PhD Defence: Decision Making and Behavioral Strategy - The Role of Regulatory Focus in Corporate Innovation Processes

For any entity (e.g. individual, team, organizational unit, corporation), performance and survival depends on achieving a proper fit with environmental demands. Different environments (as well as the same environment at different times) require the entity to engage in different levels of exploration and exploitation activities. A simple definition of what is meant by the phrases ‘exploration activities’ and ‘exploitation activities’ is provided by Jim March. March defines exploration as the “things captured by terms such as search, variation, risk taking, experimentation, play, flexibility, discovery, innovation” whereas for exploitation he used terms such as “refinement, choice, production, efficiency, selection, implementation, execution” (1991, p.71).

This thesis consists of four studies. In the first two studies, we put forward regulatory focus as a psychological factor that can explain an individual’s exploration and exploitation tendencies. Regulatory focus is a construct that has both a chronic, trait-like component as well as a context-dependent, temporary component. Hence, putting forward this construct allowed us to explain both the chronic and temporary differences in individuals’ (especially managers’) exploration and exploitation tendencies. As a result, this information helps organizations both in terms of job-person fit (i.e. matching appropriate person with appropriate role/position) and also in terms of designing the organizational/contextual environment appropriately, so as to temporarily induce a specific regulatory focus on the managers and employees.

In the last two studies, we attempted to go beyond the first two papers. In the third study, we exceeded the first two papers by applying them at a higher level of analysis. In particular, we examined the regulatory foci of management teams as a collective body, and showed how exploratory innovation levels of organizational units were affected indirectly through the effects of the management teams’ regulatory foci on the manner they made use of organizational coordination mechanisms. Finally, by examining the results of the last two meta-analyses, we realized that there was some scholarly work on the positive effects of promotion focus and negative effects of prevention focus, but little was known about the useful aspects of prevention focus in organizational research. In order to address this imbalance in the emerging regulatory focus sub-literature within the management field, we conducted the fourth study. It shows that the prevention focus (but not the promotion focus) of a general manager indirectly affects intra-organizational trust within the organization positively through increasing accountability in the management team.

Aybars defended his dissertation in the Senate Hall at Erasmus University Rotterdam on Friday, 17 October 2014. His supervisors were Professor Frans van den Bosch and Professor Henk Volberda. Other members of the Doctoral Committee included Dr. Tom Mom.

About Aybars Tuncdogan

İsmail Aybars Tunçdoğan was born in 1985 in Istanbul, Turkey. After attending high-school at The Koc School, in 2004, he went to the United States for his undergraduate education. At the Earlham College, he completed his bachelor degree with a double major in computer science and business management in 2008, and was awarded college honors for his successful completion of the program. Next, he started the ‘M.Phil. in Business Research’ program of Erasmus Research Institute of Management (ERIM) at the Rotterdam School of Management (RSM), Erasmus University in the Netherlands. During this period he became specialized in the field of strategy, and in 2010, he completed the M.Phil. degree with distinction (cum laude). His M.Phil. thesis was entitled ‘Group Regulatory Focus as a New Antecedent of Manager’s Exploratory vs. Exploitative Activities’. After that, in November 2010, he started his PhD-candidacy at the Department of Strategic Management & Entrepreneurship.

In his dissertation, he took a behavioral strategy perspective towards examining constructs relating to innovation processes in corporations, such as exploration-exploitation, exploratory innovation and intra-organizational trust. More specifically, he employed the Regulatory Focus Theory to examine these different constructs from a psychological point of view. His work is accepted to the conferences of a variety of organizations, including the Strategic Management Society, Academy of Management, European Academy of Management and British Academy of Management. Moreover, two of his papers were recently offered revise-and-resubmit from prominent academic journals, and a third one is recently submitted for consideration.

Abstract of Decision Making and Behavioral Strategy: The Role of Regulatory Focus in Corporate Innovation Processes

This dissertation makes use of the behavioral strategy perspective in order to examine a number of constructs pertaining to innovation in corporate settings. In particular, the dissertation consists of four studies; one conceptual and three empirical. The conceptual paper introduces the regulatory focus theory and forms a linkage between an individual’s regulatory focus and motivation towards exploration and exploitation. Furthermore, by means of the Motivation-Ability-Opportunity (MAO) schema, this study also provides insight into the concepts moderating this relationship. The first empirical paper tests the relationship between an individual’s (i.e. manager’s) regulatory focus and activities of exploration and exploitation. Moreover, it takes an initial step in understanding the organizational and contextual antecedents of regulatory focus, and thus, of exploration and exploitation at the individual level. The second empirical study, examines the collective regulatory focus of a management team, and its effects on the exploratory innovation level of the organization unit. Moreover, it investigates three primary organizational coordination mechanisms (i.e. centralization, formalization and connectedness) as a mediator of this relationship. Finally, the last study addresses the gap regarding the lack of knowledge about the positive effects of prevention focus in organizational settings. All in all, the contributions and findings of this study have a number of implications for behavioral strategy theory and practice, and presents areas of future research.

Photos: Chris Gorzeman / Capital Images