The Match Between Structural Attributes and Content-Based Orientation of Managerial Cognition: An Exploratory fsQCA Study of ‘Hidden Champions’

ABSTRACT Strategic decision makers interpret information and translate it into organizational action through the lens of strategic schemas. How should firms realize high performance with various strategic schemas? Cognitive content and structure have been shown to underlie strategic schemas, but few studies have considered them together. This study employs aggregation analysis to clarify the interaction between cognitive content (technology orientation, market orientation) and structure (complexity, centrality) in affecting the firm performance (FP) of ‘hidden champion’ companies, identified by the Economy and Information Technology Department of Zhejiang Province, China. The empirical method applies fuzzy-set qualitative comparative analysis to generate strategic schema profiles for high FP. This exploratory study fills a gap in the literature on managerial cognition and provides key lessons from ‘hidden champion’ companies in China and their paths for small- and medium-sized enterprises to grow.

Invest in Innovation or Not? How Managerial Cognition and Attention Allocation Shape Corporate Responses to Performance Shortfalls

ABSTRACT This study investigates the influence of managerial cognition and attention allocation on firms’ responses to negative performance feedback. We explore how managerial cognition, as shaped by managers’ experiences, connections, positions, and industry environments, affects underperforming firms’ attention allocation and, consequently, their decisions to invest in innovation. Utilizing a longitudinal sample of Chinese high-tech firms from 2009 to 2017, we find that firms increase investment in research and development (R&D) when performance falls below aspiration levels. We also document that underperforming firms are associated with an even larger R&D investment increase when their CEOs have an R&D or engineering background, serve simultaneously as the board chair, or are not politically connected. In addition, we highlight the moderating effects of industry competition and industry norms on the relationship between firm underperformance and R&D intensity. We conclude that managerial cognition affects firms’ allocation of attention to innovation as a solution for closing performance gaps and shapes corporate responses to negative performance feedback.

Corporate Entrepreneurship as a Learning Process: Development of New Capabilities

Corporate entrepreneurship (CE) seems as an insurance against environmental dynamics to let the organization grow by seeking opportunities. The main purpose of this study is to offer a conceptual framework evaluating how the individual level opportunity recognition links to firm-level integration and institutionalization of knowledge bases. This study proposes a conceptualization of CE as a learning process to develop new Dynamic Capabilities (DC) that enables firms to reinvent themselves through innovative ideas. Dynamic capabilities contribute to the managerial cognition to explore new entrepreneurial opportunities; however, no former research has investigated the development of DC through CE process. Building from our analysis of the mechanisms through which the corporate entrepreneurship could influence the development of dynamic capabilities, we apply a multiple case study design to address the research gap. To investigate the research question, four case studies have been selected, through which we examine: a) the association of managerial cognition, as the knowledge foundation of opportunity exploration, to capability development; b) the mechanism of corporate entrepreneurship learning process through discovery, engagement, and transformation; c) the reasons behind ignorance of some entrepreneurial opportunities; and d) the effect of capability development on the corporate entrepreneurship outcomes. We conclude that dynamic capabilities are most beneficial for entrepreneurs to make drastic change by moving further away from sense-making of opportunities to institutionalization of new capabilities. However, our proposed conceptual framework is general and needs to address the deeper interdependencies and complexities. As a result, the proposed framework calls for empirical astuteness and further theoretical development. Derived from two interrelated fields of corporate entrepreneurship and dynamic capability, this study contributes with a novel model addressing how managerial cognition links to entrepreneurial outcomes. By adopting organizational learning view, the proposed framework seeks to capture corporate entrepreneurship as a dynamic ongoing process.

Die Geschäftsführung als Enabler der digitalen Transformation in kleinen Unternehmen

Die Einführung digitaler Technologien führt dazu, dass Unternehmen aller Größen und Industrien sich drastisch verändern. Die Integration digitaler Technologien bietet ihnen dabei die Möglichkeit Prozesse, Produkte und Dienstleistungen sowie Geschäftsmodelle zu erneuern. Während der Weg zur digitalen Transforma­tion für große und mittelständische Unternehmen bereits erforscht wurde, bleibt unklar, welche Fähigkeiten in kleinen Unternehmen sowie Unternehmen, die eine Dienstleistung direkt am Kunden anbieten, notwendig sind und wie diese Fähigkeiten entwickelt werden. Basierend auf einer qualitativ empirischen Studie zeigen wir die entscheidende Rolle der Geschäftsführung im Prozess der digitalen Transformation. Weiterhin zeigen unsere Ergebnisse, wie Geschäftsführinnen und Geschäftsführer kleiner Unternehmen das eigene Sozialkapital, die Erneuerung der eigenen Denkbilder sowie die Entwicklung der organisationalen Digitalisierungskompetenz nutzen, um eine digitale Transformation zu durchlaufen. The advent of digital technologies is causing companies of all sizes and industries to change dramatically. The integration of digital technologies offers them the potential to renew processes, products and services, as well as business models. While the path to digital transformation has already been researched for large and medium-sized companies, it remains unclear which capabilities are necessary in small companies and companies that offer a service directly to the customer. Further, it remains unclear how these capabilities are developed. Based on a qualitative empirical study, we show the decisive role of the manager in the process of digital transformation. Furthermore, our results show how managers of small companies use their own social capital, the renewal of their own managerial cognition and the development of organizational digitalization skills to go through a digital transformation.

Counter-Clock World: How Planning Backwards Helps in Moving Forward in Collapsing Environments

Research on corporate decline and turnarounds as well as the strategic use of history have so far remained two separate research fields. We integrate these two fields with a thought experiment, proposing ways in which strategists can work with, and through time in managing and turning around declines. Our thought experiment involves two very different types of analogies: a textual one from Philip K. Dick’s science fiction novels, on the one hand, and a visual one from Einsteinian relativity science, on the other hand. Inspired and informed by these different conceptualizations of the past and time, we develop four forms of backward strategizing to successfully manage a struggling corporation on the brink of environmental collapse. The strategic options, presuming that managers are historically conscious agents embedded in time, direct corporations to go back in history, in actual terms, or in a fictional or mythological one – and thus to initiate a past-related rebirth. By offering a more nuanced and complex understanding of temporality and history, our perspective urges scholars to further unpack historical dimensions in managerial cognition of time.

Role of information technology in enabling managerial dynamic capabilities

Purpose The purpose of this conceptual paper is to explicate the role played by information technology (IT) in enabling managerial dynamic capabilities. By doing so, this paper seeks to address a critical theoretical gap regarding IT’s role in enabling dynamic capabilities (DCs). DCs are knowledge-intensive and information-intensive processes and play a crucial role in facilitating strategic renewal of firms operating in volatile, uncertain, complex and ambiguous business environments. Although managers play a central role in the DCs framework, extant research has only focused on the role of IT in enabling firm-level and process-level DCs. Design/methodology/approach This conceptual paper uses the literatures on dynamic managerial capabilities, individual-level information system use, social capital, human capital, managerial cognition and technology-enabled learning to build propositions that link managerial IT use with the enablement of dynamic managerial capabilities. Findings This paper introduces a new construct called individual IT leveraging capability (IILC) and provides theoretically grounded arguments that link IILC with managerial social capital, managerial cognition and managerial human capital. It also explicates the relationships between managerial social capital, managerial cognition and managerial human capital and the dynamic managerial capabilities of sensing, seizing and reconfiguring. Research limitations/implications The establishment of the linkage between IT and dynamic managerial capabilities extends the literature on the business value of IT. This work also adds to the literature on dynamic managerial capabilities by providing a theoretically grounded argument that IT can act as an antecedent of such capabilities. Originality/value To the best of the authors’ knowledge, this paper is arguably the first to theorize the role of IT in enabling managerial DC and thus addresses a critical gap in academic research literature.

Strategic Values of Cloud Computing Transformation

This article aims to study the strategic transformative value dimensions of cloud computing. Organizational requirements, managerial strategic objectives, and their attendant challenges are very specific indicators that enable characterization of these dimensions. An exploratory study of 173 cases of companies, covering 17 distinct economic activity sectors, spread over all continents, was conducted, taking into account contingency factors such as culture, size, and structure. The elements of industry, strategy, and technology were also considered, as well as managerial cognition. The analyses of needs, objectives, challenges, implemented solutions, and results of the transformation to cloud computing, enabled us to identify these dimensions. Strategies to maximize the transformative value of cloud computing are then presented. The results of this study can be used by managers to facilitate and optimize this cloud computing transformation.

Toward a routine-based view of interfirm rivalry

Although organizational routines have attracted increasing attention in strategy and organization research, they have received surprisingly limited attention in competitive dynamics scholarship. Our essay seeks to advance a routine-based view of interfirm rivalry by bridging the competitive dynamics and routine literatures. We put forward a conceptual model of the routine-based view of interfirm rivalry that is centered on “competitive action routines.” The model clarifies the roles that managers play in driving a firm’s competitive behavior, challenges the assumption of routine-based rigidity in competitive behavior, and adds nuance to our understanding of managerial cognition in competitive dynamics. Moreover, the routine-based view offers new insights regarding the awareness-motivation-capability framework, and amplifies previous calls to broaden the methodological repertoire of competitive dynamics research.