Nicolaj Siggelkow

David M. Knott Professor at The Wharton School


The Wharton School

Nicolaj Siggelkow is the David M. Knott Professor at the Wharton School, University of Pennsylvania. He is a CoDirector of the Mack Institute for Innovation Management at Wharton. He studied Economics at Stanford University and earned an M.A. in Economics from Harvard University. He received a Ph.D. in Business Economics from Harvard University and the Harvard Business School. Professor Siggelkow has been the recipient of multiple MBA and Undergraduate Excellence in Teaching Awards, including the Class of 1984 Award presented to the faculty member with the highest teaching rating in the MBA classroom, the Helen Kardon Moss Anvil Teaching Award, the Wharton Award, and the Wharton Graduate Association Student Choice Award. His research has been published in the leading management journals, including Academy of Management Journal, Administrative Science Quarterly, Journal of Industrial Economics, Management Science, Organization Science, and Strategic Organization. In 2008, he received the Administrative Science Quarterly Scholarly Contribution Award for the most significant paper published in ASQ five years earlier. Nicolaj is a member of the Editorial Review Boards of Administrative Science Quarterly, Organization Science, Strategic Management Journal, Strategic Organization, and Academy of Management Perspectives.

His current research focuses on the strategic and organizational implications of interactions among a firm’s choices of activities and resources. In particular, his research has focused on three broad questions: How do firms develop, grow and adjust their set of activities over time? How does organizational design affect a firm’s ability to find highperforming sets of activities? What role do interactions among a firm’s activities play in creating and sustaining competitive advantage? To address these questions, he has employed a range of methodological approaches, including indepth field studies of individual firms, econometric methods for largescale data sets, formal modeling, and simulation models.


Mack Institute for Innovation Management

Creating and Implementing Strategy for Competitive Advantage

Ashish Arora, Michelle Gittelman, John Lynch, Will Mitchell, Nicolaj Siggelkow (2016), QuestionBased Innovations in Strategy Research , Strategic Management Journal, 37, pp. 39.

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.

Phebo Wibbens and Nicolaj Siggelkow (Under Revision), Introducing LIVA to Measure LongTerm Firm Performance.

Abstract: In this paper we introduce lifetime (or longterm) investor value appropriation (LIVA) to measure firm performance, defined as the ex post value of discounted cash flows over a firm’s lifetime. Unlike other commonly used measures of firm performance, such as return on assets, Tobin’s q, economic profit, or total shareholder return, LIVA captures longterm returns visàvis the cost of capital, profitable growth, as well as the size of the economic impact in a single metric. Moreover, we show that LIVA can be equivalently operationalized using cash flow data, accounting profits, or shareholder return data. Finally, two exploratory empirical studies illustrate how LIVA can be operationalized and provide new strategic insights beyond currently used measures.

Nicolaj Siggelkow and Phebo Wibbens (Draft), A Ladder of Competitive Advantage.

Abstract: Competitive advantage, a central construct in the strategy field, has been defined in two distinct ways in the contemporary literature: based on superior performance, or based on superior value creation. These two definitions are, however, neither necessary nor sufficient for each other. Instead of trying to find a universal, single definition of competitive advantage, we propose the notion of a ladder of competitive advantage that describes three different kinds of advantages that differ in terms of scope and time horizon: at the singletransaction level, at the business unityear level, and at the firmlifetime level. The ladder can help resolve existing confusions in the literature, as well as provide a deeper insight in how managers can create and appropriate longterm value.

Oliver Baumann and Nicolaj Siggelkow (2013), Dealing with Complexity: Integrated vs. Chunky Search Processes , Organization Science, 24, pp. 116132.

Abstract: Organizations are frequently faced with high levels of complexity. While the importance of search for dealing with complex systems is widely acknowledged, how organizations should structure their search processes remains rather unexplored. This paper starts to address a basic question: how much of the entire system, and thus complexity, should be taken into consideration at any given time of a search process? Should a problem solver pursue an integrated search and be concerned with the whole system right from the start, or should a problem solver incrementally expand the “search domain” – the subset of system elements and interdependencies that are included in the search efforts, and if yes, how “chunky” should these steps be? Our analysis of a simulation model yields four insights: (1) expanding the search domain in smaller steps can yield a distinct advantage in final system performance; (2) following a completely incremental expansion pattern is not necessary as long as larger chunks are added early on in the process; (3) the value of chunky search is particular high if highly influential system elements are considered first, while highly dependent elements are added later; (4) under time pressure, chunky search can lose its performance advantage over more integrated search processes. We discuss the implications of our findings for managing organizational search and complex systems, more broadly.

Vikas Aggarwal, Nicolaj Siggelkow, Harbir Singh (2011), Corporate Development Choices and Interdependence: Strategic Tradeoffs and Performance Implications , Strategic Management Journal, 32: 705730.

Dirk Martignoni, Anoop Menon, Nicolaj Siggelkow (Work In Progress), The Power of (Initially) Simple Mental Models.

Nicolaj Siggelkow (2011), Firms as Systems of Interdependent Choices , Journal of Management Studies, 48: 11261140.

Dirk Martignoni and Nicolaj Siggelkow (Working), When it Pays to be Neurotic or to Have Blind Spots: The Value of Understanding External and Internal Contingencies.

Felipe Csaszar and Nicolaj Siggelkow (2010), How much to copy? Determinants of Effective Imitation Breadth , Organization Science, 21: 661676.

Abstract: It is a common and frequently implicit assumption in the literature on knowledge transfer and organizational learning that imitating practices from highperforming firms has a positive impact on the imitating firm. Although a large body of research has identified obstacles to successful imitation, not much is known about what breadth of imitation is most effective. In this paper, we use a simulation model to explore how context and firm similarity, interdependence among practices, context and firm similarity, and time horizon interact in nontrivial ways to determine the payoffs that arise from different breadths of imitation. The results of the model allow us to qualify and refine predictions of the extant literature on imitation. In particular, the results shed light on the conditions under which increases in imitation breadth, and hence investments that facilitate the faithful copying of more practices, are valuable. In addition, the results of the model highlight that imitation can serve two different functions—mimicking high performers, and generating search by dislodging a firm from its current set of practices—each requiring different organizational routines for its successful implementation.

Past Courses


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.


The management of large, established enterprises creates a range of multifacet challenges for the general manager. A general manager needs to understand the internal workings of a firm, how to assess and create a strategy, and how to take into account increasing, globalization. While these issues are distinct, they are very much intertwined. As a result, this course will provide you with an integrated view of these challenges and show you that effective of an established enterprise requires a combination of insights drawn from economics, sociology, psychology and political economy.


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.

Excellence in Teaching Award, Wharton Executive MBA Program, West Coast, 2015 Excellence in Teaching Award, Wharton, MBA Program, 2015 Excellence in Teaching Award, Wharton, MBA Program, 2014 Excellence in Teaching Award, Wharton Executive MBA Program, West Coast, 2014 Excellence in Teaching Award, Wharton Executive MBA Program, East Coast, 2014 Core Curriculum Teaching Award, Wharton, 2013 Fellow of the Strategic Management Society, 2013 Excellence in Teaching Award, 2012 Studentelected Faculty Marshal, 2011 Helen Kardon Moss Anvil Teaching Award, 2010 Excellence in Teaching Award, 2010 Studentelected Faculty Marshal, 2010 Administrative Science Quarterly Scholarly Contribution Award for the most significant paper published in ASQ five years earlier, 2008 Excellence in Teaching Award, 2006 Class of 1984 Award (presented to the faculty member with the highest teaching rating in the MBA classroom), 2006 Excellence in Teaching Undergraduates Award, 2005 The (inaugural) Wharton Graduate Association Student Choice Award (for commitment to teaching excellence), 2005 Class of 1984 Award (presented to the faculty member with the highest teaching rating in the MBA classroom), 2004 The Wharton Award (awarded by MBA students to “the professor who has contributed the most to students’ experience at Wharton”), 2004 Studentelected Faculty Marshal, 2004 Excellence in Teaching Award, 2003 Excellence in Teaching Undergraduates Award, 2003 Excellence in Teaching Award, 1999

Warren Buffett’s Big Secret 02/29/2012

Knowledge @ Wharton

  • The Panama Canal Expansion: Changes Beyond the Waterway, Knowledge @ Wharton 06/03/2016
  • Warren Buffett’s Big Secret, Knowledge @ Wharton 02/29/2012
  • Why Sharing Failures Can Speed Up Innovation, Knowledge @ Wharton 06/17/2011
  • Can Dell’s Turnaround Strategy Keep HP at Bay?, Knowledge @ Wharton 09/05/2007
  • Falling Behind: Working Women in Germany Grapple with Limited ChildCare Options, Knowledge @ Wharton 03/28/2007
  • A New Tool for Resurrecting an Old Theory of the Firm, Knowledge @ Wharton 05/17/2006
  • Wishing Upon a Star: Hiring a CEO from Inside the Company Vs. Going Outside, Knowledge @ Wharton 04/06/2005
  • How Mutual Fund Managers Exploit Opportunities to Maximize Fees, Knowledge @ Wharton 09/08/2004
  • Keeping Fit: The Liz Claiborne Story, Knowledge @ Wharton 03/01/2000


Courses Taught

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