Toward a forward-looking perspective of the firm : antecedents and outcomes of managerial foresight

Abstract

One challenge for theories in strategic management is to explain the heterogeneity of actions and outcomes among firms in changing environments. The managerial foresight perspective emphasizes the forward-looking cognitive representation of the decision makers, based on which, firms could build the competences that fit the trend of development in advance to gain competitive advantages that can be sustained. This dissertation attempts to advance the understanding of managerial foresight from both theoretical and empirical endeavor. The work begins by conceptualizing managerial foresight. After that, three empirical studies are presented to investigate the antecedents and outcomes of managerial foresight. The research also develops original methods to measure it using both archival and survey data. Specifically, in the first essay, I explore how managers’ characteristics in terms of experience and attention allocation affect the formation of foresight. The models are tested based on a unique context of Chinese mutual fund industry. I find that experience diversity and attention to future positively affect the formation of foresight, whereas experience specialty negatively influences it. In the second essay, I develop theory and hypotheses on the relationship among managerial foresight and fund performance. The boundary conditions on the impact of managerial foresight are further examined by examining the moderating role of managerial discretion. Results show that managerial foresight has a positive impact on the fund performance, and the relationship is moderated by environmental characteristics (market munificence, market dynamism, market complexity), and one of organizational characteristics (firm age). In general, my findings demonstrate the importance of managerial foresight in explaining firms’ competitive advantage. The third essay (co-authored with Bilian Sullivan) investigates specific mechanisms through which managerial foresight influences a firm’s performance outcomes and how important firm characteristics moderate the relationship between managerial foresight and innovation performance. The models are tested based on a two-time period survey data from 546 Chinese firms. It is demonstrated from the findings that firms with a higher degree of foresight are more likely to have higher innovation performance. In addition, the influence of foresight is working through a firm’s exploration activities, and such influence is moderated by firm age. Overall, my dissertation suggests that managerial foresight is critical to explain firm heterogeneity of actions and outcomes under accelerating environmental change. Research on managerial foresight contributes to the emerging dialogues that promote strategic management field to move from backward-looking learning to forward-looking intelligence (Chen, 2008; Gavetti & Levinthal, 2000), from mindful-less action to mindfulness cognition (Gavetti & Rivkin , 2007; Levinthal & Rerup, 2006), from reactive adapter to proactive shaper in facing with environmental change (Augier & Teece, 2007).

Date of Award	2014
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology