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Social Cognitive Theory of Organizational Management

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DOI: 10.5465/AMR.1989.4279067

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Social Cognitive Theory of Organizational Management
Author(s): Robert Wood and Albert Bandura
Source: The Academy of Management Review, Vol. 14, No. 3 (Jul., 1989), pp. 361-384
Published by: Academy of Management
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? Academy of Management Review, 1989, Vol. 14, No. 3, 361-384.

Social Cognitive Theory


of Organizational Management
ROBERTWOOD
University of New South Wales
ALBERTBANDURA
Stanford University

This article analyzes organizational functioning from the perspective


of social cognitive theory, which explains psychosocial functioning in
terms of triadic reciprocal causation. In this causal structure, behav-
ior, cognitive, and other personal factors and environmental events
operate as interacting determinants that influence each other bidi-
rectionally. The application of the theory is illustrated in a series of
experiments of complex managerial decision making, using a simu-
lated organization. The interactional causal structure is tested in con-
junction with experimentally varied organizational properties and
belief systems that can enhance or undermine the operation of the
self-regulatory determinants. Induced beliefs about the controllabil-
ity of organizations and the conception of managerial ability strongly
affect both managers' self-regulatory processes and their organiza-
tional attainments. Organizational complexity and assigned perfor-
mance standards also serve as contributing influences. Path analy-
ses reveal that perceived managerial self-efficacy influences man-
agers' organizational attainments both directly and through its effects
on their goal setting and analytic thinking. Personal goals, in turn,
enhance organizational attainments directly and via the mediation of
analytic strategies. As managers begin to form a self-schema of their
efficacy through further experience, the performance system is reg-
ulated more strongly and intricately through their self-conceptions of
managerial efficacy. Although the relative strength of the constituent
influences changes with increasing experience, these influences op-
erate together as a triadic reciprocal control system.

Many theories have been proposed over the has been explained in terms of one-sided deter-
years to explain human psychosocial function- minism. In such models of unidirectional causa-
ing. They differ in the conceptions of human na- tion, behavior is depicted as being shaped and
ture they adopt and in what they regard as the controlled either by environmental influences or
basic determinants and mechanisms of human by internal dispositions. Social cognitive theory
motivation and action. Human behavior often explains psychosocial functioning in terms of tri-

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adic reciprocal causation (Bandura, 1986). In Developmentof Competencies
this model of reciprocal determinism, behavior, ThroughMasteryModeling
cognitive, and other personal factors and envi-
ronmental events operate as interacting deter- Psychological theories traditionally have em-
minants that influence each other bidirection- phasized learning through the effects of one's
ally (see Figure 1). Reciprocality does not mean actions. If knowledge and skills could be ac-
that the different sources of influences are of quired only through direct experience, the pro-
equal strength. Nor do the reciprocal influences cess of human development would be greatly
occur simultaneously. It takes time for a causal retarded, not to mention exceedingly tedious,
factor to exert its influence and to activate recip- costly, and hazardous. Fortunately, people can
rocal influences. Because of the bidirectionality expand their knowledge and skills on the basis
of influence, people are both products and pro- of information conveyed by modeling influ-
ducers of their environment. ences. Indeed, virtually all learning phenom-
This article focuses on how personal factors ena resulting from direct experience can occur
contribute to this dynamic transaction in the vicariously by observing people's behavior and
management of organizations. In the analysis of the consequences of it (Bandura, 1986;
the personal determinants in this interactional Rosenthal & Zimmerman, 1978).
causal structure,social cognitive theory accords Mechanisms Governing Modeling
a central role to cognitive, vicarious, self-
regulatory, and self-reflective processes. Three Observational learning is governed by four
aspects of social cognitive theory are especially component processes. Attentional processes de-
relevant to the organizational field (Bandura, termine what people selectively observe in the
1988d):the development of people's cognitive, profusion of modeling influences and what in-
social, and behavioral competencies through formation they extract from ongoing modeled
mastery modeling, the cultivation of people's activities. People cannot be much influenced by
beliefs in their capabilities so that they will use observed accomplishments if they do not re-
their talents effectively, and the enhancement of member them. A second major subfunctiongov-
people's motivation through goal systems. erning observational learning concerns cogni-
tive representational processes. Retention in-
volves an active process of transforming and
restructuring information about events in the
form of rules and conceptions. Retention is
greatly aided when people symbolically trans-
form the modeled information into memory
codes and mentally rehearse the coded infor-
mation.
In the third subfunction in modeling-
behavioral production processes-symbolic
conceptions are translated into appropriate
courses of action. This is achieved through a
conception-matching process, in which people's
Figure 1. Schematization of the relations centrally guided patterns of behavior are en-
among behavior (B), cognitive and other per- acted and the adequacy of their actions is com-
sonal factors (P), and the external environment pared against their conceptual model (Carroll&
(E). Bandura, 1987). Individuals then modify their

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behavior on the basis of the comparative infor- action that go beyond what they have seen or
mation in order to achieve close correspon- heard. Much human learning is aimed at devel-
dence between their conceptions and their ac- oping cognitive skills on how to acquire and use
tion. The richer the repertoire of subskills that knowledge for different purposes. Observa-
people possess, the easier it is to integrate these tional learning of thinking skills is greatly facili-
skills in the production of new behavior pat- tated if models verbalize their thought processes
terns. in conjunction with their action strategies
The fourth subfunction in modeling concerns (Bandura, 1986;Meichenbaum, 1984).
motivational processes. Social cognitive theory
Guided Mastery Modeling
distinguishes between acquisition and perfor-
mance because people do not do everything Mastery modeling has been widely used with
they learn. Performance of observationally good results to develop intellectual, social, and
learned behavior is influenced by three major behavioral competencies (Bandura, 1986,
types of incentive motivators-direct, vicarious, 1988d). The method that produces the best re-
and self-produced. People are most likely to sults includes three major elements. First, the
adopt modeled strategies if the strategies pro- appropriate skills are modeled to convey the ba-
duce valued outcomes, rather than unreward- sic competencies. Effective modeling teaches
ing or punishing effects. The observed cost and people general rules and strategies for dealing
benefits that are accrued to others influence ob- with different situations, rather than specific re-
servers' adoption of modeled patterns in much sponses. People need to learn how the rules can
the same way as do directly experienced conse- be widely applied and adjusted to fit changing
quences. People are motivated by the successes conditions. Modeling influences must be de-
of others who are similar to themselves, but they signed to build self-assurance in one's capabil-
are discouraged from pursuing behaviors that ities as well as to convey skills. The impact that
they have seen often result in adverse conse- modeling has on beliefs about one's capabilities
quences. Personal standards of conduct provide is greatly increased by one's perceived similar-
a further source of motivation. The self- ity to the models.
evaluations people generate about their own The second aspect involves guided skill mas-
behavior regulate which observationally tery. After individuals understand the new
learned activities they are most likely to pursue. skills, they need guidance and opportunities to
They express what they find self-satisfying and perfect them. Initially, they test their newly ac-
reject what they disapprove of. quired skills in simulated situations in which
Modeling is not merely a process of behavior- they need not fear making mistakes or appear-
al mimicry. People may adopt functional pat- ing inadequate. This is best achieved by role-
terns of behavior, which constitute proven skills playing, in which they practice handling the
and established customs, in essentially the types of situations they must manage in their
same formas they are exemplified. However, for work environment and they receive instructive
many activities, subskills must be improvised to feedback. The feedback that is most informative
suit changing circumstances. Modeling influ- and helps to achieve the greatest improvements
ences also convey rules for generative and in- is based on corrective modeling.
novative behavior. In this form of abstract mod- Modeling and guided performance under
eling, observers extract the rules governing the simulated conditions are well suited for creating
specific judgments or actions exhibited by oth- competencies, but it is unlikely that the new
ers. Once they learn the rules, they can use skills will be used for long, unless they prove
them to judge events and to generate courses of useful when they are put into practice in work

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situations. The third aspect of mastery modeling mance attainments is governed by several self-
is a transfer program aimed at providing self- regulatory mechanisms that operate together.
directed success. People must experience suffi- One of the mechanisms that occupies a central
cient success when using what they have role in this regulatory process works through
learned in order to believe both in themselves people's beliefs in their personal efficacy. Per-
and the value of the new ways. This is best ceived self-efficacy concerns people's beliefs in
achieved by a transfer program, in which newly their capabilities to mobilize the motivation, cog-
acquired skills are first tried on the job in situa- nitive resources, and courses of action needed
tions that are likely to produce good results. As to exercise control over events in their lives.
individuals gain skill and confidence in han- There is a difference between possessing skills
dling easier situations, they gradually take on and being able to use them well and consis-
more difficult problems. If they do not gain suf- tently under difficult circumstances. To be suc-
ficient success to convince themselves of their cessful, one not only must possess the required
new effectiveness, they will apply the new skills skills, but also a resilient self-belief in one's ca-
weakly and inconsistently, and they will rapidly pabilities to exercise control over events to ac-
abandon their newly acquired skills when they complish desired goals. People with the same
either fail to get quick results or experience dif- skills may, therefore, perform poorly, ade-
ficulties. quately, or extraordinarily, depending on
Mastery modeling programs have been suc- whether their self-beliefs of efficacy enhance or
cessfully applied to help supervisors develop impair their motivation and problem-solving ef-
competencies. Mastery modeling produces last- forts.
ing improvements in supervisors' skills (Latham
Sources of Self-Efficacy Beliefs
& Saari, 1979). Simply explaining to supervisors
the rules and giving them strategies on how to People's beliefs about their efficacy can be in-
handle problems on the job without using mod- stilled and strengthened in four principal ways.
eling and guided practice does not improve The most effective way individuals develop a
their supervisory competencies. To enhance strong sense of efficacy is through mastery ex-
competencies, people need instructive model- periences. Performance successes strengthen
ing, guided practice with corrective feedback, self-beliefs of capability. Failures create self-
and help in transferring new skills to everyday doubts. However, if people experience only
situations. Porras and his colleagues have easy successes, they come to expect quick re-
shown that mastery modeling affects the morale sults and are easily discouraged by failure. To
and productivity of organizations as well as su- gain a resilient sense of efficacy, people must
pervisors' skills (Porras et al., 1982). Supervisors have experience in overcoming obstacles
who had the benefit of the modeling program through perseverant effort. Some setbacks and
improved and maintained their supervisory difficulties in human pursuits serve a useful pur-
problem-solving skills, as rated by their employ- pose in teaching that success usually requires
ees. The plant in which the modeling program sustained effort. After people become assured of
was applied had a lower absentee rate, lower their capabilities through repeated successes,
turnover of employees, and a higher level of they can manage setbacks and failures without
productivity in follow-up assessments. being adversely affected by them.
The second way to strengthen self-beliefs is
Self-Efficacy Regulatory Mechanism through modeling. Proficient models build self-
beliefs of capability by conveying to observers
In social cognitive theory (Bandura, 1986, effective strategies for managing different situa-
1988a), self-regulation of motivation and perfor- tions. Modeling also affects self-efficacy beliefs

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through a social comparison process. People create. One's judgments of personal efficacy af-
partly judge their capabilities in comparison fect one's choice of activities and environments.
with others. Seeing similar others succeed by People tend to avoid activities and situations
sustained effort raises observers' beliefs about they believe will exceed their coping capabili-
their own capabilities, whereas observing simi- ties, but they readily undertake challenging ac-
lar others fail despite high effort lowers observ- tivities and pick social environments they judge
ers' judgments of their own capabilities and un- themselves capable of managing. The social in-
dermines their efforts. fluences in the selected environments can set
Social persuasion is a third way of increasing the direction of personal development through
people's beliefs that they possess the capabili- the competencies, values, and interests these in-
ties to achieve what they seek. If people receive fluences promote. This process is well illustrated
realistic encouragements, they will be more in research on the impact that perceived self-
likely to exert greater effort and to become suc- efficacy has on choice of career paths. The stron-
cessful than if they are troubled by self-doubts. ger the people's self-beliefs of efficacy, the more
However, if their beliefs of personal efficacy are career options they consider to be possible and
raised to unrealistic levels, they run the risk of the better they prepare themselves education-
failures that undermine their perceptions of per- ally for different occupational pursuits (Betz &
sonal efficacy. Successful motivators and effi- Hackett, 1986; Lent & Hackett, 1987; Miura, 1987).
cacy builders do more than convey positive ap- People often restrict their career options be-
praisals. In addition to raising people's beliefs in cause they believe they lack the necessary ca-
their capabilities, they assign tasks to them in pabilities, although they have the actual ability.
ways that bring success and avoid placing them This self-limitation arises more from self-doubts,
prematurely in situations in which they are rather than from inability. Women are espe-
likely to fail. To ensure progress in personal de- cially prone to limit their interests and range of
velopment, success should be measured in career options through the self-beliefs that they
terms of self-improvement, rather than through lack the necessary capabilities for occupations
triumphs over others. that are traditionally dominated by men, even
People also rely partly on judgments of their when they do not differ from men in actual abil-
physiological states when they assess their ca- ity.
pabilities. They read their emotional arousal People's self-beliefs of efficacy also determine
and tension as signs of vulnerability to poor per- their level of motivation, which is reflected in
formance. In activities involving strength and how much effort they will exert and how long
stamina, people judge their fatigue, aches, and they will persevere. The stronger the belief in
pains as signs of physical incapability. The their capabilities, the greater and more persis-
fourth way of modifying self-beliefs of efficacy is tent are their efforts (Bandura, 1988a). When
for people to enhance their physical status, to faced with difficulties, people who have self-
reduce their stress levels, or to alter their dys- doubts about their capabilities slacken their ef-
functional construals of somatic information. forts or abort their attempts prematurely and
Diverse Effects of Self-Efficacy Beliefs quickly settle for mediocre solutions. Those who
have a strong belief in their capabilities exert
People's beliefs in their efficacy can affect greater effort to master the challenge (Bandura
their psychological well-being and performance & Cervone, 1983, 1986; Cervone & Peake, 1986;
through several intervening processes Jacobs, Prentice-Dunn, & Rogers, 1984; Wein-
(Bandura, in press-a). People can exert some in- berg, Gould, & Jackson, 1979). Strong persever-
fluence over their lives through the environ- ance usually pays off in performance accom-
ments they select and the environments they plishments. Studies of manufacturing industries

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indicate that the impact that training programs individuals visualize success scenarios that pro-
have on the acceptance of production goals and vide positive guides for performance, whereas
level of productivity is partly mediated by those who judge themselves as inefficacious are
changes in employees' self-beliefs of efficacy more inclined to visualize failure scenarios,
(Earley, 1986). which undermine performance. One's per-
People's self-beliefs of efficacy affect how ceived self-efficacy and cognitive simulation af-
much stress and depression they experience in fect each other bidirectionally. People's high
threatening or taxing situations, as well as their sense of efficacy fosters cognitive constructions
level of motivation. People who believe they can of effective actions, and people's cognitive reit-
exercise control over potential threats do not eration of efficacious courses of action strength-
conjure up apprehensive cognitions and, there- ens their self-beliefs of efficacy (Bandura & Ad-
fore, are not perturbed by them. But those who ams, 1977; Kazdin, 1979).
believe they cannot manage potential difficul- The sociocognitive benefits of a sense of per-
ties experience high levels of stress. They tend to sonal efficacy do not arise simply from the in-
dwell on their deficiencies and view many as- cantation of capability. Saying something is so
pects of their environment as threatening (Ozer should not be confused with believing it. Self-
& Bandura, 1989). Disbelief in one's capabilities efficacy beliefs are the product of a process of
to attain valued goals that affect one's sense of self-persuasion that relies on diverse sources of
self-worth or to secure things that bring satisfac- efficacy information that must be selected,
tion to one's life also creates depression weighted, and integrated (Bandura, 1986). If
(Bandura, 1988a; Holahan & Holahan, 1987a, b; people's self-efficacy beliefs are firmly estab-
Kanfer & Zeiss, 1983). Through inefficacious lished, they remain resilient to adversity. In con-
thought, such people distress and depress them- trast, individuals with weakly held self-beliefs
selves and constrain and impair their level of are highly vulnerable to change, and negative
functioning (Bandura, 1988b, 1988c; Lazarus & experiences readily reinstate their disbelief in
Folkman, 1984; Meichenbaum, 1977; Sarason, their capabilities.
1975).
Self-beliefs of efficacy also affect thought pat- Self-Regulation
terns that may be self-aiding or self-hindering.
of Motivation and Action
These cognitive effects take various forms. Much
human behavior is regulated by forethought in
Through Goal Systems
the form of cognized goals. Personal goal setting Social cognitive theory also emphasizes hu-
is influenced by one's self-appraisal of capabil- man capacities for self-direction and self-
ities. The stronger the perceived self-efficacy, motivation (Bandura, 1988a). The self-regulation
the higher the goals people set for themselves of motivation and action operates partly through
and the firmer are their commitments to these people's internal standards and their evalua-
goals (Bandura & Cervone, 1986; Locke, Freder- tions of their own behavior. People seek self-
ick, Lee, & Bobko, 1984; Taylor, Locke, Lee, & satisfactions from fulfilling valued goals, and
Gist, 1984). Many activities involve analytic they are motivated by discontent with substan-
judgments that enable people to predict and dard performances. Thus, discrepancies be-
control events in probabilistic environments. tween behavior and personal standards gener-
Strong belief in one's problem-solving capabili- ate self-reactive influences, which serve as mo-
ties fosters efficient analytic thinking. And fi- tivators and guides for action designed to
nally, people's perceptions of their efficacy influ- achieve desired results. Through self-evaluative
ence the types of anticipatory scenarios they reactions, people keep their conduct in line with
construct and reiterate. Highly self-efficacious their personal standards.

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Hierarchical Dual Control Mechanism goals. Goals can improve individuals' psycho-
logical well-being and accomplishments in sev-
Many theories of motivation and self- eral ways. First, goals have strong motivational
regulation are founded on a negative feedback effects. Goals provide a sense of purpose and
control model (Carver-& Scheier, 1981; Kanfer, direction, and they raise and sustain the level of
1977; Lord & Hanges, 1987). This type of system effort needed to reach them. When people are
functions as a motivator and regulator of action unclear about what they are trying to accom-
through a discrepancy reduction mechanism. plish, their motivation is low and their efforts are
Perceived discrepancy between performance poorly directed. Investigations of varied do-
and an internal standard triggers action to re- mains of functioning under both laboratory and
duce the incongruity. In negative feedback con- naturalistic conditions provide substantial con-
trol, if the performance matches the standard, verging evidence that explicit, challenging
the person does nothing. A regulatory process goals enhance and sustain people's motivation
in which matching a standard occasions inac- (Latham & Lee, 1986; Locke, Shaw, Saari, &
tivity does not characterize human self- Latham, 1981; Mento, Steel, & Karren, 1987).
motivation. Such a feedback control system Goals not only guide and motivate perfor-
would produce circular action that leads no- mance, they also help to build people's beliefs in
where. In fact, people transcend feedback loops their capabilities. Without standards against
by setting new challenges for themselves. which to measure their performances, people
Human self-motivation relies on discrepancy have little basis either for judging how they are
production as well as on discrepancy reduction. doing or for evaluating their capabilities. Sub-
It requires both active control and reactive con- goals serve this purpose well (Bandura &
trol (Bandura, 1988a; in press-b). People initially Schunk, 1981). Success in attaining challenging
motivate themselves through active control by subgoals increases people's self-beliefs in their
first setting valued standards that create a state capabilities. Accomplishing challenging goals
of disequilibrium and then by mobilizing their also creates self-satisfaction and increases one's
effort on the basis of what it would take to ac- interest in what one is doing. The closer the at-
complish what they seek. Feedback control tainments match valued goals, the greater are
comes into play in one's subsequent adjust- the positive self-reactions (Bandura & Cervone,
ments of effort to achieve desired results. After 1986; Locke, Cartledge, & Knerr, 1970). Goals
people attain the standards they have been pur- have these beneficial effects when they serve as
suing, they generally set higher standards for challenges, rather than as onerous dictates.
themselves. Their adoption of further challenges The beneficial effects of goals are partly de-
creates new motivating discrepancies to be termined by how far into the future they are set.
mastered. Thus, self-motivation involves a dual Short-term, or proximal, goals raise one's effort
control mechanism that operates through dis- and direct what one does during the short run.
crepancy production, which is followed by dis- Distant goals are too far removed in time to be
crepancy reduction. effective self-motivators. Usually, there are too
Diverse Effects of Goals many competing influences in everyday life for
distant aims to exert much control over one's
Many of the activities that people perform are current behavior. Motivation is best regulated
aimed at obtaining future outcomes. Therefore, by long-range goals that set the course for one's
they must create guides and motivators in the endeavors combined with a series of attainable
present for activities that lead to outcomes in the subgoals that guides and sustains the efforts
future. This is achieved by adopting goals and along the way (Bandura & Schunk, 1981;
evaluating one's progress in relation to those Bandura & Simon, 1977; Morgan, 1985). Making

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complex tasks manageable by breaking them Lawrence, & Fowler, 1978). However, the com-
down into a series of subgoals also helps to re- bined influence of goals and performance feed-
duce one's self-demoralization through high as- back heightens motivation.
piration. A person's accomplishment may indi- Cognitive motivation based on goal intentions
cate significant progress when evaluated is mediated by three types of self-influences: af-
against a proximal subgoal, but it may appear fective self-evaluation, perceived self-efficacy
disappointing if compared against long-range for goal attainment, and adjustment of personal
lofty aspirations. People can be making good standards. As already noted, goals motivate by
progress but deriving little sense of accomplish- enlisting self-evaluative involvement in the ac-
ment because of the wide disparity between tivity, and perceived self-efficacy determines
current standing and distal aspiration. whether discrepancies between standards and
Recent research into the effects that goals attainments are motivating or discouraging. The
have on complex decision making has shown goals people set for themselves at the outset of
that challenging goals lead people to use more an endeavor are likely to change, depending on
effort in the development of strategies (Earley, the pattern and level of progress they are mak-
Wojnaroski, & Prest, 1987). However, challeng- ing (Campion & Lord, 1982). Individuals may
ing goals also may lead to suboptimal cognitive maintain their original goal, they may lower
processing (Huber, 1985) and the selection of their sights, or they may adopt an even more
less effective strategies (Earley, Connolly, & challenging goal. Thus, the third constituent,
Ekegren, in press). Managerial goals that are self-influence in the ongoing regulation of moti-
difficult to attain increase the likelihood of failure vation, concerns the readjustment of one's goals
and one's vulnerability to self-debilitating in light of one's attainments. Taken together,
modes of thought. these self-reactive influences account for a ma-
jor share of the variation in motivation under
Self-Influences Governing
different goal structures (Bandura & Cervone,
Cognitive Motivation 1983, 1986).
Motivation based on personal standards or
goals involves a cognitive comparison process. Analysis of Interactional
By making self-satisfaction conditional on Causal Structures in
matching adopted goals, people give direction
to their actions and create self-incentives to help
Managerial Decision Making
them persist in their efforts until their perfor- The remainder of this article presents a de-
mances match their goals. The motivational ef- tailed analysis of the interactional causal struc-
fects do not stem from the goals themselves, but tures that are operating within the context of
rather from people responding evaluatively to managerial decision making in a dynamic sim-
their own behavior. Their goals specify the con- ulated environment. In this series of experi-
ditional requirements for positive self- ments, each of the major interactants in the tri-
evaluation. adic causal structure-cognitive, behavioral,
Activation of self-evaluation processes and environmental-functions as an important
through internal comparison requires both com- constituent of the organizational process. The
parative factors-a personal standard and cognitive determinant is indexed by self-beliefs
knowledge of the level of one's own perfor- of managerial efficacy, personal goal setting,
mance. Neither performance knowledge with- and quality of analytic thinking. The manage-
out goals, nor goals without performance knowl- rial choices that are actually executed constitute
edge has any lasting motivational impact the behavioral determinant. The portrayed and
(Bandura & Cervone, 1983; Becker, 1978; Strang, objective properties of the organizational envi-

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ronment, the level of challenge it prescribes, and the types of decisions studied limit the gen-
and its responsiveness to managerial interven- eralizability of the findings to managerial deci-
tions represent the environmental determinant. sion making.
By including multiple trials, the experiments ad- Some of the cognitive research is based on
vance understanding of how the interactional paramorphic models, such as the lens model of
causal structure operates and changes over social judgment (Brunswik, 1952). This approach
time. describes the relationship between inputs and
Self-referent phenomena are at the very heart outputs of decisions, but it ignores the dynamic
of causal processes. They not only contribute to processes by which individuals acquire infor-
the meaning and valence of most external influ- mation and make and implement decisions
ences, but they also function as important prox- (Hogarth, 1981; Schweiger et al., 1985). One's
imal determinants of motivation and action. The search processes and feedback from executed
self-regulatory mechanisms governing mana- decisions affect one's level of motivation and
gerial decision making, therefore, figure promi- learning in natural decision environments
nently in the causal analysis. (Klayman, 1984; Wood & Bailey, 1985). Manag-
ers must be concerned with the implementation
Multifaceted Nature of Managerial
and feedback aspects of decisions because
Decision Making
these become important inputs to subsequent
Descriptive studies of managerial activities decisions in the continuous flow of organiza-
portray managers as continuously involved in tional activity for which they bear responsibility.
making decisions and structuring the efforts of Unlike subjects in decision experiments, manag-
others toward desired outcomes (Kotter, 1982; ers must live with the consequences of their er-
Mintzberg, 1973; Stewart, 1967). The managerial rors in judgment and faulty decisions.
decision environments consist of dynamic flows To complicate matters further, managers do
of varied information and resources from di- not simply react to decision environments that
verse sources. Feedback concerning the ade- are carefully demarcated for them. Rather, they
quacy of decisions is often delayed, multidimen- create their own decision support systems and
sional, and tainted by biases. Decision tasks selectively process the information generated by
usually include multiple stages, in which peo- these constructed environments (George, 1980).
ple's decisions at each stage are influenced by Managerial decision making requires that the
their prior decisions and informative experi- manager work through others within organiza-
ences. Within this decisional context, managers tional contexts that are characterized by hierar-
must continually link short-term goals to more chy and division of labor and specialization.
distal organizational objectives along ill- Many of the important decisions that managers
structured means-ends pathways. must make involve allocating work roles and
Despite the evidence that much of what man- managing and monitoring the collective efforts
agers do involves decision making in complex of the people they oversee (Mintzberg, 1973).
and uncertain environments, little attention has Cognitive approaches to decision making are
been devoted to systematic analysis of manage- further limited because they usually ignore the
rial decision processes (Schweiger, Anderson, & impact that affective, motivational, and other
Locke, 1985). Decision-making research con- self-referent influences have on one's informa-
ducted within the framework of cognitive psy- tion acquisition, evaluation, and choice. In nat-
chology has contributed to the understanding of urally occurring decision environments, interac-
how perceptual and cognitive processes affect tions between situational demands and self-
decision making. However, the range of vari- referent factors can exert a powerful influence
ables encompassed by these decision models on the decision-making process. For example,

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in studies of organizational decision making, regulating their attention and level of effort. In
perceived threats and setbacks have been organizational environments, managerial goals
shown to reduce managers' willingness to seek must be socially mediated through the coordi-
new information or to incorporate it into their nated efforts of others. Managerial effort alone
choices (Tjosvold, 1984), to strengthen their com- does not ensure attainment of a group goal.
mitment to past courses of action (Brockner & Moreover, efforts to enhance the level of orga-
Rubin, 1985), and to narrow their focus, or to nizational functioning often require constituent
foster a retrospective focus, in their search be- changes in particular aspects of the social struc-
havior (Conlon & Parks, 1987; Janis & Mann, ture and the way in which social resources are
1977). However, managers do not always be- allocated. Systematic pursuit of such opera-
come closed-minded in situations of threat. They tional subgoals contributes to eventual success,
may explore opposing opinions, search for dis- but it does not necessarily produce sizable gains
confirming information, and strive to reconcile in organizational performance during the short
conflicting values in efforts to arrive at decisions run. Therefore, generalizations regarding the
that bring success (Maoz, 1981). performance-enhancing effects of goal chal-
When research has addressed motivational lenges at the organizational level must be tem-
mechanisms, it has often been conducted with pered by considerations of these complexities.
relatively simple tasks in which individual effort In organizational environments that require
can directly affect the level of performance. complex decision making, managers must mas-
Such tasks limit the applicability of the findings ter serviceable managerial rules that enable
to managerial decision making, in which perfor- them to predict and exercise influence over the
mance accomplishments must be achieved collective effort. In order for them to discern pre-
through group effort. Goal setting is the most dictive rules, they must effectively process mul-
widely researched and validated theory of work tidimensional information that contains ambigu-
motivation (Locke & Latham, 1984; Mento, Steel, ities and uncertainties. Predictive factors usually
& Karren, 1987). However, until recently, most of are related probabilistically, rather than invari-
the studies on the effects of goal setting have ably, to future events, which leaves some de-
included simple tasks (Wood, Mento, & Locke, gree of uncertainty. In ferreting out predictive
1987). To achieve organizational performance rules, people must draw on their state of knowl-
goals, managers must create appropriate pro- edge to generate hypotheses about predictive
duction functions, allocate people to those func- factors, to weight and integrate these factors into
tions, and continually adapt their organizational composite rules, to test their judgments against
practices to changes in available resources and outcome information, and to remember which
situational circumstances (Kotter, 1982; Mintz- notions were tested and how well they worked.
berg, 1973). Effective management of these on- Less skilled decision makers formulate vague
going activities calls for high levels of motivation composite rules, they tend to alter several fac-
and effective strategies for organizing the collec- tors concurrently, making it difficult to assess the
tive effort productively. source of multiply produced effects, and they
The multifaceted nature of managerial activi- make less effective use of informative outcome
ties and their intricate linkage to organizational feedback (Bourne, 1965; Bruner, Goodnow, &
performance introduces complexities in the re- Austin, 1956).
lation between personal goals and group attain- For the formal characteristics of the simulated
ment. In most previous research, self-set goals organization used in this research program,
are applied to personal performances, over managers must learn the form of the functions re-
which individuals can exercise direct control by lating several motivational factors to aggregate

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outcomes. Some of the factors involve nonlinear Organizational Simulation
and compound rules, which are more difficult to
learn than are linear ones (Brehmer, Hagafors, The mechanisms and outcomes of managerial
& Johansson, 1980). Moreover, they must figure decision making do not lend themselves readily
out the best way to integrate the set of rules and to experimental analysis in actual organiza-
to apply them discernibly to each member of the tional settings. The ongoing interaction among
group. To achieve all this, they must generate behavioral, cognitive, and environmental fac-
hypotheses about functional relations for differ- tors cannot be controlled in a way that can elu-
ent motivational factors and they must integrate cidate causal processes. A simulated environ-
these hypotheses into a coherent managerial ef- ment permits systematic variation of theoretical-
fort. ly relevant factors and precise assessment of
It requires a strong sense of efficacy to deploy their impact on organizational performance and
one's cognitive resources optimally and to re- the psychological mechanisms through which
main task oriented in the face of organizational they achieve their effects. The temporal dynam-
difficulties and failures. Those who judge them- ics of triadic reciprocality require the sequential
selves inefficacious in coping with environmen- measurement of interacting factors in order to
tal demands tend to become more self- isolate the effects of the constituent factors. The
diagnostic than task-diagnostic (Bandura & design of the simulation used in the experiments
Dweck, 1988). Such self-referent intrusive think- discussed here permits the isolation of time-
ing creates stress and undermines effective use ordered effects of the different classes of vari-
of capabilities by diverting one's attention from ables in social cognitive theory. By incorporat-
how best to proceed and centers it on personal ing multiple trials in the simulated environment,
deficiencies and possible adverse outcomes. it is possible to examine temporal interdepen-
People who believe strongly in their problem- dencies and cumulative effects in decision-
solving capabilities remain highly efficient in making processes. Thus, the simulation pro-
their analytic thinking in complex decision- vides an excellent vehicle for systematically ex-
making situations. Quality of analytic thinking, amining the model of triadic reciprocal
in turn, affects their accomplishments. causation.
In the postulated self-regulatory causal struc- The characteristics of the simulated organiza-
ture that governs organizational management, tion are presented elsewhere in some detail and
perceived self-efficacy enhances organizational will be only summarized here (Wood, Bandura,
performance both directly and indirectly by the & Bailey, in press). Business school graduates
effect it has on people's goal setting and use of served as managers of the simulated organiza-
analytic strategies. The stronger the perceived tion. In executing the managerial task, they
self-efficacy, the more challenging are the orga- were asked to allocate employees from a roster
nizational goals subjects set for themselves and to the differentproduction subfunctions, in order
the more systematically they use analytic strat- to complete the work assignments within an op-
egies to discover the managerial rules. Their timal period. By correctly matching employees
high self-set goals and systematic analytic think- to job requirements, the managers could attain
ing, in turn, enhance the level of organizational a higher level of organizational performance
performance. Tests of the regulatory causal than if employees were poorly matched to jobs.
structure were performed in conjunction with To assist them in this decision task, they received
experimentally varied organizational properties descriptions of the effort and skill required for
and belief systems that can enhance or under- each of the production subfunctions and the
mine the operation of the self-system. characteristics of each employee. This informa-

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tion described employees' skills, experience, Knowing rules does not ensure optimal imple-
and motivational level; employees' preference mentation of them. Managers also had to gain
for routine or challenging work assignments; proficiency in tailoring the applications of the
and employees' standards of work quality. rules to individual employees, and they had to
In addition to allocating employees to jobs, apply these rules together to achieve desired re-
the managers were asked to decide how to use sults. At several points in the simulation, both
goals, instructive feedback, and social incen- the managers' perceived managerial self-
tives to guide and motivate their supervisees. efficacy and the goals they sought to achieve
For each of these motivational factors, the man- were assessed. The adequacy of their analytic
agers were given a set of options representing strategies for discovering managerial rules and
the types of actions that managers might take in the level of organizational performance they
an actual organization. A mathematical model achieved were also measured.
was used to calculate the hours taken to com-
plete a production order based on the adequacy Factors Affecting Management of
of managers' allocation of employees to jobs Organizational Performance
and their use of the three motivational factors.
A series of experiments was conducted that
The group performance for each production or-
varied the properties of the organizational envi-
der or trial was reported to the managers as a
ronment and the cognitive orientations that
percentage of a preset standard number of
were expected to affect the management of or-
hours to complete each manufacturing order.
ganizational performance (Bandura & Wood, in
Managers were asked to make decisions and to
press; Wood & Bandura, in press; Wood et al., in
react to the consequences of those choices. A
press). Some of these studies involved induction
more detailed description of the mathematics
of self-aiding or self-hindering belief systems.
and logic of the model has been presented in an
earlier publication (Wood & Bailey, 1985). Conceptions of Managerial Capability
The managers performed the managerial task
over an extended series of trials and received People's conceptions of their abilities can act
feedback about how well their group per- upon the self-regulatory influences that govern
formed. In order to discover the managerial ongoing motivation and personal accomplish-
rules, they had to test options, to cognitively pro- ments in complex decision-making environ-
cess the outcome feedback information of their ments. People tend to construe cognitive ability
decisions, and to continue to apply analytic either as an acquirable skill or as a fixed inher-
strategies in ways that would reveal the govern- ent capacity (Bandura & Dweck, 1988; Dweck &
ing rules. To enhance the performance of their Elliott, 1983). Those who view cognitive ability as
organization, managers had to set the optimal an acquirable skill regard it as continually en-
level of challenge for each employee, tailor the hanceable through knowledge and the perfec-
supervisory feedback to the adequacy of the in- tion of one's competencies. They adopt an in-
dividual performance, and use social incentives quiring learning goal. They seek challenges
beneficially. In an organizational setting, the that provide opportunities to expand their
impact that social incentives have on perfor- knowledge and competencies. For them, errors
mance is affected by social-comparison pro- are regarded as a natural, instructive part of an
cesses as well as by the nature of the incentives. acquisition process. They judge their capabili-
Managers, therefore, had to learn a compound ties more in terms of personal improvement than
decision rule that combined incentive and eq- by comparison against the achievement of oth-
uity factors. ers.

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People who construe cognitive ability as a that the simulation provides a vehicle for culti-
more or less fixed capacity regard their perfor- vating decision-making capabilities. A second
mance level as diagnostic of basic intellectual group was told that complex decision making
aptitude. For them, errors and deficient perfor- reflects inherent cognitive capacities and that
mances, therefore, carry personal and social the simulation provides a vehicle for gauging
evaluative threats. People who adopt this con- the underlying cognitive aptitude.
ception of ability tend to pursue safe perfor- The impact that these alternative conceptions
mance goals that demonstrate their compe- of ability had on the self-regulatory mechanisms
tence. They prefer tasks that minimize errors that governed the utilization skills and perfor-
and permit ready display of intellectual profi- mance accomplishments is seen in Figure 2.
ciency, even if this is at the expense of expand- Managers who were led to construe their deci-
ing their knowledge and learning new skills. To sion-making ability as reflective of their inherent
them, high effort, which is often required to de- cognitive aptitude were beset by increasing
velop competencies in complex activities, also doubts about their managerial efficacy as they
poses evaluative threats because it is indicative encountered problems. They became more and
of low ability. An entity conception of ability is more erratic in their decisional activities, they
less conducive to effective management of fail- lowered their organizational aspirations, and
ure than is the view of ability as an acquirable they achieved progressively less with the orga-
skill (Elliott & Dweck, 1988). nization they were managing. In marked con-
The psychological effects that these concep- trast, managers with an induced conception of
tions of ability had on the managerial function- ability as an acquirable skill fostered a highly
ing of talented business school graduates as resilient sense of personal efficacy. Even though
they managed the simulated organization they were assigned taxing goals that were diffi-
(Wood & Bandura, in press) were examined. Be- cult to fulfill, these managers remained stead-
fore they directed the simulated organization, fast in their perceived managerial self-efficacy,
one group of managers was told that complex they continued to set themselves challenging or-
decision making reflects an acquirable skill and ganizational goals, and they used analytic strat-

55 22 100

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Figure 2. Changes in perceived managerial self-efficacy, the performance goals set for the orga-
nization relative to the preset standard, effective analytic strategies. and achieved level of orga-
nizational performance across blocks of trials under acquirable skill and entity conceptions of
capability. Each trial block comprises six different production orders (Wood & Bandura, in press).

373

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egies in ways that aided discovery of optimal individuals who have the same skills may per-
managerial decision rules. Such a self- form variably, depending on how well they use
efficacious orientation, which is well suited for the skills they possess (Bandura, 1986, 1988c).
handling adversity, paid off in uniformly high For the most part, the social environment con-
organizational attainments. stitutes a potentiality that is actualized by appro-
Induced differential conceptions of ability bias priate action. Thus, what parts of the potential
how similar substandard performances at the environment are actualized and what forms
outset are cognitively processed. A person's they will take depend on how people behave.
construal of substandard attainments as indi- Human behavior is, of course, governed largely
cants of deficiencies in inherent aptitude grad- by people's perceptions of their efficacy and the
ually creates an inefficacious self-schema in the social environments, rather than simply by their
particular domain of functioning, whereas a objective properties. Thus, individuals who be-
person's construal of substandard attainments lieve themselves to be inefficacious are likely to
as instructive guides for enhancing personal effect limited change, even in environments that
competencies fosters an efficacious self-schema. provide many potential opportunities. Con-
Such evolving self-beliefs further bias the per- versely, those who have a firm belief in their
son's cognitive processing of outcome informa- efficacy, through ingenuity and perseverance,
tion and promote actions that create confirma- figure out ways of exercising some measure of
tory behavioral evidence for them. This pro- control in environments that contain limited op-
duces an exacerbation cycle of motivational and portunities and many constraints.
performance effects, in accordance with the In the transactions of everyday life, individu-
model of reciprocal causation. als' beliefs regarding self-efficacy and how con-
trollable the environment is are not divorced
Organizational Controllability and
from experiential realities; rather, these beliefs
Performance Standards
are products of reciprocal causation (Bandura,
Belief systems regarding how controllable an 1986). Thus, when people believe the environ-
organization is also can exert a substantial im- ment is controllable on matters of import to
pact on the quality of organizational manage- them, they are motivated to exercise fully their
ment. There are two aspects to the exercise of personal efficacy, which enhances the likeli-
control that are especially relevant to manage- hood of success. Experiences of success, in turn,
ment of organizational performance (Bandura, provide behavioral validation of personal effi-
1986; Gurin & Brim, 1984). The first aspect con- cacy and environmental controllability. If peo-
cerns the level of personal efficacy needed to ple approach situations as largely uncontrolla-
effect changes through enlistment of effort and ble, they are likely to exercise their efficacy
creative use of capabilities and resources. This weakly and abortively, which breeds failure.
constitutes the personal side of the transactional Over time, failures take an increasing toll on
control process. The second aspect concerns both one's perceived self-efficacy and one's be-
how changeable or how controllable the envi- liefs about how much environmental control is
ronment is. This facet represents the level of sys- possible.
tem constraints and opportunities that are avail- To gauge the impact that perceived controlla-
able for one to exercise personal efficacy. bility has on the self-regulatory factors govern-
Neither self-efficacy nor social environments ing organizational management, differential be-
are fixed entities. One's operative self-efficacy is liefs about the controllability of organizations
a generative capability in which multiple sub- (Bandura & Wood, in press) were experimen-
skills must be continuously improvised to man- tally induced in the research program. For half
age ever-changing circumstances. Therefore, the managers, organizations were portrayed as

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difficultto predict and control. The workhabits of the view that there were severe limits on how
employees were characterized as being not eas- much one can change organizational function-
ily changeable, and not all employees are fully ing. The divergent changes in these self-
responsive even to helpful guidance. Small regulatory factors were accompanied by large
changes do not necessarily improve the overall differences in organizational attainments.
outcomes. For the others, organizations were Resiliency of self-efficacy has considerable
portrayed as predictable and controllable. The functional value because major accomplish-
work habits of employees were characterized as ments are rarely achieved through quick suc-
more easily changeable than would be gener- cesses. Such accomplishments are realized by
ally assumed, and most employees were char- self-efficacious people who persevere in the face
acterized as responsive to helpful guidance. of failures and setbacks, who learn from their
Small changes can set in motion processes that mistakes, and who construe obstacles as chal-
improve the overall outcomes. Within each of lenges, rather than as reflections of their defi-
the controllabilityconditions, half the managers ciencies. To abort one's effortsprematurely or to
were assigned easy-to-reach organizational undermine them by self-inefficacious thinking
standards for the simulated organization. The precludes significant personal accomplish-
other half were given difficult organizational ments.
standards to meet.
The contrasting effects of the induced belief Organizational Complexity
systems are summarized in Figure 3. People Learning the rules in dynamic environments
who managed the simulated organization un- through the results of action alone is difficultat
der a cognitive set that organizations are not the individual level of behavior, let alone the
easily changeable quickly lost faith in their collective level (Brehmer, 1980;Klayman, 1984).
managerial capabilities, even when perfor- Managerial decision tasks vary in the complex-
mance standards were within easy reach, and ity of judgments required and the nature of de-
they lowered their sights for the organization. If cision rules that must be mastered. The com-
managers make an effortto manage an organi- plexity of decisions can vary along several di-
zation that is regarded as relatively uninfluence- mensions (Wood, 1986). One aspect of
able, they feel a sense of personal inefficacy to complexity concerns the number of relevant fac-
effect change which, in turn, makes it difficultfor tors available for consideration, their informa-
them to realize group accomplishments. Al- tiveness, and the number of judgments that
though a sense of uncontrollabilityis personally must be made. Complexity also increases if
and socially handicapping, viewing an organi- managers must coordinate and make trade-offs
zational environment as capable of being influ- between different decisions. A third aspect of
enced fosters productive action. Managers who complexity relates to the stability of differentpre-
operated under a cognitive set that organiza- dictive factors in the probabilistic environment.
tions are controllable displayed a resilient sense Managers can learn the factors that have highly
of managerial efficacy, set themselves increas- predictable effects and can incorporate them
ingly challenging goals, and used good analytic more readily into their composite decision rules
thinking for discovering effective managerial rather than factors that change in their predic-
rules. They exhibited high resiliency of self- tive value according to changes in circum-
efficacy, even when difficult organizational stances.
standards eluded them. Indeed, they main- Much of the research on the effects of various
tained a stronger sense of efficacy than did their motivational mechanisms has been conducted
counterparts, who managed the organization on relatively simple tasks. By contrast, in com-
under readily attainable standards but who had plex activities, individuals' increased effortis not

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Figure 3. Changes in strength of perceived managerial self-efficacy. the performance goals set
for the organization, and level of organizational performance for managers who operated under a
cognitive set that organizations are controllable or difficult to control. Each trial block comprises
six different production orders (Bandura & Wood, in press).

translated into performance gains unless they of a small number of employees, and each em-
develop effective strategies for deploying that ef- ployee was best suited for only one job function.
fort productively (Wood & Locke, in press; In the complex organization, the managers su-
Wood, Mento, & Locke, 1987). As the informa- pervised more than twice as many employees,
tion-processing demands of activities increase, and optimal matching of employees to jobs re-
managers need greater cognitive resources to quired several trade-offs among employees who
function competently. When task demands ap- were equally suited for the same job. This
proximate the limits of managers' cognitive ca- placed greater demands on managers to han-
pabilities, external motivators, such as incen- dle both component and coordinative sources of
tives or assigned goals, can undermine their complexity (Wood, 1986). The managers were
performance by diverting their attention from assigned either the general goal to do their best
how best to perform the task to concerns about or the explicit goal to substantially improve their
the consequences of their failure (Humphreys & group's performance.
Revelle, 1984; Wood, 1985). As shown in Figure 4, challenging goals en-
The influence that complexity of organiza- hanced organizational performance under low
tional demands had on managerial perfor- complexity, but they had no effect when the
mance was evaluated in a study in which both managerial demands were more complex. This
organizational complexity and managerial goal is not because the managers rejected the chal-
assignments were varied (Wood, Bandura, & lenging goals or lacked sufficient commitment to
Bailey, in press). Complexity was varied by try to achieve them. The finding is, perhaps, bet-
changing the number of employees the manag- ter explained in terms of the temporal and social
ers supervised and the degree of match be- complexity of the links among managerial effort,
tween employees' skills and job functions. In the group attainments, and the multifaceted nature
simple organization, the managers took charge of goal setting in complex social environments.

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100
n
-@ GOAL
CHALLENGING
O -0 DO YOURBEST

w 90

0 80

Z6 70_ \
o

N
Z
60
0
0

50

1 2 3 4 1 2 3 4
LOWCOMPLEXITY HIGHCOMPLEXITY
TRIALBLOCKS

Figure 4. Organizational performance across trial blocks as a function of goal assignment and
managerial complexity (Wood, Bandura, & Bailey, in press).

Goal attainment had to be socially mediated periences, these changes temporarily disrupt
through the efforts of the group of employees in the motivational effects that goal setting has on
the simulated organization. Managerial effort performance.
alone will not augment group performance if In complex tasks, proximal subgoals enhance
managers have not discovered how best to individuals' performance attainments, whereas
match motivational factors to employee at- distal goals may have little effect (Bandura &
tributes in order to achieve good collective out- Schunk, 1981). The managers' reports revealed
comes. Personal goals influenced performance additional complexities about their efforts to
in the earlier trials, but they did not in the later achieve socially mediated outcomes. Many of
trials when the roster of employees had been them directed their efforts at operational sub-
changed. To the extent that significant changes goals, such as improving the performance of
in the dynamic components of an environment one employee or achieving a better allocation of
reduce the transferability of managers' prior ex- social rewards. Careful attention to such sub-

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goals eventually will improve the level of orga- significant beyond the .05 level are shown in
nizational attainments, but notable gains may Figure 5. In both phases of the simulation, the
not be achieved immediately. relation of prior organizational performance to
Neither complexity nor goal assignment af- subsequent performance is partly mediated by
fected the self-regulatory factors. In path analy- managers' perceived self-efficacy, personal
ses, the self-regulatory influences had compara- goals, and analytic strategies. A significant di-
ble effects on managerial performance across rect relation also was found between prior and
the differing levels of goal assignment and or- subsequent organizational performance.
ganizational complexity. In the initial phase, perceived self-efficacy en-
hanced the level of organizational performance
Analysis of Causal Structures through its effects on managers' goal setting and
analytic strategies. The structure of significant
The causal ordering of the self-regulatory in- causal relations is replicated in the subsequent
fluences on organizational attainments in this phase, except that the contribution of prior per-
set of experiments was tested by path analysis formance is weaker, and perceived managerial
computed on the combined data from the set of self-efficacy plays a larger causal role in orga-
simulation studies. The direction of causality in nizational performance, affecting it both directly
the path model is based on theoretical proposi- as well as through managers' goal setting and
tions from social cognitive theory and the tem- analytic strategies. Personal goals influenced
poral sequencing of variables in the simulation. managers' performance indirectly through the
In this conceptual model (Bandura, 1986), prior positive effects they had on analytic strategies.
performance attainments influence managers' Effective use of analytic strategies enhanced or-
perceived self-efficacy and personal goals, ganizational performance, after controlling for
which, in turn, influence analytic strategies all prior determinants. Thus, comparison of the
and subsequent performance. Prior perfor- causal structures at the different phases of orga-
mance was included as the first factor in the nizational management reveals that when ini-
analysis as a proxy for possible determinants tially faced with managing a complex, unfamil-
other than the self-regulatory influences exam- iar environment, managers relied heavily on
ined in these studies. Perceived self-efficacy performance information in judging their effi-
was entered second because beliefs about their cacy and in setting their personal goals. But, as
capabilities influence both the goals people set they began to form a self-schema of their effi-
for themselves and the proficiency of their ana- cacy through further experience, the perfor-
lytic strategies. Perceived self-efficacy also con- mance system was regulated more strongly and
tributes independently to performance. Manag- intricately by their self-conceptions of efficacy.
ers' personal goals were expected to affect sub- The specified model accounted for the major
sequent performance directly through the share of the variance in organizational perfor-
mobilization of effort and indirectly by their in- mance attainments in both the initial phase, R2
fluence on analytic strategies. The quality of = .75, p < .001, and the subsequent phase, R2
their analytic strategies would have a direct in- = .84, p < .001 of the organizational manage-
fluence on performance attainments through al- ment.
location of resources and adjustment of motiva- The overall findings of this research program
tional factors. The full set of structural equations demonstrate the utility of social cognitive theory
representing the hypothesized causal relations for the study of motivation and performance in
were analyzed separately for the different the domain of managerial decision making. The
phases of the organizational simulation. results show that the interaction of cognitive and
The standardized path coefficients that were motivational processes is important to an under-

378

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standing of how managers approach the daily systems in organizations that influence people's
stream of decisions that must be made in com- interpretations of events and organizational ac-
plex and uncertain decision environments. tion (Martin & Siehl, 1983; Schein, 1985). Beliefs
Social cognitive theory offers several advan- about the nature of managerial capability and
tages over existing models of managerial deci- organizational controllability might represent
sion making. First, it is not constrained by the specific manifestations of an organization's ide-
assumption of sequential phases of search, ational culture, in a manner similar to Schall's
evaluation, choice, and implementation activi- (1983) analysis of culture as informal communi-
ties (Mintzberg, Raisinghani, & Theoret, 1976; Si- cation norms. Martin and her colleagues (Mar-
mon, 1960). Attempts to validate the specified tin, Feldman, Hatch, & Sitkin, 1983) have shown
phases within different decision models have that perceived personal control is a major theme
failed to support a methodical sequencing of ac- in organizational stories that are expressions of
tivities (Witte, 1972). Many of the decision activ- organizational cultures. How these belief sys-
ities are performed simultaneously, and be- tems are transmitted through modeling, incen-
cause of the dynamic, evolving nature of much tive practices, selection systems, and staff devel-
managerial work, managers frequently cycle opment activities would be a fruitful area for re-
back and forth between different decisional ac- search, given the effects these belief systems
tivities (Mintzberg et al., 1976). These dynamic have on the self-regulatory mechanisms that
conditions create reciprocal influences among govern managerial performance. Social cogni-
personal factors, decisional actions, and envi- tive theory specifies psychological mechanisms
ronmental effects. by which organizational cultures can affect in-
Another contribution of this model is the incor- dividual behavior.
poration of self-regulatory factors in the analysis
of managerial decision processes. As the above- Concluding Remarks
mentioned studies have shown, self-referent in-
fluences are important determinants of manag- The value of psychological theory is judged
ers' analytic thinking and performance accom- not only by its explanatory and predictive
plishments in complex decision environments. power, but also by its operational power to im-
These factors influence how well managers prove human functioning. Social cognitive the-
cope with organizational demands and how ory provides a conceptual framework for clari-
well they learn from failures, setbacks, and suc- fying the psychological mechanisms through
cesses. Even managers who enjoy remarkable which social-structural factors are linked to or-
success operate in environments that constantly ganizational performance. Within the model of
threaten their sense of self-efficacy (George, triadic reciprocal causation, both personal and
1980). How they cope with obstacles and adver- organizational factors operate through a bidi-
sities and how they remain resilient in the face of rectionality of influence. Many conceptual sys-
recurrent stressors may be more important than tems are dressed up in appealing terminology,
their rate of success when explaining the evolu- but they remain prescriptively ambiguous on
tion of managerial careers (Rochlin, 1965; Za- how to effect psychosocial changes. Social cog-
leznik, 1967). nitive theory provides explicit guidelines about
The strong effects that induced belief systems how to equip people with the competencies, the
have on managerial capability and organiza- self-regulatory capabilities, and the resilient
tional controllability are relevant to issues of or- sense of efficacy that will enable them to en-
ganizational culture. This line of theorizing and hance both their well-being and their accom-
research concerns ideational themes or belief plishments.

380

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Albert Bandura (Ph.D., University of Iowa) is the
David Starr Jordan Professor of Social Science in Psy-
chology, Stanford University.
Robert Wood (Ph.D., University of Washington) is a
Senior Lecturer at the Australian Graduate School of
Management. Correspondence concerning this arti-
cle should be addressed either to Robert Wood,
AGSM, University of New South Wales, P.O. Box 1,
Kensington, NSW, Australia, 2033 or to Albert
Bandura, Department of Psychology, Building 420,
Jordan Hall, Stanford University, Stanford, CA 94305.
The authors' research reported in this article was sup-
ported by a University of New South Wales Research
Board Grant and by Public Health Research Grant
MH-5162-25 from the National Institute of Mental
Health. Some sections of this overview article include
revised and expanded material from the articles by
Wood and Bandura, in press; Wood, Bandura, and
Bailey, in press; Bandura and Wood, in press; and
Bandura, 1988a, 1988d.

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