Framing the future : cognitive frames, strategic choice and firm response to the fiber-optic revolution

Abstract

Much research has sought to understand why technological discontinuities are difficult for firms to manage. While the literature devotes little attention to the role played by managerial cognition, in such equivocal situations as those created by rapid technical change, executives' cognitive frames of the environment, not the "objective" characteristics of the situation, should be essential for shaping outcomes. Despite an increasing emphasis on managerial cognition in the strategy field, there have been limited attempts to link cognitive frames to strategic choice and action in the face of dynamic events. Thus, my research seeks to shed light on the following question: to what extent and through which mechanisms do managerial frames about the technology and environment affect firm strategic response to technical change? My dissertation is a multi-method examination of this question in the specific context of communications technology firms' responses to the fiber-optic revolution. First, I examine the macro patterns and consequences of frames for strategic action. An analysis of a panel dataset of 72 communication technology firms (over the period 1982-2001) testing the effect of top managers' frames about the importance of optical technologies on strategic action (in the form of patenting in the optical arena) shows that, even when controlling for a number of plausible alternative explanations, there is a strongly positive and significant association between frames and subsequent strategic actions across a wide range of firms. Second, I unpack the micro mechanisms connecting cognitive frames and strategic choice. A qualitative exploration of one firm, employing ethnographic techniques to examine cognition "in the wild" of strategy

(cont.) making, follows several strategic projects to understand not just the decisions themselves but how they are produced in the course of situated action. Drawing on framing theory in the social movements literature, I develop a model of"framing contests" in which frames and framing strategies are tightly intertwined with interests and political strategies in producing strategic choices about technology investment. Third, I integrate the macro and micro perspectives to build a structurational model of framing that addresses the essential tension between adaptation and inertia in the face of technical change.