research@hec - Issue #8 - (Page III)

Ambivalence The Upside of Key Ideas effect. • Evaluation of a situation as both positive and negative generates broader organizational involvement in the solution-finding process and more novel and creative solutions. • CEO interest in divergent perspectives reduces friction between third parties. • Intensity is crucial. Only strongly positive and negative evaluations increase the likelihood of organizational action; weakly ambivalent evaluations have the opposite “Ambivalence” tends to have negative connotations of indecisiveness and therefore weakness. But Nils Plambeck and Klaus Weber’s study on CEO ambivalence and organizational action-taking proves the contrary. They have found that simultaneously positive and negative CEO evaluations of a strategic issue are more likely to provoke organizational action than univalent—positive or negative—assessments. M CEO REACTIONS TO EQUIVALENT PROS AND CONS CEOs typically classify issues as either positive or negative, but routine is occasionally disrupted, and CEOs are faced with situations that are seen as both positive and negative. The issues concerned tend to be complex and multi-faceted, and Plambeck explains that the result is not just more action, but also multi-dimensional initiatives. In effect, CEO ambivalence leads to a more thorough exploration of an issue and consideration of a broader range of perspectives. There is also an emotional reaction that drives CEOs’ more comprehensive responses to ambivalent issues. The non-routine nature of simultaneously positive and negative evaluations causes CEOs to experience “emotional arousal,” which translates into increased energy and motivation. To respond to the negative and the positive aspects of a matter, CEOs consult more people and departments, which is largely beneficial to organizational action. “The more participatory process of search and consensus-building generates a greater sense of ownership of decisions and hence increases commitment to implementation.” ORGANIZATIONAL INCLUSIVENESS, TOLERANCE, AND CREATIVITY Greater organizational involvement and less friction are thus the major benefits of ambivalenceinspiring action. Holding positive and negative evaluations of a strategic issue enables wider organizational involvement; executive doors open to any member of the organization who has insight to contribute. In addition, the CEO brings parties with divergent beliefs to the same side—the CEO’s side. In the case of new EU entrants, the marketing department might see new opportunities while the production division may fear local factory closings. CEOs who explore both of these positions obtain fuller sets of information, avoid the alwaysharmful specter of confrontation between business units, and send a message of mutual respect and tolerance throughout the organization. Once CEOs have collected information, they can integrate different viewpoints and are likely to come up with atypical solutions. Solutions might not be Nils Plambeck BIOGRAPHY Nils Plambeck joined HEC in 2004 and is currently an assistant professor in the strategy and business policy department. He holds a PhD from the University of Hamburg, and his research interests include managerial and organizational cognition, decision making, and organizational learning. “CEO Ambivalence and Responses to Strategic Issues” received the 2009 Syntec Management Council best article award in the categories of management, HR, and organization.* April-May 2009 • research@hec III http://www.hec.edu/Faculty/Professors-alphabetical-list/(professor)/Plambeck

Table of Contents for the Digital Edition of research@hec - Issue #8

Cover & Contents
Research Update: Financial Crisis
The Upside of Ambivalence
Inventory Management and Financial Performance
Sending Signals: the Meaning of Equity vs. Cash

research@hec - Issue #8