A study exploring the effects of cognitive complexity and conformity on managers' adaptive performance in a turbulent environment is reported. Traditionally treated separately, complexity and conformity were examined jointly for 8 top managers of 6 different business units in the consumer banking industry. The results support an over-all positive effect of cognitive complexity on performance. Importantly, this effect is directly and also indirectly mediated by a lack of conformity. These results point out the criticality of hiring and promoting business-unit-level managers with high cognitive complexity and low conformity to achieve adaptive performance. They also suggest that business-unit-level managers who lack these characteristics are better suited to more stable environments.
Get full access to this article
View all access options for this article.
References
1.
AbellP. (1975) Organizations as bargaining and influence systems. London: Heinemann.
2.
AbelsonR. P.LeviA. (1985) Decision making and decision theory. In LindseyG.AronsonE. (Eds.), The handbook of social psychology. Vol. 3. New York: Academic Press. Pp. 231–309.
3.
AldrichH. E. (1979) Organizations and environments. Englewood Cliffs, NJ: Prentice-Hall.
4.
ApplegateJ. L. (1982) The impact of construct system development on communication and impression formation in persuasive contexts. Communication Monographs, 49, 277–289.
5.
BarkerJ. A. (1992) Future edge: Discovering the new paradigms of success. New York: William Morrow.
6.
BartunekJ. M.ReisM. R. (1988) The design of work environments to stretch managers' capacities for complex thinking. Human Resource Planning, 11, 13–22.
7.
BeachL. R.MitchellT. R. (1978) A contingency model for the selection of decision strategies. Academy of Management Review, 3, 439–449.
8.
BettenhausenK.MurnighanJ. K. (1985) The emergence of norms in competitive decision-making groups. Administrative Science Quarterly, 30, 350–372.
9.
BuntzmanG. F.MillerG. A. (1989) Industry differences in perceived environmental uncertainty, strategic goal conflict, and near term organizational performance. Paper presented at the Academy of Management annual meeting.
10.
CacioppoJ. T.PettyR. E. (1982) The need for cognition. Journal of Personality and Social Psychology, 42, 116–131.
11.
ChaninM. N.ShapiroH. J. (1985) Dialectical inquiry in strategic planning: Extending the boundaries. Academy of Management Review, 10, 663–675.
12.
ClarkR.DeliaJ. (1977) Cognitive complexity, social perspective-taking and functional persuasive skills in second to ninth-grade children. Human Communication Research, 3, 128–134.
13.
CookT. D.CampbellD. T. (1979) Quasi-experimentation—design and issues for field settings. Boston, MA: Houghton Mifflin.
14.
DawesR. M. (1979) The robust beauty of improper linear models in decision making. American Psychologist, 34, 571–582.
15.
DeliaJ. G.ClarkR. A.SwitzerD. E. (1974) Cognitive complexity and impression formation in informal social interaction. Speech Monographs, 41, 299–308.
16.
DeliaJ. G.ClarkR. A.SwitzerD. E. (1979) The content of informal conversations as a function of interactants' interpersonal cognitive complexity. Communication Monographs, 46, 274–281.
17.
DessG. G. (1987) Consensus on strategy formulation and organizational performance: Competitors in a fragmented industry. Strategic Management Journal, 8, 259–277.
DollingerM. J. (1984) Environmental boundary spanning and information processing effects on organizational performance. Academy of Management Journal, 27, 351–368.
20.
DriverM. J. (1977) A study of education and work. (Unpublished Management Department paper, The University of Southern California).
21.
DriverM. J. (1979) Individual decision-making and creativity. In KerrS. (Ed.), Organizational behavior. Columbus, OH: Grid Publ.
22.
DriverM. J. (1983) Decision style and organizational behavior: Implications for academia. Review of Higher Education, 6, 387–406.
23.
DriverM. J.MockT. J. (1975) Information processing, decision theory, and information systems. The Accounting Review, 490–508.
24.
DriverM. J.RoweA. J. (1979) Decision-making styles: A new approach to management decision-making. In CooperC. L. (Ed.), Behavioral problems in organizations. Englewood Cliffs, NJ: Prentice-Hall.
25.
DriverM. J.StreufertS. (1969) Integrative complexity: An approach to individuals and groups as information processing systems. Administrative Science Quarterly, 14, 272–285.
26.
DuttonJ. E.DuncanR. B. (1987) The creation of momentum for change through the process of strategic issue diagnosis. Strategic Management Journal, 8, 279–295.
27.
DuttonJ. E.JacksonS. E. (1987) Categorizing strategic issues: Links to organizational actions. Academy of Management Review, 12, 76–90.
28.
EinhornH. J.HogarthR. M. (1981) Behavioral decision theory: Processes of judgment and choice. Annual Review of Psychology, 32, 53–88.
29.
EisenhardtK. M. (1989) Making fast strategic decisions in high-velocity environments. Academy of Management Journal, 32, 543–576.
30.
EisenhardtK. M.SchoonhovenC. B. (1990) Organizational growth: Linking founding team, strategy, environment, and growth among U.S. semiconductor ventures, 1978–1988. Administrative Science Quarterly, 35, 504–529.
31.
EmeryF. E.TristE. L. (1965) The causal texture of organizational environments. Human Relations, 18, 21–32.
32.
FeldmanD. D. (1984) The development and enforcement of group norms. Academy of Management Review, 9, 47–53.
33.
FeldmanL. S. (1992) An empirical investigation of factors affecting marketing management decision making and firm performance. Unpublished doctoral dissertation, The University of Michigan, School of Business Administration.
34.
FiskeS. T.TaylorS. E. (1984) Social cognition. Reading, MA: Addison-Wesley.
35.
FornellC.BarclayD. W. (1993) Jackknifing in PLS. Research Note, The University of Michigan, School of Business Administration, Ann Arbor, MI48109.
36.
FornellC.BooksteinF. L. (1982) Two structural equation models: LISREL and PLS applied to consumer exit-voice theory. Journal of Marketing Research, 19, 440–452.
37.
FornellC.LarckerD. F. (1981) Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18, 39–50.
38.
GalbraithJ. R. (1973) Designing complex organizations. Reading, MA: Addison-Wesley.
39.
GoodmanP. (1968) The measurement of an individual's organizational map. Administrative Science Quarterly, 13, 246–265.
40.
GuptaA. K.GovindarajanV. (1984) Business unit strategy, managerial characteristics, and business unit effectiveness at strategy implementation. Academy of Management Journal, 27, 25–41.
41.
HaleC. L. (1980) Cognitive complexity-simplicity as a determinant of communication effectiveness. Communication Monographs, 47, 304–311.
42.
HambrickD. C. (1982) Environmental scanning and organizational strategy. Strategic Management Journal, 3, 159–174.
43.
HambrickD. C. (1988) Preface. In HambrickD. C. (Ed.), The executive effect: Concepts and methods for studying top managers. Greenwich, CT: JAI Press.
44.
HambrickD. C. (1989) Putting top managers back in the strategy picture. Strategic Management Journal, 10 (special issue), 5–16.
45.
HambrickD. C.GeletkanyczM. A.FredericksonJ. W. (1990) Top executive commitment to the status quo: Some tests of its determinants. Working paper, Columbia University School of Business.
46.
HambrickD. C.MasonP. A. (1984) Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9, 193–206.
47.
HarveyO. J.HuntD. E.SchroderH. M. (1961) Conceptual systems and personality organization. New York: Wiley.
48.
HaugtvedtC. P.PettyR. E. (1992) Personality and persuasion: Need for cognition moderates the persistence and resistance of attitude changes. Journal of Personality and Social Psychology, 63, 308–319.
49.
HirschmanE. C. (1980) Innovativeness, novelty seeking, and consumer creativity. Journal of Consumer Research, 7, 283–295.
50.
HogarthR. M. (1980) Judgement and choice: The psychology of decision. Chichester, UK: Wiley.
51.
HogarthR. M. (1981) Beyond discrete biases: Functional and dysfunctional aspects of judgmental heuristics. Psychological Bulletin, 90, 197–217.
52.
HurstD. K.RushJ. C.WhiteR. E. (1989) Top management teams and organizational renewal. Strategic Management Journal, 10 (special issue), 87–106.
53.
HuttM. D.ReingenP. H.RonchettoJ. R. (1988) Tracing emergent processes in marketing strategy formation. Journal of Marketing, 52, 4–19.
54.
IaquintoA. L.FredericksonJ. W. (1990) Top management team consensus on the nature of a firm's strategic decision process: Its impact on firm performance. Paper presented at the Academy of Management annual meeting.
55.
JanisI. L. (1972) Victims of groupthink. Boston, MA: Houghton Mifflin.
56.
KuhnT. S. (1970) The structure of scientific revolutions. Chicago, IL: Univer. of Chicago Press.
57.
LepsingerR.MullenT. P.StumpfS. A.WallS. J. (1989) Large scale management simulations: A training technology for assessing and developing strategic management skills. In Advances in management development. New York: Praeger.
58.
LewinA. Y.StephansC. U. (1990) Individual properties of the CEO as determinants of organization design: An integrated model and implications for upper echelons theory. Paper presented at the National Academy of Management Meeting.
59.
LohmöllerJ-B. (1989) Latent variable path modeling with partial least squares. Heidelberg, Germany: Physica-Verlag.
60.
MacCrimmonK. R.TaylorR. N. (1976) Decision making and problem solving. In DunnetteM. P. (Ed.), Handbook of industrial and organizational psychology. Chicago, IL: Rand McNally.
61.
MannI. T. (1979) Free response causal attribution and information requests regarding interpersonal events: An examination of Kelly's attribution model. Unpublished doctoral dissertation, Michigan State Univer.
62.
McGillA. R. (1989) The influences of complexity and conformity in organizational performance: An exploratory field study. Unpublished doctoral dissertation, The University of Michigan, School of Business Administration.
63.
MetzgerR.MitroffI.RauS. (1986) Challenging the strategic assumptions of the banking industry. Bankers Magazine, 167(4), 29–34.
64.
MilesR. E.SnowC. C. (1978) Organizational strategy, structure, and process. New York: McGraw-Hill.
65.
NeterJ.WassermanW. (1974) Applied linear statistical models. Homewood, IL: Irwin.
66.
NeuliepJ. W.HazletonV. (1986) Enhanced conversational recall and reduced conversational interference as a function of cognitive complexity. Human Communication Research, 13, 211–224.
67.
NewellA.SimonH. (1972) Human problem solving. Englewood Cliffs, NJ: Prentice-Hall.
68.
NuttP. (1990) Strategic decisions made by top executives and middle managers with data and process dominant styles. Journal of Management Studies, 27, 173–194.
69.
PayneJ. W. (1973) Alternative approaches to decision-making under risk: Moments versus risk dimensions. Psychological Bulletin, 80, 439–453.
PettigrewA. M. (1986) Some limits of executive power in creating strategic change. In SrivastvaS. & Assoc. (Eds.), Executive power. San Francisco, CA: Jossey-Bass. Pp. 132–154.
72.
PfefferJ.SalancikG. (1978) The external control of organizations: A resource dependence perspective. New York: Harper & Row.
73.
PorterM. E. (1980) Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.
74.
PrahaladC. K.BettisR. A. (1986) A dominant logic: A new linkage between diversity and performance. Strategic Management Journal, 7, 485–501.
75.
PriemR. L. (1991) Strategy making processes, chief executive configural decision rules, and firm performance Working paper, Univer. of Texas at Arlington.
76.
ScheinE. H. (1971) Organizational socialization and the profession of management. In KolbD. A.RubinI. M.McIntyreJ. M. (Eds.), Organizational psychology: A book of readings. (2nd ed.) Englewood Cliffs, NJ: Prentice-Hall. Pp. 209–264.
77.
SchroderH. M.DriverM. J.StreufertS. (1967) Human information processing. New York: Holt, Rinehart & Winston.
78.
SchwenkC. R. (1986) Information, cognitive biases, and commitment to a course of action. Academy of Management Review, 11, 298–310.
79.
SchwenkC. R. (1988) The cognitive perspective on strategic decision making. Journal of Management Studies, 25, 41–55.
80.
SimonH. A. (1981) Sciences of the artificial. (2nd ed.) Cambridge, MA: MIT Press.
81.
SnowC. C.HrebiniakL. G. (1980) Strategy, distinctive competence, and organizational performance. Administrative Science Quarterly, 25, 317–336.
82.
SproullL. (1981) Beliefs in organizations. In NystromP.StarbuckW. (Eds.), Handbook of organizational design. Oxford, UK: Oxford Univer. Press. Pp. 203–225.
83.
StawB. M.SandelandsL. E.DuttonJ. E. (1981) Threat-rigidity effects in organizational behavior: A multilevel analysis. Administrative Science Quarterly, 26, 501–524.
84.
StreufertS.SwezeyR. W. (1986) Complexity, managers, and organizations. New York: Academic Press.
85.
StubbartC. I. (1989) Managerial cognitions: A missing link in strategic management research. Journal of Management Studies, 26, 325–347.
86.
TaylorR. N. (1975) Perception of problem constraints. Management Science, 22, 22–29.
87.
TerreberryS. (1968) The evolution of organizational environments. Administrative Science Quarterly, 12, 590–613.
88.
ThomasJ. B.McDanielR. R. (1990) Interpreting strategic issues: Effects of strategy and the information processing structure of top management teams. Academy of Management Journal, 33, 286–306.
89.
VanMaanenJ.ScheinE. H. (1979) Toward a theory of organizational socialization. In StawB. M. (Ed.), Research in organizational behavior. Greenwich, CT: JAI Press.
90.
WiersemaM. F.BantelK. A. (1992) Top management team demography and corporate strategic change. Academy of Management Journal, 35, 91–121.
91.
WissemaJ. G.Van der PolH. W.MesserH. M. (1980) Strategic management archetypes. Strategic Management Journal, 1, 37–47.
92.
WoldH. (1982) Systems under indirect observation using PLS. In FornellC. (Ed.), A second generation of multivariate analysis: Methods. New York: Praeger. Pp. 325–347.
