Journal
ORGANIZATION SCIENCE
Volume 30, Issue 1, Pages 51-69Publisher
INFORMS
DOI: 10.1287/orsc.2018.1237
Keywords
cognitive accessibility; hierarchical business groups; R&D search behavior; attention-based view
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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.
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