Keep Your Eye on the Ball or on the Field? Exploring the Performance Implications of Executive Strategic Attention

Abstract

Scholars have highlighted executive attention as a vital organizational resource. However, as prior studies have examined different facets of attention, a theoretical tension has emerged as to whether attention to a broader or narrower set of strategic issues better facilitates firm performance. On the one hand, a narrower breadth of strategic attention limits the risk of managerial cognitive overload. On the other hand, a greater breadth of strategic attention helps managers avoid blind spots and identify more or better opportunities. We argue that this balance shifts based on the quantity and quality of opportunities available in the market and on firms’ recently demonstrated ability to execute against these opportunities effectively and efficiently. Using a novel text-analysis tool that we develop, validate, and make available, we find support for our arguments within a random sample of Standard & Poor’s (S&P) 500 companies. We find that broader strategic attention is associated with enhanced performance in weaker opportunity environments, with firms using their resources efficiently, or with firms’ failure to utilize their capabilities effectively. In supplementary analyses, we also provide new insights into the importance of following attention with subsequent organizational action.