The Behavioral Foundations of Strategic Management

Philip Bromiley

John Wiley & Sons, Feb 4, 2009 - Business & Economics - 160 pages

The Behavioral Foundations of Strategic Management

This book argues that rationality and market equilibrium assumptions are inconsistent with rigorous strategic management research so that strategic management should adopt behavioral assumptions.

When strategy scholars assume that firms can make better or worse decisions, they implicitly adopt a behavioral view. After examining the problems that rationality and equilibrium assumptions create, the author outlines the basics of a behavioral approach to strategic management. The book addresses how a behavioral approach relates to several major strains of strategic management scholarship and explores relevant methodological issues.

Overall, the book argues persuasively that a behavioral perspective offers the best foundation for strategic management scholarship.

Contents

• 1 Introduction: 1
• Objectives of Strategic Management Research: 2
• Rigor in Strategy Research: 5
• Rationality and Bounded Rationality: 8
• Summary of the Argument: 10
• Outline of the Book: 12
• 2 Basics of a Behavioral Approach: 14
• Basic Views of Decisions: 15
• Bounded Rationality: 16
• Routines: 22
• Aspirations and Search: 26
• Slack: 30
• The Ecological or Selection Argument: 31
• Two Criticisms of the Bounded Rationality View: 36
• Summary: 37
• 3 A Behavioral Critique of Rationality and Equilibrium: 40
• The Behavioral Critique of Rationality: 41
• Responses to the Critique: 43
• Logical Problems of Rationality and Equilibrium: 56
• Bounded Rationality in Economics: 61
• Game Theory: 63
• A Lack of Rigor: 67
• Summary: 72
• 4 A Behaviorists Perspective on Current Strategy Approaches: 75
• No Rules for Riches?: 82
• The ResourceBased View: 85
• Transaction Cost Economics: 97
• Agency Theory: 101
• Summary: 105
• 5 Behavioral Methodology: 107
• The Importance of Process: 111
• Process and Testing: 115
• Time Series and Endogeneity: 116
• 6 Where Do We Go From Here?: 119
• Competition: 121
• Prescription: 123
• Statistics: 124
• Behavioral Theory of the Firm: 125
• Concluding Remarks: 127
• References: 129
• Index: 141

About the author

Philip Bromiley holds the Curtis L. Carlson Chair in Strategic Management and chairs the Department of Strategic Management and Organization at the Carlson School of Management, University of Minnesota.

Bibliographic information

• Title: The Behavioral Foundations of Strategic Management; Theories of Strategic Management Series
• Author: Philip Bromiley
• Publisher: John Wiley & Sons, 2009
• ISBN: 1405142502, 9781405142502
• Length: 160 pages
• Subjects: Business & Economics / Decision-Making & Problem Solving; Business & Economics / General; Business & Economics / Management