Strategic interpretation on sustainability issues – eliciting cognitive maps of boards of directors

Abstract

Purpose The purpose of this paper is to examine the role of cognitive diversity on strategic issue interpretation among the boards of directors making sense of sustainability management. The study also investigated the centrality of the corporate sustainability issues to identify common interpretative patterns in the shared cognitive maps among the companies. In addition, the aim was to advance quantitative methods for the analysis of decision-makers’ cognition. Design/methodology/approach The research was an exploratory study analyzing 43 individual cognitive maps collected through surveys from the boards of nine cleantech companies. For the elicitation of the cognitive maps, the study used the hybrid cognitive mapping technique. The diversity of the shared cognitive maps was analyzed using the distance ratio formula and the graph analysis method with eigenvector to measure the centrality of the strategic issue interpretation in the maps. Findings This study provides evidence through the analysis of distance ratios on the existence of cognitive diversity among companies within the same industry. Surprisingly, despite the cognitive diversity, the study identified strong common patterns on strategic issue interpretations among the companies. In addition, the study shows that the sustainability management issues have gained minor attention from the boards of directors. Research limitations/implications The initial industry sample provided relatively restricted perspectives on managerial cognition, and to confirm the findings regarding the effects of industry on the shared cognitive maps of top decision-makers, wider industry-level data are needed. Practical implications This study provides an approach to facilitate the process of strategic decision-making for top decision-makers by identifying the shared beliefs of the selected strategic theme and to concentrate on the most central strategic issues in the company and industry. It reveals asymmetry between the significance of sustainability issues in an open agenda and the real position of sustainability concepts in the shared cognitive maps in the green industry. Also, the study advances cognitive mapping techniques for application in the board’s decision-making. Originality/value This paper contributes to brightening the black box of corporate governance by shedding light on the interaction of the concepts of corporate sustainability and other key strategic issues within the shared cognitive maps of the boards. It also provides new empirical knowledge on top decision-making processes and the effects of cognitive diversity on the strategic issue interpretations within the corporate boards of the green industry, and it further develops the methodology for the quantification of cognitive diversity and the content of cognitive maps.