46
Journal of Occupational and Organizational Psychology (2016), 89, 46–72
© 2015 The British Psychological Society
www.wileyonlinelibrary.com
The power of caring and generativity in building
strategic adaptability
Abraham Carmeli1*, Carla D. Jones2 and Galy Binyamin3
1
Tel Aviv University, Israel,
Sam Houston State University, Huntsville, Texas, USA
3
Ariel University, Israel
2
In this study, we integrate relational theory and the upper echelon perspective to explore
how and why caring and generative relationships in top management teams (TMTs) can be
a source for building strategic adaptability. We argue that when TMT members care for
each other’s inner needs, a generative psychological space (which allows members to
experience positivity and produce enduring transformative outcomes) is nurtured. This
generative psychological space, in turn, helps to build a capacity to respond proactively to
the external environment and adapt well to environmental jolts. The results lend support
to our hypothesized model in which caring among TMT members nurtures generativity,
which in turn enhances strategic adaptability. In so doing, we aim to further cultivate
discussion on the micro-foundations of strategic management in general and increase
interest in the micro-relational foundations of strategic capabilities in particular.
Practitioner points
Strategic adaptability is crucial for a firm’s viability, but top management teams (TMTs) struggle to
navigate and adapt successfully in ever-changing environments.
Caring defines those relationships in which TMT members show genuine interest in and concern for
each other’s needs, and can be a conducive force for building strategic capabilities, such as the capacity
to adapt to environmental jolts.
Work relationships among members are powerful; thus, organizations should devote efforts to finding
ways to go beyond instrumental-driven connections to cultivate more humanistic-driven connections
where the inner needs of each member are considered, and to shaping a generative psychological space
that helps to enhance adaptability and nurture growth.
A focus on micro-relational mechanisms in a TMT is important for organizations, because the TMT
plays a fundamental role in building strategic capabilities and helping organizations to thrive in the
marketplace.
All organizations face the challenge of adapting to their environment, whether it provides
contexts for growth or for decline (Aldrich, 1979). Firms seek to develop a fit with the
environment, which often requires a change in their organizational system and practices
(Carmeli, Gelbard, & Gefen, 2010; Siggelkow, 2001; Zajac, Kraatz, & Bresser, 2000). The
ability to adapt – learn and change – to turmoil and jolts in the external environment
*Correspondence should be addressed to Abraham Carmeli, Faculty of Management, Tel Aviv University, Tel Aviv 69978, Israel
(email: [email protected])
DOI:10.1111/joop.12106
Caring, generativity, and strategic adaptability
47
clearly affects the performance outcomes and the viability of the organization (Cameron,
Kim, & Whetten, 1987; Weitzel & Jonsson, 1989).
The importance of top management teams (TMTs) in making strategic decisions and
navigating the organization through an ever-dynamic environment is anchored in strategic
leadership or upper echelon research (Boal & Hooijberg, 2001; Finkelstein, Hambrick, &
Cannella, 2009).1 Through strategic decision-making, TMTs shape the orientation,
structure, and context of the organization, thereby influencing the type and the sequence
of responses to changes in the task environment, and by extension the organizational
outcomes (Carpenter, Geletkanycz, & Sanders, 2004; Finkelstein et al., 2009).
A major question that remains unresolved in the strategic leadership/upper echelon
literature is why some TMTs are more capable of navigating their organization in such a
way that enables the development of a capacity to adapt to a dynamic and uncertain
external environment, whereas others fail to do so and often face demise (Beer, 2003). In
an attempt to unravel how TMT functions, researchers have used demography as a proxy
for cognitive processes. This has paradoxically led researchers to overlook the
opportunity to develop theorizing on psychological processes that underlie TMT
processes and outcomes (Hambrick, 2007). An effective strategy depends on the firm’s
ability to make fast and high-quality decisions on a frequent basis. Hence, exploring the
processes that underpin strategic responses is of considerable importance (Eisenhardt,
1999). A number of processes involving the TMT have been examined by upper echelon
theorists (social integration: Smith et al., 1994; consensus: Bourgeois, 1980; communication quality and frequency: Smith et al., 1994; interpersonal conflict and consensus
seeking: Knight et al., 1999; interdependency: Michel & Hambrick, 1992; and behavioural integration: Carmeli & Schaubroeck, 2006; Hambrick, 1994, 1998; Li & Hambrick,
2005; Lubatkin, Simsek, Ling, & Veiga, 2006) (see Carmeli, 2008). Nevertheless, further
studies that examine micro-relational processes (Eisenhardt, Furr, & Bingham, 2010) are
still needed as they can shed more light on their role in building strategic capabilities (Felin
& Foss, 2005; Foss, 2011) and the processes that TMTs use to achieve their goals
(Hambrick, 2007).
We expand on this emerging stream of research to develop a deeper understanding
of the processes that underpin strategic adaptability (Mahoney, 2005; Powell, 1992;
Zahra, Sapienza, & Davidsson, 2006; Zajac et al., 2000). We are particularly interested
in the micro-relational processes within the TMT that lead to adaptive or maladaptive
strategic responses that influence the performance outcomes of the organization
(Hambrick, 1994, 1998; Mooney & Sonnenfeld, 2001). We draw from research on
positive work relationships (Dutton & Heaphy, 2003; Dutton & Ragins, 2007;
Stephens, Heaphy, & Dutton, 2011) to expand and apply micro-relational foundations
to the strategy literature in general and upper echelon research in particular. In so
doing, we respond to the call for a more extensive dialogue between micro- and
macro-perspectives in strategy (Ling, Simsek, Lubatkin, & Veiga, 2008) and management (Hackman, 2003; March, 1996; Rousseau, 2011), as this can help to unravel ‘the
actual psychological and social processes that serve to transform executive characteristics into strategic action’ (Hambrick, 2007, p. 337).
Relational dynamics among TMT members evoke a range of emotions that influence
the strategic decision-making process (Brundin & Nordqvist, 2008; Huy, 2005; Kisfalvi &
1
The term ‘upper echelon perspective’ is used to reference a broader management entity, but note that our focus here is on the
TMT (CEO and senior executives with whom he or she makes strategic choices).
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Abraham Carmeli et al.
In particular, caring denotes the fact that members act in positive ways to fulfil each
other’s psychological needs and enable others to act through shared and communal
mechanisms; members feel valued and become active and engaging participants (Kahn,
2001, 2007) who can develop more expansive and rich possibilities (Carlsen, 2006;
Dutton & Carlsen, 2011; McAdams & de St. Aubin, 1992), thereby building an adaptive
organizational system. In addition, caring in teams fosters the creation of a safe
environment (Kahn, 2001, 2007) which helps to nurture generative relationships which
are rich, strengthening, energizing, and developmental (Carlsen, 2006; Dutton & Carlsen,
2011). Kahn (2005) and Lawrence and Maitlis (2012) noted that caring relationships can
help the team and its members to become more resilient, which entails an adaptive
capacity to bounce back from setbacks and continue moving forward (Sutcliffe & Vogus,
2003). Building on Stephens et al.’s (2011) theorizing of the relational mechanisms that
underpin positive work relationships, we suggest that when members experience caring
relationships in their connection with others in the team, it likely to boost positive
emotions, which broaden members’ thinking and expand cognitive and social resources
(Fredrickson, 2001). For instance, caring is likely to elicit a sense of gratitude which occurs
when members feel that others in the team have provided them with something
meaningful (Fredrickson, 2001, 2004). Such positive emotions not only motivate
members to work together, but also expand the thought–action repertoire of the team,
and thereby help enhance the capacity to adapt. This logic provides the basis for our third
and final hypothesis:
Hypothesis 3:
Team generativity mediates the relationship between team caring and
strategic adaptability.
Method
Sample
This study is part of a larger research project which involves the TMTs of 500 organizations
operating in both high- and low-technology industries in Israel (Carmeli, Friedman, &
Tishler, 2013; Carmeli, Tishler, & Edmondson, 2012). Through alumni of executive
programmes, we contacted the CEOs of these organizations and asked them and their
TMT members to participate in a research project on dynamics and processes in TMTs. In
our cover letter, we provided a brief explanation about the study goals and solicited their
participation. In addition, a promise was made to all participating TMTs to share the
findings of the research upon request.
Following previous research (Hambrick & Mason, 1984), the CEOs were asked to
specify those TMT members who comprised the ‘inner circle’ (Pettigrew, 1992). We
received 312 questionnaires from 82 TMTs. The average tenure of the respondents
in the organizations (CEOs and TMT members) was 8.57 years. The average tenure
of members on the TMT was 6.02 (SD 4.35). Forty-six TMT members were female.
The average team size was 5.12 (SD 1.03). However, we excluded five organizations
for which fewer than 50% of the TMT members responded to our questionnaire, as
well as TMTs that provided incomplete information. We tested for potential
dissimilarities between the participating and non-participating firms in terms of size
as measured by the number of employees and found no significant differences
(p > .10). Subsequent analyses were conducted on data obtained from 77 TMTs
(15.4% response rate).
Caring, generativity, and strategic adaptability
49
Theoretical background and hypotheses
Caring in teams
In positive work relationships, people are supportive and helpful and show genuine
interest in each other’s needs, expectations, and welfare (Harris, Harris, & Harvey, 2007;
McAllister & Bigley, 2002). Caring is a particular form of interrelating between people that
represents the essence and building block of positive human relationships (Kahn, 2001;
Solomon, 1998). Caring has been defined as ‘any thoughtful human response (or nonresponse) that enables others to thrive (Noddings, 1984)’ (in Wrzesniewski & Dutton,
2004, p. 5) and thus is likely to require some emotional, cognitive, and behavioural
resources (Kahn, 1993). Noddings’ (1984) influential writing suggests that morality is
built on acts of caring; caring is both a prerequisite for entering into relationships and is
central to ‘the dynamic potential for growth in relation’ (p. 703). Acts of caring can be
conveyed naturally (i.e., ‘natural caring’) or they are derived from a sense of obligation
(i.e., ‘I must’), but as an ‘active virtue’ requires these two sentiments to be enacted. In that
sense, ‘in caring, we accept the natural impulse to act on behalf of the present other. We
are engrossed in the other. We have received him and feel his pain or happiness, but we
are not compelled by this impulse. We have a choice; we may accept what we feel, or we
may reject it’ (p. 701).
We focus on caring between members in teams and conceptualize it as the way in
which members interrelate with each other by paying attention and showing genuine
interest in each other’s inner needs. This set of behaviours includes three key elements:
(1) being attentive and showing genuine interest in the other person; (2) expressing
empathy with what is occurring in the other person’s life; and (3) acknowledging that the
interest and empathy one shows in another person’s world go beyond the mere work role
within an organization. Our definition is consistent with Kahn’s (1993) conceptualization
of caring as a process of witnessing another person’s journey (see Noddings, 1984), as well
as Solomon’s (1998) view that caring for another person is about expressing concern
about him or her. Care in relationships among organizational members is characterized by
mutuality, active empathy, access to help among team members, lenient judgment
towards participants in the team, and courage. Care encourages organization members to
give feedback as part of a process to help others (Von Krogh, 1998).
For example, in an interview on 16 November 2012, Kevin Coyne, the former
McKinsey Worldwide Strategy Practice Co-Leader, reflected on the mentors who made an
impact on him and his career. He shared his view about the essence and substance of
caring, noting that caring goes beyond what managers need ‘to care about others for the
job’. He explained that ‘it is always about [the fact] that your relationship extends beyond
just getting the job done, just helping you be more successful on the job – When there is a
genuine interest in you’. In a series of interviews we conducted with TMT members of a
biotechnology firm, caring behaviours were shown to bond and connect them. For
example, when one of the members had health issues in his family, he mentioned how the
CEO and other TMT members showed true care for him and his family members by
expressing interest and concern for his situation. This experience instilled a deep sense
among all the members that caring is a cornerstone of what makes them a unique and
quality team (Carmeli, Tishler, & Edmondson, 2012).
Caring, however, is conceptually different from cognate constructs such as support,
benevolence, helping behaviours, and compassion. Support provided by team members
can be instrumental, such as offering professional help. This professional help can range
from providing technical resources (e.g., quality assurance device) to conveying
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Abraham Carmeli et al.
appreciation for one’s work (e.g., granting financial and non-financial rewards).
Nevertheless, providing such support does not tap the essence and substance of caring,
because it involves neither displaying genuine concern to the other’s person inner needs
nor empathetic behaviours.
Helping has been discussed in the context of organizational citizenship behaviour and
refers to ‘the extent to which individuals orient newcomers or help others who have
heavy workloads, even though their jobs do not explicitly require it’ (LePine & Van Dyne,
2001, p. 79). Helping is conceived as promotive, non-controversial, affiliative behaviours
that contribute to building and preserving relationships (Van Dyne & LePine, 1998, p.
109). Although helping is likely to be the outcome of caring behaviours, it does not tap the
involvement of one’s genuine concern and full attention to the other person’s inner needs.
Caring also differs from benevolence. Benevolence can be defined as an aspect of trusting
relationships, in which ‘a trustee is believed to want to do good to the trustor’ (Mayer,
Davis, & Schoorman, 1995, p. 718) or as a sense of humanity ‘to do good, kind, or
charitable acts’ (Karakas & Sarigollu, 2012, p. 539). Finally, caring should be distinguished
conceptually from compassion. In essence, compassion is about responding to pain
(Kanov et al., 2004; Lilius et al., 2008). A compassionate person demonstrates ‘a
sustained and practical determination to do whatever is possible and necessary to help
alleviate (the other person’s) suffering’ (Rinpoche, 1992, p. 187), and not only showing
genuine concern or understanding of the emotional state of the other person (Cohen &
Strayer, 1996, p. 988). Our view is that one can exhibit genuine care towards another
person’s needs but does not respond to his/her pain. Rather, we believe that caring
relationships help to cultivate ‘a psychological space that provides an environment in
which people have an opportunity to grieve and to regroup (Frost, 2003; Heifetz, 1994;
Kahn, 2001)’ (Frost et al., 2006, p. 849).
Caring and generativity
Generativity is defined as ‘strips of experience that bring a feeling of energy and aliveness
to people and also have the potential to produce more enduring expansive and
transformative consequences’ (Carlsen & Dutton, 2011, p. 15). Generativity enables
members to ‘see differently’ (Dutton & Carlsen, 2011) or develop ‘a new sense-making’
(Bushe, 2010), which opens up alternatives and possibilities that expand opportunities of
knowing and acting. As Dutton and Carlsen (2011) put it: ‘Seeing anew mostly spawns
acting anew’ (p. 217). Building on this literature, we define generativity as the extent to
which the relationships between team members provide them with the opportunity to
generate, learn, and seek new things. Generativity taps the quality of relationships formed
and cultivated between team members that injects more positive energy and aliveness and
thus potentially has transformative implications (see Dutton & Carlsen, 2011).
Caring behaviours that organizational members display towards each other build and
constitute the fabric of positive work relationships. Caring falls within an informal context
(Rynes, Bartunek, Dutton, & Margolis, 2012), but is likely to have a major influence on
members of an organization (Frost, Dutton, Worline, & Wilson, 2000, p. 26). For example,
caring is a key to developing the psychological conditions of safety, meaningfulness, and
availability through which better outcomes can be achieved (Kahn, 2001; Kahn &
Heaphy, 2014).
We suggest that caring behaviours help in building positive work relationships in
which people experience mutuality and are able to flourish and proactively adapt. This is
consistent with the Wrzesniewski and Dutton (2004) findings on employees’ narratives of
Caring, generativity, and strategic adaptability
51
caring at work, as well as Noddings’ (1984) theorizing about the potential of acts of caring
for increased reciprocity and mutuality (p. 703). Specifically, we theorize that acts of
caring between members cultivate generative relationships within a team. Drawing on
Winnicott’s (1965) concept of the ‘holding environment’ which ‘describes the nature of
effective caregiving’ (in Kahn, 2005, p. 9), we argue that in a holding environment, team
members can regain strength in anxiety situations. As Kahn and Heaphy (2014) put it,
holding environments are effective relational contexts in which ‘people floundering in
anxiety are caught up and secured by others – calmed, appreciated, understood, helped –
until they are able to regain their equilibrium and continue on their way’ (p. 87). We posit
that when TMT members care for one another, they create a context in which members
individually and collectively can cope more effectively with difficulties, adapt, and grow.
When members are confronted with work-related situations that they find disturbing,
discomforting, or anxiety provoking, they seek a holding environment, because it allows
them to better cope with these situations (Kahn, 2001). Caring provides the psychological
brace to better cope with, adapt to, and grow from uncertainty and difficult tasks (Kahn,
2007). This is also consistent with research that points out that caring expressed among
organizational members creates a safe environment that supports individuals through
challenging circumstances (Frost et al., 2000), as well as with research on the interactions
between care providers and parents, which help to cultivate psychological resources and
improve psychological health and reduce work–family conflicts (Kossek, Pichler, Meece,
& Barratt, 2008).
Experiencing caring relationships helps to create psychological conditions that are
conducive to promoting the intrinsic motivation to engage in innovative behaviours
(Vinarski-Peretz & Carmeli, 2011). When people feel others care for them so that they are
able to grow, they are more likely to come up with new initiatives (Baer & Frese, 2003).
This is because in caring relationships, members are connected such that they think about
each other’s situation and respond (Noddings, 1984). The attention each person gives and
receives shapes a more generative space in which members can learn, develop, and see
opportunities both individually and collectively. Specifically, a positive way of relating by
caring for each other’s needs nurtures generative relationships that facilitate a forwardlooking attitude and underpins a safe environment in which people voice and share their
ideas about possibilities or give feedback as part of a process of helping others (Dutton &
Carlsen, 2011; Kahn, 2007; Von Krogh, 1998). A safe environment is developed, as caring
drives greater readiness to express doubts and change the basis for new knowledge to
develop (Von Krogh, 1998). In addition, Bushe (2007) associates the quest for new ideas
and processes that alter the aspirations of the group. The ability to create a generative
psychological space depends on the foundation of caring within the TMT that evokes the
positivity in the process. In this regard, Liu and Maitlis (2014) theorized about the
emotional dynamics that underlie the strategy process and showed that positive
emotional dynamics facilitate stronger bonding and more collaborative processes.
Previous studies have pointed out that generativity is shaped by social forces
(McAdams & de St. Aubin, 1992; McAdams & Logan, 2004) and is associated with changes
in motives derived from a future time perspective (Kooij & Van De Voorde, 2011), as well
as positive affectivity (Ackerman, Zuroff, & Moscowitz, 2000) which is embedded in
positive relationships. We expand on Dutton and Ragins’ (2007) discussion about why
generativity is likely to be nurtured in positive work relationships and suggest that (1) the
capacity for positive work relationships involves generativity and openness to new ideas
and influences; (2) positive work relationships have the capacity to enrich or energize and
thus increase the resource-producing capabilities of individuals and groups; and (3) in
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Abraham Carmeli et al.
positive work relationships, people engage in actions that facilitate generative ‘alive’
dynamics (see Ancona & Isaacs, 2007).
Building and expanding on the emerging literature of positive relationships (Dutton &
Carlsen, 2011; Dutton & Ragins, 2007), we thus argue that caring cultivates generative
relationships between team members that allow them, individually and collectively, to
grow and adapt (Kahn, 2001; McAdams & de St. Aubin, 1992). A caring environment
builds meaningful experiences of being in community with others that allows members to
see and act in different and positive ways (Dutton & Carlsen, 2011; Zabelina & Robinson,
2010). Further, caring helps team members to develop their self, as well as to develop
commitment that extends beyond their self (Erikson, 1950), as they, for example, develop
a strong desire to nurture others (Stewart, Franz, & Layton, 1988). For a team to fully
understand its surroundings (Dutton & Carlsen, 2011) and see new prospects and
opportunities, even in difficult situations, members need to draw on their own capacities,
but mostly work collectively in a nurturing environment in such ways that enable them to
build on each other’s perspectives and capabilities.
In sum, caring relationships build what can be called a ‘reinforcing nurturing spiral’,
which enables members to expand and grow (Stewart et al., 1988). Caring underpins
holding environments that facilitate sustained positive experiences and outcomes for
members across situations (Kahn, 2001). In these environments, there is a process of
helping each other and regenerating in such ways that enable members to grow and
develop. As Kahn (2001) put it,
‘. . .people help others move further along the paths of dealing with anxietyarousing situations by helping them clear away the underbrush of troubling emotions, by
affirming their sense of themselves as competent, and by helping them see and engage their
next steps more clearly’ (p. 270)
This logic leads to our first hypothesis:
Hypothesis 1:
Caring is positively related to generativity in teams.
Generativity and strategic adaptability
Strategic adaptability refers to the organization’s capacity to respond proactively and
adapt to market changes to achieve strategic fit (Lukas, 1999; McKee, Varadarajan, &
Pride, 1989). Adaptability focuses on proactive behaviours, rather than simply being
limited in a conceptual sense to reactive behaviours. Thus, strategic adaptability is
regarded as a source of competitiveness and success (Tuominen, Rajala, & M€
oller, 2004).
The capacity of a firm’s TMT to adapt to the environment is vital for avoiding decline
(Weitzel & Jonsson, 1989) and strategic erosion (Teece, 2002) on the one hand, and a key
for fostering growth and viability on the other (Aldrich, 1979; Beer, 2003; Zajac et al.,
2000). However, many organizations struggle to change and adapt to their environments,
thereby failing to create environmental fit (Beer, 2003). According to Miles and Snow
(1994), failure to adapt to the external environment means that an organization provides
inappropriate responses, which results in a misfit between the firm and its environment
(Gresov, 1989; Millman, Von Glinow, & Nathan, 1991), as well as misalignment between
organizational goals and strategies and organizational structure (Leiblein, Reuer, &
Dalsace, 2002).
Caring, generativity, and strategic adaptability
53
Another reason for failure to strategically adapt to the environment stems from
being overly committed to existing practices, which inhibits the ability to recognize
and respond to changes in the environment (Brockner, 1992; Whyte, Saks, & Hook,
1997). This commitment to a particular course of action can escalate further such that
it does not allow TMT members to see things differently or change their perspectives
and actions. A commitment to a course of action is essential but can yield positive
outcomes when it is coupled with some flexibility. As Ghemawat and Del Sol (1998)
noted, ‘the flexible management of commitments involves either adaptation of the
planned course of action to the feedback received about it, or if the news is sufficiently
grim, its abandonment’ (p. 39).
This challenge of reconciling seemingly fundamentally opposing demands between
generativity and stagnation also occurs in a micro-dynamic context (Calo, 2007; Zacher,
Rosing, Henning, & Frese, 2011). Stagnation emerges when TMT members are selfcentred or overly focused on a particular feature without paying adequate attention to
others (Erikson, 1950), such as focusing on the internal environment of the organization
without considering developments in the competitive environment, and vice versa. In
contrast, generativity reflects a process that allows individuals to extend beyond
themselves in ways that motivate the entire team to open up to new possibilities.
We posit that the TMT’s ability to generate new alternatives and possibilities leads to
improved strategic adaptability of the organization to its external environment.
Generativity is crucial to the development of an organizational capacity to adapt in
dynamic environments because it allows for opening up and seeing possibilities in a new
and positive way, both of which are essential for learning and change. Behaviours that are
generative involve the renewal of practices and development of ideas that connect to the
future and ensure continuity over time (Erikson, 1982). This is consistent with research
that points to generativity as an enabler for reconstructing reality and producing ‘infinite
possibilities’ (Avital & Te’eni, 2009, p. 349). As noted above, generativity creates a
psychological space that enables a more complete grasp of the surroundings (Dutton &
Carlsen, 2011). Thus, we suggest that generativity allows TMT members to engage in
multiple ways to provide leadership and guidance (Zacher et al., 2011), which in turn
helps facilitate different, positive viewpoints about the competitive landscape and idea
generation (Bradley & Marcia, 2008). Generativity is not limited to the short-term, but also
contributes to a long-term positive perspective such that a TMT can search for new
opportunities, notice, and act upon them in such a way that underlies adaptive systems.
This leads to our second hypothesis:
Hypothesis 2:
Generativity is positively related to strategic adaptability.
The mediating role of generativity
Caring manifests a holding environment (Kahn, 2001) in which team members are more
energized and available to see things differently, in a positive way. Thus, team members
are able not only to respond to emerging issues, but also to adapt by their enhanced
capacity for learning and change. Hence, caring relationships are not merely defensive
(i.e., enabling members to avoid paralysis; Kahn, 2005), but rather energizing,
imaginative, and help make people capable of approaching things in different, positive
ways (Carlsen & Dutton, 2011). This capability to see and approach things differently and
positively underpins the capacity to adapt to environmental changes and ensure the
viability of the organization.
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Abraham Carmeli et al.
In particular, caring denotes the fact that members act in positive ways to fulfil each
other’s psychological needs and enable others to act through shared and communal
mechanisms; members feel valued and become active and engaging participants (Kahn,
2001, 2007) who can develop more expansive and rich possibilities (Carlsen, 2006;
Dutton & Carlsen, 2011; McAdams & de St. Aubin, 1992), thereby building an adaptive
organizational system. In addition, caring in teams fosters the creation of a safe
environment (Kahn, 2001, 2007) which helps to nurture generative relationships which
are rich, strengthening, energizing, and developmental (Carlsen, 2006; Dutton & Carlsen,
2011). Kahn (2005) and Lawrence and Maitlis (2012) noted that caring relationships can
help the team and its members to become more resilient, which entails an adaptive
capacity to bounce back from setbacks and continue moving forward (Sutcliffe & Vogus,
2003). Building on Stephens et al.’s (2011) theorizing of the relational mechanisms that
underpin positive work relationships, we suggest that when members experience caring
relationships in their connection with others in the team, it likely to boost positive
emotions, which broaden members’ thinking and expand cognitive and social resources
(Fredrickson, 2001). For instance, caring is likely to elicit a sense of gratitude which occurs
when members feel that others in the team have provided them with something
meaningful (Fredrickson, 2001, 2004). Such positive emotions not only motivate
members to work together, but also expand the thought–action repertoire of the team,
and thereby help enhance the capacity to adapt. This logic provides the basis for our third
and final hypothesis:
Hypothesis 3:
Team generativity mediates the relationship between team caring and
strategic adaptability.
Method
Sample
This study is part of a larger research project which involves the TMTs of 500 organizations
operating in both high- and low-technology industries in Israel (Carmeli, Friedman, &
Tishler, 2013; Carmeli, Tishler, & Edmondson, 2012). Through alumni of executive
programmes, we contacted the CEOs of these organizations and asked them and their
TMT members to participate in a research project on dynamics and processes in TMTs. In
our cover letter, we provided a brief explanation about the study goals and solicited their
participation. In addition, a promise was made to all participating TMTs to share the
findings of the research upon request.
Following previous research (Hambrick & Mason, 1984), the CEOs were asked to
specify those TMT members who comprised the ‘inner circle’ (Pettigrew, 1992). We
received 312 questionnaires from 82 TMTs. The average tenure of the respondents
in the organizations (CEOs and TMT members) was 8.57 years. The average tenure
of members on the TMT was 6.02 (SD 4.35). Forty-six TMT members were female.
The average team size was 5.12 (SD 1.03). However, we excluded five organizations
for which fewer than 50% of the TMT members responded to our questionnaire, as
well as TMTs that provided incomplete information. We tested for potential
dissimilarities between the participating and non-participating firms in terms of size
as measured by the number of employees and found no significant differences
(p > .10). Subsequent analyses were conducted on data obtained from 77 TMTs
(15.4% response rate).
Caring, generativity, and strategic adaptability
55
Procedure and treatment of common method variance
Prior to administering the questionnaire, we asked 25 senior executives to review the
measurement items and indicate to us whether the questions were clear and reflected the
constructs they were intended to measure. Following Brislin’s (1986) guidelines, two
scholars translated the items into Hebrew and then back-translated them into English to
ensure that the content was accurately represented in the Hebrew items.
To reduce potential common source bias, we analysed the data provided by different
sources as follows. We followed Podsakoff, MacKenzie, Podsakoff, and Lee’s (2003)
recommendations and separated questions used in the study from each other to minimize
potential biases. TMT members (excluding the CEO) provided data on team caring and
generativity, whereas the CEO was queried on strategic adaptability and prior past
performance. Data about the other control variables were collected from all team
members, including the CEO.
Common method variance
As the TMT members (excluding the CEO) reported on team caring and generativity, we
performed confirmatory factor analysis, using AMOS 19, to assess the discriminant validity
of the research variables. The results indicated that a two-factor model structure indicated
a good fit with the data; a chi-square of 11.3 on 8 degrees of freedom, and other goodnessof-fit statistics (NFI = .97; CFI = .99; TLI = .98; RMSEA = .07) were obtained and
compared to statistics for a one-factor model (v2(9) = 56.3; NFI = .83; CFI = .85;
TLI = .76; RMSEA = .263).
In addition, we assessed a three-factor model (caring, generativity, and strategic
adaptability) in which items loaded onto their respective measures (i.e., estimating a full
measurement model that included a factor for each of our three key variables). A chisquare of 59.9 on 41 degrees of freedom, and other goodness-of-fit statistics (NFI = .89;
TLI = .95; CFI = .96; RMSEA = .078) indicated that the model had an acceptable fit with
the data. We then assessed a 2-factor model in which items assessing both caring and
generativity were loaded onto the same measure, and items measuring strategic
adaptability were loaded onto another factor. The results of this model structure did
not show a good fit with the data (A chi-square of 104.8 on 43 degrees of freedom, and
other goodness-of-fit statistics [NFI = .81; TLI = .84; CFI = .87; RMSEA = .138] were
obtained). We also estimated a one-factor model where all the items were loaded onto the
same measure. The results indicated that the one-factor model structure did not have a
good fit with the data (a chi-square of 197.8 on 44 degrees of freedom, and other goodnessof-fit statistics [NFI = .63; TLI = .60; CFI = .68; RMSEA = .214] were obtained).
In addition, following Podsakoff et al. (2003), we examined the potential increase in
model fit by directly modelling a common method factor; we first allowed the method
factor to correlate with the measurement items of the three latent variables, but it was not
allowed to correlate with the other latent variables; we then compared the standardized
regression weights of this procedure with the standardized regression weights obtained in
the three-factor model structure (without the method factor). The results indicated that
no path was affected by common method bias as there was no difference when we added
the common latent factor, which extracted part of the variance that was explained by the
indicators for the common latent factor.
We also assessed Fornell and Larcker’s (1981) test for discriminant validity between
caring and generativity, following Farrell’s (2010) guidelines. We first calculated the
average variance extracted (AVE) for each item, by its related construct. The AVE for
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Abraham Carmeli et al.
caring and generativity were .70 and .79, respectively. We then calculated the maximum
shared variance (MSV) using the square of the correlation between the two constructs. If
the smallest AVE is larger than the maximum shared variance estimate, then discriminant
validity must hold for all constructs (see Farrell, 2010). The MSV was .54. The AVE
estimates for caring and generativity (i.e., .70 and .79, respectively) were thus greater than
the shared variance between the two constructs (.54), providing evidence for discriminant validity between the two constructs (Fornell & Larcker, 1981). These various
methodological steps and analyses indicated that common method variance is likely not to
have been a pervasive problem in this study.
Measures
Strategic adaptability
We used a five-item scale by adapting the measure employed by Carmeli and Sheaffer
(2008) that assesses strategic adaptability as a way ‘to adapt and respond to dynamics
and turbulence in its respective industry’ (p. 475), as well as incorporating two more
items to comprehensively capture the essence of strategic adaptability in terms of
willingness to engage in strategic change. The following items were used: (1) ‘This
organization is having difficulties in responding and adapting to environmental
turbulence’; (2) ‘This organization has been complacent with respect to dynamics in
this specific industry’; (3) ‘This organization fails to evaluate environmental changes’;
(4) ‘There is not enough willpower to make substantial changes needed due to
changes in the industry’; and (5) ‘The strategy guiding our course of action does not
address the real needs of the organization’. All items were reverse-coded. Responses
were on a 5-point scale ranging from 1 = strongly disagree to 5 = strongly agree. The
Cronbach’s a for this measure was .83.
Team generativity
We adapted three items aimed to assess generativity from the Carmeli and Spreitzer (2009)
measure. Team members were asked to indicate the extent to which (1) ‘The relationships
between TMT members enable us to generate new things’; (2) ‘The relationships between
TMT members enable us to learn new things’; and (3) ‘The relationships between TMT
members enable us to seek new opportunities’. Responses were on a 5-point scale ranging
from 1 = not at all to 5 = to a very large extent. The Cronbach’s a for this measure was .91.
The ICC1, ICC2, and Rwg values of .71, .91, and .81 were consistent with conventional
standards for aggregating individual questionnaire responses about group-level analysis in
field research (see Bliese, 2000; ).
Team caring
Following the literature on caring in organizations and in particular McAllister and Bigley
(2002), we adapted a three-item scale to assess the extent to which TMT members engage
in caring behaviours (show genuine concern for each other’s inner needs) while
interacting with each other. The items were as follows: (1) ‘Members of this team pay
attention to each other’s needs’; (2) ‘Members of this team are attentive to each other’; and
(3) ‘Members of this team show empathy to each other’s needs’.
Caring, generativity, and strategic adaptability
57
To further ascertain the validity of our measure of team caring, we conducted a pilot
study on 72 graduate students who were taking a course on work groups. The results of a
factor analysis indicated a one-factor solution that explained 71.43% of the variance
(eigenvalue = 2.14; items loadings ranged from .82 to .89). The Cronbach’s a for the
measure in the pilot study was .79. We also asked 25 executives to assess the extent to
which the items reflected our conceptualization of caring in a TMT context and provided
comments on the clarity of the items.
Responses were on a 5-point scale ranging from 1 = not at all to 5 = to a very large
extent. Factor analysis results produced a one-factor solution with an eigenvalue of
2.37 and an explained variance of 79.20 (item loadings ranged from .85 to .91). The
Cronbach’s a for the measure in the pilot study was .86. The ICC1, ICC2, and Rwg
values of .57, .86, and .89 were consistent with conventional standards for aggregating
individual questionnaire responses about group-level analysis in field research (see
Bliese, 2000).
Control variables
We controlled for high- and low-technology industry, firm ownership (family firm vs. nonfamily firm), environmental munificence, past firm performance, average of team
members’ tenure (average number of years the CEO and his or her inner circle of senior
executives had served on the team), and team size (number of team members including
the CEO). High-technology settings are often characterized by instability (Hambrick,
Finkelstein, & Mooney, 2005), technological discontinuities (Tushman & Anderson,
1986), and high velocity (Eisenhardt, 1999), where adaptation to these strategic issues is
critical. In contrast, low-technology environments are characterized by more stable
conditions and continuous changes and thus require a relatively lower level of strategic
adaptation. In addition, we controlled for differences between family firms (defined as
family members who hold more than 50% of the ownership share) and non-family firms,
because family firms may tend to adopt a more conservative approach and thus are less
engaged in pursuing change.
We also controlled for environmental munificence, because of its potential influence
on the capacity of a firm to adapt and change. Following Walters, Kroll, and Wright (2010),
we defined munificence as the extent to which a firm operates in an environment where
there is a sustained (current and expected) demand. This is because a high growth market,
which is manifested in sustained demand, generally represents a more abundant
environment (Wiersema & Bantel, 1993). Team members (including the CEO) were asked
to indicate on a 5-point scale the extent to which (1) ‘demands in the industry have grown
or declined over the past 3 years’; (2) ‘changes in demands in the industry have increased
(or decreased) over the past 3 years’; and (3) ‘the prospects regarding the demand in the
industry for the upcoming 3 years is positive’. The Cronbach’s a for this measure was .86.
In addition, we controlled for past firm performance (for an average of 2 years prior to
our survey period), because firms that show enhanced performance may be associated
with greater strategic adaptability. We used the average of 2-year profitability (return on
gross, operational, and net income) of the firm as an indicator of its performance, as
reported by the firm’s CEO. We controlled for team members’ tenure (the average tenure
of members on the team), because teams with members who serve for a longer period in
the team establish familiarity and work routines that may help them respond more
efficiently and quickly to environmental changes. Finally, we controlled for team size, as
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Abraham Carmeli et al.
Table 1. Means, standard deviations (SD), and correlations
1. Industry
(1 = high
technology)
2. Firm
ownership
(family
firm = 1)
3. Environmental
munificence
4. Past firm
performance
5. Average
of team
members’
tenure
6. Team size
7. Team
caring
8. Team
generativity
9. Strategic
adaptability
Mean
SD
1
2
3
4
5
6
7
–
–
–
–
–
.13
–
3.50
0.42
.16
.05
(.86)
3.79
0.76
.08
.07
.13
(–)
6.02
4.35
.14
.05
.10
.02
(–)
5.12
3.66
1.03
0.66
.06
.19
.37**
.13
.06
.18
.05
.01
.01
.06
(–)
.18
(.86)
3.76
0.62
.19
.06
.01
.13
.05
.07
.67**
4.06
0.71
.15
.14
.02
.24*
.15
.01
.31**
8
9
(.91)
.42**
(.83)
Note. N = 77; two-tailed test; reliabilities are in parentheses on the diagonal.
#
p < .10, *p < .05; **p < .01.
large teams tend to be more heterogeneous (Haleblian & Finkelstein, 1993) and this
diversity may influence the ability to adapt to the environment.
Results
The means, standard deviations, and correlations between the research variables are
presented in Table 1. Team caring was significantly associated with both generativity
(r = .67, p < .01) and strategic adaptability (r = .31, p = .01). Generativity was significantly related to strategic adaptability (r = .42, p < .01). In addition, the results indicated
a significant relationship between past firm performance and strategic adaptability
(r = .24, p < .05).
Hypothesis testing
Hypothesis 1, which predicted that team caring would be positively associated with
generativity, was supported. Model 2 in Table 2 shows the regression of generativity onto
both the control variables and team caring. As hypothesized, there was a significant
positive relationship between team caring and generativity (b = .68, p < .01). The results
of Model 3 in Table 2 support Hypothesis 2, which predicted that generativity would be
positively related to strategic adaptability (b = .39, p < .01).
Caring, generativity, and strategic adaptability
59
Table 2. Hierarchical regression results for the mediating role of generativity in the relationship
between team caring and strategic adaptability
Constanta
Industry (1 =
high technology)
Firm ownership
(family firm = 1)
Environmental
munificence
Past firm
performance
Average of team
members’ tenure
Team size
R2
Adjusted R2
F for R2
SE of the estimate
Generativity
DR2
F for DR2
R2
Adjusted R2
SE of the estimate
Team caring
DR2
F for DR2
R2
Adjusted R2
SE of the estimate
Model 1 b (t)
Strategic
adaptability
Model 2 b (t)
Generativity
Model 3 b (t)
Strategic
adaptability
Model 4 b (t)
Strategic
adaptability
2.07 (2.18*)
.02 ( 0.17)
1.61 (2.52*)
.00 (0.01)
1.31 (1.39)
.02 ( 0.16)
1.32 (1.39)
.02 ( 0.18)
.16 (1.27)
.19 ( 2.09*)
.23 (1.97#)
.24 (1.94#)
.08 ( 0.68)
.12 ( 1.36)
.04 ( 0.32)
.03 ( 0.26)
.25 (2.15*)
.16 (1.87#)
.18 (1.67#)
.17 (1.59)
.14 (1.21)
.06 ( 0.66)
.16 (1.48)
.16 (1.48)
.11 (0.86)
.125
.045
1.55
.691
.04 ( 0.44)
.06
.027
.06
.637
.12 (1.06)
.125
.045
1.55
.691
.39 (3.58**)
.146
12.794**
.271
.191
.635
.12 (1.04)
.125
.045
1.55
.691
.41 (2.61**)
.146
12.794**
.271
.191
.635
.03 (0.18)
.00
.03
.271
.179
.641
.28 (2.30*)
.067
5.31*
.192
.104
.669
.68 (7.46**)
.511
66.20**
.538
.487
.450
Note. aUnstandardized coefficients.
#
p = .07, *p < .05; **p < .01.
To test Hypothesis 3, which predicted that generativity would mediate the
relationship between team caring and strategic adaptability, we followed Baron and
Kenny’s (1986) and the Kenny, Kashy, and Bolger (1998) mediation guidelines using
regression analyses and performed a bootstrap analysis. We first performed a series of
regressions, which are shown in Table 2. Model 1 shows the regression of strategic
adaptability onto both the control variables and team caring. The beta coefficient was
statistically significant and positive in sign (b = .28, p < .05), supporting the first
mediation condition. The results of the regression of generativity onto both the control
variables and team caring (model 2 in Table 2) indicated that the beta coefficients were
significant and positive in sign (b = .68, p < .01), thus supporting the second mediation
condition. Model 4 in Table 2 shows the regression equation for strategic adaptability
onto both the mediator (generativity) and independent variable (team caring). As can
60
Abraham Carmeli et al.
be seen from the results in Table 2, the coefficient of team caring in relation to
strategic adaptability decreased in magnitude and became non-significant (b = .28,
p < .05 [see Model 1 in Table 2] vs. b = .03, p > .10 [see Model 4 in Table 2]), while
the influence of generativity on strategic adaptability remained statistically significant
(b = .39, p < .01 [see Model 3 in Table 2] vs. b = .41, p < .01 [see Model 4 in
Table 2]). These results indicate that generativity mediates the relationship between
team caring and generativity, thus providing support for Hypothesis 3. However, the
Baron and Kenny (1986) strategy may not be the optimal test for mediation because of
the use of the normal distribution for assessing significance (two-tailed p value). A
more stringent approach is to ‘bootstrap the sampling distribution of ab and derive a
confidence interval with the empirically derived bootstrapped sampling distribution’
(Preacher & Hayes, 2004, p. 721). Using Hayes’ (2012) PROCESS in SPSS (Model 4), a
bootstrap analysis using 10,000 iterations with a 95% confidence interval (CI) (the biascorrected confidence interval excludes zero) indicated that the direct effect of caring
on strategic adaptability was not significant (coefficient = .03, p > .10; bootstrap CI
(95%) = .31, .36); the indirect effect of caring, through generativity, on strategic
adaptability was significant [regression coefficient = .30, p < .01; bootstrap CI
(95%) = (.06, .67)]. The normal theory test for indirect effect was significant (.30,
p < .05; SE = .13, Z = 2.37). This lends support to our hypothesized mediation model.
Testing alternative explanations
We also tested an alternative explanation for why some organizations are more
capable to adapt strategically to the task environment. Drawing on an extensive body
of literature (e.g., Bunderson & Sutcliffe, 2002; Simons, Pelled, & Smith, 1999), we
examined the effect of TMT diversity on both generativity and strategic adaptability,
because diversity may be used as a proxy for explaining team- and firm-level
processes and outcomes. We ran two regressions in which generativity and strategic
adaptability were regressed on both functional and demographic diversity of the
TMTs. TMT members’ role diversity (known as TMT dominant functional diversity)
assesses whether a particular functional background of the TMT members is
dominant. As in Cannella, Park, and Lee (2008), we first classified each executive
dominant functional background into six categories (administration–management,
finance, technology, marketing, human resources, and operation/logistics), followed
by an index that captures this type of diversity at the team level. An index closer to 1
indicates a high level of diversity. We also computed professional diversity by
classifying each executive’s profession into eight categories (economics and business
administration, finance and accounting, engineering and technology, marketing and
sales, human resources and consulting, advocating, medicine, and other). We also
computed gender diversity (1 = female), as well as age and tenure diversity (in
years), for each TMT member. Educational level diversity was computed by
classifying each executive education level into five categories (high school, diploma,
BA, MA/MSc, and PhD/DSc). Finally, we computed organizational tenure diversity
and role tenure diversity, which were assessed by the number of years each
executive works for his/her organization and assumes his/her particular role,
respectively. We used the R program to compute all diversity measures. The results
in Table 3 indicate that none of the diversity variables had a statistically significant
effect on either generativity or strategic adaptability.
Caring, generativity, and strategic adaptability
61
Table 3. The effect of diversity on generativity and strategic adaptability
Constant(1)
Role diversity
Professional diversity
Gender diversity
Age diversity
Organizational tenure diversity
Role tenure diversity
Educational diversity
R2
Adjusted R2
F for R2
SE of the estimate
Model 1 b (t)
Generativity
Model 2 b (t)
Strategic adaptability
4.05 (9.97**)
.02 ( 0.13)
.09 (0.65)
.09 ( 0.67)
.21 ( 1.66)
.03 (0.03)
.05 ( 0.38)
.11 ( 0.87)
.08
.02
.83
.63
2.08 (4.35**)
.06 ( 0.40)
.02 ( 0.12)
.02 (0.16)
.07 ( 0.55)
.11 (0.83)
.05 ( 0.41)
.07 (0.53)
.02
.08
.19
.74
Note. **p < .01.
Discussion
Our study aimed to unravel micro-relational processes that help a TMT to proactively build
strategic capabilities to adapt to environmental jolts. Our results indicate that caring
relationships among TMT members are critical for cultivating a generative psychological
space which, in turn, allows for greater capacity to respond and adapt to an uncertain
environment.
Theoretical implications
Our research contributes to a better understanding of the microprocesses through which
organizations develop strategic adaptability (Mahoney, 2005; Powell, 1992; Zahra et al.,
2006; Zajac et al., 2000). In particular, our study advances theory and research by
grounding strategy on micro-foundations (Bridoux & Stoelhorst, 2013; Eisenhardt et al.,
2010; Felin & Foss, 2005; Foss, 2011; Hitt et al., 2007) by integrating relational theory
(Dutton & Ragins, 2007; Fletcher et al., 2000; Jordan et al., 1991) and the upper echelon
perspective (Hambrick, 2007) to unpack the power of micro-relational foundations of
strategic adaptability.
This endeavour helps to enrich the literature on micro-relational foundations that
underpin organizational capacity to proactively adapt to changing environmental
conditions and thus contributes to an integration and expansion of relatively disparate
realms of research. By specifying a more humanizing interrelation between TMT
members manifested by acts of caring for each other’s needs where they can develop a
‘growth in connection’ (Jordan et al., 1991), we shed light on how they can enhance
their collective potency for taking transformative actions that can help build adaptive
capacity that improves the competitive position of the organization. In particular, our
focus on micro-relational processes helps to explain why some firms and their TMTs
are better able to adapt to their environment than others (Hambrick, 1998; Mooney &
Sonnenfeld, 2001). Examination of the processes provides greater insights into firms’
pre-emptive and reactive strategic adaption to the external environment. Upper
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Abraham Carmeli et al.
echelon theory has been refined to include greater emphasis on understanding the
processes and dynamics with a TMT (Hambrick, 2007; Li & Hambrick, 2005). Our
study extends this line of research by integrating relational theory and more
specifically by theorizing on the power of high-quality relationships in the workplace
(Dutton & Heaphy, 2003; Ragins & Dutton, 2007; Stephens et al., 2011) and
specifically how caring behaviours can be a source of a growth in connection (Jordan
et al., 1991) and strategic adaptability.
Our study indicates that caring, as a humanizing way of interrelating in TMTs,
enables members to more profoundly connect and achieve desired ends as a collective
entity. We refer to caring as a conduit to the development of a fertile terrain where a
‘holding environment’ enables members to strengthen their capacity, individually and
collectively, to cope and adapt (Kahn, 2001, 2005). The ‘holding environment’ may be
particularly important in the context of TMTs. TMT members bear both individual and
collective major task responsibilities and often face challenging issues. Major task
responsibilities and a high level of interdependency are often reflected in individualistic and in certain cases self-centred and competitive behaviours, which can result in
depletion rather than generativity. Fear of others’ negative actions can create an
individualistic incentive system and escalate competition among TMT members, which
can prompt them to care more about their own position and career than about others
and the group as a whole (Von Krogh, 1998). However, caring can serve as a crucial
mechanism for building emotional carrying capacity in which members are able to
express both negative and positive emotions (Stephens et al., 2011) and handle
conflicts more effectively. For example, in interviews we conducted with TMT
members, we learned that two senior members had experienced negative emotions
stemming from a meeting between the two executives and the R&D unit. In this
meeting, Dan (fictitious name) made a few points that embarrassed David (fictitious
name) and undermined his authority. David told us he was surprised and felt very
disappointed with Dan. However, the caring they had conveyed to each other over the
years helped them build a relationship in which they could express negative emotions
and handle conflicts; this ability enabled them and the group as a whole to grow and
adopt a forward-looking outlook. The results of our study on caring expand recent
theorizing about work teams, which suggests that when members show and act with a
sense of caring towards each other, they value relationships for their own sake and as a
generative source for a more adaptive team capacity (Lawrence & Maitlis, 2012), rather
than only as a means to reach desired goals (Blatt, 2009). Our study also expands on
and provides further evidence for Liu and Maitlis’ (2014) findings on the relationalbased generative strategizing process.
Our research also helps to enhance our knowledge about the ways in which positive
work relationships may drive the production of new resources, strategies, and
opportunities (Baker & Dutton, 2007). While psychologists have long been interested
in generativity and its influence on individual lives, our study sheds light on the ways in
which generativity is nurtured in organizational contexts (see Dutton & Carlsen, 2011)
and why generative relationships are conducive for building strategic capabilities. The
beauty and power of generativity concept lie in its wide-ranging applicability in
organizations (McAdams & Logan, 2004), and our study helps pave new ways for
theorizing about generativity in the workplace. Finally, our research goes beyond studies
that focus on the individual level (Clark & Arnold, 2008; Zacher et al., 2011) by providing
a first attempt to understand micro-relational processes that underpin the capacity to
respond and adapt in dynamic environments.
Caring, generativity, and strategic adaptability
63
Practical implications
Our research has several important implications for managers. One of the most
challenging tasks CEOs and their TMTs face is how to create sustained growth in highly
turbulent, intricate, and uncertain environments. Investing in the development of
strategic adaptability is a key way that organizations can achieve both internal and
external fit. Aligning elements in an organizational system and the internal system with
the external environments is complex, as this is a dynamic, iterative process. Over time,
TMTs often develop a strong commitment to existing practices or to a particular course
of action. Their capacity to notice possibilities by approaching things differently is
bounded, which is likely to result in inertia and decline. A lack of attention to
environmental changes, coupled with a firm belief that a particular path is justifiable
even in the face of conflicting information, is a recipe for losing a competitive edge. For
example, SONY revolutionized the consumer electronic product industry, but their
management team, influenced by the powerful engineers of the company who adopted
an inward culture, did not take the necessary steps to make organizational systems
more adaptive (see Finkelstein, 2006). The Danaher Corporation has adapted its
organizational practices to manage these different forms of acquisitions at both the
business unit and the corporate levels to respond effectively to changing conditions in
the environment (see Brueller, Carmeli, & Drori, 2014). However, the CEO and the
TMT play a major role in the firm’s capacity to adapt strategically. For example, Grove’s
leadership of Intel was a role model for ‘his continuing ability to adapt to shifting
realities’, thus allowing a compound annual growth rate of nearly 30% during his 11year tenure as CEO (see Tedlow, 2005).
Our study also offers some practical insights to managers as regards caring
relationships and generativity. We suggest that TMTs need to devote more effort to
creating a generative psychological space in which the capacity to adapt is enhanced. The
environment is enormously rich and complex and thus poses significant threats to many
organizations and their senior leaders. One way to effectively address this richness and
complexity in a competitive environment is to shape a generative psychological space,
such that members can develop a fuller understanding of the landscape. This level of
understanding may enable TMTs to develop intimate knowledge and a nuanced
awareness of the evolutionary changes in an industry, thus enabling them to identify,
recognize, develop, and seize new opportunities.
We also encourage organizations to devote efforts to finding ways to go beyond
instrumental-driven connections to cultivate more humanistic-driven connections
where the inner needs of each member are considered, and shape a generative
psychological space that helps to enhance adaptability and nurture growth. We
recognize that a generative psychological space is difficult to build and senior
executives may develop different perspectives regarding how it should be created and
sustained. While it would be difficult to train people to act with a sense of caring
towards their colleagues at work, CEOs and TMT members can create social norms
that encourage caregiving activities. Small acts of deep-level caring for the inner needs
of other members can help facilitate generativity in TMTs. For example, if a TMT
member is ill or experiencing a family issue, showing concern by speaking and visiting
this member can make a fundamental change in the generative psychological space
within a team. Within the TMT, caring is even more important because organizational
members look up to TMTs and receive signals regarding what is encouraged and what
is not desirable. Although TMT members are often seen as competitive, individualistic,
self-centred (sometimes even lone wolves), and task-oriented, CEOs and TMT
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Abraham Carmeli et al.
members who act with a deep sense of caring towards their team members can make
a significant positive change in their organization. These acts of caring vary but they
have one thing in common – A concern for the needs of the other person.
A focus on micro-relational mechanisms to unpack processes within a TMT is
important for organizations, because the TMTs play a fundamental role in building
strategic capabilities and helping organizations to thrive in the marketplace. While
‘team building’ workshops have become popular, they are mainly designed to
develop team members’ ability to work together effectively. However, we suggest
that this activity can be a fertile terrain for facilitating caring and nurturing and,
ultimately, the development of a generative psychological space. It may require CEOs
to seek professional consultation and involve the HR managers and external experts
in designing humane and nurturing practices. For example, asking each member on
the team to share a caring act he or she has done or an act of care on the part of
others towards him or her can shape norms and the kind of environment that senior
executives attempt to design and build.
Limitations and future research directions
Although this research contributes to the literature on micro-foundations in strategic
management, there are a few limitations that should be noted and some important
questions that need to be answered. Although researchers have embraced a relational
view to understand strategic issues (e.g., Dyer & Singh, 1998), the micro-relational
processes that underpin strategic capabilities are new and require further study. For
example, we do not know whether social skills or emotional intelligence play a role in the
extent to which TMT members act with a deep sense of caring. We also do not know how a
TMT’s act of caring transmutes into an organizational culture of caring. We have not
examined CEO leadership behaviours, and thus, we know relatively little about how CEOs
can shape a holding environment where caring is a core element. Similarly, we have yet to
develop a good understanding of the role of followers in shaping holding environments
and a generative psychological space. It is certainly a primary role of CEOs (or the top
leaders of the organization) to design and build particular work environments; however,
we need further studies aimed at unravelling why CEOs acting in similar ways yield
different outcomes.
Future studies should also examine the long-term performance implications of
caring and generativity. First, we cannot claim causation and future research is
needed to use such a time-lagged approach. Second, our findings imply potentially
positive outcomes derived from caring and generativity. We focused on the relational
underpinnings of strategic adaptability, but we did not examine how this capability
drives performance outcomes across different types of organizations. Future research
should also address the need to delineate other mechanisms through which
microprocesses can facilitate strategic adaptability. For example, mindfulness may
be an important mechanism for adapting to changing environmental conditions. An
interesting path would be to examine the relational ways in which mindfulness and
adaptability are facilitated and enhanced. We believe that a longitudinal case study
would provide rich insights regarding particular environments where caring and
generativity are embraced. Examining the evolution of such an environment over
time can help elucidate the micro-relational processes that underpin the ways in
which both strategic capabilities are built and strategic orientations are shaped.
Similarly, a longitudinal survey-based study can also help in making causal inferences.
Caring, generativity, and strategic adaptability
65
We also believe that a more fine-grained examination should focus on different stages
in the organizational life cycle. For example, we should identify whether and how
generativity can be nurtured in declining organizations; it is likely that caring
relationships are important in all situations, but they may be more crucial for
organizations that experience a period of decline or a crisis situation, because these
events pose significant identity threats and undermine the fundamental beliefs that
guide individual and group behaviours.
In addition, we focused on caring for individuals, but future research can also
concentrate on caring for the organization and explore how these two different forms of
caring may help cultivate different mechanisms and their cross-level effects. This also
raises the need for greater clarity and precision about caring. Scholars have suggested
different definitions of caring. Our study took a narrower view of caring and did not intend
to capture the construct in its entirety. Future studies on caring would benefit not only
from crystalizing but also examining whether caring is a multidimensional construct for
which a new operationalization is needed.
In addition, the challenges of collecting data from TMTs and the expected sample
size in such settings need to be acknowledged. We believe that our sample was
diverse, and thus, the findings are generalizable (see Cook & Campbell, 1979; Lubatkin
et al., 2006; Rogelberg & Stanton, 2007), but one should interpret the findings with
caution due to biases associated with the sampling procedure. Although we used
separate informants to assess the independent variables and dependent variable and
used multiple respondents, reliance on survey data requires caution as regards
potential common method bias. As we explained above, we implemented various
methodological procedures and analyses, and the results indicate that common
method bias was not a pervasive problem in this study.
Conclusion
Strategic capabilities are a key determinant in the ability of a TMT to ensure viability and
drive sustained success. This study expands on and integrates relational theory and the
upper echelon perspective to offer new insights regarding the power of micro-relational
foundations that underlie the capacity to adapt to environmental jolts, which is
fundamental for the viability of an organization. Our findings indicate that when TMT
members engage in caring behaviours where they display genuine concern for each
other’s inner needs, a generative psychological space is nurtured within the team, which
in turn helps to build a capacity to adapt to environmental jolts.
Acknowledgements
We would like to thank the Editor and our anonymous reviewers for their very helpful
comments on previous drafts of this paper. We are thankful to Dr. Andrew Farrell for his help
with this analysis the AVE estimates and Amit Gal for his help with calculating the diversity
indices. We acknowledge the financial support of The Henry Crown Institute of Business
Research in Israel and the Eli Hurvitz Institute of Strategic Management at Tel Aviv University.
We also thank Esther Singer for her editorial comments. The paper was presented at the 2014
AOM meeting in Philadelphia, and a shorter version was published in 2014 Best Papers
Proceedings of the Academy of Management. The first author acknowledges that part of this
work was done during his affiliation with King’s College, London.
66
Abraham Carmeli et al.
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Received 30 May 2014; revised version received 28 December 2014