Abstract for: Does your strategy withstand the test of time? A dynamic theory-based view of strategy
Scholars and practitioners have been consistently formulating strategy problems as a structured pursuit of opportunities, market positions, and underpriced assets in a massive search space. In contrast, a theory-based view of strategy claims that a “great strategy” is the result of a unique firm-level theory about which problems to solve and how to govern the value creation process. To be complete and comprehensive, a theory-based view must be able to determine the dynamic mechanisms that enable a theory to be formulated. Therefore, we argue that an explicit dynamic theory is required for strategy development to account for its full complexity and ever-changing environment. Our argument is built regarding the design and SD literature. From that starting point, we apply SD logic to develop an initial demonstration of a dynamic theory-based view of strategy with a central focus on providing accessible means for decision-makers to experiment with their tentative theories. With a systemic approach to strategy development that explicitly accounts for behavior over time and an endogenous explanation of performance, decision-makers can better address the challenges and uncertainties posed by turbulent environments, boost their learning process and experiment with their mental models before readily moving to action.