Who’s in the Driver’s Seat? Exploring Firm-Level vs. CEO-Level Effects on Problemistic Search

Hu, S., Gentry, RG., Quigley, T., & Boivie, S. in press. Who’s in the driver’s seat? Exploring firm-level vs. CEO-level effects on problemistic search. Journal of Management, Forthcoming

41 Pages Posted: 31 Jan 2022

See all articles by Songcui Hu

Songcui Hu

University of Arizona - Department of Management and Organizations

Richard Gentry

University of Mississippi

Timothy J. Quigley

University of Georgia - Department of Management

Steven Boivie

Texas A&M University - Department of Management

Date Written: November 15, 2021

Abstract

The Behavioral Theory of the Firm suggests that performance below an aspiration triggers problemistic search that can lead to organizational change and risk-taking. This compelling perspective has spawned considerable empirical examination of diverse strategic outcomes as firms’ responses to performance feedback. However, empirical studies have provided inconsistent evidence of problemistic search effects on various organizational search outcomes. This empirical controversy is likely attributed to the fact that most research has considered problemistic search as a firm-level and relatively routinized process with a high degree of automaticity in firms’ responses to performance feedback while overlooking the role of managerial agency. Rather than viewing problemistic search as an automatic firm-level process, we believe that behavioral responses are shaped, at least partially, by top executives, notably CEOs. To this end, we first examine whether problemistic search effects vary across a range of organizational change and risk outcomes. We then explore whether the relative size of firm and CEO effects varies across different search outcomes. Using a multilevel approach, we show not only the heterogeneity in problemistic search effects on different organizational outcomes but also heterogeneity in the relative size of firm and CEO effects on these outcomes. While firm effects are substantial in directing some strategic decisions, as proposed by the problemistic search model, CEO effects are large for certain organizational outcomes, such as changes in resource allocation. This study serves as a jumping-off point for future theorizing and empirical work on problemistic search that incorporate the role of managerial agency.

Suggested Citation

Hu, Songcui and Gentry, Richard and Quigley, Timothy J. and Boivie, Steven, Who’s in the Driver’s Seat? Exploring Firm-Level vs. CEO-Level Effects on Problemistic Search (November 15, 2021). Hu, S., Gentry, RG., Quigley, T., & Boivie, S. in press. Who’s in the driver’s seat? Exploring firm-level vs. CEO-level effects on problemistic search. Journal of Management, Forthcoming , Available at SSRN: https://ssrn.com/abstract=3964055

Songcui Hu (Contact Author)

University of Arizona - Department of Management and Organizations ( email )

405 McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

Richard Gentry

University of Mississippi ( email )

Oxford, MS 38677
United States

Timothy J. Quigley

University of Georgia - Department of Management ( email )

United States

Steven Boivie

Texas A&M University - Department of Management ( email )

430 Wehner
College Station, TX 77843-4218
United States

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