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Decision weaving: Forming novel, complex strategy in entrepreneurial settings

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  • Timothy E. Ott
  • Kathleen M. Eisenhardt
Abstract
Research Summary Strategy formation is central to why some firms seize novel opportunities while others fail. We explore a core dilemma of strategy formation in entrepreneurial settings—whether to learn a novel strategy one domain at a time (modular) versus assemble a complex strategy of coherent activities across all domains at once (integrative). By studying six ventures, we develop a theoretical framework for how entrepreneurs effectively form novel, complex strategy: Decision weaving. They (a) employ sequential focus (not parallel), (b) pause at plateaus (not optima), and (c) deploy stepping stones (not leaps) in background domains. These behaviors enable both fast, effective learning and evolving yet holistic understanding of an emerging strategy. Overall, we contribute to the microfoundations of strategy by proposing a cognitively sophisticated, yet realistic strategist. Managerial Summary Strategy formation is central to why firms seize novel opportunities while others fail. By comparing three venture‐pairs, we develop a fresh framework for strategy formation in nascent markets where strategy is both novel and complex: Decision weaving. Effective strategists: (a) use sequential focus (not parallel) to learn about successive focal strategic domains, (b) pause at learning plateaus to consolidate that knowledge about a focal domain, and (c) use stepping stones to make progress in background domains without losing focus. These behaviors enable both fast, effective learning, and evolving yet holistic understanding of an emerging strategy. More importantly, these behaviors set the stage for rapid and profitable scaling (i.e., growth).

Suggested Citation

  • Timothy E. Ott & Kathleen M. Eisenhardt, 2020. "Decision weaving: Forming novel, complex strategy in entrepreneurial settings," Strategic Management Journal, Wiley Blackwell, vol. 41(12), pages 2275-2314, December.
    • Handle: RePEc:bla:stratm:v:41:y:2020:i:12:p:2275-2314
    DOI: 10.1002/smj.3189
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    References listed on IDEAS

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    3. Gomes, Leonardo Augusto de Vasconcelos & Faria, Aline Mariane de & Braz, Antonio Carlos & Mello, Adriana Marotti de & Borini, Felipe Mendes & Ometto, Aldo Roberto, 2023. "Circular ecosystem management: Orchestrating ecosystem value proposition and configuration," International Journal of Production Economics, Elsevier, vol. 256(C).
    4. Rocha, Vera & Pozzoli, Dario, 2021. "Give it Another Shot: Startup Experience and the Mobilization of Human Resources in New Ventures," Working Papers 11-2021, Copenhagen Business School, Department of Economics.
    5. Liang Chen & Mengmeng Wang & Lin Cui & Sali Li, 2021. "Experience base, strategy‐by‐doing and new product performance," Strategic Management Journal, Wiley Blackwell, vol. 42(7), pages 1379-1398, July.
    6. Bohan, Sarah & Tippmann, Esther & Levie, Jonathan & Igoe, Josephine & Bowers, Blake, 2024. "What is scaling?," Journal of Business Venturing, Elsevier, vol. 39(1).
    7. Du, Yunzhou & Kim, Phillip H., 2021. "One size does not fit all: Strategy configurations, complex environments, and new venture performance in emerging economies," Journal of Business Research, Elsevier, vol. 124(C), pages 272-285.
    8. Sanasi, Silvia & Ghezzi, Antonio & Cavallo, Angelo, 2023. "What happens after market validation? Experimentation for scaling in technology-based startups," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    9. Andric, Mateja & Hsueh, Josh Wei-Jun & Zellweger, Thomas & Hatak, Isabella, 2024. "Parental divorce in early life and entrepreneurial performance in adulthood," Journal of Business Venturing, Elsevier, vol. 39(3).
    10. Mark W. Moffett & Simon Garnier & Kathleen M. Eisenhardt & Nathan R. Furr & Massimo Warglien & Costanza Sartoris & William Ocasio & Thorbjørn Knudsen & Lars A. Bach & Joachim Offenberg, 2021. "Ant colonies: building complex organizations with minuscule brains and no leaders," Journal of Organization Design, Springer;Organizational Design Community, vol. 10(1), pages 55-74, March.
    11. Rembrand Koning & Sharique Hasan & Aaron Chatterji, 2022. "Experimentation and Start-up Performance: Evidence from A/B Testing," Management Science, INFORMS, vol. 68(9), pages 6434-6453, September.
    12. Huikkola, Tuomas & Kohtamäki, Marko & Ylimäki, Juho, 2022. "Becoming a smart solution provider: Reconfiguring a product manufacturer's strategic capabilities and processes to facilitate business model innovation," Technovation, Elsevier, vol. 118(C).
    13. Mostafiz, Md Imtiaz & Musteen, Martina & Saiyed, Abrarali & Ahsan, Mujtaba, 2022. "COVID-19 and the global value chain: Immediate dynamics and long-term restructuring in the garment industry," Journal of Business Research, Elsevier, vol. 139(C), pages 1588-1603.
    14. Amirmahmood Amini Sedeh & Rosa Caiazza & Amir Pezeshkan, 2023. "Unraveling the resource puzzle: exploring entrepreneurial resource management and the quest for new venture success," The Journal of Technology Transfer, Springer, vol. 48(5), pages 1552-1573, October.
    15. Tippmann, Esther & Ambos, Tina C. & Del Giudice, Manlio & Monaghan, Sinéad & Ringov, Dimo, 2023. "Scale-ups and scaling in an international business context," Journal of World Business, Elsevier, vol. 58(1).

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