Rational Strategic Reasoning: An Unnatural Act?

We review recent literature on competitive reactions and strategic thinking and offer several observations. Evidence is mounting that strategic thinking is an unnatural act, made difficult by natural individual biases and organizational roadblocks. In addition, it is possible that uncertainty about...

Full description

Saved in:
Bibliographic Details
Main Authors: MONTGOMERY, David B., Urbany, Joel E.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1998
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/1620
https://doi.org/10.1023/a:1008024306716
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
Description
Summary:We review recent literature on competitive reactions and strategic thinking and offer several observations. Evidence is mounting that strategic thinking is an unnatural act, made difficult by natural individual biases and organizational roadblocks. In addition, it is possible that uncertainty about competitive behavior is caused by and contributes to informal and incomplete competitive intelligence. We propose a simple model which suggests a potential path dependency in a firm's intelligence gathering, driven by the inertia of its past decision-making. Such a path dependency can be broken, however, as evidenced by several examples of firms who have overcome barriers to strategic thinking in creative ways. Paradoxically, though, there are circumstances in which competition is overemphasized in decision-making. Research priorities are discussed.