Search results

We examine how the organizational identity of established firms affects their strategic outcomes during the emergence phase of a new market. Drawing on cognitive theories of analogical learning, we build theory about how the established identities of producers influence the fluency with which consumers make sense of novel products, and hence affect valuations. We illustrate this theory through an empirical study of consumer evaluations of de alio entrants during the emergence of the digital camera industry.

Strategy scholars have long argued that breakthrough innovation is generated by recombining knowledge from distant domains. Even if firms have the ability to access and absorb knowledge from distant domains, however, they may fail to pay attention to such knowledge because it is seemingly irrelevant to their tasks. We draw attention to this problem of knowledge relevance and develop a theoretical model to illuminate how ideas from seemingly irrelevant (i.e., peripheral) domains can generate breakthrough innovation through the cognitive process of analogical reasoning, as well as the conditions under which this is more likely to occur. We situate our theoretical model in the context of teams in order to develop insight into the microfoundations of knowledge recombination within firms. Our model reveals paradoxical requirements for teams that help to explain why breakthrough innovation is so difficult.

In social theory, emergence is the process of novelty (1) creation, (2) growth, and (3) formation into a recognizable social object, process, or structure. Emergence is recognized as important for the existence of novel features of society such as new organizations, new practices, or new relations between actors. In this introduction to the volume on emergence, we introduce a framework for examining emergence processes and theories that have been applied or can be applied to each of the three stages. We also review each volume chapter and discuss their relation to each other. Finally, we make suggestions on the future of research on social emergence processes.

At the level of a cognitive schema, a business model is a mental map of a firm’s value-creating, value-delivering, and value-capturing activities and the linkages between them. An important question in the study of business models as cognitive schemas is whether and how schemas differ across industry actors and whether the differences are connected to the variation observed in actual business models in the industry. This chapter examines, in particular, the ways in which business model schemas of industry insiders differ from those of industry outsiders. Using data from interviews with chief executive officers (CEOs) of 30 legal-tech firms, we graphically construct and analyze the CEOs’ schemas of important causal interdependencies between their firms’ activities. The analysis shows systematic differences between insiders and outsider CEOs’ schemas. We theorize that these differences underlie insider and outsider CEOs’ distinct approaches to opportunity recognition, expertise perception, and value framing, and have consequences for actual business model evolution in the industry.

This chapter examines whether the view of the jury in cases involving forensic evidence can be changed from that of “naïve automatons” to that of “sophisticated decision makers”; whether the defense and prosecution must provide the jurors with information to help them develop a schema upon which to evaluate the forensic evidence; and whether to remove decision making from the expert forensic scientist and return it to the jury. The chapter uses secondary sources of information collected from criminal cases, the current federal law, as interpreted by the U.S. Supreme Court dealing with expert testimony, studies of how to enable juries confronted with forensic evidence, as well as a framework of learning theory and persuasion games. I argue that expert forensic scientists make errors. Juries are capable of making decisions based on complex forensic evidence if provided the knowledge within which to develop schema to evaluate that evidence. Competition between the defense and prosecution in presenting interpretations of scientifically valid evidence, as well as providing schema to enable the jury to evaluate the information, provides juries with the ability to arrive at a full information decision. Expert nullification of jury decision making should be halted and decision making returned to the jury. The value of this chapter is to integrate learning theory from cognitive psychology with one-shot and extended persuasion games to evaluate the roles of the jury and the expert forensic scientists within the criminal justice system.

It is commonly acknowledged that history matters in strategy. However, the strategy literature mainly discusses history in terms of path dependency, leaving little room for managerial agency, despite growing anecdotal evidence that managers can actively draw on corporate history to improve decision-making. An emerging literature on how managers use the past to give sense to internal and external stakeholders has given rise to a more agent-based approach to history, but while sense-giving is commonly connected to sense-making as a driver of strategic change, the role of history in sense-making remains unexplored. Drawing on the concept of analogical reasoning, this chapter theorizes the connection between corporate archives and managerial sense-making, arguing that analogies drawn from past experience can reduce uncertainty and foster learning. This theory leads to the suggestion that consulting the corporate archive can promote strategic renewal and thus boost performance.

Strategic option generation is a fundamental step in strategy formulation. Several lenses have been proposed to explain its foundations, including the microeconomics positioning school, and the resource and capabilities based view of the firm. These approaches are largely based on inductive and deductive logics, which are not the logics that provide strategic options that are potentially novel, profitable, and largely differentiated from competitive offerings. In this chapter, we propose a unifying framework of the cognitive foundations of strategic option generation. Building on five fundamental cognitive acts – imitation, framing, analogical reasoning, abductive reasoning, and mental simulation, this proposed model both synthesizes the extant literature and provides guidance about promising avenues for future theoretical and empirical research.