Dynamic Capabilities and Top Management Cognitions

Maghzi, Atefeh, Gudergan, Siggi, Wilden, Ralf, and Lin, Nidthida (2015) Dynamic Capabilities and Top Management Cognitions. In: Academy of Management Annual Meeting Proceedings (2015) 248. From: Academy of Management Annual Meeting, 07-11 Aug 2015, Vancouver, BC, Canada.

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Scholars increasingly seek to link environmental conditions and managerial cognition to dynamic capabilities. Environmental conditions affect the use of dynamic capabilities and this use is the outcome of managerial behaviour which rests on psychological foundations. In this paper, we argue that to improve our understanding of how firms deploy dynamic capabilities we need to first understand the specific decision-making approaches (rational reasoning vs. heuristics) that top management teams (TMTs) apply and how environmental conditions (highly vs. moderately dynamic) interact with such decision-making. Building on extensive literature on heuristics-based decision making, we argue that as the degree of dynamism in the environment increases, TMTs encounter less accessibility to valid and accurate information, leading to decreased predictability of decision outcomes. Accordingly, in highly dynamic environments TMTs predominantly rely the heuristics-based deployment of dynamic capabilities, and by doing so, enhance firm performance. This paper contributes to our understanding of the psychological foundations of dynamic capabilities.

Item ID: 75392
Item Type: Conference Item (Abstract / Summary)
ISSN: 2151-6561
Keywords: dynamic capabilities
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Date Deposited: 20 Jan 2023 04:03
FoR Codes: 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3507 Strategy, management and organisational behaviour > 350718 Strategy @ 100%
SEO Codes: 15 ECONOMIC FRAMEWORK > 1503 Management and productivity > 150306 Technological and organisational innovation @ 100%
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