Table Of ContentStrategic
Optionality
Pathways Through Disruptive
Uncertainty
Surja Datta · Tobias Kutzewski
Strategic Optionality
Surja Datta • Tobias Kutzewski
Strategic Optionality
Pathways Through Disruptive
Uncertainty
Surja Datta Tobias Kutzewski
Oxford Brookes University VU Amsterdam
Oxford, UK Amsterdam, The Netherlands
ISBN 978-3-031-17353-0 ISBN 978-3-031-17354-7 (eBook)
https://doi.org/10.1007/978-3-031-17354-7
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature
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Acknowledgement
We are able to look further because we have had the good fortune to
stand on the shoulders of giants. Isaac Newton said something similar,
and we wholeheartedly agree with him on this. We have benefited from
insights produced in diverse disciplines like cognitive science, complexity
science, anthropology and sociology. We have attempted to introduce a
new way of strategic thinking in this book, one which embraces uncer-
tainty rather than try to wish it away. To do so, we had to look for ideas
outside of the conventional strategy literature. Once on the journey, we
found plenty of gems strewn elsewhere, and we have not been hesitant to
borrow them for our endeavour. We express our gratitude to all the think-
ers who have impacted our thinking in myriad ways.
Throughout the writing of the book, we have actively shared the emer-
gent ideas with a host of entrepreneurs and industry practitioners, greatly
profiting, in the process, from those interactions. There are too many of
you to name here individually, but you know who you are, and we thank
you profusely for your time and viewpoints.
Our institutions, Oxford Brookes University and Vrije Universiteit
Amsterdam, provided us with generous research hours which greatly
v
vi Acknowledgement
facilitated the authorship of this book, and for that we are grateful
to them.
At the end, we have to acknowledge the support of our families. They
have been our rock, and without their understanding and patience, this
book would not have seen the light of the day. So, Boni, Jishnu, Henrike,
Jakob, Kolja and Alma—a big thank you to all of you.
Contents
1 I ntroduction 1
2 The Business Landscape: Unpacking the Idea of ‘Domain
Specificity’ 9
3 The Conventional Wisdom in Strategy 37
4 Strategic Optionality: Introducing the Idea 91
5 Optionality and Innovation: Two Sides of the Same Coin? 109
6 Competitive Success: Competing Across FRL Domains 135
7 O ptionality: The Method 169
8 C onclusion 183
I ndex 189
vii
List of Figures
Fig. 2.1 Global flows 14
Fig. 2.2 Physical and digital spaces 22
Fig. 2.3 FRL domains 28
Fig. 2.4 +2 (additive) vs multiplicative 32
Fig. 3.1 Porter’s diamond 47
Fig. 3.2 Triple Helix 50
Fig. 3.3 Porter’s five forces 59
Fig. 3.4 Industry life cycle 62
Fig. 3.5 Generic strategies by Michael E. Porter 69
Fig. 3.6 SWOT matrix 76
Fig. 3.7 BCG matrix (illustration is derived from original article
published on the company website of the Boston Consulting
Group) 84
Fig. 3.8 Ansoff Matrix 86
Fig. 4.1 Risk/uncertainty 93
Fig. 5.1 Diffusion of innovation 112
Fig. 5.2 4Ps of Innovation 115
Fig. 5.3 Nine dots 119
Fig. 5.4 Product life cycle 123
Fig. 5.5 The Innovation Process 128
Fig. 6.1 The 4RS of competitive success 136
ix
x List of Figures
Fig. 6.2 VRIO framework 138
Fig. 6.3 Determinants of competitive success for an MNC at a foreign
location 148
Fig. 6.4 Multiplicity of roots 154
1
Introduction
In 2016, Jeff Bezos, Amazon’s CEO, warned the company’s shareholders
that ‘one common pitfall for large organizations—one that hurts speed
and inventiveness—is “one-size-fits-all” decision making’.
So, what did Bezos mean by ‘one-size-fits all decision-making’?
Some decisions are consequential and irreversible or nearly irreversible—
one-way doors—and these decisions must be made methodically, carefully,
slowly, with great deliberation and consultation. If you walk through and
don’t like what you see on the other side, you can’t get back to where you
were before. We can call these Type 1 decisions. But most decisions aren’t
like that—they are changeable, reversible—they’re two-way doors. If you’ve
made a suboptimal Type 2 decision, you don’t have to live with the conse-
quences for that long. You can reopen the door and go back through. Type
2 decisions can and should be made quickly by high judgement individuals
or small groups.
In business schools we have traditionally taught Bezos’ ‘Type 1’ decision-
making. Strategic decisions are arrived at methodically, and they are con-
sidered irreversible. Bezos’ ‘Type 2’ decision-making constitutes an alien
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 1
S. Datta, T. Kutzewski, Strategic Optionality,
https://doi.org/10.1007/978-3-031-17354-7_1
