Managerial Dynamic Cognitive Capabilities in a Complex Market Environment

This chapter demonstrates how simulation modelling of complex adaptive systems can enhance managerial dynamic cognitive capabilities. SAFE ARCS framework is introduced, which offers a comprehensive analysis for strategic decision-making and related dynamic cognitive capabilities, consisting of four key stages: Search, Articulate, Find, and Evaluate Agent Resource Configurations. The SAFE ARCS correlates with essential cognitive capabilities like strategic imagination, strategic conversation, strategic innovation, and strategic surprise. Strategic imagination involves the capability to envision plausible future scenarios and identify avenues for strategic change. This aligns with the ‘search’ cognitive phase, which is supported by the RAM framework. Strategic conversation is the capability of engaging with stakeholders within and outside the organization. It revolves around fostering dialogues and diverse perspectives, creating an environment for strategic idea generation and alignment. This relates to the ‘articulate’ aspect and is again supported by the RAM methodology. Strategic innovation encompasses the capability to communicate alternative options for competitive advantage. The ‘find’ phase aligns with this capability, guiding managers in identifying game-changing strategies, supported by scenario simulation experimentation. Strategic surprise emphasizes the capability for proactively responding to future changes. In this context, the ‘evaluate’ cognitive phase relates to the process of comparing and selecting optimal strategic paths.