October 2024
Article
Strategic Management Journal

Strategic Decision Making at Platform Transitions: The Case of Nokia (2010-2011).

Format:Print
| Pages:45

Abstract

We studied Nokia’s decision to adopt the Windows platform in 2011 to induce new theory on the emotional dynamics of incumbent firms’ strategic decision making at platform transitions. We find that platform companies’ entry into an established industry activates a cosmological episode—a period when long-held core assumptions about the industry become invalid—for incumbent senior teams, triggering anxiety and stunting self regulation. Distinct mechanisms then influence incumbent senior team’s emotions toward external platform options—myopic appraisals of firm competitiveness inside a platform (vs. platform competitiveness against other platforms), appraisals of changing firm boundaries, and emotional resonance of potential partners. These emotions contribute to emotional drift, with top managers ultimately favoring the emotionally attractive option. These findings extend theory on platforms, strategy, and emotion.