PSYCHOLOGICAL FOUNDATIONS OF DYNAMIC CAPABILITIES: REFLEXION AND REFLECTION IN STRATEGIC MANAGEMENT

GERARD P. HODGKINSON, MARK P. HEALEY
2009 Academy of Management Proceedings  
In recent years, there has been a move to identify the behavioral foundations underpinning the evolutionary and economic fitness of the enterprise. Indeed, the dynamic capabilities project now occupies center stage in the field of strategic management. Yet the accounts developed thus far-like much of the field's theory and research more generally-are predicated upon a cold cognition logic that downplays the significance of emotional/affective and nonconscious cognitive processes for strategic
more » ... aptation. In this article, we rectify this imbalance by drawing upon contemporary advances in social cognitive neuroscience and neuroeconomics to develop a series of countervailing insights and new prescriptions for the development of dynamic capabilities. Using Teece's (2007) influential framework to organize and illustrate our arguments, we demonstrate how the fundamental capabilities of sensing, seizing, and transforming each require firms to harness the cognitive and emotional capacities of individuals and groups to blend effortful forms of analysis with the skilled utilization of less deliberative, intuitive processes. 'The decision-making paradigm, as it has developed, is the product of a marriage between cognitive psychology and economics. From economics, decision theory inherited, or was socialized into, the language of preferences and beliefs and the religion of utility maximization that provides a unitary perspective for understanding all behavior. From cognitive psychology, decision theory inherited its descriptive focus, concern with process, and many specific theoretical insights. Decision theory is thus the brilliant child of equally brilliant parents. With all its cleverness, however, decision theory
doi:10.5465/ambpp.2009.44268008 fatcat:akzq5lnn3jbhnmbiai27o7pt7i