CONCEPT
Dominant Logic
Prahalad and Richard Bettis's 1986 term for the cognitive frame through which managers interpret their competitive environment — always right about the current paradigm, always wrong about the next one.
Dominant logic is the concept Prahalad introduced with Richard Bettis in a 1986 Strategic Management Journal article to name the shared cognitive frame that organizations use to interpret their competitive environment. Dominant logic is the set of assumptions, analytical habits, and mental models that a management team uses to make sense of its market, its competitors, and its own organization. It is always right about the current paradigm — that is how the team got to the top — and it is always wrong about the next paradigm, because the next paradigm operates on different assumptions the dominant logic has not yet recognized.
In The You On AI Field Guide
The dominant logic of the AI transition, visible across boardrooms in 2026, is headcount arithmetic. The logic says: AI produces a productivity multiplier; productivity multipliers translate into workforce reduction; workforce reduction produces margin improvement; margin improvement produces shareholder value. Each link in the chain is correct within the old paradigm. The chain as a