Theory-Based Decisions: Foundations and Introduction

Teppo Felin (), Alfonso Gambardella () and Todd Zenger ()
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Teppo Felin: Department of Strategy and Entrepreneurship, Huntsman School of Business, Utah State University, Logan, Utah 84322; and Department of Strategy, Innovation and Management, Saïd Business School, University of Oxford, Oxford OX1 1HP, United Kingdom
Alfonso Gambardella: Department of Management and Technology & ION Management Science Laboratory, SDA Bocconi, Bocconi University, 20136 Milan, Italy
Todd Zenger: Department of Entrepreneurship and Strategy & ION Management Science Laboratory, David Eccles School of Business, University of Utah, Salt Lake City, Utah 84122

Strategy Science, 2024, vol. 9, issue 4, 297-310

Abstract: Theories are foundational for decision making. We point to a normative agenda that emphasizes the need for decision makers—including managers, firms, entrepreneurs, and startups—to develop their own theories. Our argument is that decision makers should be like scientists and use the scientific method—theories, causal reasoning, and experimentation—to problem solve and generate new data and value. In this paper and special issue introduction, we discuss the foundations of the theory-based view (TBV), particularly as it relates to forward-looking reasoning and decision making under uncertainty. Rather than handing prescriptive theories to others, the goal of the TBV is to provide the scaffolding for economic actors themselves to develop their own, idiosyncratic theories. Theories are built on heterogeneous beliefs and causal reasoning that enable the generation of unique paths to value. We discuss the implications of this argument for key theories within strategy and economics, along with highlighting research opportunities at the nexus of the TBV and topics such as learning, entrepreneurship, finance, ownership and leadership. We also introduce the special issue papers and discuss their contributions to the TBV.

Keywords: theory-based view; decision making; strategy; entrepreneurship; causal reasoning; theories; governance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:9:y:2024:i:4:p:297-310

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