Rational Strategic Reasoning: An Unnatural Act?

• Main Authors: MONTGOMERY, David B., Urbany, Joel E.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1998
• Subjects: Business
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/1620; https://doi.org/10.1023/a:1008024306716
• Institution: Singapore Management University

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.