We theorize how, through adversarial framing efforts, the movement and profession each seek to evoke emotions in particular ways to shape the actions of clients in their favor. Our model begins with a framing contest between a social movement that disrupts a profession’s jurisdictional control and the profession that defends it.
We develop a model of how emotions shape the participation of professions’ clients in episodes of jurisdictional contestation. Specifically, we integrate the concept of ecologically rational heuristic reasoning to answer two key questions: First, how does ecologically rational heuristic reasoning facilitate proactive DC deployment when the decision context is uncertain? Second, why is ecologically rational heuristic reasoning effective for proactive DC deployment? In summary, our paper advances the ongoing debate concerning DCs and the way in which heuristic reasoning assists a firm in deploying such capabilities. We also incorporate the evolutionary logic of variation, selection, and retention to theorize about the role of heuristic reasoning in the process of proactive DC deployment. Drawing on the opportunity creation perspective in entrepreneurship, we argue that proactive DC deployment is characterized by uncertainty, which makes deductive reasoning less effective and thus requires the use of heuristic reasoning.
Research on dynamic capabilities (DCs) has focused primarily on reactive DC deployment (i.e., opportunity discovery) with less attention being paid to proactive DC deployment (i.e., opportunity creation). Thus, the Bowman paradox is explained in this study parsimoniously, with the fundamental features of the context of corporate diversification that exist regardless of the variation in managerial preferences for risk or in managerial capabilities. This study counters that pessimistic view and develops a formal model to explain theoretically how the negative risk-return relationship exists in diversified firms due to the interplay of two types of economies of scope. Furthermore, the view that the negative risk-return relationship does not need to be explained theoretically translated into a bottom line for nearly five decades of research on diversified firms-that the paradox cannot be explained theoretically based on the context of corporate diversification. A popular alternative view has been that the paradox is merely an empirical artifact and, thus, does not need to be explained with management theories. Theoretically, the paradox was explained with an appeal to contingent managerial preferences for risk or to heterogeneous managerial capabilities. The negative relationship between corporate risk and corporate returns, also known as the “Bowman paradox,” has been an important puzzle in strategy research that has motivated dozens of empirical studies.
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