Frameworks and strategic decision-making

The experiment randomly varies the instructions students see at the top of the online survey that they receive. The Control group receives standard instructions to input the problem the company faces and the strategic options that they see as being available to the company. In addition to these standard instructions, the Treatment group receives several frameworks that guide them in crafting strategic options.

2024-03-26

2024-04-02

We will observe the following outcomes:
(1) the number of total options that the student brainstormed
(2) the number/share of strategic (rather than operational) options that the student brainstormed
(3) a binary measure of whether the options were mutually exclusive
(4) the number/share of options that suggest that the company continue its current strategy (vs. exit or expand)
(5) binary measures of whether the best-chosen option is to "continue", "exit", or "expand"

Some of the measures will be coded by two independent coders using a rubric who are blind to the random assignment, e.g.:
(1) whether the options are strategic or operational
(2) whether the options are mutually exclusive
(3) whether the options suggest that the company continue its current strategy vs. exit or expand

All participants will be asked to articulate a problem statement and their thought process in developing the problem statement.
Survey questions to all participants: (1) Describe how you developed your options; (2) How confident are you in the options you have developed? (3) How would you describe the difficulty of the task? (4) Which specific data from the case did you rely on the most to complete this exercise? (5) Beyond the data provided in the case, what additional data would be helpful for you to complete this exercise?
Additional survey questions to the treatment group only: (1) Did you find the framework provided in the instructions helpful in developing your options? (2) Please elaborate on why it was helpful or not helpful.
Peer evaluations of option quality, binary variable on how detailed the option is, various details about the nature of the option, and group-level outcomes on strategic options. Secondary outcomes will be collected and coded based on feasibility (e.g., if budget allows).

This project aims to understand how using a framework affects the crafting of strategic options. This project is an extension of prior works (Kim, Hyunjin and Nety Wu. 2022. "Frameworks and strategic decision-making." AEA RCT Registry. October 03. https://doi.org/10.1257/rct.10146-1.0. Kim, Hyunjin and Nety Wu. 2023. "Frameworks and strategic decision-making." AEA RCT Registry. February 21. https://doi.org/10.1257/rct.10961-1.0. Kim, Hyunjin and Nety Wu. 2023. "Frameworks and strategic decision-making." AEA RCT Registry. September 20. https://doi.org/10.1257/rct.12114-1.0. Kim, Hyunjin and Nety Wu. 2024. "Frameworks and strategic decision-making." AEA RCT Registry. February 14. https://doi.org/10.1257/rct.12963-1.0) We plan to run the same experiment on a new cohort of students.

We plan to run an experiment where participants will be asked to articulate a problem statement and brainstorm strategic options for a firm described in a short case. The experiment will be conducted across students in an elite business school. This experiment will be embedded within an exercise designed for a class session, where students will be randomized into two groups.

All students will be asked to articulate a problem statement, brainstorm all available strategic options, and indicate which they think is the best. They will then be put into groups, where they will continue brainstorming.

The experiment randomly varies the instructions students receive at the top of the online survey.

Individuals are randomized into control and treatment by stratifying on gender and industry (whether they are working in consulting), using a computer.

Randomization is conducted at the individual level. Each participant is first randomly assigned to the treatment or the control group, stratified on gender and industry (whether they worked in consulting). Then, within each group, participants are randomly assigned to subgroups for further brainstorming of options.

No

N/A

98 students (study 1) plus 92 students (study 2) plus 131 students (study 3)

study 1: 49 participants control, 49 participants treatment
study 2: 46 participants control, 46 participants treatment
study 3: 65 participants control, 66 participants treatment