Cognitive Dynamics of Capability Development Paths

Recent research on capability dynamics has increasingly turned its attention to the cognitive microfoundations of capability development. On the basis of a longitudinal case study of the evolution of three network security software firms, we find that the effects of managerial cognition can be detected at three distinct levels of capability development. At the level of operational capabilities, instrumental cognition affects the way in which capabilities are developed. At the level of a firm's capability portfolio, shifts in management's attention regarding capability development cause different evolutionary paths to emerge. Finally, at the extended enterprise level, managerial foresight influences the way in which a firm's capability constellation morphs over time. Our findings provide novel empirical evidence and contribute to an improved understanding of the role of managerial cognition in capability development. Copyright (c) Blackwell Publishing Ltd 2009.