Bet-the-company decisions: when do they pay off?

Abstract

Purpose

The purpose of this paper is to examine what distinguishes bet-the-company decisions from strategic decisions in general, what forms do they take and under what circumstances do firms make them.

Design/methodology/approach

From a comprehensive review and synthesis of relevant literature and media coverage since 1980, the author identifies 42 cases of bet-the-company decisions, from which the conclusions are drawn.

Findings

The author identify four characteristics, three distinct types and four drivers of bet-the-company decisions.

Research limitations/implications

The author draws conclusions from a qualitative analysis of 42 cases mentioned in prominent business media, supplemented by a literature review. Identifying the underlying processes that result in betting the company would require a more in-depth series of case studies. Acquiring statistical evidence would require more formal meta-analysis that this paper lacks.

Practical implications

The paper identifies common characteristics, types and drivers of bet-the-company decisions that decision-makers could use to judge to recognize whether they also face such a situation.

Originality/value

Executives are very sensitive to decisions with extreme consequences. This paper offers the first review of bet-the-company decisions, decisions that lie at the upper extreme of the range of strategic decision consequences.

Citation

Fralich, R. (2016), "Bet-the-company decisions: when do they pay off?", Journal of Business Strategy, Vol. 37 No. 1, pp. 44-50. https://doi.org/10.1108/JBS-08-2014-0094