Managerial cognition: the sources of sustainable competitive advantage in hypercompetition

Hangbiao Shang, Peilun Huang and Yan Guo

Nankai Business Review International, 2010, vol. 1, issue 4, 444-459

Abstract: Purpose - Based on the theory of bounded rationality, the purpose of this paper is to explore the role played by top managerial management cognition in firms' efforts to obtain and maintain competitive advantage in a dynamic environment. Design/methodology/approach - A research framework of the relations between environment changes, management cognition, strategic actions, organizational capability evolution and organizational performance is built. Data are collected through interviews, internal documents, and external documents and consequently a qualitative database is built to construct a causal map between environment, cognition, strategic actions, and organizational capability. Then by applying this causal map, a case study analysis of Vanward Group is carried out to explore its management cognition, strategic actions, and organizational capability in a dynamic environment. Findings - The research propositions were tested and confirmed that top managerial management cognition is of bounded rationality and in dynamic environment it exerts direct and critical effect on their firms' strategic actions and organizational capability. Further discussion is extended to the roles played by institutional factors in organizational strategic decision process and the roles of top management in organizational dynamic capability. Research limitations/implications - The generalizability of this paper's conclusions to other firms is to be tested by large sample quantitative research. Practical implications - The research confirms the bounded rationality perspective in strategic management, and explores in depth the formation, evolution, and functions of top management cognition in a dynamic environment. It also emphasizes the non‐economic factors related to the continuous acquisition and maintenance of competitive advantages in a dynamic environment. Originality/value - The paper releases the economic assumptions underlying industrial structure theory and resource‐based views by emphasizing the effect of top management cognition on organizational strategic actions and organizational capabilities. It further enriches the institution‐based view by illustrating how institutional environment affects top management cognition and consequently affects the changes in organizational strategic actions and organizational capability. Thus, the institutional context for organizational strategic decision making is emphasized. The paper contributes to research in dynamic capability by emphasizing top management roles in developing dynamic capability.

Keywords: Competitive advantage; Managers; Cognition; Strategic management; China (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:nbripp:v:1:y:2010:i:4:p:444-459

DOI: 10.1108/20408741011082589

Access Statistics for this article

Nankai Business Review International is currently edited by Dr Xuexiu Wang and Professor Li Wei'an

More articles in Nankai Business Review International from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().