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Strategy Question: How do I develop an effective plan and strategy in an environment that is highly uncertain, turbulent, and unpredictable?

Summary: An organization exists as a subset of numerous spheres of influence, including the overall environment, the economic forces within that, and the industry forces within that. The Strategic Environmental Scan (SES) uses a structured approach to survey each of those areas, compile responses, sort responses, forecast impacts of those issues seen as higher probability, and highlight those issues for plan consideration. Since a strategist can’t control these forces, it is important to understand the environmental forces to develop real-time course corrections within the planning horizon. The tool consists of a basic one-page framework along with a process to gather, assess, and organize information that the strategist can use to determine what environmental issues deserve serious attention in the development of the strategy and plan, which issues need to be monitored, and which can be ignored (for the time being). This tool builds upon Dr. Michael Porter’s gold standard Five Forces Industry Analysis and employs stakeholder input to ensure a full appreciation of the broad environmental factors.

This chapter argues that aspiring hegemons face a wide array of complex and distinct military challenges. Managing scarce military resources requires a subtle and complex global strategy that is likely to generate cognitive overload for the political system. As a result of cognitive overload, aspiring hegemons are likely to flail around, rapidly shifting from one global strategy to another. Such strategic flailing will occur independently of whether or not the economy is in crisis, though clearly economic crisis will exacerbate the tendency towards strategic incoherence. The chapter examines U.S. global strategy since the end of the Cold War, looking at the focus on “rogue regimes,” a growing concern with “global chaos,” worry about the rise of a peer competitor (China), and the debates about the root causes of, and best strategies to mitigate, terrorism. The chapter concludes with a discussion of the role of culture and notions of national identity and their role in the formulation of grand strategy.

Courses in strategic management should teach future strategists how to react to unexpected strategic events such as the appearance of innovative technologies, proposed mergers, drastic changes in production costs, or major actions by competitors or customers. Strategic events often trigger important changes in strategies, and reactions to strategic events make the difference between long-run success and failure. Courses can teach students about the philosophical and psychological difficulties posed by complex environments and uncertain futures and teach some procedures that help to assure that important issues receive consideration. Research may be able to identify some decision-making heuristics that foster success.

By theorizing choice as an information and decision problem, behavioral strategy research has not considered fully the agentic capacities of strategists. We argue that agentic capacities are distinct from decision-making and information-processing capacities as they rest on temporally anchored engagements with the world through habit, imagination, and judgment. We propose that understanding agency as temporally anchored action capacities is particularly important for research in behavioral strategy, as strategic phenomena encompass accumulated experience and path-dependencies (the past), ongoing competitive, market, and organizational interactions and exchanges (the present), and plans, visions, and forecasts for the future (the future). We outline how strategic choice and agency involve cognitive engagement in the three time horizons through distinct cognitive capabilities and the organizational processes that support them.

This chapter highlights some of the tensions and most promising points of convergence between the strategic management and stakeholder theory literatures. We briefly examine the early development of both areas, identifying some of the background assumptions and choices that informed how the fields evolved, and how these factors led the two fields to engage in scholarly pursuits that seldom intersected for a period of years, followed by a renewal of interest among strategists in themes that are central to stakeholder theory. From this discussion, we develop a larger agenda with specific topics as examples of areas that offer promise for integrative research that can advance knowledge in both fields. Our vision of the future is one in which the larger aspirations of scholars in strategy and stakeholder theory are more fully realized with human purposes, broadly defined, as the focal point.

Developments in the social neurosciences over the past two decades have rendered problematic the main knowledge elicitation techniques currently in use by strategy researchers, as a basis for revealing actors’ mental representations of strategic knowledge. Extant elicitation techniques were advanced during an era when cognitive scientists and organizational researchers alike were preoccupied with the basic information of processing limitations of decision makers and means of addressing them, predicated on an outmoded conception of strategists as affect-free, cognitive misers. The need to adapt these techniques to enable the investigation of the emotional content and structure of actors’ mental representations is now a pressing priority for the advancement of theory, research, and practice pertaining to several interrelated areas of strategic management, from dynamic capabilities development, to upper echelons theory, to strategic consensus formation. Accordingly, in this chapter, we report the findings of two studies that investigated the feasibility of adapting the repertory grid, a robust method, widely known and well used in strategic management, for this purpose. Study 1 elicited a series of commonly mentioned strategic issues (the elements) from a sample of senior managers similar in composition to the sample recruited to the second study. Study 2 participants evaluated the elements elicited in Study 1 in relation to a series of researcher-supplied bipolar attributes (the constructs), based on the well-known affective circumplex model of human emotions. In line with expectations, a series of vector-based multivariate analyses revealed a number of interesting similarities and variations among participants in terms of the basic structure and emotional salience of the issues under consideration.

Despite widespread interest in “behavioral strategy,” it is not clear what this term, or its associated academic subfield, is all about. Unless a critical mass of scholars can agree on the meaning of behavioral strategy, and professionally identify with it, this embryonic community may face a marginal existence. We describe three alternative conceptions for the academic subfield of behavioral strategy, along with assessments of the pros and cons of each. The “small tent” version amounts to a direct transposition of the logic of behavioral economics to the field of strategic management, specifically in the style of behavioral decision research. The “midsize tent” view is that behavioral strategy is a commitment to understanding the psychology of strategists. And the “large tent’ view includes consideration of any and all psychological, sociological, and political factors that influence strategic outcomes. We conclude that the midsize tent represents the best path forward, not too narrow and not too broad, allowing rich scope but with coherence. The large tent conception of behavioral strategy, however, is not out of the question and warrants serious consideration.

Strategic option generation is a fundamental step in strategy formulation. Several lenses have been proposed to explain its foundations, including the microeconomics positioning school, and the resource and capabilities based view of the firm. These approaches are largely based on inductive and deductive logics, which are not the logics that provide strategic options that are potentially novel, profitable, and largely differentiated from competitive offerings. In this chapter, we propose a unifying framework of the cognitive foundations of strategic option generation. Building on five fundamental cognitive acts – imitation, framing, analogical reasoning, abductive reasoning, and mental simulation, this proposed model both synthesizes the extant literature and provides guidance about promising avenues for future theoretical and empirical research.