A day of an academic:

An intimate visit to the business and joy of:

a) developing future research ideas about strategy and dialectics
b) developing future scholars and professionals

Moshe Farjoun
Background
•“The behavioral foundations of strategy” - Doctoral seminar at York University,
Schulich School of Business, Fall 2019.
• Instructor also teaches core and advanced strategy courses for undergraduate
and MBA students).
•December 4, 2019, 8:16- 8:42 AM.
• Beginning of final course session.
• Followed by class discussion.
•Attending students:
• Qasim Saddique
• Nudrat Mahmood
• Xuan Ma.
Background
•While currently called “The behavioral foundations of strategy” a more apt terms to
describe its content would be “the social science of strategy” or “strategy and social
theory’.
•Course’s book materials mentioned in the presentation:
• Allison, G. T. and Zelikow, P. 1999. The essence of decision: Explaining the Cuban Missile Crisis. 2nd
edition. Addison Wesley – Longman, New York.
• Jackson, W. A. 2019. Markets: Perspectives from economic and social theory. Routledge: London.
• Nalebuff, B., & Brandenburger, A. (1996). Coopetition
• Pisano, G. P. (2019). Creative construction: The DNA of sustained innovation. PublicAffairs.
• Rumelt, R. 2011. Good strategy Bad strategy: the difference and why it matters. Deckle edge.
• Veblen T. The theory of business enterprise. 1904.

• Models mentioned: Scenario analysis, value net (coopetition), Porter’s five forces,
resource-based view, Alisson’s decision-making models, Jackson on heterodox
economics models.
Blackboard layout at the end of the presentation
This presentation includes
animated materials. For best
results use “slideshow”

Original, unedited recording is available on the last slide:

26:38 minutes total
0. Morning coffee routine
December 4, 2019
• Coffeeshop routine before doctoral class. I answer some emails:
• Student 1 (MBA): interested in independent study on scenario
analysis. Work for BlackBerry (good – I need some connections there
for my research project)
• Student 2 (MBA): wanted some recommended books in strategy ( I
offered “good and bad strategy”, “coopetition”, “creative construction”)
• Googled “coopetition” to find most recent edition and found a nice brief
summary
• On the background of this:
• My research interest in dialectics
• Class assignment for one of the students: to read Veblen’s 1904 – a first
modern business strategy book
• Things start getting connected in a nice way…
Independent Coffeeshop
study for routine
MBA on
scenarios

Scenario
Dialectics
analysis

Coopetition Veblen

Research on Doctoral
BlackBerry seminar
December 4, 2019
• Usually when I have these kinds of half-baked
connections, I write them down. I have folders on
my computer for different projects and so forth.
Later, I try to digest them, connect them with other
stuff, and at the end of the day (or years later) I
may end up writing something about it.
1. On scenarios
1. On scenarios
• Expanding the horizon from “one official future for an industry
or a company
• Identifying certain and uncertain developments through
research
• Extracting “critical uncertainties”- usually orthogonal,
oppositional developments
• Building a scenario matrix by using critical uncertainties as axes.
Potentially adding a fifth “wild card” scenario. Considering
“certainties” or relative stabilities within each scenario.
• Designing strategies that are effective across all envisioned
scenarios, balancing commitment and flexibility in the process
 Industry scenarios as a dialectical system
Critical uncertainties: A
A = Autonomous vs.
Regular (A-)

B = Hydrogen vs. V
Electric energy I II
source (B-)

B B-

III IV

A-
Certainty-
uncertainty
2. Coopetition
• Stands for cooperation and competition combined.
• Developed by Nalebuff and Brandenburger
• A value net model, extending Porter’s 5 forces analysis to include
cooperation.
• Has some overlap with the original forces
• But highlight firms as opposed to industries
• Focuses on both increasing the pie and dividing it
• Includes complements
• Extends to both product and resource spaces
• Highlights (strategic) interactions as contrasted with industry
structure
• Particularly useful for situational analysis (as contrasted with
historical)
Like scenarios, coopetition can also be viewed as a dialectical system, grounded
in oppositions (e.g., competitors and complements, resources and products)

Customers

Product
space

Competitors The Firm Complements

Resource
space

Suppliers

Interaction, situational analysis. NOT

industry structure
Enriching the coopetition (value
net) model:
• Combining situational analysis with history, process and evolution:
• Viewing forces or actors (e.g., customers) as coevolving
• Viewing relations as evolving (e.g., from cooperating to competing)
• Considering both adapting and shaping
• Opening the “firm” black box
• Moving from rational unitary actor model (Alisson model I) to better
include organization, decision processes, routines and resources (e.g., the
resource-based view)
• Combining resources (traits) with interactions to explain firm
success:
• Both what the firm has and what it does.
• Resources (cumulated, or ‘stocks) arise from interactions ( or ‘flows’ and
guide them in turn.
3. Veblen’s 1904 theory of
industry and strategy
• Unlike the standard view of industry as a
competitive system, Veblen highlights industry as
first and foremost a cooperative system for creating
value.
• In his view, the capitalist appear as opposing to
thus base line. His or her main motivation is to
profit and this is done through controlling key parts
of the coordinated value creating process,
disruption and innovation.
• Competitive strategy is therefore disruptive
4. Jackson (2019) on the realism
of economic models
• Most economic models, including the resource-based
view, start from the neoclassical model
• They assume perfect competition, rationality, equilibrium.
• For sure, most models highlight deviations from the
neoclassical model, highlighting those allowing for
competitive advantage and superior profits to exist.
• Questioning the ideal neoclassical model base line,
Jackson and heterodox economics offer to start with
reality, for instance, rather than start with harmonious
system or a conflicted one, accept the coexistence of both
contradictory tendencies.
4. Jackson (2019) on the realism
of economic models
• As we discussed, newer and more realistic models will better
attend to firms and industries as dialectical or paradoxical
systems premised on:
• Cooperation and competition
• Certainty and stability but also uncertainty, change and
disequilibrium
• Resources and products
• Value creation and value capture
• What firms have and what firms do
• Furthermore, new promising models can try to
• Better integrate the internal (game theory’s black box) and the
external
• Combine situational and historical analysis
Original recording available below
Thank you