Managerial and Organizational Cognition

by

Daniela Blettner

• LAST REVIEWED: 26 October 2023
• LAST MODIFIED: 26 October 2023
• DOI: 10.1093/obo/9780199846740-0219

Introduction

Managerial and organizational cognition is concerned with how managers and members in organizations make sense and structure information, how they interpret information, and how they structure their thinking. Managerial and organizational cognition stretches across multiple levels of the organization. This literature includes multiple levels of analysis. The first level of analysis is the individual, namely, the CEO, the top management team, middle managers, managers, other executives, employees. Another level of analysis is the group or team level, addressing questions of collective cognition within the organization. There is also the level of the organization, where cognition spans across the entire organization. Another level is the industry level, i.e., the cognition at the level of the industry. This article focuses on the level of individual cognition, group/team cognition, and organizational cognition. While also very interesting, industry cognition is outside of the scope of this article. At the individual level, different approaches referred to include Mental Representations and Cognitive Schemas, Cognitive Maps, Biases and Heuristics, Upper Echelons Theory, and Managerial Attention. At the group level, reference is made to different theories of Collective (Group-Level) Cognition. At the organizational level, relevant articles in the streams of literature on Organizational Learning and Sensemaking in Organizations are cited. The field of managerial and organizational cognition is large and draws on many different research traditions, such as behavioral and cognitive approaches. Since it is concerned with the study of cognition of decision-makers in organizations, this field is an applied one. Cognition is studied not only in organizations but also in the laboratory. This is complemented by archival approaches as well as conceptual work. An important challenge of this field is the question of how to elucidate cognition at the individual level and how to aggregate it to the organizational level. A simple aggregation of the individual cognition is inadequate. Researchers have proposed using proxies (e.g., demographic information of key decision-makers, such as CEOs and top management team members), computer simulations, field studies, and laboratory studies. Several technologies are increasingly being used and are particularly promising for the study of managerial and organizational cognition. For instance, functional magnetic resonance imaging (fMRI) will allow researchers to gain much deeper insights into the cognition of individuals, and machine learning will open new avenues for studying attention in organizations.

General Overview

Several overviews of the field of managerial and organizational cognition focus on different aspects and different stages of the development of the field of managerial and organizational cognition. Cognition research assumes that information from the environment is processed to develop cognitive schemata (Walsh 1995). This is summarized as the information processing perspective in which organizations create and change cognitions. The author recognizes that processing information is how cognitions are used and altered. Initially, the literature was less concerned about measuring actual cognition, but, as time went on, researchers became interested in measuring actual cognition. More recent developments in the field are described in Kaplan 2011. Kaplan 2011 summarizes the literature on managerial and organizational cognition from 1979 to 2009. Hodgkinson and Healey 2008 provides a different perspective on cognition in organizations from the point of view of industrial and organizational psychology.

• Hodgkinson, Gerard P., and Mark P. Healey. “Cognition in Organizations.” Annual Review of Psychology 59 (2008): 387–417.

  DOI: 10.1146/annurev.psych.59.103006.093612

  The authors provide an overview of industrial and organizational psychology. They address ten substantive domains of applications of industrial and organization psychology. Their central message suggests a greater cooperation among researchers across both traditions to tackle the theoretical challenges and to find solutions the problems of the 21st-century workforce.

• Kaplan, Sarah. “Research in Cognition and Strategy: Reflections on Two Decades of Progress and a Look to the Future.” Journal of Management Studies 48.3 (2011): 665–695.

  DOI: 10.1111/j.1467-6486.2010.00983.x

  Kaplan provides a recent summary of the literature on managerial cognition. Kaplan describes the early development of the field. She discusses influential papers, such the work by Porac and colleagues on cognition about competitive structures in the Scottish knitwear industry. She provides a quantitative and qualitative overview of the papers related to cognition that have appeared in relevant journals from 1979 to 2009.

• Walsh, James P. “Managerial and Organizational Cognition: Notes from a Trip Down Memory Lane.” Organization Science 6.3 (1995): 280–321.

  DOI: 10.1287/orsc.6.3.280

  Walsh reviews the literature on managerial and organizational cognition in 1995. He points out the different cognitive constructs that researchers have used. He refers to the different levels of analysis in cognition (individual, group, organization). He identifies challenges, such as the study of changing knowledge structure. He identifies two different research agenda, one focused on content (of organizational knowledge) and one focused on the structure (of organizational knowledge).