posted on 2025-05-11, 13:50authored byAtefeh Maghzi
This thesis is an endeavour to understand how heuristic reasoning characterizes the deployment of dynamic capabilities in highly dynamic environments. First, exploratory research is conducted to assess the extent to which a firm’s management draws on heuristic reasoning when deploying dynamic capabilities in highly dynamic environments and how such heuristic dynamic capability deployment may affect firm performance. The empirical analyses rest on data from earnings call transcripts and financial data of 150 firms listed in the S&P 500 index. The results show that management engages in less analytical, effortful reasoning (implying a greater engagement in heuristic reasoning) when both dynamic capability deployment and environmental dynamism are high. Further, we also find that less engagement in analytical, effortful reasoning (implying a greater engagement in heuristic reasoning) in dynamic capability deployment improves firm performance as environmental dynamism increases. Second, drawing on the conceptualization of ‘ecologically rationality’, we theoretical explain how heuristic reasoning characterizes the deployment of the three dynamic capabilities processes (sensing, seizing, and reconfiguring) in highly dynamic environments. Then drawing on the conceptualization of the bias-variance trade-off we explicate why reliance on heuristic reasoning may improve firm performance in highly dynamic environments. We further clarify why managers with greater cognitive ability are more likely to accurately and timely apply ecologically rational heuristic when deploying dynamic capabilities in highly dynamic environments.
History
Year awarded
2018.0
Thesis category
Doctoral Degree
Degree
Doctor of Philosophy (PhD)
Supervisors
Gudergan, Siggi (University of Newcastle); Lin, Nidthida (University of Newcastle); Wilden, Ralf (Macquarie university)