The growth of hidden champions in China: a cognitive explanation from integrated view

Purpose There is a research gap in strategic management regarding the complement from managerial cognition literature to the behavioral theory of firm, as well as linkage between cognitive structure and cognitive process of strategy formulation in the field of managerial cognition, which also calls for further exploration. The purpose of this paper is to construct a model from an integrated view for explaining the process of cognitive reconstruction under incremental changes. Design/methodology/approach Qualitative research is conducted in the form of 17 semi-structured interviews in four hidden champions operating in China. Based on the model generated from the literature review, this paper adopts the abductive logic for data analysis. Findings This paper draws the following conclusions. The cognitive structure is shaped by the changing environment and the performance feedback, the variance in structural attributes will affect whether the changing environment destructs the effectiveness of original cognitive structure or not, the centrality of cognitive structure will promote the efficiency of tried-and-true organizational adaptations to incremental changes, and cognitive structure reconstruction is the result of the recursive process of trial-and-error learning. Originality/value This paper proposes the model explaining the interaction mechanisms between cognitive structure and strategy formulation process. It also presents the iterative sense-making process for reconstructing cognitive structure in strategy formulation. Both of them extend the understanding on managerial cognition in organizational adaptations to incremental environmental changes.