Intuition, Reflection and Organizational Adaptation to Discontinuous Change

Abstract

The phenomenon of adaptation to discontinuous change is a subject of long-standing inquiry in organizational theory. A key source of variation in organizational adaptation is managerial cognition, as it engenders both routine inertia and change. Yet, empirical research on the role of cognitive processing types (Type 1-intuition and Type 2-reflection) in organizational adaptation to discontinuous change is nonexistent. To close this gap, we theorize and show the causal effect of cognitive processing types on group adaptation under different ambiguity conditions. Using a longitudinal, behavioral, no-deception, between-groups experimental design, we introduce a discontinuous change that makes previous routines obsolete to observe how groups adapt. Analyzing behavioral data from 80 groups of experienced managers, we find that: (1) priming Type 1 processing increases organizational adaptation more than Type 2; (2) this effect is stronger in conditions of high ambiguity; and (3) there is no difference between cognitive types when ambiguity is low. Therefore, our findings suggest not only that the nature of change imposes specific cognitive challenges for organizational adaptation, but also that the level of ambiguity of the environment influences the efficacy of the cognitive processing types. Overall, our study advances the understanding of the interplay between managerial cognition and environmental ambiguity on organizational adaptation to discontinuous change.