Top PhD in Strategy / International Business?

[moomber123]

As a strategy person, I would like to add the followings:

1.) The program at Northwestern is strong, well regarded, but not in the same area as the usual "strategy" departments would participate. It is really more of an econ shop than a strategy shop.

2.) NYU is strong, has many excellent faculty members, but is not necessarily a place to focus on strategy per se. There is nothing wrong with that, strategy as a business sub-field does not necessarily have a clear boundary. Many strategy people are doing stuffs pretty much similar to the "management" people are doing.

3.) I would offer a bit of a push-back on the notion that game theory is one of the two main approaches in strategy. Clearly there are the econ vs. sociology (OT) streams in strategy research, but the econ approach does not usually resort to game theory. If you review the top strategy journal (SMJ), what people mean by the econ stream in strategy usually means heavy use of econometrics methods, not necessarily econ theory like game theory. In fact, many prominent economists in strategy field have been crying for a stronger "theory" orientation in the field. Game theory, in particular, is now rarely used in strategy (in the sense that an econ publication revolves around the core concept of game theory, many strategy journal articles appeal to game theoretic logic, but offer no proof, or reserve the proof at the appendix section, and would not bother dwelling on the heavy math stuff).

This impression that game theory might be heavily used in "strategy" might be rooted in the fact that econ people do use the term "strategy" as well in their literature, but if you look at the type of research covered, it's only tangentially related to what people in "strategy" would be doing.

From my own experience, "strategy" in business school deals with the following main topics: transaction costs economics (Coase, Williamson approach, while heavily microecon based, but few in this stream use heavy math. most paper, i.e. Williamson's classics, are mostly just English text), resource based view (Jay Barney, Rumelt, etc, again, while some papers appeal to econ reasoning, it is hard to see the kind of heavy math in the usual econ literature.), knowledge-based view (as an outgrowth of resource based view, many would even consider it part of the RBV), many prominent researchers blend these approaches together into unique approach that is perhaps hard to classify at first, for example, Mintzberg's papers are usually case studies, English text only, but certainly are important papers in the field of strategy.

The key distinction is that when strategy people say their research is "econ based," it might or might not necessarily mean a heavy game theoretic, or even microecon type of research. This presents a bit of a problem for program like Northwestern's. Most likely graduates from that program compete for publication in econ journals (indeed I have yet to see people from that department publish in the typical top strategy journals), and in that arena, it's extremely heavy in rigorous math. It is somewhat unfortunate they use the term "strategy" in their department name (not that I would like to monopolize the term for my own field), as it creates a bit of a confusion for people who aspire to pursue a career in this area. I would recommend thinking of that department as pure econ shop instead.

[mikebike]

Thank you very much for the enriching excourses!
Now I'm a little bit confused ;-)
Basically, I'm interested in the "outside" perspective of firm behaviour or how players act in markets. I guess this would more likely go in the direction of economically touched strategy programmes (like competitive strategy, industrial organization, game theory, etc), right?

could someone group the programmes mentioned in this thread to the more quantitative ones and the more sociology-focused ones?

thanks a lot!

[moomber123]

Originally Posted by mikebike

Thank you very much for the enriching excourses!
Now I'm a little bit confused ;-)
Basically, I'm interested in the "outside" perspective of firm behaviour or how players act in markets. I guess this would more likely go in the direction of economically touched strategy programmes (like competitive strategy, industrial organization, game theory, etc), right?

could someone group the programmes mentioned in this thread to the more quantitative ones and the more sociology-focused ones?

thanks a lot!

Hi, sorry if my long response added to your confusion. But the reality is that this is not a very coherent field. (One famous textbook in strategic management even goes as far as disputing the notion of an agreement on the very basic definition of strategy....)

Your so called "outside" perspective (competitive strategy, industrial organization, and game theory, etc) is indeed one stream of the research within strategy. However, it is my opinion that this particular stream has somehow faded into the background in the current research literature. For instance, in terms of competitive strategy, Michael Porter's five forces is perhaps one of the most famous framework, and is still a dominant framework in the undergraduate and MBA level education (as mentioned in my posts elsewhere in the forum, there is a HUGE divide between what we teach and what we research, which is one of the most interesting characteristics of this academic community), but it rarely mentioned in modern strategy literature. IO economics is also no longer the focus topic of strategy research. (In fact, many would argue that Porter's five forces and his other early work represented his attempt to push IO econ out of strategy field by emphasizing the crucial role of firm as unit of analysis, as opposed to economics conventional assumption of homogeneous firms. To the extent that Porter has been successful, IO econ has been pushed out of much of the strategy research area. Of course, this is not an absolute statement. You do sometimes see IO based research here and there, but it certainly is no longer a dominant research topic within strategy as it used to be a few decades ago.)

Game theory, is likewise fading out of the scene. It is still the very dominant paradigm in economics departments, but within strategy, there is a clear consensus that game theory is no longer useful to explain firm performance differences. One of the biggest problem with game theory (put forth by some leading economists in strategy, which speak a lot of volume because they are supposed to be the experts of game theory) is the realization that results are highly sensitive to minor changes in model assumptions, which tend to be very hard to defend. So one can easily find one article arguing that so and so is the optimal equilibrium and another arguing the exact opposite but both seem to offer seemingly rigorous proofs.

Another big issue is that game theory (and IO econ, etc) tends to require the assumption of "perfect rationality" of economic agents. One can easily argue that managers are not nearly as competent as economic models depict as to so precisely anticipate each others' actions, and correctly figure out the logic of competition. Herbert Simon (and his pals from the Carnegie school: Cyert and March) represent the strong push back from the "bounded rationality" approach.

As a result, competitive strategy seems to give way to the dominant resource-based view (and knowledge based view as an outgrowth) that much of strategy research today is based on. You can go to SMJ for the past few years and scan the abstracts of all the articles and see how few of them explicitly deal with competitive strategy from the IO, game theoretic perspective. (which is not to say that there is no competitive strategy papers, but not certainly not using the same approach or targeting the same research questions as you might imagine out of the impression of the undergrad and MBA materials.)

My personal take on it is that game theory type of research is simply inappropriate for the purpose of management education. Future managers can't be expected to think in game theoretic models (this is evident in many class "experiments" I conducted by asking students to play some "games," and rarely do MBA students behave consistent to the model equilibrium. Even those who have decent exposure to game theory choose to NOT behave "optimally" because they simply don't expect all players to know the models and the logics behind it).

This is not to say that game theory type of research has no place in management research community. At the very least, it sort of provides a "theoretical optimal" outcomes for comparison. However, as stated, it is getting very "out of fashion" to conduct such type of research. But you need to be aware of a unspoken respect strategy gives to orthodox economics (I can't defend such mentality, but I can attest to its very strong existence.) Therefore, if you can successfully publish in top econ journals (e.g., AER), using those hardcore economics models, you would not have a hard time landing jobs in strategy department. The only problem with that approach is econ people in that area might not be exactly the "easy" crowd to compete with. (and people in that area certainly will look down at you if you pursue appointment at strategy departments. they will likely see you as a failure or a sellout of "rigorous" research in exchange of much higher salary. Yes, I have to be honest and inform you that business scholars are not well respected in academia, especially from econ people. We like to brush that off by saying they are simply jealous of our income, but I can also understand how their opinion has merits from a purely academic rigor perspective.)

I guess this is another long response that might further confuse you. But as I said, this is not a coherent field. Even Michael Porter, the self-proclaimed "father" of strategy, failed to unify the field. His current status is sort of like a respected elderly that nobody in the field openly insult, but nobody in the field openly embrace, at least not in our research efforts. We all love to teach his stuffs to MBA students, because it is easy to understand. But we don't take it too seriously for research because it is almost impossible to generate any interesting theories based on it. Most consider him to be too "consulting" oriented, and I guess only the Harvard style researchers (who are pretty much only hired by Harvard in inbreeding appointments they are so infamous for, perhaps MIT, and Ivy school of management in Ontario) would still base their research paradigm on Porter.

If that's your stuffs, well, go to those three schools, but be aware of the likely consequences of having a much smaller future employment choice set. Or, if you truly think you are all about game theory and IO econ, simply go to econ departments (or heavily econ based strategy departments that pretty much ignore strategy journals for publication. e.g., Northwestern, Chicago, etc) But the likely consequence is that you will be regarded most likely as an economist, not a strategy scholar. There is nothing wrong with that, but MBA students usually don't give too much attention to economists (in the strict orthodox definition, not the loose definition used in everyday language.)

I also have to re-emphasize the HUGE gap between MBA materials and strategy research literature. Most of us only read Harvard case studies before class because MBA students demand such an exposure. After class, we simply push it aside. Once in a while some Harvard cases do inspire us to some research idea, but any top journals would reject any article that is based solely on that kind of content. I might be too presumptuous, but I guess your interests in competitive strategy might be the direct result of the undergrad and MBA level materials. In which case, you might find what strategy scholars do far from what you imagine.

[blueguitar322]

Moomber, I have nothing to add except to say that your few posts here in the last week have done more to help me understand the academic strategy field than the sum of all other research I've done thus far. Thank you very much!

[ThatGuyOverThere]

Moomber is pretty dead-on in his recommendations. Also, realize that "strategy" is a fairly fractured field that tends to have a common interest (firm performance) and a wide variety of approaches (economics and sociology, certainly, but many subsets ranging from organizational ecology to individual decision-making). You are better off thinking about the approaches that matter most to you.

If you don't know which approaches appeal to you (not uncommon) schools that offer a diversity of approaches to strategy would be best for you: MIT, Wharton, Toronto, HBS [with moomber's caveats], INSEAD, LBS, and Duke are all good choices with excellent recent placement histories; Chicago, Stanford, Northwestern, CMU, Michigan, NYU, and Berkeley all also being excellent, but with a more limited set of approaches.