Judgmental Errors, Interactive Norms, and the Difficulty of Detecting Strategic Surprises

Abstract

The concept of strategic surprise has been used by writers on military strategy to explore the successful amplification of resources during battle. This paper applies the same concept to subcontracting relationships and develops a cognitive framework to explain the phenomenon of strategic surprises, using buyer-supplier relations as an example. We first examine the factors that produce vulnerability to strategic surprise in cooperative situations. Then, we explore the reasons why firms are caught by surprise in spite of their vigilance. We present a model representing false alarms and strategic surprises as judgmental errors. We argue that judgmental errors cause misinterpretation of evidence and a consequent sense of false security. Interactive norms, which exist in some industries and may be taken as proxies for enduring relationships, may increase the likelihood of misjudgment and strategic surprises.