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Thinking strategically about thinking strategically: the computational structure and dynamics of managerial problem selection and formulation

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  • Mihnea Moldoveanu

Abstract

A new model of managerial problem formulation is introduced and developed to answer the question: ‘What kinds of problems do strategic managers engage in solving and why?’ The article proposes that a key decision metric for choosing among alternative problem statements is the computational complexity of the solution algorithm of alternative statements. Managerial problem statements are grouped into two classes on the basis of their computational complexity: P‐type problems (canonically easy ones) and NP‐type problems (hard ones). The new model of managerial cognitive choice posits that managers prefer to engage with and solve P‐type problems over solving NP‐type problems. The model explains common patterns of managerial reasoning and decision making, including many documented ‘biases’ and simplifying heuristics, and points the way to new effects and novel empirical investigations of problem solving‐oriented thinking in strategic management and types of generic strategies, driven by predictions about the kinds of market‐ and industry‐level changes that managers will or will not respond to. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Mihnea Moldoveanu, 2009. "Thinking strategically about thinking strategically: the computational structure and dynamics of managerial problem selection and formulation," Strategic Management Journal, Wiley Blackwell, vol. 30(7), pages 737-763, July.
    • Handle: RePEc:bla:stratm:v:30:y:2009:i:7:p:737-763
    DOI: 10.1002/smj.757
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    Cited by:

    1. Nicodemus M. Mutinda & James M. Kilika, 2019. "TMT Cognitive Capability and Organizational Outcomes: A Theoretical Review," International Business Research, Canadian Center of Science and Education, vol. 12(8), pages 31-52, August.
    2. Ahmed Al-Qatamin & Ayat Esam, 2018. "Effect of Strategic Thinking Skills on Dimensions of Competitive Advantage: Empirical Evidence from Jordan," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(5), pages 127-127, March.
    3. Nikolaeva, Ralitza, 2014. "Interorganizational imitation heuristics arising from cognitive frames," Journal of Business Research, Elsevier, vol. 67(8), pages 1758-1765.
    4. Loock, Moritz & Hinnen, Gieri, 2015. "Heuristics in organizations: A review and a research agenda," Journal of Business Research, Elsevier, vol. 68(9), pages 2027-2036.
    5. Jackson Nickerson & Nicholas Argyres, 2018. "Strategizing Before Strategic Decision Making," Strategy Science, INFORMS, vol. 3(4), pages 592-605, December.
    6. Driouchi, Tarik & Trigeorgis, Lenos & So, Raymond H.Y., 2020. "Individual antecedents of real options appraisal: The role of national culture and ambiguity," European Journal of Operational Research, Elsevier, vol. 286(3), pages 1018-1032.

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