IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v18y2007i3p420-439.html
   My bibliography  Save this article

On the Origin of Strategy: Action and Cognition over Time

Author

Listed:
  • Giovanni Gavetti

    (Harvard Business School, 237 Morgan Hall, Boston, Massachusetts 02163)

  • Jan W. Rivkin

    (Harvard Business School, 237 Morgan Hall, Boston, Massachusetts 02163)

Abstract

We develop a perspective on how managers search for a strategy. In the spirit of Cyert and March (1963), we aim for a perspective that reflects the reality of managerial behavior, that respects both the reasoning power of managers and the bounds on their rationality, and that permits organizations to change but within realistic limits. Our perspective employs the variable time to frame the question of strategy’s origins in a distinctive way. Over time, the cognitive and physical elements that make up a strategy become less plastic, while mechanisms to search rationally for a strategy become more available. This generates a fundamental tension in the origin of strategy: Managers struggle to understand their environment well enough to search rationally for an effective strategy before their firms lose the plasticity necessary to exploit that understanding. A focus on time allows us to synthesize and extend the evolutionary and positioning models of strategic search. Toward this end, we couple induction and deduction. The inductive part of the paper uses detailed observation of the search for a strategy at one firm to identify constructs that play a crucial role in strategic search. The deductive part steps beyond our focal firm and uses these constructs to derive theoretical propositions about the typical path of strategic search and the mortality associated with different approaches to search.

Suggested Citation

  • Giovanni Gavetti & Jan W. Rivkin, 2007. "On the Origin of Strategy: Action and Cognition over Time," Organization Science, INFORMS, vol. 18(3), pages 420-439, June.
  • Handle: RePEc:inm:ororsc:v:18:y:2007:i:3:p:420-439
    DOI: 10.1287/orsc.1070.0282
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.1070.0282
    Download Restriction: no

    File URL: https://libkey.io/10.1287/orsc.1070.0282?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Mary Tripsas & Giovanni Gavetti, 2000. "Capabilities, cognition, and inertia: evidence from digital imaging," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1147-1161, October.
    2. Giovanni Gavetti & Daniel A. Levinthal & Jan W. Rivkin, 2005. "Strategy making in novel and complex worlds: the power of analogy," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 691-712, August.
    3. C. Marlene Fiol & Anne Sigismund Huff, 1992. "Maps For Managers: Where Are We? Where Do We Go From Here?," Journal of Management Studies, Wiley Blackwell, vol. 29(3), pages 267-285, May.
    4. Burgelman, Robert A., 2002. "Strategy as Vector and the Inertia of Co-evolutionary Lock-in," Research Papers 1745, Stanford University, Graduate School of Business.
    5. Steven Klepper & Elizabeth Graddy, 1990. "The Evolution of New Industries and the Determinants of Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 27-44, Spring.
    6. Sidney G. Winter, 2000. "The Satisficing Principle in Capability Learning," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 981-996, October.
    7. Glenn R. Carroll & William P. Barnett, 2004. "Organizational ecology: an introduction," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(1), pages 1-1, February.
    8. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    9. Adam M. Brandenburger & Harborne W. Stuart, 1996. "Value‐based Business Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(1), pages 5-24, March.
    10. Joseph F. Porac & Howard Thomas & Charles Baden‐Fuller, 1989. "Competitive Groups As Cognitive Communities: The Case Of Scottish Knitwear Manufacturers," Journal of Management Studies, Wiley Blackwell, vol. 26(4), pages 397-416, July.
    11. Henry Mintzberg, 1990. "The design school: Reconsidering the basic premises of strategic management," Strategic Management Journal, Wiley Blackwell, vol. 11(3), pages 171-195, March.
    12. Daniel A. Levinthal, 1997. "Adaptation on Rugged Landscapes," Management Science, INFORMS, vol. 43(7), pages 934-950, July.
    13. Robert A. Burgelman, 1991. "Intraorganizational Ecology of Strategy Making and Organizational Adaptation: Theory and Field Research," Organization Science, INFORMS, vol. 2(3), pages 239-262, August.
    14. James P. Walsh, 1995. "Managerial and Organizational Cognition: Notes from a Trip Down Memory Lane," Organization Science, INFORMS, vol. 6(3), pages 280-321, June.
    15. Heather A. Haveman & Michael V. Russo & Alan D. Meyer, 2001. "Organizational Environments in Flux: The Impact of Regulatory Punctuations on Organizational Domains, CEO Succession, and Performance," Organization Science, INFORMS, vol. 12(3), pages 253-273, June.
    16. Cohen, Michael D, et al, 1996. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(3), pages 653-698.
    17. Herbert A. Simon, 1991. "Bounded Rationality and Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 125-134, February.
    18. Jan W. Rivkin, 2000. "Imitation of Complex Strategies," Management Science, INFORMS, vol. 46(6), pages 824-844, June.
    19. Baron, James N & Burton, M Diane & Hannan, Michael T, 1996. "The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(2), pages 239-275.
    20. Abernathy, William J. & Clark, Kim B., 1985. "Innovation: Mapping the winds of creative destruction," Research Policy, Elsevier, vol. 14(1), pages 3-22, February.
    21. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giovanni. Gavetti & Daniel A. Levinthal, 2004. "50th Anniversay Article: The Strategy Field from the Perspective of Management Science: Divergent Strands and Possible Integration," Management Science, INFORMS, vol. 50(10), pages 1309-1318, October.
    2. Giovanni Gavetti, 2005. "Cognition and Hierarchy: Rethinking the Microfoundations of Capabilities’ Development," Organization Science, INFORMS, vol. 16(6), pages 599-617, December.
    3. Giovanni Gavetti, 2012. "PERSPECTIVE—Toward a Behavioral Theory of Strategy," Organization Science, INFORMS, vol. 23(1), pages 267-285, February.
    4. Camblanne, Lionel, 2013. "Family vision and cognition: An illustration through forest owners’ harvesting decisions," Journal of Family Business Strategy, Elsevier, vol. 4(4), pages 245-259.
    5. Teppo Felin & Stuart Kauffman & Roger Koppl & Giuseppe Longo, 2014. "Economic Opportunity and Evolution: Beyond Landscapes and Bounded Rationality," Post-Print hal-01415115, HAL.
    6. Felipe A. Csaszar & Daniel A. Levinthal, 2016. "Mental representation and the discovery of new strategies," Strategic Management Journal, Wiley Blackwell, vol. 37(10), pages 2031-2049, October.
    7. Stephan Billinger & Kannan Srikanth & Nils Stieglitz & Terry R. Schumacher, 2021. "Exploration and exploitation in complex search tasks: How feedback influences whether and where human agents search," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 361-385, February.
    8. Miles M Yang & Feifei Yang & Tingru Cui & Ying-Chu Cheng, 2019. "Analysing the dynamics of mental models using causal loop diagrams," Australian Journal of Management, Australian School of Business, vol. 44(3), pages 495-512, August.
    9. Daniella Laureiro-Martínez & Stefano Brusoni & Nicola Canessa & Maurizio Zollo, 2015. "Understanding the exploration–exploitation dilemma: An fMRI study of attention control and decision-making performance," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 319-338, March.
    10. Ilgaz Arikan & Ipek Koparan & Asli M Arikan & Oded Shenkar, 2022. "Dynamic capabilities and internationalization of authentic firms: Role of heritage assets, administrative heritage, and signature processes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 601-635, June.
    11. Sarah Kaplan, 2008. "Framing Contests: Strategy Making Under Uncertainty," Organization Science, INFORMS, vol. 19(5), pages 729-752, October.
    12. Christina Fang & Daniel Levinthal, 2009. "Near-Term Liability of Exploitation: Exploration and Exploitation in Multistage Problems," Organization Science, INFORMS, vol. 20(3), pages 538-551, June.
    13. Sidney G. Winter & Gino Cattani & Alex Dorsch, 2007. "The Value of Moderate Obsession: Insights from a New Model of Organizational Search," Organization Science, INFORMS, vol. 18(3), pages 403-419, June.
    14. Hadida, Allègre L. & Paris, Thomas, 2014. "Managerial cognition and the value chain in the digital music industry," Technological Forecasting and Social Change, Elsevier, vol. 83(C), pages 84-97.
    15. Oliver Baumann & Nicolaj Siggelkow, 2013. "Dealing with Complexity: Integrated vs. Chunky Search Processes," Organization Science, INFORMS, vol. 24(1), pages 116-132, February.
    16. Felipe A. Csaszar, 2018. "What Makes a Decision Strategic? Strategic Representations," Strategy Science, INFORMS, vol. 3(4), pages 606-619, December.
    17. Glenn B. Voss & Zannie Giraud Voss, 2013. "Strategic Ambidexterity in Small and Medium-Sized Enterprises: Implementing Exploration and Exploitation in Product and Market Domains," Organization Science, INFORMS, vol. 24(5), pages 1459-1477, October.
    18. Walrave, Bob & Gilsing, Victor A., 2023. "Game of skill or game of luck? Distant search in response to performance feedback," Technovation, Elsevier, vol. 121(C).
    19. Ansari, Shahzad (Shaz) & Krop, Pieter, 2012. "Incumbent performance in the face of a radical innovation: Towards a framework for incumbent challenger dynamics," Research Policy, Elsevier, vol. 41(8), pages 1357-1374.
    20. Ron Adner & Felipe A. Csaszar & Peter B. Zemsky, 2014. "Positioning on a Multiattribute Landscape," Management Science, INFORMS, vol. 60(11), pages 2794-2815, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:18:y:2007:i:3:p:420-439. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.