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Bringing cognition into strategic interactions: Strategic mental models and open questions

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  • Anoop Menon

Abstract

Research Summary This article explicitly introduces cognitive considerations into the treatment of strategic interactions, using the value‐based framework as an extended example. Through real‐world examples and prior empirical findings, it shows that many of the implicit assumptions of the framework are regularly violated in practice when actors simplify their complex realities into incomplete, inaccurate mental models. These violations lead to outcomes that are often contrary to the predictions of the classical framework. As initial steps toward developing a cognitively grounded theory of strategic interactions, the article characterizes the core components of strategic mental models that might form the foundation of such a theory and then lays out some open questions that this theory would need to address. These questions, when answered, can point to novel cognitive capabilities. Managerial Summary This article argues that a realistic analysis of interactions between strategic agents requires us to include the mental models, that is, belief systems, of those agents into the analysis. Real‐world examples and prior empirical findings are used to show that if such mental models are not accounted for, the outcomes predicted by the analysis could be quite different from those obtained in reality. The article identifies a few key aspects of these strategic mental models that deserve attention. It also identifies a few central questions that, when answered, could allow firms to develop novel cognitive capabilities that confer competitive advantage.

Suggested Citation

  • Anoop Menon, 2018. "Bringing cognition into strategic interactions: Strategic mental models and open questions," Strategic Management Journal, Wiley Blackwell, vol. 39(1), pages 168-192, January.
  • Handle: RePEc:bla:stratm:v:39:y:2018:i:1:p:168-192
    DOI: 10.1002/smj.2700
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    Cited by:

    1. Srivastava, Smita & Sahaym, Arvin & Allison, Thomas H., 2021. "Alert and Awake: Role of alertness and attention on rate of new product introductions," Journal of Business Venturing, Elsevier, vol. 36(4).
    2. Felipe A. Csaszar, 2018. "What Makes a Decision Strategic? Strategic Representations," Strategy Science, INFORMS, vol. 3(4), pages 606-619, December.
    3. Timo Ehrig & Jaison Manjaly & Aditya Singh & Shyam Sunder, 2022. "Adaptive Rationality in Strategic Interaction: Do Emotions Regulate Thinking About Others?," Strategy Science, INFORMS, vol. 7(4), pages 330-349, December.
    4. Hazhir Rahmandad & Jerker Denrell & Drazen Prelec, 2021. "What makes dynamic strategic problems difficult? Evidence from an experimental study," Strategic Management Journal, Wiley Blackwell, vol. 42(5), pages 865-897, May.
    5. Sicheng Luo & Hao-Chieh Lin, 2022. "How do TMT shared cognitions shape firm performance? The roles of collective efficacy, trust, and competitive aggressiveness," Asia Pacific Journal of Management, Springer, vol. 39(1), pages 295-318, March.
    6. Xianjin Du & Meng Li & Brian Wu, 2019. "Incumbent repositioning with decision biases," Strategic Management Journal, Wiley Blackwell, vol. 40(12), pages 1984-2010, December.
    7. Douglas P. Hannah & Ron Tidhar & Kathleen M. Eisenhardt, 2021. "Analytic models in strategy, organizations, and management research: A guide for consumers," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 329-360, February.
    8. Jackson Nickerson & Nicholas Argyres, 2018. "Strategizing Before Strategic Decision Making," Strategy Science, INFORMS, vol. 3(4), pages 592-605, December.
    9. Maria Jose Murcia & Pilar Acosta, 2023. "Accounting for Plural Cognitive Framings of Growth and Sustainability: Rethinking Management Education in Latin America," Journal of Business Ethics, Springer, vol. 185(2), pages 299-313, June.
    10. Fuentes González, Fabián & Sauma, Enzo & van der Weijde, Adriaan Hendrik, 2022. "Community energy projects in the context of generation and transmission expansion planning," Energy Economics, Elsevier, vol. 108(C).
    11. Yufei Wang & Mangirdas Morkūnas & Jinzhao Wei, 2024. "Strategic Synergies: Unveiling the Interplay of Game Theory and Cultural Dynamics in a Globalized World," Games, MDPI, vol. 15(4), pages 1-25, June.
    12. Timo Ehrig & Todd Zenger, 2024. "Competing with Theories: Using Awareness and Confidence to secure Resources and Rents," Working Papers TIMES² 2024-078, ULB -- Universite Libre de Bruxelles.

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