- 2015-03-09 (x)
- leadership (x)
- Eastburn, Ronald W. (x)
- Search results
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Show moreWe propose qualitative research to understand how financial institution management makes sense of decision outcomes that do not meet expectations, under what circumstances these experiences are likely to occur, and to what extent they lead to mindful management of the unexpected. This research will facilitate greater understanding of the factors that make some organizations far more capable and function far more reliably than others in coping with the unexpected, the unknowable and the Black Swan (Taleb, 2007), with resultant positive influence on firm performance. The conceptual framework for this research focuses on individuals engaging in managing for high performance in settings where the potential for surprises (from internal operating activity or external market challenges) in today’s highly uncertain and demanding business environment is extremely challenging. The interview sample will focus on executive management in mid-size regional banking institutions ($100million to $25billion in assets) having responsibility for strategic and operational decisioning made with regularity in organizations. The prevalence of material decision failures (Nutt, 2002; Hickson, 2001) acts to inhibit firm performance, while organizations that have no choice but to function reliably to avoid disaster and severe harm (e.g. nuclear power plants, aircraft carriers etc.,), are operating very mindfully in managing the unexpected and are termed high-reliability organizations (HROs). Organizations with high-reliability maintain a collective mindfulness (Weick and Sutcliffe, 2001) and adopt five key operating practices that are designed to anticipate and contain those incipient weak signals that can grow into disasters and decision failures. Organizations that can develop a collective mindfulness can be better positioned to maintain awareness about the environment in which they operate. Understanding the influence of mindfulness on organizational performance will provide insight into the ways organizations can move beyond being mindless to mindful behavior and reduce post-decision surprise events (Weick et al., 2001) and ultimately be far more successful.
Doctorate of Management Programs
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Show moreManaging the unexpected is relevant for all organizations and banks experienced this bitterly during the financial crisis of 2007-2009. In this study we argue that the organizational mindset driving unexpected results within the banking sector stemmed from an inability to anticipate and detect the early warning signals. The goal of this study was to gain insights into how successful banks are continuously "adaptive" in that banks with higher levels of absorptive capacity (ACAP) - the mechanisms used for sensing and experimentation of knowledge- are more likely to screen and acquire, assimilate, transform and exploit knowledge to positively influence performance. We also show that absorptive capacity is affected by three antecedents of risk, operating and learning orientation. Data obtained from a survey of 165 bank CEOs confirm that among excellent performing banks ACAP indeed enhanced the firm's performance during the banking crisis by reducing (negative) variance in profits. We also demonstrated the multi-dimensional mediated structure of ACAP and show that the three identified antecedents positively affect ACAP and consequently firm performance. This shows that ACAP integrates knowledge into firm routines as to help firm discriminate against surprises. The study also advances the empirical validation of ACAP construct and related measures. Several directions for future studies of the unexpected are proposed.
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Show moreThe literature is silent about the occurrence and impact of unexpected results of managerial decisions in the financial services industry- a sector whose executives’ decisions have nonetheless “surprised” us unrelentingly in recent years. Building on prior work on High Reliability Organizations and the collective mindfulness that guides them, we sought to generate a grounded theory about why surprise outcomes of bankers’ decisions occur and how executives make sense of them. Semi-structured interviews with 23 high ranking U.S. banking executives yielding over 50 narrative accounts of decisions gone awry revealed that bankers are not skilled in detecting and managing the unexpected. Findings call for more “mindful mindlessness" on the part of bankers charged with decisions that impact businesses, communities and individuals.
Doctorate of Management Programs
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