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This article explores the linkages between cognitive science and strategic management research. It begins by noting that Schendel and Hofer, in their classic work Strategic Management: A New View ofBusiness Policy and Planning, implicitly assumed a cognitive basis for much of the strategy-making process but did little to systematize a cognitive approach. Next, the article examines the foundations of modern cognitive science. Several areas of recent research that are particularly relevant to strategic thinking are reviewed. The article concludes with a call for a more explicit cognitive emphasis in strategic management. INTR03UCTIONSince Chandler wrote Strategy and Structure (1962), the variety of perspectives brought to bear upon stategy has proliferated. New ideas have entered the discipline from economics, decision theory, organization behaviour, and organization theory, as well as from more distant fields such as critical theory, biology, literary theory, agency theory, etc. This article aims to introduce cognitive science to strategy and to demonstrate how cognitive science can impart a powerful theoretical and empirical thrust to advance strategic management research.This discussion contains four parts. The first shows how managerial cognition was already a vital but neglected element in Schendel and Hofer's strategic management paradigm. The second is a brief review of the central principles of cognitive science, which provide a cornerstone theoretical subject that sets the stage for research into specific issues in managerial cognition. Next, three topics in managerial cognition relevant to strategic management are briefly addressed: categories, semantic networks, and inferences. Lastly, the article concludes by summing up the contributions which managerial cognition can make to strategic management.

This study used computer-assisted content analysis of more than four hundred presidents' letters to shareholders to examine empirical linkages between cognitive strategic groups clustered by themes in the reports and strategic groups clustered by performance. We found these groups converged as predicted by the literature, and that mental models and performance are involved in a recursive process of competitive enactment which contributes to strategic group stability. Our research used inductively derived themes from the letters to structure a mental model widely shared in the pharmaceutical industry, and then employed thematic variations to find stable clusters of companies. These thematic clusters were triangulated with the strategic groups from a published study of the same industry, in the same period, and were shown to converge. Additionally, longitudinal linkages between earlier mental models of strategic goals and later reports of performance were found. The findings of our large-scale empirical study support strategic group theory, demonstrate a novel approach to data mining, and pose questions for future research.

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This special issue of Organization Science taps into the burgeoning work on managerial and organizational cognition. In the last 15 years, there has been a decided “cognitive turn” within organizational studies as researchers increasingly explore the relationships among mind, management, and organization. The early groundwork established by the Carnegie School of organizational theory, the success of modern cognitive science, and the recent diffusion of social constructionism within organizational studies have all contributed to this growing interest in cognitive research. Researchers are now exploring the cognitive underpinnings of such diverse organizational phenomena as job attitudes, performance appraisals, managerial decision making, environmental sensemaking, organizational learning, and interorganizational belief systems. Few areas of contemporary organizational science remain untouched by a cognitive agenda. In this short paper, we introduce the special issue by discussing the issue's focus and highlighting several key questions that constantly recur within the cognitivist agenda illustrated by these papers.