Choice Structures , Business Strategy and Performance : A Generalized NK-Simulation Approach by

There is a line among the fragments of the Greek poet Archilochus which says: " The fox knows many things, but the hedgehog knows one big thing. " Scholars have differed about the correct interpretation of these dark words, which may mean no more than that the fox, for all his cunning, is defeated by the hedgehog's one defense. But, taken figuratively, the words can be made to yield a sense in which they mark one of the deepest differences which divide writers and thinkers, and, it may be, human beings in general. For there exists a great chasm between those, on one side, who relate everything to a single central vision, one system less or more coherent or articulate, in terms of which they understand, think and feel…and on the other side, those who pursue many ends…seizing upon the essence of a vast variety of experiences and objects for what they are in themselves. —Isaiah Berlin, The Hedgehog and the Fox The fox and the hedgehog seem to us to capture an important part of one of the central tensions within the strategy field at the millennium: the cross-sectional vs. longitudinal tug-of-war concerning the best perspective for thinking about linkages among choices. The cross-sectional perspective has increasingly come to emphasize the complexity of coordinating across a large number of choices when the cross-sectional linkages among them are significant. The longitudinal perspective actually subsumes a number of quite different views about how to model intertemporal linkages in choices but all of these views accord much more importance to path-dependence or historical constraint than does the pure cross-sectional perspective. In that sense, the longitudinal perspective has more of an affinity with the hedgehog's perspective, whereas the cross-sectional perspective has more of an affinity with the fox's. Section 1 provides some historical background on the debate between the cross-sectional and longitudinal perspectives. Section 2 uses two case histories to shed light on the debate, and concludes that it is probably useful to integrate these two analytical 3 perspectives. Section 3 considers various ways of integrating and analyzing the choice structures implied by the two perspectives, an exercise that leads us to propose a graph-theoretic generalization of the NK simulation-based approach that has already been applied with some success to strategy. Section 4 presents our results from generalized NK simulations of how the structure of choice landscapes affects organizational fitness levels, and section …