Studying strategy formation in small companies – a cognitive perspective

Abstract

Purpose – The major part of studies in the field of strategic cognition focussed on strategy content, while process studies are comparatively rare. Those of the studies that are dedicated to explain strategy occurrence are dominantly restricted to formal decision making. In contrast to this, the purpose of this paper is to draw on a framework that helps to get a differentiated picture on contingent processes, strategies may pass through in organizations. Furthermore, an own elicitation procedure is introduced that enables to measure strategic cognition on different levels. Design/methodology/approach – The paper provides an empirical approach by applying collective causal mapping techniques, both on an individual as well as collective level. The conceptual framework of the study rests on the “genesis” concept of strategy formation introduced by Kirsch and colleagues. Findings – The main contribution of the paper is the presentation of a methodical approach to study the formation of shared strategic orientations in small companies. An operationalization to study these cognitive processes, based on collective causal mapping techniques is provided. Practical implications – Applying the methodical approach presented in the paper is expected to make a contribution to the understanding of the shared knowledge of organizational members about major strengths and weaknesses of a new strategic reorientation and to contribute to practical concerns of organizational members in specific problematic situations, especially in small companies. Originality/value – The study empirically approaches the complex phenomenon on strategy formation in small companies and therefore expands the understanding of shared cognition in organizations.

Conversations across the table: shared cognition in top management teams

“…Cognitive mapping is a useful tool for examining knowledge structures and cognitive processes (Ho and Wilson, 2008) and for research on strategic cognition (Wrona and Ladwig, 2015). It is a recognised method for illustrating the development of thinking by an individual about a situation (Ensley and Pearce, 2001; Mohammed et al , 2000; Curşeu et al , 2010; Eden and Ackermann, 2010), but can also be applied to teams, reflecting multiple perspectives.…”

Leveraging Strategic Knowledge And Strategic Competence For Strategy Formulation

“…Strategy formulation is known as a complex process, including the activities of examining strategic problems, making sense, interpreting, and making decisions that guide an organization's future actions (Wrona & Ladwig, 2015). On the other hand, strategy formulation is an analytical, market-driven process of crafting and designing strategies, as well as selecting the best courses of action to gain the preferred organizational goals and objectives (Surbhi, 2015).…”

“…Each organization formulates its business strategy through different strategic approaches, which result in different outcomes that may not be applicable to all business type (Wrona & Ladwig, 2015). Yet, all strategic approaches are influenced either by the organization's internal or external factors.…”

Dad, where do strategies come from?

“…The article "Studying strategy formation in small companies -a cognitive perspective" by Wrona and Ladwig (2015) is a must-read both for students of strategy and SMEs, as well as for senior managers in SMEs who are looking to understand what strategic priorities their employees hold. Especially important are the maps that were created, both for individuals and collectively, as they represent a fascinating snapshot into the small business psyche.…”

“…The article "Studying strategy formation in small companies -a cognitive perspective" by Wrona and Ladwig (2015) gets right to the heart of one of the immortal questions of management research, and places it firmly in the realms of the small business. To fully understand strategic imperatives in SMEs, the authors understandably retain a tight focus, and choose to shine a light on what they call the "cognitive processes" of strategy formulation and process.…”