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Theory-Driven Strategic Management Decisions

Author

Listed:
  • Arnaldo Camuffo

    (Department of Management and Technology, Bocconi University, Milan 20136, Italy; and ION Management Science Lab, Bocconi and Utah University, Milan 20136, Italy)

  • Alfonso Gambardella

    (Department of Management and Technology, Bocconi University, Milan 20136, Italy; and ION Management Science Lab, Bocconi and Utah University, Milan 20136, Italy)

  • Andrea Pignataro

    (ION Management Science Lab, Bocconi and Utah University, Milan 20136, Italy; and ION Group, London EC4R 1BE, United Kingdom)

Abstract

This paper studies strategic decisions under uncertainty for which past data are not available. It provides microfoundations of the theory-based view of the firm by showing that the strategic problem starts with the selection of theories rather than choosing actions and that theories are selected through experiments. The value of experimenting with theories increases with the number of theories and with their uncertainty. Moreover, uncertainty makes theories superadditive—that is, experimenting with a more uncertain theory increases the benefits of experimenting with other more uncertain theories. The paper also shows that decision makers should experiment with more “surprising” theories because in this case experiments are more informative and enable more learning. A leading example helps to illustrate our concepts throughout the paper.

Suggested Citation

  • Arnaldo Camuffo & Alfonso Gambardella & Andrea Pignataro, 2024. "Theory-Driven Strategic Management Decisions," Strategy Science, INFORMS, vol. 9(4), pages 382-396, December.
    • Handle: RePEc:inm:orstsc:v:9:y:2024:i:4:p:382-396
    DOI: 10.1287/stsc.2024.0173
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    References listed on IDEAS

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    Cited by:

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    2. Sandro Ambuehl & Rahul Bhui & Heidi C. Thysen, 2026. "Mental Models of Causal Structure in Economics and Psychology," Papers 2603.29070, arXiv.org, revised Apr 2026.
    3. Thomas {AA}stebro & Frank M. Fossen & C'edric Gutierrez, 2026. "Attitudes Toward Ambiguity Among Self-employed and Incorporated Entrepreneurs," Papers 2603.14148, arXiv.org.

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