Strategic groups and competitive enactment: A study of dynamic relationships between mental models and performance

This study used computer-assisted content analysis of more than four. hundr ed presidents' letters to shareholders to examine empirical linkages betwee n cognitive strategic groups clustered by thanes in the reports and strateg ic groups clustered by performance. We found these groups converged as pred icted by the literature, and that mental models and performance are involve d in a recursive process of competitive enactment which contributes to stra tegic group stability. Our research used inductively derived themes from th e letters to structure a mental model widely shared in the pharmaceutical i ndustry: and then employed thematic variations to find stable clusters of c ompanies. These thematic clusters were triangulated with the strategic grou ps from a published study of the same industry, in the same period and were shown to converge. Additionally, longitudinal linkages between earlier men tal models of strategic goals and later reports of performance were found. The findings of our large-scale empirical study support strategic group the ory, demonstrate a novel approach to data mining, and pose questions for fu ture research. Copyright (C) 2001 John Wiley & Sons, Ltd.