Shared beliefs among entrepreneurs cause collective misreading of competitive threats

Evidence

Personal relations lead to shared common ideas, feelings and beliefs. The fact that entrepreneurs in Stuttgart did not notice Japanese competitors at an early stage and that they neglected to introduce countermeasures in time, was interpreted as a cognitive lock-in. Collective misinterpretations were the reasons why Stuttgart did not evaluate its industrial structure in the context of global division of labor as well as division of technological competences. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 939

Categorization

• DEFINE: Defines ‘cognitive lock-in’ as personal relations producing shared beliefs that then filter out disconfirming signals.
• STORYSTEM: A fictional industrial town whose founding families all believe the same flattering story about their superiority while a foreign competitor quietly eats the market — dramatic irony built from cognitive lock-in.