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Training Strategic Thinking: Experimental Evidence

Author

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  • Juan M. Benito-Ostolaza

    (Universidad Pública de Navarra.)

  • Juan A. Sanchis-Llopis

    (Universitat de València and ERICES)

Abstract

Strategic behavior is crucial for strong firm performance, especially in competitive environments. Thus, designing a good strategy is a key issue for firms. Designing a strategy requires a combination of strategic thinking—which involves analyzing a firm’s strategic environment, defining a vision of its future, and devising new ideas to out-think competitors—and strategic planning—which implies using these ideas to formulate a business plan. Although many firms excel at strategic planning, few devote enough resources to strategic thinking, which results in strategic insanity (i.e., firms repeatedly applying the same strategies with the expectation of different outcomes). To foster a strategic environment within a firm, firm managers and other workers must show willingness for active involvement in a firm’s strategic decisions. Nevertheless, not everybody has the skills to do so, as many firms lack work force training programs. This study shows, experimentally, how training affects firms’ strategic behavior. The starting point is two groups of individuals with initially equal qualifications who play in a sequential game whose rules hinder the calculation of equilibria. The members of only one of the groups previously receive a treatment entailing a process of training and learning that aims at fostering strategic thinking. The results point to a significant increase in the number of strategic decisions in the treatment group in sharp contrast to the control group, confirming the initial hypothesis (i.e., the positive impact of training).

Suggested Citation

  • Juan M. Benito-Ostolaza & Juan A. Sanchis-Llopis, 2013. "Training Strategic Thinking: Experimental Evidence," Working Papers 1323, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1323
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    References listed on IDEAS

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    Cited by:

    1. Chen, Yi-Min & Liu, Hsin-Hsien & Ni, Yu-Ting & Wu, Meng-Fen, 2015. "A rational normative model of international expansion: Strategic intent perspective, market positions, and founder CEOs/family-successor CEOs," Journal of Business Research, Elsevier, vol. 68(7), pages 1539-1543.
    2. Pasi Aaltola, 2019. "Strategic thinking and accounting: potentials and pitfalls from a managerial perspective," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(3), pages 323-351, October.
    3. Vymyatnina, Yulia V. (Вымятнина, Юлия В.) & Grishchenko, Vadim O. (Грищенко, Вадим О.) & Ostapenko, Vsevolod M. (Остапенко, Всеволод М.) & Ryazanov, Viktor T. (Рязанов, Виктор Т.), 2018. "Financial Instability and Economic Crises: Lessons from Minsky [Финансовая Нестабильность И Экономические Кризисы: Уроки Мински]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 20-41, August.
    4. Benito-Ostolaza, Juan M. & Hernández, Penélope & Sanchis-Llopis, Juan A., 2016. "Do individuals with higher cognitive ability play more strategically?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 5-11.
    5. Juan M. Benito-Ostolaza & Penélope Hernández & Juan A. Sanchis-Llopis, 2015. "Are individuals with higher cognitive ability expected to play more strategically?," Working Papers 1507, Department of Applied Economics II, Universidad de Valencia.

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