This study picks up on earlier suggestions that control theory may further the study of strategy. Strategy can be formally interpreted as an idealized path optimizing heterogeneous resource deployment to produce maximum financial gain. Using standard matrix methods to describe the firm Hamiltonian, it is possible to formalize useful notions of a business model, resources, and competitive advantage. The business model that underpins strategy may be seen as a set of constraints on resources that can be interpreted as controls in optimal control theory. Strategy then might be considered to be the control variable of firm path, suggesting in turn that the firm’s business model is the codification of the application of investment resources used to control the strategic path of value realization.

Optimal strategy and business models: a control theory approach

Foss, Nicolai J.
2016

Abstract

This study picks up on earlier suggestions that control theory may further the study of strategy. Strategy can be formally interpreted as an idealized path optimizing heterogeneous resource deployment to produce maximum financial gain. Using standard matrix methods to describe the firm Hamiltonian, it is possible to formalize useful notions of a business model, resources, and competitive advantage. The business model that underpins strategy may be seen as a set of constraints on resources that can be interpreted as controls in optimal control theory. Strategy then might be considered to be the control variable of firm path, suggesting in turn that the firm’s business model is the codification of the application of investment resources used to control the strategic path of value realization.
2016
2015
Johnson, Peter; Foss, Nicolai J.
File in questo prodotto:
File Dimensione Formato  
Foss_Johnson_Managerial_Decision_Economics_2016.pdf

non disponibili

Tipologia: Pdf editoriale (Publisher's layout)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 156.58 kB
Formato Adobe PDF
156.58 kB Adobe PDF   Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4002120
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 2
  • ???jsp.display-item.citation.isi??? 2
social impact