Chapter 2 - Strategic Thinking / Class 3 & 4 - Do we think strategically?

What are the three dimensions of strategy emphasized in this course?

Strategy Process, Strategy Content, Strategy Context

What are cognitive abilities in strategic reasoning?

Human limits in processing, sensing, and storing information — managed through heuristics

What are heuristics?

Mental shortcuts/rules of thumb that simplify problems; useful but can also bias thinking

What are cognitive maps?

Mental models of how the world works, formed through education/experience; focus attention but can cause rigidity

What dangers come from cognitive maps?

Rigidity, blocking new information, and difficulty seeing contrary perspectives

What benefits come from cognitive maps?

Provide shared logics, allow collective problem solving, and guide strategists to recognize opportunities

What are the two types of strategic reasoning?

Rational reasoning (analytic, logic-driven) and generative reasoning (creative, intuition-driven)

What is rational reasoning?

Conscious, analytic process relying on logic and explicit assumptions

What is generative reasoning?

Intuitive, holistic process using tacit knowledge and creative insights

Why is intuition important in strategy?

It captures the big picture, speeds decisions, and draws on tacit knowledge, but risks bias (“extinct by instinct”)

Why is logic important in strategy?

It helps test assumptions, make beliefs explicit, and refine mental models to avoid flawed decisions

What paradox do strategists face?

Balancing logic (rigor, precision) with intuition (creativity, speed) in decision-making

What was Steve Jobs an example of in strategic thinking?

He combined rational reasoning (product design rules, marketing) with generative reasoning (innovative leaps like avoiding PDAs to focus on iPod)

What caused Apple’s decline between 1985–1997?

Leadership conflicts, poor choices, and shifting toward norms of competition instead of creativity

What made Apple’s turnaround possible?

Jobs’ return, innovation (iPod, iPhone, iPad), strategic alliances, acquisitions, and focus on design/marketing

What concerns exist about Apple today?

Low PC market share, product maturity, hyper competition, high R&D costs, labor issues, and extremely high expectations

What is the final thought from Week 2?

Knowing what you don’t know is more useful than being brilliant (Charles Munger)