Anoop Menon

Anoop Menon
  • Assistant Professor of Management

Contact Information

  • office Address:

    2025 SH-DH
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: cognition, game theory, innovation, machine learning, strategic change, strategic decision making

Links: CV

Overview


Education:

Harvard Business School (Boston, MA):

Doctor of Business Administration, Strategy

Amherst College (Amherst, MA):

Bachelor of Arts, Economics and Psychology


Research Interests:

My research explores how cognitive processes, namely the mental processes by which individuals interpret situations, and acquire and process information, drive strategic decision-making and strategic interactions. Be it at crucial decision making points such as mergers and acquisitions or expansions, during periods of strategic innovation and change, or when competing with other firms, differences across strategic leaders in these cognitive processes can lead to significant performance differences across the firms. My research investigates some of the ways in which these processes can vary across decision makers, and how these differences affect performance. Thus, it provides a different, cognitive lens with which to understand persistent performance differences across firms, the central issue in strategy.


Affiliation:

Wharton Neuroscience Initiative

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Research

  • Anoop Menon, Gideon Nave, Sudeep Bhatia (Working), Volatility-Induced Emotions Impact Mergers and Acquisitions by S&P 500 Executives.

    Abstract: Risky decisions are at the heart of strategic managerial practice, and research suggests that they might be susceptible to emotional influences. However, as most work to date on the topic has relied on laboratory experiments conducted on college students, the extent to which emotions impact real-world high-stake decisions made by experienced managers is questionable. We address this question by investigating how risky decisions of the S&P 500 firms (a list of 500 of the largest publicly traded firms on the NYSE), on whether to conduct mergers and acquisitions (M&A) are influenced by emotions, induced by volatility in the stock prices of the firms. By performing text-based sentiment analysis on the earnings conference calls of these firms, we confirm that the volatility of the firms’ stocks increases the expression of negative emotions, and in turn leads to fewer M&A deals. The main emotional effect holds even when controlling for volatility itself, ruling out the possibility that the effect is epiphenomenal. Furthermore, the relationship between emotions and M&A decisions is mainly driven by the expression of sadness and fear - emotions that involve appraisals of uncertainty and lack of control - in line with the predictions of the appraisal tendency framework. We conclude by discussing the implications of our findings for managerial practice and highlight limitations and avenues for future research.

  • Anoop Menon (2018), Bringing Cognition into Strategic Interactions: Strategic Mental Models and Open Questions, Strategic Management Journal.

    Abstract: This paper explicitly introduces cognitive considerations into the treatment of strategic interactions, using the value-based framework as an extended example. Through real-world examples and prior empirical findings, it shows that many of the implicit assumptions of the framework are regularly violated in practice when actors simplify their complex realities into incomplete, inaccurate mental models. These violations lead to outcomes that are often contrary to the predictions of the classical framework. As initial steps towards developing a cognitively grounded theory of strategic interactions, the paper characterizes the core components of strategic mental models that might form the foundation of such a theory and then lays out some open questions that this theory would need to address. These questions, when answered, can point to novel cognitive capabilities.

  • Anoop Menon, Jaeho Choi, Haris Tabakovic (Working), What You Say Your Strategy Is and Why It Matters: Applying Machine Learning to Unstructured Text in Strategic Management.

  • Anoop Menon and Dennis Yao (2017), Elevating Repositioning Costs: Strategy Dynamics and Competitive Interactions in Grand Strategy, Strategic Management Journal.

    Abstract: This paper proposes an approach for modeling competitive interactions that incorporates the costs to firms of changing strategy. The costs associated with strategy modifications, which we term “repositioning costs,” are particularly relevant to competitive interactions involving major changes to business strategies. Repositioning costs can critically affect competitive dynamics and, consequently, the implications of strategic interaction for strategic choice. While the literature broadly recognizes the importance of such costs, game-theoretic treatments of major strategic change, with very limited exceptions, have not addressed them meaningfully. We advocate greater recognition of repositioning costs and illustrate with two simple models how repositioning costs may facilitate differentiation and affect the value of a firm’s capability to reduce repositioning costs through investments in flexibility.

  • Sen Chai and Anoop Menon (Under Review), Breakthrough Recognition: Competing for Attention.

    Abstract: We introduce to the literature on the recognition and spread of ideas the perspective that articles compete for the attention of researchers who might build upon them, in addition to the bias against novelty view documented in prior research. We investigate these effects by analyzing more than 5.3 million research publications from 1970 to 1999 in the life sciences. In keeping with the competition for attention view, we show that articles covering rarely addressed topics tend to receive more citations and have a higher chance of being a breakthrough paper. We also find evidence consistent with the bias against novelty, as well as that both mechanisms can work simultaneously.

  • Anoop Menon and Daniel Albert (Working), Short-termism as a long-term search-strategy.

    Abstract: A widely held belief in strategic decision-making is that if information were free and perfectly accurate, acquiring more information about the consequences of one’s choices should always lead to greater long-term performance. In this paper, we revisit this axiomatic belief and explore whether and when this is truly the case. Using computer simulations, we find in most cases that short-term focused decision-making outperforms more foresighted decision-making, both instantaneously and in the long run. For foresightedness to outperform short-termism, we identify a narrow set of environmental conditions that need to apply. Long-termism performs best in environments that are driven by the accumulation of usage specific resources. Long-termism also becomes favorable in environments where strategies are substantially heterogeneous in their performance.

  • Anoop Menon (Under Review), Cognitive Roots of Competitive Advantage.

    Abstract: This paper explicitly introduces into traditional frameworks of competitive advantage the notion that strategic actors have simplified, incomplete, and often inaccurate mental models of reality. Through this, it is seen that neither superior resources nor superior positions, traditionally defined, are sufficient nor necessary to create sustainable competitive advantage. A revised condition, fusing properties of strategic mental models and traditional factors, is proposed instead as being sufficient and necessary for creating sustainable competitive advantage. The paper also briefly explores some of the factors that drive the convergence between the system of strategic mental models and objective reality, termed cognitive convergence, which in turn affects the appropriateness of analyses done through traditional frameworks.

  • Anoop Menon and Dennis Yao (Under Review), Rationalizing Outcomes: Mental-Model-Guided Learning in Competitive Markets.

    Abstract: This paper explores how mental models affect the analysis of dynamic strategic interactions. We develop an explanation-based view of mental models founded on a regression analogy and implement this view in simulations involving market competition between two firms with possibly differing mental models regarding the structure of demand. The paper addresses the following questions: (1) How sticky are incorrect mental models and how are market observations interpreted in such models? (2) What is the impact of the interaction of different mental models on each firm’s learning? (3) Can firms with less accurate mental models outperform firms with more accurate mental models and, if so, why? We find that incorrect mental models can easily “rationalize” market outcomes and shape how a firm and its rival learns. Furthermore, this learning process does not push the firms to make increasingly convergent output choices, but rather causes those choices to diverge slowly. Finally, we identify situations where the firm with the less accurate mental model outperforms the firm with the more accurate mental model.

  • Laura Huang, Anoop Menon, Tiona Zuzul (Working), Watershed Moments, Cognitive Discontinuities, and Entrepreneurial Entry: The Case of New Space.

    Abstract: In this paper, we theorize the importance of an industry’s watershed moments: vivid, publically salient, emotionally resonant events. We draw on archival and interview data to explore how watershed moments can drive the emergence of a new market. Our empirical context is the newly-emerged New Space market, a growing number of new, private companies developing and using spaceflight-access technologies. We propose that the emergence of this market was catalyzed by a set of watershed moments that profoundly affected the actors in the aerospace industry. By focusing attention, motivating action, and threatening actors’ belief systems, the watershed moments challenged or reinforced existing mental models, triggered a search for new solutions, and illuminated the possibility for change among both entrepreneurs and industry incumbents. This, in turn, drove the emergence of a previously-unimaginable market in aerospace. In developing a model of how watershed moments can catalyze market emergence, we contribute to research on new industries, mental models, and industry-wide critical events.

  • Anoop Menon, Clarence Lee, Haris Tabakovic (Working), Using Machine Learning to Predict High-Impact General Technologies.

    Abstract: In this paper, we develop a method to ex-ante identify general, high-impact patents. We use an ensemble of deep learning models that analyze both the text of a patent as well as its bibliometric information. This method excels in identifying high generality patents, accurately identifies 80% of the top 100 high generality patents in the hold-out testing set, and outperforms, by an order of magnitude, simple regression models that use bibliometric information only. This ability to identify promising technologies early can be highly valuable for society. Given our limited time, attention, and resources, such a filter can prevent highly promising technologies from being lost in the crowd, and thus, it can help to significantly increase the innovative output of the economy. It can also have significant implications for national technology policy as well as the R&D investment of firms.

Teaching

Current Courses

  • MGMT223 - Business Strategy

    This course encourages students to analyze the problems of managing the total enterprise in the domestic and international setting. The focus is on the competitive strategy of the firm, examining issues central to its long- and short-term competitive position. Students act in the roles of key decision-makers or their advisors and solve problems related to the development or maintenance of the competitive advantage of the firm in a given market. The first module of the course develops an understanding of key strategic frameworks using theoretical readings and case-based discussions. Students will learn concepts and tools for analyzing the competitive environment, strategic position and firm-specific capabilities in order to understand the sources of a firm's competitive advantage. In addition, students will address corporate strategy issues such as the economic logic and administrative challenges associated with diversification choices about horizontal and vertical integration. The second module will be conducted as a multi-session, computer-based simulation in which students will have the opportunity to apply the concepts and tools from module 1 to make strategic decisions. The goal of the course is for students to develop an analytical tool kit for understanding strategic issues and to enrich their appreciation for the thought processes essential to incisive strategic analysis. This course offers students the opportunity to develop a general management perspective by combining their knowledge of specific functional areas with an appreciation for the requirements posed by the need to integrate all functions into a coherent whole. Students will develop skills in structuring and solving complex business problems.

    MGMT223001 ( Syllabus )

  • MGMT701 - Strat & Compet Advantage

    This course is concerned with strategy issues at the business unit level. Its focus is on the question of how firms can create and sustain a competitive advantage. A central part of the course deals with concepts that have been developed around the notions of complementarities and fit. Other topics covered in the course include the creation of competitive advantage through commitment, competitor analysis, different organizational responses to environmental changes, modularity, and increasing returns. An important feature of the course is a term-length project in which groups of students work on firm analyses that require the application of the course concepts.

    MGMT701001 ( Syllabus )

    MGMT701002 ( Syllabus )

Past Courses

  • MGMT223 - BUSINESS STRATEGY

    This course encourages students to analyze the problems of managing the total enterprise in the domestic and international setting. The focus is on the competitive strategy of the firm, examining issues central to its long- and short-term competitive position. Students act in the roles of key decision-makers or their advisors and solve problems related to the development or maintenance of the competitive advantage of the firm in a given market. The first module of the course develops an understanding of key strategic frameworks using theoretical readings and case-based discussions. Students will learn concepts and tools for analyzing the competitive environment, strategic position and firm-specific capabilities in order to understand the sources of a firm's competitive advantage. In addition, students will address corporate strategy issues such as the economic logic and administrative challenges associated with diversification choices about horizontal and vertical integration. The second module will be conducted as a multi-session, computer-based simulation in which students will have the opportunity to apply the concepts and tools from module 1 to make strategic decisions. The goal of the course is for students to develop an analytical tool kit for understanding strategic issues and to enrich their appreciation for the thought processes essential to incisive strategic analysis. This course offers students the opportunity to develop a general management perspective by combining their knowledge of specific functional areas with an appreciation for the requirements posed by the need to integrate all functions into a coherent whole. Students will develop skills in structuring and solving complex business problems.

  • MGMT701 - STRAT & COMPET ADVANTAGE

    This course is concerned with strategy issues at the business unit level. Its focus is on the question of how firms can create and sustain a competitive advantage. A central part of the course deals with concepts that have been developed around the notions of complementarities and fit. Other topics covered in the course include the creation of competitive advantage through commitment, competitor analysis, different organizational responses to environmental changes, modularity, and increasing returns. An important feature of the course is a term-length project in which groups of students work on firm analyses that require the application of the course concepts.

Awards and Honors

  • Best Reviewer Award, Behavioral Strategy IG Track, Strategic Management Society Annual Conference, 2017
  • Wyss Award for Excellence in Doctoral Research, Harvard Business School, 2012
  • Grade of “Excellent” on the Harvard Business School Doctoral Qualifying Examination; Fields: Strategy, Cognitive Foundations, Corporate Finance, 2009
  • High Pass on the Harvard Business School Doctoral General Examination, 2008
  • Addison Brown Scholarship (highest academic standing in graduating class at graduation), Amherst College, 2007
  • James R. Nelson Memorial Award for Economics, Amherst College, 2007
  • Phi Beta Kappa membership in junior year (the top 1% of the class), Amherst College, 2006
  • Economics Department Junior Class Prize, Amherst College, 2006

In the News

Knowledge @ Wharton

Activity

Latest Research

Anoop Menon, Gideon Nave, Sudeep Bhatia (Working), Volatility-Induced Emotions Impact Mergers and Acquisitions by S&P 500 Executives.
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In the News

The Final Frontier: How Entrepreneurs Cracked the Aerospace Industry

Space exploration is a complex, highly technical and increasingly expensive endeavor. What’s enabling more private firms to jump into the fray?

Knowledge @ Wharton - 2016/12/1
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Awards and Honors

Best Reviewer Award, Behavioral Strategy IG Track, Strategic Management Society Annual Conference 2017
All Awards