Analogical Reasoning (in Strategy)
Confidence 0.75 · 1 source · last confirmed 2026-04-28
The use of analogies between a known source case and an unknown target case to inform strategy formulation, communication, or evaluation. Logicians regard analogy as a weak inductive form, yet practitioners use it pervasively. The wiki’s anchor source (Carroll & Sørensen 2024) argues analogies should be disciplined, not banished.
Working definition
Two roles of analogy in strategy discourse (Gentner 1982):
| Role | Use |
|---|---|
| Rhetorical / persuasive | Vivid metaphor for stakeholders (“Glassdoor is Tripadvisor for jobs”) |
| Generative / problem-solving | Surface candidate causal mechanisms; develop firm-specific theory of value |
A predictive analogy has the structure: source A has features a₁, a₂, … and outcome a_c; target B has features b₁, b₂, … (where b_n is similar to a_n); therefore the unknown b_c is plausibly similar to a_c.
Key claims
Why analogies dominate strategy discourse despite weak logical foundations
- Efficient communication — a one-phrase analogy carries vast detail.
- Concrete and memorable — material analogies vivid; abstract theories aren’t.
- Predictive even when conceptual understanding is limited.
- Generative problem-solving tool — best solutions often generalize from familiar puzzles.
- Intermediate-level abstraction — neither too specific nor too abstract; matches how busy executives reason.
- Success-story anchoring — the source firm worked, providing existence proof.
Practical tools for disciplining strategy analogies (Carroll & Sørensen 2024)
- Decompose the global analogy into atomic feature premises.
- Add negative analogies (where source and target differ).
- Distinguish horizontal vs. vertical relations (Hesse 1966):
- Horizontal = surface similarity between source and target features.
- Vertical = causal relationships within source that produced its outcome.
- Test the vertical relations — does the source’s success theory plausibly transfer?
- Build multiple analogies in parallel — increases predictive ability.
Connection to the theory-based view of strategy
The theory-based view (TBV) of strategy (Felin & Zenger 2009, 2017) asks executives to develop firm-specific theories of value:
- What is your firm’s theory of value?
- Is your theory novel, simple, elegant?
- Is it falsifiable / generalizable / generative?
- Who must you convince for your theory to be realized?
Analogies aid TBV in theory discovery, wider-team theory engagement, identifying unique aspects, and communication.
Worked example: Glassdoor / Tripadvisor
| Tripadvisor (source) | Glassdoor (target) |
|---|---|
| experiential-good info (hotels) | experiential-good info (jobs) |
| free + open access | free + open access |
| user-generated content | user-generated content |
| five-star ratings + detailed reviews | same |
| collects data → reports + trend prediction | same |
| ad/referral revenue | same |
| market success | plausibly similar |
Negative premises (where the analogy fails or weakens): travel events vs. ongoing employment; willingness to disclose negative experiences; user registration requirements.
AI-related analogy noted in passing
The paper’s footnote-level example: a leaked Google memo (Patel & Ahmad 2023) characterized the open-source AI threat to GPT-4 as “if GPT-4 is the Walmart you go to for apples, what happens when a fruit stand opens in the parking lot?” — illustrating the analogy form in a current AI strategy debate.
Related concepts
- strategic-foresight — analogies between historical convergence cycles and the current period are explicitly invoked in FTSG 2026 (industrial revolution, post-WWII, late-1990s).
- dynamic-capabilities — sensing involves analogizing across industries, contexts, time periods.
- Anand-Wu’s 2×2 — itself a kind of generative analogical structure for matching deployment context to AI use case.
Open questions
- Single-source coverage at present (2026-04-28-carroll-sorensen-strategy-analogy); related Gavetti & Rivkin work (2005, 2014) and Felin & Zenger TBV writings would deepen the page.
- Open question whether LLMs can serve as effective analogy-generation tools for strategy work — the jagged-frontier suggests they may be especially good at the rhetorical role and potentially weaker at the generative/causal role.