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Sub-theme 45: Market Spaces, Agency, and Creative Rationality {MERGED with sub-theme 68}

Convenors:
Martina Montauti
University of St. Gallen, Switzerland
Shubha Patvardhan
Indian Institute of Management Bangalore, India
Joseph Porac
New York University, USA

Call for Papers

The prevailing paradigm of managerial choice and decision-making – from both the objectivist behavioral school and the interpretivist sensemaking perspectives – is of a decision-making process laden with cognitive myopia and biases due to bounded rationality (Simon, 1947; Cyert & March, 1963); and post-hoc meaning-making due to retrospective sensemaking (Weick, 1979).
 
Over the years, scholars have expressed dissatisfaction with this prevailing paradigm as it casts managers as backward-looking (Gavetti et. al., 2012) and predominantly “passive” with regards to the environment (Farjoun, 2008) – a concern shared by fields like psychology as well (Seligman, Railton, Baumeister, & Sripada, 2013). Our view is that whereas prevailing perspectives capture default/average managerial behavior, they do not account for the type of forward-looking processes associated with leadership (March, 2009).
 
Perhaps as a consequence, in the past decade, scholars have initiated studies on the origins of great (Gavetti & Porac, 2018), shaping-oriented (Pontikes & Rindova, 2020), value-creating (Felin & Zenger, 2017), and novel strategies (Cattani, Deichmann, & Ferriani, 2022). These efforts have shed light on a wide range of forward-looking cognitive processes–problem formulation (Bharadwaj, Mahoney, & Nickerson, 2022), theorizing (Felin & Zenger, 2017), ideals (Schilling, 2018), imagination (e.g., Patvardhan and Ramachandran, 2020; Beckert, 2022; Thompson & Byrne, 2022; Rindova & Martins, 2022), design-thinking (Liedtka, 2000; Rindova & Martins, 2021) and so on.
 
Collectively, the above insights on the constructive aspects of managerial agency point to a fundamental shift in the kind of rationality associated with decision-making – from formal rationality that is inevitably bounded (Simon, 1955) and “adaptive” rationality (Gigernzer, 2001), to creative rationality (Forest, 2009; Patvardhan, 2014; Rindova & Martins, 2021). By creative rationality, we refer to a general approach to decision-making where the criterion for rationality is novelty, rather than efficiency (“formal rationality”) or adaptation (“adaptive rationality”). Whereas in formal rationality, decision-makers evaluate given alternatives by analyzing and comparing expected outcomes and make choices that align with prevailing norms; In creative rationality, decision-makers actively generate new alternatives, often disrupting the prevailing logic, enabling unconventional and transformative solutions.
 
We invite scholars studying forward-looking phenomena (innovation, creativity, market creation, industry formation, entrepreneurship, design thinking, and so on) across domains (e.g., organization theory, organizational behavior, strategic management, entrepreneurship), and theoretical perspectives (e.g., evolutionary theory, behavioral school, sensemaking) to submit original paper proposals that throw light on elements of a framework of creative rationality – including the ontology, motivation, heuristics, cognition, and emotion, associated with such a form of rationality.
 
Related questions include:

  • Cognitive Processes: What cognitive processes underlie activities such as path creation, opportunity creation, design thinking, creativity, and innovation? How do individuals think, reason, and problem-solve when embracing creative rationality?

  • Motivation for Novelty: What motivates individuals and organizations to pursue novelty and engage in creative and innovative endeavors?

  • Sources of Novelty: Where do novel ideas come from? What are the sources of novelty that fuel creative rationality?

  • Heuristics: What heuristics or mental shortcuts are involved in the generation of creative and innovative solutions? How do decision-makers navigate the complexity of creative processes?

  • Emotional Processes: What emotional factors are associated with innovation and creation? How do emotions impact the decision-making process in the pursuit of novelty?

  • Risk Assessment: How do innovators understand and assess risk when venturing into uncharted territory? What strategies do they employ to manage uncertainty while pursuing creative rationality?

 

References

  • Alvarez, S.A., & Barney, J.B. 2010. Entrepreneurship and epistemology: The philosophical underpinnings of the study of entrepreneurial opportunities. The Academy of Management Annals, 4 (1): 557-583.
  • Alvarez, S.A., & Porac, J. 2020. Imagination, indeterminacy, and managerial choice at the limit of knowledge. Academy of Management Review, 45 (4), 735-744.
  • Bharadwaj, A., Mahoney, J.T., & Nickerson, J. 2022. Problem formulation for theorizing at the frontier: An Oliver Williamson inspired approach, Strategic Management Review.
  • Brandenburger, A. M. 2017. Where Do Great Strategies Really Come From? Strategy Science, 2 (4): 220-225.
  • Cattani, G., Deichmann, D., & Ferriani, S. 2022. Novelty: Searching for, seeing, and sustaining it. In The Generation, Recognition and Legitimation of Novelty (pp. 3-23). Emerald Publishing Limited.
  • Cyert, R.M., & March, J.G. 1963. A Behavioral Theory of the Firm. Prentice-Hall: Englewood Cliffs.
  • Dew, N., & Sarasvathy, S D. 2016. Exaptation and niche construction: behavioral insights for an evolutionary theory. Industrial and Corporate Change, 25(1): 167-179.
  • Felin, T., & Zenger, T.R. 2017. The theory-based view: Economic actors as theorists. Strategy Science, 2 (4): 258-271.
  • Forest, J. 2009. The Creative rationality as a key driver for enhancing innovation capability. CRECOS seminary creative and complex design, Helsinki,  Finland.
  • Gavetti, G., Greve, H. R., Levinthal, D. A., & Ocasio, W. 2012. The behavioral theory of the firm: Assessment and prospects. Academy of Management Annals, 6 (1): 1-40.
  • Gavetti, G., & Menon, A. 2016. Evolution cum agency: Toward a model of strategic foresight. Strategy Science, 1 (3): 207-233.
  • Gavetti, G., & Porac, J. 2018. On the Origin of Great Strategies. Strategy Science, 3 (1) 352-365.
  • Levinthal, 2020. Editorial Introduction: The Special Issue on Strategies for Market Creation and Transformation, Strategy Science 5 (3): 147-148.
  • March, J.G. 2009. Imagination, Commitment, & Joy: Don Quixote. In On leadership: 79-92. March, J.G., & Weil, T. (Eds.) John Wiley & Sons. Blackwell Publishing.
  • Patvardhan, S.D. 2015. Prospective sensemaking: Strategy-making in a pioneering firm. Academy of Management Proceedings. Vancouver, Canada.
  • Patvardhan, S.D. 2017. Exploring Imagination and its Implications for Strategic Choice. Academy of Management Proceedings, Atlanta, USA.
  • Pontikes, E. G., & Rindova, V.P. 2020. Shaping Markets Through Temporal, Constructive, and Interactive Agency, Strategy Science, 5 (3): 149-159.
  • Porac, J. & Tschang, F.T. 2013. Unbounding the managerial mind: It’s time to abandon the image of managers as small brains. Journal of Management Inquiry, 22 (2): 250-254.
  • Rindova, V.P. and Martins, L.L., 2021. Shaping possibilities: A design science approach to developing novel strategies. Academy of Management Review, 46 (4), 800-822.
  • Rindova, V P., & Martins, L.L. 2022. Futurescapes: Imagination and temporal reorganization in the design of strategic narratives. Strategic Organization, 20 (1), 200-224.
  • Seligman, M.E., Railton, P., Baumeister, R.F., & Sripada, C. (2013). Navigating into the future or driven by the past. Perspectives on psychological science, 8 (2), 119-141.
  • Schilling, M.A. (2018). The cognitive foundations of visionary strategy. Strategy Science, 3 (1), 335-342.
  • Simon, H.A. 1955. A Behavioral Model of Rational Choice. Quarterly Journal of Economics, 69: 99-118.
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Martina Montauti is Assistant Professor of Strategic and International Management at the University of St. Gallen, Switzerland. She is interested in how the cognitive and social character of categorization affects decision-making and, in turn, organizational and market-level outcomes.
Shubha Patvardhan is an Associate Professor of Strategy at the Indian Institute of Management Bangalore, India. Shubha’s research explores the role of cognition in the field of strategy (e.g., identity, image, imagination). Her more recent work explores “forward-looking” strategies by which firms only adapt to the future but also seek to “shape” it. Shubha’s research has been published in journals such as ‘Academy of Management Journal’, ‘Organization Science’, ‘Academy of Management Annals’, and ‘Research in Organizational Behavior’.
Joseph Porac is the George Daly Professor in Business Leadership at Stern School of Business, New York University, USA. He studies social and cognitive processes in and around organizations. Joe’s research has been published in the major journals of the field, and he has edited special issues on managerial and organizational cognition for ‘Organization Science’ and the ‘Journal of Management Studies’.