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Market-Based Solutions to Vital Economic Issues

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Kenan Institute 2024 Grand Challenge: Business Resilience
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Market-Based Solutions to Vital Economic Issues
Research
Jul 9, 2018

Decision Weaving: Effective Strategy Formation In Entrepreneurial Settings Research-oriented

Abstract

Strategy formation is central to why some firms succeed in entrepreneurial settings while others do not. Prior research suggests that executives effectively form strategies through actions to learn about novel opportunities, and thinking to develop a holistic understanding of the complex set of activities that must fit together. But it remains unclear how effective strategists actually combine these processes. So, we ask: How do executives effectively form strategies in entrepreneurial settings? Given limited theory and research, we use theory- building case methods to take a rare look at how 3 matched pairs of firms in different two-sided markets attempt to form strategies. Our key contribution is a novel and effective strategy formation process: Decision weaving. It includes: sequential focus to intensely devote resources to learning about strategy in a focal domain and then moving to a new one at learning plateaus while simultaneously using stepping stones in background domains to make progress without distraction and maintain a holistic view. Our results have contributions to the organizational learning, managerial cognition, and strategy formation literatures. More broadly, we contribute a portrait of a cognitively sophisticated, yet realistic strategist.


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