Cognition & Competition: Microfoundations of Competitive Adaptation

Abstract

A large body of strategy research has highlighted the many ways in which managerial cognition is a key driver in the strategic decision making of firms. Much of this research is driven by a central tenet of behavioral strategy; that is, managers face quantities of information that are beyond their cognitive capacities (Simon, 1947). Managers cope with this cognitive limitation by leveraging simplified representations of the information they expect will be important when making strategic decisions — such as who their competitors are (Porac, Thomas, & Baden-Fuller, 1989) or what product features matter (Benner & Tripsas, 2012). These representations become particularly consequential when a firm’s external environment changes, rendering initial representations obsolete (Tripsas & Gavetti, 2000). Despite the recognition of the critical role that cognition plays in managers’ strategic decision making, little research has systematically assessed the performance consequences of managerial cognition. For instance, what are the mechanisms that make one mental representation perform higher than another? How might firms’ heterogeneous representations interact in competitive environments? This gap in the research has prompted numerous calls from scholars to bring managerial cognition into a more central light in behavioral strategy research (Csaszar, 2018: 607; Gavetti, Levinthal, & Ocasio, 2007: 530; Posen, Keil, Kim, & Meissner, 2018: 209). This symposium recognizes that a key reason for this gap in further research is the methodological challenge of understanding and analyzing cognition. Given that cognitive processes occur largely within managers’ minds, how should management scholars study cognitive differences and their impact on performance? As such, this symposium proposes bringing together a group of scholars from diverse theoretical and methodological backgrounds to share their expertise on cognition and competition, and to facilitate future research on this important topic. The symposium aims to achieve three key goals. First, the symposium will explore recent research in the area of how cognition affects firm performance. For instance, how firms vary in their representations of their competitive environment, how managers’ capabilities shape the heterogeneity we observe in firms’ representations, and how firms can actively shape consumer perceptions of market categories. Second, given the methodological challenges of studying mechanisms that occur inside managers’ minds, this symposium also aims to share opinions on how to overcome the challenges of conducting and publishing empirical research on cognition. Third, we hope to encourage future research on the topics listed above by sharing theoretical insights on how strategy research on managerial cognition can be furthered.