Global Strategy - blog

Authors: Vaskelainen, Taneli (2006).Download file: 'Cognitive Change: An Empirical Study in the Pulp and Paper Industry.' Master’s thesis, Helsinki University of Technology, Espoo, Finland

Finalist in the Finnish Strategic Management Society’s annual strategy thesis competition

The Abstract

This study researches change in managerial cognitions over time. Lately there has been a growing interest in the cognitive view of strategy within the strategic management literature. This view considers the inability to adjust cognitions to environmental changes to be a major factor explaining the demise of organizations.

There have been some studies considering how this change takes place, yet none has observed the cognitions of a single organization in the long term, and thus there has not been any study of the persistence of cognitive concepts. This study contributes to the body of knowledge by filling this gap.

Using case study method this thesis creates four snapshots of the cognitions of the top management of Finnish pulp and paper company Enso Gutzeit Oy. Each map portrays a different era during the mandate of three different CEOs. The result of each case is one or more cognitive maps describing the causal interdependencies between different concepts in the managers’ belief systems. These are created by conducting a meticulous and extensive documentary analysis. To better understand the map and to be able to tie the strategic actions to them, interviews are also conducted with key managers from different eras. The final results are then derived from cross-case analysis, which examines the differences and similarities between the maps.

The most significant finding of this study is that managerial cognitions are very persistent. Despite the change of CEOs the business model of the company has changed surprisingly little over the last 40 years. This stems probably from the fact that they were recruited from within the same company. The mental models of the managers are adjusted only when some external event threatens the survival of the company. Closely related to this is another significant finding that the major threat that motivated a significant cognitive change was that posed by globalization. The story of Enso’s internationalization is interesting to the research community as there are likely to be many companies whose existence is threatened by globalization. The shift from a local to a global mindset is first and foremost a cognitive adjustment.

Keywords: Cognition, Mental model, Cognitive change