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Summary Helfat, C. E., & Peteraf, M. A. (2015). Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), 831–850. https://doi.org/10.1002/smj.2247 $6.71   Add to cart
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  5. Strategic Entrepreneurship & Organizational Renewal

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Summary Helfat, C. E., & Peteraf, M. A. (2015). Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), 831–850. https://doi.org/10.1002/smj.2247
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  • Course
  • Strategic Entrepreneurship & Organizational Renewal
  • Institution
  • Vrije Universiteit Amsterdam (VU)

Full summary of Helfat, C. E., & Peteraf, M. A. (2015). Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), 831–850.

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Document information

  • October 7, 2021
  • 6
  • 2021/2022
  • Summary

Subjects

  • cognitive capabilities
  • microfoundations of dynamic capabilities

Written for

  • Vrije Universiteit Amsterdam (VU)
  • M.Sc. Business Administration - Strategy & Organization
  • Strategic Entrepreneurship & Organizational Renewal
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Helfat & Peteraf (2015) – Managerial cognitive capabilities and the
microfoundations of dynamic capabilities


This study:

Topic: What are factors that contribute to the dynamic capabilities of the individual manager to
facilitate strategic change?

 Introduces the concept of managerial cognitive capabilities
 Identifies specific types of cognitive capabilities that likely underpin dynamic managerial
capabilities for 1) sensing, 2) seizing and 3) reconfiguring
 Explains the potential impact of these capabilities on strategic change in organizations
 Discusses how heterogeneity of these cognitive capabilities may produce heterogeneity of
dynamic managerial capabilities among top executives – which may contribute to differential
performance of organizations under conditions of change



Cognitive underpinnings of the dynamic capabilities of managers:

Cognition matters in 3 important components of dynamic managerial capabilities:

1. Sensing
2. Seizing
3. Reconfiguring

Role of the CEO

Multiple studies show that the CEO / top executives have an impact on performance and a
company’s way of dealing with strategic change

 Heterogeneity of top management congnition is associated with heterogeneity of strategic
change efforts and outcomes
 In other words: since each manager thinks differently, each company reacts differently to
change

Meaning of cognition

1) Mental activities
2) Mental structures

In making decisions, these two interact



Cognitive capabilities of managers

 Capability = the capacity to perform a function or activity in a generally reliable manner
 Capabilities develop in part through practice

Managerial cognitive capability:

“Managerial cognitive capability is the capacity of an individual manager to perform one or more of
the mental activities that comprise cognition

,  E.g. mental activities involving attention, perception, and problem-solving

There are 2 modes of mental processing of information:

Automatic mental processing (System 1) Controlled / Deliberate mental processing, aka
Executive Function (System 2)
Automatic mental activities enable quick These mental activities are slower and support
responses to external stimuli and data a more deliberate response to circumstances


Path dependency of cognitive capabilities:

 Cognitive capabilities improve through practice
 Practice may change the size or number of brain areas involved and alter pathways used
 That means: if one practices particular mental activity more of ten than other individuals,
one is likely to develop better cognitive capabilities of this sort
 Therefore, path dependence in the development of cognitive capabilities can contribute to
heterogeneity in the performance of mental activities

Context + Domain

 Capabilities are also specific to contexts and /or domains
 Thus, differences in context and/or domain in which practice occurs, are likely to lead to
heterogeneity of cognitive capabilities as well
 This is true for both controlled and automatic mental processes

Dynamic managerial capabilities

 Managers need certain dynamic capabilities to manage and facilitate strategic change. These
include Sensing, Seizing & Reconfiguring.

 Each of these dynamic capabilities is driven by some cognitive capabilities

 In the end, the more or less ausgeprägt certain cognitive capabilities (and thus dynamic
managerial capabilities are), the more or less the manager is able to adequately respond to &
facilitate strategic change – which in the end will impact the firm performance

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