Introduction
This writing intends to outline and discuss what may be understood by the concept of ‘strategic cognition’. This will involve the attempt to research theoretically on answering the questions, including what is meant by ‘cognition’ and what is meant by ‘strategic cognition’. And explain the cognitive school, which is the focal point of this writing, and hence receives the main attention. As a result, the remaining discussion will include the contributions in order to show how various strategists have dealt with strategic cognition. This includes further thoughts on phases in the interpretation process, the meaning of cognitive mapping, and heuristics and biases that potentially impact the strategic cognition process.
Cognition
The topic of cognition draws heavily on the field of cognitive science, which in turn synthesizes ideas from philosophy, neuroscience, linguistics, psychology, sociology, artificial intelligence and anthropology (Laukkanen, 1994).Theories of cognition are concerned with how human beings analyze information obtained from the environment and the organization, how it is stored in memory, and how the stored memory can be used to acquire and interpret new information and direct behavior towards the attainment of goals (Grunert, 1994). This brings understanding and explanation to why an individual, a group of people, or an organization behave the way they do, how they make sense of and interpret stimulus from their surroundings.
Strategic Cognition
Cognition is here related to issues, or situations calling for a decision, that are considered strategic in organizations. Strategic decisions and their decision processes are made to support and underpin the alignment of resources and environment of an organization that constantly deals with change (Daugaard, 2003). Such decision situations are characterized by novelty, complexity and open-endedness (Mintzberg et al., 1976). Dean & Sharfman (1993), in similar terms, contend that strategic decisions often have no precedent or guide and are often difficult to model or analyze. Schwenk (1988) suggest that strategic decision making is a messy rather than orderly process, especially in what they refer to as ‘ill-structured’ decision scenarios. Mason & Mitroff (1981: 10-13) observe that the lack of structure is caused by the complexity that surrounds strategic problems, and claim that strategic problems have no clear formulation and that it is very difficult to determine the criteria by which solutions should be judged. Further, strategic decisions lead to significant commitment of resources with significant impact on the company as a whole and on its long-term performance (Papadakis et al., 1998). Such decisions may relate to situations where companies diversify their business, adjust their product lines, choose among competing technological standards, or change strategy when the market is declining. These decisions affect the performance of the company, and needs careful analysis, but the information necessary to make them is incomplete since future decisions of customers and competitors are unknown (White, 1981). To predict their response requires effective use of abundant and complex information. Thus, strategic cognition processes involve a high degree of uncertainty and ambiguity for decision makers, and the potential number of information variables is almost infinite.
In order to get the holistic understanding of strategy, Mintzberg (1999) lassify the strategic management into ten schools, they are design school, planning school, position school, cognitive school, learning school, power school, cultural school, environmental school, and configuration school.
Congnitive School: A Mental Process
The cognitive school exit two different wings: one wing, more tend to positivism, it’s consider to treat the processing and structuring of knowledge as an effort to product some kind of objective motion picture of the world; the other wing consider all cognitions as subjective: strategy is some kind of interpretation of the world. So if the objective wing understands cognition as some kind of re-creation of the word, this wing drops the prefix and instead believes that cognition creates the world by itself (Mintzberg, 2003). As one process of strategy formation, the cognitive school become the bridge between the more objective schools (design, planning, position and entrepreneurial) and more subjective schools (learning, power, environmental, configuration).
On the academic front, the origin of strategies generated considerable interest. If strategies developed in people’s minds as frames, models, maps, concepts, or schemas, what could be understood about those mental processes? Particularly in the 1980s and continuing today, research has grown steadily on cognitive biases in strategy making and on cognition as information processing, knowledge structure mapping, and concept attainment–the latter important for strategy formation, yet on which progress has been minimal. Meanwhile, another, newer branch of this school adopted a more subjective interpretative or constructivist view of the strategy process: that cognition is used to construct strategies as creative interpretations, rather than simply to map reality in some more or less objective way, however distorted (Mintzberg ,1999).
Cognition as confusion: emphasizes judgmental biases in decision making. These include the search for evidence that supports rather than denies beliefs, the favoring of more easily remembered recent in formation over earlier information, the tendency to see a causal effect between two variables that may simple be correlated, the power of wishful thinking and so on (Mintzberg ,2003).
Cognition as information processing emphasizes the collective system for
Processing information in an organization. It indicate that managers are information workers. They serve their own needs for information as well as their colleagues and their boss.
Cognition as mapping is the mental structures for inference and action.
Cognition as concept attainment: Managers create their cognitive maps as a strategy formation, and then a strategy concept is arrived at, or attained, through pattern recognition.
Cognition as construction: this view strategy as interpretation. All the information inside the human mind need to flow various filters before be decoded by cognitive maps, otherwise, they only interpret the world which exiting in their own mind. This world can be recreated.
Having clarified the basic meaning of strategic cognition, the following section intends to discuss a significant impact on the development of the concept of strategic cognition, and areas relating to strategic cognition. The goal is to give an overview of important contributions on strategic cognition, which all deal with how strategists with limited information processing capacities deal with this complexity in order to make sense of strategic issues.
The interpretation process In recent years there has been a growing recognition of the importance of cognition in the strategy process in general, accompanied by a proliferation of studies seeking to elucidate theoretically and empirically the precise ways in which strategic thinking influences strategy development and implementation. The research relates organizational decision making to cognitive structures and processes, and addresses such topics as a decision maker’s frame of reference, strategic assumptions, knowledge structures, categorization, and the concepts of scripts, cognitive maps, schemata, organizational learning, and interpretative systems. As stated, strategists must constantly deal with change and act effectively in order to ensure their companies’ competitiveness. According to cognitive theories, the strategists are active processors of information received from the decision environment (organizational and environmental variables), and they respond to their construal of that information (Ilgen & Klein, 1988).
The strategists Mintzberg(2003) suggested that if want to serious about understanding the strategy shaping process, the best way is to research the mind of the strategist, to get the process means in the sphere of human cognition, drawing especially on the field of cognitive psychology. The strategists spend their time absorbing, processing, and disseminating information about issues, opportunities, and problems. The most fundamental challenge faced by them, however, is that their information worlds are extremely complex, ambiguous, and munificent (Mason & Mitroff, 1981). Somehow they must see their way through what may be a bewildering flow of information to make decisions and solve problems. In that process the experience and background of the strategists play a key role in the process of mapping a given decision situation.
Cognitive maps. Another stream of research has in a complementary fashion involved the development of mapping techniques that seek to capture the structure and content of actors’ strategic thought processes. This stream of work is based on the assumption that the strategist constructs a cognitive map or a mental model that is a simplified working model of reality, which acts as a basis for strategic decision making. Warren (1995: 11) sees a cognitive map as “a network of cause-effect relationships between factors in the situation under debate”. According to Huff (1992: 267), “cognitive maps are graphic representations that locate people in relation to their information environments”. They provide a frame of reference for what is known and believed, and exhibit the reasoning behind the strategic decisions. Yet, when the decision context is marked by constant change, the less useful is a map that is a product of past cognition. In such situations, strategists must make sense of changing environments and update the context in which decisions will have to be made even though important variables are unknown
Heuristics and biases On the basis of a detailed review of experimental cognitive psychology and behavioral decision theory literature, have been identified a number of potential cognitive biases. Such biases suggest that strategists use cognitive heuristics to simplify complex problems and a number of decision biases, which may have an impact on strategic decisions. Schwenk (1988) lists several selected heuristics and biases: availability, selective perceptions illusory correlation, conservatism, low of small numbers, regression bias, and wishful thinking, illusion of control, logical reconstruction, and hindsight bias. For present purposes the most interesting of these heuristic principles is the availability bias. Basically, the availability heuristic leads people to make decisions by using information that can easily be brought to mind. Strategic decisions are often influenced by the degree to which the decision maker can predict environmental changes, and the strategist accordingly judges a future event to be likely if it is easy to recall past occurrences of the event. Another bias is the illusion of control, which may affect people’s assessments of their chance of success at a venture, since it leads to overestimation of personal control of outcomes. Schwenk (1988) argues that the effects of cognitive heuristics and biases may be seen in the decision makers’ assumptions about strategic problems, which form the basic elements of a strategist’s frame of reference. It is argued that such heuristics allow organizational experts to make sense of strategic issues quickly and respond in an efficient and effective manner.
Conclusion
To sum up, the main content of the discussion of strategic cognition, it presents that strategic management has made the most of cognition psychology on practice but not theoretical. strategic cognition can important impact the process of coping with information, especially, for the strategists making notion and decisions in their mind. Therefore, strategic cognition is not only an important strategic force but also the managers’ perception and interpretation.
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