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.