Amplifying uncertainty: Escaping the lemming’s principle – Perception and reasoning capabilities in strategic decisions to deviate from the main field of competitors

When do strategic decision-makers follow their competitors and when do they deviate? While prior work in this the management and psychology literature has focused on social and cognitive pressures as well as framing of the decision situation as influencing factors on this strategic decision, we focus on the nature of strategic decision-makers’ underlying mental activities. Building on prior work in managerial cognitive capabilities theory, we argue that the strategic decision to follow or deviate from competitors is contingent on how strategic decision-makers perceive uncertainty and on the way in which they reason. Thereby, our analysis suggests that when strategic decision-makers perceive less controllable sources of uncertainty and when the reason sensibly, the likelihood of them taking the strategic decision to deviate from the direction of their competitors increases. By contrast, when strategic decision-makers perceive more controllable sources of uncertainty and reason protectively, the likelihood for strategic decisions to follow competitors rises.