Pamela S. Barr

Cognitive Processes of Opportunity Recognition: The Role of Structural Alignment

Substantial gains can be made by individuals and organizations adept at detecting new opportunities. But how do business leaders do that concretely? Organization research shows that managers are more inclined to identify threats than opportunities, but it is still not clear why this is the case. Likewise, research points to several factors that may facilitate the recognition of opportunities. Yet empirical observations have been limited by retrospective biases and other conceptual challenges. As a result, key questions remain not only about what factors facilitate the recognition of opportunities, but also about why these factors play such a role. To further understanding of these issues, we study the reasoning strategies that individuals mobilize for recognizing opportunities. We develop a model of opportunity recognition as a cognitive process of structural alignment, and analyze the think-aloud verbalizations of executive entrepreneurs as they try to recognize opportunities for new technologies. In contrast to prior research, the qualitative and quantitative data do not provide evidence that individuals use prototypes to recognize opportunities. Instead, we find that different kinds of mental connections play different roles in the process of recognizing opportunities, with different consequences. We also document why and how prior knowledge may facilitate this process. By drawing attention to the cognitive underpinnings of opportunity recognition, we cast light on why it constitutes such a challenging task for individuals and organizations. In turn, this provides a useful basis for exploring the factors that explain why some individuals/organizations are able to recognize opportunities that others simply fail to see.

Linking top manager attributions to strategic reorientation in declining firms attempting turnarounds

Abstract For decades, researchers have been reporting case studies or theoretic models suggesting that top managements interpretations of the sources of performance problems shape their firms response to declining performance. Yet, no systematic studies of declining firms have examined this argument. Using field and archival data from a sample of declining firms, this study examines the influence that causal attributions for the sources of declining performance have on the level of strategic change implemented during turnaround attempts. Consistent with attribution theory and past case study research on turnaround attempts, we find that firms whose top managers attribute decline to internal sources as opposed to external sources are more likely to show greater levels of strategic reorientation in response to declining performance. We further find that causal attributions are influenced by factors surrounding the turnaround attempt, such as top management changes and firm size, and that other firm factors, such as director turnover and financial slack, can directly spur strategic reorientation. Finally, we forward implications for understanding firm responses to decline.

OPPORTUNITY ACKNOWLEDGEMENT AS A COGNITIVE PROCESS OF ALIGNMENT: EVIDENCE FROM VERBAL PROTOCOLS.

The article discusses research into how managers interpret and new information as a precursor to opportunity. Past research has theorized that entrepreneurs/managers base opportunity recognition on...