An emotion-based view of strategic renewal

This article challenges the dominantly pessimistic view of emotion held by many strategy scholars and elaborates on the various ways in which emotions can help organisations achieve renewal and growth.

by Quy Nguyen-Huy
Last Updated: 23 Jul 2013

This chapter, written by Quy Nguyen-Huy, associate professor of strategy at INSEAD, discusses how appropriate emotion management can increase the ability of organisations to realise continuous productive changes to exploit the shifting conditions of their environments.

The article provides an alternative perspective to much of the current focus on valuing and developing emotional intelligence at the individual level. Such emotional intelligence likely benefits the individual more than the organisation.

The article suggests, instead, how emotional intelligence can be developed as a collective, organization-wide capacity, through average individuals cooperating with each other to achieve extraordinary things. Appropriate collective emotion management, fostered by organisations' systematic actions, can increase the ability of organisations to realise continuous productive changes to exploit the shifting conditions of their environments.

An emotion-based view of dynamic capability brings three new, counter-intuitive insights to strategists and managers. First, the author details the situations in which emotions can facilitate (as opposed to hurt) adaptive strategic adjustments.

Second, through the specification of detailed organisational processes dealing with emotion, the author's model proposes organisation-level actions that are distinct from individual, idiosyncratic behaviours (the focus of much of the leadership training and thinking). Third, it provides an alternative perspective to much of the current focus on valuing and developing emotional intelligence at the individual level.

This collective ability is rooted in developing emotion-based dynamic capabilities that facilitate organisational innovation and change, and express distinct emotional states such as authenticity, sympathy, hope or fun. It also arouses attachment to achieve specific organisational goals important to strategic renewal, such as receptivity to change, the sharing of knowledge, collective action, creativity and retention of key personnel.

In regard to highly dynamic markets in which industry structure and boundaries are unclear and players are ambiguous and shifting, there has been an emerging school of thought, which argues that organisations can systematically renew themselves by learning and developing stable patterns of collective actions.

Although a traditional narrow focus on negative emotions and their dysfunctional effects may have led some organisational scholars to seek ways to eliminate negative emotions (rather than to elicit positive emotions), research on emotions in organisations suggests that it represents an important dimension in major change process, both at an individual and at an organisational level.

The author also discusses the psychological underpinnings relating emotion to action and change as well as the mechanisms that influence group behaviour, the insights of punctuated equilibrium theory, continuous change, emotional capability theory and organisational creativity.

He then proposes a set of emotion-management routines that help organisations through different transition stages of strategic renewal. Quy Nguyen-Huy stresses that emotion, like cognition and behaviour, can be used in both good and bad ways. How emotion management is used depends on the ethical qualities of the actors.

Source:
An emotion-based view of strategic renewal
Quy Nguyen-Huy
Strategy Process, Advances in Strategic Management
JAI Press, December 2005

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