Towards an Attention-Based View of the Firm

Strategic Management Journal, Vol. 18 (Summer Special Issue), 187–206 (1997)

TOWARDS AN ATTENTION-BASED VIEW OF THE FIRM

WILLIAM OCASIO*

J. L. Kellogg Graduate School of Management, Northwestern University, Evanston, Illinois, U.S.A.

The central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision-makers. What decision-makers do depends on what issues and answers they focus their attention on. What issues and answers they focus on depends on the specific situation and on how the firm’s rules, resources, and relationships distribute various issues, answers, and decision-makers into specific communications and procedures. The paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation. © 1997 by John Wiley & Sons, Ltd.

Everyone knows what attention is. It is the taking possession by the mind, in clear and vivid form, of one out of what seem several simultaneously possible objects or trains of thought. Focalization, concentration of consciousness are of its essence. It implies withdrawal from some things in order to deal effectively with others . . . William James (1890), The Principles of Psychology, I: 403–404 Organizations and institutions provide the general stimuli and attention-directors that channelize the behaviors of the members of the group, and that provide the members with the intermediate objectives that stimulate action. Herbert Simon (1947), Administrative Behavior, pp. 100–101

INTRODUCTION

How do firms behave? How do firms determine when, why, and how to respond to or anticipate changes in their environment or internal processes? Why do firms undertake some decisions and moves but not others? Explaining how firms

Key words: attention, cognition, social structure, theory of the firm

* Correspondence to: William Ocasio, Kellogg Graduate School of Management, Northwestern University, Leverone Hall, 2001...