Introduction – Behavioral Strategy: A Quick Account

The origins of strategy are inherently behavioral. Some point to the publication of Simon’s Administrative Behavior in 1947 as such an origin point. Others point to the works of Andrews and his colleagues that defined business policy, and later strategy, as “the study of the functions and responsibilities of general management and the problems which affect the character and success of the total enterprise” from the viewpoint “of the chief executive or general manager, whose primary responsibility is the enterprise as a whole” (Learned, Christensen, Andrews, & Guth, 1965, p. 3).

The origins of strategy have also been undeniably organizational: Simon’s Administrative Behavior (1947), March and Simon’s Organizations (1958), and Cyert and March’s A Behavioral Theory of the Firm (1963) focused attention on the study of organizational policies, decisions, and structures as the contexts that shape how decisions are made. In one account of the field’s history, the behavioral roots of strategic management were set aside in favor of adopting economic theories to legitimate the fledgling field, provide its baseline equilibrium assumptions, and guide the adoption of sophisticated econometrics methods (Rumelt, Schendel, & Teece, 1991). Michael Porter’s reorientation of the industrial-organization economics research toward understanding the factors that limit competition, along with the research on related diversification in the 1980s, provided the theoretical foundation of business-level and corporate strategy.