Behavioural strategy and deep foundations of dynamic capabilities – Using psychodynamic concepts to better deal with uncertainty and paradoxical choices in strategic management

Abstract

Behavioural strategy deals with strategic management from a psychologically informed perspective, integrating emotional aspects in strategic management. Strategic situations can be characterised by a high level of uncertainty, based on the unforeseeable nature of the future and the paradoxical nature of underlying seemingly conflicting choices. Both entail human emotional reactions such as fear and anxiety. Therefore, the micro-foundations of dynamic capabilities theory should pay more attention on the study of fear in the strategic decision-making process. Psychoanalysis and psychotherapy have long-term experience in researching these emotions, such that psychodynamic theory can help with understanding their influences on the thoughts and feelings of the manager, the management team, and the organisation in the process of strategy making.

Using the psychodynamic lens in the field of behavioural strategy presents a new and fairly neglected avenue for exploring the more unconscious, ‘deep foundations’ of dynamic capabilities resting on the strategizing manager, the top decision-making team, and the implementing organisation. The three generic dynamic capabilities developed by Teece et al. (1997) and Teece (2007), sensing, seizing and reconfiguring, provide a framework for developing a process-oriented perspective for creating corporate strategy, so that the foundations of dynamic capabilities can be reworked and complemented within this framework. This will also enable the operationalisation of success factors for dynamic capabilities from a psychodynamic perspective and creates opportunities for future research.