||Performance Implications of Cognitive Complexity: An Empirical Study of Cognitive Strategic Groups in Taiwan Semiconductor Industry
||Department of Business Administration
cognitive strategic group
Cognitive strategic group research has received considerable attention in the field of strategic management. Cognitive strategic groups are formed by using the variables underlying managerial mental models that can truly reflect the managerial perceptions of competitive environment and competitors. Therefore, it is a very important topic to understand how firms sustain their competitive advantages through analyzing the different characteristics of cognitive strategic groups since different cognitive strategic groups experience different levels of performance. The research investigates the performance implications of cognitive complexity of cognitive strategic groups in Taiwan semiconductor industry. First, a letter to shareholder of each publicly traded company is collected as the data source. Second, through the computer-aided content analysis and factor analysis, themes underlying managerial perceptions are identified. Then, the reliability and validity tests are conducted. Themes with statistical reliability and validity are retained and used as the variables to cluster firms. The characteristics of each cognitive strategic groups are also identified. Moreover, the performance differences exist among the cognitive strategic groups. Finally, the study investigates the performance implications of cognitive complexity and external/internal related factors held by managers.
The study specifies three statistically reliable and accurate themes (operation, customer, and product) and identifies five types of cognitive strategic groups with different degrees of cognitive complexity on perceived strategic dimensions. The results indicate that the cognitively complex groups outperform the cognitively simple or non-focus group. More specifically, cognitively complex groups with dual orientations toward customers and products sustain competitive advantages over time. The findings enhance understanding that in a highly competitive industry such as the semiconductor industry, cognitively complex firms can encompass an elaborate picture of the competition to respond to environmental changes appropriately. Therefore, they can experience superior performance.
Chapter I Introduction ……………… 1
1.1 Motivation………………………… 1
1.3 Research Framework……………………9
Chapter II Theory and Hypotheses……………10
2.1. Strategic Group………………………………10
2.2 Cognitive Strategic Group……………………18
2.3 Effect of Cognitive Complexity on Performance…28
2.4 Effect of External/Internal Related Factors of Managerial Perceptions on Performance 33
Chapter III Research Methodology……………38
3.1. Letters to Shareholders……………………38
3.2. Content Analysis………………………40
3.3. Industry Description…………………………45
3.4. Specification of Mental Models………………46
3.4.1 Themes as the Measures of Mental Models…46
3.4.2 Computer-aided Content Analysis…………47
3.5 Data Collection 50
3.6 Identification of the Cognitive Strategic Space and Strategic Groups………51
3.7. Assessment of Cognitive Strategic Groups and Validation of Group Structure 52
3.8 Performance Variables…………………………52
Chapter IV Findings and Discussions…………38
4.1 Specification of Themes………………53
4.2 Identification of Cognitive Strategic Groups using Clustering Analysis…58
4.3 Evolutionary Strategic Group Structures……64
4.4 Analysis and Result….…………67
Chapter V Conclusion............72
5.3 Future Research Direction….……76
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