Technological Prisms: A Fuzzy-Set Analysis of Cognition, Robo-Advice, and Adaptation

Abstract

Directions of attention, particularly when directed toward new technology, is a critical component of incumbents adapting to technological change; however, new technology is often ambiguous at its core, skewing the interpretations associated with attending to technological change. As a result, organizations may attend to emerging technologies, but attention may differ between organization depending on how a single technological change is interpreted. Technological changes, therefore, are analogous to prisms that emit different signals with organizations recognizing few, but not all signals. Unique interpretations by organizations subsequently impact the adoption of technology and the degree to which organizations sufficiently adapt to technological change. I study the complex combinations of attentional direction, interpretations, and technological adoption by combining the computational method of topic modeling with a fuzzy-set Qualitative Comparison Analysis to uncover unique cognitive and decision-making combinations that lead to organizational adaptation. In the context of the Canadian Wealth Management industry, I outline unique cognitive interpretations of robo-advice, a technology that automates financial advice, among 15 incumbent organizations in combination with technological adoption decisions and find 3 unique paths to adaptation. The results highlight that not all directions are of attention toward emerging technologies are fruitful for adaptation and that that organizations hold the capacity to creatively adapt in the absence of both attention and technological adoption.