Strategic Management Review > Vol 5 > Issue 3

A Protocol Mechanism for Solving the "Right" Strategic Problem

Trey Cummings, Carey Business School, Johns Hopkins University, USA, treycummings@jhu.edu , Jackson Nickerson, Professor Emeritus of Organization and Strategy, Olin Business School, Washington University in St. Louis, USA, nickerson@wustl.edu
 
Suggested Citation
Trey Cummings and Jackson Nickerson (2024), "A Protocol Mechanism for Solving the "Right" Strategic Problem", Strategic Management Review: Vol. 5: No. 3, pp 273-312. http://dx.doi.org/10.1561/111.00000070

Publication Date: 11 Dec 2024
© 2024 now Publishers, Inc.
 
Subjects
Strategic management,  Micro-foundations of strategy,  Leadership and governance,  Strategy process and practice,  Strategic decision-making
 
Keywords
Strategic managementstrategy process and practicestrategic decision-makingmicro-foundations of strategyleadership and governance
 

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In this article:
Introduction 
Problem Formulation, the Decision Premise, and Type III Errors 
Dual Process Theories 
Theoretical Preliminaries 
Hypotheses for Likelihood of Type III Errors for Strategic Contexts 
Mechanism Design 
Application Case Study 
Discussion 
Conclusion 
References 

Abstract

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.

DOI:10.1561/111.00000070