Microfoundations of sensing capabilities: From managerial cognition to team behavior

Abstract

Scanning the environment for information about competitors, technology trends, or customer needs allows firms to sense opportunities and threats, which supports dynamic capabilities and helps firms remain competitive over time. There has been significant theoretical development on the cognitive antecedents of dynamic capabilities—so-called dynamic managerial capabilities. In this study, I propose a novel mechanism through which managerial cognition can scale to a collective level in support of sensing capabilities and consider how organizational design may influence this relationship. Specifically, I posit that high-construal managers engage in more environmental scanning than low-construal managers do, because their mental horizons are broader and encompass further alternatives, and that over time their behavior is modeled by their team. I also suggest that managers’ degree of task-related interdependence with peer managers across the firm influences the direction of this relationship, with low interdependence reversing it. I find support for my theory using multiple-source, time-lagged data gathered from 88 managers and their team, thereby offering key implications for theory and practice.