Academic journal article Academy of Strategic Management Journal

The Role of Emotional Intelligence in Environmental Scanning Behavior: A Cross-Cultural Study

Academic journal article Academy of Strategic Management Journal

The Role of Emotional Intelligence in Environmental Scanning Behavior: A Cross-Cultural Study

Article excerpt

INTRODUCTION

In the rapidly changing global economy, scanning for environmental change is vital to organizational performance and viability. Changes in the environment result in new opportunities for wealth creation that decision makers use in strategy formulation and implementation. Environmental changes increase information processing needs within organizations because managers must detect and interpret problem areas, identify opportunities, and implement strategic adaptations (Hambrick, 1982; Culnan, 1983; Tushman, 1977). A strategic advantage rests upon management's ability to collect pertinent information and act on signals that others miss.

Executives are responsible for bringing together specialized information from various departments and functions (Daft, Sormunen, and Parks, 1988). Scanning involves formal and informal sources of information often gained through ad hoc human sources (Thomas, 1980; Hambrick, 1982). Most previous research on scanning has relied on self-report estimates of the frequency of one's search and the source of the information. While this approach has been useful it does not take into account the intense social aspect of effective scanning behavior within firms. Decision makers must work among others to detect, communicate, and politicize information that enters the organization (Mintzberg, 1973).

The ability to effectively scan the environment has been linked to new venture creation (Fiet, 2007), reduced strategic uncertainty (Elenkov, 1997), and improved firm performance (Daft et al., 1988). Although these studies exemplify the positive outcomes associated with environmental scanning there is little understanding of how decision makers work among others to effectively scan information for opportunities and threats. If competitors have unequal abilities to bring about or transfer new information, then they differ in their abilities to formulate cogent responses to environmental changes (Hambrick, 1982). If unequal competencies exist in collecting or socializing information, then differences accompanying performance are attributable to the ability to implement a response, that is, to change or modify their strategy.

Research shows the transfer of key information is hindered when an arduous relationship exists between the source and the recipient (Szulanski, 1996). We argue a person's ability to exercise emotional intelligence (EQ) influences their ability to work across departments or functions to effectively scan the environment for new opportunities or threats within the social context of established firms. EQ has increasingly been linked to work outcomes and improved task performance (Lam and Kirby, 2002; Carmeli and Josman; 2006). However, little empirical work has examined emotion within the context of strategic management representing a gap in the literature. The present study is designed to make a contribution to the literature by drawing on existing EQ theory to examine how the dimensions of empathy and social skills explain management's ability to successfully scan the environment across different national cultures.

Not only must executives effectively bring together and make sense of new information but they must do so in an increasingly global economy. Such challenges have stimulated a strong interest in research that relates cross-cultural differences to these desired behaviors (Shane, Venkataraman and MacMillan, 1995). Since environmental scanning deals with the organization-environment interface, performance of the scanning function would be expected to differ for management across national cultures. Kim and Lim (1988) suggested further development of the field of strategic management through investigations of external validity of theories by testing them under different economic and cultural conditions. For example, national culture has been found to have effects on managerial styles and behaviors (Erez and Earley, 1993), with some cultures producing more innovation than others (Baumol, 1990). …

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