Managers’ Mental Model and Company Performance

There are many approaches to leadership, management, and decision-making which determine the vector of a company’s development. The difference between these approaches exists due to various factors, such as the specifics of the organisation, the corporate culture and the particularities of employees that require management and leadership. However, the main feature on which the manner of administration and decision-making of a manager depends is his or her mental model. This model should coincide with the goals of the organisation, as well as adapt and develop to overcome emerging challenges.

However, today there is no clear methodology for determining this model, and therefore it is difficult to estimate how it affects the work of projects and companies. For this reason, this study will propose a method for determining the managers’ mental model for comparing them, as well as assessing their impact on company performance.

Specific Research Questions

The primary issue of this study is the impact of the mental model of the manager on the performance of the company. However, it is also necessary to consider some specific questions to get an answer to the main one since most of the variables are not yet known. Therefore, the research questions are:

  • What are the distinguishing features of the different types of managers’ mental models?
  • How to capture the managers’ mental models?
  • How to compare the managers’ mental models?

Literature Review

The concept of a mental model has long existed in psychology, sociology, management, and other fields of science. The model forms and changes with the acquisition of new knowledge and can also be adapted to specific requirements (Mumford and Higgs, 2019; McKiernan, 2017). Besides, the shared mental model of managers reflects the organisational culture of a company (Hayes, 2018, p. 502).

The adaptation is necessary for managers as often the process of making the required decisions may not coincide with their vision, which impedes the development of the company. According to Mitchell (2018, p.119), “Mental models contain the integrated assumptions and images that influence how individuals see the work and understand the action taken.” Hemmati et al. (2018. p. 1273) define a narrower meaning of this concept: “Managers’ mental models are a simplified knowledge structure or cognitive representations of how business environments work”. Consequently, mental models can be different in various contexts, depending on the experience and knowledge of a person on a particular topic.

Consequently, the mental models of managers can differ significantly, but at the same time, a person can be unsure of her or his own model, which leads to a dead end in making important decisions. Hemmati et al. (2018), in their study on the incentives for the formation of a manager’s worldview, considers six mental models. Among them are government-based, benefit-based, brand-based, firm-based, manager-based, and environment-based models (Hemmati et al., 2018, p. 1278). The method for determining them is accurate and logical; however, it refers only to the sphere of export and cannot be used as a universal one.

At the same time, many works emphasise the importance of understanding the manager’s mental model and its impact on the work of companies. Martignoni, Menon and Siggelkow (2015) determined in their study that incorrectly defined mental models or their misunderstanding affect learning about making the right choice, which in turn forms a further inadequate line of work and learning.

Rust, Moorman, and Beuningenc (2016) study the impact of collective and individual emphasis on a company’s performance and argue that revenue emphasis convergence is beneficial for it, and cost emphasis convergence is not. Mishra (2017, p. 73) notes that inadequate awareness of a situation can lead to incorrect choices of schemes and scripts due to bias caused by his or her mental model. However, a universal way to determine manager perceptions and their impact on company performance still do not exist.

Conceptual Frameworks

The primary conceptual definition of this work is the mental model of the manager. The literature in the field of management and related areas of knowledge on this topic will be processed to determine and understand this conception. In addition, the ideas of decision making, biased opinions and ways to adapt the manager’s vision to the requirements of the business environment will be considered. The ways of adjusting mental models will be explored to identify the manager’s perception of their disadvantages (Scott, Cavana and Cameron, 2016; Parvin et al., 2019). It is also necessary to study the various concepts of certain types of mental models, which were identified in the course of more specialised studies.


The main way to determine mental models in this study will be a qualitative-quantitative method based on an interpretive paradigm. This approach was used by Hemmati et al. (2018), citing the onion model proposed by Saunders, Lewis, and Thornhill. It involves in-depth and semi-structured interviews based on phenomenology and projection techniques for collecting information, as well as thematic analysis in MAXQDA. However, in this study, the sample of respondents will be more extensive, approximately 100 people, and cover managers from different fields of activity. Consequently, demographic data will include issues such as age, gender, education, work experience and area of employment.

Moreover, a survey will be conducted by using the questionnaire to determine the impact of the mental model on the company’s performance. For the same purpose, data on the performance of the participated management will also be requested. Questionnaires will be sent to managers and company leaders and will be compiled in such a way as to determine the main motivation, decision-making methods and means of achieving goals. In addition, the questionnaire will include the question of the manager making the unbeneficial decision and its reasons, with several possible answers. At this phase, five representatives from each type of mental model, determined at the first stage, and their leaders will participate in the survey. Cross-analysis and statistical tools will be used to analyse the data.

Timeline of the Study’s Phases

The first stage of the study is the research of the literature and compilation of relevant universal questions for interviews, as well as for the survey in the next phase. This process, together with their testing and correction, will take approximately three months. The second step is to find respondents and interview them. The study involves a relatively wide selection of participants, so this stage can take up to one year. Structuring the information, defining mental models, and checking the questions of the questionnaire is expected to take no more than two weeks. The next step will be the selection and survey of respondents, which will require about 1.5 months. Getting the results and writing the final discussion and conclusions will need another month.

Research Results and Contribution

This study has several possible uses in theory and practice. Universal mental models of managers will be defined, as well as the very method of determining them, which can be used both by individuals and scientists for new research. This data contributes to the fact that the probability of a vague understanding of their own mental model among managers decreases, which improves their adequate assessment of the situation and factors for making decisions. In addition, specific examples of the impact of the mental model on company performance will be identified, and they can be indicators for managers to re-evaluate their motivation and working methods. Therefore, this study can bring a theoretical and practical contribution to the science of management.

Reference List

Hayes, J. (2018) The theory and practice of change management. London: Palgrave.

Hemmati, M. et al. (2018) ‘Identifying manager’s mental models of export development stimuli in the market of developing countries’, National Academy of Managerial Staff of Culture and Arts Herald, 2018(1), pp. 1272-1286.

Martignoni, D., Menon, A. and Siggelkow, N. (2015) ‘Consequences of misspecified mental models: contrasting effects and the role of cognitive fit’, Strategic Management Journal, 37(13), pp. 2545–2568.

McKiernan, P. (ed.) (2017) Historical evolution of strategic management. Volume 1. London: Taylor & Francis.

Mishra, C. (2017) Creating and sustaining competitive advantage management logics, business models, and entrepreneurial rent. Cham: Palgrave Macmillan.

Mitchell, B. (2018) Resource and environmental management. 3rd edn. New York: Oxford University Press.

Mumford, M.D. and Higgs, C.A. (2019) Leader thinking skills: capacities for contemporary leadership. London: Routledge.

Parvin, D. et al. (2019) ‘How effectiveness of comprehensive performance measurement systems on manager’s performance through modification of mental models (learning process)’, Iranian Journal of Value & Behavioral Accounting, 4(7), pp. 209-239.

Rust, R.T., Moorman, C. and Beuningen, J.V. (2016) ‘Quality mental model convergence and business performance,’ International Journal of Research in Marketing, 33(1), pp. 155–171.

Scott, R.J, Cavana, R.Y and Cameron D. (2016) ‘Mechanisms for understanding mental model change in group model building’, System Research and Behavioral Science, 33(1), pp. 101-118.

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