S. (Saeedeh) Ahmadi
Microfoundations of exploration under the condition of complexity- the role of motivation and cognition
Introduction and Questions Formulation
Rapid technology and market changes increasingly create complex situations for decision makers seeking to secure competitiveness and survival of their organizations. Complexities render much of the praised best practices and routine responses ineffective, and intensify the need for searching for new alternatives and exploring new possibilities. Indeed, exploration is known to be a pre-requisite of competiveness and survival (Jansen et al., 2006), especially under complex conditions (Kim and Rhee, 2009), but organizations are not equally successful in pursuing exploration (Levinthal & March, 1993; March, 1991; Tushman & O'Reilly, 1996). Understanding the sources of this variation has been a key focus of strategy and organization scholars. While the critical role of key decision makers in enabling and fostering exploratory behavior has been emphasized in the literature of antecedents of exploration (Gibson and Birkinshaw, 2004; Lubatkin et al., 2006; O’Reilly and Tushman, 2011), research on exploration at a micro level is scarce (Gupta et al., 2006) and underlying factors that drive exploration are underspecified (Sitkin et al., 2011). In fact, existing research on what makes individual decision makers more inclined towards exploratory behavior in their organizations is fairly limited (Gupta et al., 2006; Laureiro-mart et al., 2014). More importantly, among the studies that have examined the antecedents of key decision makers’ exploration, microfoundations work from a psychology perspective is scarce.
Exploration “engages individuals and organizations in search, experimentation, and variation” (Lavie et al, 2010, p. 110). It is “captured by terms such as search, variation, risk taking, experimentation, play, flexibility, discovery, innovation” (March, 1991, p. 71). Although employees in different levels play a role in organizational search and exploration, senior managers and key decision makers have a more salient role in this regard. Exploring opportunities under conditions of uncertainty and complexity requires substantial funds and considerable effort on the part of the organization (Helfat & Peteraf, 2014). Organizations need to develop new capabilities and no one plays a more important part in this than senior managers (Maritan, 2001). Orienting the organization towards exploration mode requires a dynamic decision-making process and frequent trade-offs between contrasting and conflicting agenda (Smith, Binns, & Tushman, 2010). Without the involvement of senior managers, exploration at lower levels of the organizations may backfire, taking the organization in different directions and perhaps resulting in poorer performance (Siggelkow & Rivkin, 2006; Coen & Maritan, 2010). Nevertheless, our knowledge about what makes senior managers and key decision makers more inclined to and capable of pursuing exploration is limited.
The above discussion highlights a need for better understanding of individual level factors that increases orientation towards exploration. Addressing this gap fits into the increasing interest in studying “microfoundations” in the strategy field. The microfoundations research in strategy has tried to “decompose macro-level constructs in strategy literature in to the actions and interactions of lower level organizational members” (Foss & Pedersen, 2014). Call for microfoundations in strategy goes back to a decade ago (Grant, 1996; Lippman & Rumelt, 2003; Felin & Foss, 2005; Gavetti, 2005) but “microfoundational work did not take off until approximately 2010” (Foss & Pedersen, 2014). Particularly, there has been a call for further consideration of psychological microfoundations of organizational adaptability (for example, Helfat & Peteraf, 2014; Hodgkinson and Healey, 2011). In response, this PhD project will look into motivational and cognitive elements of the strategic decisions with respect to exploration.
Drawing on the literature on applied psychology, I focus on two main drivers of behavior, i.e. cognitive and motivational factors. A growing body of research has recently considered motivational factors as important determinants of preference for strategic actions (Gamache et al., 2013; McMullen et al. 2009). Motivation is an important factor in studying microfoundations in as much as it refers to “the reasons underlying behavior” (Guay et al., 2010, p. 712). The role of motivation is substantial when it comes to variance seeking exploratory behavior (McGrath, 1999). In particular, this PhD research focuses on the important yet understudied facet of the managers’ decisions for exploration that concerns motivational sets which determine orientation and approach towards goals. It is based on Regulatory focus theory (Higgins, 1997) which is known to be “one of the most comprehensive motivation theories” (Kark and Van Dijk, 2007, P.503).
Concurrently, cognition is increasingly being studied as an antecedent of strategic renewal of the organizations (Eggers and Kaplan, 2009; Eggers and Kaplan, 2013; Helfat and Peteraf, 2014; Kaplan, 2011). Managers need to focus on relevant stimuli and scan the environment; they must stay alert so as to detect the direction of complex changes in the environment and create new opportunities whenever possible (Helfat & Peteraf, 2014). As such, dealing with complexity in business environment is associated with important cognitive challenges to decision makers who often focus their attention on familiar information sources such as existing competitors and partners (Capron, 2009; Maula, Keil & Zahra, 2012). This narrow focus of managers may distract the organization from exploratory behavior and stops them from considering alternative approaches within the innovation process. While much of the empirical works in strategic management literature have discussed the heterogeneity in managerial cognition in terms of limited elements of cognition (e.g. managerial attention, and mental maps), very few recent studies introduce a comprehensive view to managerial cognition. For example, managerial cognitive capabilities (Helfat & Peteraf, 2014) and cognitive control capabilities for decision making performance (Laureiro-mart, 2014) are among those. There is yet not much theoretical discussion and empirical evidence that discuss the conditions under which managerial cognition is related to exploration under complexity and the mechanisms that drive such a relationship.
In addition to the direct relationships between psychological factors and exploration, this PhD project looks into the organizational contingencies that condition such relationships. In particular, I study organizational goal setting and the effect of difficult to achieve and stretch goals on the cognitive and motivational factors that underlie exploratory orientation in the organizations. Prior research considers difficult to achieve and stretch goals in connection with organizations exploration, but theoretical discussions on this effects are not conclusive. On the one hand stretch goals are expected to foster exploration by creating a sense of urgency and stimulating creativity (Sitkin et al., 2011). On the other hand, stretch goals may deter exploration by creating a tendency for avoiding experimentation and failure among organization members (Fried and Slowik 2004) and creates a tendency towards performing better by increasing the effort without searching for new ways and approaches (Ilgen and Davis, 2000). Moreover, there is evidence that suggest difficulty of goals has an important effect on psychological antecedents of decision making. In particular, Maddox and his colleagues (2006) argue that when achieving the desired goals is easily attainable, the effect of regulatory focus diminishes. Conversely, when the goals are difficult or unlikely to be attained, regulatory focus is more influential in driving individuals’ preferences and actions. Against this backdrop, I will provide theoretical discussions and empirical evidence to explain why and how organizations, through appropriate goal setting, may ensure that cognitive and motivational factors will not deter exploration.
Besides the organizational factors, this PhD thesis examines the effects of motivational and cognitive factors in the presence of a contextual factor which could be of significance not only in managers’ decision-making for exploratory activities but also for performance of motivational self-regulatory systems and cognitive capabilities: the complexity of the business environment. A growing body of research emphasizes the need for consideration of complexity as key factor in making sense of how managers behave and analyzing the managerial response in decision making situations (Sargut and McGrath, 2011; Larsen et al., 2013). Complexity is known to have three features: (1) multiplicity, refers to the number of potentially interacting elements (Sargut and McGrath, 2011, Balasubramanian & Lieberman, 2010), (2) interdependence, relates to the degree of interaction and interrelatedness between those elements (Sargut and McGrath, 2011, Balasubramanian & Lieberman, 2010), and (3) diversity, has to do with the degree of their heterogeneity (Sargut and McGrath, 2011). These properties all together impose high degrees of uncertainty and unpredictability (Balasubramanian & Lieberman, 2010). In particular, I will provide theoretical discussions and empirical evidence to explain why and how complexity, which is inherently associated with increased unpredictability and uncertainty of the outcomes, is expected to affect the possible effect of motivational and cognitive factors on exploration.
According to the above discussion, the following research questions will guide the components of this research project:
The following sections of this proposal discuss the theoretical background, the theoretical model and hypotheses as well as research methods and contributions.
- Time frame
- 2014 -
Work in Progress (2)
S. Ahmadi, L. Berchicci & J.J.P. Jansen (2018). A Psychological Perspective On Manager's Exploration Orientation : The Role of Regulatory Focus, Regulatory Fit, and Complexity of Decisions Making.
S. Ahmadi, J.J.P. Jansen & S. Khanagha (2018). Fostering dispersed entrepreneurship within large organizations – Can stretch goals stimulate new business initiatives?
S. Ahmadi, S. Khanagha, L. Berchicci & J.J.P. Jansen (2017). Are Managers Motivated to Explore in the Face of a New Technological Change? The Role of Regulatory Focus, Fit, and Complexity of Decision-Making. Journal of Management Studies, 54 (2), 209-237. doi: http://dx.doi.org/10.1111/joms.12257[go to publisher's site]
S. Ahmadi (2017). Decision-making: are managers biased by their characters? RSM Discovery - Management Knowledge, 31 (3), 14-16.
Other Output (2)
S. Ahmadi (2015). Managing cognitive complexities during business model transformation process. Strategic Management Society Conference: St. Gallen- Switzerland- May 2015.
S. Ahmadi, L. Berchicci & J.J.P. Jansen (2015). A Motivational Perspective of Exploration: The Effects of Regulatory Focus and Managerial Decision-making Complexity on Exploration. Academy of Management Conference: Vacouver- Canada- August 2015.
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