Performance feedback in hierarchical business groups: The cross-level effects of cognitive accessibility on R & D search behavior

Luke Rhee, William Ocasio, Tae Hyun Kim

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

This study examines the cross-level effect of group-level managers on member firms' problemistic search in hierarchical business groups. Usingmultilevel data from Korean business groups, we propose that the effects of failure to meet an aspiration level on R&D search intensity increase when member firm performance and R & D investments are more cognitively accessible to group-level managers. Specifically, we find, first, that when underperforming firms are widespread in a business group, a focal member firm intensifies R & D search in response to performance below an aspiration level because member firm performance, as a group-level problem, becomes cognitively accessible to group-level managers. Second, asmember firms operating in R & D intensive industries aremore prevalent in a business group, R&D investments, as a search solution, becomemore cognitively accessible to group-level managers. Thus, a focal member firm reinforces R & D search in response to the performance shortfall. We discuss the implications of these findings for research on the behavioral theory of the firm and performance feedback.

Original languageEnglish (US)
Pages (from-to)51-69
Number of pages19
JournalOrganization Science
Volume30
Issue number1
DOIs
StatePublished - Jan 1 2019

Keywords

  • Attention-based view
  • Cognitive accessibility
  • Hierarchical business groups
  • R & D search behavior

ASJC Scopus subject areas

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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