Minding the Competition: From Mapping to Mastery

Cognitive approaches to strategy have examined the subjective nature of business environments and competitive situations, but have failed to show how managerial mental models lead to superior economic performance. In contrast, resource-based views of strategy acknowledge the importance of managerial skills in creating economic rents, but have not examined the processes through which managerial cognitions lead to sustained competitive advantage. To address this deficit, this article develops a sociocognitive capability approach that integrates cognitive and economic theories. This approach: (1) identifies sociocognitive foundations of differentiation and cost; (2) examines how these foundations emerge from the process of strategy development; (3) explains how group capabilities influence this process; and (4) shows how human and organizational resources give rise to group capabilities. The article concludes by discussing implications and directions for future research.