Not all responses are the same: How CEO cognitions impact strategy when performance falls below aspirations

Wangrow, David B.; Kolev, Kalin; Hughes-Morgan, Margaret

doi:10.1177/0306307018798143

Cited by 19 publications

(19 citation statements)

References 89 publications

(129 reference statements)

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“…Another contribution of the article is the focus on the human element in the BTOF. While a handful of studies have looked at the moderating role of CEOs and board of directors in performance feedback research (Desai, 2016; Lim and McCann, 2014; Wangrow et al, 2019), we specifically focused on the whole team of top executives and examined several TMT characteristics facilitating or inhibiting firm responsiveness to performance shortfalls. Thus, this article contributes to better understanding of the motivational and relational aspects of managerial behavior as important determinants of firm responses to performance cues (Gavetti et al, 2007; Mahoney, 2005).…”

Section: Discussionmentioning

confidence: 99%

“…For example, Mahoney (2005) posits that the foundation of BTOF emphasizes that “organizations must take into account the motivational, attitudinal, and relational aspects of human behavior” (p. 2). While a handful of studies have looked at the role of CEOs and board of directors in how firms address performance shortfalls (Desai, 2016; Lim and McCann, 2014; Wangrow et al, 2019), this study focuses on the whole TMT and its role in firm responses to performance cues.…”

Section: Introductionmentioning

confidence: 99%

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The role of top management teams in firm responses to performance shortfalls

Kolev

McNamara

2020

Strategic Organization

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Past research rooted in the Behavioral Theory of the Firm has extensively examined the impact of performance feedback on organizational change and risk taking, finding robust effects that performance shortfalls enhance the risk taking of firms. We argue that the strength of this effect is likely to be contingent on the attributes of the firm’s top management team. To enhance our understanding of which firms are more likely to be sensitive to performance cues, we draw on the Upper Echelon Theory to theorize that key structural attributes of the top management team—tenure and gender diversity, size, and pay disparity—affect how top executives interpret poor performance and act upon it through engagement in strategic risk taking. Results show that top management teams with greater tenure diversity, smaller size, and smaller pay disparity among members engage in more strategic risk taking following performance shortfalls.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The role of top management teams in firm responses to performance shortfalls

Kolev

McNamara

2020

Strategic Organization

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“…It offers a way to better understand why some firms respond differently than others when faced with evidence of prior errors (Hambrick and Mason, 1984). When performance falls farther below aspiration levels, firms are faced with a greater necessity to undertake strategic change for mitigating performance shortfalls (Wangrow et al , 2019). Most of the work on performance feedback largely focused on contextual and firm-level influences, strategic choice patterns, and only a few of them considered its influence on decision makers (Chen et al , 2015).…”

Section: Resultsmentioning

confidence: 99%

The growth of hidden champions in China: a cognitive explanation from integrated view

Lei

Tan

2020

CMS

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Purpose There is a research gap in strategic management regarding the complement from managerial cognition literature to the behavioral theory of firm, as well as linkage between cognitive structure and cognitive process of strategy formulation in the field of managerial cognition, which also calls for further exploration. The purpose of this paper is to construct a model from an integrated view for explaining the process of cognitive reconstruction under incremental changes. Design/methodology/approach Qualitative research is conducted in the form of 17 semi-structured interviews in four hidden champions operating in China. Based on the model generated from the literature review, this paper adopts the abductive logic for data analysis. Findings This paper draws the following conclusions. The cognitive structure is shaped by the changing environment and the performance feedback, the variance in structural attributes will affect whether the changing environment destructs the effectiveness of original cognitive structure or not, the centrality of cognitive structure will promote the efficiency of tried-and-true organizational adaptations to incremental changes, and cognitive structure reconstruction is the result of the recursive process of trial-and-error learning. Originality/value This paper proposes the model explaining the interaction mechanisms between cognitive structure and strategy formulation process. It also presents the iterative sense-making process for reconstructing cognitive structure in strategy formulation. Both of them extend the understanding on managerial cognition in organizational adaptations to incremental environmental changes.

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“…One study has seen that external LOC is negatively associated with performance, while the internal is positive. 48 The effect of LOC toward performance is mainly mediated by strategic decision, 49 changes in attitudes, 44,45 or the increasing market and entrepreneurial orientation. 21 The LOC has also negatively influenced attitude formation regarding immigrants in Canada, the United States, and the United Kingdom.…”

Section: Behavioral Strategymentioning

confidence: 99%

SMEs’ Performance in Indonesia: The Nexus of Notable Ethics-Strategic Behavior Constructions

Syariati¹

2022

PRBM

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Purpose The rational strategic behavior of humanity to prioritize their self motives may lead to unethical conduct, with a potential financial consequence. Thus, this study investigates how the love of money and locus of control can affect the unethical behavior and performance of small and medium economic actors in the Indonesian context. Participants and Methods This article examines the responses from 530 small entrepreneurs as part of the hypotheses in behavioral strategy by employing covariance-based structural-equation modeling (CB-SEM). This quantitative approach is conducted following the acceptance of the data quality requirements. Results The findings confirm most hypotheses, leaving one insignificant nexus of locus of control and SME performance. This finding also illuminates the intangible behavior in shaping the SMEs’ strategic performance. Some indirect relationships are also provided. Conclusion This study substantiated the notion that the strategic aspect of SMEs’ business relies on the behavioral construction of the actors. How entrepreneurs view their source of action internally or externally is critical in shaping how they view money achievement. A strong tendency to love money too much leads them to be more unethical and ends up in a deteriorating sign of financial performance. However, being unethical justifies the potentiality of increased income streams. This specific finding of strategic behavior corresponds to the how “unregulated morality” creates a freedom in doing business.

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Not all responses are the same: How CEO cognitions impact strategy when performance falls below aspirations

Cited by 19 publications

References 89 publications

The role of top management teams in firm responses to performance shortfalls

The role of top management teams in firm responses to performance shortfalls

The growth of hidden champions in China: a cognitive explanation from integrated view

SMEs’ Performance in Indonesia: The Nexus of Notable Ethics-Strategic Behavior Constructions

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