Task and Institutional Influences on Managers' Mental Models of Competition

Abstract

From institutional theory, we argue (a) that the competitive, or task environment may encourage divergence of management cognition between organizations, management functions and amongst senior managers, and (b) that the institutional environment may encourage cognitive convergence at the level of the industry, the strategic group and within institutionalized practices linked to management functions and level. Using management cognition of competition as a vehicle and two cognitive mapping methods, we test a series of competing propositions amongst 32 managers in the UK personal financial services industry, an industry that evidences both task and institutional characteristics. Our findings indicate neither the superiority of exclusively task nor institutional explanations of management cognition. However, the results do indicate some influence of the institutional environment, most noticeably through the convergence of mental models within middle managers across the industry. The results also indicate some influence of the task environment, through cognitive differences across organizations and greater differentiation amongst senior managers' mental models. We interpret our results by referring to the usefulness of distinguishing between task and institutional environments in management cognition and strategic management research.

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