A Protocol Mechanism for Solving the “Right” Strategic Problem

Solving the wrong strategic problem, sometimes referred to as a Type III error, is a common and costly occurrence in organizations. Unfortunately, little research offers theory-based mechanisms for reducing the likelihood of Type III errors, which is a canonical strategic management problem. In response, this article develops a novel theoretical framework drawing on multiple disciplines to hypothesize when Type III errors are likely to occur in strategic contexts. It develops three criteria derived from our hypotheses to normatively design a protocol mechanism to reduce the likelihood of Type III errors. We then offer a protocol that satisfies these conditions and provide a case study to illuminate how to employ the protocol as well as illustrate its potential for reducing Type III errors. In sum, this article offers the first theoretical assessment of individual-level impediments to “solving the right strategic problem” as well as a mechanism and associated conditions for future theoretical and empirical research.