In This Article Expand or collapse the "in this article" section Strategy

  • Introduction
  • The Domain of Strategy
  • Industry Conditions, Competition, and Performance
  • Interactions: Competitive Dynamics and Cooperative Game Theory
  • Competitive Heterogeneity
  • Boundaries of the Firm and Transaction Cost Economics
  • Alliances
  • Corporate Strategy, Diversification, and Growth
  • Behavioral Strategy
  • Strategy Process

Management Strategy
Tammy L. Madsen
  • LAST REVIEWED: 26 August 2020
  • LAST MODIFIED: 26 August 2020
  • DOI: 10.1093/obo/9780199846740-0071


The strategy field seeks to understand the question: What drives differences in performance among firms? The field is relatively young and informed by multiple disciplines—economics, sociology, political science, and psychology—and multiple paradigms. As a consequence, explanations of the drivers of differences in performance among firms benefit from the integration of multiple theoretical lenses, research methods, and techniques. This diversity informs a wide array of research topics (e.g., industry conditions, competition, and performance; industry evolution; competitive dynamics; competitive heterogeneity; boundaries of firm [make versus buy]; alliances; diversification and corporate growth; resource and capability-based views of competitive advantage; behavioral strategy; and strategy process) and work that spans multiple levels of analysis—ecosystem, region, industry, interfirm, firm, and intrafirm. While this intellectual diversity has enriched the field’s progress, it also has led to a questioning of the field’s legitimacy, often within business schools. Despite these challenges and assertions that the field is fragmented, consensus remains that the field’s overarching focus is explaining differences in the performance among firms. Given this focus, drawing boundaries around the field poses challenges. For instance, research on organizational learning, networks, and managerial teams offer relevant theoretical foundations and methods to explore strategy questions yet are not necessarily situated within the core of the mainstream strategy domain. Contributions from these complementary areas inform many of the research contributions discussed in this article, but the article’s scope limits precludes separate treatment of all areas that intersect with the strategy domain. As a result and guided by the field’s central research question, this annotated bibliography provides an overview of the field’s core or mainstream areas, with specific attention to influential writings and those that detail the scope of contributions in an area. The research topics are presented in an order flowing from macro- or industry-level topics to more micro- or intrafirm and individual-level topics. Further, while the article strives to highlight foundational contributions within each research area, the breadth and depth of research in each area as well as a constraint on word counts preclude a comprehensive treatment. To address this issue, when available, each section references a recent review article as additional background.

The Domain of Strategy

The domain of the strategy field has expanded significantly since the field’s inception. Recent reviews of the field highlight its expanding scale and scope but also raise concerns over the direction of its development (Durand, et al. 2017). Despite wide agreement that the core question in strategy is what drives differences in firm performance, scholars have voiced concerns that many studies appearing in strategy journals and at strategic conferences are distant, if not disconnected, from the field’s core research question. Some scholars argue that the field’s fragmentation signals its rich diversity and vitality, whereas others point out that the ongoing fragmentation fosters uncertainty regarding the field’s distinctiveness. Scholars from the latter group are especially concerned about the “strategy soup” problem: If everything is strategy, what is strategic about strategic management? In response, scholars have explored different ways to foster integration and clarify the field’s domain. Rumelt, et al. 1994 proposes a set of research questions in an effort to refocus the field on the fundamental issues in strategy. McGahan and Mahoney 2007 summarizes the field’s accomplishments and identifies opportunities for theoretical integration. Other scholars use concepts, such as strategic decisions, to frame and prescribe the field’s scope. For instance, van den Steen develops a formal model to examine what makes a decision strategic and the conditions under which strategy is valuable (van den Steen 2017). Related work specifies three dimensions of decision interdependence that make decisions strategic (Leiblein, et al. 2018) and suggests that the field can be integrated around the study of interdependent decisions. Additionally, academic journal initiatives focus on integrating the field’s different theoretical streams, reconciling results, replicating empirical findings, and advancing methodological rigor. Between 2016 and 2018, the Strategic Management Journal, the field’s premier journal, published several editorial essays and special issues on these topics with the broad goals of synthesizing existing research, building a cumulative body of knowledge, and stimulating rigorous new work. Bettis, et al. 2016, an editorial essay, introduces new policies at the Strategic Management Journal with the purpose of promoting a repeatable, cumulative body of knowledge in the strategy field. In sum, the current dialogue and activities in the field serve to shape its future direction.

  • Bettis, Richard A., Sendil Ethiraj, Alfonso Gambardella, Constance Helfat, and Will Mitchell. “Creating Repeatable Cumulative Knowledge in Strategic Management: A Call for a Broad and Deep Conversation among Authors, Referees, and Editors.” Strategic Management Journal 37 (2016): 257–261.

    In this editorial essay, the editors highlight challenges in replicating existing work and promote new professional norms regarding the interpretation of statistical studies. The editors conclude with new policies for the journal including an openness to replication studies and studies with nonresults as well as specific guidance on the reporting of results.

  • Durand, Rudolphe, Robert Grant, and Tammy L. Madsen. “The Expanding Domain of Strategic Management Research and the Quest for Integration.” In Special Issue: Reviews of Strategic Management Research. Edited by Rodolphe Durand, Robert M. Grant, and Tammy L. Madsen. Strategic Management Journal 38.1 (2017): 4–16.

    In this introduction to the first Strategic Management Research special issue of reviews in strategic management, the authors expand on the challenge of fragmentation and discuss how reviews of strategy research can help integrate the field.

  • Leiblein, Michael J., Jeffrey J. Reuer, and Todd Zenger. “What Makes a Decision Strategic?” Strategy Science 3.4 (2018): 558–573.

    Asking what is and is not a strategic decision, the authors define strategic decision as decisions that are strongly interdependent with other contemporaneous decisions, decisions by other actors, and future decisions.

  • McGahan, Anita M., and Josephy T. Mahoney. “The Field of Strategic Management within the Evolving Science of Strategic Organization.” Strategic Organization 5 (2007): 79–99.

    To address challenges facing the field, the authors offer recommendations to advance integration in research and recommendations to promote innovation in pedagogy.

  • Rumelt, Richard P., Dan E. Schendel and David J. Teece. Fundamental Issues in Strategy: A Research Agenda, 1994.

    This edited volume uses four research questions to frame and develop the fundamental issues in strategy: How do firms behave? Why are firms different? What is the function of, or value added, by the headquarters unit in a multibusiness firm? What determines the success or failure of the firm in international competition?

  • van den Steen, Eric. “A Formal Theory of Strategy.” Management Science 63 (2017): 2621–2636.

    The author uses formal theory to illustrate that strategy is “the smallest set of choices to optimally guide (or force) other choices” (quoted from abstract).

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