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Broadening the Frame: How Behavioral Strategy Redefines Strategic Decisions

Author

Listed:
  • Dan Lovallo

    (The University of Sydney, Sydney, New South Wales 2006, Australia)

  • Olivier Sibony

    (HEC Paris, 78351 Jouy-en-Josas, France)

Abstract

Using a behavioral strategy lens, we introduce a framework to categorize and improve strategic decisions. The typology uses two dimensions, salience and framing, while considering whether decisions truly produce strategic consequences. This yields six relevant types of decisions. “Archetypal” decisions are single strategic decisions that are labeled as strategic. “Programmatic” decisions are series of multiple decisions that are accurately labeled as strategic. “Hyped” and “habitual” decisions are single and multiple decisions, respectively, that are labeled as strategic but do not produce strategic consequences. Finally, “hidden” decisions are single decisions that are not labeled as strategic but do have strategic consequences; and “process driven” decisions are sets of multiple decisions that are not labeled as strategic but do, in aggregate, produce strategic outcomes. For each type of decision, we discuss pitfalls and suggest potential remedies.

Suggested Citation

  • Dan Lovallo & Olivier Sibony, 2018. "Broadening the Frame: How Behavioral Strategy Redefines Strategic Decisions," Strategy Science, INFORMS, vol. 3(4), pages 658-667, December.
    • Handle: RePEc:inm:orstsc:v:3:y:2018:i:4:p:658-667
    DOI: 10.1287/stsc.2018.0071
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    References listed on IDEAS

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    Cited by:

    1. Michael J. Leiblein & Jeffrey J. Reuer & Todd Zenger, 2018. "Special Issue Introduction: Assessing Key Dimensions of Strategic Decisions," Strategy Science, INFORMS, vol. 3(4), pages 555-557, December.
    2. Block, Sidney T. & Friebel, Guido & Heinz, Matthias & Zubanov, Nick, 2022. "Mystery Shopping as a Strategic Management Practice in Multi-Site Firms," IZA Discussion Papers 15599, Institute of Labor Economics (IZA).

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