External representations in strategic decision-making: Understanding strategy’s reliance on visuals

Paper highlights

Strategy depends heavily on things outside the strategist’s head: two-by-twos, maps, causal diagrams, roadmaps, spreadsheets, and simulations. These visuals shape the analysis itself. They change what managers can notice, remember, compare, and search for.

The paper explains why external representations are pervasive and why some help while others mislead. A visual can enlarge the space a manager can reason about, but a flexible tool in unskilled hands can also send the search in unproductive directions.

How visuals support strategy

External representations extend four cognitive functions that strategic work strains:

• Working memory: keeping more elements and relationships available at once.
• Long-term memory: recording analysis so it can be revisited and refined.
• Pattern recognition: making relationships, gaps, and outliers visible.
• Knowledge transfer and transformation: allowing several people to inspect and change a shared object.

The framework

Decision quality depends on the fit among the task, the representation, and the manager. Usability determines how easily a representation can be understood and operated. Malleability determines how freely it can be changed. Representational capability is the manager’s ability to select, populate, and manipulate an appropriate representation. Malleability helps when capability is high, but can widen an unskilled search in the wrong direction.

Why it matters

• A diagram or spreadsheet is part of the cognitive system: its format changes what users notice, remember, and search for.
• Usefulness depends separately on usability, malleability, and the user’s representational capability.
• Greater malleability expands what can be explored, helping an expert while potentially overwhelming or misdirecting a novice.

The practical implication is to evaluate a tool by how it shapes the decision process, not by how polished or familiar it looks.

How to use this paper

Cite this for

• A cognitive framework for external representations in strategic decision-making.
• The four functions of external representations: working memory, long-term memory, pattern recognition, and knowledge transfer or transformation.
• Usability, malleability, and representational capability as conditions shaping whether a strategy tool helps.

Useful for teaching

• Why a framework, map, spreadsheet, or diagram is part of the decision system rather than a neutral container.
• How polished visuals can still misdirect search if they hide the wrong variables or relationships.
• Why malleable tools can help experts while overwhelming or misdirecting novices.

Careful claim

External representations shape strategic search and attention, but their value depends on the fit among the task, the artifact, and the user’s representational capability.

Abstract

External representations, particularly visuals, are important in strategic decision-making. However, their pervasiveness and impact are not well understood in the strategy literature. Based on cognitive science research, we identify four cognitive functions crucial to strategic decision-making that benefit from using external representations. We also propose a conceptual model and propositions that explain how the quality of strategic decision-making depends on the interactions among task environment, external representations, and managers. We show that external representations influence in predictable ways the boundedly rational process of searching for new strategies. Key determinants include the manager’s representational capability and the usability and malleability of the external representation. We discuss implications for users, designers, and teachers of external representations in strategy, as well as suggest avenues for future research.

Other links

• SSRN preprint
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Last updated 2026-06-21