Abstract: Senior executives can seek advice both inside and outside the boundaries of the organization and that can affect the choices made and the overall direction of the organization. Perceived environmental dynamism is a primary antecedent of this behaviour as it substantially increases the information-processing demands when solving strategic decision problems. We drew on two ‘fit’ perspectives to theorize about the organizational contingencies of this relationship. First, fit as mediation develops when executive advice seeking takes place after a comprehensive decision process has been used in response to an increase in perceived environmental dynamism. Decision process comprehensiveness fully mediates the relationship between perceived environmental dynamism and internal advice seeking and partially mediates the relationship between perceived environmental dynamism and external advice seeking. Second, fit as moderation develops when empowerment climate weakens this indirect relationship. Decision process comprehensiveness and empowerment climate function as Edgeworth–Pareto substitutes showing that, with regard to senior executive advice seeking, there is negative synergy between decision process comprehensiveness and empowerment climate. The results of our study support the notion that there is a link between information processing at the individual and organizational level, and, more importantly, suggest that power sharing within organizations can reduce the need for senior executive advice seeking when there is decision process comprehensiveness. By elaborating the information-processing perspective on advice seeking and introducing theory on organizational structural power interdependencies, we take the first steps towards a more contextualized and realistic understanding of this phenomenon.
Abstract: In an age of rapid advances in technology, understanding how firms can respond to emergence of disruptive technologies is paramount for survival. While prior research on incumbents’ responses to disruptive technologies assumes demand homogeneity, many firms, including multinational enterprises (MNEs), need to respond to technological disruption in heterogeneous markets. To address this lacuna in our understanding, we study how Ericsson tried to respond to the emergence of Cloud computing, a digital platform technology, across its operations in more than 170 countries. We reveal how incumbents need to match diverging customer demands with a complex innovation process, involving different approaches to experiments and trials, deployment strategy, and ecosystem development. We also find that the success of incumbents’ responses depends on their capability for misalignment, which allows them to manage the inconsistencies in strategic direction, structure, and resource configuration associated with a complex innovation process.