CEO cognitive flexibility, information search, and organizational ambidexterity

• Author: Miles A. Zachary,Dirk Libaers,Andreea N. Kiss,Pamela S. Barr,Tang Wang
• DOI: http://doi.org/10.1002/smj.3192
• Date: 01 December 2020
• Published date: 01 December 2020

RESEARCH ARTICLE

CEO cognitive flexibility, information search,

and organizational ambidexterity

Andreea N. Kiss

1

| Dirk Libaers

2,3

| Pamela S. Barr

4

|

Tang Wang

5

| Miles A. Zachary

6

1

College of Business, Lehigh University,

Bethlehem, Pennsylvania

2

Muma College of Business, University of

South Florida, Tampa, Florida

3

Business School, University of Aberdeen,

Aberdeen, Scotland

4

J. Mack Robinson College of Business,

Georgia State University, Atlanta,

Georgia

5

College of Business, University of

Central Florida, Orlando, Florida

6

Raymond J. Harbert College of Business,

Auburn University, Auburn, Alabama

Correspondence

Andreea N. Kiss, College of Business and

Economics, Lehigh University,

Bethlehem, PA 18015

Email: ank518@lehigh.edu

Funding information

Iowa State University, Ivy College of

Business Research Grant

Abstract

Research summary: Although prior research high-

lights the organizational and cognitive challenges asso-

ciated with achieving organizational ambidexterity,

there has been comparatively less empirical attention

focused on the cognitive characteristics that may differ-

entiate top managers of firms that achieve ambidexter-

ity. We build on emerging research and identify

cognitive flexibility as a cognitive characteristic with

particular relevance to the challenges associated with

ambidexterity and suggest that it works through chief

executive officers (CEOs)' information search activities.

We find that cognitively flexible CEOs are more likely

to engage in effortful and persistent information search

and rely to a greater extent on outside sources of infor-

mation. In turn, effortful and persistent information

search activities are associated with higher levels of

organizational ambidexterity. Our study pushes for-

ward the research agenda on cognitive micro-founda-

tions of firm capabilities.

Managerial summary: Ambidextrous organizations,

or organizations that have the capability to pursue both

incremental and discontinuous innovation, enjoy more

sustainable competitive advantages. However, the

achievement of organizational ambidexterity poses

unique demands for top managers, including cognitive

challenges. To help managers better understand these

challenges, this study focuses attention on the role of

the CEO in the achievement of organizational

Received: 16 February 2018 Revised: 17 April 2020 Accepted: 22 April 2020 Published on: 1 July 2020

DOI: 10.1002/smj.3192

2200 © 2020 John Wiley & Sons, Ltd. Strat Mgmt J. 2020;41:2200–2233.wileyonlinelibrary.com/journal/smj

ambidexterity, and on CEO cognitive flexibility as a

potential influencing factor. Our results suggest that

CEO cognitive flexibility may influence organizational

ambidexterity indirectly through its effect on CEO

information search activities, in particular where and

how intensely CEOs search for information. Our study

reinforces the importance of human factors in the exec-

utive office for the development of firm dynamic capa-

bilities, and the implementation of an innovation-

based strategy.

KEYWORDS

CEO, cognitive flexibility, cognitive micro-foundations, information

processing, organizational ambidexterity

1|INTRODUCTION

The increasing pace and level of sophistication at which innovation occurs in many organiza-

tions that successfully compete in the global marketplace has led to a recent surge in both

media attention to, and management research on, firm innovation and its antecedents, and in

particular a closer look at how firms achieve organizational ambidexterity. Organizational

ambidexterity is a firm capability to pursue both exploratory and exploitative innovation

(O'Reilly III & Tushman, 2013; Tushman & O'Reilly III, 1996). A large body of empirical evi-

dence supports the contention that ambidextrous firms enjoy sustainable competitive advan-

tages and thrive (Cao, Gedajlovic, & Zhang, 2009; Gibson & Birkinshaw, 2004; He & Wong,

2004; Lubatkin, Simsek, Ling, & Veiga, 2006; Raisch, Birkinshaw, Probst, & Tushman, 2009),

particularly in more dynamic and uncertain technology-intensive settings (O'Reilly III &

Tushman, 2013).

Although recognized as useful, organizational ambidexterity also presents unique manage-

rial challenges particularly when exploration and exploitation are pursued simultaneously. To

understand how to best address the managerial challenges associated with ambidexterity, prior

research has been focused extensively on the role of resource, structural, and contextual factors

(e.g., Cao et al., 2009; Gibson & Birkinshaw, 2004; Jansen, Van den Bosch, & Volberda, 2006).

This work has identified mechanisms, such as structural separation of explorative and exploit-

ative activities, behavioral integration (Lubatkin et al., 2006), transactive memory systems

(Heavey & Simsek, 2015), and transformational leadership styles (Jansen, George, Van den

Bosch, & Volberda, 2008) as factors that differentiate firms that successfully achieve ambidex-

terity. While these prior works have provided important insights, there has been comparatively

less research on the cognitive aspects associated with managing an ambidextrous organization.

Conceptual and qualitative work on this topic highlights that the successful pursuit of organiza-

tional ambidexterity may also rely on managers' abilities to recognize and manage the inherent

conflicts or tensions that emanate when simultaneously pursuing exploitative and exploratory

innovation, and create and maintain organizational linkages, which present significant cogni-

tive challenges (Danneels, 2011; O'Reilly III & Tushman, 2008; Raisch et al., 2009; Smith &

KISS ET AL.2201

Tushman, 2005; Taylor & Helfat, 2009). Yet to date, there has been comparatively less empirical

attention devoted to the cognitive factors associated with a firm's top managers, in particular,

the CEOs, that may facilitate the successful pursuit of ambidexterity.

This study represents an empirical inquiry into the relationship between cognitive charac-

teristics of top managers, in particular, the CEO, and the successful pursuit of organizational

ambidexterity. Specifically, we suggest that a CEO's level of cognitive flexibility, or tendency to

adapt their thinking, emotions, and behaviors to changing conditions (Martin & Rubin, 1995;

Martin, Staggers, & Anderson, 2011; Stemme, Deco, Bush, & Schneider, 2005; Taatgen, Huss,

Dickison, & Anderson, 2008) may be an important factor in the successful pursuit of organiza-

tional ambidexterity. We highlight CEO cognitive flexibility as particularly relevant for the

achievement of organizational ambidexterity, which often implies an ability to simultaneously

pursue and shift between exploratory and exploitative innovation. Cognitively flexible individ-

uals are more likely to possess the ability to switch between different modes of thinking, find

workable solutions to seemingly conflicting problems, and combine and recombine knowledge

gleaned from different sources in new ways (Basadur, 1995; Martin & Anderson, 1998; Martin

& Rubin, 1995), abilities that have been linked to innovation and ambidexterity in organizations

(e.g., Heavey & Simsek, 2017; O'Reilly III & Tushman, 2008; Raffaelli, Glynn, & Tushman, 2019;

Smith & Tushman, 2005; Tushman & O'Reilly III, 1996).

In developing our arguments, we draw on upper echelons theory and specifically a stream

of research (Chen & Nadkarni, 2017; DeRue, Nahrgang, Wellman, & Humphrey, 2011; Herr-

mann & Nadkarni, 2014; Heyden, Oehmichen, Nichting, & Volberda, 2015; Hogan & Kai-

ser, 2005; Nadkarni & Herrmann, 2010; Plambeck, 2012) that suggests that CEOs' cognitive

characteristics influence organizational outcomes indirectly through activities and behaviors

undertaken by leaders that, in turn, have an impact on organizational outcomes. We focus on

information search activity, which includes search selection and search intensity, as the activity

of interest in our study because new information is important to both the exploitation of current

resources and capabilities required for exploitation, and the development of new resources and

capabilities required for exploration. We test and validate our assumptions by using multiple

data sources. Our main data source is a sample of 202 CEOs of SMEs competing in technology-

intensive industries in India. This data source is coupled with a survey conducted on a sample

of 123 US MBA students, and an experiment that uses 58 executives. The main study results

show that cognitively flexible CEOs engage in more effortful and persistent information search

activities (search intensity) and rely to a greater extent on outside information (search selec-

tion). We also find that effortful and persistent information search activities are associated with

higher levels of organizational ambidexterity while the use of outside information plays a lim-

ited role. Furthermore, CEO information search intensity fully mediates the effect of CEO cog-

nitive flexibility on organizational ambidexterity. The subsequent survey and experiment

support most of the links between CEO cognitive flexibility and information search while also

suggesting interesting points of differentiation.

Our study makes several contributions. First, we provide additional empirical evidence that

the cognitive characteristics of top managers, in particular, cognitive flexibility, may play an

important role in the successful pursuit of ambidexterity. In doing so, we advance research on

organizational ambidexterity that seeks to uncover organizational and individual related factors

associated with its successful pursuit (e.g., Benner & Tushman, 2002, 2003; Heavey & Sim-

sek, 2017; Jansen et al., 2008; Smith & Tushman, 2005). We also add to the growing body of

research on the cognitive micro-foundations of firm capabilities (Eisenhardt, Furr, & Bing-

ham, 2010; Gupta, Smith, & Shalley, 2006; Helfat & Peteraf, 2015; Powell, Lovallo, & Fox, 2011;

2202 KISS ET AL.