PhD Seminar on Strategy

Spring, 2012

Professor Christina Fang

MGMT-GB-4301.01: Tuesdays 2pm to 5pm; Tisch 7-20

Professor Fang: 7-62 KMC, phone: 212-998-0241, email: cfang@stern.nyu.edu.

Office Hours: By appointment.

Introduction

In the past 3 decades, Strategy has emerged as an important area of study in Management. The
Business Policy and Strategy division now boasts of the largest membership in all of AOM. In
practice, the field of Strategy is the only area that speaks exclusively to the highest level of
corporations the leaders, the CEOs, and the movers and shakers of the modern firm. It
transcends functional areas such as finance or marketing, as it brings functional knowledge to
bear on the most critical issues faced by the firms key decision makers.

While there is a strong degree of core consensus among scholars, Strategy is a young discipline
with many unresolved theoretical puzzles and empirical challenges. Far from being obstacles,
these gaps present attractive and ample opportunities for fledging scholars to make a mark.
Whether you aspire to contribute directly to the scholarship of Strategy or are simply curious
about how Strategy may relate to your area (whether it be Information Systems, Marketing or
Public Policy), this course offers an overview of classic concepts and ideas and introduce you to
current research in Strategy.

Class Format

At the PhD level, learning mainly occurs through discussion, exchange and mutual critique of
ideas, based on a careful reading of the materials. We strive to create an open learning
environment where 1) no question is considered stupid; 2) if you dont understand, ask and
inquire; and 3) one never takes any idea for granted. In other words, while we should refrain
from arguments just for their own sakes, we nevertheless encourage mutual critiques of each
others ideas (including mine). Thus, one needs to develop some thick skin and learn not to take
productive debates as personal attacks.

1
A prototypical class session will have a first-half in which the materials themselves, the
background context, and on-going related research initiatives and controversies are reviewed and
discussed. In the second-half, we will try, as a class, to identify open opportunities, possible
extensions and theoretical and empirical gaps. In other words, the first half focuses on the
readings, while second half aims to extend conventional wisdom and create new knowledge.

The exact class format will evolve as we go. A variety of formats will be experimented:
instructor or student led opening remarks, mini-lectures, class exercises, student debates and
presentations and so forth.

Class Requirements

1. Class Preparation:

Analyze (as described below) and be prepared to discuss the readings that are assigned for each
class, giving special attention to the above the line readings under each topic. The below the
line readings are generally optional so far as the seminar discussion is concerned, and are listed
partly by way of providing a bibliographic resource.

All students should arrive at class with their analyses of the readings, ready to go. Please ensure
that you have a point of view on the key insights of each article as well as each articles strengths
and weaknesses. Also bring your thoughts on questions and interesting issues to discuss during
class.

Analyzing each article means outlining research question(s), central arguments and
hypotheses as appropriate and for empirical papers, methods (research design, sample, data
collection, construct measures, analytic techniques) and results. It means that you are familiar
with key conclusions and takeaways, as well as each papers strengths, weaknesses, and
contributions to the literature.

2. Reaction Paper (30% of final grade):

Each student is to prepare a brief (roughly one page, single-spaced) Reaction Paper, before each
class. This short note helps develop your own point of view on the issues that interest prior
scholars. Ask yourself: What are the common themes within the articles, contradictions among
the articles, and insights? What are the 2-3 most important conclusions from the readings viewed
collectively? Excluding anything written by me, what is the best of the assigned articles (and
why)? It conveys your provocative reflections on the readings, which can take many forms. It
may be organized around your puzzlement at the argument that the author(s) are making. It may
reflect on contrasts in the arguments of the various authors. It might identify gaps in the existing
literature and, in turn, research opportunities. Alternatively, the note could focus on applications
and examine ways in which the conceptual material may provide insight into some important
business phenomena; or, how an important business phenomena points to gaps and weaknesses
in the theoretical ideas.

2
These notes should not merely, or primarily, restate the arguments of the various authors. In
writing these notes, you should assume that your audience (me and your fellow students) have
read the articles associated with that class with some care and would not be interested in
regurgitation of these ideas but would be stimulated by a fresh and original take on them.

While the baseline requirement is that students submit one Reaction Paper for every class session,
you are entitled to two waivers. That is, you can select two class sessions out of this requirement,
for whatever reasons.

These are due by 11am the day of class. Place an electronic copy on the course Blackboard
Turnitin assignment folder. In addition, please place a hard copy under my office door (KMC, 7-
62). If your physical distance from the Management Department prevents that, please provide a
hard copy to me at the start of class. No reaction papers will be accepted subsequent to the
associated class session.

3. Research Idea Presentation (RIP) (20% of final grade)

For each class, you are also asked to outline an original research idea in a powerpoint
presentation. The research idea may either be theoretical or empirical. It may consist of an
alternative explanation for an empirical regularity discussed in the literature for that week or a
suggestion for a different empirical test of some of the theories discussed in the readings for that
week. It may also suggest new types of data that can be used to test theories. Alternatively, it can
propose new theories and ideas addressing the gaps in the literature.

Note that this research idea may build on your reaction paper for that week, but should be
distinct in content and focus. The presentation should be no more than five minutes and contain
no more than 5-6 slides. This presentation will be graded on originality, that is, whether the idea
is creative and interesting.

4. Final Paper (50%)

Students will write a 5000 word paper. It may consist of an alternative approach to / explanation
for some of the empirical regularities discussed in the course. Alternatively, the research idea can
specify a different way of testing a theory. The paper should be grounded in the literature
presented in the course, but does not need to address the literature in its entirety rather, students
are encouraged to pick one of the weekly topics, and build on the topic in your own way.

The paper shall consist of:

1) An introduction of 500 words or so, introducing the topic to be discussed and why it
matters
2) A brief (max 1000 word) discussion of the literature relevant to the topic
3) A careful discussion of the main idea (about 2000 words)
4) A (1000 word) discussion of why the idea matters theoretically and or empirically.
That is, this section should answer: Why should researchers and managers care about
your idea? What theoretical or empirical puzzles can your idea solve?
5) A conclusion of about 500 words, which answers the following question: if you were to

3
 develop your idea further, or test it empirically, what are the most important steps?

The paper will be graded on: A) the originality / contribution of the idea can you convince us
that the idea is novel and would be of interest for researchers in the area you focus on and / or
managers? B) your understanding of how your idea relates to the existing literature can you
clearly explain how your idea relates to the existing literature (does it extend it, complement it,
how does it differ from other ideas, theories, and methods)? C) the depth of your idea and
discussion does it go beyond the simplest possible application / discussion? The paper needs to
discuss the implication of your findings and why they matter. D) The clarity of your writing.

Course Schedule

# Date Topic
1 1/31 Introduction: the Strategy Concept

2 2/7 What is Theory?

3 2/14 Sustained Superior Performance

4 2/21 Industry Analysis and Market Power

5 2/28 The Resource Based View of the Firm

6 3/6 Evolutionary Perspectives on Strategy

7 3/13 Organization Learning

8 3/20 Technology Innovation

9 3/27 Complexity, Imitation and Fit

10 4/10 Corporate Strategy

11 4/17 Behavioral Strategy

12 4/24 Rules for Riches?

13 5/1 Strategic Process and Practice

14 5/9 Course Wrap Up and Student Presentations

Logistics: Electronic version of the readings can be found in my folder in the Management Q
drive. If you wont be officially registered for the course, but wish to audit, I grant approval on a
case by case basis, before the start of the course.

4
1. Introduction: The Strategy Concept

Michael Lewis, 2003. Moneyball: The Art of Winning an Unfair Game. W. W. Norton &
Company, New York. Chapters 2, 5 and 6.

Tse-Tung Mao.1965. On Geurrilla Warfare. Frederick Praeger Publishers. Chapters II, III and 3.

Whittington, R. (2000) What is strategy - and does it matter? London: Routledge. Chapters 1 and
2.

Mintzberg, Henry 1990 'The Design School: Reconsidering the basic premises of strategic
management' . Strategic Management Journal 11/3: 171-195.

Brandenburger and Nalebuff, The Right Game: Use Game Theory to Shape Strategy, Harvard
Business Review, July-August 1995.

___________________

Ghemawat P. (2002). Competition and Business Strategy in Historical Perspective. Business

History Review 76: 37-74.

Rumelt, Richard P., Schendel, Dan, and Teece, David (1991). "Strategic Management and
Economics." Strategic Management Journal (Special Issue) 12: 5-29.

McKenna, C. (2006). Writing the ghost-writer back in: Alfred Sloan, Alfred Chandler, John
McDonald and the intellectual origins of corporate strategy. Management & Organizational
History, Vol. 1, No. 2, 107-126.

5
2. What is Theory?

Charles A. Lave and James G. March. (1975). An Introduction to Models In The Social Sciences.
Harper and Row, New York. Chapter 1,2, and 3.

Sutton, R.I. and Staw, B.M. (1995). What theory is not, Administrative Science Quarterly, 40,
371-384.

Shapira, Z. 2011. Ive Got a Theory PaperDo You?: Conceptual, Empirical, and Theoretical
Contributions to Knowledge in the Organizational Sciences. Organization Science, 22(5) p.1312-
1322.

___________________

6
3. Sustained Superior Performance

Powell, T. C, (2003). Varieties of competitive parity, Strategic Management Journal, 24 (1), 61-
86.

R. L. Axtell. (2001). Zipf Distribution of U.S. Firm Sizes. Science, Vol. 293, Issue 5536, pp.
1818-1820.

Kohli, Rajeev and Raaj Sah (2006), Some Empirical Regularities in Market Shares,
Management Science, 52 (11), 17921798.

Rumelt, Richard. 1991. "How Much Does Industry Matter?" Strategic Management Journal, 12:
167- 185.

Bruderl, J., P. Preisendorfer, R. Ziegler (1992), "Survival chances of newly founded business
organizations", American Sociological Review, Vol. 57 pp.227 - 242.

Waring, G. F., Industry Differences in the Persistence of Firm-Specific Returns, American

Economic Review, 86 (1996), 1253-1265.

___________________

Denrell, J. (2005). Selection Bias and the Perils of Benchmarking. Harvard Business Review,
April, 2005, 114-119.

Jacobson, R., Aaker, D.A., Is market share all that its cracked up to be? (1985), Journal of
Marketing, Vol. 49 pp.11-22.

Phil Rosenzweig, 2007 Misunderstanding the Nature of Company Performance: The Halo Effect
and Other Business Delusions", 49/4 (Summer 2007): 6-20.

Shaver, J. M. (1998) `Accounting for Endogeneity when Assessing Strategy Performance: Does
Entry Mode Choice Affect FDI Survival?', Management Science44(4): 571-585.

Wensley, R. Explaining Success: the Rule of Ten Percent and the Example of Market Share;
Business Strategy Review, 8 63-70 (1997)

Barney, J. (2001). Gaining and Sustaining Competitive Advantage. Prentice Hall, New Jersey.
Chapter 2: What is performance?

Caves, R. (1998): "Industrial Organization and New Findings on the Turnover and Mobility of
Firms", Journal of Economic Literature, vol. 36, no. 4, pp. 1947- 1982.

Chan, L., J. Karceski, and J. Lakonishok. 2003. The Level and Persistence of Growth Rates.
Journal of Finance, 58, 643-684.

7
Fama, E. F. And K. R. French, Forecasting Profitability and Earnings, Journal of Business 73
(2000), 161-175.

Geroski, Paul (2003). The evolution of new markets. Oxford University Press.

Jacobsen, R. 1988. "The Persistence of Abnormal Returns." Strategic Management Journal, 9:

415- 430.

McGahan, Anita and Michael Porter. 1997. How Much Does Industry Matter, Really?
Strategic Management Journal, 18: 15-30.

Van Reenen, John and Bloom, Nick (2007) Measuring and explaining management practices
across firms and countries. Quarterly journal of economics, 122 (4). pp. 1351-1408.

Wiggins, R. R. and T. W. Ruefli, Sustained Competitive Advantage: Temporal Dynamics and

the Incidence and Persistence of Superior Economic Performance, Organization Science, 13
(2002), 82-105.

8
4. Industry Analysis and Market Power

F.M. Scherer and David Ross, The Structure-Conduct-Performance Paradigm, (pp. 4-7 in
Industrial Market Structure and Economic Performance).

Richard Caves and Michael Porter, From Entry Barriers to Mobility Barriers, Quarterly
Journal of Economics, 91: 241-262 (1977)

Michael Porter, Note on the Structural Analysis of Industries, HBS 376-054, 1975. (Essentially
identical to Chapter 1 in Competitive Strategy, 1980).

Michael Porter, The Disposable Diaper Industry in 1974, Harvard Business School Case 9-
380-175 (with 1984 and 1990 updates), HBS Case Services, 1980.

Demsetz, H. (1973). Industry Structure, Market Rivalry, and Public Policy. Journal of Law and
Economics, 16(1): 1-9.

___________________

F.M. Scherer and David Ross, chapters 6, 7, and 8 in Industrial Market Structure and Economic
Performance, 3rd. ed.

Caves, R.E. (Mar 1980) Industrial organization, corporate strategy and structure, Journal of
Economic Literature, 18 (1), pp. 64-92.

9
5. The Resource Based View of the Firm

S.A. Lippman, R.P. Rumelt (1982), "Uncertain imitability: An analysis of interfirm differences
in efficiency under competition", Bell Journal of Economics, Vol. 13 pp.418 - 438.

Jay Barney, Strategic Factor Markets: Expectations, Luck and Business Strategy, Management
Science, 32: 1231-1241 (1986).
Jay Barney, Firm Resources and Sustained Competitive Advantage, Journal of Management, 17:
99-120 (1991).
I. Diericks and Karel Cool, Asset Stock Accumulation and Sustainability of Competitive
Advantage, Management Science, 35: 1504-1511 (1989), with comment by Jay Barney at 1511-
1513.
Peteraf, M.A. (1993). The Cornerstone of Competitive Advantage: A Resource-Based View.
Strategic Management Journal, 14(3): 179-192.

Sidney Winter. Four Rs of Profitability: Rents, Resources, Routines and Replication, in C.

Montgomery, ed., Resource-Based and Evolutionary Theories of the Firm, 147-178 (1995).
Alchian, Rent, in J. Eatwell, M. Milgate and P. Newman, eds, The New Palgrave: A
Dictionary of Economics, 141-143 (1987).
___________________
Margaret Peteraf and Jay Barney, Unraveling the Resource-Based Tangle, Managerial and
Decision Economics 24: 309-323 (2003).
Steven Lippman and Richard Rumelt, The Payments Perspective. Strategic Management
Journal 24: 923-947 (2003).
A. Brandenburger and H. Stuart, Value-based Business Strategy. Journal of Economics and
Management Strategy, 5: 5-24 (1996).
S. Lippman and R. Rumelt, A Bargaining Perspective on Resource Advantage. Strategic
Management Journal, 24: 1069-1086 (2003).
Philip Bromiley and Lee Fleming, The Resource-Based View of Strategy: A Behaviorist
Critique, in M. Augier and J. March, eds., The Economics of Choice, Change and Organization,
319-336 (2002).
Giovanni Gavetti and Daniel Levinthal, The Strategy Field from the Perspective of
Management Science: Divergent Strands and Possible Integration, Management Science 50:
1309-1318 (2004).

R. Priem and J. Butler (2001). Is the resource-based view a useful perspective for strategic
management research?. Academy of Management Journal, 26: 22-40.

MacDonald, G. and M. Ryall (2004). How do value creation and competition dynamics
determine whether a firm appropriates value? Management Science, 50: 1319-1333.

10
6. Evolutionary Perspectives on Strategy

Alchian, A. (1950): Uncertainty, Evolution and Economic Theory, Journal of Political

Economy, 58, 211221.

Mancke, R.B. (1974) Causes of interfirm profitability differences: a new interpretation of the
evidence, Quarterly Journal of Economics , 88: 181-193.

Nelson, R. R. and S. Winter (1995). Recent Evolutionary Theorizing About Economic Change,
Journal of Economic Literature, Vol 33, March, pp 87-112.

Arthur, B. 1990, Positive Feedbacks in the Economy, Scientific American, Vol. 262, No. 2,
February, pp. 92-97.

Salganik, Matthew J., Peter S. Dodds, and Duncan J. Watts. 2006. Experimental study of
inequality and unpredictability in an artificial cultural market. Science, 311:854-856.

Denrell (2004). Random walks and sustained competitive advantage. Management Science, Vol.
50 No. 7, pp. 922-934.

___________________

W. H. Starbuck, M. L. Barnett & P. Baumard. 2008. Payoffs and pitfalls of strategic learning.
Journal of Economic Behavior and Organization, 66(1): 7-21.

P Bertrand M, Mullainathan S. 2001, Are ceos rewarded for luck? the ones without principals
are. Quarterly Journal of Economics. 116: 901-932.

Powell, T. C, (2003). Varieties of competitive parity, Strategic Management Journal, 24 (1), 61-
86.

Jacobson, Robert. 1992. The Austrian School of Strategy. Academy of Management Review 17:
782-807.

Starbuck, W.H., Narayan Pant, P. (1990), 'Innocents in the forest: Forecasting and research
methods', Journal of Management, 16(2): 433-460.

Nassim Taleb, 2005. Fooled by Randomness: The Hidden Role of Chance in Life and the
Markets. Random House, New York.

Michael Cohen, Whats Different is Routine, Industrial and Corporate Change 15: 387-390
(2006).

11
7. Organization Learning

Linda Argote and Dennis Epple (1990), "Learning Curves in Manufacturing," Science, New
Series, Vol. 247, No. 4945. (Feb. 23, 1990), pp. 920-92.
Marcie Tyre and Wanda Orlikowski, Windows of Opportunity, Organization Science 5: 98-
118 (1994).
James March. 1991. Exploration and Exploitation in Organizational Learning, Organization
Science 2: 71-87 (1991).
Bruce Kogut and Udo Zander, Knowledge of the Firm, Combinative Capabilities and the
Replication of Technology, Organization Science, 3: 383-397 (1992).
Daniel Levinthal and James March, The Myopia of Learning, Strategic Management Journal,
14: 95-112 (1993).
Wesley Cohen and Daniel Levinthal, Absorptive Capacity: A New Perspective on Learning and
Innovation, Administrative Science Quarterly, 35: 128-152 (1990).
___________________

Edwin Hutchins and Tove Klausen, Distributed Cognition in an Airline Cockpit, in Y.

Engestrom and D. Middleton, eds. Cognition and Communication at Work: 15-34 (1996).

Barbara Levitt and James March, Organizational Learning, reprinted in M. Cohen and L.
Sproull, eds., Organizational Learning, Chapter 22 (1996, orig. pub. Annual Review of
Sociology 14 (1988).

Eric von Hippel and Marcie Tyre, How Learning by Doing is Done: Problem Identification in
Novel Process Equipment, Research Policy 24: 1-12 (1995).

Michael D. Cohen and Lee S. Sproul, Organizational Learning 1996), passsim, but especially
Chapters 1-5, 10, 15, 16, 20, 21.

Sidney Winter, Towards an Evolutionary Theory of Production, in K. Dopfer, ed., The

Evolutionary Foundation of Economics, 223-254 (2005).

Robert E. Cole, ed., Knowledge and the Firm, special issue of the California Management
Review, 1998, passim.

John Seely Brown and Paul Duguid, Organizational Learning and Communities-of- Practice:
Toward a Unified View of Working, Learning and Innovation, Organization Science, 2: 40-57
(1991).

Christina Fang, Jeho Lee and Melissa Schilling. 2010. Balancing Exploration and Exploitation
through Structural Design: The Isolation of Subgroups and Organization Learning. Organization
Science. 21(3), 625-642.

12
8. Technological Innovation

D. Teece (1986). Profiting from technological innovation: Implications for integration,

collaboration, licensing, and public policy. Research Policy, 15: 285-306.

Arthur, W. Brian (1989). Competing Technologies, Increasing Returns, and Lock-In by

Historical Events, Economic Journal, 97: 642-65.

P. Aghion et al (2005). Competition and innovation: An inverted U-relationship. Quarterly

Journal of Economics, 120: 701

M. Tushman and P. Anderson, Technological Discontinuities and Organizational Environments,

Administrative Science Quarterly 31: 439-465 (1986).

Rebecca Henderson and Kim Clark, Architectural Innovation: The Reconfiguration of Existing
Product Technologies and the Failure of Established Firms, Administrative Science Quarterly,
35: 9-30 (1990).

M. Tripsas, Unraveling the Process of Creative Destruction: Complementary Assets and Firm
Survival in the Typesetter Industry, Strategic Management Journal 18 (Summer Special Issue):
119-142 (1997).

Barabsi, A.-L. and R. Albert, (1999). Emergence of scaling in random networks, Science 286,
509512.

Merton, R. K. (1968). The Matthew Effect in Science: The reward and communication systems
of science are considered. Science 159, 56-63.

___________________

W. Abernathy and K. Clark (1985). Innovation: Mapping the winds of creative destruction.
Research Policy, 14: 3-23.

Clayton Christensen and Joseph Bower, Customer Power, Strategic Investment and the Failure
of Leading Firms, Strategic Management Journal 17: 197-218 (1996).

Giovanni Gavetti, Rebecca Henderson and Simona Giorgi, Kodak and the Digital Revolution
(A) and (B). Harvard Business School cases 9-705-448 and 9-704-489 (2004).

M.L. Tushman, P. Anderson and C. OReilly, Technology Cycles, Innovation Streams, and
Ambidextrous Organizations: Organization Renewal Through Innovation Streams and Strategic
Change, Introduction to Managing Strategic Innovation and Change: 3-23 (1997).

Cusumano, M.A., Mylonadis, Y. and Rosenbloom, R.S. (Spring 1992) Strategic manoeuvring
and mass-market dynamics: the triumph of VHS over Beta, Business History Review, 66 (1),
pp. 51-94.

13
9. Complexity, Imitation and Fit

H. Simon (1969). The architecture of complexity in The Sciences of the Artificial. Boston, MA:
MIT Press.

D. Levinthal (1997). Adaptation on rugged landscapes. Management Science, 43: 934-950.

P. Milgrom and J. Roberts. (1995). Complementarities and fit: Strategy, structure, and
organization change in manufacturing. Journal of Accounting and Economics, 19: 179-208.

Nicolaj Siggelkow, Change in the Presence of Fit: The Rise, the Fall, and the Renaissance of
Liz Claiborne. Academy of Management Journal 44: 838-857 (2001).

Jan Rivkin, Imitation of Complex Strategies, Management Science 46: 824-844 (2000).

___________________

Udo Zander and Bruce Kogut, Knowledge and the Speed of the Transfer and Imitation of
Organizational Capabilities: An Empirical Test, Organization Science 6: 76-92 (1995).

Giovanni Gavetti and Daniel Levinthal, Looking forward and looking backward: cognitive and
experiential search, Administrative Science Quarterly, 45: 113-137 (2000).

Jan Rivkin, Reproducing Knowledge: Replication Without Imitation at Moderate Complexity.

Organization Science 12: 274-293 (2001).

N. Siggelkow (2002). Evolution towards fit. Administrative Science Quarterly, 47: 125-19.

14
10. Corporate Strategy

D. Teece (1982). Towards an economic theory of the multi-product firm. Journal of

Economic Behavior and Organization, 3: 39-63.

Rumelt, R. 1982. Diversification strategy and profitability. Strategic Management Journal, 3,

359-369.

C. Montgomery (1994). Corporate diversification. Journal of Economic Perspectives, 8 (3):

163-78.

D. Teece, R. Rumelt, G. Dosi, and S. Winter (1994). Understanding corporate coherence.

Journal of Economic Behavior and Organization, 23: 1-30.

Barney JB. 1988. Returns to bidding firms in mergers and acquisitions: reconsidering the
relatedness hypothesis. Strategic Management Journal , Summer Special Issue 9: 71-78.

___________________

On Vertical Integration

O. Williamson (1979). Transaction cost economics: The governance of contractual relations,

Journal of Law and Economics, 22: 233-261.

Klein, B., Crawford, R.G., and Alchian, A.A. (1978). Vertical Integration, Appropriable Rents,
and the Competitive Contracting Process. Journal of Law and Economics, 21(2):297-326.

Joskow, P.L. (1988). Asset Specificity and the Structure of Vertical Relationships: Empirical
Evidence. Journal of Law, Economics, and Organization, 4(1): 95-117.

Nickerson, J.A., and B.S. Silverman, 2003, Why firms want to organize efficiently and what
keeps them from doing so: Inappropriate governance, performance, and adaptation in a
deregulated industry, Administrative Science Quarterly 48, 433465.

David RJ and S-K Han (2004), A Systematic Assessment of the Empirical Support for
Transaction Cost Economics, Strategic Management Journal, 25, 1: 39-58

Lafontaine, Francine, and Margaret Slade, 2007, Vertical integration and firm boundaries: The
evidence, Journal of Economic Literature 45, 629685.

On Horizontal Integration

Liebeskind, Julia P., 2000, Internal capital markets: Benefits, costs, and organizational
arrangements, Organization Science 11, 5876.

C. Montgomery and B. Wernerfelt (1988). Diversification, Ricardian rents and

15
Tobins q. Rand Journal of Economics, 19: 623-632.

Markides, C. (1995) Causes and consequences of corporate restructuring, in Thomas, H.,

O'Neal, D. and Kelly, J. (eds.) Strategic renaissance and business transformation, Wiley.

P. Berger and E. Ofek (1995). Diversifications effect on firm value. Journal of Financial
Economics, 37(1): 39-65.

Villalonga, Belen, 2004, Diversification discount or premium? New evidence from the Business
Information Tracking Series, Journal of Finance 59, 479506.

Chakrabarthi A, Signh K and Mahmoud I. (2007), Diversification and Performance from East
Asian Firms, Strategic Management Journal, 28, 1010-120

Bettis, R.A. and Prahalad, C.K. (Jan 1995) The dominant logic: retrospective and extension,
Strategic Management Journal, 16 (1), pp. 5-14.

Shleifer, A. and Vishny, R.W. (Winter 1991) Takeovers in the 60s and the 80s: evidence and
implications, Strategic Management Journal, 12, Special Issue, pp. 51-59.

On Mergers and Acquisitions

Hayward MLA, Hambrick DC. 1997. Explaining the premiums paid for large acquisitions:
evidence of CEO hubris. Administrative Science Quarterly 42(1): 103-127.

J. Stein (1997). Internal capital markets and the competition for corporate resources. Journal
of Finance, 52: 111-133.

Wulf, Julie, 2004, Do CEOs in Mergers Trade Power for Premium? Evidence from Mergers of
Equals, Journal of Law, Economics, and Organization 20, 60101.

Capron L, Pistre N. 2002. When do acquirers earn abnormal returns? Strategic Management
Journal 23(9): 781-794.

16
11. Behavioral Strategy

Tversky, A. and Kahneman, D. (1974) Judgment under uncertainty: heuristics and biases.
Science 185 (4157), 1124-1131.

Edward Zajac, Max Bazerman. 1991. Blind spots in industry and competitor analysis:
implications of interfirm (mis)perceptions for strategic decisions. Academy of Management
Review 16(1): 37-56.

Colin Camerer and Daniel Lovallo, Overconfidence and excess entry: an experimental approach,
American Economic Review 89 (1999), pp. 306318.

John Sterman, Rebecca Henderson, et al. (2007). "Getting Big Too Fast: Strategic Dynamics
with Increasing Returns and Bounded Rationality." Management Science 53(4): 683-696.

Denrell, J. and C. Fang (2010). Predicting the next big thing: Success as a signal of poor
judgment. Management Science, 56(10), 1653-1667. 2010.

___________________

Kahneman, D., & Lovallo, D. (1993). Timid choices and bold forecasts: A cognitive perspective
on risk-taking. Management Science, 39, 17-31.

Vincent Crawford and Nagore Iriberri (2007) "Fatal Attraction: Salience, Naivete, and
Sophistication in Experimental Hide-and-Seek Games" (with ), American Economic Review 97
(December 2007), 1731-1750.

Moore, D. A., Oesch, J. M., & Zietsma, C. (2007). What competition? Myopic self focus in
market entry decisions. Organization Science, 18(3), 440-454.

Cockburn IM, Henderson RM, Stern S. 2000. Untangling the Origins of Competitive Advantage.
Strategic Management Journal 21 (10/11), Special Issue: The Evolution of Firm Capabilities):
1123-1145.

Bromiley, P. and S. James-Wade (2003). Putting Rational Blinders Behind Us: Behavioral
Understandings of Finance and Strategic Management. Long Range Planning, 36: 3748.

17
12. Rules for Riches?

Cockburn IM, Henderson RM, Stern S. 2000. Untangling the Origins of Competitive Advantage.
Strategic Management Journal 21 (10/11), Special Issue: The Evolution of Firm Capabilities):
1123-1145.

Denrell, J., C. Fang, and S. Winter (2003). The Economics of Strategic Opportunity. Strategic
Management Journal, 24 (10): 977-990.

Shleifer, Andrei & Vishny, Robert W, 1997. "The Limits of Arbitrage," Journal of Finance, vol.
52(1), pages 35-55.

Bromiley, P. and C. Papenhausen (2003) 'Assumptions of Rationality and Equilibrium in

Strategy Research. 1(4): 413-437.

Michelle Clayman, 1987, In Search of Excellence: The Investors Viewpoint, Financial Analyst
Journal, May-June, pp. 54-63.

Denrell, J. (2005). Should We Be Impressed with High Performance? Journal of Management

Inquiry, 14 (3), 292-298.
___________________

Jacobson, Robert. 1992. The Austrian School of Strategy. Academy of Management Review 17:
782-807.

Donald McCloskey, 1994. An Economic Uncertainty Principle, Scientific American,

November, p. 107.

Mosakowski, E. (1998) Managerial Prescriptions under the Resource-Based View of Strategy:

the Example of Motivational Techniques, Strategic Management Journal, 19 (12): 116983.

Schoemaker PJH. 1990. Strategy, complexity and economic rent. Management Science 36(10):
1178-1192.

Shleifer, Andrei (2000). Inefficient Markets: An Introduction to Behavioral Finance. Oxford,

UK: Oxford University Press.

T. Hens, P.J. Herings and A. Predtetchinskii, Limits to Arbitrage when Market Participation is
Restricted, Journal of Mathematical Economics, 45 issue
4-5 (2006), 556-564.

Bromiley P. 2005. The Behavioral Foundations of Strategic Management. Blackwell Publishing:

Oxford, UK.

Ryall, Michael (2003) Subjective Rationality, Self-Confirming Equilibrium and Corporate

Strategy, Management Science. 49: 936-49.

18
13. Strategy Process and Practice

Cyert RM, March JG. A Behavioral Theory of the Firm (1963) Englewood Cliffs, NJ: Prentice-
Hall. Chapters 2, 3, 5, and 6.

Quinn, J.B. 1978. Strategic change: Logical incrementalism. Sloan Management Review, 20 (1):
7-21.

Robert Burgelman, Fading Memories: A Process Theory of Strategic Business Exit in Dynamic
Environments, Administrative Science Quarterly 39: 24-56 (1994).

Gavetti, G., and Jan W. Rivkin. "On the Origin of Strategy: Action and Cognition Over Time."
Organization Science 18, no. 3 (May - June 2007).

Whittington, R. (2006) Completing the practice turn in strategy research Organization Studies,
27 (5), pp. 613-634

Jarzabkowski, P. and J. Balogun (2009). The Practice and Process of Delivering Integration
through Strategic Planning, Journal of Management Studies, August.

___________________

Mintzberg, H., & Waters, J.A. 1985. Of strategies, deliberate and emergent. Strategic
Management Journal, 6: 257-72.

Pettigrew, A.M. (1992) 'The Character and Significance of Strategy Process Research', Strategic
Management Journal, 13(winter special issue): 5-16.

Langley, A. 1989. In search of rationality: the purposes behind the use of formal analysis in
organisations. Administrative Science Ouarterly, 34: 598-631.

Jrme Barthlemy, 2006, The Experimental Roots of Revolutionary Vision, Sloan

Management Review, 48 (1), pp. 81-84.

Tripsas M, Gavetti G. 2000. Capabilities, cognition, and inertia: Evidence from digital imaging.
Strategic Management Journal 21(10/11): 1147-1161.

Hutzschenheuter T and Kleindienst I. (2006), Strategy Process Research: what have we learned
and what is still to be explored?, Journal of Management, 32, 673-720.

19