Senior Management Cognition And Corporate Dynamic Capabilities Evolution

"How do organizations survive in the face of change?" Underlying this question is a debate between two viewpoints(adaptation versus selection) which has evolved into an attempt to understand, both theoretically and empirically, under what conditions some organizations sustain their competitive advantage in the face of environmental transitions while others do not. In this process, more static theories of strategy based on positional or resource advantages have been supplanted with dynamic capabilities theory which is a dynamic approach exploring how some firms recombine and integrate their resources to adapt to environmental changes.Including dynamic capabilities research, the tranditional capability research has existed following faults:(1) Capabilities are usually interpreted as learned and stable patterns of collective concepts, thus the role of individuals in organization is nelected in a large extent. Accordingly, some facors such as individual cognition and action may be interpreted as a result that driven by organizational routines and capabilities; (2) Following evolutinary economics and the Carnegie tradition of organization research, former organizational capabilities research emphasizes the role played by experiential learning which is routine-centered and based on performance feedback in the evolution of capabilities. This is an experience-based logics and it overlook the influences of cognitive logics of action to a large degree. It is less likely, however, that experience-based logics of action alone could adequately explain the development and evolution of dynamic capabilities, especially because the intrinsic definition of dynamic capabilities hints that their role is in overcoming the experiential forces that could lead to obsolescence of a firm's capabilities. " where are firm's capabilities come from and how its develop and evolve?" In order to answer this basic question of capability research, it is necessary to extend research domain from macro to micro and further delve into the micro-level orgin of individual cognition and action that lead to capability heterogeneity and interaction mechnism between firm-level factors and individual-level factors.From the pespective of firm's practices, continuously adapting to environmental changes and achieveing sustained development is final mission that every firm continues pursue. For Chinese firms under the environment of transition economies and emerging markets, they may be facing more difficult challenges in adapting environmental changes and achieveing sustained development because they have to face all kinds of challenges from institution, culture, technology and market. Since 2008, the worldwide economic decline triggered from international financial crisis has undoubtedly made the problems that Chinese firms existed for a long time become more and more severe. Under this conditions, it is a core strategic issue of vital importance for Chinese firms that promoting transformation and upgrading, overcoming the problems that hinder the firm's development, effectively coping with environmental changes and achieveing sustained development. Although the transformation and upgrading of firm need great efforts made by the whole society, the effective strategic action made by firm itself is an important precondition. Former strategic management research has shown that the launch and implementation of firm's strategic action is closely related to managerial cognition and organizational capabilities. Therefore, it is more instructive, both theoretically and empirically, to study the relationship mechnism between managerial cognition and firm's dynamic capabilities under the environment of Chinese firm's transformation and upgrading. This dissertaion is based on the above mentioned background.First of all, the dissertation proprose research question, namely:what is micro-level cognitive mechnism of the evolution of firm's dynamic capabilities and its related influential factors under the environment of Chinese firm's transformation and upgrading? Based on the core research question, the dissertation define some related concepts. Then it focus on the status quo and development tendency of research on managerial cognition and firm's dynamic capabilities, as well as rationality and necessity of research on cognition and capabilities under the context of firm's strategic change and renewal. On that basis, the dissertation study cognitive mechnism of a typical firm's dynamic capabilities and its related influential factors based on a time-spanned longitudial case study. Afterwards, in the light of research findings from case study, the dissertaion examine the relationship between the characteristics of top manager's cognition and firm's resource deployment flexibility which is an important representation of firm's dynamic capabilities based on panel data of listed companies from Shanghai and Shenzhen A share stock markets.The main research conclusions as follows:(1) The characteristics of top manager's cognition influence the development and evolution of firm's dynamic capabilities, and top managers who have more degree of cognitive flexibility and cognitive complexity may be inclined to develop firm-level dynamic capabilities in order to cope with environmental changes. (2) There are obvious differences in the .characteristics of firm's dynamic capabilities among the different stage of transformation and upgrading. It is shown that top manager's dynamic managerial capabilities interplay with firm-level dynamic capabilities and rise alternately and top manager's cognition plays an important role in the process. (3) Key manager plays an important role in cognitive mechnism of the evolution of firm's dynamic capabilities. (4) Government and institutional environment exert potential influences to cognitive mechnism of the evolution of firm's dynamic capabilities.Finally, the dissertation summarize the contributions and innovation points, theoritical and practical implications and future research interests.