The Cognitive

Perspective on
Strategic Decision
Making
By Charles R Schwenk

Research Studies

Mintzberg and Waters

Suggests that in the entrepreneurial mode of strategymaking the development of a new strategy is typically
carried out in a single informed brain.

Hambrick and Mason (1984)

Note that strategic decision-making is influenced by the

cognitive frames and decision processes of members of
organizational upper echelons

Suggests
that the
concepts,
beliefs,
assumptio
ns, and
cause-andefect
understan
dings of
strategies
determine
how
strategic
issues will
be framed.

Al (1983:
310)

Dutton Et

Lyles (1981: 62)

Notes that subjectivity is involved in the

process of problem definition and suggests that
strategists problem definitions will be guided
by their past experiences.

Cognitive
Heuristics and
Biases

Bias
Availability
Selective Perception
Illusory Correlation
Converstatism
Law of Small Numbers
Regression Bias
Wishful Thinking
Illusion of Control
Logical Reconstruction
Hindsight Bias

Effects
Judgment of probability of easily recalled events
distorted.
Expectations may bias observations of variables
relevant to strategy.
Encourages belief that unrelated variables are
correlated.
Failure sufficiently to revise forecasts based on
new information.
Overestimation of the degree to which small
samples are representative of populations.
Failure to allow for regression to the mean.
Probability of desired outcomes judged to be
inappropriately high.
Overestimation of personal control over
outcomes.
Logical reconstruction of events which cannot
be accurately recalled.
Overestimation of predictability of past events.

Isenberg (1983; 17)

Found that managers created new meanings by comparing

a current issue with an issue that prototypical organization
dealt with in a particular manner.

Louis (1980)

Stated that the process of drawing analogies seems to be

very common when organizational actors are trying to
understand an ambiguous or novel situation.

 Steinbrunner (1974: 115)

Discussed the reasoning by analogy in

foreign policy-making. This involves the
application of simple analogies and images
to guide complex problem definition

Discussed that
the
development of
shared
analogies
which help
frame strategic
decisions. It
involves the
creation of
shared
vocabulary
among the
decisionmakers through
discussion of
problems and
the emergence
of shared
images among
the group to
define the
problems.

(1983)

Sapienza

Gordon (1961)

Stated that the reasoning by analogy has been shown to

be efective in generating creative solutions to a variety of
problems

Huff (1982: 123)

He said that the past often provides a ready source of

analogies. Present decisions may viewed as similar to past
decisions.

Gilovich (1981)

He demonstrated that analogies to the past

influenced decision-makers recommendations
about how to resolve a hypothetical international
relations crisis in a laboratory experiment.

Noted that
foreign policy
decision-makers
frame present
problems by
using analogies
to the past. They
sometimes
select the first
analogy which
comes to mind
rather than
searching more
widely, or
pausing to
analyze the
analogy and ask
in what ways it
might be
misleading.

May (1973: xi)

Mintzberg (1976)

Discussed that the similar ideas in connection with the

development of solutions to strategic problems.

Simon (1957-1976)

Suggested that schemata are simplified models of the

relationships between variables relevant to a strategic
problem