How Do CEOs Make Strategy?

Mu-Jeung Yang, Michael Christensen, Nicholas Bloom, Raffaella Sadun and Jan Rivkin

No 27952, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the critical question of how executives make strategic decisions. Utilizing a new survey of 262 CEO alumni of Harvard Business School, we gather evidence on four aspects of each executive’s business strategy: its overall structure, its formalization, its development, and its implementation. We report three key results. First, different CEOs use markedly different processes to make strategic decisions; some follow highly formalized, rigorous, and deliberate processes, while others rely heavily on instinct and intuition. Second, more structured strategy processes are associated with larger firm size and faster employment growth. Third, using a regression discontinuity centered around a change in the curriculum of Harvard Business School’s required strategy course, we trace differences in strategic decision making back to differences in managerial education.

JEL-codes: L2 M1 M2 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-lma
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Published as Mu-Jeung Yang & Michael Quinn Christensen & Nicholas Bloom & Raffaella Sadun & Jan W. Rivkin, 2020. "How Do CEOs Make Strategy?," Academy of Management Proceedings, vol 2020(1).

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