A conceptual theory for analyzing and understanding oxidative addition reactions that form the cornerstone of many transition metal mediated catalytic cycles that activate C-C and C-H bonds, for example, was developed. The cleavage of the σ- or π-bond in the organic substrate can be envisioned to follow a closed or an open shell formalism, which is matched by a corresponding electronic structure at the metal center of the catalyst. Whereas the assignment of one or the other mechanistic scenario appears formal and equivalent at first sight, they should be recognized as different classes of reactions, because they lead to different reaction optimization and control strategies. The closed-shell mechanism involves heterolytic bond cleavages, which give rise to highly localized charges to form at the transition state. In the open-shell pathway, bonds are broken homolytically avoiding localized charges to accumulate on molecular fragments at the transition states. As a result, functional groups with inductive effects may exert a substantial influence on the energies of the intermediate and transition states, whereas no such effect is expected if the mechanism proceeds through the open-shell mechanism. If these functional groups are placed in a way that opens an electronic communication pathway to the molecular sites where charges accumulate, for example, using hyperconjugation, electron donating groups may stabilize a positive charge at that site. An instructive example is discussed, where this stereoelectronic effect allowed for rendering the oxidative addition diastereoselective. No such control is possible, however, when the open-shell reaction pathway is followed, because the inductive effects of functional groups have little to no effect on the stabilities of radical-like substrate states that are encountered when the bonds are broken in a homolytic fashion. Whether the closed-shell or open-shell mechanism for oxidative addition is followed is determined by the ordering of the d-orbital dominated frontier orbitals. If the highest occupied molecular orbital (HOMO) is oriented in space in such a way that will give the organic substrate easy access to the valence electron pair, the closed-shell mechanism can be followed. If the shape and orientation of the HOMO is not appropriate, however, an alternative pathway involving singlet excited states of the metal that will invoke the matching radicaloid cleavage of the organic substrate will dominate the oxidative addition. This novel paradigm for formally analyzing and understanding oxidative additions provides a new way of systematically understanding and planning catalytic reactions, as demonstrated by the in silico design of room-temperature Pauson-Khand reactions.