Article Critique for: Mental Models, Decision Rules, and Performance Heterogeneity

Topics: Critical thinking, Management, Cognition Pages: 2 (406 words) Published: March 3, 2014
Gray M, Wood R. 2011. Mental Models, Decision Rules, and Performance Heterogeneity. Strategic Management Journal, 32(6), 569-694.

Definition of Key Concepts: Managerial cognition- managerial mental models are a critical determinant of strategic choices. Ephemeral- lasting for only a short period of time and leaving no permanent trace

Assumptions, theoretical arguments, and their justification: The authors cite significant evidence that mental models influence decision making through managers’ efforts to match strategic choices to their understanding of the business environment. However, there is limited empirical evidence for the link between mental model accuracy and performance. There are strong beliefs within strategic management that managers who have a richer understanding about the dynamics of industry structure and organizational capabilities can improve the performance of their firms. There is however, an alternative possibility that complexity, uncertainty, and change in business environments overwhelm managers’ capacity to take advantage of any richer understanding about the situation. Under these circumstances, competitive advantage would be driven by initial conditions, random environmental shocks, and lucky managerial responses rather than the result of accurate mental models underpinning managerial foresight or strategic insights. The authors recognized that there has been little empirical research examining the relationships between differences in mental model accuracy and performance.

Conclusions, and Theoretical/ empirical significance: The authors provide empirical evidence for the links between mental models and performance outcomes and help explain why some managers adopt strategies that are ultimately successful and others don’t. They found substantial variation in the accuracy of decision makers’ mental models and in performance outcomes. Decision makers with more accurate mental models not only achieved high...
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