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Market-Based Solutions to Vital Economic Issues
Research
Oct 27, 2011

Rational Heuristics: The “Simple Rules” that Strategists Learn from Process Experience

Abstract

While much research indicates that organizational processes are learned from experiences, surprisingly little is known about what is actually learned. Using a novel method to measure explicit learning, we track the learned content of six technology-based ventures from three diverse countries as they internationalize. The emergent theoretical framework indicates that firms learn heuristics. These heuristics have a common structure centered on opportunity capture and are learned in a specific developmental order. This results in a deliberately small, yet increasingly strategic, portfolio of heuristics. Broadly, we contribute to the psychological foundations of strategy by highlighting the rationality of heuristics as strategy, capability creation as the cognitive transition from novice to expert heuristics, and simplification cycling as a critical dynamic capability for sustaining competitive advantage.

Citation

Bingham, C.B., & Eisenhardt, K. M. (2011). Rational heuristics: the “simple rules” that strategists learn from process experience. Strategic Management Journal, 32(13), 1437–1464. doi:10.1002/smj.965


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