Cognitive Advantage for Innovation: A Theoretical Formulation and Empirical Application in the Software Industry

• Main Author: Rhee, Seung-Hyun Luke
• Format: Dissertation
• Language: English
• Subjects: management; organization theory
• ISBN: 9781339786575; 1339786575

The primary goal of my dissertation is to build theoretical and empirical models to identify cognitive factors that can lead firms or individuals to spur innovation in their work. In the first chapter, I suggest that some firms have a cognitive advantage greater than others in product innovation and that this advantage varies based on whether their managerial attention styles are holistic or analytic. Using new product data in the software industry and measuring holistic and a text mining technique known as topic modeling, I find two contingent effects of holistic and analytic managerial attention on product innovation. First, I find that firms with holistic managerial attention are more likely to adopt discontinuous technologies quickly in their current product suites than those with analytic attention. To the extent that product innovation is an adaptive project to respond to technological discontinuities in a timely manner, holistic managerial attention is more advantageous to the firm than an analytic one. Second, firms with analytic managerial attention are more likely to launch new products at novel product categories at the industry-level than those with holistic managerial attention. To the extent that product innovation is an explorative project to identify new market spaces, analytic managerial attention is more advantageous than to a holistic one.
In the second chapter, I develop the construct of cognitive congruence -- i.e. the extent to which attentional orientations between a focal firm and alliance partners are similar to each other -- to identify an alliance portfolio that can facilitate the firm's new product introductions. Using new products data in the software industry and a text mining technique known as topic modeling, I argue that the greater the cognitive congruence between a focal firm and alliance partners, the greater the firm's number of new product introductions. I also link the attention-based view with traditional resource-based explanations and show that the benefit of cognitive congruence for new product introductions is amplified under the high-level of firm/partner resource complementarity and abundant slack resources, and is attenuated under the condition of poor financial performance.
In the third chapter, I show that people do not pay as much attention to information coming from brokers (i.e. ones who communicate with people who do not talk to each other) as they do to other communication partners. But, using survey data on communication networks among software engineers at a mobile service company, I also find empirical evidence that individuals who pay more attention to brokers than they do to other communication partners receive higher performance ratings on project-based work than individuals who pay little (or no) attention to the brokers among their communication partners. Therefore, there exists a mismatch between who people normally do pay attention to among network colleagues and who they should be paying attention to if they wish to improve their innovative performance in the workplace. Consequently, with respect to their innovative performance, individuals have a systematic attention bias against information coming from brokers.