Academic journal article Administrative Science Quarterly

Looking Forward and Looking Backward: Cognitive and Experiential Search

Academic journal article Administrative Science Quarterly

Looking Forward and Looking Backward: Cognitive and Experiential Search

Article excerpt

We used computer simulations to examine the role and interrelationship between search processes that are forward-looking, based on actors' cognitive map of action-outcome linkages, and those that are backward-looking, or experience based. Cognition was modeled as a simple, low-dimensional representation of a more complex, higher dimensional fitness landscape. Results show that, although crude, these representations still act as a powerful guide to initial search efforts and usefully constrain the direction of subsequent experiential search. Changing a cognitive representation itself can act as an important mode of adaptation, effectively resulting in the sequential allocation of attention to different facets of the environment. This virtue of shifting cognitive representation, however, may be offset by the loss of tacit knowledge associated with the prior cognition. [*]

The notion of bounded rationality (Simon, 1955) has been a cornerstone of organizational research (March and Simon, 1958; Cyert and March, 1963) and a basis for two distinct intellectual lineages. One is a perspective focusing on organizational learning (Levitt and March, 1988), especially ideas of local search (Cyert and March, 1963) and the evolution of relatively stable organizational routines (Nelson and Winter, 1982). Such routines reflect experiential wisdom in that they are the outcome of trial and error learning and the selection and retention of prior behaviors. Although bounded rationality highlights the importance of information-processing constraints, as reflected in the role of organizational routines and standard operating procedures (March and Simon, 1958; Cyert and March, 1963), it does not negate the possibility of action based on a logic of consequences (March, 1994). Indeed, the notion of bounded rationality has helped spawn a second research tradition that focuses on individuals as explici tly considering the possible consequences of the choices they make (March and Simon, 1958; Simon, 1991). In this tradition, bounded rationality is manifest primarily in the limited or imperfect cognitive representations that actors use to form mental models of their environment (Thagard, 1996). Such representations both simplify the complexity of spatial relationships (Porac, Thomas, and Baden-Fuller, 1989), the interaction among choices and actors at a point in time, and temporal or causal relationships (Weick, 1979). Cognitive representations have been shown to be a critical determinant of managerial choice and action (Tversky and Kahneman, 1986; Huff, 1990; Fiol and Huff, 1992; Walsh, 1995); in particular, a firm's choice of strategy is often a by-product of actors' representation of their problem space (Simon, 1991).

In terms of figure 1, cognitive and experiential based logics of choice can be distinguished as follows. Cognition is a forward-looking form of intelligence that is premised on an actor's beliefs about the linkage between the choice of actions and the subsequent impact of those actions on outcomes. Such beliefs derive from the actor's mental model of the world (Holland et al., 1986). Greater fidelity between the mental model of action-outcome linkages presumably leads to more efficacious choices of action.

In contrast, experiential wisdom accumulates as a result of positive and negative reinforcement of prior choices (Levitt and March, 1988). Choices that have led to what are encoded as positive outcomes are reinforced, while the propensity to engage in actions that have led to negative outcomes is diminished. In this sense, experiential learning offers a form of backward-looking wisdom. In addition, the cognition--the belief about action-outcome linkages--itself may change as a result of prior experiences (Louis and Sutton, 1991). Thus, efforts at sensemaking (Weick, 1995) can be interpreted as a higher-order form of experiential learning.

Although prior work has addressed how experience may lead to changes in cognitive representations (Louis and Sutton, 1991; Weick, 1995), few scholars have addressed the opposite, how cognition influences subsequent processes of experiential learning. …

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