Creativity in strategic thinking: Mind wandering, complexity, and strategic outcomes

Guide(s)

Yayavaram, Sai

Department

Strategy

Area

Strategy

University

Indian Institute of Management Bangalore

Place

Bangalore

Publication Date

3-31-2023

Year Awarded

March 2023

Year Completed

March 2023

Year Registered

June 2016

Abstract

Understanding the mind of the strategist and the role of cognition has been viewed as essential to learning how strategies form under various circumstances. The extant literature investigating mental processes during strategizing has demonstrated the causal link between cognition and strategic outcomes and established cognition as a legitimate factor in strategic management (Kaplan, 2011). These mental processes shape what the strategists know, do, and experience. Some of the most important mental processes are those that deal with creativity, defined in the business context as the generation of novel and useful ideas. Business success and survival often need creativity in strategic thinking (Brandenburger, 2017). Relying purely on an analytical approach lacking creativity may lead to business failure and demise because such an approach leads to incremental changes that are insufficient in a complex world (IBM, 2010). Surprisingly, research in strategic management has paid inadequate attention to strategy formulation’s creative aspects, and current strategic management theories lack sufficient psychological grounding (Powell, Lovallo, & Fox, 2011; Augier, Fang, & Rindova, 2018). Scholars and management thinkers have acknowledged strategic problem-solving as a complex task that can benefit from creative approaches. While past research has explored the interdependence facet of complexity (Gavetti & Levinthal, 2000; Gavetti, Levinthal, & Rivkin, 2005), our understanding of how interdependence influences creativity in strategic thinking is incomplete. In my dissertation, I seek to explore the role of creative cognition in strategy formulation and investigate the impact of creativity in strategic thinking under various conditions of interdependence. Extant literature in strategic management has relied on Kauffman’s (1993) NK landscape to model interdependence. My dissertation builds on this extant body of knowledge (Levinthal, 1997). Kauffman theorizes about adaptation and self-organization in species using the concept of canalization and models adaptive behavior based on Boolean Networks. Three essays constitute my dissertation. The first two essays extend Kauffman’s work, use computational simulation as the method, and introduce canalization to management literature as a model of creativity. In contrast, the third essay takes an empirical path to validate the theory using an experiment. The first essay builds on the recent advances in the literature in cognitive psychology and neuroscience that have shown mind wandering as a legitimate mechanism of creativity (Dane, 2018; Smallwood & Schooler, 2015). In my first essay, I use Dane’s (2018) theoretical conceptualization of mind wandering and borrow from the evolutionary biology literature to build a computational model of mind wandering. I use the NK landscape to represent the strategy formulation space, simulate varying levels of decision interdependence, and benchmark a creative strategist who uses mind wandering with a non-creative strategist who uses random variations of decision elements to explore the strategic decision space. The study finds that the creative strategist outperforms the non-creative strategist. Furthermore, the difference in performance is highest at the intermediate levels of interdependence. The findings suggest that creativity is most fruitful when the organizational environment is neither too simple nor too complex. The second essay extends the first essay’s theme in the direction of creativity in dyads while continuing the focus on the cognitive processes of strategic thinking. Historical accounts of organizations chronicle the presence of individuals working in pairs to steer their firm to success. Surprisingly, sparse management research exists on this vital organizational phenomenon despite its ubiquity (Rouse, 2020). Dyads, or two-member teams, involve intimate interactions, interpersonal relationships, and long-term partnerships which are crucial in offering a psychologically safe context for idea generation in organizations. In the second essay, I build a simulation model based on Rouse’s (2020) theoretical arguments and investigate the influence of creativity in strategic thinking in dyads. The simulation study’s findings inform that the creative pair outperforms the single creative actor and the noncreative actor when the interaction within the dyad is unrestrained. For creative collaboration to flourish, it is vital to allow unfiltered expression of ideas, idea-focused evaluation, and a selective focus of attention on different dimensions of the problem. The first two essays are conceptual, use computational modeling as the method, and contribute to theory building. The third essay pursues an empirical path using the experimental method to investigate individual creativity in complex tasks. The experiment evaluates the levels of interdependence where creativity in strategic thinking is most beneficial. I build a framework for studying creativity in new product development, use the experiment design to alter interdependence in strategic thinking tasks methodically and observe the effects of this variation on creativity outcomes. The experiment’s results found modest support for the hypothesis on the interdependence levels where creativity is most beneficial in strategic thinking. My dissertation contributes to our knowledge of the importance of creativity in strategic thinking (Schilling, 2018; Brandenburger, 2017) in several ways. First, the dissertation demonstrates that the pursuit of creativity is beneficial and identifies the boundary conditions where the differential rewards are the highest. Second, the dissertation contributes to the nascent literature on the creative collaboration of strategists who work in pairs (Rouse, 2020). Third, the dissertation illuminates the significance of play and experimentation in the organizational pursuit of intelligence (March, 1976, 2006). Overall, my dissertation contributes in novel and appealing ways to the strategy formulation literature and cuts new pathways of knowledge to unchartered territories in understanding strategy practice.

Pagination

vi, 180p.

Copyright

Indian Institute of Management Bangalore

Document Type

Dissertation

DAC Chairperson

Yayavaram, Sai

DAC Members

Pallathitta, Rejie George; Mukherjee, Prithwiraj

Type of Degree

Ph.D.

Relation

DIS-IIMB-FPM-P23-11

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