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The Evolution of Collective Strategy Frames in High- and Low-Velocity Industries

Department of Management, University of Nebraska, Lincoln, Lincoln, Nebraska 68588-0491
Department of Management, Le Bow College of Business, Drexel University, 3141 Chestnut Street, Philadelphia, Pennsylvania 19104-2875
snadkarn{at}unlnotes.unl.edu
vk722{at}drexel.edu

We argue that the collective assumptions of firms drive their actions and practices, and create the conditions of industry velocity. In our view, cognitive construction by firms is the primary driver of industry velocity. This is in contrast to the contingency views common in the literature, which hold that industry velocity plays a role by constraining and shaping firm strategies. Specifically, we suggest that firms develop unique assumptions, social networks, and feedback mechanisms; that these mechanisms perpetuate patterns of changes in collective beliefs and aggregate actions; and that these patterns in turn shape high- and low-velocity conditions. We examine these assertions by tracing the collective beliefs of three aircraft (low-velocity) and semiconductor (high-velocity) firms over a 20-year period (1977–1997). Our results suggest that the cognitive construction view of industry velocity is reasonable.

Key Words: collective strategy frames; industry velocity; clockspeed; causal maps; cognitive construction