Emotions in strategic organization: Opportunities for impactful research

Abstract

Following the emergence of the behavioral movement in economics and finance, there have been mounting calls for strategy scholars to expand and deepen what is called the field of behavioral strategy, in which cognitive and social psychology will be merged with strategic management theory and practice (Powell et al., 2011). The goal is to bring realistic assumptions about human cognition, emotion, and social behavior to the strategic management of organizations and thus to enrich strategy theory, empirical research, and real-world practice. Thanks to advancing research in social psychology and neuroscience, there has been a resurgence of scholarly interest in connecting micro-psychological phenomena to strategic outcomes (e.g., Hodgkinson and Healey, 2011; Huy, 2011; Powell et al., 2011). Levinthal (2011) noted that many strategic management challenges involve ill-specified alternatives and coarse-grained representations of strategic issues with a high level of uncertainty and ambiguity. Dealing adequately with these issues escapes neat optimizing algorithms, which has been the focus of the literature on judgment and decision-making. One type of psychological phenomenon, human emotion, has barely been integrated into strategy research, although mushrooming research on emotion has shown that it can have a potent influence on cognition and behavior, especially under conditions of uncertainty and ambiguity (see Elfenbein, 2007). This essay discusses how scholars in strategic organization can do future research to advance the field of behavioral strategy and, more specifically, how emotion can play an important role in this field. Indeed, affect-laden cognition has been part of strategic management research at least since the 1970s with influential concepts such as escalating commitment (Staw, 1976; Staw and Ross, 1987), strategic issues conceived as threats or opportunities (Jackson and Dutton, 1988; Staw et al., 1981), or top management hubris (Hayward and Hambrick, 1997; Hiller and Hambrick, 2005). How emotion plays a central role in influencing strategic processes started to be treated more explicitly at the periphery of the strategic management literature only about two decades later (e.g., Huy, 1999, 2002, 2005). One reason might be due to the growing legitimacy of emotion as a scientific phenomenon thanks to new technologies (e.g., the MRI scanner) that have given rise to neuroscience; neurologists have demonstrated the influence of emotions on individual-level thinking and behavior (e.g., Damasio, 1994). Moreover, emotion-based ability has been synthesized by the concept of emotional intelligence that has captured the imagination of many researchers and practitioners (Mayer and Salovey, 1997; Salovey and Mayer, 1990). 453107 SOQ10310.1177/1476127012453107HuyStrategic Organization 2012