CEOs’ Cognitive Complexity, Cognitive Flexibility and Strategic Change

Activity: Talk or presentationScience to science

Description

In this study, we examine the influence of two CEO cognitive map properties - CEO cognitive complexity and cognitive flexibility - on strategic change. Using a topic model algorithm that was trained on over 60 Million words, we measure the complexity of individual cognitive maps as well as their degree of adaption over time. Our panel data analysis of 156 firms in the S&P500 between 2002-2019 shows that CEO cognitive complexity is negatively related to strategic change, while CEO cognitive flexibility is positively related to strategic change. However, the effect of cognitive complexity on strategic change is mediated through cognitive flexibility. Our study findings contribute novel insights into the cognitive microfoundations of strategic change. We also provide empirical evidence of the detrimental effects of CEO cognitive complexity by revealing the mediating role of cognitive flexibility. Finally, we develop a new text-based approach to measure CEO cognitive map properties over time.
Period16 Jun 202118 Jun 2021
Event titleEURAM 2021
Event typeUnknown
Degree of RecognitionInternational