With this research, we contribute to the study of ambiguity by analyzing how it can be handled in... more With this research, we contribute to the study of ambiguity by analyzing how it can be handled in a rational, objective manner across the main strategic decision-making contexts that entrepreneurs and organizations face. Differentiating from most previous managerial and entrepreneurial studies, we conduct the analysis from a mathematical rather than an experimental approach, doing so by considering variants of a robust, yet simple, decision problem. Significantly, the analysis offers a simple model and approach to consider as benchmarks when assessing the impact of an ambiguity level of information against cases where more precise information is available. We identify the many costs of ambiguity, including direct absolute and relative maximum harms, as well as indirect possible penalties. We discuss the strategic entrepreneurial and managerial implications.
Teece asserts that competition policy is so outdated that it now significantly degrades the abili... more Teece asserts that competition policy is so outdated that it now significantly degrades the ability of Big Tech firms to bring socially beneficial innovations to market. He suggests that strategic management research is essential in the struggle to update such policies. We counter that none of these assertions are accurate, let alone backed by evidence. While the larger goal of improving laws and policies through scientific research is a worthy one, the specific focus on doing so to aid a set of powerful firms that have allegedly caused—directly or indirectly—great societal damage is quite unappealing. To balance his pro-Big Tech perspective, we provide logical and theory-based arguments and evidence that indicates Big Tech has often been bad for innovation and society while their regulation has been good, and that more oversight—specifically tailored to digital platforms—would be better. We then offer three alternative paths for us, as management scholars, to take that leverage our...
makes several claims in defense of effectuation, as well as describes several ways forward in ent... more makes several claims in defense of effectuation, as well as describes several ways forward in entrepreneurship-and process-related theorizing. We respond in a manner consistent with the traditional perspective in management theorizing that "good theory is practical" (Lewin, 1945), where "theory is theory" (Simon, 1967; Van de Ven, 1989) based on our discipline's collective commitment to knowledge production (Suddaby, 2014). In fact, we respond in the tradition of scientific theory-its building, its critique, and its defense. Leveraging the logic behind that tradition, we thus refute every point contained in RSDW's, RFC's, GCM's, and GG's commentaries and attempt to build on what is common to all theory while celebrating what is valuable in the diversity of theorizing (i.e., in the ways we produce theory). The 3E framework applies to all proposed theories that claim to be scientific, including those based in pragmatism and those based on a process. The evaluation of effectuation in Arend, Sarooghi, and Burkemper (2015, henceforth, "ASB") is fair, objective, scientific, and comprehensive; most definitely considers the practical implications, human actions, and dynamic system states of its targets; and accommodates the features of process research. None of the four Dialogue commentaries on ASB offers any actual evidence otherwise but, instead, relies on false implications. We respond to each commentary, separately and in relevant groupings, below. In response to the points made by RSDW, we reply as follows: The six assumptions in ASB emerge from RSDW's papers (often quoted in ASB), not from the 3E framework, and, thus, simply remain true. The ASB description of effectuation, including its logic, assumptions, paths, 1 and states, all emerge from RSDW's papers and are accurately construed; for example, contingencies do affect the process, and are not depicted as paths. The effectuation research reviewed in ASB is fair, accurate, complete, standard (e.g., in the tradition of Short, Ketchen, Shook, & Ireland, 2010, and others), and covers as wide a spectrum as the standard and explicit We note several inconsistencies with RSDW's counterpoints-for example, Sarasvathy (2001) refuted her own 1 Proposition 1 and supported ASB's assumption #6 in her Propositions 2 and 3, explicitly linking effectuation with success, and we further note that it was expert-read successful-entrepreneurs who were supposed to be the basis for effectuation theory. Also, note that not only does that approach appear to sample on the dependent variable, but it also appears to lead to the same false optimism described in Hirschman's (1967) "Benevolent Hiding Hand." ASB's assumption #1 is not about a priori personality traits; rather, it concerns the abilities that RSDW state their entrepreneurs possessed, although such abilities appear only ex post (which poses another problem for effectuation theory, but not for the 3E framework).
This chapter sums up the preceding analysis, striking a balance between the fundamental reality t... more This chapter sums up the preceding analysis, striking a balance between the fundamental reality that evil can never be eliminated and the hope that good can emerge from its study and the experience of it. Several directions for future research are suggested to address unanswered questions and to open up investigative work in relevant, related fields like biology.
This chapter describes the location—in terms of the characteristics of the contextual ‘system inv... more This chapter describes the location—in terms of the characteristics of the contextual ‘system involved—in which the phenomenon is most likely to occur. Further aspects of the ‘bad barrel’ explanation are analyzed. Transactional oversight is analyzed for where flaws and gaps occur. An analysis of why such systems are surprisingly resistant to competitive pressures is provided.
The creation school of opportunity formation is a relatively new partial theory of entrepreneursh... more The creation school of opportunity formation is a relatively new partial theory of entrepreneurship built upon a relatively new approach to theorizing. Given their significant respective impacts, we critically evaluate both that school and that approach to better understand their respective values to theorizing. We apply a comprehensive, critical framework to evaluate the creation school. We determine that it is not yet a theory, but that it raises several important theoretical questions, from the origins of valuable heterogeneity to which meta-heuristics should be assumed and to what types of uncertainty are involved in entrepreneurial opportunities. We then describe its comparison-based approach for theorizing, delineating it from similar approaches that also contrast against the given benchmark ideas in a field, to determine its benefits and costs to advancing the modeling of phenomena. We determine that this new approach differs from problematization and constrastivity; instead ...
The technological improvements modeled for Cournot competition have primarily focused on producti... more The technological improvements modeled for Cournot competition have primarily focused on production cost reductions and scope effects. We consider a case where the technology improves the ability to affect the production capacity constraints instead. We find that although such technological progress entails public benefits in the form of greater consumer surplus and social welfare, it is likely to have limited and even sometimes harmful private effects (e.g., to firm profits). We formally model this technological improvement possibility through the relevant variants of oligopolies and rival technological asymmetries. We describe and discuss the strategic implications for managers and policy-makers considering investing and exploiting such capacity-adjusting technologies. We also flesh out the many core areas for future work to follow up on in our initial unique results.
We propose a partial theory explaining the processing of opportunities by individuals in organiza... more We propose a partial theory explaining the processing of opportunities by individuals in organizations, specifically for opportunities with both commercial and moral significance (measured as intensities). The goal of such theorizing is to identify and analyze the range of interactions that the ethical and economic impacts of an opportunity can have so that managers can make better decisions on their exploitation and modification. We explain why and how there is variance in the processing of the ideas behind such opportunities as caused by their moral and commercial intensities. We explain the likely interactions between those two intensities, and when they occur and what can result. Doing so complements work in social entrepreneurship and corporate social responsibility by filling the gaps of the possible combinations of economic and ethical interactions. We provide these explanations by leveraging a precedent model that had adapted a standard knowledge-processing method to ethical...
The author presents suggestions for the development of social entrepreneurship theories while com... more The author presents suggestions for the development of social entrepreneurship theories while commenting on the article "Venturing for Others With Heart and Head: How Compassion Encourages Social Entrepreneurship," by T. Miller, M. Grimes, J. McMullen, and T. Vogus, published in the same issue of the journal. Topics include the motivations of entrepreneurship and potential challenges in using emotions as research variables.
In this exploratory study, we challenge real decision makers to make choices in strategic games i... more In this exploratory study, we challenge real decision makers to make choices in strategic games involving ambiguity, and to rationalize those choices. Such games are unique because they are not optimizable; however, the challenge such decisions represent—making choices over irreversible resource commitments in a competitive context and without complete information—is only growing in frequency in our modern business context. As such, our goal is to improve our understanding of real strategic decision making facing irreducible uncertainty, and then to identify ways to improve the outcomes. The challenge is that there are no theoretical solutions for these problems. (While such work has offered solutions, those have always involved watered-down problems—in terms of a lack of true uncertainty or a lack of true optimization). Thus, we approach the challenge from an experimental methodology as one alternative path toward improving outcomes. We do so by considering the influence of decisio...
NK models are agent-based simulations of market evolution generated through new entry and firm in... more NK models are agent-based simulations of market evolution generated through new entry and firm innovation, and are often focused on better understanding complex interdependencies in organizational phenomena. We provide a counterpoint to the mostly optimistic descriptions of the advantages and of the requirements for these fitness-landscape-based analyses. We do so by offering a comprehensive list of limitations of that modelling technique as well as a critical analysis of two recent applications of the NK model—one of a theory-testing application and one of a theory-building application. Our analysis reveals that when care is not taken to capture the essential parts of a phenomenon, the NK approach may be unnecessary at best, and misleading at worst. We discuss the implications of these analyses and update past suggestions for future uses of NK simulations in organizational research.
This chapter addresses the question involving the motivations of the relevant parties. Besides 'g... more This chapter addresses the question involving the motivations of the relevant parties. Besides 'greed', even more 'dangerous' explanations are considered, from culture, to shadenfreunde, to conspiracy.
We apply data from two related surveys to an exploratory study centred on 'what is the value&... more We apply data from two related surveys to an exploratory study centred on 'what is the value' that academic theory creates for its main stakeholders. We begin to address questions of whether and how and to whom we, as strategy researchers, add new value through our published theoretical propositions. Our preliminary results reveal that the majority of our top-tier theoretical published causal relationships are obvious to business school students. That said, we provide several paths for increasing our added and appropriable value, including an identification of the audiences that need it most.
We may take for granted that the business school context promotes and rewards ethical research, t... more We may take for granted that the business school context promotes and rewards ethical research, teaching, and service. I provide an alternative perspective, describing how the context, especially at midlevel tier schools, can offer the opportunity, motivation, and rationalization for significant (in depth and breadth) unethical monetization schemes. I list such schemes, describe possible solutions, and appeal to those handling oversight and misdeeds to act.
We revisit the assertion that entrepreneurs are uniquely characterized in their ways of thinking;... more We revisit the assertion that entrepreneurs are uniquely characterized in their ways of thinking; specifically being relatively more prone to the overconfidence bias and the representativeness heuristic in their decision‐making. We replicate an earlier seminal study in entrepreneurial cognition, with a wider and more current survey. We then extend that analysis by investigating whether such “different thinking” leads to different (i.e., less rational) choices and different (i.e., worse) firm performance. Given the expected differences, we also investigate whether there exist other factors that affect the use of such biases and heuristics, to control their effects on focal outcomes.
We propose a new theory of the firm based on the premise that ‘the firm’ characterizes a factor-i... more We propose a new theory of the firm based on the premise that ‘the firm’ characterizes a factor-integrative form of doing business that is often the most effective and efficient structure for doing well by doing bad. We define the terms and requirements involved for such a theory, and fulfill those requirements by explaining what it is ‘to do bad’, and why and when the firm form is especially fitted to that. We do so by building upon basic premises about ‘bad-ness’ and by leveraging the logic of market failures. From this base, we argue a new reason for the firm form to exist and yet be limited in its growth. This leads to six related propositions regarding the relationships between ‘bad’ firms, tolerant contexts and realized social harms. We discuss how to test the ideas, and what the implications are for research on the firm, strategy and entrepreneurship.
Currently, there is no satisfying answer to how cooperation arises rationally in a single-play pr... more Currently, there is no satisfying answer to how cooperation arises rationally in a single-play prisoner’s dilemma game with complete information. When player types are known, as well as payoffs and actions, economic analysis through payoff-optimizing computation does not provide a clear path for cooperation. We propose a new form of game–the ‘expected’ game–and illustrate its implications for theory and practice based on the prisoner’s dilemma example. We prove that cooperation can be a rational choice for players in reality in such games defined by a weighted set of payoffs of two or more different reference games.
With this research, we contribute to the study of ambiguity by analyzing how it can be handled in... more With this research, we contribute to the study of ambiguity by analyzing how it can be handled in a rational, objective manner across the main strategic decision-making contexts that entrepreneurs and organizations face. Differentiating from most previous managerial and entrepreneurial studies, we conduct the analysis from a mathematical rather than an experimental approach, doing so by considering variants of a robust, yet simple, decision problem. Significantly, the analysis offers a simple model and approach to consider as benchmarks when assessing the impact of an ambiguity level of information against cases where more precise information is available. We identify the many costs of ambiguity, including direct absolute and relative maximum harms, as well as indirect possible penalties. We discuss the strategic entrepreneurial and managerial implications.
Teece asserts that competition policy is so outdated that it now significantly degrades the abili... more Teece asserts that competition policy is so outdated that it now significantly degrades the ability of Big Tech firms to bring socially beneficial innovations to market. He suggests that strategic management research is essential in the struggle to update such policies. We counter that none of these assertions are accurate, let alone backed by evidence. While the larger goal of improving laws and policies through scientific research is a worthy one, the specific focus on doing so to aid a set of powerful firms that have allegedly caused—directly or indirectly—great societal damage is quite unappealing. To balance his pro-Big Tech perspective, we provide logical and theory-based arguments and evidence that indicates Big Tech has often been bad for innovation and society while their regulation has been good, and that more oversight—specifically tailored to digital platforms—would be better. We then offer three alternative paths for us, as management scholars, to take that leverage our...
makes several claims in defense of effectuation, as well as describes several ways forward in ent... more makes several claims in defense of effectuation, as well as describes several ways forward in entrepreneurship-and process-related theorizing. We respond in a manner consistent with the traditional perspective in management theorizing that "good theory is practical" (Lewin, 1945), where "theory is theory" (Simon, 1967; Van de Ven, 1989) based on our discipline's collective commitment to knowledge production (Suddaby, 2014). In fact, we respond in the tradition of scientific theory-its building, its critique, and its defense. Leveraging the logic behind that tradition, we thus refute every point contained in RSDW's, RFC's, GCM's, and GG's commentaries and attempt to build on what is common to all theory while celebrating what is valuable in the diversity of theorizing (i.e., in the ways we produce theory). The 3E framework applies to all proposed theories that claim to be scientific, including those based in pragmatism and those based on a process. The evaluation of effectuation in Arend, Sarooghi, and Burkemper (2015, henceforth, "ASB") is fair, objective, scientific, and comprehensive; most definitely considers the practical implications, human actions, and dynamic system states of its targets; and accommodates the features of process research. None of the four Dialogue commentaries on ASB offers any actual evidence otherwise but, instead, relies on false implications. We respond to each commentary, separately and in relevant groupings, below. In response to the points made by RSDW, we reply as follows: The six assumptions in ASB emerge from RSDW's papers (often quoted in ASB), not from the 3E framework, and, thus, simply remain true. The ASB description of effectuation, including its logic, assumptions, paths, 1 and states, all emerge from RSDW's papers and are accurately construed; for example, contingencies do affect the process, and are not depicted as paths. The effectuation research reviewed in ASB is fair, accurate, complete, standard (e.g., in the tradition of Short, Ketchen, Shook, & Ireland, 2010, and others), and covers as wide a spectrum as the standard and explicit We note several inconsistencies with RSDW's counterpoints-for example, Sarasvathy (2001) refuted her own 1 Proposition 1 and supported ASB's assumption #6 in her Propositions 2 and 3, explicitly linking effectuation with success, and we further note that it was expert-read successful-entrepreneurs who were supposed to be the basis for effectuation theory. Also, note that not only does that approach appear to sample on the dependent variable, but it also appears to lead to the same false optimism described in Hirschman's (1967) "Benevolent Hiding Hand." ASB's assumption #1 is not about a priori personality traits; rather, it concerns the abilities that RSDW state their entrepreneurs possessed, although such abilities appear only ex post (which poses another problem for effectuation theory, but not for the 3E framework).
This chapter sums up the preceding analysis, striking a balance between the fundamental reality t... more This chapter sums up the preceding analysis, striking a balance between the fundamental reality that evil can never be eliminated and the hope that good can emerge from its study and the experience of it. Several directions for future research are suggested to address unanswered questions and to open up investigative work in relevant, related fields like biology.
This chapter describes the location—in terms of the characteristics of the contextual ‘system inv... more This chapter describes the location—in terms of the characteristics of the contextual ‘system involved—in which the phenomenon is most likely to occur. Further aspects of the ‘bad barrel’ explanation are analyzed. Transactional oversight is analyzed for where flaws and gaps occur. An analysis of why such systems are surprisingly resistant to competitive pressures is provided.
The creation school of opportunity formation is a relatively new partial theory of entrepreneursh... more The creation school of opportunity formation is a relatively new partial theory of entrepreneurship built upon a relatively new approach to theorizing. Given their significant respective impacts, we critically evaluate both that school and that approach to better understand their respective values to theorizing. We apply a comprehensive, critical framework to evaluate the creation school. We determine that it is not yet a theory, but that it raises several important theoretical questions, from the origins of valuable heterogeneity to which meta-heuristics should be assumed and to what types of uncertainty are involved in entrepreneurial opportunities. We then describe its comparison-based approach for theorizing, delineating it from similar approaches that also contrast against the given benchmark ideas in a field, to determine its benefits and costs to advancing the modeling of phenomena. We determine that this new approach differs from problematization and constrastivity; instead ...
The technological improvements modeled for Cournot competition have primarily focused on producti... more The technological improvements modeled for Cournot competition have primarily focused on production cost reductions and scope effects. We consider a case where the technology improves the ability to affect the production capacity constraints instead. We find that although such technological progress entails public benefits in the form of greater consumer surplus and social welfare, it is likely to have limited and even sometimes harmful private effects (e.g., to firm profits). We formally model this technological improvement possibility through the relevant variants of oligopolies and rival technological asymmetries. We describe and discuss the strategic implications for managers and policy-makers considering investing and exploiting such capacity-adjusting technologies. We also flesh out the many core areas for future work to follow up on in our initial unique results.
We propose a partial theory explaining the processing of opportunities by individuals in organiza... more We propose a partial theory explaining the processing of opportunities by individuals in organizations, specifically for opportunities with both commercial and moral significance (measured as intensities). The goal of such theorizing is to identify and analyze the range of interactions that the ethical and economic impacts of an opportunity can have so that managers can make better decisions on their exploitation and modification. We explain why and how there is variance in the processing of the ideas behind such opportunities as caused by their moral and commercial intensities. We explain the likely interactions between those two intensities, and when they occur and what can result. Doing so complements work in social entrepreneurship and corporate social responsibility by filling the gaps of the possible combinations of economic and ethical interactions. We provide these explanations by leveraging a precedent model that had adapted a standard knowledge-processing method to ethical...
The author presents suggestions for the development of social entrepreneurship theories while com... more The author presents suggestions for the development of social entrepreneurship theories while commenting on the article "Venturing for Others With Heart and Head: How Compassion Encourages Social Entrepreneurship," by T. Miller, M. Grimes, J. McMullen, and T. Vogus, published in the same issue of the journal. Topics include the motivations of entrepreneurship and potential challenges in using emotions as research variables.
In this exploratory study, we challenge real decision makers to make choices in strategic games i... more In this exploratory study, we challenge real decision makers to make choices in strategic games involving ambiguity, and to rationalize those choices. Such games are unique because they are not optimizable; however, the challenge such decisions represent—making choices over irreversible resource commitments in a competitive context and without complete information—is only growing in frequency in our modern business context. As such, our goal is to improve our understanding of real strategic decision making facing irreducible uncertainty, and then to identify ways to improve the outcomes. The challenge is that there are no theoretical solutions for these problems. (While such work has offered solutions, those have always involved watered-down problems—in terms of a lack of true uncertainty or a lack of true optimization). Thus, we approach the challenge from an experimental methodology as one alternative path toward improving outcomes. We do so by considering the influence of decisio...
NK models are agent-based simulations of market evolution generated through new entry and firm in... more NK models are agent-based simulations of market evolution generated through new entry and firm innovation, and are often focused on better understanding complex interdependencies in organizational phenomena. We provide a counterpoint to the mostly optimistic descriptions of the advantages and of the requirements for these fitness-landscape-based analyses. We do so by offering a comprehensive list of limitations of that modelling technique as well as a critical analysis of two recent applications of the NK model—one of a theory-testing application and one of a theory-building application. Our analysis reveals that when care is not taken to capture the essential parts of a phenomenon, the NK approach may be unnecessary at best, and misleading at worst. We discuss the implications of these analyses and update past suggestions for future uses of NK simulations in organizational research.
This chapter addresses the question involving the motivations of the relevant parties. Besides 'g... more This chapter addresses the question involving the motivations of the relevant parties. Besides 'greed', even more 'dangerous' explanations are considered, from culture, to shadenfreunde, to conspiracy.
We apply data from two related surveys to an exploratory study centred on 'what is the value&... more We apply data from two related surveys to an exploratory study centred on 'what is the value' that academic theory creates for its main stakeholders. We begin to address questions of whether and how and to whom we, as strategy researchers, add new value through our published theoretical propositions. Our preliminary results reveal that the majority of our top-tier theoretical published causal relationships are obvious to business school students. That said, we provide several paths for increasing our added and appropriable value, including an identification of the audiences that need it most.
We may take for granted that the business school context promotes and rewards ethical research, t... more We may take for granted that the business school context promotes and rewards ethical research, teaching, and service. I provide an alternative perspective, describing how the context, especially at midlevel tier schools, can offer the opportunity, motivation, and rationalization for significant (in depth and breadth) unethical monetization schemes. I list such schemes, describe possible solutions, and appeal to those handling oversight and misdeeds to act.
We revisit the assertion that entrepreneurs are uniquely characterized in their ways of thinking;... more We revisit the assertion that entrepreneurs are uniquely characterized in their ways of thinking; specifically being relatively more prone to the overconfidence bias and the representativeness heuristic in their decision‐making. We replicate an earlier seminal study in entrepreneurial cognition, with a wider and more current survey. We then extend that analysis by investigating whether such “different thinking” leads to different (i.e., less rational) choices and different (i.e., worse) firm performance. Given the expected differences, we also investigate whether there exist other factors that affect the use of such biases and heuristics, to control their effects on focal outcomes.
We propose a new theory of the firm based on the premise that ‘the firm’ characterizes a factor-i... more We propose a new theory of the firm based on the premise that ‘the firm’ characterizes a factor-integrative form of doing business that is often the most effective and efficient structure for doing well by doing bad. We define the terms and requirements involved for such a theory, and fulfill those requirements by explaining what it is ‘to do bad’, and why and when the firm form is especially fitted to that. We do so by building upon basic premises about ‘bad-ness’ and by leveraging the logic of market failures. From this base, we argue a new reason for the firm form to exist and yet be limited in its growth. This leads to six related propositions regarding the relationships between ‘bad’ firms, tolerant contexts and realized social harms. We discuss how to test the ideas, and what the implications are for research on the firm, strategy and entrepreneurship.
Currently, there is no satisfying answer to how cooperation arises rationally in a single-play pr... more Currently, there is no satisfying answer to how cooperation arises rationally in a single-play prisoner’s dilemma game with complete information. When player types are known, as well as payoffs and actions, economic analysis through payoff-optimizing computation does not provide a clear path for cooperation. We propose a new form of game–the ‘expected’ game–and illustrate its implications for theory and practice based on the prisoner’s dilemma example. We prove that cooperation can be a rational choice for players in reality in such games defined by a weighted set of payoffs of two or more different reference games.
This article is an open access article distributed under the terms and conditions of the Creative... more This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY
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Papers by Richard Arend