Behavioral Foundation

Topics: Decision theory, Decision making, Management Pages: 5 (1462 words) Published: December 12, 2012
The Behavioral Foundations of Strategic Management
Philip Bromiley

This essay stated strategy management has developed in many ways including industrial organization economics, resource-based view, and population ecology. It defines the objectives and what good strategy in strategic management research. Thus, it offers an initial discussion of the difficulties of conventional economic analysis and the consequent need for behavioral assumptions. 1. An explanation offers a mechanism by which the conditions interact to determine the outcomes of interest. 2. Rigor in Strategy Research. Theory must be logically consistent and tie clearly with empirical work. 3. Strategic management should adopt a behavioral perspective. 4. Rationality and Bounded Rationality are basics of a Behavioral Approach. 5. Irrational behavior is unpredictable

6. Empirical results reject the rationality assumption.
7. However, an important distinction between behavioral and economic approaches comes in the treatment of assumptions. 8. “No rules for riches” comes directly from assumptions of rationality and equilibrium. 9. Overall, this essay has shown research in strategic management fit closely with behavioral foundations. 10. From a behavioral view, the methodological implications of accepting the performance of strategic management conclusions. The opinion of the each chapters

1. behavioral position and contrast it to other positions in the literature Management is diversify and flexible subject of new administrative period. Management conform a standard method and system in all the time. But present universe is always altering. New opportunities and problems are occurring daily. And olden management strategy cannot adapt with the new conditions and new environment. Management to adapt with new situations and environment must change its strategy and policy; this is known as strategic management. Strategic management is one of subjects under discussion and increasingly attractive fields of development management. Strategic management is a systematic approach to major and increasingly important responsibility of general management to position and relate the organization to its environment in a way which will ensure its continued success and make it secure from surprises. Learned, Christensen, Andrews & Guth (1965) show that the discipline of strategic management has evolved over 40 years ago. Strategic behavior is Conscious behavior arising among a small number of competitors or players, in a situation where all are aware of their conflicting interests and interdependence of their decisions. Strategic behavior is a set of activities that organizations take to influence the offices environment in order to improve their position in the administrations.

2. provides the basics of a behavioral approach to strategic management The aim of this chapter is to explore the link between decision making and organizational performance. Study find out that employee diverse decision behaviors have different impacts on organizational performance. Results of the current study are in line with the finding made by Amason (1996) and Rehaman (2000) that management decisions influence organizational performance. Present research findings conclude that employee rational, dependent and spontaneous decision making style have positive impact on organizational performance where as avoidant decision making style have weak negative impact on organizational performance. In sequence with the previous literature findings that rational decision making have an impact on organizational performance (Irene, Abdul and Rasheed, 1997). Strategic decision makings and managers cannot be separated. They go inline together. Moreover with the organization’s concern on the firm performance, strategic decision makings are considered crucial to managers that manage the organization. They have to make sound decisions in order to ensure the organization that they...
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