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2022/2023  KAN-CCMVV1461U  Behavioral Strategy

English Title
Behavioral Strategy

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Quarter
Start time of the course Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Nicolai J. Foss - Department of Strategy and Innovation (SI)
Main academic disciplines
  • Organisational behaviour
  • Strategy
  • Business psychology
Teaching methods
  • Face-to-face teaching
Last updated on 12-08-2022

Relevant links

Learning objectives
The learning objectives of this course are the following ones: Students who follow the class will
  • learn a number of important and useful basic theories, insights, and concepts, rooted in psychology, behavioral economics and strategic management
  • learn to structure their argumentation using behavioral strategy so as to, for example, prepare them for their later master thesis work
  • acquire tools that can support decision-making at various levels of the company, for example, by understanding how decision making is shaped by, e.g., or by understanding the psychological (e.g., motivational basis) of key company resources
  • add important tools to their toolbox, for example, if they decide to pursue a strategy consultant or investment banking career
  • get in a position where they can relate behavioral strategy theories and insights to each other, in principle, allowing them to create new insights in behavioral strategy
Behavioral Strategy:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Spring
Aids Closed book: no aids
However, at all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player), and the student is allowed to bring simple writing and drawing utensils (non-digital). PLEASE NOTE: Students are not allowed to communicate with others during the exam.
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
The number of registered candidates for the re-take exam warrants if the exam, most appropriately, is to be held as an oral examination. The students will be informed if the re-take examination will be held as an oral examination instead.
Course content, structure and pedagogical approach

Behavioral strategy seeks to put psychology and behavioral economics into strategy! In one definition of the field, “Behavioral strategy merges cognitive and social psychology with strategic management theory and practice. Behavioral strategy aims to bring realistic assumptions about human cognition, emotions, and social behavior to the strategic management of organizations and, thereby, to enrich strategy theory, empirical research, and real-world practice” (Powell, Lovallo & Fox, 2011: 1371  Behavioral strategy considers the classical issues in strategic management, e.g., CEO and top management team behaviors, entry decisions, competitive interaction, firm heterogeneity. But it does so based on the idea that insights from psychology and behavioral economics that are based on evidence should informs the understanding of how strategists and firms behave, and what is the role of work motivation in driving value creation. To a very large extent, the class confronts students with the CBS Nordic Nine principles, as a rigorous understanding of the limits and potentials of self-managing organization very much involve notions of notions of collaboration, critical thinking, organizational and personal learning, and, in particular, the ability to contextualize business knowledge.

Description of the teaching methods
Face-to-face, on-site, highly interactive teaching, based on short lecture modules, exercises, orchestrated class discussion. The class will also involve visits by reflective practitioners (e.g., Mathilde Fogh Kirkegaard, Head of Customer Behavioral Insights, Nordea). The course is based on a high level of student involvement. Students are expected to be thoroughly prepared and to take an active part in the presentation and discussion of the material
Feedback during the teaching period
Every session will feature exercises and quizzes, which both, in different ways, provide students with feedback. The exercises are designed to focus and deepen the in-class learning process and form the basis for class discussion. Each class ends with a quiz, the purpose of which is to sum up the learning of the relevant session
Student workload
Lectures 33 hours
Preparation 100 hours
Exam 73 hours
Expected literature
  • Foss, N.J. 2020. Behavioral Strategy and the Covid-19 Disruption. Journal of Management, 46: 1322-1329.
  • Powell, T. C., Lovallo, D., & Fox, C. R. 2011. Behavioral strategy. Strategic Management Journal, 32(13): 1369-1386.
  • Levinthal, D. A. 2011. A Behavioral Approach to Strategy-What’s the Alternative? Strategic Management Journal, 32(13): 1517-1523.
  • Simon, H.A. 1955. A Behavioral Model of Rational Choice. Quarterly Journal of Economics, 69: 99-118.
  • Tversky, A., & Kahneman, D. 1974. Judgment under Uncertainty: Heuristics and Biases. Science, 185: 1124-1131.
  • Chapters 2 and 7 Cyert, R. M., and March, J. G. 1963. A Summary of Basic Concepts in the Behavioral Theory of the Firm: 1–18. Cambridge, MA: Blackwell.
  • Hart E. Posen, Thomas Keil, Sangyun Kim, and  Felix D. Meissner. 2018. Renewing Research on Problemistic Search—A Review and Research Agenda. Academy of Management Annals 12 (1), 208-251.
  • Greve, H. 1998. Performance, Aspirations, and Risky Organizational Change. Administrative Science Quarterly, 43: 58-86.
  • Gaba V, Greve H (2019) Safe or profitable? Pursuing conflicting goals. Organization Science. 30(4):647-867.
  • Porac, J. F. & Thomas, H. 1990. Taxonomic Mental Models in Competitor Definition. Academy of Management Review 15: 224-240.
  • Chen, M. J. & Miller, D. 2012. Competitive Dynamics: Themes, Trends, and a Prospective Research Platform. Academy of Management Annals, 6: 135-210.
  • ·Eggers, J.P. & Kaplan, S. 2013. Cognition and Capabilities: A Multi-level Perspective. Academy of Management Annals, 7: 295-340.

  • Tripsas, M., & G. Gavetti. 2000. Capabilities, Cognition, and Inertia: Evidence from Digital Imaging. Strategic Management Journal 21: 1147-1161
  • Lindenberg, S. & Foss, N.J. 2011. Managing Motivation for Joint Production: The Role of Goal Framing and Governance Mechanisms. Academy of Management Review 36: 500-525 (2011).
  • Larkin, I., Pierce, L., & Gino, F. 2012. The psychological costs of pay‐for‐performance: Implications for the strategic compensation of employees. Strategic Management Journal, 33(10): 1194-1214.
  • Weber, L. & Mayer, K. 2014. Transaction Cost Economics and the Cognitive Perspective: Investigating the Sources and Governance of Interpretive Uncertainty. Academy of Management Review, 39: 344-363.
  • Foss, N.J & Weber, L. 2016. Putting Opportunism in the Back Seat: Bounded Rationality, Costly Conflict and Hierarchical Forms.” Academy of Management Review, 41: 41-79 (2016).
  • Laureiro‐Martínez, D., & Brusoni, S. 2018. Cognitive flexibility and adaptive decision‐making: Evidence from a laboratory study of expert decision makers. Strategic Management Journal39(4), 1031-1058.
  • Luger, J., Krakowski, S, & Raisch, S. 2022. Artificial intelligence and the changing sources of competitive advantage. An investigation of chess tournaments. Strategic Management Journal
Last updated on 12-08-2022