ABSTRACT
This chapter argues that institutional complexity forces firms into processes of strategic renewal. It introduces three important managerial factors: cognitive variety, regulatory focus, and temporal orientation, and explains the ways in which these factors determine an organization’s strategic renewal trajectory. The chapter identifies managerial factors that have a bearing on the perception and interpretation of institutional complexity and investigates the actual mechanisms through which variation of these variables will result in heterogeneity in organizations’ strategic renewal attempts in response to institutional complexity. It discusses the implications that this might have on organizational response to institutional complexity. Temporal orientation influences fundamental aspects of a firm’s strategic orientation, and behaviors such as technological and capital investments. Future research needs to consider the combinations of managerial traits and organizational contextual factors, to generate a more complete understanding of the drivers of strategic response to institutional complexity.
