Csaszar, F. A. (forthcoming). Unbounding rationality: Why AI is a fundamental issue for strategy. Invited chapter in a forthcoming book on strategy’s fundamental issues, edited by Jay Barney and Todd Zenger.
Abstract:
Recent breakthroughs in artificial intelligence represent a fundamental discontinuity for the field of strategy. This chapter argues that AI strikes at the heart of strategy’s foundational assumption: bounded rationality. By offering a path toward “unbounding rationality”—systematically relaxing the cognitive constraints that have shaped organizational decision-making since Simon—AI promises to transform both strategy process (how strategic decisions are made) and strategy content (the sources of competitive advantage). The chapter builds this case by presenting affirmative arguments grounded in AI’s demonstrated mastery of complex cognitive tasks, from creative problem-solving to sophisticated language understanding. It then directly confronts two powerful objections: that AI’s widespread availability will homogenize rather than differentiate firms, and that AI lacks the forward-looking creativity essential for strategic thought. Finally, it proposes a concrete research agenda centered on computational strategy processes, predictive foresight, verifiable benchmarks, and new forms of scholarly contribution. Embracing this program can sharpen theory, guide practice, and position the field to lead in an era of radical, ubiquitous intelligence.
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