Strategy making in novel and complex worlds: the power of analogy

摘要: We examine how firms discover effective competitive positions in worlds that are both novel and complex. In such settings, neither rational deduction nor local search is likely to lead a firm successful array of choices. Analogical reasoning, however, may be helpful, allowing managers transfer useful wisdom from similar settings they have experienced the past. From long list observable industry characteristics, analogizing choose subset believe distinguishes industries different ones. Faced with industry, seek familiar which matches one along characteristics. They matching high-level policies guide industry. We embody this conceptualization analogy an agent-based simulation model. The model allows us impact managerial structural characteristics on effectiveness analogical reasoning. With respect we find, not surprisingly, reasoning especially powerful when pay attention truly distinguish More find marginal returns depth experience diminish rapidly while greater breadth steadily improves performance. Both only accurately understands what also following too orthodox manner—strictly constraining efforts suggests—can dysfunctional. regard well-informed particularly interactions among decisions cross policy boundaries so underlying decision problem easily decomposed. Overall, results shed light form prevalent practicing strategists yet largely absent scholarly analysis strategy. Copyright © 2005 John Wiley & Sons, Ltd.