assumptions of rationality and equilibrium in strategy research: The limits of traditional economic analysis. Strategic Organization, 1(4), 413-437.

  • Lovallo, D., & Sibony, O. (2018). Broadening the frame: How behavioral strategy redefines strategic decisions. Strategy Science, 3(4), 658-667.

18.09.23

- Cléber Santos, George, Luciano

Week 08 - Behavioral Strategic Management - Trends and future

We are reaching the end of this course. What about the future?

  • Anwar, J., Bibi, A., & Ahmad, N. (2021). Behavioral strategy: mapping the trends, sources and intellectual evolution. Journal of Strategy and Management, 15(1), 140-168.

  • BAĞIŞ, M. (2021). A research on the cognitive and behavioral foundations of strategic management: 1995-2020. Ege Academic Review, 21(3), 163-180.

  • Borchardt, W., Kamzabek, T., & Lovallo, D. (2022). Behavioral strategy in the wild. Management Research Review, 45(9), 1185-1204.

  • Hesselbarth, I., Alnoor, A., & Tiberius, V. (2023). Behavioral strategy: A systematic literature review and research framework. Management Decision.

25.09.23

-Roberto Ferreira, Lidiane, Daniela

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