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StrategicManagementJournal,Vol.18(SummerSpecialIssue),187–206(1997)

TOWARDSANATTENTION-BASEDVIEWOFTHE

FIRM

WILLIAMOCASIO*

gGraduateSchoolofManagement,NorthwesternUniversity,Evanston,

Illinois,U.S.A.

Thecentralargumentisthatfirmbehavioristheresultofhowfirmschannelanddistribute

cision-makersdodependsonwhatissuesand

suesandanswerstheyfocusondependsonthe

specificsituationandonhowthefirm’srules,resources,andrelationshipsdistributevarious

issues,answers,anddecision-makersintospecifier

developsthesetheoreticalprinciplesintoamodeloffirmbehaviorandpresentsitsimplications

forexplainingfirmbehaviorandadaptation.©1997byJohnWiley&Sons,Ltd.

etaking

possessionbythemind,inclearandvividform,

ofoneoutofwhatseemseveralsimultaneously

zation,

concentrationofconsciousnessareofitsessence.

Itimplieswithdrawalfromsomethingsinorder

WilliamJames(1890),ThePrinciplesof

Psychology,I:403–404

Organizationsandinstitutionsprovidethegeneral

stimuliandattention-directorsthatchannelizethe

behaviorsofthemembersofthegroup,and

thatprovidethememberswiththeintermediate

objectivesthatstimulateaction.

HerbertSimon(1947),AdministrativeBehavior,

pp.100–101

INTRODUCTION

Howdofirmsbehave?Howdofirmsdetermine

when,why,andhowtorespondtooranticipate

changesintheirenvironmentorinternalproc-

esses?Whydofirmsundertakesomedecisions

andmovesbutnotothers?Explaininghowfirms

Keywords:attention,cognition,socialstructure,

theoryofthefirm

*Correspondenceto:WilliamOcasio,KelloggGraduate

SchoolofManagement,NorthwesternUniversity,Leverone

Hall,2001SheridanRoad,Evanston,IL60208,U.S.A.

behaveisoneofthefundamentalissuesorques-

tionsthatdefinethefieldofstrategy,itspriorities

andconcerns,andthecontributionitmakesto

thetheoryandpracticeofmanagement(Rumelt,

Schendel,andTeece,1994).Inparticular,

explaininghowfirmsbehaveallowsustocom-

prehendwhetherandwhenfirmsareableto

adapttochangingenvironments,whetherthey

successfullychangetheirstrategiesandcapabili-

ties,orwhethertheyfailtorespondadequately

tocompetition.

Halfacenturyago,HerbertSimon(1947)

introducedathennewperspectiveonfirm

behavior,whichboldlydepartedfromeconomists’

theoriesofrationalchoiceandhighlightedthe

limitsofhumanrationalityinexplaininghow

fiitedattentional

capabilityofhumans—totherangeofconse-

quencesoftheiractions,howtheseconsequences

wouldbevalued,andthescopeofavailable

alternatives—resultsintheirboundedcapacityto

on,organizationsinfluence

individualdecisionprocessesbyallocatingand

distributingthestimulithatchanneltheattention

ofadministratorsintermsofwhatselectedaspects

ofthesituationaretobeattended,andwhat

havior,for

Simon,isbothacognitiveandastructuralproc-

CCC0143–2095/97/S10187–20$17.50

©1997byJohnWiley&Sons,Ltd.

ess,asdecision-makinginorganizationsisthe

resultofboththelimitedattentionalcapacityof

humansandthestructuralinfluencesoforgani-

zationsonanindividual’sattention.

Fiftyyearsafteritsinitialpublication,this

paperaimstorediscoverthecentralimportance

ofthestructuringofattentioninSimon’s(1947)

earlyworkonadministrativebehavior,andupdate

ittoincorporateourcurrentunderstandingof

socialstructures,environmentalinfluences,and

heconcept

ofattentionhasalonghistoryandtraditionin

organizationtheory,ithasnotthusfardeveloped

intoaunifiedperspectiveonfi-

ferentauthorshavestresseddifferentaspectsof

attentionallocationandstructuring,butignored

icular,theoriesofattentionhave

movedawayfromSimon’s(1947)dualemphasis

onstructureandcognitiontoemphasizeeither

howattentionisshapedbyroutinesandbounded

rationality(MarchandSimon,1958;Cyertand

March,1963),oralternatively,howattentionis

looselycoupledthroughenactmentprocesses

(Weick,1979)andorganizedanarchy(Cohen,

March,andOlsen,1972).Intheprocessthe

effectsofthesocialstructureonthechanneling

anddistributionofdecision-makers’attention

havebeengreatlydeemphasizedifnotentirely

lost.

1

Iproposetobringthembackin.

Theobjectiveofthispaperisthustoexplicitly

linkstructureandcognitionintoanattention-

basedviewofthefiicitlylinksindivid-

ualinformationprocessingandbehaviortothe

organizationalstructurethroughtheconceptsof

proceduralandcommunicationchannelsand

ersfromandextends

Simon’s(1947)originalformulationbyproviding

anexplicittreatmentofattentionalprocessing

asamultilevelprocessshapedbyindividuals,

organizations,inking

1

Intheirbook-lengthexpositionofthegarbagecanmodelof

decision-making,MarchandOlsen(1976)utilizetheconcept

ofattentionstructuresasasetofrulesthatconstrainhow

problems,solutions,andparticipantsgetlinkedinthegarbage

neralizationofthemodeloforganizedanarchy

providesanindependentrolefororganizationalstructurein

theallocationofattention,andhasservedasaguideinthe

oregeneralmodel,however,

unlikethesimplemodeloforganizedanarchy,hashadlimited

impactontheorganizationalorstrategicmanagementlitera-

rmore,unliketheargumentsfoundinSimon

(1947),orthetheorypresentedhere,individual-levelattention

andinformationprocessingareabsentfromMarchandOlsen’s

(1976)formulation.

multiplelevels,thispaperfocusesonorgani-

zationalattention,thesociallystructuredpattern

ofattentionbydecision-makerswithinanorgani-

zation(Ocasio,1995).Thecentralargumentof

thisopensystemsperspective(Scott,1992)is

thattoexplainfirmbehavioristoexplainhow

firmsdistributeandregulatetheattentionoftheir

eaisbasedonthreeinter-

relatedpremises:

cision-makersdodependsonwhat

issuesandanswerstheyfocustheirattention

on(FocusofAttention).

suesandanswersdecision-makers

focuson,andwhattheydo,dependsonthe

particularcontextorsituationtheyfindthem-

selvesin(SituatedAttention).

rticularcontextorsituationdecision-

makersfindthemselvesin,andhowthey

attendtoit,dependsonhowthefirm’srules,

resources,andsocialrelationshipsregulateand

controlthedistributionandallocationofis-

sues,answers,anddecision-makersintospeci-

ficactivities,communications,andprocedures

(StructuralDistributionofAttention).

Thisviewprovidesanalternativeexplanationfor

firmbehaviorbothtotheoriesofrationalchoice,

suchasgametheoryandagencytheory,and

theoriesthatemphasizeenvironmentaldetermin-

ism,rmore,

thispaperarguesthatafocusonthestructuring

oforganizationalattentiontoexplainfirm

behaviorisofspecialinterestandimportancefor

ourunderstandingofstrategicchoice(Child,

1972).Corporatestrategy,definedbyAndrews

asthepatternofdecisionsinacompanythat

determinesandrevealsitsobjectives,purposes,

orgoals,producestheprincipalpoliciesandplans

forachievingthosegoals(1971:13),isunder-

stoodhereasapatternoforganizationalatten-

tion,thedistinctfocusoftimeandeffortby

thefirmonaparticularsetofissues,problems,

opportunities,andthreats,andonaparticular

setofskills,routines,programs,projects,and

ntion-basedviewbothshares

astrongcommonalitywithandhasbeeninflu-

encedbyprocess-basedviewsofstrategyformu-

lationandfirmbehavior(Allison,1971;Bower,

1970;Burgelman,1983,1994),whileaddingto

theseanexplicitfocusonattentionalprocessing.

Thenextsectionpresentsthemainoutlineof