MAN 301 Lecture 02: Microfoundations of Strategy

Vocabulary flashcards covering core concepts, behavioral theory, cognitive biases, and research models from MAN 301 Microfoundations of Strategy Lecture 02.

Microfoundations of Strategy

The perspective that organizational outcomes are explained through individuals and their interactions, tracing from decision context to perceptions, decisions, collective actions, and firm performance.

Risk

A decision condition where both the potential outcomes and their associated probabilities are known.

Uncertainty

A decision condition where probabilities are unknown or cannot be reliably predicted.

Ambiguity

A decision condition characterized by unclear or hazily defined states with possible multiple meanings.

Complexity

A decision condition characterized by having many variables and multiple interdependencies.

Equivocality

A decision condition characterized by competing interpretations of the same information.

Cognition

The psychological domain of thinking, which includes perception, memory, reasoning, and problem-solving.

Affection

The psychological domain of feeling, which includes emotions, moods, attitudes, and values.

Conation

The psychological domain of willing, which includes intention, motivation, goals, persistence, and willpower.

Behavioral Turn

An approach that focuses on observable behavior, reinforcement, and consequences leading to repeated behavior.

Cognitive Turn

An approach that focuses on mental representations, attention, interpretation, and beliefs shaping responses.

Bounded Rationality

The recognition that human decision-makers possess limited time, attention, memory, and information-processing capacity.

Satisficing

The selection of an acceptable option that clears a minimum threshold rather than optimizing for the absolute best choice.

Aspiration Levels

Performance benchmarks in the Behavioral Theory of the Firm that are influenced by historical results and peer comparisons.

Coalition of Participants

The concept that an organization consists of members with differing individual goals and aspirations.

Quasi-Resolution of Conflict

The organizational practice of addressing divergent goals sequentially rather than resolving them simultaneously.

Uncertainty Avoidance

The use of organizational routines and predictable arrangements to reduce instability.

Problemistic Search

A localized search for solutions triggered when organizational performance falls below target aspiration levels.

Organizational Learning

The process by which operational feedback leads to updated routines and aspiration levels.

Administrative Man

A descriptive view of actual human organizational decision-makers operating under bounded rationality, contrasting with the fully rational economic ideal.

Upper Echelons Theory

A theory positing that executives' experiences and cognitive frames shape their interpretation and strategic choices, with observable backgrounds serving as imperfect proxies.

Type 1 Cognition

Cognitive processing that is fast, intuitive, automatic, associative, and places low demand on working memory.

Type 2 Cognition

Cognitive processing that is slow, reflective, deliberate, rule-based, and requires working-memory demand.

Cognitive Reflection Test (CRT)

An assessment that measures the ability or tendency to suppress an intuitive Type 1 answer in favor of a reflective, carefully checked Type 2 response.

Halo Effect

A cognitive bias in which a single positive impression leads to overly favorable judgments of unrelated qualities.

Survivorship Bias

A cognitive bias where only successful visible outcomes are evaluated while failures are overlooked, producing misleading recipes for success.

Sunk-Cost Fallacy

A cognitive bias where unrecoverable past investments inappropriately drive future resource allocation decisions.

Anchoring

A cognitive bias where an initial piece of information serves as a reference point that skews subsequent evaluations due to insufficient adjustment.

Overconfidence

A cognitive bias characterized by excessively strong certainty or overly precise forecasts paired with limited checks.

Attribution Bias

A cognitive bias involving excessive emphasis on personal traits while paying insufficient attention to situational conditions.

Stewardship Perspective

A theoretical view in family-firm succession positing that firm-specific learning and a long-term orientation generate performance benefits.

Hybrid Entrepreneurship

The process of engaging in paid employment while simultaneously developing a new business venture.

Attention-Based View

A management framework premised on limited cognitive resources, proposing that how attention is allocated shapes organizational actions and performance.

Attentional Availability

The condition of a founder being present and available during critical operating windows for their venture.

Attention Residue

The mental carryover that lingers after switching tasks between primary paid employment and startup operations.

Situated Attention

The phenomenon wherein an individual's primary employment environment influences what cues they notice, prioritize, or delay in their venture.

Capacity Utilization

The actual use of labor, equipment, and assets relative to their full productive potential.