Strategic Literacy and Cognitive Restraints in Owner-Managed Enterprises: Overcoming Barriers through AI-Supported Decision-Making

Abstract

Owner-managed enterprises, small enterprises with fewer than 10 employees, are a crucial part of
microenterprises worldwide. Still, they often have limited involvement in formal strategic planning due
to low strategic literacy and cognitive limitations. These constraints lead to informal, reactive decisionmaking
instead of structured, long-term strategies, resulting in suboptimal performance. This study
examines how AI-enabled decision-support tools can reduce cognitive barriers and improve strategic
literacy among OMEs. Using a mixed-methods approach that combines qualitative interviews with an
AI-supported planning prototype, this research explores literacy gaps, identifies key cognitive
limitations, and assesses the influence of digital tools on planning behaviors. Findings suggest that AI
support shows potential to enhance planning capacity without adding cognitive load. This paper
advances strategic management theory by application of the concept of bounded rationality with digital
augmentation, offering practical insights for tool design and policy development.