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Article Excerpt
Management teams and other groups play a key role in strategic decision making. These groups include top management teams (Hambrick and Mason, 1984), boards of directors (Forbes, 1999; Pettigrew, 1992), and planning task forces (Van de Ven, 1980). The acknowledgement of the importance of groups in strategic decision making has led to a stream of research termed organizational demographics (Hambrick and Mason, 1984). This research focuses on examining the relationships between certain group composition factors and both the strategic decision-making process that is used and ultimately organizational performance (Haleblian and Finkelstein 1993; Hambrick and Mason, 1984; Hurst et al., 1989; Peterson et al., 2003; Staw, 1991; Walsh and Fahey, 1986; Zaccaro, 2001; Zaccaro and Klimoski, 2002). While these authors explore the composite of individual
decision-making characteristics or demographics, we propose a new, group-level construct called group cognitive style (GCS), defined broadly as group-level patterns of behavior in the strategic decision-making process of a group.
Because research in group decision making has shown both consistency (Daft and Weick, 1984; Miles and Snow, 1978) and variability (Mintzberg et al., 1976) in the decision-making processes adopted by groups over time, it is critical that we begin to model the underlying factors that may explain these differences more clearly. In order to do this, we need to focus our research on group-level constructs, rather than on an aggregate or average of individual demographic and psychological factors currently used in organizational demographics research. As the use of group decision making in organizations continues to increase, researchers need a theoretical model that explains differences in decision making and problem solving at the group level of analysis. The model proposed here suggests that decision process differences are the result of differences in the cognitive style of the group as a whole. It is suggested that, just as individuals have a cognitive style, or a characteristic way of gathering and processing information for decision making, groups also develop such consistency in information processing and decision-making behavior. The cognitive style of the group is proposed to reflect differences in the composition and structure of the group, as well as the cognitive style and the social interaction of individual group members. In order to provide a foundation for developing a model of group cognitive style, we will begin with a brief overview of the organizational demographics literature in order to provide an understanding of why the concept of group cognitive style is needed to expand our understanding of organizational demographics and strategic decision-making processes. We will then discuss why the concept of group cognitive style is important and how it differs from the concept of individual cognitive style. Finally, we will develop propositions followed by a discussion of the managerial implications of exploring the concept of group cognitive style and conclude with suggestions for future research.
ORGANIZATIONAL DEMOGRAPHICS
Research in organizational demographics focuses mainly on identifying the individual characteristics of decision making and aggregating or averaging these characteristics to explore the relationship between the homogeneity or heterogeneity of the top management team and strategic decision-making processes or organizational performance. Individual variables that have been examined in the organizational demographics literature include both demographic and psychological variables. Demographic variables such as an individual's age, tenure in the firm, education level, and functional background have been examined (Bantel and Jackson, 1989; Hambrick and Mason, 1984), as well as psychological variables such as locus of control, tolerance for ambiguity, and cognitive style (Hurst et al., 1989; Slater, 1989).
The main weakness of these studies lies in the fact that while individual characteristics can be measured, aggregating the individual-level data into a "group-level variable" poses both conceptual and statistical problems (Morgeson and Hofmann, 1999; Roberts et al., 1978). To date, most of this work has utilized an average of individual measures or a measure of dispersion to indicate how homogeneous a group is on certain variables, and has focused mainly on aggregating demographic variables. Very little work has been done on group-level psychological dimensions that affect decision making.
One notable exception is the work of Hurst, Rush, and White (1989). In their development of the creative management model of strategic decision making, these authors argue that differences in cognitive preferences, or differences in the way that individuals prefer to process information, have an impact on their ability to identify and exploit strategic opportunities. Their model suggests that there is a relationship between individual cognitive style and the definition of an issue as strategic versus non-strategic.
While the variables examined in organizational demographics research have been linked to firm performance (Bantel and Jackson, 1989; Eisenhardt and Schoonhoven, 1990; Finkelstein and Hambrick, 1990; Wiersema and Bantel, 1992), many researchers believe that other, possibly more important mediating and/ or moderating, variables are being ignored. For instance, Priem, Lyon, and Dess (1999) argue that because the majority of this research has focused on individual decision making, there is still a large "causal gap" in the empirical literature between executive demographics, decision-making processes, and firm performance. They suggest that variables such as group interaction processes, group affect, and effective implementation still need to be explored in the strategic decision-making process. Lawrence describes this gap as the "black box of organizational demography" (1997: 1). She argues that scholars are making a congruence assumption when they assume that demographic predictors intended to represent top management team cognitive heterogeneity are congruent with the intervening processes through which they are theorized to influence firm performance. She goes on to say that the intermediate steps in theorizing causal chains (i.e., that TMT cognitive heterogeneity produces greater conflict, which improves decision quality and ultimately firm performance) are not tested but are assumed to be true in demographics-based research.
If we are making congruence assumptions between top management team demographics and strategic decision-making processes, it is clear that the exploration of these processes at the group level of analysis and the development of group-level constructs is imperative. In the next section, we argue that the concept of group cognitive style is an important construct for increasing our understanding of the causal chain between individual decision makers and organizational performance.
WHY GROUP COGNITIVE STYLE IS IMPORTANT
In strategic decision-making literature, it has been suggested that differences in strategic decision-making outcome, defined in such terms as differences in speed to a solution, number of errors, member satisfaction, and group cohesiveness, are a function of the type of decision process used, the social interaction between group members, and the nature of the group's composition (Milliken and Vollrath, 1991; Mintzberg, 1978). When decisions are made in a group setting, it is a social situation and the group's decision may be influenced by social interaction among the various members of the decision-making team. Hurst et al. (1989) suggested that who interacts with whom and how they interact will have an impact on strategic decision-making processes. They also suggested that differences in the cognitive style composition of the decision-making team leads to differences in problem identification that leads to differences in decision processes. Subsequently, differences in decision processes affect firm strategy and performance. Specifically, they proposed a number of very interesting relationships. First, they proposed that organizations, like individuals, have distinct cognitive preferences. Second, they suggested that differences in the cognitive preference composition of the top management team will lead to different "patterns of behavior" over time.
In this article, we develop the concept of group cognitive style and address three main questions. These include: 1) Where...
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