“You can create a virtual board of directors that will have different expertises and that will come up with ideas that a given person may not come up with.”

– Felipe Csaszar

About Felipe Csaszar

Felipe Csaszar is the Alexander M. Nick Professor and chair of the Strategy Area at the University of Michigan’s Ross School of Business. He has published and held senior editorial roles in top academic journals including Strategy Science, Management Science, and Organization Science, and is co-editor of the upcoming Handbook of AI and Strategy.

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papers.ssrn.com

LinkedIn Profile:

Felipe Csaszar

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Felipe Csaszar

What you will learn

How AI transforms the three core cognitive operations in strategic decision making: search, representation, and aggregation.
The powerful ways large language models (LLMs) can enhance and speed up strategic search beyond human capabilities.
The concept and importance of different types of representations—internal, external, and distributed—in strategy formulation.
How AI assists in both visualizing strategists’ mental models and expanding the complexity of strategic frameworks.
Experimental findings showing AI’s ability to generate and evaluate business strategies, often matching or outperforming humans.
Emerging best practices and challenges in human-AI collaboration for more effective strategy processes.
The anticipated growth in framework complexity as AI removes traditional human memory constraints in strategic planning.
Why explainability and prediction quality in AI-driven strategy will become central, shaping the future of strategic foresight and decision-making.

Episode Resources

Transcript

Ross Dawson: Felipe, it’s a delight to have you on the show.

Felipe Csaszar: Oh, the pleasure is mine, Ross. Thank you very much for inviting me.

Ross Dawson: So many, many interesting things for us to dive into. But one of the themes that you’ve been doing a lot of research and work on recently is the role of AI in strategic decision making. Of course, humans have been traditionally the ones responsible for strategy, and presumably will continue to be for some time.

However, AI can play a role. Perhaps set the scene a little bit first in how you see this evolving.

Felipe Csaszar: Yeah, yeah. So, as you say, strategic decision making so far has always been a human task. People have been in charge of picking the strategy of a firm, of a startup, of anything, and AI opens a possibility that now you could have humans helped by AI, and maybe at some point, AI is designing the strategies of companies.

One way of thinking about why this may be the case is to think about the cognitive operations that are involved in strategic decision making. Before AI, that was my research—how people came up with strategies. There are three main cognitive operations. One is to search: you try different things, you try different ideas, until you find one which is good enough—that is searching.

The other is representing: you think about the world from a given perspective, and from that perspective, there’s a clear solution, at least for you. That’s another way of coming up with strategies. And then another one is aggregating: you have different opinions of different people, and you have to combine them. This can be done in different ways, but a typical one is to use the majority rule or unanimity rule sometimes. In reality, the way in which you combine ideas is much more complicated than that—you take parts of ideas, you pick and choose, and you combine something.

So there are these three operations: search, representation, and aggregation. And it turns out that AI can change each one of those. Let’s go one by one. So, search: now AIs, the current LLMs, they know much more about any domain than most people.

There’s no one who has read as much as an LLM, and they are quite fast, and you can have multiple LLMs doing things at the same time. So LLMs can search fas...