25: Competitive Groups as Cognitive Communities - Joseph Porac

In this third Season 3 episode, we discuss a classic paper from the Journal of Management Studies (JMS) entitled “Competitive Groups as Cognitive Communities the case of Scottish Knitwear Manufacturers” (1989) by Joseph Porac, Howard Thomas, and Charles Baden-Fuller. This time, we had the pleasure to have Sarah Kaplan as a guest in our discussion who by invitation of JMS wrote a great review of the paper discussing also its implications for subsequent studies.

The paper was published in 1989 in a special issue on Managerial Thinking in Business Environments. It is based on an empirical study of the picturesque case of the Scottish knitwear industry, which explores the theme of competition, and more specifically, the interplay between competitive environment, firm-level strategies, and group-level structures.

Employing an approach based on the ‘interpretive’ side of organizations, the Authors propose that a key mechanism in competition and strategy is given by the “mental models used by key decision-makers to interpret the task environment of their organization”. These, in turn, emerge out of material and cognitive exchanges among customers, suppliers, and producers. The lesson we can draw from this work is that meaning orients action: individuals do not have an immediate access to the environment, the strategies that they design and enact are influenced by who they think their competitors are.

This paper had a great impact in the management and organization field, especially on cognition and strategy. As a matter of fact, it has contributed to the vibrant community on managerial cognition which today feeds into many areas of the field. It has also been essential for the development of the growing field of studies on the construction of markets and categories.