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CEO Ambivalence and Responses to Strategic Issues

Department of Strategy and Business Policy, HEC School of Management, 78351 Jouy-en-Josas CEDEX, France
Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
plambeck{at}hec.fr
klausweber{at}northwestern.edu

We examine how executives' ambivalent evaluation of a strategic issue relates to organizational actions taken in response. Ambivalence occurs when a decision maker evaluates an issue as simultaneously positive and negative, a state that has received scant attention in organizational research. We integrate findings in social psychology with the behavioral theory of the firm to suggest how executives' ambivalence prompts wider and more vigorous search for action responses and enables broader participation. Data from a two-wave survey of 104 German CEOs who evaluated the enlargement of the European Union in 2004 and reported their organizations' responses show that organizations whose CEOs evaluated the event as both positive and negative were more likely to take action when both evaluations were also strongly held. The reported actions were also of greater scope, novelty, and riskiness. The study contributes to research on organizational decision making by theorizing the role of top executives' ambivalence and by providing a first systematic test of how ambivalence affects responses to strategic issues.

Key Words: ambivalent evaluations; organizational action; behavioral theory of the firm