Lecture 3 - Entrepreneurial school + Cognitive school Flashcards
(!) Describe the entrepreneurial school in general & situations for its use
General:
- Descriptive
- Strategy formation: Visionary process
- Vision as direction & visionary leader
- High risk & high return
- Centralized power: CEO
- Opportunities > Problems
- Goal: Growth
- Mental process of TM: Enabled by experience
- Focused on individuals
- Entrepreneur either founder, manager or innovative leader
- (Closely connected to design school)
- (Seek big picture)
Situations:
- Small firms
- Start ups
- Turnarounds
- Owner based firms
(.) Describe the root dimensions of the entrepreneurial school
Sources:
- Schumpeter
Base discipline:
- None / Early economists
Champions:
- Popular business press
- Small business people
Intended message:
- Envision
Realized message:
- Centralize
(.) Describe the entrepreneurial personality & techniques
Personality:
- Resilience
- Calculator > Gambler
- Overconfident
- Optimism to point of un-realism
- (Charismatic)
- (Persuasive)
- (Impulsive)
- (Reckless)
- (Irritated by obstacles)
- (Needs control, independence & achievement)
Techniques:
- Gut feeling
- Intuition
- Insight
- Inspiration
- “Envisioning”
(!) What is meant by a vision
Vision:
- Target in far future state
- Informal & personal: To remain rich & flexible
- Mental image of leader
- Mental strategy representation
- Based on values, commitment & aspirations
- Operate on emotional & spiritual resources
- Umbrella for decisions & emerging detailed strategies
- When visionary leadership
- Must be realistic, credible & attractive
- (Shift: Unfreezing –> Changing –> Refreezing)
(!) Describe the strengths & weaknesses of the entrepreneurial strategy
Strengths:
- Flexible & adaptable
- Deep knowledge
- Minimize politics: Leader decide
- Charismatic leadership provide motivation
- Catch opportunities: Not waiting for all info
Weaknesses:
- Unrealistic burden on leader
- Few power checks on leader
- High risk if leader leave
- Resistant to change if leader dont
- Narrow organizational control
- Low commitment: Little LL-participation
- Overlook other changes
- Danger of “capture”: Vision not reality. Unknown future.
- Both positive/negative sides of entrepreneurial personality
(.) Describe the root dimensions of the cognitive school
Sources:
- Simon
- March & Simon
Base discipline:
- Psychology
Champions:
- Psychologists
Intended message:
- Cope & create
Realized message:
- Worry or imagine
(!) Describe the cognitive school in general
General:
- Descriptive
- Strategy formation: Mental process
- Strategy in strategists mind: Self taught by experience
- Focused on individuals
- Strategy is complex & non-neutral
- Use knowledge to produce most objective vision of world
- Construction > Reflection: Cognition create world, not recreate
- Personalized > Deterministic: Understand human minds
- Strategy shaped by representations of world & environment
- Representations take form as models, constructs, concepts, maps, interpretation, schemes & frames
- Representations twisted by bias
- Strategies difficult to attain or change
- (Strategies emerge as perspectives)
View on human cognition:
- Limited
- Bounded rationality
- Never full info
- Biased
(.) Describe some biases
Anchoring:
- Giving initial info too much weight
Group think:
Conservatism:
- Failure to change ideas when new info
Self-Sealing:
- Search for facts confirming view
- Reject info dont confirming view
Inconsistency:
- Inability to apply same decision criteria to similar situations
Recency:
- Recent events dominate thinking
- Less recent ignored
Availability:
- Reliance on events easily recalled
Illusory Correlation:
- Assume that if A and B happen together one causes the other
Selective Perception:
- See problems based on one’s background
Regression Effects:
- Ignore role of randomness when predicting future events
Attribution:
- Success attributed to one’s skills
- Failure due to bad luck or others’ mistakes
Optimism & wishful thinking:
- Outcome preference produces analyse that predict outcome
Anxiety Reduction:
- Need to reduce anxiety produces pressure to make a decision: So decision maker prone to bias
(Other considerations:)
- Groupthink
(!) Describe frames in general
- Exclude some info & include other
- Relates to premises: What to focus on
- Define figure & background
- Socially meta communicative
- Map cognition
- Meta communicative: Aid to understand message in frame
- (Alternative words: Concept, script, plan, mental model, map)
(.) Describe the Myers-Briggs instrument
General:
- 16 cognitive styles
- 4 dimensions
___________
Dimensions:
Extroverted/Introverted:
- Extroverted: Energized by outside world
- Introverted: Energized by inside world
Sensing/Intuition:
- Sensing: Info from relying on senses
- Intuition: Info from trying to grasp pattern
Thinking/feeling:
- Thinking: Rely on analysis for decision
- Feeling: Rely on feelings for decision
Judgement/Perception:
- Judgements: Planned, orderly, controlled
- Perception: Flexible, & spontaneous
___________
Relation to schools:
ESTJ: Positioning school
ESFP: Learning school
(!) Describe the two wings of the cognitive school
General:
- Cognitive school bridge objective & subjective schools
The objective wing:
- Re-create world
- Some objective vision of world: Reduce biases
- Focus on info-processing: How bias influence decision
The subjective wing:
- Create world
- Strategy as interpretation of world
- Focus on construction: Social constructivist
(!) Describe the three views on environment
General:
- Constructed or out there?
Objective Environment:
- External
- Prescriptive schools
- Exist independent of observer
- Knowledge relies on search & discovery
- Something waiting to be found
Perceived Environment:
- External
- Exist independent of observer
- Can never be known: Bounded rationality
- Knowledge relies on testing hypotheses
- (Minimize gap between perception & reality)
Enacted Environment:
- Dependent of observer
- Constructed by human actions
- (Labelling process)
- (Constructed & reconstructed through interaction with experiences)
(!) Describe the strengths & weaknesses of the cognitive school
Strengths:
- Explain strategic rigidity
- Highlight important thinking & psychology in strategy formation
- Highlight limits of info-processing
- Highlight creativity & imagination
- (Best on individual cognition)
Weaknesses:
- Sometimes we just try things. Ref. Learning school
- More in research than practice
- Ignore intuition
- Reduce complex social cognition to individual cognition
(!) Describe dominant logic
General:
- The cognitive school in practice
Definition:
- Mindset that rule DM-processes across all SBU
Shape DM-processes by:
- Control premises
- Focus attention
- Filter info
- Reduce ambiguity
- Structure time
Advantages:
- Relatively unhindered
- Can create strong, flexible link between HQ & BU
- Guide > dictate DM-processes
- Avoid rigidity of formal strategic planning & organizational controls
(.) (Describe the model of strategic decision making)
Attention:
- What info to process
- What info to ignore
Encoding:
- Give meaning to info: Fit to existing categories
- Risk of stereotyping by categorizing
Storage/retrieval:
- Memory create cognition
- Memory is web of associations between different info items
Decision:
- Choices in cognitive process
- Often collective
- Cognition create & reinforce need to solve issues: Dont produce decisions
- Emergent process
Outcomes:
- Beginning of feedback process
- Can be hampered by past learning
