IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v52y2017i2p312-326.html
   My bibliography  Save this article

CEOs’ ambivalent interpretations, organizational market capabilities, and corporate entrepreneurship as responses to strategic issues

Author

Listed:
  • Yuan, Wenlong
  • Bao, Yongjian
  • Olson, Bradley J.

Abstract

We apply the heuristic-systematic model, an information processing perspective, to examine how CEOs’ ambivalent interpretations of strategic issues affect corporate entrepreneurship (CE). Ambivalent interpretations indicate that CEOs label strategic issues as both positive and negative. Based on a two-wave survey of 170 firms in mainland China during global economic crisis that began in 2008, we find that firms’ market capabilities moderate the relationship between ambivalence and CE. Although organizations with strong market capabilities tend to adopt CE activities to cope with ambivalent environmental changes, those with weak market capabilities actually reduce their CE activities in a highly ambivalent environment.

Suggested Citation

  • Yuan, Wenlong & Bao, Yongjian & Olson, Bradley J., 2017. "CEOs’ ambivalent interpretations, organizational market capabilities, and corporate entrepreneurship as responses to strategic issues," Journal of World Business, Elsevier, vol. 52(2), pages 312-326.
    • Handle: RePEc:eee:worbus:v:52:y:2017:i:2:p:312-326
    DOI: 10.1016/j.jwb.2016.12.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951616302796
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jwb.2016.12.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nils Plambeck & K. Weber, 2009. "CEO Ambivalence and Responses to Strategic Issues," Post-Print hal-00464009, HAL.
    2. Louis D. Marino & Franz T. Lohrke & John S. Hill & K. Mark Weaver & Tulus Tambunan, 2008. "Environmental Shocks and SME Alliance Formation Intentions in an Emerging Economy: Evidence from the Asian Financial Crisis in Indonesia," Entrepreneurship Theory and Practice, , vol. 32(1), pages 157-183, January.
    3. Fiona Murray & Leigh Graham, 2007. "Buying science and selling science: gender differences in the market for commercial science," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 16(4), pages 657-689, August.
    4. Keller, Kevin Lane & Staelin, Richard, 1987. "Effects of Quality and Quantity of Information on Decision Effectiveness," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 14(2), pages 200-213, September.
    5. William G Egelhoff, 1991. "Information-Processing Theory and the Multinational Enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(3), pages 341-368, September.
    6. Adam McKissack & Jessica Y. Xu, 2011. "Chinese macroeconomic management through the crisis and beyond," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 25(1), pages 43-55, May.
    7. Jane E. Dutton & Liam Fahey & V. K. Narayanan, 1983. "Toward understanding strategic issue diagnosis," Strategic Management Journal, Wiley Blackwell, vol. 4(4), pages 307-323, October.
    8. Bruce R. Barringer & Allen C. Bluedorn, 1999. "The relationship between corporate entrepreneurship and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 20(5), pages 421-444, May.
    9. Alain Verbeke & Wenlong Yuan, 2013. "The Drivers of Multinational Enterprise Subsidiary Entrepreneurship in C hina: A New Resource-Based View Perspective," Journal of Management Studies, Wiley Blackwell, vol. 50(2), pages 236-258, March.
    10. Shugan, Steven M, 1980. "The Cost of Thinking," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 7(2), pages 99-111, Se.
    11. Nils Plambeck & Klaus Weber, 2010. "When the Glass is Half Full and Half Empty: CEO's Ambivalent Interpretations of Strategic Issues," Post-Print hal-00528394, HAL.
    12. Michael Lubatkin & Zeki Simsek & Yan Ling & John F. Veiga, 2006. "Ambidexterity and Performance in Small-to Medium-Sized Firms : The Pivotal Role of Top Management Team Behavioral Integration," Post-Print hal-02311781, HAL.
    13. Ming-Jer Chen, 2002. "Transcending Paradox: The Chinese “Middle Way” Perspective," Asia Pacific Journal of Management, Springer, vol. 19(2), pages 179-199, August.
    14. Nils Plambeck & Klaus Weber, 2010. "When the glass is half full and half empty: CEOs' ambivalent interpretations of strategic issues," Strategic Management Journal, Wiley Blackwell, vol. 31(7), pages 689-710, July.
    15. Susan C. Schneider & Arnoud De Meyer, 1991. "Interpreting and responding to strategic issues: The impact of national culture," Strategic Management Journal, Wiley Blackwell, vol. 12(4), pages 307-320, May.
    16. Adam McKissack & Jessica Xu, 2011. "Chinese macroeconomic management through the crisis and beyond," Treasury Working Papers 2011-01, The Treasury, Australian Government, revised Jun 2011.
    17. Jane E. Dutton & Robert B. Duncan, 1987. "The creation of momentum for change through the process of strategic issue diagnosis," Strategic Management Journal, Wiley Blackwell, vol. 8(3), pages 279-295, May.
    18. Zeki Simsek, 2007. "CEO tenure and organizational performance: an intervening model," Strategic Management Journal, Wiley Blackwell, vol. 28(6), pages 653-662, June.
    19. Swait, Joffre & Adamowicz, Wiktor, 2001. "Choice Environment, Market Complexity, and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 86(2), pages 141-167, November.
    20. Nils Plambeck & Klaus Weber, 2009. "CEO Ambivalence and Responses to Strategic Issues," Organization Science, INFORMS, vol. 20(6), pages 993-1010, December.
    21. Burpitt, William J. & Rondinelli, Dennis A., 1998. "Export decision-making in small firms: the role of organizational learning," Journal of World Business, Elsevier, vol. 33(1), pages 51-68.
    22. Michael Song & Cornelia Droge & Sangphet Hanvanich & Roger Calantone, 2005. "Marketing and technology resource complementarity: an analysis of their interaction effect in two environmental contexts," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 259-276, March.
    23. Justin Tan & Mike W. Peng, 2003. "Organizational slack and firm performance during economic transitions: two studies from an emerging economy," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1249-1263, December.
    24. Olson, Bradley J. & Bao, Yongjian & Parayitam, Satyanarayana, 2007. "Strategic decision making within Chinese firms: The effects of cognitive diversity and trust on decision outcomes," Journal of World Business, Elsevier, vol. 42(1), pages 35-46, March.
    25. Griffith, David A. & Yalcinkaya, Goksel & Calantone, Roger J., 2010. "Do marketing capabilities consistently mediate effects of firm intangible capital on performance across institutional environments?," Journal of World Business, Elsevier, vol. 45(3), pages 217-227, July.
    26. Tina C Ambos & Ulf Andersson & Julian Birkinshaw, 2010. "What are the consequences of initiative-taking in multinational subsidiaries?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(7), pages 1099-1118, September.
    27. Zhongfeng Su & En Xie & Hong Liu & Wei Sun, 2013. "Profiting from product innovation: The impact of legal, marketing, and technological capabilities in different environmental conditions," Marketing Letters, Springer, vol. 24(3), pages 261-276, September.
    28. Yan Ling & Zeki Simsek & Michael Lubatkin & John F. Velga, 2008. "Transformational Leadership's Role in Promoting Corporate Entrepreneurship : Examining the CEO - TMT Interface," Post-Print hal-02276697, HAL.
    29. Tom J. M. Mom & Frans A. J. van den Bosch & Henk W. Volberda, 2009. "Understanding Variation in Managers' Ambidexterity: Investigating Direct and Interaction Effects of Formal Structural and Personal Coordination Mechanisms," Organization Science, INFORMS, vol. 20(4), pages 812-828, August.
    30. Hsu, Wen-Tsung & Chen, Hsiang-Lan & Cheng, Chia-Yi, 2013. "Internationalization and firm performance of SMEs: The moderating effects of CEO attributes," Journal of World Business, Elsevier, vol. 48(1), pages 1-12.
    31. Zhang, Junfeng & Wu, Wei-ping, 2013. "Social capital and new product development outcomes: The mediating role of sensing capability in Chinese high-tech firms," Journal of World Business, Elsevier, vol. 48(4), pages 539-548.
    32. Wing Thye Woo & Wei Zhang, 2011. "Combating the Global Financial Crisis with Aggressive Expansionary Monetary Policy: Same Medicine, Different Outcomes in China, the UK and USA," The World Economy, Wiley Blackwell, vol. 34, pages 667-686, May.
    33. Bojica, Ana Maria & Fuentes, Maria del Mar Fuentes, 2012. "Knowledge acquisition and corporate entrepreneurship: Insights from Spanish SMEs in the ICT sector," Journal of World Business, Elsevier, vol. 47(3), pages 397-408.
    34. Clark G. Gilbert, 2006. "Change in the Presence of Residual Fit: Can Competing Frames Coexist?," Organization Science, INFORMS, vol. 17(1), pages 150-167, February.
    35. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    36. Tine Buyl & Christophe Boone & Walter Hendriks & Paul Matthyssens, 2011. "Top Management Team Functional Diversity and Firm Performance: The Moderating Role of CEO Characteristics," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 151-177, January.
    37. Ciaran Heavey & Zeki Simsek & Frank Roche & Aidan Kelly, 2009. "Decision Comprehensiveness and Corporate Entrepreneurship: The Moderating Role of Managerial Uncertainty Preferences and Environmental Dynamism," Journal of Management Studies, Wiley Blackwell, vol. 46(8), pages 1289-1314, December.
    38. Busenitz, Lowell W. & Barney, Jay B., 1997. "Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making," Journal of Business Venturing, Elsevier, vol. 12(1), pages 9-30, January.
    39. McKelvie, Alexander & Haynie, J. Michael & Gustavsson, Veronica, 2011. "Unpacking the uncertainty construct: Implications for entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 26(3), pages 273-292, May.
    40. William P. Wan & Daphne W. Yiu, 2009. "From crisis to opportunity: environmental jolt, corporate acquisitions, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(7), pages 791-801, July.
    41. Roy, Abhik & Walters, Peter G. P. & Luk, Sherriff T. K., 2001. "Chinese puzzles and paradoxes: conducting business research in China," Journal of Business Research, Elsevier, vol. 52(2), pages 203-210, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kanchanabha, Bhawini & Badir, Yuosre F., 2021. "Top management Team's cognitive diversity and the Firm's ambidextrous innovation capability: The mediating role of ambivalent interpretation," Technology in Society, Elsevier, vol. 64(C).
    2. Guercini, Simone & Milanesi, Matilde, 2020. "Heuristics in international business: A systematic literature review and directions for future research," Journal of International Management, Elsevier, vol. 26(4).
    3. Natalia García-Carbonell & Fernando Martín-Alcázar & Gonzalo Sánchez-Gardey, 2021. "Facing crisis periods: a proposal for an integrative model of environmental scanning and strategic issue diagnosis," Review of Managerial Science, Springer, vol. 15(8), pages 2351-2376, November.
    4. Soluk, Jonas & Kammerlander, Nadine & Darwin, Solomon, 2021. "Digital entrepreneurship in developing countries: The role of institutional voids," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    5. Maisam Ali & Christopher Gan & Muhammad Nadeem, 2023. "A CEO's expertise power and bank diversification," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 3815-3840, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Natalia García-Carbonell & Fernando Martín-Alcázar & Gonzalo Sánchez-Gardey, 2021. "Facing crisis periods: a proposal for an integrative model of environmental scanning and strategic issue diagnosis," Review of Managerial Science, Springer, vol. 15(8), pages 2351-2376, November.
    2. Kent D. Miller & Shu-Jou Lin, 2015. "Analogical reasoning for diagnosing strategic issues in dynamic and complex environments," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 2000-2020, December.
    3. Lennart Burger & Ivana Blažková, 2020. "Internal Determinants Promoting Corporate Entrepreneurship in Established Organizations: A Systematic Literature Review," Central European Business Review, Prague University of Economics and Business, vol. 2020(2), pages 19-45.
    4. Matsuno, Ken & Kohlbacher, Florian, 2020. "Proactive marketing response to population aging: The roles of capabilities and commitment of firms," Journal of Business Research, Elsevier, vol. 113(C), pages 93-104.
    5. Blake E. Ashforth & Kristie M. Rogers & Michael G. Pratt & Camille Pradies, 2014. "Ambivalence in Organizations: A Multilevel Approach," Organization Science, INFORMS, vol. 25(5), pages 1453-1478, October.
    6. Christoph Markmann & Alexander Spickermann & Heiko A. von der Gracht & Alexander Brem, 2021. "Improving the question formulation in Delphi‐like surveys: Analysis of the effects of abstract language and amount of information on response behavior," Futures & Foresight Science, John Wiley & Sons, vol. 3(1), March.
    7. Beverly B. Tyler & Turanay Caner, 2016. "New product introductions below aspirations, slack and R&D alliances: A behavioral perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(5), pages 896-910, May.
    8. Galina Shirokova & Liudmila Ivvonen & Elena Gafforova, 2019. "Strategic Entrepreneurship in Russia during Economic Crisis," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 13(3), pages 62-76.
    9. Xue Wan & Stephen X. Zhang & Feng Wei, 2023. "CEO–TMT Congruence in Growth‐Need Strength and Firm Growth," Journal of Management Studies, Wiley Blackwell, vol. 60(3), pages 722-751, May.
    10. Andreas Engelen & Christoph Neumann & Christian Schwens, 2015. "“Of Course I Can†: The Effect of CEO Overconfidence on Entrepreneurially Oriented Firms," Entrepreneurship Theory and Practice, , vol. 39(5), pages 1137-1160, September.
    11. Kanchanabha, Bhawini & Badir, Yuosre F., 2021. "Top management Team's cognitive diversity and the Firm's ambidextrous innovation capability: The mediating role of ambivalent interpretation," Technology in Society, Elsevier, vol. 64(C).
    12. Alfredo De Massis & Kimberly A. Eddleston & Paola Rovelli, 2021. "Entrepreneurial by Design: How Organizational Design Affects Family and Non‐family Firms’ Opportunity Exploitation," Journal of Management Studies, Wiley Blackwell, vol. 58(1), pages 27-62, January.
    13. Jintong Tang & Zhi Tang & Birton J. Cowden, 2017. "Exploring the Relationship between Entrepreneurial Orientation, CEO Dual Values, and SME Performance in State–Owned vs. Nonstate–Owned Enterprises in China," Entrepreneurship Theory and Practice, , vol. 41(6), pages 883-908, November.
    14. Jiewei Zu & Jianan Wang & Jun Ma, 2022. "Ambidexterity in a Rapidly Changing Environment of China: Top Management Team Decision Making and Sustained Performance," Sustainability, MDPI, vol. 14(7), pages 1-20, March.
    15. Andreea N. Kiss & Dirk Libaers & Pamela S. Barr & Tang Wang & Miles A. Zachary, 2020. "CEO cognitive flexibility, information search, and organizational ambidexterity," Strategic Management Journal, Wiley Blackwell, vol. 41(12), pages 2200-2233, December.
    16. Conti, Claudio Ramos & Goldszmidt, Rafael & Vasconcelos, Flávio Carvalho de, 2020. "Firm characteristics and capabilities that enable superior performance in recessions," Journal of Business Research, Elsevier, vol. 119(C), pages 553-561.
    17. Parida, Vinit & George, Nerine Mary & Wincent, Joakim, 2018. "Strategic diagnosis of information processing structures and commercialization in new ventures," Journal of Business Research, Elsevier, vol. 85(C), pages 83-90.
    18. Jeffery S. McMullen & Katrina M. Brownell & Joel Adams, 2021. "What Makes an Entrepreneurship Study Entrepreneurial? Toward A Unified Theory of Entrepreneurial Agency," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1197-1238, September.
    19. Daniel Leunbach & Truls Erikson & Max Rapp-Ricciardi, 2020. "Muddling through Akerlofian and Knightian uncertainty: The role of sociobehavioral integration, positive affective tone, and polychronicity," Journal of International Entrepreneurship, Springer, vol. 18(2), pages 145-164, June.
    20. Mitja Ruzzier & Evan J. Douglas & Maja Konečnik Ruzzier & Jana Hojnik, 2020. "International Entrepreneurial Orientation and the Intention to Internationalize," Sustainability, MDPI, vol. 12(14), pages 1-19, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:worbus:v:52:y:2017:i:2:p:312-326. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.