Principal Topic

The entrepreneurship literature has noted that because opportunity exploitation involves a significant amount of ambiguity, people who have a greater tolerance for ambiguity may be more likely to exploit opportunities. If this is the case, then the willingness to tolerate ambiguity is essential to the performance of established firms as well as the creation of new ventures. But, the attempt to achieve balance by hiring more employees with a higher “tolerance for ambiguity” presupposes that these employees can be easily identified and obtained and that their predisposition for ambiguity is constant and unwavering. Moreover, employees who are constantly ambiguity averse or ambiguity seeking may present a core rigidity in a competitive environment that mandates organizational flexibility. Thus, the question becomes: how does an organization reconcile this paradox and achieve flexibility in its innovative orientation without having to acquire additional resources that may cause it to become inflexible?

Method

Our study examines whether individual inclinations for innovation strategies of different ambiguity levels can be influenced through a change in work conditions. Our sample consists of 60 researchers who were provided a conjoint experiment including 33 situations each comprised of five cues (competence, credit, blame, financial reward, and time constraint) of differing levels (high or low). We then asked the researchers to select an innovation strategy falling on a continuum ranging from incremental (uncertain) to radical (ambiguous).

Results and Implications

As a result, it appears that through contextual changes an organization could alter its cognitive infrastructure to encourage more or less ambiguity aversion depending upon its present strategic desires. Preliminary findings suggest that researchers prefer an “ambiguous” option such as radical innovation when the cue of competence is high but time constraint is low. Conversely, when the cues of blame and time constraint are high, the less ambiguous (uncertain) choice of incremental innovation is preferred. This suggests that organizations could possibly retain or regain their entrepreneurial orientation while preventing unnecessary core rigidities and, perhaps more importantly, retain entrepreneurial employees through minor alterations in work environment.

CONTACT: Jeff McMullen, Management Division, University of Colorado, Boulder, CO 80309-0419; (T) 303-492-4865; (F) 303-492-5962; mcmullenjeff@yahoo.com