Anoop Menon

Education:

Harvard Business School (Boston, MA):

Doctor of Business Administration, Strategy

Amherst College (Amherst, MA):

Bachelor of Arts, Economics and Psychology

Research Interests:

My research explores how cognitive processes, namely the mental processes by which individuals interpret situations, and acquire and process information, drive strategic decisionmaking and strategic interactions. Be it at crucial decision making points such as mergers and acquisitions or expansions, during periods of strategic innovation and change, or when competing with other firms, differences across strategic leaders in these cognitive processes can lead to significant performance differences across the firms. My research investigates some of the ways in which these processes can vary across decision makers, and how these differences affect performance. Thus, it provides a different, cognitive lens with which to understand persistent performance differences across firms, the central issue in strategy.

Anoop Menon (2017), Bringing Cognition into ValueBased Strategy: Cognitive Capabilities as Sources of Competitive Advantage , Strategic Management Journal, forthcoming.

Abstract: This paper explicitly introduces cognitive considerations into the valuebased strategy framework. By incorporating the mental models of strategic actors, it develops a cognitive valuebased framework. It is found that this modified framework can result in outcomes that can, in many situations, be different from what would be predicted by the classical valuebased framework. It also helps identify certain cognitive capabilities that firms could possess or develop which would allow them to increase their competitive advantage, as well as some underexplored properties of strategic positions that would affect their ability to generate competitive advantage. More generally, it provides a framework that will hopefully allow for easier incorporation of insights from the cognitive sciences into central questions of strategy.

Dirk Martignoni, Anoop Menon, Nicolaj Siggelkow (2016), Consequences of Misspecified Mental Models: Contrasting Effects and the Role of Cognitive Fit , Strategic Management Journal, 37 (13), pp. 25452568.

Abstract: Mental models, reflecting interdependencies among managerial choice variables, are not always correctly specified. Mental models can be underspecified, missing interdependencies, or overspecified, containing nonexistent interdependencies. Using a simulation model, we find that under and overspecification have opposite effects on exploration, and thereby performance. The effects are also opposite depending on whether the manager controls all choice variables. The mechanism underlying our results is a feedback loop: misspecificed mental models influence managerial learning about the effectiveness of choices; this learning guides how the environment is explored, which in turn affects which information will be generated for future learning. We explore implications of these results for strategic management and introduce the notion of “cognitive fit” between the mental model of the decision maker and the strategic environment.

Giovanni M. Gavetti and Anoop Menon (2016), Evolution Cum Agency: Toward a Model of Strategic Foresight , Strategy Science, 1 (3), pp. 207233.

Abstract: The study examines the origin of the strategic innovation that changed the face of financial services— Charles Merrill’s financial supermarket business model—through three wellknown and largely juxtaposed conceptual models of strategic foresight. Our study, whose purpose, business historical focus, and structure mirrors Graham Allison’s famous “Conceptual Models of the Cuban Missile Crisis,” allows us to make three contributions. First, it sharpens our understanding of the models we used in the study. Second, it provides the foundations of an integrated view and model of strategic foresight that suggests disciplined strategic foresight is possible, understandable, and replicable within some precise boundaries. Finally, it suggests directions for future behavioral strategy work.

Exequiel Hernandez and Anoop Menon (2016), Acquisitions, Node Collapse, and Network Revolution, Management Science, forthcoming.

Abstract: We explore a novel mechanism of network change that occurs when a firm acquires another one and inherits its network ties. Such ‘node collapse’ can radically restructure the network in one transaction, constituting a revolutionary change compared to the incremental effect of tie additions and deletions, which have been the focus of prior research. We explore several properties of node collapses: their efficacy in helping firms achieve superior network positions, the externalities they impose on other network actors, and how they provide exclusive control over both internal and network resources. Using a simulation in which actors compete to acquire one another, we model network dynamics driven by node collapses. We find that node collapses directly affect the performance of the acquirer and indirectly that of other actors, and that the direction of network evolution hinges on the degree to which firms pursue internal vs. network synergies through node collapses.

Description: Finalist for the Best Conference Paper Award at the 2015 SMS Annual Conference.

Anoop Menon and Dennis Yao (2016), Elevating Repositioning Costs: Strategy Dynamics and Competitive Interactions , Strategic Management Journal, forthcoming.

Abstract: This paper proposes an approach for modeling competitive interactions that incorporates the costs to firms of changing strategy. The costs associated with strategy modifications, which we term “repositioning costs,” are particularly relevant to competitive interactions involving major changes to business strategies. Repositioning costs can critically affect competitive dynamics and, consequently, the implications of strategic interaction for strategic choice. While the literature broadly recognizes the importance of such costs, gametheoretic treatments of major strategic change, with very limited exceptions, have not addressed them meaningfully. We advocate greater recognition of repositioning costs and illustrate with two simple models how repositioning costs may facilitate differentiation and affect the value of a firm’s capability to reduce repositioning costs through investments in flexibility.

Anoop Menon (2015), Managerial Overoptimism in Strategy Formulation: An Associative Explanation , Advances in Strategic Management, 32, pp. 327350.

Abstract: This paper explores the phenomenon of managerial overoptimism, focusing on the cognitive underpinnings of the mechanisms that generate this bias. It develops a formal model of probability estimation that is inspired by the biological (cognitive neuroscience) evidence on associative information processing in the brain. The model is able to make novel, testable predictions about managerial overoptimism. It is able to parse out three mechanisms that could lead to overoptimism, as well as predict boundary conditions on when these effects should be observed and when the opposite (a pessimistic bias) should be observed instead. Furthermore, it predicts that under certain conditions, attempts by managers to “debias” their estimates might exacerbate the overoptimistic bias.

Anoop Menon and Dennis Yao, “Product Market Strategy”. In Palgrave Encyclopedia of Strategic Management, edited by David Teece and Mie Augier, (2014),

Anoop Menon, Giovanni M. Gavetti, Katherine Dowd Harvard Business School Case (2011) 71151: Charlie Merrill and the Financial Supermarket Strategy.

Daniel Albert and Anoop Menon (Under Review), Shorttermism as a longterm searchstrategy? Temporal Myopia, Foresightedness, and Intertemporal Choices.

Abstract: In this paper, we revisit the field’s almost unanimous reasoning that longterm success hinges on forwardlooking decision making, and pay particular attention to the role of temporal myopia and foresightedness. By proposing a framework that integrates the intertemporal nature of choices within spatially complex performance landscapes, we come to several important conclusions. First, foresightedness allows organizations to identify high performing longterm strategies in their local neighborhood quickly, however, at the expense of spatial exploration. Second, more temporally myopic search increases spatial exploration because organizations pursue one shortterm strategy after another. Third, highest performing organizations are more temporally myopic than they are foresighted. Myopic ignorance of longterm consequences leads organizations to opportunistically exploit shortterm strategies while indirectly exploring enough to come across a global, high performing longterm strategy. Our findings add to longstanding debates on myopic search, the role of foresight capabilities, and the tension between shortterm and longterm survival. In particular, our study suggests that shorttermism, in moderation, can constitute a viable longterm strategy when an organization’s search is allowing for competition between short and longterm alternatives that leads to longterm strategy adoption, eventually. Thus, our model suggests an answer to why shortterm oriented organizations have often prevailed and prospered in the longrun.

Laura Huang, Anoop Menon, Tiona Zuzul (Under Review), Watershed Moments, Cognitive Discontinuities, and Entrepreneurial Entry: The Case of New Space.

Abstract: Watershed moments – highly visible, emotionallyresonant events – can challenge or reinforce the mental models shared by actors in a particular industry. In this paper, we draw on archival and interview data to propose that watershed moments can even act as catalysts for successful entrepreneurial entry into an industry. Our empirical context is the successful entry of New Space firms, a small but growing number of new, private companies developing spaceflightaccess technologies, into the aerospace industry. We propose that in this case, in contrast to prior theory, entrepreneurial entry was not sparked by technological or regulatory discontinuities, or the collective activities of activists or social movements. Instead, we propose that entry was driven by a set of watershed moments that profoundly challenged actors’ mental models, or takenforgranted beliefs about the structure of the industry. We thus theorize watershed moments as producing cognitive discontinuities that can catalyze entrepreneurial entry, even in the absence of dramatic technological or regulatory changes.

Past Courses

MGMT223 BUSINESS STRATEGY

This course encourages students to analyze the problems of managing the total enterprise in the domestic and international setting. The focus is on the competitive strategy of the firm, examining issues central to its long and shortterm competitive position. Students act in the roles of key decisionmakers or their advisors and solve problems related to the development or maintenance of the competitive advantage of the firm in a given market. The first module of the course develops an understanding of key strategic frameworks using theoretical readings and casebased discussions. Students will learn concepts and tools for analyzing the competitive environment, strategic position and firmspecific capabilities in order to understand the sources of a firm's competitive advantage. In addition, students will address corporate strategy issues such as the economic logic and administrative challenges associated with diversification choices about horizontal and vertical integration. The second module will be conducted as a multisession, computerbased simulation in which students will have the opportunity to apply the concepts and tools from module 1 to make strategic decisions. ,The goal of the course is for students to develop an analytical tool kit for understanding strategic issues and to enrich their appreciation for the thought processes essential to incisive strategic analysis. This course offers students the opportunity to develop a general management perspective by combining their knowledge of specific functional areas with an appreciation for the requirements posed by the need to integrate all functions into a coherent whole. Students will develop skills in structuring and solving complex business problems.

MGMT701 STRAT & COMPET ADVANTAGE

This course is concerned with strategy issues at the business unit level. Its focus is on the question of how firms can create and sustain a competitive advantage. A central part of the course deals with concepts that have been developed around the notions of complementarities and fit. Other topics covered in the course include the creation of competitive advantage through commitment, competitor analysis, different organizational responses to environmental changes, modularity, and increasing returns. An important feature of the course is a termlength project in which groups of students work on firm analyses that require the application of the course concepts.

Wyss Award for Excellence in Doctoral Research, Harvard Business School, 2012 Grade of “Excellent” on the Harvard Business School Doctoral Qualifying Examination; Fields: Strategy, Cognitive Foundations, Corporate Finance, 2009 High Pass on the Harvard Business School Doctoral General Examination, 2008 Addison Brown Scholarship (highest academic standing in graduating class at graduation), Amherst College, 2007 James R. Nelson Memorial Award for Economics, Amherst College, 2007 Phi Beta Kappa membership in junior year (the top 1% of the class), Amherst College, 2006 Economics Department Junior Class Prize, Amherst College, 2006

Knowledge @ Wharton

The Final Frontier: How Entrepreneurs Cracked the Aerospace Industry, Knowledge @ Wharton 12/01/2016