Cognitive Maps and a Hyperknowledge Support System in Strategic Management

Strategic management is defined as the system of action programs which form sustainable competitive advantages for a corporation, its divisions, and its business units in a strategic planning period.We have developed a system called Woodstrat to serve as a support system for these action program activities on both the corporate, the divisional, and the business unit levels. The system is modular and is built around the logic of strategic management, i.e., the main modules cover the market position; the competitive position; the production position; and the profitability, investment, and financing positions. The innovation in Woodstrat is that these modules are linked together, i.e., when a strong market position is built into some market segment, it will have an immediate impact on profitability through links running from the assumptions on an expected development to the projected profit/loss statement. There are similar links making the competitive position interact with the market position, and the production position interact with both the market and the competitive positions, and with the profitability and financing positions.The intermodular links are based on expert knowledge of strategic management; expert knowledge is also worked into the modules such that the logic of strategic management guides the user through the process of working out sustainable competitive advantages. The process is made user-supportive with a hyperknowledge user interface. The support is made intuitive and effective with the use of object-oriented expert system technology. The basis for this is rather unusual: the Woodstrat system was built with Visual Basic, in which the objects to create a hyperknowledge environment were built.It is shown that the conceptual constructs which form strategic management can be described with cognitive maps, and that these can be adequately represented with our hyperknowledge objects. It is also shown that the knowledge formation which takes place in a management team when strategic plans are formed can be described and validated with a hyperknowledge support system. It is finally shown that a support system with hyperknowledge features, which are close to the cognitive maps of a management team, will have a profound impact on the depth and the structure of its strategic management processes.