Design- and Theory-Based Approaches to Strategic Decisions

Alfonso Gambardella () and Danilo Messinese ()
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Alfonso Gambardella: Department of Management and Technology, ION Management Science Laboratory—Scuola di Direzione Aziendale Bocconi, Bocconi University, 20136 Milan, Italy
Danilo Messinese: Department of Strategy, Instituto de Empresa Business School, Instituto de Empresa University, 28006 Madrid, Spain

Organization Science, 2025, vol. 36, issue 4, 1271-1287

Abstract: We develop a unified framework to examine the implications of two primary approaches to strategic decision making under uncertainty: designing and shaping future scenarios vis-à-vis testing theories about future scenarios. We conducted a three-arm randomized controlled trial involving 308 early stage entrepreneurs, dividing them into three groups—design-based training, theory-based training, and a control group—and tracked them over approximately 1.5 years. Our findings reveal that both approaches reduce the need for information in decision making and lead to higher commitment rates. The design-based approach encourages action despite negative beliefs, resulting in less frequent and later project termination. In contrast, the theory-based approach promotes a more conservative termination rule, leading to earlier and more frequent project abandonment. Although the theory-based approach is associated with higher average performance upon survival, the design-based approach fosters breakthroughs for decision makers. In sum, the design-based approach is well-suited for innovative ventures that gather information to shape their environment, whereas the theory-based approach is optimal for pursuing high performance under lower degrees of uncertainty.

Keywords: strategic decision making; entrepreneurship; uncertainty; field experiments (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:36:y:2025:i:4:p:1271-1287

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