Strategic cognition in a mature industry : differentiation, consensus, and outcomes
This thesis reports the outcomes of a multi-level longitudinal empirical enquiry designed to test several fundamental, though previously unsubstantiated, propositions associated with the theory of competitive enactment, recently advanced by Porac and his associates as an explanation of the role of cognition in the evolution of competitive structures in industries and markets (Porac et al, 1989; Porac & Thomas, 1990). The study, which was conducted in the UK residential estate agency industry, employed a modified repertory grid based approach in order to explore three issues: the extent to which strategists' mental models of competitive space are correlated with measurable strategic behaviours and organisational performance; the extent to which strategists' mental models within this industry are homogeneous or diverse; and the extent to which strategists' mental models are stable or transient in the face of significant changes in market conditions. In all three cases substantial empirical support was obtained in keeping with the predictions of competitive enactment theory - ie mental models were found to correlate with a number of measurable strategic behaviours, mental models were found to be highly homogeneous, and mental models were found to remain stable - despite a significant down-turn in the market from Tl - T2. These findings provide a convincing demonstration of the existence and negative impact of a strongly held collective mental model, within a mature industry, on strategy and performance. The implications for theory, research methodology, and the practice of strategic management are discussed, as are the limitations of the present study. The thesis concludes with a call for further multi-level longitudinal studies, which extend the range of industries investigated and the methodologies employed for cognitive modelling, and vary the time intervals between data collection periods, in order to tease out the confounding effects of these factors.