Business Leader

The Entrepreneur as Business Leader
The Entrepreneur as
Business Leader
Cognitive Leadership in the Firm
Silke Scheer
Max Planck Institute of Economics, Jena, Germany
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
© Silke Scheer 2009
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Contents
Foreword by Ulrich Witt vii
Acknowledgments ix
1 Introduction 1
1.1 Finding solutions to the problem of coordination and
motivation of employees 2
1.2 Coordination and motivation from an alternative
perspective 3
1.3 Differences from charismatic leadership 5
1.4 Aims and structure of the book 7
2 The theory of cognitive leadership and its foundation in
cognitive psychology 12
2.1 The theory of cognitive leadership 13
2.2 Foundations of the theory of cognitive leadership in
cognitive psychology 19
2.3 Summary 28
3. Dyadic processes: cognitive leader to employee 31
3.1 A newcomer’s motivation to learn about a firm 32
3.2 Shaping mental models by learning 35
3.3 Summary 49
4 Group processes: work group to employee 53
4.1 A newcomer’s perspective on joining a group 54
4.2 A work group’s perspective on a newcomer 60
4.3 Deviant behavior in work groups 65
4.4 Summary 72
5 Exploring the theory of cognitive leadership empirically 79
5.1 Hypotheses development 79
5.2 Method 86
5.3 Results 88
5.4 Summary 105
6 Implications and open research questions 109
6.1 Implications from the present work 109
6.2 Outlook 115
6.3 Summary 120
v
vi The entrepreneur as business leader
Appendix A: Questionnaire used in the study 124

Appendix B: Figures and table data from the study 130
References 145
Index 167
Foreword
The kind of interactions in, and the governance structure of, firm organi-
zations systematically change when the size of the organization grows
over time. In a developmental view firms typically start as rather small
entrepreneurial businesses. At this stage, the entrepreneurial conception
of what business to do, and how, can directly shape the ongoing organiza-
tional activities provided it is sufficiently articulate, effectively communi-
cated to and adopted by the firm members. This can be achieved by giving
detailed orders and controlling order execution and performance tightly,
leaving little room to initiative and discretion on the part of the individual
firm members. A governance regime of this kind can be characterized in a
stylized way as a monitoring regime with intra-organizational interactions
resembling the principal–agent model of modern microeconomics. When
the business is profitable and the organization size is expanding, a govern-
ance regime like this requires a growing hierarchy of managerial layers
at which orders and controls can be channeled top down. Hierarchical
directives and controls find their limits, though, when the firm’s environ-
ment gets more turbulent and unanticipated and non-routine problems
need to be solved on a large-scale basis. Even with monitoring devices in
place, such problems leave room for a growing incoherence of individual
problem solving and for motivational hazards with respect to the level
of effort taken. As a consequence, managerial controls can be rendered
increasingly ineffective – one of the causes of the well known managerial
diseconomies to firm growth.
As an alternative, a governance regime can be tried at the early state
of small entrepreneurial businesses that can be characterized in a stylized
way as a cognitive leadership regime. Under this regime, the task percep-
tions of the individual firm members are informed by a common, socially
shared cognitive frame that corresponds to the entrepreneurial business
conception and a social model of high task commitment. Tacit agreement
on theses features is a crucial means of coordination within the organiza-
tion. It allows more room to be given to individual initiative, discretion
and self-responsibility without degrading organizational coherence. At the
same time, it positively affects individual work motivation and identifica-
tion with the firm’s goals. The problem is, however, that a shared cogni-
tive frame and a corresponding social model of high task commitment
vii
viii The entrepreneur as business leader
cannot be achieved by entrepreneurial or managerial order. They hinge

on the outcome of a collective social cognitive learning process that takes
place in communication with, and by observation of, other firm members.
The outcome of the collective learning process is likely to be influenced
by a multitude of factors like, for example, the entrepreneur’s capacity
to prevail in the informal agenda processes and the particular features of
the business conception. It is also very likely to be affected, however, by
the growth of the firm organization delimiting, for instance, the frequency
and intensity of face-to-face interactions between the entrepreneur and the
growing number of firm members.
The governance regime of cognitive leadership, its attractive coopera-
tive features and the challenges it faces in the process of organizational
growth are the topic of Silke Scheer’s fascinating study. She elaborates
the still not fully understood motivational foundations of this regime that
contrast so drastically with the portrait of unconditionally self-interested,
opportunistic attitudes within firm organizations as it has been drawn
by the principal–agent literature. To explore the mutual contingencies
of socially shared cognitive frames, social models of task commitment
and work motivation at the empirical level is no easy task. Silke Scheer
addresses it on the basis of a questionnaire methodology. She offers first
insights on the empirical role that the different governance regimes play
for motivating firm members, for solving unanticipated and non-routine
problems, and for the degree of organizational coherence. In doing so, her
study highlights the practical relevance of the cognitive leadership regime
and the characteristic motivational features on which it draws that are
widely neglected in the modern theory of the firm.
Ulrich Witt
Max Planck Institute of Economics, Jena, Germany
Acknowledgments
This book has taken years of development – a development that has been
supported by many people. I would like to thank Prof. Witt as my mentor
and supervisor and my colleagues and companions at the Max Planck
Institute of Economics, especially Thomas Brenner, Guido Bünstorf, Dirk
Fornahl, Uta-Maria Niederle, Inken Poszner, Klaus Rathe, Christian
Schubert, Georg von Wangenheim and Hagen Worch. I am also indebted
to Fabian Eser who helped with the preparation of the empirical part of the
project. Besides the scientific resources I enjoyed, the ‘background’ support
of the IT department and the library were of great help. Therefore my thanks
go to Thomas Baumann, Thomas Brückner and Jürgen Rosenstengel as
well as to Hella Bruns, Brigitte Hofmann and Katja Müller.
I am also grateful to the participants of my study. Without them taking
the time involved this project would have had a different scope.
Of course, this work would not have been possible without the support
of my friends and family. I am appreciative of Heike Hahn’s proofreading,
my father’s advice and Gesine Hofinger’s. And, finally, thank you so much
for time, space and tolerance, Matthias, Amrei and Tjarde!
ix
1. Introduction
The existence of firms has occupied researchers’ minds for some time and
still does. In transaction-costs economics it is assumed that firms exist
because under certain constellations organizing the work flow by a firm
can help to minimize transaction costs, hold-ups and post-contractual
hazards while economies of scale can be internalized (for example, Coase
1992; Shelanski and Klein 1995; Williamson 1985, 2002). In contrast to
market transactions for realizing one’s entrepreneurial ventures, choos-
ing a firm to do so can also be advantageous, because within the organi-
zational framework of a firm it is, for example, possible to accumulate
intangible assets like knowledge and skills (Foss 1993; Teece et al. 1994)
and to achieve sufficient adherence to a firm’s goals (see Witt 1998). This
issue is especially relevant when the knowledge or skills a firm requires are
implicit and/or not available to one single employee which necessitates
coordination to tap on these resources (ibid.). It is these firm-specific com-
petencies that from an evolutionary point of view explain the existence of
firms (Pelikan 1989; Langlois 1992; Nooteboom 1992; Foss 1993; Teece et
al. 1994; Kogut and Zander 1996).
However, organizing the production process by means of a firm and to
introduce a division of labor, and thus specialization, also entails some
drawbacks that have to be outweighed against potential benefits. As
Hayek (1945, p. 520) said, ‘the problem is precisely how to expand the
span of our utilization of resources beyond the span of control of any one
mind’.
First, a firm founder has to resort to incomplete contracts because the
future demands of the work process are unknown to her (Simon 1951;
Grossman and Hart 1986). To put it differently – ‘[n]ew firms and firms
that are forced to relentlessly create new businesses, cannot be operated
with detailed plans based on the fiction that all possible contingencies can
be anticipated’ (Witt 1998, p. 172). Thus, contracts have to be written that
rather commit the employees to engage in their work tasks for the best of
their company rather than to pin down an individual employee’s specific
work tasks completely and exhaustively (Witt 2005). Moreover, a firm’s
intangible assets are also impossible to define. It follows that the coordina-
tion of employees has to be arranged.
Second, it has been assumed in the literature that in firms information is
1
2 The entrepreneur as business leader
distributed asymmetrically, which may result in moral hazards. Employees

may pursue their (hidden) personal interests, behave opportunistically and
favor their personal interests over those of the firm if the marginal benefits
for doing so exceed the marginal costs (for example, Grossman and Hart
1983). Since the observation of the employees’ actions or achievements
are costly to the employer and employees may thus be induced to shirk,
incentives have to be provided to the employees in order to balance the
potential losses incurred by their opportunistic behavior, on the one hand,
and the potential gains on transaction costs resulting from the founding of
the firm, on the other hand (Williamson 1985; Foss 2001).
1.1 FINDING SOLUTIONS TO THE PROBLEM

OF COORDINATION AND MOTIVATION OF
EMPLOYEES
Solutions that have been suggested to the problems of coordinating

and motivating employees revolve around conceptions like monitoring
(Alchian and Demsetz 1972), governance (Williamson 1975, 1979) or more
abstract incentive structures like those proposed by Grossman and Hart
(1983) in their principal–agent model.
Characteristic of the principal–agent model is the notion of asymmetric
information which enables the agent to hide her true interests from the
principal and to act in an opportunistic way. Following the reasoning of
the principal–agent theory, one way to counteract opportunistic tenden-
cies is to implement a close monitoring regime whereby the behavior of the
employees can be kept under tight control. Thus, they can be prevented
from shirking. The degree to which the asymmetric information prevails
depends on how difficult and costly it is for the principal to judge the per-
formance of the agents.
Close monitoring requires a hierarchical organizational structure that is
costly not only in terms of money but also in terms of time; the more so, the
bigger the organization grows (Witt 2000). In the end, ‘managerial disecono-
mies of scale’ might result (Mueller 1972, pp. 203ff.). Furthermore, monitor-
ing can also have negative effects on the monitored employees’ motivation
in that it dampens the employees’ creativity and intrinsic motivation (Enzle
and Anderson 1993; Williams and Yang 1999). Taking into account these
negative effects of monitoring, it seems debatable whether monitoring indeed
presents a solution to the coordination and motivation of employees.
Ensuring the employees’ motivation can also be approached by intro-
ducing contracts that imply an incentive to the employees not to shirk but
to contribute their best efforts to the firm’s productivity. Consequently,
Introduction 3
incentive compatible contracts may reduce the need for monitoring.

However, these kind of contracts may also entail a number of drawbacks
that have to be balanced against these benefits. First, their implementation
may entail substantial costs. Second, they may fail, for example, because
they are incomplete, not enforceable by a third party or because their
costs outweigh their returns (Foss 2000). Third, under certain conditions
incentive compatible contracts bear the risk of crowding out the employ-
ees’ potentially existent intrinsic motivation (see Frey 1997). And, fourth,
assuming that an employee has to fulfill multiple tasks or multi-dimensional
tasks that entail different costs of measuring may induce the employee to
preferably put her efforts into those tasks that are more easily measurable
than others, that may be essential but comparably hard to measure and
may therefore be neglected (Holmström and Milgrom 1991).
Barnard (1948, p. 141, emphasis added) has pointed out that ‘an organi-
zation can secure the efforts necessary to its existence . . . either by the
objective inducements it provides or by changing states of mind’. Whereas
the organizational regimes presented above favor the former way of secur-
ing a firm’s existence, the regime that is presented in the following rather
adheres to the latter.
1.2 COORDINATION AND MOTIVATION FROM AN

ALTERNATIVE PERSPECTIVE
The theory of cognitive leadership suggests an alternative approach for

resolving the coordination and motivation problems a firm founder has
to tackle (Witt 1998, 2000, 2002, 2003, 2005). Central to this theory is the
person of the entrepreneur and firm founder (see Schneider 1987; Casson
2000; Foss 2001). She is argued to have a business conception she aims at
realizing. Since the entrepreneur cannot do so on her own, she founds a
firm, hires employees and – consequently – faces the problems that have
been outlined above: in order to realize her business conception she has to
coordinate her employees’ inputs and to motivate the employees to put in
their best efforts.1 In other words, she becomes a leader to her employees.
The theory of cognitive leadership argues that a firm founder can solve
these problems by conveying her business conception to her employees.
This kind of leadership is called ‘cognitive leadership’ because the convey-
ance of the business conception it is argued mainly depends on cognitive
processes. The underlying reasoning of this assumption is outlined below.
The business conception of the firm founder expresses what kind of busi-
ness she wants to pursue and how she wants to do it. It provides a reference
point for the processing and assessment of incoming information – for the
firm founder as well as for her employees (for example, Witt 1998). In this
sense, it provides a coordination function to them. Furthermore, through
the adoption of the business conception the employees’ personal interests
are assumed to merge with those of the firm. Consequently, their motiva-
tion to achieve their tasks can be assumed to be predominantly intrinsic in
nature (see Bénabou and Tirole 2003).2 The high level of cognitive coher-
ence allows the firm founder to grant substantial degrees of freedom to
her employees – a measure that is argued to further boost their intrinsic
motivation (Deci et al. 1999). Hence, the employees rely less on extrinsic
rewards which it is argued pose a threat to their intrinsic motivation since
extrinsic incentives potentially crowd out intrinsic motivation. Thus, a
business conception is what Ghoshal et al. (1995, p. 749) in reference to
Hayek describe as a ‘coherent institutional context’:
To be able to simultaneously exploit [the] benefits of distributed and localized

resources and knowledge and achieve efficiency through the economies of scale
and scope and the reduction of transaction costs, [. . .] firms cannot rely either
wholly or even primarily on hierarchical governance and must depend instead
on creating a coherent institutional context which motivates ‘individuals to do
the desirable things without anyone having to tell them what to do’. (Hayek
1945, p. 527)3
The firm founder – or cognitive leader – conveys her business concep-

tion by means of communication and by being a model to her employees.
Moreover, she can point out other people to her employees who can serve
as models. Colleagues are also considered to potentially have an impact
on the employees’ cognitive agendas by means of communication and
observational learning.
For the conveyance of the business conception the cognitive leader is
crucial because it depends on her capabilities and her business concep-
tion’s characteristics whether the employees adopt the business concep-
tion in the first place. Since communication and observational learning
depend on the frequency of social interaction, it is further argued that a
firm founder’s frequent interaction with her employees is necessary to have
an impact on their cognitive agendas and to align these according to the
business conception (see Reichers 1987; Langfield-Smith 1992).4
Within the framework of the theory of cognitive leadership people are
assumed to be boundedly rational, that is, people have limited capacities
for processing information and their attention and information processing
are guided by cues. The adoption of the business conception by employees
thus influences their cognitive agendas in such a way that incoming infor-
mation is processed from the perspective of the business conception and
decisions are made conforming to it.
Introduction 5
Contingent on the described processes, the theory of cognitive leader-

ship puts forward a pattern of organizational development according to
which a growing firm is assumed to expand (for example, Witt 2005). It is
claimed that cognitive leaders and their business conceptions have a deci-
sive influence in the evolution of firm organizations.
A number of aspects that are implied in the theory of cognitive leader-
ship or that the theory of cognitive leadership is based on are, however,
not included in it. The theory of cognitive leadership does not, for example,
explain the cognitive processes basic to its assumptions nor does it explain
the conditions the exertion and the success of cognitive leadership are
dependent on. While it outlines characteristics of the cognitive leader that
foster the conveyance of the business conception, characteristics of the
employees or situational aspects are not discussed. Also, the view on the
impact of incumbent employees on the exertion of cognitive leadership is
limited in that they are reduced to their prospective function as models
to their colleagues or to their potential to pose a threat to the initial busi-
ness conception by behaving in a deviant manner. A work group’s posi-
tive contribution to cognitive leadership is not considered. Furthermore,
the assumptions of the theory of cognitive leadership have not yet been
subject to any empirical validation. This volume sets out to improve on
this situation.
1.3 DIFFERENCES FROM CHARISMATIC

LEADERSHIP
Before the aims of this volume are presented in more detail, we have to
define the theory of cognitive leadership in relation to charismatic leader-
ship. Foss and Klein (2005) have categorized cognitive leadership as one
form of charismatic leadership – a perspective not adopted in the present
thesis. The differences between cognitive leadership and charismatic lead-
ership can be outlined as follows.
Charismatic leadership theories assume that a charismatic leader can
influence her followers’ basic values, beliefs and attitudes so that they
are willing to perform beyond what would normally be expected of them
(Podsakoff et al. 1996; Conger 1999). She is able to do so by communi-
cating her vision, by inspiring and empowering her followers, by being a
model to her followers, by providing intellectual stimulation and meaning
to her followers, by appealing to higher-order needs, by the setting of high
expectations in her followers and by fostering a collective identity.
Although the theory of cognitive leadership is also based on the
forming and shaping of the followers’ cognitive agendas by making use of
communication and modeling processes, it neither includes the shaping of

the more basic values nor does it explicitly aim at inspiring, empowering
or intellectual stimulation of subordinates. Also, a cognitive leader is not
assumed to appeal to higher-order needs or to set high expectations in her
followers. That cognitive leadership in fact fosters the emergence of a col-
lective identity is indeed argued in the present thesis. This is put down to
the development of shared mental models or – on a more general level – of
an organizational culture (Levine and Moreland 1991).
The employees’ personal growth or personal needs are more indirectly
addressed by cognitive leadership in that it is assumed that business con-
ceptions that offer possibilities of personal growth and the realization of
personal needs are more likely to succeed. However, a cognitive leader acts
as a meaning-maker in that she determines and communicates events or
facts that relate to her business conception.
Just how much the characteristics of charismatic (or transformational
leadership; see Shamir et al. 1993; Hunt 1999) differ from that of cogni-
tive leadership becomes clear when the seminal paper by Conger and
Kanungo (1987) is considered. With this paper the authors have outlined a
framework that aims at pinning down the observable behavioral processes
going on in charismatic leadership. To this end, the authors formulated
13 hypotheses concerning the basic characteristics of charismatic leader-
ship. Seeing cognitive leadership through the lens of these hypotheses
reveals that it differs markedly from charismatic leadership. Although
the behavioral components of cognitive leadership can be assumed to be
interrelated and, as such, form a constellation of components (Conger
and Kanungo’s first hypothesis), none of the following 12 hypotheses
serves as a necessary characteristic for cognitive leadership. For example,
in charismatic leadership the charismatic leader’s vision is assumed to be
‘highly discrepant from the status quo’ (ibid., p. 642). Further, a charis-
matic leader is assumed to ‘take on high personal risks’ (ibid.), to engage
in ‘novel, unconventional and counternormative’ behavior (Conger and
Kanungo 1987, p. 643) and to ‘portray the status quo as negative or intol-
erable and the future vision as the most attractive and attainable alterna-
tive’ (Conger and Kanungo 1987, p. 644). No such features are included in
the theory of cognitive leadership as characterizing cognitive leadership.
Thus, we can conclude that cognitive leadership cannot be completely
merged in Conger and Kanungo’s framework of charismatic leadership
(see Witt 2005). Cognitive leadership relies on influencing the followers’
mental models by communication and learning processes, without needing
counternormative, novel or unconventional behavior, without high per-
sonal risks taken on by the cognitive leader and without characterizing the
status quo as intolerable. Also, the business conception is not idealized ‘as
Introduction 7
the most attractive and attainable alternative’ to the status quo (Conger
and Kanungo 1987, p. 644) but as the desirable alternative envisioned by
the cognitive leader that stands in competition with other entrepreneurs’
business conceptions (Witt 1998).5 A context favoring the emergence of
charismatic leadership is periods of stress or crisis, a hypothesis developed
by political scientists that examined charismatic leaders in political and
religious contexts, respectively (Cell 1974; Toth 1981). Referring to the
empirical study conducted by Roberts and Bradley (1988) Conger con-
cludes that critical periods as well as certain organizational characteristics,
influencing the frequency and quality of interaction between a leader
and her subordinates, facilitate the emergence of charismatic leadership.
Although cognitive leadership views the frequency of interaction as key to
the leadership process, critical periods are not assumed to have a positive
impact on cognitive leadership. Bearing these differences between char-
ismatic and cognitive leadership in mind, we can conclude that cognitive
leadership is in a sense much less demanding on the cognitive leader and
the context than charismatic leadership is on the charismatic leader and
the context.
1.4 AIMS AND STRUCTURE OF THE BOOK
The scope of the theory of cognitive leadership ranges from explaining why
an entrepreneur founds a firm, how she can succeed in coordinating and
motivating her employees, to what path-dependent developmental pat-
terns of firm growth can be assumed based on this theoretical framework.
Thus, it includes more than approaching the coordination and motivation
of employees from a cognitive perspective. This volume focuses on the
latter. It sets out to achieve three main aims. First, it will bridge some of
the missing links that can be identified in the theory of cognitive leadership
with regard to the coordination and motivation of employees. Second, it
will broaden the theory of cognitive leadership’s scope by investigating
the group level processes that can be assumed to have an impact on the
socialization of newcomers. Third, it will explore the assumptions of the
theory of cognitive leadership empirically. Furthermore, the implications
of the present volume as well as open questions are presented. These aims
are elaborated in the following.
At the outset, in Chapter 2 the theory of cognitive leadership is pre-
sented (Section 2.1). First, the role of the entrepreneur who has a business
conception and who – by founding a firm and hiring employees – turns
into a leader is explained. As a cognitive leader it is her aim to shape her
employees’ cognitive frames according to her business conception. How
this can be achieved is explained. Before the hypothesized benefits of cog-

nitive leadership are presented, the potential impact of deviant behavior
is explained. Finally, the path-dependent development of a firm that is
in the beginning run by cognitive leadership is briefly outlined. However,
this part of the theory of cognitive leadership is not considered further in
the present volume since it focuses on social influence processes and their
determining factors in dyadic interactions as well as in group situations.
Within the framework of the theory of cognitive leadership, the under-
lying assumption is that we have limited cognitive capacities or – in other
words – that we are boundedly rational. In order to economize on our
cognitive capacities our attention is guided by cues. Consequently, we per-
ceive and process information selectively. The present volume elaborates
on these processes in more detail in Section 2.2. It explains the functioning
of attention and information processing as they are based on the organi-
zation of long-term memory. The concepts an employee – a ‘newcomer’
– has to learn on her way to becoming an ‘oldtimer’ are identified to be
related to the tasks as well as to social issues. It is further explained that
rather than employing the notion of cognitive frames as the theory of cog-
nitive leadership originally does, the present volume prefers the notion of
mental models.
It is argued that our limited information processing capacities result in a
more or less engaged processing of incoming information. The factors that
determine the extent of an individual’s engagement in information process-
ing are presented and it is reasoned that most of the time a rather superflu-
ous processing of information that relies on our long-term memory can be
assumed for most individuals. Section 2.3 summarizes Chapter 2.
A cognitive leader takes advantage of this selectivity by aiming at estab-
lishing her business conception as a basis to her employees’ attention and
information processing. This is achieved by frequently communicating
with the employees. Moreover, the employees learn about the business
conception by observational learning.
These issues are discussed in Chapter 3. This volume argues that for an
individual employee to adopt a business conception she has to be motivated
to do so. It is argued that she can be assumed to be motivated because of
her need for certainty and affiliation (Section 3.1). Furthermore, it is con-
cluded that immediately after joining a new organization a newcomer is
most susceptible to the influence of others – be it the cognitive leader or
her colleagues.
Whereas the theory of cognitive leadership concentrates on communica-
tion and observational learning for the conveyance of the business concep-
tion, this focus is broadened in the present volume (Section 3.2). Classical
conditioning as well as operant learning are presented as the most basic
Introduction 9
forms of learning that, on the one hand, are important to observational

learning but that, on the other hand, also contribute to an individual’s
learning in their own right. With regard to observational learning, the
focus of the theory of cognitive leadership is widened in that this volume
outlines the determining factors of an individual’s learning by observing
others. The same approach is taken with regard to learning from commu-
nication. Again, the determining factors of learning from communication
are explored. It is argued that the effects of communication depend on the
individual’s engagement in information processing, the cognitive leader’s
characteristics and behavior and the business conception’s characteristics.
A summary of Chapter 3 is offered in Section 3.3.
The theory of cognitive leadership addresses the impact of employees
on the implementation and maintenance of cognitive leadership to a
limited extent by proposing that employees can serve as models to their
colleagues. While these models may be coherent with the business concep-
tion, in some cases they may potentially threaten the cognitive leadership
by introducing deviant behavior to the work group.
Social influence has been shown to be a dyadic as well as a group-level
phenomenon. The Chapter 4 therefore broadens the approach of the
theory of cognitive leadership by directing the attention to group-level
processes. These are argued to have a substantial impact on the imple-
mentation and maintenance of cognitive leadership. As an example of
the potential impact a work group can have on an individual employee,
a newcomer’s joining of a firm is analysed from both perspectives, that of
the newcomer as well as that of the work group she enters (Sections 4.1
and 4.2, respectively).
From a newcomer’s point of view, she has to learn task-related con-
cepts (for example, shared mental models about the work group’s way
of processing the mail) as well as group-related concepts (that is, shared
mental models about the work group’s social norms and social roles) on
her way to become a full group member. These shared mental models
constitute a ‘common frame of reference’ or – in other words – the work
group’s culture (Levine and Moreland 1991). The tactics a newcomer
employs for gaining such information are outlined.
Taking the oldtimers’ perspective, the functions of social norms, social
roles and other work-related shared mental models are then presented.
What motivation fosters the provision of information to a newcomer is
discussed as well as what tactics oldtimers employ for doing so. Since the
impact on a newcomer is reasoned to be highest during her initial time
spent with a firm the analysis focuses on this period. It is concluded that
the socialization of newcomers is likely to have a stabilizing effect on the
work group’s social norms, social role and other work-related shared
mental models and that individual employees who cannot be socialized

successfully leave the work group or organization. Consequently, work
groups and organizations can be expected to grow more homogenous over
time (Schneider 1987; O’Reilly et al. 1989). Section 4.3 turns to the occur-
rence of deviant behavior in work groups. The origins of deviant behavior
are shown to lie with the oldtimers as well as with the newcomers. The
conditions under which deviant behavior are found attractive by others
are more closely examined. Section 4.4 summarizes Chapter 4.
The theory of cognitive leadership argues that cognitive leadership mainly
has two intertwined effects. On the one hand, the cognitive coherence
achieved by it facilitates the employees’ coordination. On the other hand,
the cognitive coherence between the firm’s goals and the personal interests
of the employees constitutes the employees’ intrinsic motivation while it
allows the cognitive leader to grant substantial liberties to her employees.
Chapter 5 returns to this dyadic perspective of social influence processes and
explores the characteristics of cognitive leaders as well as the hypothesized
effects of cognitive leadership on the employees’ coordination and motiva-
tion empirically. To this end, 14 hypotheses concerning the employees’ co-
ordination and motivation are proposed. Subsequently, the method
employed in the exploration is described in Section 5.2. Before the measures
and the analyses are described, the sample is presented. The data collected
from 107 participants is analysed with regard to the characteristics of
cognitive leaders. The results of the empirical exploration are presented in
Section 5.3. The factor analysis reveals that the 25 characteristics of cogni-
tive leaders assumed in the theory of cognitive leadership can be grouped on
seven meaningful dimensions. The factor values of all participants on each
of the seven factors are divided into four percentiles and the resulting groups
are interpreted to indicate the extent to which the respective participant
exerts this characteristic factor. The correlations of the factor values with
the effects items are computed and it turns out that some of the hypothesized
effects are found, whereas some hypotheses are not supported. Section 5.4
summarizes Chapter 5.
Chapter 6 presents some implications of the present volume along
with an outlook. Implications apply to dyadic interactions as well as to
the shaping of group processes (Section 6.1). It is argued that a cognitive
leader can aim at shaping dyadic and group-level processes by adhering to
some basic rules which are explained.
An exhaustive treatise of the theory of cognitive leadership is not pos-
sible to achieve within the scope of this volume and, thus, a number of
questions remain unanswered. These are outlined in Section 6.2. Since
the importance of the socialization of newcomers has already been
pointed out, the importance of selecting the ‘right’ employees is especially
Introduction 11
highlighted. It is argued that the selection of employees who fit the organi-
zation can lessen the need for socialization (for example, Rentsch and Hall
1994). Dimensions of fit that can be found in the literature and those that
relate to the theory of cognitive leadership are presented. It is suggested
that they include the employees’ background as well as the fit of the new-
comer to the organization, the work group and the supervisor with regard
to their values and personalities.
The importance of a fit between a newcomer and the new organization
is further emphasized by the findings of Higgins (2005). She argues that it
is not the accumulated experiences of an employee that predominate her
behavior in the workplace but that an employee’s early and midcareer
professional socialization experiences have an enduring impact on her
behavior throughout her professional life. This ‘career imprint’ results
from the combined impact of three factors: (1) the place (including an
organization’s strategy, structure and culture), (2) the individual’s charac-
teristics and (3) the individual’s career paths followed within a particular
organization. Higgins suggests that the greater the alignment of these
three factors is, the stronger the career imprint. Hence, the socialization
of a newcomer can be assumed to be facilitated as well as impeded by
the individual’s career imprint and choosing recruits who do not fit to an
organization may result in substantial investments in their socialization
that may turn out to be to no avail. Further open questions are discussed.
A summary of Chapter 6 is offered in Section 6.3.
NOTES
1. Other constellations of a firm founding, for example by a group of entrepreneurs, are

neither considered in the theory of cognitive leadership nor in this volume.
2. Note that this volume’s perspective on the issue of intrinsic and extrinsic motivation is
based on the assumption that in principle both kinds of motivation co-exist and that
only their extents vary. Consequently, when speaking, for example, about intrinsically
vs extrinsically motivated employees this is to say that their predominant source of
motivation is either intrinsic or extrinsic and that the respective counter motivation is
also present albeit to a lesser extent. This perspective acknowledges that intrinsically
motivated employees desire fair pay just as extrinsically motivated employees do.
3. See also Barnard’s ‘moral factor’ (Barnard 1948).
4. Formal training programs designed to train a newcomer on her entry to a firm are
excluded from the present discussion.
5. However, we cannot conclude that a cognitive leader’s aura of charisma is by any means
harmful to cognitive leadership.
2. The theory of cognitive leadership
and its foundation in cognitive
psychology
Founding a firm and being an entrepreneur almost certainly involves exert-
ing leadership over other people. At least, once the workload exceeds the
capacities of the entrepreneur herself. Although a lot of people have to do
it everyday, leading other people or in other, more informal words getting
them to do what one wants them to do is at times difficult. Numerous
research programs have been conducted on the subject, both theoretical
and empirical in nature (for an overview see Yukl 2002). Some of these
projects have approached the subject from a static perspective focusing,
for example, on the leader’s traits (for a meta-analysis on this subject see
Zaccaro et al. 2004); others have approached it from a dynamic perspec-
tive focusing, for example, on the exchange between the leader and her
subordinates (Leader–Member Exchange Theory, Dansereau et al. 1975;
Graen and Cashman 1975). These, however, discuss the leadership process
on the background of individuals or work groups in incumbent firms that
have to be led and their interaction with the leader.
On the other hand, research projects deal with the development of newly
founded firms and factors that contribute to their growth or decline (see,
for example, Greiner 1972; Clifford 1973; Albach et al. 1985; Garnsey
1998; Kauffeld et al. 2002).
The theory of cognitive leadership combines both perspectives by focus-
ing on the dynamics of leadership shortly after the founding of a firm, that
is, when a person has a business conception, founds a company and from
thereon has to make sure that her employees do things as she would like
them to. How to take care of this task is the subject of the theory of cog-
nitive leadership that is presented in this chapter (Witt 1998, 2000, 2002,
2003, 2005). The presentation of the theory of cognitive leadership is fol-
lowed by a section on the cognitive foundations of the theory, namely the
functioning of perception and information processing, the organization of
the long-term memory as a basis to perception and information processing
and the effects of our limited capacities for information processing. The
chapter concludes with a summary.
12
Cognitive leadership and its foundation in cognitive psychology 13
2.1 THE THEORY OF COGNITIVE LEADERSHIP

The theory of cognitive leadership is a dynamic leadership theory. It sets
out to answer the question ‘whose imagined ventures are to be followed
by the firm members’ (Witt 1998, p. 163), that is, who succeeds in leading
the firm members to follow a certain agenda which is called a ‘business
conception’ (Witt 2005, p. 4). This section outlines the core concepts of
the theory of cognitive leadership as they have been introduced by Witt
(1998, 2000, 2002, 2003, 2005).1 The first subsection introduces the firm
founder in the role of a cognitive leader who founds a firm in order to
realize her business conception. To this end, the cognitive leader has to
induce her employees to follow this business conception. How this can
be achieved is discussed. Before the benefits of cognitive leadership are
presented the occurrence of deviant behavior is focused on. Finally, three
potential developmental routes of cognitive leadership in growing firms
are presented.
The Firm Founder as a Cognitive Leader
The theory of cognitive leadership focuses on the firm founder as the key
element initiating the founding of a firm. By this act the firm founder exerts
the genuine entrepreneurial act of providing the constitutive service of
‘incessant (re-) structuring of production and trade’ and thus turns into an
entrepreneur (ibid., p. 2).2 The firm founder is assumed to have the inten-
tion to realize her unique vision of ‘what business is to be created and how
to do it’; this vision is called the ‘business conception’ (Witt 2005, p. 4). A
business conception is defined as the representation of an ‘interpretative
framework which furnishes the decision maker with a general orientation
and a general associative basis for deriving and assessing action informa-
tion . . . it leaves room to cover up-coming information’ and ‘has the fea-
tures of a cognitive frame’ (Witt 1998, p. 166ff.). As such, it is largely tacit
but can, for example, be partly overtly expressed in a business plan which
is based on a business conception (Witt 2005).3
In case the workload that is needed for realizing the business conception
exceeds the entrepreneur’s personal capacities, she will hire employees and
thus turn into a leader. In the theory of cognitive leadership the leading
of these employees means inducing them to follow the leader’s business
conception – a process argued to mainly depend on cognitive processes.
The person of the leader is crucial to the development of the firm because
it is mainly dependent on her whether the employees of her newly founded
and possibly growing firm follow her business conception. As presented in
the following section, the concepts of bounded rationality (Simon 1995)
and observational learning (Bandura 1986) are key to the realization of

cognitive leadership (see Witt 2000).
Shaping the Employees’ Cognitive Frames
In order to realize cognitive leadership the cognitive leader aims at occupy-

ing the employees’ current cognitive agenda with the business conception
(see Witt 2005). However, the adoption of a new cognitive frame as that
of a business conception cannot be ordered. It is not a matter of conscious
decision making for or against a certain cognitive frame (see Witt 2005, p.
11). Also, the theory of cognitive leadership claims that the thriving and
propagation of a business conception is dependent on external contingen-
cies that do not lie in the cognitive leader’s hands (for example, ‘market
development and local economies, level of aggregate economic activity,
entry and behavior of competitors’ (Witt 2000, p. 741).
According to the theory of cognitive leadership cognitive frames are
formed by individual’s socialization, the learning of language as well as the
identification of meaning. The formation and shaping of cognitive frames
extends to a lifelong process through experiencing and (social) learning
(see Section 3.3). To put it differently, people form and reform their cog-
nitive frames constantly through contact with their environment, both
physical and social. The ‘more frequent and the more intense’ the employ-
ees’ contacts with the desired business conception are ‘the more likely that
there are some similarities in the subjective representation of knowledge’
(Witt 1998, p. 164). Thus, gradually, groups of employees that have an
intense communication with the leader and among each other develop
‘[s]ocially shared interpretation patterns and frames’ (ibid., p. 165). Also
‘common tacit knowledge of facts, hypotheses, practices and skills as well
as shared knowledge of rewarding or aversive experiences and correspond-
ing preferences and models of behavior’ develop within a closely interact-
ing group via observational learning (ibid.). This is especially the case in
non-formal communication (for example, Witt 2000). The formation of
‘[s]ocially shared interpretation patterns and frames’ (Witt 1998, p. 165)
is assumed to be due to the agents’ bounded rationality (Simon 1995) and
the observational learning that takes place during the agents’ interaction
(Bandura 1986).
The concept of bounded rationality implies that the human capacity for
processing information is limited. Therefore, humans perceive and process
information selectively, being guided by cues. Because of their bounded
rationality people are not able to consider unlimited amounts of informa-
tion. Instead, their information processing is guided by the current cogni-
tive frame that has been elicited by the cues. In an organizational context
the predominance over the employees’ cognitive frame ensures that they try
to solve their tasks in the spirit of the business conception (see Witt 2000).
The theory of cognitive leadership assumes the success of the propaga-
tion and the adoption of the business conception to be dependent on the
qualities of the business conception as well as on the characteristics of the
cognitive leader.
A sound and appealing business conception is assumed to ‘induce
the employees to believe in the success of the entire venture in which
they are participating’; furthermore, the ‘business conception may also
promise to be personally rewarding in terms of qualification, enhance-
ment, working conditions, career options and remuneration’ (Witt 1998,
p. 168). Advantageous characteristics of a cognitive leader are assumed to
be ‘eloquence, persuasiveness, patience and persistence, the capacity for
gaining sympathy and confidence’ (ibid.), ‘communicativeness, . . ., fair-
ness, credibility and appreciativeness’ (Witt 2000, p. 746).
Since influencing the employees via communication and observational
learning can only take place in social interaction, the interaction intensity
and frequency between the leader and her employees is crucial to her
potential influence on them. To uphold sufficient personal contact with the
employees is bound to get harder the more employees are hired. A lack of
personal contact though can lead to a crisis in leadership and can entail ‘a
major efficiency loss’ (Witt 1998, p. 174).
Deviant Behavior
It is assumed that the predominance over the employees’ cognitive frames

cannot be achieved completely. Consequently, deviations from com-
monalities in opinions and behavior occur. They are likely to be noticed
by the other employees and the entrepreneur has to constantly check her
employees’ behavior for whether it fits the business conception or not (for
example, Witt 2000). Behavior that runs contrary to the business concep-
tion should be sanctioned, whereas complementing behavior should be
rewarded. In case the deviating behavior is rewarded or if the respective
person can get away with her behavior (and the direct reward gained by
the deviating behavior itself is high enough) then vicarious learning will
take place in the group and the respective kind of behavior is likely to be
imitated by its members. Therefore, the cognitive leader has to constantly
control for deviating behavior, that is, for potentially rivaling cognitive
frames and reward or punish it in time before it occurs too often and in the
end shifts the prevailing cognitive frames of the group to one less desirable
in the eyes of the entrepreneur. This is what Witt has called the ‘wrestling
for cognitive leadership’ (see Witt 2005, p. 9).
Benefits of Cognitive Leadership
The benefits of cognitive leadership are argued to be twofold and inter-

dependent. If the cognitive leader – via intensive communication and obser-
vational learning – succeeds in implementing her business conception as a
maxim and if the employees develop a common understanding about all
other work-related issues the employees decide and act in accordance with
the business conception and in a coordinated manner. Thus, ‘a high level of
cognitive coherence among its members’ consistent with the leader’s busi-
ness conception can be attained and ‘dispersed knowledge and individual
endeavor can be coordinated most effectively’ (Witt 2000, p. 743).
This allows the leader to grant substantial ‘room for discretionary or
self-determined decision-making’ (Witt 2005, p. 6) which boosts intrinsic
motivation (Deci et al. 1999). Consequently, under the regime of cogni-
tive leadership the employee is motivated to show initiative, to engage in
problem solving and to use her creativity in the work process in line with
the business conception (Williams and Yang 1999). Thus, the properties
of cognitive leadership are ‘particularly relevant in markets and industries
in which entrepreneurial ventures demand a high level of creativity’ (Witt
2005, p. 7). Witt (2005) further notes that extrinsic incentives that are
usually offered to support the employees’ motivation can have a detrimen-
tal effect on the employees’ intrinsic motivation because they can crowd
it out.
Cognitive Leadership in Growing Firms
Up to this point, the theory of cognitive leadership has been described as

static in the sense that it looks at the interaction between the leader and the
individual employee. There is, however, a further dimension to the theory
that includes propositions about the changing characteristics of cognitive
leadership in case the (nucleus) firm is successful and has to hire new staff
(Witt 2000, 2002, 2003, 2005).4
As has been outlined, the success and failure of cognitive leadership
hinges to a large part on the business conception, on the person of the
leader, her abilities and traits. It also hinges on the personal contact
between the leader and her employees because this is how the leader shapes
the cognitive frames of her employees. If the firm starts growing in terms
of the number of employees, the frequency of personal contact between
the cognitive leader and her employees decreases (for example, Witt 2005).
Consequently, the impact the cognitive leader exerts on her employees
also decreases and the likelihood of a rivaling cognitive frame to take over
(or of diverse rivaling frames to take over) rises significantly. Hence, the
benefits of cognitive leadership regarding the internal coordination of the

firm and the employees’ motivation decline correspondingly. The number
of employees that marks this point in the history of a firm depends – as
has been argued – on the skills and characteristics of the entrepreneur as
well as on the qualities of the business conception. When rivaling business
conceptions have an increasing influence on the employees – probably
accompanied by signs of crisis (Clifford 1973) – three different kinds of
development are possible.
The entrepreneur may – for reasons not discussed here – not notice the
changes that undermine her leading position in the firm. She may therefore
not react appropriately and lose the predominance over her employees’
cognitive frames. This loss goes along with a declining coordination of
the firm. Rivaling cognitive frames will take over and the interests of the
employees will split into diverse directions. Thus, the intrinsic motivation
of the employees is likely to focus on other aspects than those desired by
the original business conception. Some employees may lose their intrinsic
motivation to behave according to the business conception completely and
instead rely on extrinsic motivators such as remuneration and so on. These
employees are assumed to soon adopt slack ways of working. Witt (2005,
p. 16) summarizes the effects of this muddling through in the follow-
ing way: ‘the firm organization is likely to perform in a significantly less
efficient way with negative effects on profitability’; however, ‘the lack of
coordination and motivation tends to impede the firm’s growth, but does
not necessarily threaten the survival of the firm’. A return from extrinsic
to intrinsic motivation is assumed to be highly unlikely or even impossible
since ‘it is hard to undo the double incidence of a changed cognitive frame
of the employees . . . and the crowding out of their intrinsic motivation’
(Witt 2005, p. 17). If the reduction in productivity does not endanger the
firm so greatly that it has to close down, it may leave enough time for the
entrepreneur to sell the firm or to organize the firm’s takeover by a third
party (Witt 2005).
If, however, the entrepreneur does notice the changes going on in her
firm, she can decide to stop cognitive leadership altogether and replace it
by ‘ad hoc instructions to the employees and supervision of the carrying
out’ (Witt 2002, p. 8), that is, a monitoring regime that induces the firm to
operate ‘in much the way accounted for by the transaction costs approach
to the firm’ (Witt 2000, p. 752). In such a case, the entrepreneur is likely
to divide up the firm into hierarchically organized departments that are
supervised by a corresponding hierarchy of managers (this is equivalent to
what Witt (2002, p. 16) calls an ‘extended monitoring’ regime). Of course,
this has a serious impact on the employees’ cognitive frames and intrinsic
motivation. Deviating models of behavior are assumed to develop within
the firm and a close monitoring of the employees will be necessary to keep
up coordination. However, monitoring curbs the employees’ intrinsic
motivation and ‘tends to paralyze [the employee’s] creative impulses and
the motivation to pursue unknown consequences’ (Witt 1998, p. 173). And
with that, the aforementioned positive effects on the employees’ ‘creativ-
ity, initiative and problem solving engagement’ are lost for the firm (Witt
2005, p. 18) leaving the firm to react slowly to changing demands, let alone
working creatively (Witt 1998). Moreover, ‘coordination through detailed
directions, regulations, authorization and tight control causes frictions
and is slow and costly in terms of time resources’ (Witt 2000, p. 748) so
that the firm’s productivity can be seriously affected (see Mueller 1972).
However, Witt assumes that this shift in the governmental regime may
hold up the firm’s achievement with regard to, for example, reputation and
contribute to a continued yielding of the economies of scale that have been
achieved by the firm before the shift of the governmental regime. If this is
not the case or if ‘managerial governance is weak’ the ‘further development
of the firm is characterized by stagnation and even decline’ (Witt 2000, p.
752). Due to former bad experiences with switching to a monitoring regime
or due to her dim expectations about the future course of the firm the entre-
preneur may decide to put her firm up for sale or takeover (Witt 2000).
A third alternative reorganization of the firm opens up to the entrepre-
neur at the point where her capacity to be the sole cognitive leader of the
firm runs out. The entrepreneur can split up the firm’s organization into
sub-divisions and implement a second hierarchical layer of (sub-) entrepre-
neurs each supervising a sub-division at their own discretion, that is, the
entrepreneur can implement a ‘divided entrepreneurship’ regime within
the firm (Witt 2002, p. 15).5 In such a regime it is the aim of the entrepre-
neur to shape the cognitive frames of the sub-entrepreneurs according to
her business conception although the firm has been subdivided. In other
words, she has to implement an ‘overarching business conception’ that is
in general applicable to all divisions but that may be adapted in detail for
the respective needs of each division (Witt 2000, p. 750). To ensure the pre-
dominance of the overarching business conception the entrepreneur again
has to make sure that close enough personal interaction is given between
the group of sub-entrepreneurs and the entrepreneur herself. It is the task
of each sub-entrepreneur to take over the role of an entrepreneur and take
care of shaping her respective employees’ cognitive frames according to
the overarching business conception in the place of the entrepreneur. With
such a regime of sub-entrepreneurs and an overarching business concep-
tion, the benefits of cognitive leadership can be held up for the growing
firm6 and the ‘firm profitability and rate of growth [is assumed to be] above
average’ (Witt 2000, p. 752).
2.2 FOUNDATIONS OF THE THEORY OF

COGNITIVE LEADERSHIP IN COGNITIVE
PSYCHOLOGY
As has been outlined above, the cognitive leader (that is, the founder) aims
at influencing her employees so that they internalize the business concep-
tion as a maxim for deducing rules and so on. Intense communication also
contributes to the development of a common pool of references which
leads to similar interpretations of the same events. This section focuses
on explaining the functioning of the theory of cognitive leadership as it is
based on psychological processes. The first subsection explains the func-
tioning of perception and information processing. Then, the organization
of the long-term memory will be presented along with how a maxim and
a common pool of references can be conceptualized in cognitive terms.
This section further explicates how our cognitive structures guide our
perception and information processing. Last, the effects of our limited
information processing capacities are discussed. At large, it is argued that
our limited information processing capacities are a fundamental condition
for cognitive leadership.
Attention Management and Information Processing
Humans perceive and process information selectively, because the human

capacity for information processing is limited (see the concept of bounded
rationality, Simon 1995). The resources, that is, the arousal capacity of
an information processing system like the short-term memory, that are
necessary for processing the incoming stimuli are managed by the limited
capacity control system.7 The limited capacity control system deals out the
available capacities on an anticipatory basis: before the actual stimulus is
presented to the system it reacts to ‘warning signals’ (that is, cues; Gopher
and Donchin 1985) by providing the required resources.
Automated behavior can be performed without any extra cognitive
effort. All other behavior requires a minimum of cognitive effort for which
a minimum concentration is needed. The limited capacity control system
is responsible for the individual’s ability to focus on a situation or the
apparently most important aspects of a situation when doing two things.
First, it additionally arouses those systems that are involved in informa-
tion processing. Second, the limited capacity control system inhibits those
systems that are not involved in this process (see Birbaumer and Schmidt
1991, p. 485; see also Treisman’s attenuation theory (1964) and its empiri-
cal validation by, for example, Johnston and Heinz 1978). To do this, the
limited capacity control system must apply some sort of ‘filtering process’
by means of which stimuli can be assessed as (un)important. We adapt our

attentional capacities to the necessities of our environment by inferring
from our past experiences what aspects of a current situation are the most
likely aspects to change or its most important features (see Kahneman
2003; Dörner’s ‘HyPercept-program’ in Dörner 1999, pp. 144ff.; Neisser
1967; Yarbus 1967). Thus, perception is guided by external information
and memory. In other words, perception is organized from the bottom up
(external information is perceived) as well as from the top down (memo-
ries guide the focus of attention, hence filtering the available information)
(Abelson and Black 1986). Alternative messages only get to us when they
are (a) ‘physically striking (a loud noise)’ (see Posner et al. 1978), (b) ‘par-
ticularly important (our name)’ or (c) ‘consistent with the message we are
processing’ (Anderson 2000 [1980], p. 81).
However, we can overcome the physical salience of a stimulus by delib-
erately focusing our attention on something (Kahneman 2003). Also, high
emotional or motivational arousal can ‘greatly increase the accessibility
of thoughts that relate to the immediate emotion and to the current needs
and reduce the accessibility of other thoughts (Loewenstein 1996, 2000;
Elster 1998)’ (Kahneman 2003, p. 1454).8
The quantity of the resource capacities allocated by the limited capac-
ity control system depends on automatically performed pattern matching
processes. A given stimulus presents a cue or a ‘warning signal’ to the
corresponding sensory organ. It arouses a node in the mental network
which also facilitates the activation of neighboring nodes. Hence, asso-
ciated concepts emerge more easily than unrelated ideas (‘associative
priming’; Meyer and Schvaneveldt 1971). We then perform a pattern
matching process: by comparing the current stimulus with the invoked
stored concepts we assess and interpret the situation. How this process
actually works and its importance for the theory of cognitive leadership is
described in the following section.
Organization of the Long-term Memory
As a starting point for the approach to the pattern-matching process we

use the organization of the long-term memory because the long-term
memory offers the material we use for pattern matching processes. The
long-term memory is organized as a hierarchical neural network. On the
lowest level of this hierarchy we find propositions that are more or less
strongly related to each other. Propositions represent ‘what is important
about specific things’ (Anderson 2000 [1980], p. 155). The strength of
the relations between them determines how closely two propositions are
related. It can be imagined to range from 0 to 1. The higher the strength of
a relation, the more easily related propositions are accessible if a neighbor-

ing (that is, related) proposition is active. The fact that one proposition A
is related to another proposition B with a strength of, for example, 0.7 is
equivalent to the belief that if proposition A is active then – with a likeli-
hood of 0.7 – proposition B is also active.
On the next higher level, propositions form schemas and scripts.
Schemas represent ‘what specific things tend to have in common’ (ibid.),
whereas scripts represent what events tend to have in common (for
example, going to a restaurant; see Anderson 2000 [1980], p. 159ff.; see
also Nisbett and Ross 1980 for a distinction between schemas and scripts).
Schemas and scripts are represented by their prototypes, that is, schemas
and scripts that combine all necessary characteristics of an object or an
event. Possible characteristics of an object or an event are linked with a
certain strength to the respective prototype. The strength indicates how
likely it is for an object or an event to possess the respective feature. Thus,
we are able to not only identify and process typical objects or events but
also less typical objects and events.
Again on the next higher level, schemas and scripts are combined into
mental models. Mental models are also organized hierarchically, that is,
a more abstract mental model is formed by a number of layers of more
concrete mental models. The fact that perception and thus information
processing is in part a top down process implies that mental models are
decreased images of the actual circumstances. According to Denzau and
North’s definition ‘mental models are the internal representation that indi-
vidual cognitive systems create to interpret the environment’ (Denzau and
North 1994, p. 4; see also Hayek 1952, 1963). These interpretations (that
is, the meaning we attach to each situation) are the basis for our behavior
(Berger and Luckmann 1966; Gioia and Poole 1984; Lord and Kernan
1987). We further use mental models to guide our focus of attention and to
‘generate descriptions of system purpose and form, explanations of system
functioning and observed system states and predictions (or expectations)
of future system states’ (Rouse et al. 1992, p. 1300; see also James and
James 1989), that is, we use them for information processing and problem
solving. We can do so because mental models enable us to flexibly combine
schemas and scripts (see Holland et al. 1986).
In pattern matching we compare our stored mental models to the current
situation, that is, for example, an external stimulus. To be considered in
information processing the external stimulus first has to pass a filter that
only lets those cues pass that fit into the currently active mental model or
that invoke our attention by, for example, being particularly important
to us. The stimulus is then processed on the basis of the currently active
mental model. The outcome of the information process is fed backward to
Stored mental
models
Feedback loop
to stored mental
models
Filtering of incoming
information on a
cognitive level and an
evaluative level;
executed by the least
capacity control system
(LCCS)
Perception of
Outcome of
stimulus and
information
External processing of it Potential
processing: action
stimulus (pattern matching reaction
plan, integration of
(cue) facilitates the
stimulus into
assessment and the
stored mental
interpretation of the
models
stimulus)
Figure 2.1 The cognitive processing of an external stimulus
our long-term memory and, potentially, an action plan is developed and

exerted on the basis of the processing of the stimulus. The experiences with
the execution of the developed action plans are fed backward to the long-
term memory. Both kinds of feedback may cause an adaptation of the
original mental model. In effect, this is how individuals learn (see Piaget
1975; Section 3.3).9 Figure 2.1 summarizes this process.
If an individual’s mental model to a certain degree overlaps with
another individual’s mental model, that is, if ‘a dyad of individuals pos-
sesses a similar cognitive representation of some situation or phenom-
enon’ (Langan-Fox et al. 2001, p. 99), this is called a shared mental model
(Denzau and North 1994; Orasanu 199410; see Figure 2.2). The same applies
to the group level: a work group ‘with a shared mental model is one where
most, if not all, of the people involved think about a phenomenon or situa-
tion in a very similar manner’ (Klimoski and Mohammed 1994, p. 421). A
perfect coherence of mental models is deemed to be unlikely since individu-
als are not exclusively and coherently influenced by only one single source
(see Rentsch and Hall 1994). Furthermore, within a work group, multiple
shared mental models may co-exist (Klimoski and Mohammed 1994).
Shared mental models of individuals develop through frequent inter-
action during which learning and communication take place (for example,
Schneider and Reichers 1983; Foushee et al. 1986; Walsh et al. 1988;
Rentsch 1990; Schein 1992; see Chapter 3). They contain not only the
task-related knowledge of a group member (for example, the knowledge
Individual 1
Schemas and Scripts

Mental
models
Propositions and
Relations
Shared
mental
models
Schemas and Scripts
Propositions and
Relations
Mental models
Individual 2
Figure 2.2 Stylized portrayal of the hierarchical organization of an

individual’s long-term memory and its potential social
dimension in the form of shared mental models
about the work group’s standard operation procedures) but also group-
related knowledge (knowledge about the work group’s way of function-
ing, its social norms and the social roles of the group members) (see
Schein 1971; Feldman 1976, 1983, 1984; Van Maanen and Schein 1979;
Orasanu 1990; Levine and Moreland 1991; Cannon-Bowers et al. 1993).
The ‘common frame of reference’ which shared mental models constitute
‘is often described as the group’s culture’ (Levine and Moreland 1991,
p. 258). On the basis of shared mental models group members interpret
events similarly. These interpretations are typically initiated by the leader
of a group (Aldrich 1999). According to Klimoski and Mohammed (1994)
shared mental models may ensure the coordination of a work group more
effectively than leadership exerted by a person could.
Coming back to the theory of cognitive leadership, we can conclude that
a cognitive leader aims at shaping her employees’ mental models or – to
put it differently – aims at setting their cognitive agenda so that shared
mental models with regard to work-related issues develop and so that the
cognitive leader’s business conception is adopted as a maxim in relation

to all of the other work-related mental models. This intersubjectivity –
that is, a ‘shared understanding of what is being discussed or worked on’
(Levine et al. 1993, p. 600) – is the prerequisite for coordinated activity
among the employees.
Witt’s notion of a business conception has the features of a mental
model (see, for example, Witt 1998; see also Anderson 2000 [1980]). Under
the regime of successful cognitive leadership the business conception is
superior to all other work-related mental models in the hierarchical organ-
ization of the long-term memory. It states fundamental business-related
principles or rules of conduct and is thus suitable for deducing lower-order
rules. It is very strongly connected to all other work-related mental models
and thus is accessed whenever work-related information is processed. In
this sense it serves as a maxim for all work-related information processing
that guides all business-related information processing.
The theory of cognitive leadership states that ‘at any point in time only
one cognitive frame can be in operation’ (Witt 2005, p. 6), thus the entre-
preneur’s and the employees’ capacities for considering alternatives that lie
outside the currently active mental model are assumed to be unavailable.
This assumption is crucial to cognitive leadership because it implies that –
once a business conception has been adopted and serves as a maxim – the
individual is limited in her potentials to interpret upcoming information. To
put it differently, the outcomes of an employee’s information processing is
predestined by the business conception if she has adopted a cognitive lead-
er’s business conception as a maxim and thus processes upcoming informa-
tion through the lens of it. This is caused by the business conception’s strong
relation to all sub-ordered work-related mental models that make sure that
the arousal of any work-related mental model also arouses the business
conception (see the following section on the effects of our limited informa-
tion processing capacities). In the present thesis the notion of mental models
is preferred to the notion of cognitive frames because in the literature the
former notion is most commonly used.
Effects of Limited Information Processing Capacities
From an evolutionary point of view our cognitive limitations in informa-

tion processing have led to the development of ways to economize on our
scarce resources (see Dörner 1999; Lord and Maher 1990; McFadden
1999; Busenitz and Barney 1997 for an application to the entrepreneurial/
managerial context). The top down/bottom up organization of perception
and information processing that has been presented in the previous sub-
section are only two ways for economizing on our scarce cognitive resources.
With the path-breaking research Kahneman did mainly in collaboration

with Tversky (for example, Tversky and Kahneman 1974; Kahneman and
Tversky 1979, 2000), he has pointed out numerous systematic biases in
information processing that play a crucial role for cognitive leadership.
Kahneman assumes that the human cognitive system is divided into
three parts: the perception, System 1 and System 2 (Stanovich and West
2000).11 The operations of System 1 are characterized as being ‘fast,
automatic, effortless, associative and often emotionally charged; they are
also governed by habit and are therefore difficult to control or modify’
(Kahneman 2003, p. 1451). The outcomes of System 1 are ‘not voluntary
and need not be verbally explicit’ (Kahneman 2003, p. 1452). Conversely,
the operations of System 2 are described as ‘slower, serial, effortful and
deliberately controlled; they are also relatively flexible and potentially
rule-governed’ (ibid.). The outcomes of System 2 are always ‘explicit and
intentional, whether or not they are overtly expressed’ (ibid.). Hence,
‘System 2 is involved in all judgments, whether they originate in impres-
sions or in deliberate reasoning’ (ibid.). System 1 and System 2 both
operate on the basis of perceptions as well as memories; that is, bottom up
as well as top down. In information processing System 1 and System 2 col-
laborate closely: System 1 delivers impressions and inclinations whereas
System 2 takes over the monitoring and correction – although ‘quite
lightly’ (Kahneman 2003, p. 1467). That is to say that most of our infor-
mation processing is done in the System 1 mode: fast, automatic, without
much effort, on an associative basis, often emotionally charged and guided
by habit. These features of System 1 come at the price of systematic biases
in information processing. The so-called ‘framing effect’ explains why the
top down characteristics of perception and information processing limit
the possible outcomes of information processing (Tversky and Kahneman
1981). It states that people make different choices depending on the
relative salience of different aspects of a problem that we generally accept
without questioning (see Johnson et al. 1993). Referring to mental models
this effect is due to the initial arousal of certain nodes and neighboring
nodes that focus the individual’s attention and determine the information
processing. Hence, a problem’s frame facilitates access to some proposi-
tions whereas it inhibits access to others. Consequently, the ‘mental area
of search’ with respect to solutions is limited. A tendency to search locally
has been found in cognitive contexts (March and Simon 1958; Cyert and
March 1963) as well as organizational contexts (Cohen and Levinthal
1990; March 1991; Sørensen and Stuart 2000). The salient features are
partly inherent in the presentation of a problem; partly they are evoked in
relation to our long-term memory. In addition, they are influenced by our
current emotional and/or motivational state (see Loewenstein 1996, 2000;
Elster 1998). In the theory of cognitive leadership it is assumed that the

business conception largely determines what characteristics of a situation
are assessed as relevant (top down information processing). Additionally,
the salient features of a situation co-determine the information processing
(bottom up characteristic of information processing).
As can be inferred from the top down character of perception and
information processing, an individual’s expectations contribute largely to
the accessibility of related mental models. If an individual (consciously or
not) expects a situation to develop in a specific way, mental models related
to the assumed future development of the situation will be activated (see
Kiesler et al. 1984; Levine et al. 1993).
The effect of our expectations and our first perception of a stimulus is
augmented by our tendency to pay more attention to those stimuli that
confirm our initial hypotheses and to interpret them accordingly (the so-
called ‘confirmation bias’; Wason 1960). Hutchins (1991) illustrates the
confirmation bias by presenting an example about an accident at sea taken
from Perrow’s (1984) book Normal Accidents. In that example two ships
collide because the captain of one of the ships succumbs to the confirma-
tion bias and does not interpret the stimuli presented in the correct way
(which would have enabled him to avoid the accident altogether).
The confirmation bias does not only apply to physical stimuli but has
been found for attributions (Anderson et al. 1980), personality traits
(Hastie and Kumar 1979), logical inference tasks (Wason 1968; Wason
and Johnson-Laird 1972), beliefs about important social issues (Lord et
al. 1979) and scientific reasoning tasks (Fleck 1979; Tweney et al. 1981,
Parts III and IV) (according to Hutchins 1991). Take, for example, the first
encounter of a person. The salient features present at this event are features
like that person’s gender, appearance and so on – generally those things
which are observable quite easily. Based on these cues we infer further
attributes of the person in question by drawing on our stored mental
models that may contain such information as ‘women tend to wear skirts
more often than men’. But also more serious and profound conclusions
may be drawn based on such thin knowledge as a person’s gender. For
example, a common stereotype is that women are less skilled in intellectual
tasks than men. The observation of a woman outdoing male contestants,
that is, the observation of information that counter-runs the stereotype,
does not necessarily lead to a revision of it. Rather, the reason for that
woman winning is attributed to external circumstances like her trying very
hard so that the stereotype can be maintained (Yarkin et al. 1982).
Whether System 2 takes over from System 1 is a matter of how much
cognitive effort the individual is willing and able to bring up for processing
the task at hand. Louis and Sutton (1991) identified three conditions under
which individuals are likely to switch to a cognitively more effortful way of

information processing. This is the case if the situation the individual faces
is unusual or novel, if a situation develops contrary to the individual’s
expectations and if the individual willingly engages in the task at hand.
However, Kahneman (2003) states that people have trouble working in
System 2 if they are (a) under time pressure (Finucane et al. 2000; see
also Fiedler and Garcia’s (1987) cognitive resource theory), (b) currently
involved in a different effortful task (Gilbert 1989, 1991, 2002), (c) at odds
with their biorhythm (Bodenhausen 1990) or (d) in a bad mood (Isen et al.
1988); on the other hand, the operation of System 2 is facilitated if people
(a) are intelligent (Stanovich and West 2002), (b) have a need for cogni-
tion12 (Shafir and LeBoeuf 2002) and (c) are exposed to statistical thinking
(Nisbett et al. 1983; Agnoli and Krantz 1989; Agnoli 1991).
Kahneman (2003, p. 1450) resumes that we make ‘most judgments and
most choices . . . intuitively’ (see also Taylor and Fiske 1978). Moreover,
the cognitive system ‘tends to see what it expects to see’ (Kahneman 2003,
p. 1454; see also Bruner and Minturn 1955; Reason 1990; Dörner 1995).13
As we have learned from Kahneman (2003) and Stahlberg and Frey
(1996) the accessibility of our mental models to a large extent determines
the outcomes of information processing. So what are the specific mecha-
nisms that facilitate access to our long-term memory?
Besides the characteristics of the stimulus (physical salience, importance
and consistency with the currently active mental models; Anderson 2000
[1980]) and those of the individual (being under time pressure or not,
being currently involved in a different effortful task or not, being at odds
with one’s biorhythm or not, being in a bad mood or not, being intelligent
or not, being exposed to statistical thinking or not or having a need for
cognition or not; according to Kahneman 2003), practice has a strong
impact on the accessibility of mental models. Every time we think about a
specific schema or script on a neurological level we channel the employed
connections of this assembly of nodes. Already existent connections are
re-enforced every time they are used. And the more often a connection
is used (that is, the more often one thinks about a certain concept, prob-
ably triggered by frequent encounters with the stimulus), the more active
they can get and the easier they are accessible (see Hebb 2002). The more
strongly related propositions are with other currently active propositions,
the more rapidly they are verified. This means that we process information
systematically faster if it fits our current schemas and scripts (Anderson
2000 [1980]). Anderson (2000 [1980], p. 187) points out that the ‘effects
of practice on memory retrieval are extremely regular and very large’ (see
Newell and Rosenbloom’s (1981) power law learning).
Getting back to the theory of cognitive leadership we can conclude that
the fast and automatic perception and information processing on a System

1 level dominates most of our cognitive activities. Under the regime of
cognitive leadership, that is, assuming that the cognitive leader’s business
conception has been implemented successfully as a maxim to all of the
employees’ work-related mental models, this means that the business con-
ception dominates the employees’ perception and information processing.
This dominance is augmented by the confirmation bias and practice. We can
conclude that a shift from a System 1 level of perception and information
processing to a System 2 level in which the business conception (and other
work-related mental models) are questioned is contingent on the described
factors and that – generally – our information processing (and hence our
learning) is inert because it is path-dependent and subject to economization
with regard to time and mental effort (Rizzello and Turvani 2002).
2.3 SUMMARY
This chapter presented the theory of cognitive leadership and the cogni-
tive underpinnings of it. The theory of cognitive leadership focuses on the
person of the entrepreneur who has a business conception she wants to
realize. In order to do so she founds a firm and becomes a cognitive leader
to her employees.
A cognitive leader is characterized by having a business conception that
guides her information processing and decision making and by having the
aim to convey her business conception to her employees via personal com-
munication and observational learning. The theory of cognitive leader-
ship assumes that if the cognitive leadership is successfully exerted the
employees adopt the cognitive leader’s business conception and use it as
a maxim for all work-relevant information processing. Furthermore, they
are assumed to develop a common pool of references.
The effects of cognitive leadership are twofold and interdependent. On
the one hand, the firm’s internal coordination runs smoothly because the
employees all refer to the same business conception and the same pool
of references in their work-related information processing and decision
making. This allows the cognitive leader to grant substantial degrees of
freedom to her employees. On the other hand, the individual employee’s
degrees of freedom in her daily work and her feeling to contribute to a
common goal boost her intrinsic motivation. Thus, the cognitive leader
can be sure that her employees aim at contributing their best to the work
process without having to implement an extrinsic reward scheme.
It has been explained that an individual’s cognitive structure consists of
hierarchically organized mental models that again consist of hierarchically
organized propositions, schemas and scripts. The cognitive leader’s busi-

ness conception has been defined as being the most superior mental model
to all other work-related mental models that states work-related principles
and serves as a maxim. As such it guides all work-related information
processing. Besides the business conception, employees learn a number of
other work-related shared mental models that contain task- as well as work
group-related knowledge. The common frame of reference constituted by
a work group’s shared mental models is the work group’s culture.
The evaluation of a stimulus determines whether the individual will
focus her attention on the stimulus at all. The pattern matching process
that is performed automatically assesses the similarity between the cur-
rently encountered information and the existing mental models. On the
basis of this match we assess and interpret the situation and develop plans
for possible reactions. As has been pointed out, our mental models are
reduced images of the world that only include those features that the indi-
vidual assumes to be most important. They are formed by learning.
Besides the top down/bottom up organization of the perception and
information processing, cognitive resources are further economized on.
The main mode we use for information processing is the so-called System
1 – a mode that is characterized as being fast, automatic, effortless, assoc-
iative and often emotionally charged and that is governed by habit, which
makes it difficult to control or to modify. Conversely, the slower, serial,
effortful and deliberately controlled System 2 is relatively flexible and
potentially rule-governed and takes over if monitoring and corrections
seem indicated. Thus, most information processing is performed in the
fallible System 1 and hence subject to systematic biases (for example,
the framing effect). Although we are of course able to include alternative
stimuli in our perception and information processing we can conclude that
our information processing assumes a path-dependent character and is
driven by the principle to economize on time and mental energy.
The following chapter turns to the analysis of a cognitive leader’s influ-
ence on individual employees. It explains why a cognitive leader can be
assumed to have a lasting impact on newly hired employees, although
they can be supposed to have work-related mental models prior to joining
the respective cognitive leader, and what determines a cognitive leader’s
impact on her employees.
NOTES
1. Additional literature that is referred to is cited according to Witt.

2. In the definition of entrepreneurship Witt follows Penrose who differentiates between
entrepreneurial services and managerial services. The former services denote ‘those con-
tributions to the operations of a firm which relate to the introduction and acceptance
on behalf of the firm of new ideas . . ., to the acquisition of new managerial personnel,
to fundamental changes in the administrative organization of the firm, to the raising
of capital and to the making of plans for expansion, including the choice of method of
expansion’ (these services are viewed as independent from the entrepreneur’s position in
the hierarchy of the firm) (Penrose 1995, p. 31). Conversely, the latter services relate to
the ‘execution of entrepreneurial ideas and proposals and to the supervision of existing
operations’ (Penrose 1995, p. 32). However, the ‘same individuals may . . . provide both
types of service to the firm’ (ibid.).
3. The term ‘metaphor’ as proposed by Hill and Levenhagen (1995) gives an impression of
how a business conception can be operationalized and over time is molded in concrete
mental models. However, their concept focuses on what a business sets out to achieve,
not on how these aims are to be achieved.
4. As Witt has pointed out (2005, p. 15), the ‘reasons for, and the conditions of, the growth
of a firm are a complex issue of its own’ and can be assumed to be exogenous for our
purposes.
5. The course of reasoning presented in this section also applies – albeit with adaptations
– to the introduction of a 3rd, 4th, . . ., nth layer of management.
6. For case studies in business history reporting such a successful regime change from a
single entrepreneur to a subdivided firm with a group of sub-entrepreneurs as a second
managerial layer see Chandler 1977, Part V; Bernstein 1999; Olegario1999; Murmann
2003, Chapter 3).
7. That is the totality of the brain structures being involved in attentional processes. Main
parts of the limited capacity control system are the reticular thalamus, parts of the
basal ganglia as well as the prefrontal and the parietal cortex (Schmidt and Thews 1995,
pp. 141ff.).
8. Shah (2003) has conducted research on the influence our mental representations of
significant others (for example, colleagues) can have on the accessibility of memories
(that is, stored mental models). His results show that the mental ‘presence’ of a signifi-
cant other may prime goals in the participants. Thus, the participant’s commitment to
the goals, her persistence and performance increases. The closer the participant felt to
the primed person, the stronger the observable effect. It was also shown that the effect
inhibited unrelated mental models.
9. Note that an individual’s learning is not necessarily guided by an objective improve-
ment of the individual’s adaptation to her environment. Rather, an individual’s learn-
ing is guided by her initial mental models and thus subjective in nature.
10. The same concept has been given diverse names in the literature, for example team
mental model (Klimoski and Mohammed 1994); organizational cognition (Laukkanen
1994); collective cognitive map (Axelrod 1976), dominant logic (Prahalad and Bettis
1986).
11. See Lord and Maher’s (1993) differentiation between automatic and controlled
processes.
12. An individual’s need for cognition captures her ‘tendency to engage in and enjoy effort-
ful cognitive endeavors’ (Cacioppo et al. 1984, p. 306).
13. Chapman and Johnson (2002) come to an interesting conclusion concerning the cor-
rection of such misinterpretation. They observe that the individual will only detect her
mistake if the opposing cues (that is, the opposing pieces of information the situation
offers) are salient. She then will try to correct this mistake but nevertheless the final
judgment is likely to ‘remain anchored on the initial intuitive impression’ (Kahneman
2003, p. 1468).
3. Dyadic processes: cognitive leader
to employee
In the theory of cognitive leadership the cognitive leader is assumed to
have two main ways for influencing the mental models of her employees
and hence to diffuse her business conception and a common pool of refer-
ences to them – in other words, to set her employees’ cognitive agendas
or to act as a ‘meaning manager’ (Smircich and Morgan 1982): personal
communication and observational learning (see Poole et al. 1989; Poole et
al. 1990; Innami 1992; Orasanu 1994).1 This chapter explores the function-
ing of the cognitive leader’s personal communication and the employee’s
observational learning. Additionally, operations that also facilitate the
agenda setting effect are investigated. As far as this agenda setting effect,
that is, the creation and shaping of the employees’ work-related mental
models and especially the implementation of the business conception as
a maxim, is due to dyadic processes. These are dealt with in this chapter.
Those processes of the agenda setting effect that are based on the impact
an established work group exerts on a newly hired colleague are discussed
in Chapter 6.
As a conclusion of the previous chapter we have stated that individuals
tend to stick to their established mental models and can be assumed to
be rather inert in changing them. Thus, before discussing the determin-
ing factors of influence via communication and learning we first have to
explain why a newly hired employee (a ‘newcomer’) can be assumed to
be motivated to learn about her new firm. This is the subject of Section
3.1. Section 3.2 discusses how mental models can be shaped by learning.
To this end, classical conditioning and operant learning as the most basic
forms of learning are explained along with learning in social contexts
(observational learning). Finally, the focus turns to how a cognitive leader
can influence an individual employee by personal communication. The
attributes that the cognitive leader and the business conception contribute
to the successful shaping of an employee’s mental models are explored.
Section 3.3 summarizes the chapter.
31
3.1 A NEWCOMER’S MOTIVATION TO LEARN

ABOUT A FIRM
From the perspective of a cognitive leader who aims at conveying her busi-
ness conception to her employees the question arises why a newly hired
employee would want to learn about the business conception and other
work-related mental models if, in general, individuals tend to stick to their
established mental models as has been argued in Section 2.2. To put it dif-
ferently: what causes the newcomer’s motivation for adopting a cognitive
leader’s business conception?
Besides our motives to fulfill basic needs like hunger and thirst, we also
have a motive to maintain a certain level of certainty in our life (Dörner
1999). Indirectly, this motive was hinted at in Section 2.2 on the cognitive
underpinnings of the theory of cognitive leadership: The adaptation of our
attentional capacities is realized by an inferential process on what aspects
of a current situation are most likely to change or are most likely to be
important (ibid.). Thus, we monitor situational aspects that could become
useful – or that could turn dangerous. The functioning of perception, as
described in Chapter 2, goes largely unnoticed by the individual. However,
as also argued in Section 2.2, we are able to willingly focus our attention on
certain situational aspects that we have assessed as potentially important.
By the same token, we start to actively search for more information – either
consciously or subconsciously – in situations we assess as being unfamiliar
(and important) to us because if we are uncertain about the development
of a situation we are left with a feeling of uneasiness that induces us to
search for more information on which we can base our hypotheses about
the future development of the respective situation (see Hogg and Abrams
1993). The entering of a work group in a new firm is a case in point. The
newcomer experiences ‘disorientation, foreignness and a kind of sensory
overload’ due to her fragmentary knowledge about how things are done
in the new work group (Louis 1980, p. 230; Levine and Moreland 1991;
Aldrich 1999). This aversive state of uncertainty produces tensions the
individual desires to attenuate, for example, by actively searching for
information (Van Maanen 1978; Louis 1980; Ashford 1986).
The obtained information is then used to refine the newcomer’s mental
models of the current situation and consequently to refine her hypotheses
about the possible future development of the situation (see the organiza-
tion of action in Dörner 1995, pp. 67ff.). To put it differently, the new-
comer’s task on entering a new organization (or equivalently: a specific
work group) besides performing the expected work tasks is to attach
meaning to the experiences she makes in the new work group or firms in
general (Louis 1980).
Dyadic processes 33
Furthermore, we have a need for affiliation (see Schachter 1959) or legit-

imization (Dörner 1999; see also Boulding 1978), that is, we have a need
to know that – from our own perspective as well as from the perspective
of significant others – we are ‘okay’, that we are accepted and appreciated
by ourselves as well as by significant others2 (see Boulding 1978, p. 196).
To put it differently, we want to build and maintain a positive self-esteem
as well as a positive social identity (see Cialdini and Trost 1998).3 It is ‘an
important function of groups to provide people with a framework within
which they can construct a social identity’ (Tyler and Blader 2000, p. 143).
Thus, entering a new organization may in the end result in adopting a
new social identity which implies identification with the organization or
– more specifically – with the work group one has joined (see Akerlof and
Kranton 2005).
Behavior that signals to an individual that she is being assessed as ‘okay’
can have various forms: physical contact, hair styles, clothing and smiles
(Dörner 1999; see also Eibl-Eibesfeldt 1987). In work groups the positive
social identity of a group member can be conveyed by physical signals like
eye contact, smiles and so on but also by sharing information, seeking
advice and so on. Due to the positive impact on an individual’s self-esteem
and her social identity receiving signals of legitimization is a positive
reinforcement to the individual’s behavior which further increases the like-
lihood of the individual to repeat the respective behavior (see Section 3.2;
Fisher 1986). This, in turn, induces the newcomer to behave as is expected
of her by significant others (for example, the cognitive leader). From the
perspective of a newly hired employee the cognitive leader can indeed be
assumed to constitute the most important significant other. The cognitive
leader, in turn, can be assumed to send signals of legitimization if the new-
comer behaves according to the cognitive leader’s business conception. To
put it differently, in order to receive signals of legitimization the newcomer
has to fulfill the cognitive leader’s expectations about newcomers (Levine
and Moreland 1991). Fulfilling the cognitive leader’s expectations entails
that the cognitive leader will feel more committed to the respective new-
comer and hence to share more information with her (ibid.). This, in turn,
provides positive reinforcement to the newcomer while at the same time it
fosters the conforming newcomer’s mastering of her tasks.
The interrelatedness of an individual’s self-esteem and her social iden-
tity means that a newcomer’s self-esteem is substantially influenced by her
assessment of the work group she joins (see Tyler and Blader 2000).4 This
allows two conclusions. First, assuming that on average we strive for and
manage to maintain a positive self-esteem, we can conclude that a new-
comer who joins a work group voluntarily infers from her behavior that
the work group is to be assessed positively (Bem’s (1972) self-perception
theory). This boosts the newcomer’s self-esteem. Second, assuming that we

are inclined to maintain a positive self-esteem as well as a positive social
identity we can conclude that once a newcomer has joined a new work
group she will strive to support the work group as well as she can because
being a group member of this work group makes her co-responsible for the
functioning of the group (see Hogg and Abrams 1990, 1993). The higher
the work group’s achievements the more positively she will be able to
assess it and consequently herself.
In summary, we can conclude that a newcomer is motivated to learn and
to adopt the business conception.
It has to be noted, however, that a newcomer’s motivation to learn
about the cognitive leader’s business conception and other work-related
mental models like the social norms and social roles of the organization
or the specific work group she joins heavily depends on whether the new-
comer takes on the new job voluntarily (Fisher 1986). Voluntarily taking
a job offer is expected to foster the motivation of learning about the new
job and vice versa. Besides, the newcomer’s expectation regarding the
duration of her membership in a work group and potential alternatives to
the membership of that group also play a role for the newcomer’s learning
motivation (see, for example, Hvinden 1984). Supposing that the new-
comer expects to stay with the group over an extended or unlimited period
of time, we can assume that she is motivated to learn about the cognitive
leader’s business conception and other work-related mental models, social
norms and social roles (see Wanous 1980). Newcomers who expect to be a
group member for a limited period of time only, on the other hand, can be
supposed to be able to bridge the troubles of knowing only a little about
the group. Presumably, they can fall back on other social groups (family,
friends, former work groups and so on) for obtaining and/or maintaining
a positive self-esteem as well as a positive social identity (Wilder 1986; see
also Ashforth 2001). Also, their costs of integration into the new work
group can be assumed to be higher than the benefits received from it.
Due to the formal organization of a firm, a firm’s head – in our case the
cognitive leader – always holds the social role of a leader who is expected
to provide ‘a blueprint of how the experience of organizational members is
to be structured’ (Smircich and Morgan 1982, p. 259). As such, the cogni-
tive leader is the main source for all information a newcomer needs about
the firm. Even more so because the employee can assume that the cogni-
tive leader, due to her position in the firm, possesses extensive information
about the firm (see Stryker and Statham 1985). Thus, the newcomer can
be assumed to turn to the cognitive leader for filling in her information
gaps, which renders the cognitive leader in a unique position for shaping
her employee’s work-related mental models according to her business
Dyadic processes 35
conception. Since the cognitive leader is in a powerful position compared

to that of her employees, the individual employee is further induced to
understand the cognitive leader’s behavior (see van Maanen 1977; Louis
1980) and to accept the cognitive leader as a model (Parsons 1955; Bandura
et al. 1963; see also the subsection on observational learning below).5
It is during this early phase of organizational affiliation that a new-
comer is highly susceptible to the cognitive leader’s business conception
and other shared mental models because she is in need of re-establishing
certainty and sources of legitimization, as well as a work-related social
identity. This sensitive socialization phase has been determined to last up
to six months (Chatman 1991; Ashforth and Saks 1996; Bauer and Green
1998; Bauer et al. 1998). However, researchers have been able to show a
newcomer’s adaptation to an organization as early as four weeks after
entry indicating the rapidness of this process (Major et al. 1995; Thomas
and Anderson 1998).
The following sections focus on mechanisms by which the cognitive
leader can convey her business conception and other work-related mental
models to a newcomer in the sensitive period of her socialization. These
mechanisms are personal communication and learning.
3.2 SHAPING MENTAL MODELS BY LEARNING
The theory of cognitive leadership assumes that the cognitive leader can
influence her employees’ mental models by personal communication.
Furthermore, employees are assumed to learn by observing the behavior
of others, that is, the cognitive leader and their colleagues. This section
explains the functioning of learning in organizational contexts. As the
most basic form of learning it starts by explaining classical conditioning
and operant (or instrumental) learning. After that observational learning,
that is, learning in and from social contexts, is presented. The last sub-
section turns to learning that is induced by communication.
For learning to take place a necessary condition is that the individual
pays attention to relevant aspects of a situation. The amount of an indi-
vidual’s attention determines what cues will be included in the information
processing and thus determines the result of it. Underlying the reasoning
of this section is the assumption that the impact of an external stimulus
(for example, a business conception) on a learner (that is, the employee) is
dependent on the mode in which the learner processes the external stimu-
lus (Kahneman 2003). The employment of a certain mode of informa-
tion processing is, in turn, dependent on the learner’s characteristics (for
example, her intelligence) as well as on situational aspects (for example,
time pressure). Some additional factors that an individual’s focus of atten-

tion is dependent on have been identified in direct relation to the way of
learning. These factors are presented in the corresponding subsections.
For the purpose of this thesis, the determinants of the learner’s attention
will not be elaborated on further. Rather, the empirical findings that inves-
tigate how a recipient’s information processing shifts when her attention is
high or low will be looked at in each of the following subsections.
Classical Conditioning and Operant Learning
Classical conditioning is the most basic form of learning. The classic

example for classical conditioning is Pavlov’s dogs and it shall serve as an
example to explain classical conditioning (Pavlov 1928).6 By nature, dogs
salivate when confronted with food, that is, they show an unconditioned
reaction, the saliva, to an unconditioned stimulus, the food. Pavlov found
out that when the food was presented together with the ticking of a metro-
nome as a neutral stimulus the dogs started to produce saliva after a couple
of trials and also in those settings where they were solely confronted with
the ticking metronome. In theoretical terms this means that the contiguity
of the unconditioned stimulus (that is, the food) and the neutral stimulus
(that is, the metronome) after some trials triggers a conditioned reaction.
Thus, the metronome becomes a conditioned stimulus that evokes the sali-
vation reaction of the dog which now has become a conditioned reaction.
In other words, the metronome has become the discriminative stimulus for
the dog to salivate.
Generally, to keep up the conditioned reaction, the dog every once in a
while has to be exposed to both the initial stimulus (that is, the food) and
the newly learned stimulus (that is, the metronome) simultaneously. If this
is not done the conditioned reaction will become extinct. After the condi-
tioned reaction has been established the metronome can be replaced by a
new stimulus. For example, the metronome can be exchanged by a bright
light, which after a couple of trials will basically evoke the same condi-
tioned reaction as the metronome. This is called ‘second order condition-
ing’ (see Powell et al. 2005). However, the reaction triggered by the bright
light will generally be weaker than that elicited by the metronome.
The mechanisms of classical conditioning are the same for dogs as
for people (see, for example, Powell et al. 2005). It has been found, for
example, that messages that are communicated in a pleasant atmosphere
are more positively assessed than are messages that are presented along
with repulsive stimuli like an unpleasant smell (Razran 1940; as cited in
Staats and Staats 1958). For a recipient it is not easy to escape classical
conditioning even if she knows how it works (Insko and Oakes 1966).
Dyadic processes 37
Operant (or instrumental) learning explains the likelihood of a specific

behavior to occur. Although the present discussion uses the learning of
behavior as an example, it should be noted that behavior is based on stored
mental models. These, of course, are also learned and can be influenced by
all forms of learning. The basic idea is that behavior can be reinforced,
punished or ignored. Depending on the consequences following a pattern
of behavior the pattern’s likelihood to occur increases or declines. For
example, if a newly hired employee has to learn about the business concep-
tion the cognitive leader can react to the newcomer’s appropriate behavior
with praising the newcomer (positive reinforcement) or with lifting some
constraint that newcomers usually have to face (negative reinforcement).
Both reactions will increase the likelihood of the appropriate behavior to
reoccur. To inappropriate behavior on behalf of the newcomer the cogni-
tive leader can react by punishing her, for example, by imposing some
obnoxious task on her (positive punishment) or by denying her a privilege
(negative punishment). These two reactions will decrease the likelihood of
the inappropriate behavior to reoccur. If a behavior has no consequences
whatsoever7 the individual will refrain from showing it in the future, that
is, the behavior will be extinct.
Relating the discussion of operant learning to the theory of cognitive
leadership we assume the cognitive leader to be the authority that rewards,
punishes or ignores behavior whereas the employee is assumed to be in
the position of the learner. Consequences executed by fellow employees
can substitute for or complement the cognitive leader’s rewards or sanc-
tions. Just how effective operant learning in an organizational setting
can be has, for example, been shown in the study by Poole et al. (1989).
Their study explored the effectiveness of changing the employees’ mental
models according to a CEO’s mental model. They found that it is not the
proclamation of a mental model or giving instructions on how to achieve
a mental model that most successfully influences employees but the impo-
sition of adequate rewards and sanctions as feedback to the employees’
behavior as well as indirect manipulations of the employees that yield the
best effects (see Smircich and Morgan 1982). Even more so since fellow
employees observe the events, draw their conclusions and learn for them-
selves (see subsection on observational learning).
Reinforcers and punishers are not limited to those things an individual
finds reinforcing in itself like, for example, eating her favorite dish. A lot
of reinforcers that are commonly employed are ‘secondary reinforcers’,
that is, they are reinforcing because over time they have been associated
with a basic reinforcer (for example, money). The same happens when
a cognitive leader consistently reinforces an individual’s behavior like,
for example, paying respect for desired behavior. From the individual’s
perspective paying respect and the behavior that elicited paying respect
become associated. Thus, over time the individual will find the respective
behavior rewarding and thus reinforcing in itself (Powell et al. 2005). To
put it differently, the respective behavior achieves functional autonomy
(Allport 1937) and becomes intrinsically motivating; that is, extrinsic
rewards become superfluous for the conservation of the respective behav-
ior (see, for example, Bénabou and Tirole 2003). By the same token we
can, for example, learn to experience hard work or the adherence to some
rule as rewarding in itself. This way the individual (partly) regulates her
own behavior, independently from extrinsic feedback. Behavior that is
motivating in itself is much more stable than externally rewarded behavior
(Bandura 1977).
In the theory of cognitive leadership intrinsically motivated behavior is
assumed to usually co-exist with extrinsic rewards (for example, payment)
(Witt 2005). Intrinsic motivation can be defined as ‘the individual’s desire
to perform the task for its own sake’ as opposed to extrinsic motivation
that relies on externally provided contingent rewards (Bénabou and Tirole
2003, p. 490). It has been shown that the intuitively correct conclusion that
both forms of motivation simply add up to an individual’s total motiva-
tion is incorrect (Deci 1971). Under certain conditions extrinsic rewards
have been found to crowd out an individual’s intrinsic motivation (Deci
1971; Kruglanski et al. 1971; Lepper et al. 1973; Frey 1997). These detri-
mental effects are discussed below.
Supposing an employee is intrinsically motivated and is free to decide
on her reaction to the respective task (Folger et al. 1978), she will be
inclined to attribute her behavior to an extrinsic reward in case she finds
her behavior to systematically and noticeably co-vary with it (Kelley 1967,
1972a, 1972b; Duval and Hensley 1976; Taylor and Fiske 1978). This
effect can be explained with Bem’s (1972) self-perception theory which
states that in case an individual perceives her behavior to systematically
and noticeably co-vary from the observation of her own behavior she
will conclude that her internal motivation could not have been sufficient
to elicit the behavior (see also Kreps 1997). Consequently, the individual
can no longer maintain a feeling of self-efficacy, which is a major source
of motivation (Bandura 1986) but instead feels like being subject to some
external power because the perception of her locus of control shifts from
being internal to being external (deCharms 1968; for the concept of ‘locus
of control’ see Rotter 1966). Such a shift in an individual’s perception of
her locus of control can also be aroused by a firm’s close monitoring that
signals control over her and thus curbs her intrinsic motivation (see Ryan
and Connell 1989; Enzle and Anderson 1993; Williams et al. 1996).8
A shift of the employee’s locus of control can be avoided by offering
Dyadic processes 39
extrinsic rewards unexpectedly (Lepper et al. 1973; Harackiewicz and

Manderlink 1984) and in an informational9 rather than a controlling
manner.10 This applies to verbal rewards (Pittman et al. 1980; Ryan 1982)
as well as to tangible rewards (Ryan et al. 1983).
In case an employee’s intrinsic motivation has become crowded out
by extrinsic rewards this does not necessarily mean a substantial loss in
engagement. If the extrinsic reward offered for an activity is high enough,
the employee will engage in the activity because the extrinsic reward then
serves as a positive reinforcer. However, the performance of the respec-
tive activity is then dependent on the expected rewards and therefore the
employer has to closely monitor her employee’s activities in order to be
able to reinforce or punish adequately. Furthermore, the employee’s initial
impetus to perform the respective activity is lost so that the employer will
have to prompt the desired behavior. Even greater harm can be done by
offering an extrinsic reward (or fine) that in the eyes of the employee is
insufficient or small. Whereas an insufficient extrinsic reward may signal
little respect or appreciation to the receiver a small extrinsic fine may
signal the activity, for which the fine has been incurred, not to be that
important (and thus to be ignored). Both will curb the employee’s engage-
ment (Gneezy and Rustichini 2000a, 2000b).
The success of operant learning depends on a number of factors. For
an employee to learn via operant learning she has to notice a pleasant or
unpleasant consequence and to relate it to her behavior. In other words, she
has to notice contiguity and a causal relation between her behavior and a
consequence. Generally, it should be aimed at providing a behavior’s con-
sequence as soon as possible after the behavior in question has occurred.
Otherwise, the causal relationship should be pointed out explicitly, thus
ensuring the employee notices the causal relationship between her behavior
and the consequences.
The judgment whether a certain consequence is a punisher or a reinforcer
solely depends on the employee’s reaction to it: if the probability for the
employee’s behavior to occur increases after the consequence, the conse-
quence has been a reinforcer; if it decreases, the consequence has been a
punisher (Powell et al. 2005). Referring to the theory of cognitive leader-
ship a cognitive leader has to closely monitor her employee’s reaction to a
consequence and decide on this observation on her future reaction to the
employee’s behavior.
The personal relationship between the cognitive leader and her employee
is largely not discussed with regard to classical or operant learning because
these theories focus on the relations between an individual’s behavior and
its consequences. However, Edelmann (2000) notes that a maximum learn-
ing effect can be attained when the learning takes place in an atmosphere
of appreciation (see Razran 1940; as cited in Staats and Staats 1958).

Also, behaving authentically,11 respectfully and considerately achieves
maximum learning effects. Thus, from those qualities of a cognitive leader
assumed in the theory of cognitive leadership appreciation, the capacity
for gaining sympathy, confidence and fairness turns out to be relevant to
operant learning.
When new behavior is learned, rewards are necessary for every correct
reaction to a stimulus (continuous reinforcement). This respective stimu-
lus will become the discriminative stimulus once the behavioral pattern
has been learned. The individual then is very likely to perform a certain
behavior whenever the stimulus has been presented to her. If confronted
with a stimulus similar to one of our conditioned stimuli we have a ten-
dency to generalize the conditioned reaction to the new, similar stimulus,
that is, we show the same conditioned reaction to that stimulus too. This
is called ‘stimulus generalization’ (see Powell et al. 2005, p. 284). In an
organizational context stimulus generalization is – among others – respon-
sible for employees to approach similar tasks in similar ways. Therefore,
the presumably adequate behavior of an employee does not have to be
prompted by, for example, a cognitive leader for every slightly different
situation. After a while, occasional pleasant consequences are sufficient
(partial or intermittent reinforcement) and indeed yield the most stable
results (Kerpelman and Himmelfarb 1973).
On the other hand, negative reinforcers most likely succeed when the
undesired behavior is only weakly established and when it is not backed
up by a strong motivational drive. Since sanctioning undesired behavior
per se does not trigger desired behavior one should offer desired alterna-
tive ways of behavior which in turn are rewarded. In combination with
lowering the performance of incompatible behavior through punishment
or extinction this should yield good results (see Edelmann 2000, Table 4).
Observational Learning
Observing others is a common source for learning. When an employee

observes the behaviors of a colleague (the model) she gains information
about what kind of consequences are related to what kind of behavior
and forms conceptions and rules of behavior that she can transfer to and
employ on future occasions. Thus, the colleague becomes a model for the
behavior in question. This form of learning is called ‘observational’ or
‘vicarious’ learning (Bandura 1986).12
The actual learning mechanisms of observational learning are based on
those of classical conditioning and operant conditioning (see Powell et al.
2005, pp. 419ff.). In observational learning the employee uses the observed
Dyadic processes 41
information on the causes and effects someone else initiates or experiences

to adjust her stored mental models and to modify her own future behavior
accordingly. As Bandura (1986, pp. 47ff.) points out ‘modeling has always
been acknowledged to be one of the most powerful means of transmitting
values, attitudes and patterns of thought and behavior’ without the indi-
vidual having to make certain experiences herself.
Besides the acquisition of new behavior or rules of behavior, observa-
tional learning can strengthen or weaken the likelihood of once learned
behavior to occur. Observing another person’s behavior and the related
outcome can induce the observer to come to a new evaluation of this
behavior (Bandura 1965). Thus, the likelihood of a behavior to occur can
decrease or increase. Also, observing another person’s behavior can link
stored mental models that up to that point had been separate. To put it
differently, the observer forms new sequences of behavior or learns about
the usefulness of, for example, certain objects.
In general, the models in observational learning can be other people or
symbolic models like behavior portrayed in written form or on videotape.
For the purpose of this volume we focus on observational learning that
takes place when an employee observes her colleagues’ or the cognitive
leader’s behavior and its outcome. The time frame of an observed behav-
ior as it is understood here can vary. This depends on the observer’s under-
standing and interpretation of the observed behavior.
Assuming that an employee has acquired a behavioral pattern and is
able to execute it, the likelihood of a performance depends on a number
of factors based on the mechanisms of operant learning (see Powell et
al. 2005). The performance is more likely if the model has been observed
of becoming reinforced for her behavior (see, for example, Bandura and
McDonald 1963). Accordingly, the observer will refrain from performing
a certain behavior if she observed the model being punished for it (see
Weiss et al. 1999). Additionally, the observer’s individual learning history
plays an important rule too.
A cognitive leader can prompt observational learning by pointing out
suitable models. She can also influence her employees’ behavior by being
a model herself. Determinant factors for both aspects are discussed. The
impact of colleagues as models for the individual employee on the group
processes that influence an individual employee’s behavior is discussed in
Chapter 4.
As argued above, before learning can take place the respective stimulus
first has to be included in the processing of information. The observer’s
attention to a model is channeled by a number of factors. First, models
are more likely to attract an observer’s attention when the models’
behavior achieves a goal that is desirable to the observer. Second, the
behavioral patterns of powerful persons (Parsons 1955; Bandura et al.

1963a), of extraordinary gifted persons (Mausner 1953, 1954), of persons
with a high socio-economic status (Lefkowitz et al. 1955), of successful
and competent persons (Akamatsu and Thelen 1974; Weiss 1977) and of
considerate persons (Flanders 1968) are more likely to be imitated. Often,
these attributes have to be inferred by some readily observable personal
attribute like gender, age and race (Fiske 1993). Especially employees with
low self-esteem can be expected to be influenced by successful and compe-
tent models (Weiss 1978). If the employee perceives the model to resemble
her (for example, by personal characteristics or similar demographic back-
grounds) this helps to increase the attention paid (see Whiting’s (1960)
theory of identification; Bussey and Bandura 1984). Perceived similarity
also contributes to a more favorable assessment of a model (Pulakos and
Wexley 1983) which in turn is related to a greater impact of the model
because if the observer respects, admires or likes the model this increases
her impact (Schuler 1975; Brandstätter 1976; Bandura 1986).
Coming back to the theory of cognitive leadership, we can conclude that
the impact of a cognitive leader on a newcomer increases if she is perceived
to be powerful, extraordinarily gifted, successful, competent, considerate
or – in more general terms – positively assessed by the newcomer (Bandura
and Huston 1961). These conclusions are also in line with what can be
concluded about the factors that enhance a sender’s impact on recipients
in that senders as well as models have an increased influence on others if
they are assessed positively by them. Since some of the leader’s qualities
included in the theory of cognitive leadership like the capacity for gaining
sympathy and confidence, fairness, credibility and appreciativeness can be
assumed to be assessed positively by others it can be concluded that these
positive attributes enhance the cognitive leader’s impact (see Witt 1998,
2000). Besides, a cognitive leader who has similar characteristics com-
pared to her employees has an increased likelihood of influencing them
and due to her position as a leader a cognitive leader will be perceived as
being powerful. Consequently, the employees will have a natural tendency
to accept her as a model. With regard to a cognitive leader’s characteristics
such as patience, eloquence, persuasiveness, persistence and communica-
tiveness we cannot assume these per definitionem to be positively assessed
by others and thus cannot draw any conclusions on their effects on the
employees’ observational learning.
Generally, the same mechanisms that have been explained with regard
to the cognitive leader also apply to others. On the one hand, this implies
that employees holding these characteristics enhance or threaten the cog-
nitive leader’s position depending on whether they model behavior in line
with the cognitive leader’s business conception or against it (see Chapter
Dyadic processes 43
4). On the other hand, a cognitive leader can take advantage of these
mechanisms by pointing out and supporting those employees who show
desired behavioral patterns or by enhancing, for example, their socio-
economic status in the work group.
If the cognitive leader reinforces her employees for paying attention
to certain models this will – as predicted by operant learning – increase
the employees’ attention (see Pepperberg and Sherman 2000). However,
learning can of course also take place without external reinforcement
(Hergenhahn and Olson 1997 [1976]).
Learning from Communication
This section deals with the impact of the personal communication of one
individual to another. The components of such a communication are the
sender (here the cognitive leader), the message (here the business concep-
tion)13 and the recipient (here the individual employee). It is the aim of the
cognitive leader to implement her business conception as a maxim, that is,
as a mental model that is hierarchically superior to all other work-relevant
mental models that can serve for deducing rules and so on and that is
accessed whenever another work-relevant mental model is activated. As
Stroebe and Jonas (1996, p. 271) note, influencing another person’s behav-
ior through communication or persuasion has the one great advantage
that this influenced person’s ‘behavior remains under intrinsic control and
thus does not need any monitoring’.
The theory of cognitive leadership assumes that the influence a cognitive
leader can have on her employees’ mental models is among others realized
via formal and informal communication. It lies in the cognitive leader’s
position in the firm, that she is in the position to influence her employees’
mental models, that is, the position of the cognitive leader is supported by
the institutionalized organization of the firm (see Van Maanen 1977; Louis
1980; Stryker and Statham 1985).
The informal communication, however, is not under the cognitive
leader’s control simply by her position in the firm. Hence, it is assumed
that she has to explicitly take care that her position (and linked to that her
capability of influencing her employees’ mental models according to her
business conception) is also realized in the informal communication with
her employees (see, for example, Witt 2000). However, for the purpose
of this volume it is assumed that an individual observes the behavior and
reactions of others at any point in time and uses her observations for
a validation of her own mental model (see theory of social comparison
processes in Festinger 1950, 1954). Since communication is one form of
behavior we can generalize that an individual observes the communication
of others at any point in time. Thus, an individual will observe the formal
and the informal communication of the cognitive leader as well as her
behavior on formal and informal occasions. Consequently, in this volume
the effects of formal or informal communication or behavior on formal or
informal occasions will not be distinguished.
However, the focus of the present section explicitly lies on the personal
communication of the leader to her employees, that is, information that
from the employees’ perspective clearly originates from the cognitive
leader. This personal communication is assumed to be mainly realized by
personally talking to the employees but also (though less often) by holding
speeches and so on.
The theory of cognitive leadership conceives a number of personal char-
acteristics to be important for the cognitive leader in her attempt to exert
cognitive leadership: eloquence, persuasiveness, patience, persistence, the
capacity for gaining sympathy and confidence, communicativeness, fair-
ness, credibility and appreciativeness (see, for example, Witt 1998, 2000,
2002). However, the theory of cognitive leadership does not clearly state
which of these qualities are explicitly useful for the personal communica-
tion of the business conception, which are important for a cognitive leader
to have for reasons of observational learning or which are useful for both.
Thus, this volume analyses the helpfulness of all qualities mentioned with
regard to the personal communication of the business conception as well as
with regard to its conveyance via observational learning. First, leadership
skills that have been considered to be generally important are discussed.
Then, the focus turns to the conditions under which the recipient includes
the leader’s qualities in her processing of the leader’s message.
The general relevance of a leader’s characteristics in the leadership
process is recognized by numerous researchers. However, the impact of
the respective situation (the task, the characteristics of the subordinates
and the situational context) is also considered to be an important factor
for successful leadership (see Rosenstiel 1992; Koppl and Minniti 2003).
Hence, research has looked at the interaction of these factors with
the qualities of a successful leader. Zaccaro et al. (2004) in their meta-
analysis of the relevant literature from 1990 to 2003 state that a number
of key leader attributes seem to generally contribute substantially to the
success of a leader regardless of other situational factors. Those related
to interactional competencies are personality attributes (in the form of
extroversion, conscientiousness, emotional stability, openness, agreeable-
ness and MBTI14 – preferences for extroversion, intuition, thinking and
judging) and social capacities (in the form of self-monitoring, social intel-
ligence and emotional intelligence). However, these characteristics are on
a higher level of abstraction than those discussed in the theory of cognitive
Dyadic processes 45
leadership and the authors also state that considerable limitations apply to
these findings. Moreover, a meta-analysis conducted by Andersen (2006)
comes to the opposite conclusion that traits of leadership are not capable
of explaining organizational effectiveness. He points out that organiza-
tional leadership is ‘not about possessing special traits’, but ‘about acting’
(ibid., p. 1078). We take these findings as a reminder of the ongoing discus-
sion on the relevance of leadership traits. For the purpose of the present
thesis, we focus on the findings on characteristics of leaders in relation to
the recipient’s mode of information processing.
As has been argued, the learner’s mode of information processing deter-
mines what features she includes in the processing of a communication.
Thus, the impact of a leader’s qualities on the successful conveyance of
her message is moderated by the recipient’s willingness and capability to
engage in the processing of the information. The qualities of a cognitive
leader are not likely to have an impact on the information processing of
the recipient if the recipient pays a lot of attention to the communication
process because then she is likely to focus on the message’s actual content
rather than on the sender of the message (Petty and Cacioppo 1984a).
However, if the recipient does not engage in thorough information
processing, the credibility of a sender (here the cognitive leader) comes
into play. If the sender is assumed to be an expert, this induces the recipi-
ent to perceive this characteristic as a cue in favor of the sender’s message
(Petty et al. 1981; Moore et al. 1986). The same applies if the sender is very
likeable (Chaiken 1980; Wood and Kallgren 1988) or if she is assessed
as being trustworthy (Maheswaran and Chaiken 1991). Thus, it can be
concluded that under the condition of a recipient’s superficial engagement
in the information processing, the characteristics of the sender serve as a
ready cue for the acceptance or rejection of the message (Petty et al. 1983;
Petty and Cacioppo 1984a). If the sender is assessed positively, the prob-
ability of biased information processing in favor of the sender’s opinion is
increased whereas the actual arguments of the message go rather unnoticed
(Chaiken 1980; Pallak 1983).
On a more general note, Chaiken and Eagly (1983) were able to show
that if the characteristics of a sender are salient during a communication,
these will be more intensely processed than presented cues related to the
message. The opposite effect can be observed in case the sender’s charac-
teristics are not salient. Then the message’s features determine the shaping
of the recipient’s mental models.
Also the more confidently a message is presented, the greater its effect
on the recipient’s mental model (Chaiken and Eagly 1976). Hovland and
Weiss (1951) were able to show that the same arguments are more effective
if they come from a credible sender compared to a dubious sender. Finally,
the similarity between the sender and the recipient seems important to the
shaping of the recipient’s mental models: the higher the similarity of the
sender to a recipient is the greater the impact of the sender’s message on
the recipient (see, for example, Burnstein et al. 1961; Stotland et al. 1961).15
This is possible due to the fact that similarity breeds liking (Byrne 1971;
Carli et al. 1991; Hogg et al. 1993) and liking in turn breeds high attitudi-
nal consensus and behavioral conformity (Jackson 1996; Friedkin 2004).
In summary, the leader’s effect on the recipient’s mental models can
be enhanced by those leader attributes that are assessed positively by the
recipient. Some of the qualities assumed by the theory of cognitive leader-
ship (credibility and the capacity for gaining sympathy) have explicitly
been included in the above cited studies. Other attributes still have to be
investigated for their relevance to cognitive leadership (eloquence, persua-
siveness, patience, persistence, communicativeness, fairness, appreciative-
ness and the capacity for gaining confidence as well as potential others
not yet included in the theory). However, from a theoretical perspective,
it seems highly likely that they support cognitive leadership: if a leader is
eloquent, persuasive, patient, persistent and communicative she will be
able to keep up the personal communication to her employees with a much
lower risk of getting tired of it. Indeed, persuasion is considered a tradi-
tional leadership skill (Mumford et al. 2000). Furthermore, a cognitive
leader’s capacity for gaining confidence fosters her chances of persuading
her employees since this characteristic can be assumed to be assessed posi-
tively by others.
The group-value model of procedural justice (Lind and Tyler 1988)
and the relation model of authority (Tyler and Lind 1992) argue that we
care about being treated with dignity by trustworthy authorities. This is
argued to be the case because those experiences confirm an individual’s
assumption to belong to a valuable group and to be appreciated by this
group, which positively reflects on an individual’s personal identity. In
other words, individuals care about their personal status which is – among
others – expressed by a cognitive leader’s appreciative and fair handling
of her employees. Thus, from a theoretical perspective, a fair and appre-
ciative cognitive leadership increases her likelihood to successfully exert
cognitive leadership.
Let us now turn to the qualities of the business conception. The theory
of cognitive leadership assumes the chances of a business conception to
induce employees to follow it if it is ‘appealing’ and ‘sound’. Besides, the
business conception is supposed to potentially contain prospects of per-
sonal rewards like personal enhancement, professional qualification, excel-
lent working conditions, career options and remuneration. Depending on
an individual’s mode of information processing, the business conception’s
Dyadic processes 47
attributes play a more or less important role with regard to its impact
on the employees. With regard to an individual’s mode of information
processing concerning a certain message, it can be said that if the context
of communication is bound to distract a recipient’s attention, this also
affects the depth of elaboration in favor of a more superficial information
processing (Petty et al. 1976). Conversely, personal relevance of a message
enhances a person’s attention (Biek et al. 1996).
First, it is investigated how a recipient’s information processing shifts
when her attention is high or low. Other complementing theories and
findings are consulted to explore the determinants of a successful message
conveyance. Then, the assumption of the theory of cognitive leadership is
discussed in the light of these theories and findings.
When a message is processed in a System 2 mode the recipient is likely
to focus her attention on the cogency of the information presented (Petty
et al. 1983). Thus, under high elaboration condition the message’s quality
is more important for an impact on the recipient’s mental models though
it was found to play a role also under low elaboration conditions (ibid.;
Petty and Cacioppo 1984b; Petty and Cacioppo 1986).
If the individual processes a message on a System 1 level or if a message
is ambiguous the recipient is likely to turn to cues that lie outside the
message itself because these are assumed to help her to better assess the
message. These kinds of cues can be reinforcements or sanctions experi-
enced or observed by the recipient (Staats and Staats 1958; see also Section
3.2 on learning), rules such as a decision rule (for example, Petty and
Cacioppo 1984b: the more positive (and cogent) arguments for a message
are presented the more positively this message is assessed) or the sender’s
characteristics.16
An additional heuristic that people succumb to when superficially
processing information is the ‘attribute substitution’. In the case of
‘attribute substitution’ an object’s attribute that is effortful to process is
substituted for a different so-called ‘heuristic attribute’ that is more easily
recalled than the original attribute. This leads us to judge messages or
objects on a subjectively biased basis (Kahneman and Frederick 2002).
Attribute substitution stabilizes our initial mental models. We also make
use of a related heuristic which Kahneman (2003) calls the ‘prototype
heuristic’. This heuristic implies that we prefer to substitute the assessment
of a new stimulus that demands extra cognitive efforts for a stimulus of
the mentally stored prototype that is more readily available and therefore
demands less cognitive effort. Thus, we cling to our stored prototypical
mental models more than the available information objectively suggests
and further stabilize them.
However, if we expect to avoid negative consequences, to trigger
positive consequences or to be able to disprove dissonant information by

remembering dissonant information this kind of information is learned
and remembered well (Jones and Aneshansel 1956; Frey 1981, 1986).
On a more general level, evidence has been found that for a message
to be conveyed successfully it is advantageous if it is easy to understand
(Chaiken and Eagly 1976). The experience of understanding a message
easily, that is, with relatively little cognitive strains, is perceived as being
more pleasant in comparison with difficult messages. Also, the recipients
were observed to conclude backwards: recipients of easy messages assessed
the sender as ‘more professional and expert’ and ‘more personally attrac-
tive and warm’ (ibid., p. 610).17 A similar effect has been observed for the
repetition of messages. Its repeated presentation has been found to boost
the impact of its arguments’ quality (Cacioppo and Petty 1989).
Relating the presented findings on the features advantageous in convey-
ing a message successfully we have to conclude that the literature does
not explicitly focus on the business conception’s attributes included in the
theory of cognitive leadership. The theory of cognitive leadership assumes
a business conception to be more likely to be successfully conveyed to a
newcomer when it is sound and appealing while offering personal rewards
to the newcomer like personal enhancement, professional qualification,
excellent working conditions, career options and remuneration. However,
for a sound and appealing business conception we can suppose that
positive and high quality arguments are much easier to find. In that sense,
sound and appealing business conceptions are much more likely to be con-
veyed successfully to a newcomer. Similarly, a sound business conception
may imply that it is easily understood, which would also increase the likeli-
hood of its successful conveyance. Both attributes, however, are vague and
do not allow for definite conclusions. This also applies to the prospects of
personal rewards that may be offered by a business conception. We can
assume the prospects of personal rewards enhance the appealing nature
of a business conception yet conclusions cannot be drawn on the basis of
the presented findings. Definitely beneficial to the successful conveyance
of a business conception is the repeated presentation of it. This assump-
tion is implied in the theory of cognitive leadership when it assumes that
the frequent interaction between the cognitive leader and her employees
facilitates the conveyance of the business conception. Here the theory of
cognitive leadership’s scope reaches even further by not only focusing on
the communication of the cognitive leader and her employees but also by
including observational learning as a means of conveyance.
If a cognitive leader succeeds in implementing her business conception
as a maxim, positive feedback loops help to consolidate it: findings on
the general functioning of information processing show our inclination
Dyadic processes 49
to confirm our initial mental models and thus to further stabilize them
(for example, attribute substitution, the prototype heuristic, the guid-
ance of information processing by stored mental models). This makes
them more easily accessible on the next encounter of similar information.
Consequently, we tend to assess new information in the same way as we
have assessed it the last time, which contributes to a stabilization of our
stored mental models.
The role of tangible rewards in the theory of cognitive leadership is
somewhat ambiguous. On the one hand, it is claimed that tangible rewards
like remunerations foster the business conception’s proliferation. On the
other hand, the theory of cognitive leadership points out that tangible (that
is, extrinsic) rewards present the danger of crowding out the employees’
intrinsic motivation. As far as the offering of remuneration is interpreted
as being a high quality argument in favor of the business conception, we
can conclude that remuneration indeed positively contributes to the busi-
ness conception’s propagation. Its sometimes conflicting role with regard
to the employees’ intrinsic motivation is also discussed.
Besides the attributes of the business conception that have just been dis-
cussed we have to note that the assumptions the individual employees have
about the business conception will be validated in real-life situations. That
is based on the business conception that the individual employee will inte-
grate new information into her stored mental models and will use them to
generate action plans she bases her behavior on. If the business conception
cannot stand this ‘test’ because, for example, it proves to be inapplicable
to the daily tasks of an employee the respective employee will discard the
business conception in favor of her own or other rivaling mental models
(see Langfield-Smith 1992; Rentsch and Hall 1994). In other words, a busi-
ness conception also has to prove its usefulness in solving work-related
tasks in order to prosper and disseminate in an organization.
The following section analyses the learning processes that can enhance
the proliferation of the cognitive leader’s business conception and other
shared mental models.
3.3 SUMMARY
This chapter focused on a newly hired employee’s motivation to learn

about a cognitive leader’s business conception as well as on the possi-
bilities of the cognitive leader shaping her employee’s mental models and
behavior according to the business conception.
It has been argued that a newcomer’s motivation to learn about the
business conception (and other work-related mental models) is due to her
need for certainty and signals of legitimization as well as to her need to

maintain a positive self-esteem and hence to create a positive social iden-
tity that is partly based on her professional experiences. By organizing the
individual employee’s organizational learning experiences in accordance
with her business conception the cognitive leader can shape the employee’s
mental models and behavior. In the most basic form of learning – classical
conditioning – a reaction to a new stimulus is learned by associating the
new stimulus to an established one. It has, for example, been shown that
messages communicated in a pleasant atmosphere are assessed more posi-
tively than those communicated along with a repulsive stimulus.
By operant learning the likelihood of a behavioral pattern to occur can
be influenced. Rewarding consequences enhance the likelihood, whereas
punishing consequences decrease it. Consistent reinforcement or punish-
ment speeds up the learning. Over time, consistently rewarded (punished)
behavior becomes rewarding (punishing) in itself and thus it becomes
intrinsically motivated. Intrinsically motivated behavior is not depend-
ent on extrinsic rewards and hence is much more stable than extrinsically
motivated behavior.
Learning by observing the behavior of others is a common way for
gaining new information on causes and effects without investing effort
or enduring the potential consequences of a behavior. The likelihood of
a person to become a model for others increases if this person is power-
ful, extraordinarily gifted, successful, competent or considerate or if this
person has a high socio-economic status. Thus, it can be concluded that a
cognitive leader due to her position as a leader is accepted as a model.
On a more general level, it has been found that persons assessed
positively by others are more likely to be imitated. As far as some of the
advantageous characteristics of a cognitive leader assumed in the theory
of cognitive leadership can generally be supposed to be assessed positively
by others we can conclude these characteristics to increase an individual’s
chances of becoming a model to others. This applies, for example, to cred-
ibility, appreciativeness, fairness and the capacity of gaining sympathy
and confidence. However, some characteristics assumed in the theory of
cognitive leadership do not allow such an assessment. These characteris-
tics are eloquence, persuasiveness, patience, persistence and communica-
tiveness. With regard to these, no conclusions can be drawn concerning
their impact on observational learning.
Individuals also learn from communication. It has been argued that
the chances for a cognitive leader to convey her business conception to an
employee are contingent on the employee’s mode of information processing
as well as the characteristics of the cognitive leader and of the business con-
ception. Of the characteristics of a cognitive leader assumed in the theory
Dyadic processes 51
of cognitive leadership, two have been explicitly included in studies on the

conveyance of messages. These are credibility and the capacity of gaining
sympathy, that is, being liked by others. Both have been found to enhance
the likelihood of a successful conveyance. Whereas appreciativeness and
fairness from a theoretical perspective have been explained to support a
sender’s impact on the recipients (Lind and Tyler 1988; Tyler and Lind
1992), all other characteristics of a cognitive leader assumed by the theory
of cognitive leadership could not be found in the literature. However, they
can be assumed to support the conveyance of a message in that they gener-
ally aid a cognitive leader with communication issues or allude to a given
talent to influence others (eloquence, persuasiveness, patience, persistence,
communicativeness and the capacity of gaining confidence).
With regard to the characteristics of the business conception, it has been
explained that cogent business conceptions containing high quality argu-
ments are advantageous. Accommodating for a potential low elaboration
of the business conception on behalf of the recipients, the chances of con-
veying the business conception successfully rise if it is easy to understand
and repeated often and if the number of arguments in favor of it outrun
the number of arguments against it.
In essence the conveyance of a mental model such as the business con-
ception teaches the recipients to perceive events and stimuli through the
lens of it. Thus, the individual employee can be assumed to process infor-
mation in a way that is biased by the organization. As has been argued
above, information processing mainly works in a System 1 mode. This
substantially contributes to the stabilization of the business conception
and other work-relevant mental models once they have been successfully
implemented in the employees’ mental models.
With the following chapter we leave the dyadic interaction of a cognitive
leader with an individual employee behind and broaden the focus of the
theory of cognitive leadership by turning to the social influence processes
that accompany the socialization of a newcomer in an established work
group.
NOTES
1. Since the frequent and intensive interaction between the people involved in the agenda
setting process (that is, here the cognitive leader and the individual employee) is a neces-
sary prerequisite for the diffusion of a certain mental model (for example, the business
conception) (Levine and Moreland 1991; Witt 1996; Aldrich 1999). For the sake of the
argument, this is assumed to be the case.
2. Significant others may be parents, siblings, friends, colleagues or other reference groups
(see, for example, Sherif 1948; Kelley 1952; Bowlby 1982).
3. An individual’s social identity comprises the designations of the social role that this
individual has internalized (see Levine et al. 1993).
4. Depending on the firm’s size, a new employee joins an organization or a specific work
group. Regarding the group processes at work in such a case this differentiation is
unimportant and hence in this context both notions can be employed interchangeably.
However, for the sake of simplicity, the notion of ‘work group’ is used in the follow-
ing and we adopt Levine and Moreland’s definition of a work group: a ‘work group
consists of three or more persons who interact regularly to perform a joint task, who
share a common frame of reference, who have affective ties with one another and whose
behavior and outcomes are interdependent’ (Levine and Moreland 1991, p. 257).
5. Starting from property rights/incomplete contracts theory (Grossman and Hart 1986;
Hart 1995) Kreps (1990) has indeed argued that one possible leadership task stemming
from open contracts is to implement implicit contracts that state ‘general principles . . .
that instruct employees . . . about how unforeseen contingencies will be handled in the
future’ (Foss 2001, p. 361).
6. Pavlov was awarded a Nobel Prize in medicine for his discoveries in 1904.
7. This means that the newcomer would not experience any positive or negative reactions
either from the cognitive leader or from herself (see the self-regulating effect of internal
reinforcement and punishment below).
8. This approach also fits the findings that events such as deadlines (Amabile et al. 1976)
and imposed goals (Mossholder 1980) curb intrinsic motivation whereas the provision
of choice (Zuckerman et al. 1978) has been found to enhance intrinsic motivation.
9. According to Deci et al. (1999, pp. 565ff.) making rewards informational requires ‘(a)
minimizing the use of authoritarian style and pressuring locution, (b) acknowledging
good performance but not using rewards to try to strengthen or control the behavior,
(c) providing choice about how to do the tasks and (d) emphasizing the interesting or
challenging aspects of the tasks’.
10. A verbal controlling feedback includes the word ‘should’, for example, ‘Excellent,
you should keep up this standard’, whereas a verbal informational feedback could be
‘Compared to most of my participants, you are doing really well’ (Deci et al. 1999).
11. See Tausch and Tausch (1998, p. 215) for the characteristics of authenticity.
12. See Weick’s (1979) idea of ‘enactment’.
13. This section uses the business conception as an example for the portrayal of the con-
tingencies of a successful conveyance of a message. It should be noted, however, that it
is assumed that the principles of a successful conveyance are applicable to all kinds of
messages.
14. MBTI is the abbreviation for ‘Myer-Briggs Type Indicator’ (Briggs Myer et al. 1998).
15. See section on observational learning for which the similarity between the model and
the learner also has a positive effect.
16. Here the recipient’s learning experience comes into play. If the recipient has learned
that, for example, the attractiveness of a person does not yield reliable information
about, for example, the trustworthiness of her arguments she is inclined not to use a
person’s attractiveness as a useful cue.
17. See Camerer and Knez (1996) who claim that the simplicity of a message (here Total
Quality Management) ensures that it becomes common knowledge and can thus serve
as a focal principle that coordinates organizational behavior.
4. Group processes: work group to
employee
In the theory of cognitive leadership it is not only the cognitive leader
who influences her employees’ behavior by communication and frequent
and intense personal contact. With regard to potential rivaling business
conceptions or mental models as well as with regard to observational
learning the theory of cognitive leadership also emphasizes the influence
of fellow employees.1 Generally, work groups exert a normative influence
on the behavior of individual group members, especially so if the work
group’s cohesion is high (Seashore 1954; Cialdini and Trost 1998). Under
most circumstances the informal socialization of a newcomer – as under
the regime of cognitive leadership – increases the potential influence of
the work group even further (Van Maanen 1978). Moreover, newcomers
have been found to turn to their supervisors for technical, performance
and role information yet to their coworkers for normative and social
information (Morrison 1993b). However, the theory of cognitive leader-
ship does not provide an elaboration on the influences stemming from a
work group on a newcomer joining it. This chapter extends the theory’s
scope in this direction. The group processes that can have an impact on
an individual employee are discussed using the entering of a newly hired
employee (the ‘newcomer’) into an established work group (consisting of
‘oldtimers’) as an example. These group processes are looked at from two
angles: the newcomer’s and the work group’s perspective. For both per-
spectives what kind of information deemed important is analysed and how
the respective piece of information is attained or conveyed. Furthermore,
the work group’s motivation to share their information with a newcomer
is discussed.2 Also, the occurrence and diffusion of deviant thinking and
behavior in work groups is presented.
The time frame in which the socialization of a newcomer takes place
has been investigated by numerous researchers. The socialization period
of a newcomer, that is, the period of time during which she is most suscep-
tible to organizational influences, is determined to last up to six months
(Chatman 1991; Ashforth and Saks 1996; Bauer and Green 1998; Bauer
et al. 1998). A newcomer’s adaptation to an organization has been shown
as early as four weeks after entry indicating the rapidness of this process
53
(Major et al. 1995; Thomas and Anderson 1998). Such an early impact on
newcomers has been explained with their urgent need to reduce uncertainty
after their entry and with the fact that those expectations and perceptions
created during this initial stage are robust and affect the perception and
interpretation of subsequent events (Bauer and Green 1994; Ashforth and
Saks 1996; Bauer et al. 1998).
The chapter is structured as follows. First, we take the perspective of
a newcomer entering her new work group and analyse what concepts a
newcomer has to learn about her new work group and how she can gain
information about them. Second, we turn to the group of oldtimers.
Here, the work group’s concepts are discussed from a group perspec-
tive. Furthermore, a work group’s motivation to provide information to
a newcomer as well as the modes in which this information is conveyed
are discussed. Third, we turn to the origins of deviant mental models and
behavior and explain the factors determining the diffusion of them among
a group of oldtimers. Section 4.4 summarizes this chapter.
4.1 A NEWCOMER’S PERSPECTIVE ON JOINING A

GROUP
This section focuses on the newcomer and her experiences on entering

a new organization which on an individual level equals entering a new
work group. As argued in Section 3.1 upon entering an organization a
newcomer can be assumed to hold only limited information about the
new work group with regard to both task-related and work group-related
knowledge. Obviously, she has to gain task-related knowledge in order
to be able to perform adequately. Furthermore, the lack of group-related
knowledge leaves the newcomer in an adverse state of uncertainty com-
bined with a lack of signals of legitimization and a social identity that has
to be restructured in accordance with the new work group. Thus, it has
been concluded that a newcomer is motivated to not only learn about her
new tasks but also to learn about her new work group.
Besides this motivational effect of joining a new work group, a new-
comer who voluntarily joins a work group for an extended or unlimited
period of time can be assumed to identify with her work group and thus
to assess it more positively than other groups (‘minimal group paradigm’,
Tajfel et al. 1971).3 This increases the work group’s potential influence on
the newcomer because under the condition of informational overload from
which a newcomer suffers the positive assessment of the work group serves
as a heuristic cue in the newcomer’s information processing. Since the new
group is assessed positively, the newcomer is inclined to adopt the work
Group processes 55
group’s view (Axsom et al. 1987; Schnabl 1991) and is likely to accept the
incumbent group members as models (Bandura and Huston 1961).4
This section focuses on a newcomer’s efforts for overcoming the state
of being a greenhorn and becoming a full group member referring not to
the cognitive leader but to the processes that go on between the newcomer
and her new work group. To put it differently, the newcomer undergoes a
process of socialization during which she acquires the knowledge and the
orientation that is required to be a full member of the work group (Davis
1968; Van Maanen and Schein 1979; Louis 1980). The section proceeds as
follows. First, those concepts that are important for a newcomer to learn
when entering a new work group are explained. Then the newcomer’s
tactics for gaining the desired information about her new work group are
discussed.
Work Group Concepts
This section focuses on selected aspects that characterize a work group

and that are important for a newcomer’s integration or socialization into
that group. On the one hand, these are the work group’s shared mental
models that contain the task-related knowledge. On the other hand, a new-
comer also has to learn the work group’s shared mental models on group-
related knowledge. This knowledge comprises the work group’s way of
functioning: its social norms and the social roles of each group member
(see Feldman 1976, 1981, 1983, 1984, 1989; Van Maanen and Schein 1979;
Orasanu 1990; Levine and Moreland 1991; Cannon-Bowers et al. 1993)
– this ‘common frame of reference’ which a work group’s shared mental
models constitute ‘is often described as the group’s culture’ (Levine and
Moreland 1991, p. 258).5
Social knowledge lowers the costs of communication while it also
enhances coordination and communication in organizations (Kogut and
Zander 1996). The business conception as a maxim can be (contingent
on her respective content) part of both task- and group-related knowl-
edge. By learning her new work group’s culture the newcomer develops a
socially shared definition and interpretation of events that will enable her
to perform adequately (Louis 1980). Due to the extended history of shared
experiences particularly strong cultures seem to develop in work groups
with stable membership (Langfield-Smith 1992).
As argued in Section 3.1, the acquaintance of task-related knowledge a
newcomer needs for performing her tasks adequately is not independent
from the work group’s social functioning but interrelated. A newcomer
who adheres to the work group’s social norms and knows about the social
role of each group member, including her own, rapidly increases her
chances that information will be shared with her. But before delving into
the benefits of social roles and social norms, the concepts of social roles
and social norms are explained.
We attach social roles to other people as well as to ourselves. Social roles
mark the expectations ‘of the rights and privileges, the duties and obliga-
tions, of any occupant of a social position in relation to persons occupying
other positions in the social structure’ (Sarbin and Allen 1968, p. 497). For
example, as a newcomer entering a group we have an idea about what kind
of behavior is expected of newcomers and we are likely to act according to
it (see, for example, Van Maanen 1977; Louis 1980; Levine and Moreland
1991; Levine et al. 1993).6 To put it differently, social roles narrow down
the varieties of behavior that have to be expected from an individual.7
Clinging to social roles is usually rewarded while the breach of them is
usually punished (Van Maanen and Schein 1979).
The effects of adopting certain social roles also appears the other way
around: if others assume that an individual has adopted a certain social
role they also assume her to possess particular attributes (the prototypi-
cal representation of schemata and scripts; see Section 2.2) and treat that
individual as if their assumptions were true (‘Pygmalion effect’; see De Nisi
et al. 1984; Stryker and Statham 1985; Eden 1992). Interestingly, this can
cause the individual to exhibit the very characteristics that she is assumed
to have in the first place (‘self-fulfilling prophecy’; see Merton 1957;
Snyder 1992). The resulting positive feedback processes contribute to the
stabilization of social interactions.
Accordingly, a newcomer who enters a work group holds a twofold
set of expectations. On the one hand, she is aware of her role as a new-
comer and will aim at behaving accordingly, possibly enhanced due to the
‘Pygmalion effect’ and related self-fulfilling prophecies. On the other hand,
she is (at least) partly aware of the roles held by the oldtimers. And she will
aim at interacting with them according to her assumptions.
A similar concept related to work groups is that of social norms. Social
norms are ‘rules and standards that are understood by members of a
group and that guide and/or constrain social behavior without the force
of laws’ (Cialdini and Trost 1998, p. 152). These often develop from the
initial patterns of behavior in a group that freeze into norms (see Gersick
and Hackman 1990). The speed with which they develop and the amount
of negotiation that is needed to do so is dependent on the extent of shared
mental models among the group members (Bettenhausen and Murnighan
1991).
It has to be noted that a work group does not have to be aware of all
its social norms since they can be introduced, for example, by direct state-
ments of powerful persons (like the group leader), as conclusions drawn
Group processes 57
from critical incidents, due to the acceptance of primacy or based on the

group members’ former experiences (Feldman 1984). To put it differ-
ently, social norms can be explicit as well as implicit in nature. Explicit
norms are known to the members of the work group and can be stated on
request. They can be transmitted through instructions or enactment that
is observed by a target person (Lumsden 1988; Allison 1992). Conversely,
implicit norms cannot be stated on request and are mainly conveyed by
modeling and observational learning. However, a breach of implicit norms
is just as clearly noticed as is the breach of explicit social norms (Cialdini
and Trost 1998). If social norms are breached the work group will sanc-
tion the group member’s behavior whereas adherence to a group’s social
norms is rewarded (ibid.). To put it differently, social norms are reinforced
by the group.
The socialization of newcomers into established work groups does not,
however, produce newcomers that adhere to ultimate, single standards.
Social norms and social roles rather mark out an area of acceptable or
expected behavior. Thus, ‘socialization decreases the extremes in behav-
ior and attitudes’ (Feldman 1983, p. 176; Fisher 1986). Besides this, the
assignments of social roles as well as the reinforcement of social norms
serve a work group in the following ways.
Social norms have a comparable function to social roles in that they are
bridges ‘towards the yet unknown future’ (Rizzello and Turvani 2002, p.
203): Both provide group members with expectations on what is – accord-
ing to certain social norms or social roles – to be expected from an indi-
vidual or a group of individuals in certain situations (see the concept of
focal rules in Knez and Camerer 1994). An individual can also have such
expectations with regard to her own behavior. In such a case, social norms
and social roles take over a coordinating function in work groups. Just like
shared mental models, social norms and social roles focus and coordinate
a work group’s interaction and thus help the group to keep in check mis-
understandings and other frictions while accomplishing its goals (Bastien
and Hostager 1988; Cialdini and Trost 1998; Barley and Bechky 1994).
Since we adapt our need for certainty by generating social norms and
assigning social roles8 subsequent attempts to change an established order
may invoke fear and mistrust among group members and meet their resist-
ance (Levine and Moreland 1998). These adverse effects of the attempt to
change social norms or roles stabilize incumbent ones.
Social norms and social roles contribute substantially to a work group’s
stability; they help us to economize on scarce cognitive resources and to
quickly form (presumably suitable) mental models about the likelihood of
a certain way of behavior by a person (see Stahl 2002). Thus, we are able
to react more quickly than without social norms and social roles.9
Gaining Information About Work Group Concepts
When a newcomer joins a new work group she is of course aware of her
lack of information not only about the tasks she is expected to fulfill but
also about the work group’s shared mental models. These shared mental
models contain task-related and group-related knowledge, for example,
shared mental models on standard operation procedures, collective expe-
riences, social norms and the social roles of each group member. Thus, a
newcomer does her best to fill her informational gaps. To this end, several
tactics can be observed in a newcomer that are presented below.
The most obvious way to attain relevant information on the work
group’s shared mental models is asking oldtimers what they do and for
what reasons (see Feldman 1989; Blau 1993; Boden 1994). Newcomers
have been found to do so mainly for obtaining task-related information
(Morrison 1993b, 1995).
Conversely, obtaining less urgent or more sensitive information like
group-related information is more often managed by observation.
Together with operant learning, observations present an abundant source
for gaining information: newcomers observe the behaviors of others in
the new group, combine these observations with their growing knowledge
about the functioning of the work group and suitable models, and thus
arrive at mental models and action plans they assess as appropriate for
their own interaction with other group members. Ostroff and Kozlowski
(1992) found that observing incumbent employees was the most frequently
used tactic for obtaining information. This is in line with the findings of
Louis et al. (1983) who found that frequent contact with supervisors and
peers were rated as most helpful for job adjustment.
The learning mechanisms of observational and operant learning are
the same (see Section 3.2). In a first approximation suitable models are
selected on the basis of the newcomer’s initial mental models related to
group structures. These mental models and action plans are then applied
in the interaction with the oldtimers and/or in the fulfillment of the tasks.
This triggers the oldtimers’ reaction, which serves as a feedback to the
newcomer on her behavior and/or achievements. Especially under the con-
dition of superficial information processing, which is very likely to be the
case for a newcomer due to information overload (Louis 1980), a stimulus
that is supported by the work group is likely to be assessed positively by
the newcomer; those newcomers who have a lower need for cognition
are even more apt to assess stimuli in accordance with the work group’s
opinion (Axsom et al. 1987). This effect increases a work group’s impact
on a newcomer.
The work group’s reaction (punishment or reward) shows the newcomer
Group processes 59
what kind of behavior is desired or undesired from the work group’s per-
spective and a newcomer can be assumed to be motivated to learn about
these contingencies (see Section 3.1). These functions of oldtimers to new-
comers are what Louis (1980, p. 243) put the following way: ‘[I]t seems
particularly important for newcomers to have insiders who might serve as
sounding boards and guide them to important background information
for assigning meaning to events.’ Other researchers add a filtering function
to the interpretive function of fellow-employees: in that fellow employees
convey what kind of information they deem important or useless, they
help newcomers to assess incoming information according to the work
group’s culture (Feldman 1980, 1983; Van Maanen 1984).
What determines a newcomer’s selection of a certain model in a work
group that is unknown to her? This selection is based on two sources: the
formal role of each group member in the group (for example, the group
leader) that is known to the newcomer as well as those characteristics that
are easily observable and salient for the newcomer. If these sources signal
that the respective group member is powerful, extraordinarily gifted, has
a high socio-economic status or is – on a more general level – perceived
to be competent and successful or especially considerate a newcomer is
most likely to adopt this respective group member as a model for her own
behavior.10
Newcomers who behave according to the established work group’s
shared mental model on how a newcomer has to behave – to put it differ-
ently, who behave according to the social role of a newcomer – are likely
not only to obtain the oldtimers’ commitment but also to elicit informa-
tion from them which mirrors the general statement that adherence to
social roles and norms is rewarded (Levine and Moreland 1991). The
typical social role of a newcomer is constituted by four elements (ibid.): a
newcomer is assumed to be concerned with regard to her acceptance by the
oldtimers and with regard to her abilities (Van Maanen 1977); to rather
hold back her personal opinions and suggestions concerning the work
group’s way of functioning; to be dependent on the oldtimers (namely
to imitate their behavior and to ask them for advice; Feldman and Brett
1983). Also, a newcomer is expected to conform to the work group, that is,
to avoid disagreement with the oldtimers and to adopt their view (Snyder
1958). The resulting sharing of information with the newcomer enables her
to acquire relevant task- as well as group-related knowledge quicker than
non-conforming newcomers and consequently to master their tasks better
than non-conforming newcomers (Levine and Moreland 1991).
A newcomer is also likely to search the work group for group members
similar to her, for example, fellow newcomers because newcomers can
provide support to each other (Feldman 1983; Moreland and Levine 1989).
By comparing their behavior to that of other newcomers and by observ-

ing the group’s reaction to it, individual newcomers can conclude on the
group’s shared mental models and their social norms (Whiting’s (1960)
theory of identification; Bussey and Bandura 1984). Collaboration among
newcomers has been found to enhance their socialization (see, for example,
Louis et al. 1983). For example, building on the contacts among them,
newcomers might start to offer assistance to each other for obtaining infor-
mation about the work group (Burke and Rolf 1986). However, the sociali-
zation of groups of newcomers has to be monitored. Newcomers provide
support to each other (Bell and Price 1975) that may lead to greater devia-
tion from the officially desired track because in a group of newcomers they
become more confident about their own ideas (see Dornbusch 1955; Evan
1963). Newcomers with a low self-esteem or with little experience regard-
ing the group’s tasks can be assumed to heavily rely on the observation of
and comparison to other group members (Weiss 1978). On the other hand,
those newcomers who have already accumulated information about the
functioning of similar groups can be expected to rely on their past experi-
ences as well as on their current experiences with the new group.
4.2 A WORK GROUP’S PERSPECTIVE ON A

NEWCOMER
With this section we turn to the work group’s perspective on a newcomer’s

entering a work group. Why would an established work group be moti-
vated to integrate a newcomer into their work group? To put it differently,
why would a work group be motivated to share the business conception
and other work-related shared mental models with the newcomer? And
what does a work group do to facilitate the integration of a new col-
league? These are the core questions answered in this section. Essentially,
this section is intended to complement the above section on a newcomer’s
perspective by showing the integration process from the work group’s
perspective.
Work Group Concepts
The concepts that characterize a work group have been presented in

Sections 2.2 and 4.1. These are the work group’s shared mental models,
the social role of each group member and the social norms the group
members have agreed on (see Feldman 1976, 1981, 1983, 1984, 1989; Van
Maanen and Schein 1979) – in short the work group’s culture (Levine and
Moreland 1991). This section revisits these concepts and sheds light on
Group processes 61
them from a work group’s perspective by presenting the functions these

concepts take over for a work group.
Just as mental models serve the individual as a guide in perception and
for the processing of information, shared mental models assume this func-
tion on a group level. Only on a group level do shared mental models con-
tribute to the work group’s coordination by focusing the group members’
attention on the same characteristics, events and so on. Consequently, the
work group does not have to constantly renegotiate what features are to be
assumed important or negligible but can rely on the work group’s shared
mental models because they have – through communication and learning
processes – come to share these mental models that they can fall back on
as a basis for their joint work without questioning them (see Kahneman
2003). The amendments, which shared mental models are subject to, occur
during the work process and – as long as no grave frictions appear – go
largely unnoticed. In case of severe frictions, shared mental models are
renegotiated and adapted accordingly.
While social norms contain a work group’s rules and standards guiding
the individual group member’s behavior, social roles consist of the ‘rights
and privileges, the duties and obligations’ in relation to all other group
members (Sarbin and Allen 1968, p. 497). Both mark out an area of
behavior that can be expected from each group member, thus simplifying
the group members’ interaction, reducing complexity and uncertainty and
thus helping to economize on the group members’ cognitive resources.
The reinforcement of social norms and social roles contributes greatly
to the stability of the group. On an organizational level, social norms at
least partly replace organizational monitoring by social control. Thereby,
expenses are saved that otherwise would have to be invested in monitoring
systems.
The Work Group’s Motivation to Provide Information
Obviously, a newcomer who joins an established work group has an

impact on the work group’s functioning because she lacks the task- and
group-related knowledge necessary to become a full group member
and to perform adequately and thus interrupts its smooth functioning.
This section presents a work group’s view of the joining of a new group
member. It is argued that a work group can be assumed to be motivated
to integrate the newcomer – preferably without major changes concerning
the functioning of the work group.11 Generally it can be stated that old-
timers from work groups with strong cultures hand down related informa-
tion more successfully to newcomers (Levine and Moreland 1991). This
contention is also in line with the conclusion that cohesive groups more
easily socialize newcomers (Feldman 1977, 1980). Members of cohesive

work groups more actively engage in conversation with each other and
are therefore more likely to have a strong culture. Also work groups that
are experienced with the integration of newcomers are more successful in
passing on their culture because the frequent entering of newcomers into
a work group brings about learning opportunities for the oldtimers (see
Ziller 1965; Moreland and Levine 1989; Levine and Moreland 1991).
It has been a basic assumption in this volume that when a newcomer
joins an established work group it is obvious that she lacks knowledge
on the tasks she is to master in her new job as well as on the work group
she joins. It follows from these assumptions that a newcomer is less able
to perform tasks for the work group than the incumbent group members
are. Supposing the work group is dependent on the performance of the
newcomer (for example, in case of understaffing or in case the newcomer
holds knowledge the incumbent group members lack), the group members
are well advised to support the newcomer in her learning about her new
tasks and the functioning of the group because only after she has become
a full group member will she be able to maximally contribute to the
work group’s productivity (Petty and Wicker 1974). Thus, socialization
improves if the oldtimers expect the individual newcomer to be useful
in achieving the work group’s tasks, for example, by complementing
their capabilities. This is the case if a work group is understaffed (see, for
example, ibid.; Cini et al. 1993) or if a work group’s performance is poor
(Ziller and Behringer 1960).
Another reason for providing a newcomer with information that is also
related to the newcomer’s contribution to the work group’s productivity
is the individual group member’s aim to maintain a positive self-esteem
(see Section 3.1). Part of an individual’s self-esteem is fed by her social
identity. Thus, we can assume that she also endeavors to maintain a posi-
tive social identity, which in turn is partly composed by the work group
she belong to. In other words, the positive assessment of her work group
entails a positive feedback to her social identity, which entails a positive
feedback to her self-esteem (see, for example, Van Maanen and Schein
1979; Wanous 1980). A positive assessment of the work group can be
assumed to be – among others – contingent on the work group’s perform-
ance. Hence, group members can be assumed to be strongly motivated
to share the necessary information with a newcomer if the work group’s
productivity depends on the successful integration of new group members
(Levine and Moreland 1991).
On a more personal level, some group members may spontaneously
develop a close personal relationship to a newcomer and take on the role
of her mentor in the quest for becoming a full group member (see Hunt
Group processes 63
and Michael 1983; Burke 1984). These mentors then engage for the suc-
cessful socialization of the newcomer (Moreland and Levine 1989).
Now that we have established the motivational reasons for oldtimers
to provide information to newcomers we can turn to the question why
they can be assumed to aim at maintaining their initial constellation in the
work group or at least to integrate a newcomer with as little changes to it
as possible. To this end, we fall back on what has been argued in Section
3.1.
A newcomer joining a work group potentially threatens the work
group’s established order of how they work together (see Brawley et al.
1988; Arrow et al. 2004). Or, to put it differently, the individual oldtimer’s
feeling of certainty is diminished. At the same time, the work group’s old-
timers can be expected to assess the joining of a new colleague as an impor-
tant event because they cannot ignore the newcomer but are expected to
work together with her – a person they have only limited, if any, informa-
tion about. Consequently, each oldtimer will monitor the newcomer and
the reaction of other oldtimers and search for information for the develop-
ment of adequate mental models regarding the future development of the
situation that could help them to reduce their feelings of uncertainty. At
the same time, the oldtimers will engage in behavior that helps to main-
tain or to re-establish the work group’s previous culture and to minimize
the newcomer’s impact on it because the most attractive new balance of
the work group is likely to be the old one. This can be assumed for two
reasons. First, because the change the individual oldtimer has to accom-
modate to (that is, the costs of the new entry) is thus minimized, which is
attractive. Second, because the oldtimers’ expectation regarding the new-
comer’s social role in the group is that it is the newcomer who is anxious
about her acceptance by the group; she is expected to hold back her per-
sonal opinions and suggestions regarding the work group’s functioning,
to imitate the oldtimers’ behavior and to ask them for advice as well as
to conform to the work group (Levine and Moreland 1991). To put it dif-
ferently, the oldtimers expect the newcomer to adapt to the work group
and not vice versa (Snyder 1958) and furthermore, they expect her to be
motivated to do so. Thus, the entering of a newcomer into an established
work group is likely to amount to the integration of the newcomer in such
way that she adopts the group’s shared mental models, social roles and
social norms and smoothly fits into the established order (see Moreland
and Levine 1989; Levine and Moreland 1991).
Besides the oldtimers’ need for certainty, their need for legitimization
(Dörner 1999) is a motivator for an integration of a newcomer that mini-
mizes changes. Our need for legitimization makes us more or less depend-
ent on the positive feedback from others, preferably others significant to
us. With regard to a work group, the need for legitimization contributes to
the stabilization of the work group’s culture because the individual group
members will only receive signals of legitimization from their colleagues
if they behave according to this culture (see Section 3.1). Additionally, it
also contributes to the tradition of the work group’s culture because the
individual group member does not want to risk her acceptance by other
group members but aims at maintaining (or even increasing) the frequency
of the signals of legitimization she receives from her colleagues. Hence she
will adhere to the work group’s culture while interacting with a newcomer
and thus contribute to passing on the work group’s culture to her.
Modes of Conveying Information
As argued above, a work group is well advised to support a newcomer in

learning the task- and group-related shared mental models of the work
group. How a work group ensures that the newcomer learns the right
information about the work group’s shared mental models, social norms
and social roles is the subject of this section.
Levine and Moreland (1991) (see also Moreland and Levine 1989) have
argued that oldtimers have a range of tactics for controlling the newcomer’s
learning process. On the one hand, the oldtimers can aim at surrounding
the newcomer with oldtimers known to be ‘willing and able to transmit
group culture’ (Levine and Moreland 1991, p. 271). The more frequent
a newcomer’s contact with an oldtimer, the quicker the learning of the
newcomer can be (Reichers 1987). Also, the more explicitly an oldtimer is
aware of the work group’s culture, the more efficiently she will convey it to
the newcomer (see Orasanu 1994). On the other hand, the work group can
aim at decreasing the newcomer’s contact with known opponents to the
work group’s culture in order to save the newcomer from their influence.
This tactic is termed ‘encapsulating’ (Moreland and Levine 1989).
As another common tactic, Levine and Moreland (1991) identify the
formal or informal appointment of mentors to the newcomer. Oldtimers
who can serve as models to the newcomers would make suitable mentors.
A work group’s social norm of holding those oldtimers who brought in a
newcomer responsible for the newcomer’s achievement or of rewarding
mentors contingent on the newcomer’s achievement can be assumed to
further boost the oldtimer’s involvement in the learning process of the
newcomer. The last tactic identified by Levine and Moreland (1991) is
based on directly influencing the newcomer’s learning process by regularly
evaluating her knowledge with regard to the work group’s culture and –
contingent on the results of the evaluation – rewarding or punishing her
accordingly. The authors suggest that evaluation can be conducted overtly
Group processes 65
by simply asking the newcomer or covertly by, for example, observing the
newcomer’s behavior in critical situations.
Generally, the more consistent the work group is with regard to its
culture, the more likely it is that also the newcomer will learn the work
group’s culture in a consistent way (ibid.). On the one hand, consistency is
achieved by social norms that consistently promote desired behavior and
punish undesired behavior or by external mechanisms that fulfill the same
task. On the other hand, consistency in the newcomer’s learning can also
be achieved by ensuring that all newcomers are treated in much the same
way (ibid.). At the same time, consistent learning conditions, that is, clear
contingencies between a behavior and a consequence, accelerate the learn-
ing (Powell et al. 2005).
While the processes described above have discussed the conveyance
of the work group’s shared mental models on task- and group-related
knowledge to a newcomer they also have a feedback effect on the work
group. By constantly communicating, acting and rewarding/punishing
behavior in accordance with the work group’s culture, the group members
keep it vivid because they constantly reconfirm themselves of the validity
of their work group’s shared mental model, social norms and social roles
(see Hebb 2002; Anderson 2000 [1980]). Douglas (1986, p. 91) has put
this phenomenon the following way: ‘Our social interaction consists very
much in telling one another what right thinking is and passing blame on
wrong thinking. This is indeed how we build the institutions, squeezing
each others’ ideas into a common shape.’
Thus, it can be assumed that the entering of newcomers into an estab-
lished work group has positive effects on the stability of the work group’s
culture. We can conclude that the group members of a work group existing
over an extended period of time are likely to become similar to each other
over time. The ASA theory12 (Schneider 1987) further claims that those
employees who do not fit to the work group’s culture leave the organiza-
tion, which further facilitates the homogenization of the organization
(see O’Reilly et al. 1989). However, notwithstanding the contingencies
described in this and previous sections, deviant thinking and behavior in
work groups occur. The following section analyses their origins and their
attractiveness to other group members.
4.3 DEVIANT BEHAVIOR IN WORK GROUPS
Notwithstanding the work group efforts to convey their shared mental

models, social roles and social norms to a newcomer and the positive
feedback this has on the vividness of the work group’s culture, deviant
ideas and behavior in work groups occur; sometimes from the side of
newcomers, who do not aptly adopt the work group’s culture, sometimes
from the side of oldtimers, who do not align their thinking and behavior
according to the work group’s culture but keep their independence from
the work group (Rentsch and Hall 1994). The cognitive leader’s ability to
control for deviant behavior is naturally limited (see Smircich and Morgan
1982). Behavior that deviates from the work group’s culture may hardly be
noticeable and thus have only little effect on it. However, in more extreme
cases, individuals may deviate substantially from the mainstream and may
even develop a business conception rivaling that of the cognitive leader.
Besides the origins of deviant behavior, potential factors propagating
deviant behavior by newcomers as well as oldtimers are discussed in this
section. It should be noted, however, that deviant behavior as such cannot
be assessed as being generally bad for the organization since it can be a
fruitful source for innovations and improvements and enhance the firm’s
adaptability (ibid.; Rentsch and Hall 1994; Levine and Moreland 1998).
Moreover, extreme cognitive coherence is associated with substantial
disadvantages as it may lead work groups to not fully exploit their capa-
bilities (Cannon-Bowers et al. 1993; Levine et al. 1993; Schneider et al.
1995). In the same vein, Wellens (1993) suggests that work groups are well
advised to find a balance of cognitive coherence that allows them to work
in a coordinated manner while being open to new stimuli (see Chatman
1989). As Rentsch and Hall (1994) concluded, complete shared mental
models are virtually unachievable and deviant behavior is likely to occur.
The following sections analyse the origins of deviant behavior in work
groups and discuss what makes deviant behavior attractive to fellow group
members and therefore may kick off the fissioning of the work group.
Origins of Deviant Behavior
Deviant behavior in work groups can be introduced to the work group

by newcomers as well as by oldtimers. The factors influencing these two
sources are presented subsequently.
As argued in Section 3.1 newcomers are dependent on their new work
group for three reasons: they are in need of a certain degree of certainty,
they are in need of signals of legitimization and they are in need of con-
structing a positive social identity that reflects on their self-esteem. So far
as a newcomer manages to fulfill these needs from her affiliation with other
groups (family, friends, social clubs and so on) her dependence on the new
work group is negligible (Hackman 1976). A similar level of independence
from the new work group may be kept by the individual for other reasons
as well. For example, highly self-confident individuals can be expected
Group processes 67
to be less dependent on their work groups (see, for example, Mausner

1954). Also, newcomers who assess the external value of the organiza-
tion as being negative will not want to identify with the organization and
hence maintain a (mental) distance to it (Vardi et al. 1989). Consequently,
assuming a newcomer manages to perform well enough to be able to hold
her job she can stay with the work group without being thoroughly social-
ized according to the established work group’s shared mental models.
If a newcomer is personally independent from her work group and has
the will to pursue and realize her own ideas she is likely to introduce new
– and possibly rivaling – ideas into the work group (see Flanders 1968;
Bandura 1977, 1981; Weiss 1977; Jones 1988). Additionally, due to her
recent experiences outside the new work group and due to the fact that
she is not blunted by the habits of the new work group she is likely to hold
ideas that are new to the oldtimers. Especially if she has worked in similar
fields she is less likely to turn to the cognitive leader or oldtimers for infor-
mation about how to perform their tasks because her former experiences
help her master her new tasks. This has a twofold effect. On the one hand,
such a newcomer does not actively search for personal contact for obtain-
ing information and thus can be assumed to have less personal contact to
the cognitive leader and/or her colleagues in comparison to a newcomer
who is dependent on obtaining such information. To put it differently, she
is less affected by the cognitive leader and the work group. On the other
hand, the cognitive leader and the incumbent group members have to
actively initiate personal contact and conveyance to the newcomer if they
want to ensure a certain level of socialization. However, if the newcomer
more or less consistently signals not to be interested in their briefings and
does not behave according to the work group’s expectations, the short-
term effect is an increase in the communication directed to that individual
(see, for example, Schachter et al. 1954; Berkowitz and Howard 1959). In
the long run, though, this newcomer runs the risk of being (at least infor-
mally) expelled from the work group, that is, the oldtimers will no longer
be interested in her becoming a full group member (see, for example,
Sampson and Brandon 1964).
So far as oldtimers are involved in conveying the work group’s culture
to the newcomer deviant behavior on behalf of the newcomer can also
be triggered by the tactics of the oldtimers in dealing with information.
Some oldtimers might – for the reason to enhance and stabilize their pow-
erful position within the group or to keep up their status – refrain from
sharing information that could diminish their personal position (Levine
and Moreland 1991). Also intended punishment, protection or the wish
to sustain the newcomer’s motivation for becoming a full group member
are specified as reasons for oldtimers to withhold relevant information to
a newcomer. If this happens to a newcomer she is likely to act in a deviant

manner due to her lack of information.
These developments do not necessarily imply a threat to the cognitive
leader’s business conception and the other established shared mental
models because a newcomer’s influence is limited as long as the established
shared mental models serve the smooth functioning of the work group
and the members of the work group are content. The factors contributing
to the attractiveness of a newcomer’s deviant behavior in the eyes of old-
timers are discussed in the following subsection.
As Aldrich (1999, p. 150) notes, some heterogeneity in a firm’s shared
mental models will always remain due to the employees’ ‘personal disposi-
tions and career histories’ (see Rentsch and Hall 1994). Thus, also in the
case of oldtimers we can assume that a certain level of deviant behavior
occurs. The extent to which deviant behavior occurs in an established
work group is contingent on factors that are explained in the following.
First, the individual group member’s dependence on the work group varies
according to her ‘personal dispositions and career histories’ (Aldrich 1999,
p. 150). That is, the individual group member’s self-esteem, creativity and
her will to pursue her own ideas and so on have an influence on her poten-
tial to develop alternative ways of achieving the work tasks or of influenc-
ing her colleagues. Furthermore, the individual group member’s learning
history with regard to her work life forms her pool of positive and negative
feedback regarding her former attempts to prevail. If she has received
more positive than negative feedback she is likely to be more willing to
pursue a new idea and to win over fellow oldtimers for the support of this
idea. This especially depends on her recent experiences with the current
work group.
Second, the extent to which deviant thoughts and behavior occur in
established work groups depends on the quality of the business concep-
tion13 and the success of the cognitive leader in leading her employees
according to it. As can be concluded from the nature and the function
of mental models, once the group members have accepted the business
conception and thus use it as a maxim this puts the business conception
to the test by the employees. If the employees detect that the business con-
ception does not hold what it promised – for example, if it turns out not
to be applicable to the daily work routines of a group member – it will be
adjusted or discarded and no longer used for the daily work (Shrivastava
and Alvesson 1987; Levine and Moreland 1991; Langfield-Smith 1992;
Rentsch and Hall 1994). This process entails a certain level of disappoint-
ment or lacking satisfaction with the work routines as they are suggested
by the business conception and therefore by the cognitive leader. As a
reaction to this frustration, oldtimers will devise their own set of mental
Group processes 69
models that better help to handle their daily workloads. Although these
alternative mental models may not immediately exert a great impact on
the whole work group they can mark the beginning of the takeover of a
rivaling business conception.
Attractiveness of Deviant Behavior
So far, the argument of this volume has focused on showing that upon
joining a firm or a work group, newcomers can be expected to readily
adopt the work group’s shared mental models on the business concep-
tion, their tasks, social norms and social roles. It has further been argued
that mental models are quite resistant to change. However, just as deviant
behavior occurs, it also occurs that employees feel attracted to deviant
mental models. It is the aim of this section to identify the factors respon-
sible for a shift of mental models. The nature of the mental model in
question – be it the business conception, a new way of doing things or a
new interpretation of a standard situation – is not considered here because
the underlying processes are assumed to be the same for all kinds of mental
models. However, the involved processes are discussed using the business
conception as an example. The impact of a rivaling business conception
depends, as argued in Section 3.2, on the recipients’ sensitivity to it, on
the qualities of it and on the source of it. These aspects are discussed
subsequently.
From the reasoning of this volume it follows that the introduction
of new mental models is facilitated if established mental models have
proven not to be applicable for dealing with the tasks at hand or under
other unusual circumstances. Minor changes to established shared mental
models are likely to always develop ‘along the way’. Whether these
changes are noticed by the involved employees depends on the gravity
of the amendments; a large fraction of changes is likely to go unnoticed
simply because their impact is too small.
However, the cognitive structure of our long-term memory implies
that higher-order mental models from which other mental models can be
deduced have repercussions on these lower-order mental models. Hence,
such mental models towards the upper end of our cognitive hierarchy
have an impact on all lower-order mental models and may render them
useless to a more or less severe extent. A deficiency of higher-order mental
models like that of a business conception is thus more severe than that of
lower-order mental models. Employees who hold to a deficient business
conception as a maxim are likely to make frustrating work experiences
because their mental models do not fit reality. If they anticipate similar
negative experiences with the business conception in the future they are
inclined to look for alternative ways of managing their workload. To put

it differently, these employees process information related to the business
conception in a System 2 mode, which makes them attentive to the quality
of it as well as to potential alternative approaches in dealing with their
tasks. Thus, alternative business conceptions are likely to be assessed as
particularly important to them which lets the employees turn their atten-
tion to rivaling business conceptions that would have gone unnoticed if the
established business conception would have served them well (Anderson
2000 [1980]; Kahneman 2003).
Besides the qualities of the business conception, some personal factors
of the individual employee like her intelligence (Stanovich and West
2002), her need for cognition (Shafir and LeBoeuf 2002) and her exposi-
tion to statistical thinking (Nisbett et al. 1983; Agnoli and Krantz 1989;
Agnoli 1991), and the urgency to find a solution to problems arising from
an inadequate business conception enhances the employee’s alertness to
alternative solutions (Kahneman 2003). These solutions may come in the
form of a rivaling business conception that turns out to be applicable.
Consequently, the initial business conception will be refined according to
the rivaling business conception or will even be replaced with it.
As has been argued, the impact of a message not only depends on the
qualities of the message itself – here the business conception – and the
attentiveness of the recipients – here the members of a work group – but
also on the origins of it. In our case, rivaling business conceptions can, on
the one hand, stem from newcomers joining the work group and, on the
other hand, stem from incumbent group members.
For a newcomer to impose a threat to the established system she would
have to be an independent minded and somehow gifted person who in
the eyes of (at least some of) the incumbent group members is positively
assessed.14 As far as communication is concerned, the chances of influenc-
ing fellow employees rise with the cogency of the presented alternative, the
quality of the arguments presented in favor of it and with the frequency
of communication among the newcomer and the oldtimers. Observational
learning, on the other hand, is fostered if desired goals are reached with the
observed behavior (that is, if the model is successful) and if others have the
chance to observe this. Moreover, individuals are more likely to become
models to others if they are powerful (Parsons 1955; Bandura et al. 1963),
successful and competent (Akamatsu and Thelen 1974; Weiss 1977) or
considerate (Flanders 1968). Also liked, respected or admired individuals
are more likely to serve as models to others (Schuler 1975; Brandstätter
1976; Bandura 1986). The proliferation of a rivaling business conception
based on both communication and observation is further enhanced in case
the newcomer is actively aiming at changing how things are done, but the
Group processes 71
discussed processes can also be kicked off without the newcomer noticing
or actively making use of her influence.
However, the role assignments a newcomer is subject to stand at odds
with a newcomer’s chances to influence the oldtimers. A newcomer is
usually assigned the social role of a newcomer, which states that she is con-
cerned with regard to her acceptance by the oldtimers and with regard to her
abilities (Van Maanen 1977), to rather hold back her personal opinions and
suggestions concerning the work group’s way of functioning, to be depend-
ent on the oldtimers (Feldman and Brett 1983) and to conform to the work
group (Snyder 1958). However, the interactions of the discussed factors with
the social role of a newcomer cannot be determined in the present thesis.
The factors that foster a newcomer’s impact on the oldtimers also apply
when it comes to one oldtimer influencing another one. In case a change
is actively aimed for by an oldtimer she might be in a more advantageous
position compared to that of a newcomer because she is accustomed to
the work group’s shared mental models, its social norms and social roles.
Hence, she is more likely to know which other group member is, for
example, discontent with the business conception or in general susceptible
to her ideas. To put it differently, an incumbent group member can fall
back on her task- and group-related knowledge for finding allies in her
quest of changing the established business conception. Newcomers, on
the other hand, may have the advantage of being associated with making
things hum, which may seduce the oldtimers to follow her.
Concerning the momentum of change, we have to bear in mind that
extreme deviates are evaluated less favorable than moderate ones and
that the likelihood of a group member to become a model to other group
members increases if her behavior is prototypical for the group compared
to non-prototypical behavior (see Mackie et al. 1992; van Knippenberg
and Wilke 1992). Consequently, the impact of extreme deviates may be
smaller than that of moderate deviates. A shift from the established busi-
ness conception towards a rivaling business conception would thus be
expected to proceed at moderate pace (Levine 1989).
Furthermore, it has to be noted that for a new mental model to spread
in a work group a certain critical mass of adopters has to be reached.
Assuming that in the beginning only one member of a work group propa-
gates an alternative business conception via communication and/or by
being a model to the other group members, this behavior and its outcome
will be observed by the other group members. They may – on the basis of
the processes and inferences described above – decide to adopt the alterna-
tive business conception. This entails positive feedback loops: a behavior
that has been adopted by other group members can consequently be
observed more often which increases the chances of its further spreading in
the work group. Once a critical number of group members have adopted
the respective behavior it will disseminate even faster in the work group
(see Witt 1989, 1996; Stahl 2000; for a diffusion model of culture on the
level of a society see Latané 1996). However, bearing relevant psychologi-
cal literature in mind, the impact of a minority on a majority presumably
is not only dependent on the critical mass phenomenon.
Supposing an employee has managed to persuade a fraction of her work
group in favor of her mental model or a fraction of the work group has
emerged that follows a rivaling business conception, the work group’s
situation has changed substantially from having one exclusive business
conception to being split into two fractions adhering to different busi-
ness conceptions. To put it differently, the work group is then split into
a majority and a minority. Assuming the majority to adhere to the initial
business conception and the minority to follow the new one, what factors
then determine a minority’s influence on a majority and thus influence the
further spreading of the new business conception on a group level?
Kruglanski and Mackie (1990) present an analysis of influence mecha-
nisms of majorities and minorities that have traditionally been subject to
research. Their analysis is based on the target person’s motivation (for
example, her need to come to a specific conclusion on a topic), attention
(for example, the availability of information in long-term memory) and
other inferential factors (for example, the perceived consistency of infor-
mation). The authors come to the conclusion that for only one out of 21
influence processes a necessary co-variation can be determined. This is
the ‘consensus heuristic’, which induces us to believe that validity can be
induced from the number of people approving of, for example, a position
(Axsom et al. 1987). Therefore, majorities tend to be more persuasive than
minorities if the target person is liable to this heuristic.
A number of influence modes can be argued to typically co-vary with
the majorities and minorities; for example, if the target person favors a
rebel status she is likely to adhere to a minority’s position rather than to
adopt a majority’s one because majority typically signal the ‘average’ or
‘normal’ position (Kruglanski and Mackie 1990). Other influence modes
do not relate to majorities or minorities but occur in both groups (for
example, majorities and minorities can both exhibit behavioral consist-
ency and thereby exert an influence on the target person).
4.4 SUMMARY
This chapter presented the influence processes between a newcomer and

her new work group. The socialization of a newcomer has been looked
Group processes 73
at from both perspectives, that of a newcomer and that of the incumbent

work group. Based on the motivation of a newcomer to learn about her
new work group that has been outlined in Section 3.1 it has been argued
that the work group concepts a newcomer has to learn upon joining are
the work group’s shared mental models on task- as well as group-related
knowledge. Whereas task-related knowledge refers to the tasks the respec-
tive work group has to master, group-related knowledge refers to the work
group’s social norms and social roles or – to put it differently – to the work
group’s way of functioning. The business conception as a maxim can be
part of both task- and group-related knowledge. The common frame of
reference that is thus constituted in a work group is often referred to as the
work group’s culture (Levine and Moreland 1991). By adopting the work
group’s shared mental models or common frame of reference a newcomer
becomes a full group member and is enabled to perform adequately.
Social roles have been defined as the expectations ‘of the rights and
privileges, the duties and obligations, of any occupant of a social posi-
tion in relation to persons occupying other positions in the social struc-
ture’ (Sarbin and Allen 1968, p. 497) and thus define a range of expected
behavior. Adhering to social roles is usually rewarded while breaching
them is punished. When we expect a certain behavior to occur we treat the
respective person accordingly, which may trigger the expected behavior
in the first place. It can consequently be expected that oldtimers treat a
newcomer according to the social role ‘newcomer’ and that the newcomer
in turn behaves according to this role. Social norms have been defined as
‘rules and standards that are understood by members of a group and that
guide and/or constrain social behavior without the force of laws’ (Cialdini
and Trost 1998, p. 152). Adherence and breach of norms are clearly
noticed and rewarded or sanctioned accordingly by the work group. Thus,
social norms are reinforced by the group.
The functions of both social roles and social norms to a work group
are very similar. They decrease the extremes in behavior and attitudes,
allow the individual to infer hypotheses on possible future developments
in the work group, minimize frictions in the work group and help the work
group to attain its goals since they take over a coordinating function.
From a more general perspective, social roles and norms stabilize the work
group and help to economize on the individual group member’s scarce
cognitive resources.
Newcomers can obtain relevant information on a work group’s task-
and group-related knowledge by employing a range of tactics like asking
or observing oldtimers. It has been argued that due to the informational
overload newcomers suffer from they are likely to accept and adopt the
work group’s opinions or assessments. At the same time, newcomers
learn from their own experiences with the work group. Additionally, they
are likely to search the work group for fellow newcomers, compare their
behavior to them and to also turn to them for support.
If observational learning is one major source of information for a new-
comer what determines her choice for or against a potential model? It has
been argued that those oldtimers are more likely to be accepted as a model
who either hold a formal role or who possess easily observable characteris-
tics that signal status, influence and the like to a newcomer or who are – on
a more general level – positively assessed by the newcomer.
The concepts a newcomer has to learn upon joining a new work group
have been revisited and looked at from a work group’s perspective. It has
been argued that from this perspective, shared mental models take over a
coordinative function by saving the work group constant renegotiations,
enable it to (quickly) process new information from a common angle and
hence to work in concert. Social norms and social roles complement the
work group’s smooth functioning. Additionally, they contribute to its sta-
bility while reducing complexity and uncertainty for the individual group
member.
The analysis of a work group’s motivation to share relevant information
with a newcomer has revealed a range of sources for such motivation. The
first source that has been offered is related to the work group’s productiv-
ity. A work group is well advised to share information with a newcomer
if it is dependent on the newcomer becoming a full member of the work
group and performing accordingly. This coherence is further strengthened
by the individual group member’s desire to keep up a positive self-esteem.
A positive self-esteem is part of a positive social identity, which in turn is
at least partly fed by an individual’s work group. Consequently, a well per-
forming work group enhances the individual group member’s self-esteem,
which motivates her to share information with a newcomer if she can
thus ensure the work group’s performance. Furthermore, personal liking
between an oldtimer and a newcomer may induce the oldtimer to support
the newcomer in her becoming a full group member and thus to provide
her with relevant information.
The contention that oldtimers can be assumed to aim at maintaining
their initial constellation in the work group or at least to integrate a new-
comer with as little changes to it as possible has been explained with their
needs for security and legitimization. The potential threat a newcomer
presents to the established order induces the oldtimers to manipulate the
newcomer in such way that she fits herself into the work group without
major interruptions. Besides this, the individual group member’s need for
legitimization ensures that she adheres to the group’s culture while inter-
acting with the newcomer, which further stabilizes the group’s culture.
Group processes 75
Oldtimers have been identified as employing a range of tactics for making

sure that newcomers learn the right information (Levine and Moreland
1991; see also Moreland and Levine 1989). They can control a newcomer’s
learning by surrounding her with veteran group members well known for
their adherence to the work group’s culture while at the same time mini-
mizing the newcomer’s contact with known dissenters. In a similar vein,
the informal or formal appointment of a group member as a mentor to
a newcomer who can, on the one hand, serve as model to the newcomer
while, on the other hand, guide her learning has been identified as another
tactic. Treating newcomers consistently and regularly evaluating their
knowledge on the work group complement a work group’s tactics.
It has been concluded that conveying a work group’s culture to a
newcomer has positive repercussions on the incumbent group members.
By constantly communicating, acting and rewarding/punishing behavior
in accordance with the work group’s culture, the group members keep
it vivid because they constantly reconfirm themselves of the validity of
their work group’s shared mental model, social norms and social roles.
Notwithstanding the previous reasoning, deviant thinking and behavior in
groups occurs. It has been argued that they either stem from newcomers
or oldtimers.
Newcomers who introduce deviant thinking or behavior to an estab-
lished work group presumably are personally independent from their
work group due to, for example, their high self-confidence and to have a
will to realize their own ideas. Consequently, they are less motivated to
learn about their new work group and thus are less affected by them as well
as by the cognitive leader. Moreover, interacting with a newcomer who
does not behave according to the oldtimer’s expectations on the social role
of newcomers may give rise to conflict which may trigger a fundamental
discussion on the work group’s culture. These developments, however, do
not pose a threat to cognitive leadership as long as the established group
members are content with the functioning of their work group.
To the extent that oldtimers are involved in conveying the work group’s
culture to a newcomer, deviant thinking or behavior on behalf of the
newcomer may be due to oldtimers who refrain from passing on relevant
information. Withholding information may, for example, be motivated by
the wish to keep up status or to punish the newcomer. On the one hand,
deviant thinking and behavior originating from oldtimers has been argued
to be due to the individual oldtimer’s personal characteristics. Confident
oldtimers who are creative and have a will to pursue their own ideas are
more likely to develop alternative mental models or to try out alternative
problem solutions. This tendency is increased if the respective oldtimer has
previously received positive feedback for enforcing her ideas. On the other
hand, the extent to which deviant thoughts and behavior occur is deter-
mined by the oldtimers’ satisfaction with the established work group’s
culture or the respective business conception. By means of the business
conception this idea has been explained. Assuming the oldtimers to be dis-
satisfied with it, they are bound to adjust it or discard and replace it with
alternative mental models that do the job better.
Finally, what factors contribute to the dissemination of deviant thoughts
or behaviors have been discussed. Again, the involved processes have
been discussed on a more general level using a cognitive leader’s busi-
ness conception as an example. Just like dissatisfaction with a business
conception lets an employee develop alternative mental models we have
concluded that dissatisfaction makes an employee more sensitive to
alternative mental models offered by fellow employees. Certain charac-
teristics like her need for cognition have been identified to enhance the
employee’s alertness to alternatives. Besides these factors, the origin of
an alternative business conception determines her acceptance by others.
Alternative business conceptions are more likely to be accepted if they
originate from a positively assessed person, be it, for example, because
she is admired or because she has a high socio-economic status. The
frequent and cogent presentation of an alternative business concep-
tion complemented with high quality arguments in favor of it further
enhance its chances of acceptance by others.
It has been concluded that compared to newcomers, oldtimers can be
assumed to have higher chances of having an impact on their colleagues
because they are accustomed to the work group’s culture whereas the
chances of a newcomer to influence her new work group stand at odds
with her social role of being a newcomer. However, these interactions are
not discussed further in the present thesis.
The momentum of the diffusion of a business conception has been
argued to proceed at moderate pace because the extreme deviates are
evaluated as less favorable by others. Also, the critical mass phenomenon
is assumed to have a decisive impact on the momentum of diffusion: Once
a critical number of imitators have picked up a rivaling business concep-
tion positive feedback loops enhance the further spreading of it. However,
assuming a minority–majority constellation in the work group where a
minority of oldtimers has adopted a rivaling business conception while a
majority of oldtimers still adheres to the initial business conception, it has
been argued that various influence processes work independently from a
work group’s size, some co-vary with it and only one influence process
necessarily co-varies with it.
In the following chapter we return to the dyadic perspective on cogni-
tive leadership, that is, the potential impact of a cognitive leader on her
Group processes 77
employees. This time, however, we approach the issue from an empirical

perspective. To this end, hypotheses are developed on the effects of cogni-
tive leadership on the employees’ coordination and motivation. Along
with these hypotheses, the characteristics of cognitive leadership are
explored in an empirical study which is presented in that chapter.
NOTES
1. Whereas in small firms the work group level equals the organizational level, this is not
the case in larger organizations with several managerial layers. Here we restrict the
discussion to the work group level.
2. The newcomer’s motivation to learn about her new work group has already been dis-
cussed in Section 3.1.
3. This effect may be explained by looking at the relation between an individual’s self-
esteem and her social identity (see Tajfel and Turner 1979). Being the member of a
certain group contributes substantially to an individual’s social identity, which in turn
is positively related to her self-esteem. Since a robust self-esteem is necessary for an
individual to remain capable of acting (Dörner 1995, 1999) and since our membership
in a work group contributes to our self-esteem we are inclined to assess this work group
positively in order to maintain a substantial source of our own self-esteem.
4. Those newcomers who have a lower need for cognition are even more apt to assess
stimuli in accordance with the work group’s opinion (Axsom et al. 1987).
5. ‘First, culture is often viewed as a set of thoughts that are shared among group members.
These thoughts guide group members’ actions and provide a common interpretive
framework for their experiences. Second, culture is often viewed as a set of customs
that embody the thoughts that group members share. These customs serve to remind
group members that their experiences can (and should) be interpreted in common ways’
(Levine and Moreland 1991, p. 258; emphasis in the original).
6. Over time individuating information and experiences in the work group will cause a
newcomer to revise inaccurate assessment (see Arrow et al. 2004).
7. Sherif (1936) concluded from his experiments using an autokinetic effect that we
develop norms whenever the context provides little information to guide actions or to
formulate beliefs.
8. Sherif (1936) identified the ambivalent situation he created in an autokinetic experiment
to be the cause for the participants in his experiment to adhere to a group norm even
though it stood at odds with the participants’ own observation. In order to test the
perseverance of such a social norm Jacobs and Campbell (1961) varied Sherif’s setting
so that they were able to determine the average number of five generations of naïve
participants in order to change the social norm the confederate had established before.
9. Similar to the systematic biases that have been discussed in Chapter 2 with regard to
the processing of information, some heuristic biases with regard to behavior have been
discovered in relation to social norms; for example, sufficient social support for a par-
ticular behavior can lead individuals to adopt this behavior because consensus implies
correctness (Cialdini 1993).
10. See Chapter 3, Parsons (1955), Mausner (1953, 1954), Lefkowitz et al. (1955), Bandura
et al. (1963a), Flanders (1968), Akamatsu and Thelen (1974).
11. As argued in Section 3.1 the expected duration of a newcomer’s membership in a work
group is relevant not only to the individual’s motivation to learn about the work group
but also to the group member’s motivation to share information with the newcomer. If
the newcomer is expected to leave after a rather short period of time, the work group is
likely to minimize its efforts regarding the integration of the newcomer because of the
anticipated costs of her integration. Conversely, if the work group expects a newcomer
to be easily replaceable, it is less committed to this newcomer’s socialization (Moreland
and Levine 1989).
12. ASA stands for attraction, selection and attrition.
13. Again the focus of the discussion lies on the business conception albeit all other shared
mental models succumb to the same processes.
14. See chapter 3 on factors enhancing a communicator’s and model’s impact, for example,
being an expert or being trustworthy in the case of conveying her business conception
via communication and, for example, being powerful or having a high socio-economic
status in the case of observational learning.
5. Exploring the theory of cognitive
leadership empirically
This chapter presents the explorative study that has been carried out for
evaluating the theory of cognitive leadership. The study, which has been
conducted in Germany in the beginning of 2004, asked executive officers,
firm founders and CEOs to fill in a questionnaire. The differentiation that
the theory of cognitive leadership makes with regard to the characteristics
of a cognitive leader, on the one hand, and the effects of her cognitive
leadership, on the other hand, is mirrored in the questionnaire which con-
tains a range of items concerning the characteristics of the participants as
well as items concerning the effects of her leadership.
The chapter is structured as follows. In Section 5.1 hypotheses on the
effects of cognitive leadership on the employees’ coordination and motiva-
tion are developed. Then, the methods that have been employed to explore
these hypotheses empirically and the results of the analyses are presented
successively. The chapter closes with a summary (Section 5.3).
5.1 HYPOTHESES DEVELOPMENT
In this section 14 hypotheses are proposed that capture the effects of cogni-
tive leadership on the coordination and the motivation of the employees;
the section is structured accordingly. The first subsection presents the
hypotheses regarding the employees’ coordination while the following
subsection presents the hypotheses regarding the employees’ motivation.
It has to be noted that these hypotheses do not claim to give a complete
picture of all hypotheses deducible in relation to the theory of cognitive
leadership.
Coordination
Under the conditions of cognitive leadership employees share the entre-

preneur’s business conception as a maxim and other work-related mental
models. In Chapter 2 it has been argued that due to the functioning of our
perceptual and cognitive processes we have sets of mental models that are
79
well used because mental models from these sets frequently serve us in
our endeavor to understand our environment and react adequately to it.
Since these sets of mental models are so frequently used, they are highly
accessible, which in turn increases their frequent use even further (positive
feedback loop). Other, less frequently used sets of mental models remain
stored in our long-term memory for their eventual use. Or, if they are not
invoked for a longer period of time, they are eventually forgotten. Thus,
we have sets of mental models that are highly accessible and we have sets
of mental models that are accessible but to various lesser degrees. It has
further been argued that most of the time we operate in a System 1 mode
(Kahnemann 2003). This means that we perceive and process information
about our environment on a superficial level using those mental models
that quickly come to mind and that roughly fit to the situation at hand.
Thus we economize on our scarce cognitive resources. However, this econ-
omizing comes at the price of potential misperceptions and misinterpreta-
tions of the current situation and can amount to inadequate reactions. If
the individual notices these misinterpretations or inadequate reactions or
if she decides to invest more cognitive effort she will switch to processing
information in a System 2 mode. But as long as we pre-consciously judge
our environment to be manageable on a System 1 level we use this less
demanding way of information processing. Thus we can conclude that
employees who are trained to do their tasks and who are familiar with
their professional environment mainly process information in a System 1
mode. Or, to put it differently, they process information by using those sets
of mental models that quickly and easily come to their minds which – in
the case of cognitive leadership – are the business conception and other
work-related mental models.1 This argument is captured by Hypothesis 1:
H1. Under the regime of cognitive leadership the employees’ interests

are more coherent to their unit’s interests than under other leadership
regimes.
The fact that all employees of a work group share these mental models
as well as the business conception as a maxim has positive effects on the
coordination of it (see Rentsch and Hall 1994; Schneider et al. 1995).
As argued in Chapter 2, mental models focus and direct an individual’s
attention and activities and serve her for making predictions on the future
development of a situation. In work groups shared mental models take
over similar functions for the work group by focusing and directing the
work group’s attention and activities on and towards common goals and
by enabling group members to predict the work group’s future needs and
the group members’ future behavior and thus to adapt beforehand to this
Exploring the theory of cognitive leadership empirically 81
expected development (Orasanu 1994; Rentsch and Hall 1994). Moreover,

shared mental models enhance the speed, flexibility and implementation of
a decision (Walsh and Fahey 1986). Thus, the waste of time, labor and re-
sources that occurs in work groups (Steiner 1972) can be reduced (Cannon-
Bowers et al. 1993; Rentsch and Hall 1994; see also Barley 1983; Weick and
Roberts 1993). Furthermore, shared mental models give form and coher-
ence to the experience of group members, which also facilitates the work
group’s coordination (Orasanu 1994; see also the model of Bettenhausen
and Murnighan 1985). Thus, work groups who share mental models can
work more efficiently and with fewer frictions than work groups who do not
share mental models (Walsh et al. 1988; Rentsch et al. 1994; Mathieu et al.
2000; Rentsch and Klimoski 2001). Also group members who have shared
mental models more easily manage conflicts and diagnose performance
problems (Converse et al. 1991; Cannon-Bowers et al. 1993, 1995).
From a more abstract perspective, we can conclude that the extent to
which shared mental models in work groups overlap is proportionate to
the likelihood with which the group members will predict the needs of
the work group’s tasks and its needs and to the likelihood with which the
group members will interact coordinated and successfully with each other
(Converse et al. 1991; Cannon-Bowers et al. 1993).2
Consequently, work groups with shared mental models can be hypoth-
esized to need less detailed instructions because their knowledge and their
use of the business conception as a maxim as well as other work-related
mental models ensures that the employees can decide how to handle an
issue in the firm’s interests and what missing pieces of information they
should get in order to be able to handle the issue. In other words, they have
a lesser need for detailed information on their tasks and on how to achieve
them. Thus, Hypothesis 2 and 3 are stated:
H2. Under the regime of cognitive leadership employees have a lesser

need for detailed instructions on their tasks than employees under other
leadership regimes.
H3. Under the regime of cognitive leadership employees have a lesser
need for detailed instructions on the manner of how to achieve their
tasks than employees under other leadership regimes.
These contentions do not only apply to routine situations but also to

extraordinary situations that may have to be dealt with under time pres-
sure. Unusual situations that involve time pressure are likely to be handled
resorting to quickly accessible mental models (Finucane et al. 2000). In
the case of cognitive leadership these are the business conception as a
maxim and other work-related mental models. But also for those unusual
situations that can be handled in a more relaxed manner, for example,

a new and complex demand from a customer, we can assume that the
employees first try to deal with the situation on a System 1 level and that
System 2 will only take over if mistakes are noticed or if the individual
decides to invest more cognitive efforts and to focus her attention on the
issue at hand.3 As opposed to employees under the regime of cognitive
leadership employees under other leadership regimes are assumed to have
less well developed mental models. Hence, Hypothesis 4 is:
H4. Under the regime of cognitive leadership employees are more able
to make adequate decisions on behalf of their unit (and within their
realms of discretion) in extraordinary situations than employees under
other leadership regimes.
The assumption that the employees under the regime of cognitive

leadership process information using the business conception and other
work-related shared mental models implies that they will be able to under-
stand the information given to them more easily than if they would not
have shared mental models (Denzau and North 1994). This is due to the
fact that group members who share their mental models are ‘better able
to anticipate the information requirements of other members and better
able to present it in the most useful form’ (Rentsch and Hall 1994, p. 241).
It can further be supposed that the communication of these employees
functions smoothly because they all refer to the same set of mental models
(ibid.). Misunderstandings and faulty communication should then be
minimal. Hypothesis 5 captures this argumentation as follows:
H5. Under the regime of cognitive leadership the communication

among the employees functions more smoothly than the communica-
tion among the employees under other leadership regimes.
Among other things, cognitive leaders are assumed to convey their busi-
ness conception to their employees by being a model themselves and by
pointing out other suitable models to them. A model could be the cogni-
tive leader or any other person the cognitive leader deems suitable. It is
expected that under the regime of cognitive leadership employees have
suitable models that guide their behavior more often than is the case under
other leadership regimes that presumably do not emphasize the impact of
models. Hypothesis 6 captures this reasoning as follows:
H6. Under the regime of cognitive leadership the employees have

suitable models more often than under other leadership regimes.
For the successful exertion of cognitive leadership through personal

communication and observational learning it is necessary for the cogni-
tive leader to have frequent personal contact to her employees (see Section
3.2). The frequency with which a cognitive leader is able to have personal
contact to her employees is limited by the amount of time she is able to
spend on these contacts. The more employees a cognitive leader has to
have regular personal contact to, the shorter these contacts will have to be.
Thus, it is assumed that a cognitive leader has an idea of an upper limit-
ing number of employees to whom she can maximally convey her business
conception successfully. These assumptions are captured in Hypotheses 7
and 8:
H7. Cognitive leaders have personal contact to their employees more

often than other leaders.
H8. Cognitive leaders give a smaller upper limiting number of employ-
ees for the conveyance of their business conception than other leaders.
The theory of cognitive leadership assumes that the business conception

and other work-related mental models are not only shared between the
cognitive leader and her individual employee but also among the employ-
ees. This entails coordination on an organizational level while it also has an
effect on the employees in a work group by fostering its cohesion (Levine
and Moreland 1998). Cohesion has been described as ‘the resultant of all
forces acting on the members of a group to remain in the group’ (Festinger
1950, p. 274; emphasis in the original). It is the interpersonal attraction
of the group members that together with the goals shared by the group
members constitute a work group’s cohesion (Carron 1982). Cohesion is
enhanced the more time the group members spend together (Griffith and
Greenlees 1993), develop shared mental models and thus become more
similar to each other, which reflects, for example, in a high attitudinal
consensus and the exhibition of behavioral conformity (Jackson 1996;
Friedkin 2004). In turn, similarity between group members breeds liking
and trust that even further enhance a work group’s cohesion (Klimoski and
Mohammed 1994). To put it differently, cognitive leadership is expected to
facilitate high group cohesion. Members of cohesive work groups can be
assumed to be strongly motivated to contribute to the work group’s goals
(Cartwright 1968) while at the same time being highly susceptible to the
work group’s influence (see, for example, Gerard 1954). The cohesiveness
of a work group has been found to be positively related to its productivity
(see, for example, Mullen and Copper 1994; Gully et al. 1995). Moreover,
cohesive work groups become easier to maintain because their group
members are, for example, more likely to join group activities and to resist
disruptions (Levine and Moreland 1998). Thus, Hypotheses 9 and 10 are

as follows:
H9. Under the regime of cognitive leadership the cohesion among the
employees is higher than under other leadership regimes.
H10. Under the regime of cognitive leadership the employees pull
together more often than under other leadership regimes.
As has been argued, mental models do not only contain task-related

knowledge of group members (for example, the knowledge about the work
group’s standard operation procedures) but also group-related knowledge
(knowledge about the work group’s way of functioning, its social norms
and the social roles of the group members) (see Schein 1971; Feldman
1976, 1983, 1984; Katz and Kahn 1978; Van Maanen and Schein 1979).
Shared mental models on group-related knowledge have been shown to
improve the effectiveness of work groups in comparison to work groups
who do not share such mental models (Nieva et al. 1985). An increase in a
work group’s effectiveness has also been found in work groups with shared
mental models on the work group’s tasks (Walsh et al. 1988). Meyer (1982)
even found that ‘harmonious organizational ideologies’ (such as, for
example, cognitive leadership) can take the place of formal organizational
structures acting as a substitute for structural control (according to Walsh
1995, p. 296; see also Klimoski and Mohammed 1994). Consequently,
the cognitive leader is assumed to be able to grant substantial degrees of
freedom to her employees without endangering her firm’s internal coordi-
nation (see Hypothesis 11):
H11. Under the regime of cognitive leadership more freedom is granted

to the employees in the fulfillment of their tasks than under other leader-
ship regimes.
Work autonomy has also been found to be positively related to per-

formance and organizational commitment (Colarelli et al. 1987). Since
performance and organizational commitment are closely related to the
employees’ motivation this finding leads to the question what impact cog-
nitive leadership can be assumed to have on the employees’ motivation.
Motivation
Congruence between the firm’s tasks and the employees’ goals and the
granting of substantial degrees of freedom to the employees implies
positive effects on the employees’ motivation to pursue their tasks. First,
congruence of the organizational and the individual goals implies the

individual employee’s identification with the organization, which facili-
tates her attachment and commitment to it (O’Reilly and Chatman 1986;
Ashforth and Mael 1989; Van Vugt and Hart 2004).4 This assertion has
been supported by the results of Vancouver and Schmitt (1991) who found
that a congruence of goals is positively related to commitment. Similar
contributions have been made by others who found positive relations
between motivation and involvement (for example, Mowday et al. 1982).
The identification of employees with their organizations has been argued
to be ‘the ideal motivator if . . . the effort of a worker is either hard to
observe or hard to reward’ (Akerlof and Kranton 2005, p. 10; see also
Kogut and Zander 1996). However, this conclusion does not limit the
benefits of identification to these situations.
Second, the granting of freedom signals that the cognitive leader trusts
her employees not to behave opportunistically. Since individuals tend to
act according to what is expected of them (Van Maanen 1977; Louis 1980;
Levine and Moreland 1991; see also Section 6.1) trusted employees can be
expected not to misuse the trust put in them. Moreover, granting substan-
tial degrees of freedom to the employees signals that the cognitive leader
trusts her employees to be able to succeed. This boosts the employees’ self-
confidence and thus has a motivating effect on them (Deci 1975; Bénabou
and Tirole 2003). Also it enhances the employees’ intrinsic motivation
(Deci et al. 1999). The main positive effects of intrinsically motivated
behavior are twofold. Intrinsically motivated behavior is not contingent
on externally provided rewards because it is performed for its own sake.
The independence from extrinsic rewards makes intrinsically motivated
behavior more stable than extrinsically motivated behavior. It has been
found that firms that tend to rely on and enhance their employees’ intrinsic
motivation are more productive than firms who rely on extrinsic incentives
(Ichniowski et al. 1997). Furthermore, because the engagement in their
tasks is experienced as being pleasant, intrinsically motivated employees
can be expected to search new challenges and engage in them on their
own initiative. The literature has also captured this kind of behavior
under the heading of ‘contextual behavior’. This notion conceptualizes
the employees’ behaviors ‘that are not directly related to their chief task
functions’ (Goodman and Svyantek 1999, p. 254). Employees who exhibit
contextual behavior, for example, help each other or volunteer and thus
free organizational resources that otherwise would have to be used to
solve the related problems (Organ 1988). The contribution of contextual
performance to organizational performance has been shown, for example,
by George and Bettenhausen (1990) as well as by MacKenzie et al. (1991).
Thus, Hypotheses 12 and 13 are as follows:
H12. Under the regime of cognitive leadership the employees more

often engage for their unit more than is expected of them even if they do
not personally benefit from their engagement than under other leader-
ship regimes.
H13. Under the regime of cognitive leadership the employees show
more initiative than under other leadership regimes.
Intrinsic motivation is also basic to the engagement in such activities as

exploration, play and the seeking of new challenges (Deci et al. 1999). As
such, it is basic to an individual’s creativity (Williams and Young 1999).
This connection is mirrored in Hypothesis 14:
H14. Under the regime of cognitive leadership the employees show

more creativity than under other leadership regimes.
5.2 METHOD
This section describes the method that has been employed for the empiri-
cal exploration of the theory of cognitive leadership. The first subsection
explains the sample and the procedure of data collection. Then, the meas-
ures that have been used in the questionnaire are introduced. The last
subsection describes the analyses performed on the data.
Sample and Procedures
The empirical exploration of the theory of cognitive leadership was

approached by conducting a survey among firm members that head a
group of subordinates. With the help of the chambers of commerce in
Giessen, Hamburg and Jena as well as the Federal Association of Small
Businesses (Bundesverband mittelständischer Wirtschaft) in Thuringia
firms have been contacted.5
In January and February 2004, 424 firms were asked to take part in the
study. The final sample consists of 48 firms. By these firms, 107 question-
naires have been handed back, which amounts to a rate of return of 11.3
percent. The number of returned questionnaires per firm ranges from 1 to 19;
most frequently one questionnaire has been filled in per company (35 times).
The companies come from diverse lines of trade, although the greater
part of them – namely 25 firms – manufactures medical and surgical equip-
ment or orthopedic appliances.6 Fifty six of the participating firms are situ-
ated in the former western part of Germany, 51 firms in the former eastern
part of Germany.
The diverse organizational positions of the participants necessitated

a wording in the questionnaire that would grasp the organizational unit
of which the individual participant is the executive officer or supervisor.
Depending on the position of the individual participant this can either
refer to the whole company (in case the participant holds the position of
the CEO) or it can refer to a sub-unit in the company (in case the partici-
pant holds some other position like head of department). This issue has
been solved by introducing the notion of the ‘company unit’. ‘Company
unit’ or simply ‘unit’ can therefore relate to the whole company or to a
sub-unit contingent on the position of the individual participant. Fifty
seven participants work as CEOs, 24 have a higher managerial position, 18
a lower managerial position and 5 participants hold other organizational
positions like that of a project leader. Three participants did not indicate
their organizational position at all.
Measures
The participants mostly were asked to indicate the degree to which they
agreed or disagreed with an item. To this end, a five-point Likert-Scale
was presented ranging from 1 (approval of the item) to 5 (disapproval
of the item). Only two items were required to give an absolute number.
Additionally, participants were also offered the possibility to indicate that
they held no knowledge about an item or that they could not make up their
mind by ticking ‘don’t know’. Items rated ‘don’t know’ were counted as
missing data.
The items on leadership included in the questionnaire can be divided
into two groups, that is, items that concern the characteristics of a cog-
nitive leader and items that deal with the effects of cognitive leadership.
These groups of items mirror the underlying assumptions of the theory of
cognitive leadership: a supervisor who leads according to the principles of
cognitive leadership can be identified by a range of characteristics and the
same is assumed to apply to the effects of cognitive leadership. In total, 29
items deal with the characteristics of a cognitive leader and 14 items deal
with the effects of cognitive leadership (see Appendix A).
Analyses
Based on the assumption that the data is metric and the relation between
the characteristic items are linear, a factor analysis has been conducted in
order to detect the underlying factors that describe cognitive leadership in
a more concise way. Before the realization of the factor analysis, missing
values have been replaced by the multiple imputations of random draws
realized by multivariate imputation by chained equations.7 On average,

around three missing values had to be imputed for each characteristic item
and around seven missing values had to be imputed for each effect item.
The data has been controlled for potential outliers. To this end, a score
for each participant has been calculated consisting of the added results
of the characteristic and the effect items that were to be responded to on
a Likert-Scale (see Appendix A). The scores of all 107 participants have
been plotted with a boxplot that shows the scores of participant 49 to be
outside the extreme value limits (see Figure B.1 in Appendix B; Massart et
al. 2005). Consequently, this participant has been excluded from the fol-
lowing analyses. The final sample thus consists of 106 participants.
The factor analysis has been performed for the group of characteristic
items. In order to determine the number of factors included in the factor
analysis, a screeplot for the characteristic items was plotted (cf. Figure B.2 in
Appendix B). A screeplot depicts the distribution of the eigenvalues of each
factor. Those factors are included in the analysis that has eigenvalues con-
verging asymptotically to the abscissa. The screeplot suggests performing a
factor analysis limited to seven factors (Bühl and Zöfel 2002).
The relation of the characteristic factors and the effect items have
been explored by computing the correlations of each of the charac-
teristic factors with each of the effect items (see Hypotheses 1 to 14).
Computing linear regressions on the data was not possible because the
relations of the characteristic factors and the effect items turned out not
to be linear.
5.3 RESULTS
In this section the results of the analyses are described. The first subsection
presents the results of the factor analysis of the characteristic items while
the following subsection turns to the exploration of the correlations of the
characteristic factors and the effect items. It has to be noted that the results
are based on the subjective ratings of the participants. Furthermore, the
characteristics of cognitive leadership had not yet been explored with the
help of a questionnaire or with any other empirical instrument before
the present study. Thus, we cannot be sure whether all characteristics of
cognitive leaders are captured and whether the operationalization of the
characteristics of cognitive leadership in the questionnaire has achieved
maximum exactness and minimum inconsistency. So the findings of the
present study are limited in certain ways. However, the questionnaire has
been designed with great care and has been revised according to the com-
ments of critical experts to achieve the best possible result.8
Factor Analysis on Characteristic Items
A factor analysis, namely a principal component analysis with a varimax

rotation, has been performed on the items characteristic for cognitive lead-
ership with the number of factors or principal components limited to seven.
The outcome of this analysis shows the correlation of each characteristic
item with the respective factor (see Table B.1 in Appendix B). In order to
achieve a more clear-cut description of the factors, the interpretation of the
factor loadings include only those factor loadings of or above an absolute
value of 0.40 (Table 5.1).9 Based on the associations among the charac-
teristic items as regards contents for each of the seven factors, the factors
are called Trust in the Employees (Factor 1), Determinants of Conveyance
(Factor 2), Stimulating Working Conditions (Factor 3), Renunciation of
Formalisms (Factor 4), Detailedness of Business Conception (Factor 5),
Impact of Group Size (Factor 6) and Conveyance of the Maxim (Factor 7).
Two of the characteristic items, 4.3 and 5.6, do not load equal to or more
than an absolute value of 0.40 on any of the seven factors. Accordingly,
they have not been included in the interpretation of the factors. In the fol-
lowing the factors are described in their order of occurrence.
Factor 1: Trust in the Employees

This factor unites characteristic items that emphasize the unimportance
of controlling the employees or providing detailed instructions to them.
A participant high on this factor can be described as having trust in her
employees to work productively for the company unit.
Factor 2: Determinants of Conveyance

This factor primarily combines characteristic items on the determinants
of the business conception’s conveyance to the employees. Participants
high on this factor are of the opinion that the conveyance of the business
conception is enhanced by personal contact, if it is sound, if it matches
the ideas of the employees and if the employees assess it to advance the
company unit. Furthermore, these participants resort to active counter-
measures if they notice a lack of personal contact or endangered group
cohesion.
Factor 3: Stimulating Working Conditions

This factor mostly consists of characteristic items that put emphasis on
providing working conditions that induce the employees’ creativity and
initiative. A participant high on this factor would structure the work
process accordingly while counteracting her employees’ tendencies to
disagree with her business conception.
Table 5.1 Rotated component matrix of the factor analysis on the characteristic items limited to seven factors, cut off
point for inclusion: 0.40 (extraction method: principal component analysis; rotation method: varimax with
Kaiser normalization; rotation converged in 16 iterations)
Factor 1: Trust in the

Employees
Factor: 2: Determinants
of Conveyance
Factor 3: Stimulating
Working Conditions
Factor 4: Renunciation
of Formalisms
Factor 5: Detailedness
of Business Conception
Factor 6: Impact of
Group Size
Factor 7: Conveyance
of the Maxim
90
Item 6.1 0.729
A precise control of my employees regarding their individual
contribution is not necessary.
Item 6.2 0.696
I do not control the individual contributions of my employees.
Item 6.3 0.642
I do not provide detailed instructions to my employees on what
they have to do.
Item 6.4 0.637
I do not provide detailed instructions to my employees on how
they have to achieve their tasks.
Item 6.6 0.613
I do not control my employees’ output regarding its quality.
Item 6.5 0.451
I do not control my employees’ output regarding its quantity.
Item 4.5 0.729
According to my experiences, my conception is more easily
conveyed if my employees assess my conception to be sound.
Item 5.4 0.620
I resort to counteractive measures if I notice a deficit of personal
contact to my employees.
Item 4.2 0.601
conveyed if the personal ideas of my employees coincide with it.
91
Item 4.1 0.534
conveyed if I have frequent personal contact with my employees.
Item 4.6 0.466
conveyed if my employees perceive my conception to advance
the company unit.
Item 5.7 0.436
I resort to counteractive measures if the cohesion in the work
group is endangered.
Item 4.3
conveyed if my employees’ models share my conception.
Table 5.1 (continued)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
Item 4.10 0.857

I design the organizational processes in my company unit so
that my employees have to show creativity.
92
Item 4.9 0.855
I design the organizational processes in my company unit so
that my employees have to show initiative.
Item 5.5 0.573
I resort to counteractive measures if I notice that my
employees do not agree with my conception.
Item 5.6
I resort to counteractive measures if I assess my employees’
model to be unsuitable.
Item 3.5 0.672
I do not convey my conception to my employees by formal
means like holding speeches or circulating memos.
Item 6.7 0.633
I do not talk to my employees mainly by formal means like
written instructions.
Item 4.8 0.611
I prefer change like that induced by innovations over routine.
Item 3.2 −0.484
I convey my conception to my employees by being a model
to them.
Item 2.2 0.755
I have a detailed idea of how my company unit shall achieve
93
this conception.
Item 2.1 0.745
I have a detailed conception of what my company unit shall
achieve.
Item 4.4 0.704
conveyed as long as the group of employees is relatively small.
Item 4.7 0.576
conveyed if my employees perceived my conception to be
personally rewarding to them.

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
Item 4.11 0.560
94
With growing numbers of employees I had to change my
leadership style.
Item 3.4 0.624
I convey my conception to my employees by pointing out
suitable models to them.
Item 3.1 0.459 0.495
I emphasize the importance of conveying my conception as a
maxim to my employees.
Item 3.3 0.419 0.468
I convey my conception to my employees by talking about
it with them.
Factor 4: Renunciation of Formalisms

This factor mainly unites characteristic items on formal communication.
Participants high on this factor make limited use of formal communica-
tion and prefer change over routines while they do not aim at serving as a
model to their employees.
Factor 5: Detailedness of Business Conception

This factor mostly combines characteristic items related to the business
conception and its conveyance. Participants high on this factor have an
idea of what they want to achieve with their company unit and how this
can be achieved. They aim at conveying their business conception as a
maxim to their employees, preferably by talking about it.
Factor 6: Impact of Group Size

This factor primarily unites characteristic items on the importance of the
size of the company unit for the conveyance of the business conception.
Participants high on this factor have made the experience that convey-
ing their business conception is easier in smaller groups, that they had to
change their leadership style to adapt to the growing number of employ-
ees and that the conveyance of the business conception has been easier if
employees assessed it to be personally profitable to them.
Factor 7: Conveyance of the Maxim

This last factor combines characteristic items on the conveyance of the
business conception as a maxim. Participants high on this factor aim at
conveying their business conception as a maxim to their employees by
pointing out suitable models and by talking to them. It should be noted
that two of the characteristic items that load highest on this factor also
show meaningful loadings on the fifth factor.
The factor analysis of the characteristic items shows that most of the
characteristics of cognitive leadership can be arranged in seven meaningful
factors that offer a concise characterization of cognitive leadership.
Exploring the Correlations of Characteristic Factors and Effect Items
The factor values of all participants on each of the seven factors are
divided into four percentiles (for the distribution of the factor values on
each factor see Figures B.3 to B.9 in Appendix B). The resulting groups of
26 participants (first and fourth quartile) and 27 participants (second and
third quartile) of each factor, respectively, are interpreted to indicate the
extent to which the respective participant exerts this characteristic factor.
This extent ranges from 1 (very high) to 4 (very low). Table 5.2 summarizes
the significant results.10 It has to be noted that the obtained correlations

do not allow judgment on the hypotheses. Rather, the correlations reveal
a tentative picture of which extent(s) of what factors are related to the
proposed effects because of the subjective nature of the data and the height
of the obtained correlations that range from low to medium. In the follow-
ing the relations of each of the seven factors with regard to each of the 14
hypotheses are discussed first from the hypotheses’ perspective, then from
the factors’ perspective.
Concerning the coherence of the employees’ interests with those of
the unit (H1), the findings show that a very high level on Factor 2
(Determinants of Conveyance) is the only factor that correlates positively
with the effect item. A very low Factor 1 (Trust in the Employees), a low
Factor 4 (Renunciation of Formalisms) as well as a very high and a very
low Factor 6 (Impact of Group Size) negatively correlate to it whereas a
low Factor 3 (Stimulating Working Conditions) is positively related to it. In
summary, Factors 2, 3 and 4 seem to be most important for the coherence
of the employees’ and the company unit’s interests.
With regard to the employees’ need for instructions on their tasks (H2)
a very high Factor 1 (Trust in the Employees), a high Factor 3 (Stimulating
Working Conditions) and a very high Factor 7 (Conveyance of the Maxim)
positively correlate with the related effect item whereas a very low Factor
3 and a high Factor 7 are negatively related to it. Also a low Factor 2
(Determinants of Conveyance) negatively correlates with it. We can con-
clude that all factors for which correlations have been obtained with this
hypothesis seem to be important to it.
Concerning the employees’ need for detailed instructions on how to
achieve their tasks (H3), only three significant correlations have been
obtained. A very high Factor 2 (Determinants of Conveyance) is related
positively to the effect item whereas a low Factor 2 is related negatively
to it. Also, a high Factor 3 (Stimulating Working Conditions) is positively
related to it. The two correlations between the different levels of Factor 2
can be interpreted to denote the importance of this factor for the employ-
ees’ need for detailed instructions on how to achieve their tasks.
The effect item on the employees’ capability to handle extraordinary
situations (H4) correlates positively to a very low Factor 4 (Determinants
of Conveyance) and high Factor 3 (Stimulating Working Conditions). A
very high Factor 1 (Trust in the Employees) as well as a high Factor 6
(Impact of Group Size) is negatively correlated to the effect item. It seems
that Factors 1 and 6 are especially important to the employees being able
to handle extraordinary situations.
Regarding the employees’ smooth communication (H5), a medium level
of Factor 1 (Trust in the Employees) correlates positively with the related
Table 5.2 The significant correlations of the characteristic factors differentiated into four extents (very high (1) to
very low (4)) with the effect items (Spearman’s rho)
Factor 1: Trust
in the Employees
Factor 2:
Determinants of
Conveyance
Factor 3:
Stimulating
Working
Conditions
Factor 4:
Renunciation of
Formalisms
Factor 5:
Detailedness
of Business
Conception
Factor 6: Impact
of Group Size
Factor 7:
Conveyance
of the Maxim
H1. Under the regime of cognitive 1 0.541** −0.355*
97
leadership the employees’ interests are
more coherent to their unit’s interests than 2 −0.378*
under other leadership regimes. 3 0.448** −0.573**
(Item 8.2: The interests of my employees 4 −0.347* −0.385*
conform to the company unit’s interests.)
H2. Under the regime of cognitive 1 0.574** 0.597**
leadership employees have a lesser need for 2 0.389* −0.342*
detailed instructions on their tasks than 3 −0.668**
employees under other leadership regimes. 4 −0.615**
(Item 7.1: I do not have to provide detailed
instructions to my employees on what they
have to do.)
Factor 1: Trust
in the Employees
Factor 2:
Determinants of
Conveyance
Factor 3:
Stimulating
Working
Conditions
Factor 4:
Renunciation of
Formalisms
Factor 5:
Detailedness
of Business
Conception
Factor 6: Impact
of Group Size
Factor 7:
Conveyance
of the Maxim
H3. Under the regime of cognitive 1 0.367*

leadership employees have a lesser need 2 0.324*
for detailed instructions on the manner of 3 −0.534**
98
how to achieve their tasks than employees 4
under other leadership regimes.
(Item 7.2: I do not have to provide
detailed instructions to my employees
on how they can achieve their tasks.)
H4. Under the regime of cognitive 1 −0.497**
leadership employees are more able to 2 0.387* −0.474**
make adequate decisions on behalf of their 3
unit (and within their realms of discretion) 4 0.444*
in extraordinary situations than employees
(Item 7.3: My employees know what to
do in extraordinary situations.)
H5. Under the regime of cognitive 1 0.371*
leadership the communication among the 2 0.468**
employees functions more smoothly than 3 0.354*
the communication among the employees 4 −0.402*
(Item 7.4: The communication among my
employees functions smoothly.)
H6. Under the regime of cognitive leadership 1 −0.378*
the employees have suitable models more 2 0.371* 0.363* −0.390*
often than under other leadership regimes. 3 0.367* 0.349* −0.395*
(Item 5.1: My employees have suitable 4
models.)
H7. Cognitive leaders have personal 1
99
contact to their employees more often 2 −0.357*
than other leaders. 3 −0.359*
(Item 5.8: I have personal contact to 4
every one of my employees at least
________ times per day/week/month.)
H8. Cognitive leaders give a smaller 1 0.374*
upper limiting number of employees 2
for the conveyance of their business 3
conception than other leaders. 4 0.360*
(Item 4.12: According to my experiences,
the conveyance of my business
conception is facilitated if the number of
my employees is not higher than ______.)
Factor 1: Trust
in the Employees
Factor 2:
Determinants of
Conveyance
Factor 3:
Stimulating
Working
Conditions
Factor 4:
Renunciation of
Formalisms
Factor 5:
Detailedness
of Business
Conception
Factor 6: Impact
of Group Size
Factor 7:
Conveyance
of the Maxim
H9. Under the regime of cognitive 1 0.401* 0.374*

leadership the cohesion among the
2
employees is higher than under other
leadership regimes. 3 −0.502** 0.525**
(Item 5.2: The cohesion of my employees 4
100
is high.)
H10. Under the regime of cognitive 1 0.473** 0.347*
leadership the employees pull together 2
more often than under other leadership
3
regimes.
(Item 5.3: All my employees pull together.) 4
H11. Under the regime of cognitive 1
leadership more freedom is granted to the 2 0.348*
employees in the fulfillment of their tasks
3
than under other leadership regimes.
(Item 7.5: I grant substantial liberties to 4 0.336*
my employees regarding the achievement
of their tasks.)
leadership the employees more often 2 −0.325*
engage for their unit more than is expected 3 −0.336* 0.365*
of them even if they do not personally 4
benefit from their engagement than under
(Item 8.1: My employees engage above
average for the company unit also in such
cases when they cannot benefit personally
from their behavior.)
H13. Under the regime of cognitive 1 0.477**
101
leadership the employees show more 2 0.378* −0.363*
initiative than under other leadership 3 −0.377*
regimes. 4
(Item 8.3: My employees show initiative.)
leadership the employees show more 2 0.405*
creativity than under other leadership 3 −0.341*
regimes. 4
(Item 8.4: My employees show creativity.)
Note: ** indicates a significant correlation on a 0.01 level, * a significant correlation on a 0.05 level. Empty cells indicate non-significant
correlations.
effect item whereas a very low Factor 1 correlates negatively to it. A posi-
tive correlation is also obtained for this effect item with a very high Factor
5 (Detailedness of Business Conception). For the smooth functioning of the
employees’ communication, Factor 1 seems to be most important.
Concerning the employees having suitable models (H6), the obtained
correlations show that a low Factor 2 (Determinants of Conveyance) as
well as a low and high Factor 3 (Stimulating Working Conditions) are
positively related to this effect item. Furthermore, a very high and a low
Factor 4 (Renunciation of Formalisms) are negatively related to the effect
item whereas a high Factor 4 is positively related to it and a high Factor 7
(Conveyance of the Maxim) is negatively related to it. These low correla-
tions may be interpreted to indicate that the characteristic factors of cogni-
tive leadership do not have a strong impact on whether the employees have
suitable models or not.
In order to compute the correlations of the characteristic factors
and the frequency of personal contact between the participant and her
employees (H7), a contact index has been introduced.11 A high Factor
2 (Determinants of Conveyance) as well as a low Factor 5 (Detailedness
of Business Conception) negatively correlate to having a lot of personal
contact to the employees. These correlations may suggest that none of the
characteristic factors have a decisive impact on the frequency of the per-
sonal contact between the participants and their employees.
Regarding the upper limiting number of employees for the conveyance
of the business conception (H8), a very low Factor 6 (Impact of Group
Size) as well as a very high Factor 7 (Conveyance of the Maxim) positively
correlate to the related item. Again these correlations may denote that
none of the characteristic factors exerts an important influence on the
upper limiting number of employees for the conveyance of the business
conception.
The cohesion of the employees (H9) is positively related to a very high
Factor 7 (Conveyance of the Maxim) and negatively related to a low Factor
4 (Renunciation of Formalisms). Moreover, a very high and a low Factor 5
(Detailedness of Business Conception) correlate positively with the employ-
ees’ cohesion. Consequently, Factors 4 and 5 seem to be most important for
the cohesion of the work group.
Positive correlations have also been obtained concerning the employees
acting in concert (H10) and very high values on Factor 2 (Determinants
of Conveyance) and Factor 5 (Detailedness of Business Conception).
Compared to Factor 5, however, Factor 2 seems to be most important for
the employees pulling together.
The granting of substantial liberties to the employees (H11) is positively
related to a very low Factor 2 (Determinants of Conveyance) and a high
Factor 3 (Stimulating Working Conditions). However, both correlations

are low and may rather indicate that none of the characteristic factors has
a strong impact on the granting of substantial freedom to the employees.
The contextual behavior of the employees (H12) is negatively related
to a low Factor 3 (Stimulating Working Conditions). Furthermore, a low
Factor 5 (Detailedness of Business Conception) correlates positively to
contextual behavior and a high Factor 6 (Impact of Group Size) correlates
negatively to it. Again, the obtained correlations rather suggest that none
of the characteristic factors has a strong impact on the employees’ contex-
tual behavior.
With regard to the employees showing initiative (H13), positive cor-
relations have been found for a very high Factor 2 (Determinants of
Conveyance) and a high Factor 3 (Stimulating Working Conditions).
Negative correlations have been found for a low Factor 4 (Renunciation
of Formalisms) as well as a high Factor 6 (Impact of Group Size). The init-
iative of the employees seems mainly to be influenced by Factor 2. The
employees showing creativity (H14) is positively correlated with a high
Factor 3 (Stimulating Working Conditions) and negatively correlated with
a low Factor 4 (Renunciation of Formalisms). We may conclude that none
of the characteristic factors is decisive to the employees’ creativity.
Based on this interpretation we now look at the findings from the char-
acteristic factors’ perspective. Findings that are in line with the theory of
cognitive leadership are reported without further comments whereas those
that object to the theory of cognitive leadership are noted.
Factor 1 (Trust in the Employees) is mainly related to three effect
items. Participants who put very much trust in their employees to work
productively for their company unit also do not have to provide detailed
information on the tasks to their employees (H2). However, their trust in
their employees does not include the handling of extraordinary situations
(H4). Following the assumptions of the theory of cognitive leadership that
cognitive leadership has a positive effect on the employees’ capability to
handle extraordinary situations this finding comes as a surprise and may
indicate that very much trusting the employees could have a detrimental
effect on the employees’ capability to handle extraordinary situations
or that the trust that is put in the employees is indeed limited to routine
situations. A medium level of Trust in the Employees is further positively
related to the employees’ smooth communication whereas a very low level
of Trust in the Employees is negatively related to it (H5). This may indicate
that putting little trust in the employees can have a negative impact on the
employees’ communication.
Factor 2 (Determinants of Conveyance) is mainly related to five effect
items. Participants with high values on this factor hold that the conveyance
of the business conception is enhanced if it is sound, if it matches the

employees’ ideas and if the employees assess it to advance the business
conception. Furthermore, they believe that personal contact fosters the
business conception’s conveyance. In case these participants notice a lack
of personal contact to their employees or in case they assess the work
group’s cohesion to be endangered, they resort to active countermeasures.
Very high values on this factor are positively related to the coherence
of the employees’ and the company unit’s interests (H1) as well as the
employees pulling together (H10) and showing initiative (H13), which may
indicate the positive effect of a very high Factor 2 on these issues. An addi-
tional positive correlation of a very high Factor 2 is found with regard to
the employees’ little need for detailed instructions on how to achieve their
tasks (H3). Note that this rather low correlation of a very high Factor 2
with the employees’ low need for detailed instructions of how to achieve
their tasks goes along with a negative correlation of a low Factor 2 with
the related effect item. This may denote that the higher this factor, the
higher its positive effect on the employees’ low need for instructions on
how to achieve their tasks. Also on a low level of values on this factor, a
negative correlation has been obtained with regard to the employees’ need
to have detailed instructions on their tasks (H2). Again this may indicate
that the employees of participants low on this Factor 2 may have a nega-
tive impact on the employees working independently because they are in
need of detailed instructions on their tasks. Together with the correlations
of Factor 2 with regard to Hypothesis 2, we may conclude that a low
Factor 2 overall can have a negative effect on the employees’ independence
because of their increased need for detailed instructions on their tasks and
how to achieve them.
Factor 3 (Stimulating Working Conditions) is mainly related to two
effect items. Thus, we may conclude that aiming at structuring the work
processes so as to induce their employees’ initiative and creativity can
have a positive effect on the employees being able to work independently,
because they have to be given less detailed instructions on their tasks
(H2). However, not aiming at inducing the employees’ initiative and crea-
tivity seems to have a positive effect on the coherence of the employees’
and the company unit’s interests. This finding is not anticipated within
the framework of the theory of cognitive leadership because the theory
of cognitive leadership argues that, generally, cognitive leadership, of
which providing stimulating working conditions is a part, enhances this
coherence.
Factor 4 (Renunciation of Formalisms) is found to be mainly related
to two effect items. Not making limited use of formal communication
and preferring change of routines seems to have a negative impact on the
coherence of the employees’ and the company unit’s interests (H1) as well
as on the employees’ cohesion (H9).
Factor 5 (Detailedness of Business Conception) is mainly related to only
one effect item. Having an idea about what business is to be realized and
how this is best achieved together with aiming at conveying these ideas as
a maxim to the employees is positively related to the employees’ cohesion
(H9). That this effect has been found to be even greater for subjects with a
low Factor 5 or – in other words – for subjects who put less emphasis on
their business conception and its conveyance is unexpected by the theory
of cognitive leadership and needs further exploration. An explanation for
this finding may be that employees who cannot rely on their supervisor’s
business conception as a maxim have to come up with their own solutions
for dealing with their tasks and may support each other in doing so. This
may result in high group cohesion.
Factor 6 (Impact of Group Size) is also mainly related to only one effect
item. Conceiving the business conception to be more easily conveyed to
the employees in small work groups and adapting one’s leadership style if
the work group grows seems to have a negative impact on the employees’
ability to deal with extraordinary situations (H4). Within the framework
of the theory of cognitive leadership this finding comes as a surprise
because generally we would rather expect cognitive leadership, of which
this factor is a part, to have a positive effect on the employees’ ability to
handle extraordinary situations.
The seventh and last factor (Conveyance of the Maxim) relates to only
one effect item as well. Very much aiming at conveying the business con-
ception as a maxim to the employees seems to have a positive impact on
the employees’ ability to work independently as they need less detailed
instructions on their tasks (H2). However, the negative correlation of a
slightly lower Factor 7 with this effect items calls for further exploration
on this issue.
5.4 SUMMARY
This chapter introduced 14 hypotheses on the coordination and the

motivation of the employees under the regime of cognitive leadership.
Generally, it was hypothesized that cognitive leadership has a positive
impact on the coordination and the motivation of the employees.
In order to explore these hypotheses empirically, a study has been con-
ducted for which 107 supervisors of 48 different firms filled in a question-
naire. The data obtained with this study was analysed in a twofold way.
First, the group of items characterizing a cognitive leader were subjected
to a factor analysis. This factor analysis resulted in seven characteristic

factors that structure the group of characteristic items of cognitive leader-
ship in a meaningful way. These factors are Trust in the Employees (Factor
1: participants high on this factor can be described as having trust in her
employees to work productively for the company unit); Determinants of
Conveyance (Factor 2: participants high on this factor hold that the con-
veyance of the business conception is enhanced by personal contact, if
the business conception is sound, if it matches the ideas of the employees
and if the employees assess it to advance the company unit; these partici-
pants resort to active countermeasures if they notice a lack of personal
contact or endangered group cohesion); Stimulating Working Conditions
(Factor 3: participants high on this factor structure the work process so
as to induce their employees’ initiative and creativity while counteracting
their tendencies to disagree with the business conception); Renunciation of
Formalisms (Factor 4: participants high on this factor make only limited
use of formal communication and prefer change over routines while they
do not aim at serving as a model to their employees); Detailedness of
Business Conception (Factor 5: participants high on this factor have an
idea of what they want to achieve with their company unit and how this
can be achieved; they aim at conveying their business conception as a
maxim to their employees); Impact of Group Size (Factor 6: participants
high on this factor have made the experience that conveying their busi-
ness conception is easier in smaller groups, that they had to change their
leadership style to adapt to the growing number of employees and that
the conveyance of the business conception has been easier if employees
assessed it to be personally profitable to them); and Conveyance of the
Maxim (Factor 7: participants high on this factor aim at conveying their
business conception as a maxim to their employees by pointing out suit-
able models and by talking to them).
Second, the factor values of all participants on each of the seven factors
were divided into four percentiles. The resulting groups were interpreted to
indicate the extent to which the respective participant exerts this charac-
teristic factor ranging from 1 (very high) to 4 (very low). The correlations
revealed a tentative picture of which extent(s) of what factors are related
to the proposed effects. It has been concluded that the most distinct cor-
relations are the following. A very high extent of trust in the employees to
work productively for the company unit may lessen the employees’ need
for detailed instructions on their tasks while it seems to have a detrimental
effect on their ability to handle extraordinary situations. Alternatively,
this finding could also indicate that the trust in the employees is indeed
limited to their working productively for the company unit and excludes
their ability to handle extraordinary situations. A low Factor 1 may
further have a negative impact on the smooth functioning of employees’

communication.
A high Factor 2 (Determinants of Conveyance) seems to enhance the
coherence of the employees’ and the company unit’s interests as well as
the employees pulling together and showing initiative. Moreover, we may
conclude that the higher this factor, the higher its positive effect on the
employees’ low need for instructions on how to achieve their tasks. A low
Factor 2 seems also to have a negative impact on the employees’ need for
detailed instructions on their tasks.
Aiming at structuring the work processes so as to induce their employ-
ees’ initiative and creativity (Factor 3) can be concluded to have a positive
impact on the employees’ need for detailed instructions on their tasks.
Not aiming at doing so seems to have a positive effect on the coherence of
the employees’ and the company unit’s interests – a finding not expected
within the framework of the theory of cognitive leadership that needs
further exploration.
It has further been concluded that not making limited use of formal
communication and preferring change of routines (Factor 4) seems
to have a negative impact on the coherence of the employees’ and the
company unit’s interests and the employees’ cohesion. In addition, it has
been concluded that having an idea about what business is to be realized
and how this is best achieved together with aiming at conveying these
ideas as a maxim to the employees (Factor 5) can have a positive effect on
the employees’ cohesion. The finding that this is even more so if subjects
have a low Factor 5, that is, if subjects put less emphasis on these ideas
and the conveyance of them to the employees, is unexpected by the theory
of cognitive leadership and needs further exploration. This also applies
to the finding that a high Factor 6 (Impact of Group Size) seems to have
a negative impact on the employees’ ability to deal with extraordinary
situations.
Finally, Factor 7 (Conveyance of the Maxim) seems to lower the
employees’ need for detailed instructions on their tasks. However, further
exploration on this issue is in order because of the negative correlation
with the related effect item that has been obtained for a slightly lower
Factor 7.
Together, these findings show that some of the characteristic factors
of cognitive leadership indeed seem to have the expected positive impact
with regard to the employees’ coordination and motivation. Nevertheless,
some correlations cannot be explained within the present framework of
the theory of cognitive leadership.
The following chapter rounds off this volume by drawing implications
from it and offering an outlook on further interesting questions.
NOTES
1. As has been argued for the employees to retain mental models it is necessary that these
mental models prove to be useful and adequate for their daily tasks (see Langfield-
Smith 1992; Rentsch and Hall 1994). If they prove to be useless and inadequate, the
employees will discard or forget them. For the sake of argument, the appropriateness
and usefulness of the discussed business conception and work-related mental models is
assumed.
2. In a similar but more radical vein, several authors claim that in order to work success-
fully, all involved individuals have to have shared mental models as a necessary pre-
requisite (Louis 1980; Trice and Beyer 1984; Sapienza 1985; Converse et al. 1991; Duffy
1993; Cannon-Bowers et al. 1995).
3. Following Kahneman (2003), referring to Chapman and Johnson (2002), the indi-
vidual’s final judgment is, however, likely to remain anchored on the individual’s initial
impression on the issue.
4. Referring to Porter et al. (1974), Kalliath et al. (1999, p. 1176; emphasis in the original)
have defined organizational commitment as ‘the extent to which an individual identifies
with his or her organization and is unwilling to leave it’.
5. I thank these institutions for their help.
6. The classification of the firms on a two digit level follows the German Classification of
Economic Activities, Edition 1993 (Statistiches Bundesamt 2003).
7. S. Van Buuren, ‘Multiple imputation online’, www.multiple-imputation.com/, 11
January 2007.
8. My thanks go to Hartmut Niederle-Rencken, Klaus-Jürgen Scheer, Klaus Rathe,
Ulrich Witt, Hagen Worch and the Evolutionary Economics Group of the Max Planck
Institute of Economics.
9. The cut off point of an absolute value of 0.40 or more limits the strength of the interpre-
tations to a certain extent. Hence the interpretation of the factors may not do complete
justice to the data.
10. The complete correlations are provided in Table B.2 in Appendix B.
11. The index was computed the following way:
Indexpersonal contact
7 1
5 Personal contactday 1 aPersonal contactweek * b 1 aPersonal contactmonth * b
30 30
assuming each month to have 30 days.
6. Implications and open research
questions
The central argument of this volume is that the cognitive coherence of the
employees with the cognitive leader’s business conception is the key to a
firm’s coordination and motivation. Communication and learning have
been identified as the means for achieving this goal in dyadic relationships
like that of a cognitive leader and a new employee. Starting from there, the
focus of investigation has been widened to also include the dynamics of a
newcomer’s socialization in an organization or work group. What concepts
a newcomer has to learn during her socialization, what motivation she has
to do so and how she goes about this task have been described. Conversely,
what motivation the incumbent work group has to ‘teach’ the newcomer and
how they help to make the newcomer a full member of the group has been
explained.
This chapter turns to the implications that can be deduced from this
volume with regard to the shaping of dyadic interactions as well as group
processes (Section 6.1). In Section 6.2 some open questions are presented
that emerge from the reasoning of the present thesis. Section 6.3 summa-
rizes the chapter.
6.1 IMPLICATIONS FROM THE PRESENT WORK
This section deals with the implications that can be drawn from the present
thesis. The first subsection derives implications for interactions between the
cognitive leader and an individual employee. The next subsection presents
implications for shaping group processes in a way which is advantageous
to the implementation and maintenance of cognitive leadership.
Implications for Dyadic Interactions
Several implications can be arrived at from what has been argued in this
volume for optimizing a cognitive leader’s impact on her employees.1
As has been outlined in Section 2.1, one of the essential assumptions of
the theory of cognitive leadership is that frequent personal contact between
109
the cognitive leader and her employees is fundamental for the implementa-
tion and maintenance of cognitive leadership. Consequently, a cognitive
leader should structure the work process in such a way that frequent per-
sonal contact is given or even necessary for performing the tasks.
Influencing an employee according to the business conception is most
likely to be successful in the first six months a newcomer spends in the
firm (see Chapter 4; Chatman 1991; Ashforth and Saks 1996; Bauer and
Green 1998; Bauer et al. 1998). It has been pointed out that during this
period of time a newcomer is likely to be highly motivated to learn about
the business conception. Furthermore, the information overload she is
likely to suffer from makes her susceptible to the influence of relevant
others like, for example, the cognitive leader (see Sections 3.1 and 4.1).
The mental models adopted during early socialization are robust and they
affect the perception and interpretation of subsequent events (Bauer and
Green 1994; Ashforth and Saks 1996). Consequently, a cognitive leader
should aim at seizing this time frame for shaping her employees’ mental
models according to her business conception. If she manages to imple-
ment her business conception early on, this will set the stage for the further
information processing of the newcomer according to the business concep-
tion. This assumption is backed by the finding that those individuals who
acquire more knowledge about the organization in their first year with
it are more adjusted to it and display more positive attitudes towards it
(Morrison 1993a; Chao et al. 1994).
Another reason that a cognitive leader should make the most out of her
chance for shaping a newcomer’s mental models early on is the fact that
the newcomer’s adoption of the business conception results in congru-
ent interests between the newcomer’s and the firm’s interests and thus in
the newcomer’s intrinsic motivation to achieve her tasks. The benefits of
intrinsic motivation, like the independence from extrinsically provided
rewards, the minimal monitoring that is needed, the stability of the intrinsi-
cally motivated behavior and the resulting employee’s initiative to engage
in her tasks above average, make it highly desirable for a leader to have
intrinsically motivated employees. Conversely, missing out on the chance
to influence a newcomer may lead her to adopt mental models rivaling
the business conception. On the one hand, the adoption of a rivaling busi-
ness conception necessitates the monitoring of this employee because she
cannot be assumed to be intrinsically motivated to perform her tasks. As
explained in subsection 3.2 an employee, who is not intrinsically moti-
vated, has to be extrinsically rewarded and therefore closely monitored.
This curbs the individual’s initiative and creativity; an undesirable effect,
especially in case the firm’s success depends on its capacity to innovate and
to adapt to the changes in the market. On the other hand, the adoption of a
Implications and open research questions 111
rivaling business conception will make the respective employee dependent

on instructions. Furthermore, it may become a threat to the initial business
conception because an employee who has adopted a rivaling business con-
ception is likely to behave in a deviant manner and may become a model for
other employees.
Once an employee has lost her intrinsic motivation and instead relies on
extrinsic rewards, it is highly unlikely or even impossible to change extrin-
sic motivation back to intrinsic motivation (Gneezy and Rustichini 2004).
This can be argued to be due to the facts that habits are inert (Nelson and
Winter 1982) and that the withdrawal of a positive reinforcer in effect is a
negative punishment that reduces the desired behavior.
This volume assumes that the level on which the employees process
information cannot be determined by the cognitive leader. Consequently,
the cognitive leader cannot determine what pieces of information they
process and base their conclusions on. All a cognitive leader can do for
maximizing her chances to influence her employees according to her busi-
ness conception is to communicate and behave in such a manner that her
employees are most likely to process the offered information in accordance
with the business conception no matter whether her employees process the
information in a System 1 or 2 mode. In this regard, some conclusions can
be drawn that are based on the reasoning of Section 3.2.
Generally, the learning of the employees is enhanced if the cognitive
leader behaves authentically, respectfully and considerately. Concerning
the communication of the business conception, the cognitive leader as
the sender of the message can increase the impact on her employees by
emphasizing those of her personal characteristics that are likely to be
assessed positively by her employees (for example, her trustworthiness on
the issue at hand). In the case of a System 1 mode of information process-
ing on behalf of the employees, this enhances the probability of biased
information processing in favor of the cognitive leader’s message whereas
the actual arguments of it go rather unnoticed (Chaiken 1980; Pallack
1983). Especially in the case of newcomers who are likely to suffer from an
informational overload and who therefore are likely to process informa-
tion in a System 1 mode, emphasizing positive personal characteristics is
advantageous. This also applies to the effect of a pleasant and appreciative
communication atmosphere. Messages delivered in such an atmosphere
are assessed more positively. Hence, the cognitive leader should aim at
creating a pleasant and appreciative atmosphere when talking to her
employees.
For learning to take place, the employee has to notice the contiguity
between her behavior and a subsequent reaction to it and she has to draw
a causal relationship between them. To facilitate this, the cognitive leader
should aim at providing adequate reactions to the employee’s behavior as

soon as possible after the respective behavior occurred. Alternatively, she
can explicitly point out this causal relationship. Since sanctioning behav-
ior does not allow for conclusions on behavior that is desired instead, a
cognitive leader should aim at combining critique with suggesting alterna-
tives. This will speed up the individual employee’s learning because then
she does not have to rely on time consuming learning by trial and error.
The theory of cognitive leadership assumes that besides communication
a cognitive leader conveys her business conception by being a model to her
employees. The employees can be presumed to have a natural tendency to
accept the cognitive leader as a model due to the cognitive leader’s organi-
zational position. A cognitive leader can further increase her chances of
becoming a model to her employees if she points out personal character-
istics similar to those of her employees or if she manages to be assessed
positively by them in some other respect (for example, by her capacity of
gaining sympathy, by being fair or patient). Here, the personal characteris-
tics of a cognitive leader that are assumed to have a positive impact on her
capacity to exert cognitive leadership come into play. A cognitive leader
who easily gains other people’s sympathy and confidence, who is fair,
credible, appreciative and patient can indeed be assumed to be assessed
positively by her employees and hence to have a greater impact on them.
Of course, becoming a model to others relies on the same mechanisms
for colleagues as for the cognitive leader. Some employees may emerge
as models to other employees perhaps because they are competent and
behave considerately to their colleagues. A cognitive leader should aim at
spotting these employees and make sure they adopt her business concep-
tion because these employees can have a substantial impact on the other
employees and may significantly contribute to the propagation and the
success of the business conception. If the cognitive leader would like spe-
cific employees to be accepted as models by their colleagues she can facili-
tate their acceptance by pointing out their similarities to other employees
or she can contribute to their positive assessment by their colleagues, for
example, by increasing their socio-economic status. If the cognitive leader
reinforces her employees for paying attention to a certain model, this
will increase the employees’ attention to it (see Pepperberg and Sherman
2000). Concerning the impact of the business conception as a message,
the cognitive leader should present cogent and high quality arguments
for her business conception because this increases the chances of the busi-
ness conception to convince the employees. Furthermore, the number of
arguments in favor of the business conception should outrun the number
of arguments against it, the business conception should often be repeated
and it should be easy to understand.
Implications for Shaping Group Processes
Besides the interaction between the cognitive leader and the individual
employee, group processes have been argued to be important for the
socialization of a newcomer (see Chapter 4). Since it is the aim of the
cognitive leader to socialize new employees according to her business
conception, it makes sense for her to influence group processes so that
they support her business conception and hinder the development and
propagation of rivaling business conceptions. Adopting this perspective
on the group processes involved in the socialization of a newcomer, some
implications can be derived from Chapter 5.2
As pointed out in the previous subsection, structuring the work process
in such a way that frequent personal contact between the cognitive leader
and each group member as well as between the group members is given
or even necessary for performing the tasks is a basic condition for the
implementation and maintenance of cognitive leadership. Further condi-
tions for the shaping of group processes that facilitate cognitive leadership
follow.
Social roles, as argued in Section 4.1, are attached to every group
member. Following from these assignments is a certain range of behavior
that fits the respective role. For example, newcomers are expected to be
concerned with regard to their acceptance by the oldtimers or to hold back
their personal opinions concerning the work group’s way of function-
ing. The adherence to these social roles is rewarded by the work group
and, thus, the social role of each group member is stabilized. A cognitive
leader can make use of this group process in that she emphasizes the social
roles of newcomers and oldtimers, respectively, with the oldtimers being
in the position of experts on what is important for becoming a full group
member and the newcomers being in the position of novices with regard
to this information. This may significantly speed up the socialization of
newcomers because oldtimers tend to share information preferably with
newcomers who behave according to their social role.
Similarly, a cognitive leader should aim at influencing a work group’s
social norms so that they conform to her business conception. Only then
can social norms take over a coordinating function in the work group that
benefits the proliferation of the business conception and that substitutes
for organizational monitoring.
A cognitive leader should also aim at making as many social norms
as possible explicit because explicit norms are easier to monitor and – if
necessary – to correct. This makes it much more likely that oldtimers pass
down social norms to a newcomer that conforms to the business concep-
tion. It also pays for the cognitive leader to aim at making shared mental
models explicit because this enhances their coordinating function for the
work group (see Orasanu 1994). Individual group members may hold back
information important for a newcomer to become a full group member
because they may fear risking their personal position in the work group.
Consequently, a cognitive leader should aim at implementing social norms
that positively emphasize the group members’ open-mindedness and will-
ingness to share information with each other. The intention to punish a
newcomer may be another reason for an oldtimer not to share information
with her. A cognitive leader should aim at preventing this from happening
by, for example, promoting an active and open handling of conflicts.
It has been reasoned that the socialization of newcomers is facilitated in
work groups that are cohesive, that have developed a strong culture and
that are experienced in integrating newcomers. This yields the following
conclusions with regard to a cognitive leader’s impact on a work group.
First, a cognitive leader should aim at supporting the work group’s co-
hesion. This can be achieved, for example, by assigning tasks to the work
group that necessitates close collaboration of the group members. Second,
since particularly strong cultures seem to develop in work groups with
stable membership, a cognitive leader should aim at preserving a certain
ratio of oldtimers versus newcomers in order to maintain a work group’s
strong culture.3 Third, it can be concluded that a cognitive leader could
foster the socialization of a newcomer in a work group by, for example,
offering specific training to all group members or to some group members
who may then serve as mentors to newcomers.
In Section 4.2 it has been explained that the socialization of newcomers
improves if, for example, a work group is understaffed. Therefore, a work
group’s motivation to integrate newcomers may be enhanced by the cog-
nitive leader if she explicitly points out the individual contribution the
respective newcomer has to offer to the work group’s tasks.
Tactics of work groups to convey information to newcomers are, for
example, encapsulating newcomers, employing informal mentors and
regularly evaluating the newcomers’ standard of knowledge. A cognitive
leader should assist the work group in implementing these tactics.
In Section 3.2 the quality of the business conception has been argued to
determine whether it proves useful or not to the employees. As long as the
business conception does prove useful to them, they will not be inclined
to search for alternatives. Only if it does not hold what it promises the
employees will invest the cognitive effort necessary for finding an alterna-
tive to it. Hence, the cognitive leader should aim at offering a business
conception that is relevant and helpful to each employee’s daily tasks.
Propagating a business conception that is neither relevant nor helpful to
the employees will not only motivate them to search for an alternative but
will also shed a negative light on the credibility and competence of the
cognitive leader. Therefore, the cognitive leader should take great care in
couching the business conception.
The roots of deviant behavior have been identified in the independence
of a newcomer or an oldtimer on the work group or the organization.
Therefore, a cognitive leader should be able to impede deviant behavior
by creating a positive dependence of her employees on their colleagues or
the organization. This can be achieved by initiating measures that bolster
the individual’s personal bond to the work group or the organization, for
example, by supporting social activities in the spare time, by appreciat-
ing the individual’s contributions, by assigning interesting projects to the
employees or by creating a positive public image of the organization or the
work group. Other factors determining the incumbent group members’ ten-
dency to deviating behavior are their personal dispositions and experiences.
Thus, we may conclude that the careful selection of new employees can con-
tribute substantially to the successful implementation and maintenance of
cognitive leadership. This issue is discussed in the following section.
6.2 OUTLOOK
This volume has pursued two aims: first, to broaden the theoretical basis
of the theory of cognitive leadership and its scope with regard to group
processes, and, second, to explore the theory empirically. Obviously,
the coverage of it is limited so that a range of interesting questions and
concerns with regard to the theory of cognitive leadership could not be
addressed let alone answered. This section is dedicated to these questions
and concerns.
Before Socialization: Fit of Mental Models and Person–Organization Fit
The previous chapter offered an overview of the interactional processes

going on during a newcomer’s socialization. The time frame adopted in
that chapter has been from the entry of a newcomer to the work group
to about six months later (Cooper-Thomas and Anderson 2002). It has
been pointed out that, among others, the newcomer’s personality and
former experiences have an impact on her socialization in the work group.
This conclusion implies that a cognitive leader should be able to smooth
the strains of socialization and to increase its success if she aims at hiring
newcomers that exhibit a certain degree of fit to the work group or the
organization.4 This is to say that the ‘right’ newcomer may diminish the
need for socialization (Feldman 1989; Chatman 1991; Rentsch and Hall
1994; see also Mulford et al. 1968; Wanous 1980). Furthermore, selecting
employees who fit to an organization ‘creates a flexible workforce with
employees who can be moved easily between jobs’ (Kristof 1996, p. 22;
see also Bowen et al. 1991). In the context of the present thesis, the fit that
most intuitively comes to mind is that of fitting mental models – between
the newcomer and the cognitive leader as well as between the newcomer
and her new work group.
In the literature it is suggested that employees with common attributes,
for example, in the form of experience due to their training, are predis-
posed to process information in similar ways (Klimoski and Mohammed
1994). Moreover, the socialization process of newcomers who exhibit
similar mental models to those of the respective organization may be
accelerated or more likely to be successful because people tend to commu-
nicate more frequently with others who are similar to themselves (Reichers
1987; Zenger and Lawrence 1989; Kristof-Brown et al. 2005). One indica-
tor of a potential similarity of mental models is a person’s demographic
background that can serve as a cue indicating what kind of experiences a
person is likely to have made (Ackerman and Humphreys 1990; Poole et
al. 1990). These demographic indicators include, for example, a person’s
age, sex and tenure (Zenger and Lawrence 1989). Since similar experi-
ences breed similar mental models people with similar demographic
backgrounds are argued to hold more similar mental models than people
from different backgrounds (Rentsch and Klimoski 2001). The benefits
of similar or homogeneous group members or organizations are that they
are more stable than heterogeneous groups in that the latter show ‘higher
levels of conflict, more frequent and severe power struggles, lower levels
of social integration and poorer communication’ (Hall and Lord 1998, p.
173). Also homogeneous work groups have been shown to outperform
heterogeneous work groups (Jackson 1996). Consequently, those group
members are most likely to leave the work group who are most dissimilar
from the others (O’Reilly et al. 1989; Jackson et al. 1991).
Besides similar mental models resulting from similar experiences or
personal backgrounds the literature on person–organization fit identifies
values, goals and personalities as determinants of shared mental models
(Rentsch and Hall 1994). In her seminal review on the fit of persons and
organizations, Kristof (1996) has pointed out that the fit of a newcomer
can be looked at from four different angles: the fit between a person and
an organization, the fit between a person and the job requirements, the fit
between a person and the work group and the fit between a person and
the vocation. This perspective has been elaborated further and person–
supervisor fit has been identified as a fifth type of fit.5 Kristof-Brown et
al.’s (2005) meta-analysis on this topic presents a comprehensive overview
of this research. Mainly based on this meta-analysis, relevant concepts of

fit and their implications to the theory of cognitive leadership are presented
below. These concepts are the fit between an employee and the organiza-
tion, the work group and the cognitive leader (that is, the supervisor).
The main focus of research on person–organization fit has been on
the match between an individual’s values and an organization’s values
(for example, Chatman 1989) – a concept not addressed in the theory of
cognitive leadership. It has been shown that a high congruence of values
is negatively related to an individual’s intention to leave the organiza-
tion (Chatman 1991; O’Reilly et al. 1991) and positively related to an
individual’s tendency to exhibit contextual performance (O’Reilly and
Chatman 1986), to an individual’s productivity (O’Reilly et al. 1991), to
an individual’s commitment (ibid.; Finegan 2000) as well as to the rapid-
ness of the individual’s socialization (Chatman 1991). Companies invest
substantial resources in recruiting employees that fit their cultural values
(Cable and Judge 1997).
A second – albeit less popular – approach to person–organization fit
operationalizes the concept as a fit between an individual’s and an organiza-
tion’s goals (see, for example, Vancouver and Schmitt 1991; Witt and Nye
1992). It is one of the basic assumptions of the theory of cognitive leadership
that under the regime of cognitive leadership, the individual employee’s
goals and the organization’s goals are coherent. The effects of goal coherence
suggested in the theory of cognitive leadership are cognitive coherence that
facilitates the employees’ coordination and intrinsic motivation. The review
of Kristof-Brown and her colleagues states that meta-analytic techniques
were only applicable to the correlation of person–goal fit and job satisfac-
tion. This correlation turned out to be 0.31 as compared to the correlation
of 0.51 for a value-based person–organization fit indicating that a value-
based fit might be a better predictor for a person’s job satisfaction. A similar
picture emerges from another finding of Kristof-Brown and her colleagues:
the correlation of person–organization fit with job satisfaction, organiza-
tional commitment and intent to quit is higher without the Vancouver and
Schmitt (1991) study which operationalizes person–organization fit as the
fit of goals. These findings might indicate that embracing individual and
organizational values additionally to goals in the theory of cognitive leader-
ship may enhance the explanatory power of the theory.
Person–group fit is concerned with the ‘interpersonal compatibility
between individuals and their work groups’ (Kristof-Brown et al. 2005, p.
286). Again the concept has been operationalized as a fit of the individual’s
and the work group’s values (for example, Adkins et al. 1996), goals (for
example, Kristof-Brown and Stevens 2001) and personalities (for example,
Hobman et al. 2003).
Goal congruence on a group level, for example, has been found to

be negatively related to a person’s intention to quit and to be positively
related to commitment with a greater impact of intra-group congruence
as compared to supervisor–subordinate goal congruence (Vancouver
and Schmitt 1991). This finding supports the approach of the present
volume to include group processes in the theory of cognitive leadership.
The main focus of this strand of research, however, has been on the fit of
the individual’s and the group members’ personalities (see, for example,
Moreland and Levine 1989; Hobman et al. 2003). So far, the theory of
cognitive leadership includes hypotheses regarding advantageous person-
ality traits of the cognitive leader. The research on person–group fit goes
further and relates the personality of the newcomer and the incumbent
group members. Such a fit of personalities has been shown to positively
correlate, for example, with a work group’s cohesion, contextual perform-
ance and organizational commitment (Kristof-Brown et al. 2005). Hence,
these concepts may enrich the theory of cognitive leadership.
Finally, person–supervisor fit has been operationalized as the congru-
ence of leader–follower values (for example, Colbert 2004), goal congru-
ence (for example, Vancouver and Schmitt 1991) and personality traits
(for example, Schaubroek and Lam 2002). Again goal congruence has
been shown to be negatively related to an individual’s intention to quit and
positively related to an individual’s commitment (Vancouver and Schmitt
1991). The meta-analysis revealed correlations of person–supervisor fit
with, for example, overall performance (Kristof-Brown et al. 2005). This is
in line with the assumptions of the present thesis. However, a closer exami-
nation of this research concerning its potential contributions to the theory
of cognitive leadership is suggested especially concerning the recruitment
of suitable employees.
Recapitulating, the discussion of fit between a prospect employee and the
organization, the work group or the supervisor points to the importance
of the recruitment practices organizations employ. Conducting suitable
recruitment should yield matching employees whose socialization is easier
and involves a lesser risk of failure (Moreland and Levine 1989; Klimoski
and Mohammed 1994). Hence, expanding the scope of the theory of cogni-
tive leadership to include the relation between the recruitment, the fit and
the socialization of new employees and cognitive leadership seems to be
very worthwhile to explore.
Further Open Questions
As one of the basic conditions for cognitive leadership to be implemented,

the frequent interaction between the cognitive leader and her employees
has been assumed. It has been shown that, and how, shared mental models
develop (see Sections 2.2, 3.2, 4.1 and 4.2). However, this volume could
not determine more exactly the meaning of sufficient personal contact
between, for example, the cognitive leader and her employees. All we can
conclude from this volume is that the extent of personal contact needed
to establish cognitive leadership is contingent on the personal character-
istics of the cognitive leader, the quality of the business conception and
situational aspects of the communication or interaction. To put it differ-
ently, it is not only the quantity of personal contact but also its quality.
Furthermore, the individual newcomer’s motivation to learn the business
conception and the extent to which the tasks of a newcomer depend on
collaborating with the cognitive leader or her colleagues can be assumed
to substantially influence a successful adoption of the business conception
by a newcomer.
With regard to implementing and maintaining cognitive leadership in
work groups, several aspects have not been addressed in the present thesis.
Considering the determinants of a successful implementation of cognitive
leadership that have been outlined above, we may merely conclude that for
a cognitive leader there should be a natural limit concerning the number of
employees she is able to convey her business conception to. This is caused
by the limited time a cognitive leader can invest in interacting with each
employee. Also, the cognitive leader’s personal characteristics, the quality
of the business conception, the situational aspects and the individual
employee’s motivation to adopt the business conception can be assumed
to vary substantially across individuals and situations and to have an
impact on the conveyance of the business conception. This further compli-
cates a determination of such a limit.
A related question concerns the rate of newcomers that a cognitive
leader or a work group can cope with at a time. The socialization of
newcomers absorbs a cognitive leader’s and a work group’s resources
that could otherwise be invested in processing the workload. Assuming
that the workload has to be processed in time, a cognitive leader or each
group member can only spare a limited extent of time with socializing new-
comers. Hence, we can conclude that a cognitive leader can only deal with
socializing a restricted number of newcomers. The same is true for work
groups who can be assumed to be only able to socialize newcomers suc-
cessfully up to a certain ratio of oldtimers versus newcomers. With regard
to work groups, this ratio depends on each group member’s personal
characteristics, the quality of the business conception, the situational
aspects of the communication or interaction as well as on the individual
newcomer’s motivation to learn the business conception, the individual
oldtimer’s motivation to socialize newcomers, the tasks and the extent of
collaboration in the respective work group. Elaborating on these issues in

more detail could yield interesting implications for the rate of growth that
is supported under the regime of cognitive leadership.
Since this volume focuses on the potential impact of a cognitive leader
and a work group on individual employees or newcomers, potential inter-
dependencies of these influence processes with influences stemming from
a newcomer or incumbent members of the work group are not presented.
These, however, can be assumed to have also a distinct impact on the
implementation and maintenance of cognitive leadership and hence can be
hypothesized to be very worthwhile investigating.
In the light of literature, it seems likely that being aware of the contin-
gencies and effects of cognitive leadership increases a cognitive leader’s
chances to implement and maintain it successfully. For example, the
coordination in and the output of work groups is enhanced if the cogni-
tive leader and the group members clearly communicate their assumptions
as well as the assumed coherences and consequences of a topic (Orasanu
1994; see also Cummings 1981; Hackman 1987). Also the existence of
shared mental models in work groups has positive effects on the work
group’s decision making and performance (see, for example, Rentsch and
Klimoski 2001). Especially for the socialization of newcomers, commu-
nicating the business conception and other work-related mental models
clearly could facilitate their integration (Rentsch and Hall 1994). However,
it seems possible that individuals can also be successful cognitive leaders
on an intuitive basis. In this regard, it would be interesting to explore the
impact training could have on the implementation and maintenance of
cognitive leadership. Training can be assumed to help cognitive leaders to
improve their capabilities. Moreover, the training of work groups could
improve the socialization of newcomers.
6.3 SUMMARY
This chapter has presented the implications that can be drawn from the
present thesis. With regard to a cognitive leader who desires to shape her
individual employee’s mental models according to her business concep-
tion, several potential starting points for doing so successfully have been
discussed. Besides designing a work process that necessitates frequent per-
sonal interaction, it has been concluded that a cognitive leader should be
aware that she is most likely to have a substantial impact on her employ-
ees’ mental models during their first months with the organization.
An implementation of cognitive leadership in an organization that
has formerly been led under a monitoring regime has been argued to
be rather difficult to realize because the work-related mental models of

the employees that have developed in the monitoring regime are inert
and the employees’ motivation to change them is assumed to be low. In
shaping the employees’ mental models a cognitive leader is well advised
to adhere to some basic rules. A cognitive leader should behave authen-
tically, respectfully and considerately and aim at communicating other
personal characteristics that can be assumed to be positively assessed by
her employees. Besides creating a pleasant atmosphere the learning of the
employees is further enhanced by clear contingencies. While the employ-
ees can be assumed to have a natural tendency to accept the cognitive
leader as a model, the cognitive leader can further enhance her chances of
becoming a model to her employees by pointing out similarities between
her and the employees or – more generally – by aiming to be positively
assessed by them. She can also employ these contingencies for establishing
certain employees as models to their colleagues. The impact of the busi-
ness conception can be increased by repeatedly presenting it together with
numerous high quality arguments for it. These should outrun the number
of arguments against it.
Besides shaping an individual employee’s mental models a cogni-
tive leader can also aim at influencing group processes so that they
support a newcomer’s socialization according to the business conception.
Emphasizing the oldtimers’ social role of experts versus the newcomers’
social role of novices to the organization and shaping the work group’s
social norms so that they conform to the business conception as well as
making them explicit can facilitate a newcomer’s socialization according
to the business conception. Social norms should emphasize the positive
connotation of being open-minded with regard to newcomers as well as
being willing to share information with them. An active and open handling
of emerging conflicts can prevent oldtimers withholding important infor-
mation from newcomers.
The cognitive leader should further aim at supporting the work group’s
cohesion because cohesive groups more easily integrate newcomers. The
same is true for work groups that are used to socializing newcomers. Also
it has been suspected that a certain ratio of oldtimers versus newcomers
should be preserved.
A work group’s motivation to integrate a newcomer can be enhanced
by pointing out the newcomer’s contribution to the work group.
Furthermore, the cognitive leader should support the work group’s tactics
for socializing.
Since the employees’ motivation to search for alternatives to the initial
business conception is determined by its usefulness, a cognitive leader
should make sure that her employees profit from its adoption. Propagating
a useless business conception can backfire negatively with regard to the

employees’ assessment of the cognitive leader. Also creating a positive
dependence of oldtimers as well as newcomers on the organization has
been assumed to keep deviating behavior at bay. Besides this, deviating
behavior is contingent on the individual employee’s personal dispositions
and experiences. This contingency implies the idea that the careful selec-
tion of new employees could attenuate the efforts of socialization. It has
been argued that, on the one hand, employees from similar demographic
backgrounds can be assumed to have similar mental models. On the other
hand, other forms of fit are discussed in the literature, namely that between
the person and the organization, the work group and the supervisor.
The dimensions on which the fit of an individual employee with her
organization has been conceptualized are the fit of the employee’s values
and goals with the organization’s values and goals, respectively. It has
been concluded that including the concept of values in the theory of cogni-
tive leadership may enhance its explanatory power.
The fit of the newcomer with the oldtimers is also concerned with the fit
of the newcomer’s values and goals to those of the work group, albeit it
mainly focuses on the fit of the newcomer’s personality and the oldtimers’
personality. It has been suggested that the scope of the theory of cogni-
tive leadership could be meaningfully broadened by including the fit of
the newcomer’s and the oldtimers’ personalities since it has been shown
to positively correlate with a work group’s cohesion, contextual behavior
and organizational commitment.
The research on the fit between the individual employee and her supervi-
sor has, among others, been conceptualized on the dimensions of goal con-
gruence and personality traits. Research has found goal congruence at this
organizational level to be positively correlated with the individual’s com-
mitment as has been suggested in the present thesis. It is thus concluded
that the scope of the theory of cognitive leadership may be meaningfully
broadened by considering the recruitment of suitable employees.
Finally, some research questions that seem to be important to the theory of
cognitive leadership but that could not be adequately resolved in this volume
have been outlined. These concern the exact determination of the extent of
personal contact that is necessary for cognitive leadership to be implemented
and maintained. However, this limit is assumed to vary in dependence of the
factors influencing the implementation of cognitive leadership and thus
could not be determined more precisely. With regard to the socialization of
newcomers in work groups, a similar idea has been sketched that amounts
to the conclusion that a group of oldtimers can be assumed only to be able
to socialize a limited number of newcomers at a time. A precise ratio of
oldtimers versus newcomers, however, remains to be determined.
The focus of this volume largely excludes the impact that oldtimers and
newcomers can have on the work group. It has been suggested that these
are included in future research projects.
On a more basic level, the question has been raised whether cognitive
leadership could benefit if cognitive leaders were aware of their specific
style of leadership. From the literature it may be concluded that if a cog-
nitive leader were aware of the contingencies of cognitive leadership she
may implement and maintain this leadership regime more successfully.
Especially the socialization of newcomers may benefit from cognitive
leaders and oldtimers that, for example, communicate shared mental
models clearly. The awareness of these contingencies could be raised by
training cognitive leaders and oldtimers accordingly.
NOTES
1. Again the business conception is employed as a pars pro toto for all work-related mental
models that a newcomer has to learn on her way to become a full group member.
2. For the sake of argument it is assumed that the oldtimers have adopted the cognitive
leader’s business conception and behave accordingly whereas the newcomer is assumed
to have only limited information on it.
3. Obviously such organic growth conflicts with an organization’s will or need to grow for
other reasons.
4. As in Chapter 4, in the following the discussion is restricted to the work group level.
5. With regard to the theory of cognitive leadership some overlapping occurs. Since the
theory of cognitive leadership deals with founding, and therefore small organizations,
these organizations at some stage in the firm development may be equivalent to the cog-
nitive leader or the work group.
Appendix A: Questionnaire used in the
study
Dear Participants,
We request you to fill in this questionnaire on leadership as completely as

possible.
After filling in the questionnaire, please seal it in an envelope and hand
it to your contact person. You may also send it directly to the Max Planck
Institute of Economics in Jena.
The Max Planck Institute of Economics will protect your data and
handle it with greatest care.
If you require further information,

please contact Dipl.-Psych. Silke Scheer
(Telephone: 0 36 41 – 68 68 29; E-mail: scheer@econ.mpg.de).
We thank you for your support!
1. General information on your company unit
1. Which line of trade does

your company unit belong to? _______________
2. Which organizational position do you hold? Please specify!
❑ CEO ❑ higher ❑ lower ❑ other?

management management Please specify
_______________
124
Questionnaire used in the study 125
2. Alignment of the company unit

not don’t
correct correct know
1. I have a detailed conception of 1—2—3—4—5
what my company unit shall ❑ ❑ ❑ ❑ ❑ ❑
achieve.
2. I have a detailed idea of how my 1—2—3—4—5
company unit shall achieve this ❑ ❑ ❑ ❑ ❑ ❑
conception.
3. Communication
not don’t
1. I emphasize the importance of 1—2—3—4—5
conveying my conception as a ❑ ❑ ❑ ❑ ❑ ❑
I convey my conception to my
employees . . .
2. . . . by being a model to them. 1—2—3—4—5
❑ ❑ ❑ ❑ ❑ ❑
3. . . . by talking about it with them. 1—2—3—4—5
❑ ❑ ❑ ❑ ❑ ❑
4. . . . by pointing out suitable 1—2—3—4—5
models to them. ❑ ❑ ❑ ❑ ❑ ❑
5. I do not convey my conception to 1—2—3—4—5
my employees by formal means like ❑ ❑ ❑ ❑ ❑ ❑
holding speeches or
circulating memos.
4. Success factors of communication

not don’t
According to my experiences, my
conception is more easily conveyed . . .
1—2—3—4—5
1. . . . if I have frequent personal
❑ ❑ ❑ ❑ ❑ ❑
contact with my employees.
1—2—3—4—5
2. . . . if the personal ideas of my
❑ ❑ ❑ ❑ ❑ ❑
employees coincide with it.
not don’t
1—2—3—4—5
3. . . . if my employees’ models
❑ ❑ ❑ ❑ ❑ ❑
share my conception.
1—2—3—4—5
4. . . . as long as the group of
❑ ❑ ❑ ❑ ❑ ❑
employees is relatively small.
1—2—3—4—5
5. . . . if my employees assess my
❑ ❑ ❑ ❑ ❑ ❑
conception to be sound.
1—2—3—4—5
6. . . . if my employees perceived
❑ ❑ ❑ ❑ ❑ ❑
my conception to advance the
company unit.
1—2—3—4—5
7. . . . if my employees perceived
❑ ❑ ❑ ❑ ❑ ❑
my conception to be personally
rewarding to them.
1—2—3—4—5
8. I prefer change like that
❑ ❑ ❑ ❑ ❑ ❑
induced by innovations over
routine.
1—2—3—4—5
9. I design the organizational
❑ ❑ ❑ ❑ ❑ ❑
processes in my company unit so
that my employees have to show
initiative.
1—2—3—4—5
10. I design the organizational
❑ ❑ ❑ ❑ ❑ ❑
processes in my company unit
so that my employees have to
show creativity.
1—2—3—4—5
11. With growing numbers of
❑ ❑ ❑ ❑ ❑ ❑
employees I had to change my
leadership style.
12. According to my experiences, the conveyance of my business conception is
facilitated if the number of my employees is not higher than
______ .
(approx. specification in absolute numbers)
5. The current situation

not don’t
1—2—3—4—5
1. My employees have suitable
❑ ❑ ❑ ❑ ❑ ❑
models.
1—2—3—4—5
2. The cohesion of my employees is
❑ ❑ ❑ ❑ ❑ ❑
high.
1—2—3—4—5
3. All my employees pull together.
❑ ❑ ❑ ❑ ❑ ❑
not don’t
I resort to counteractive measures . . .
1—2—3—4—5
4. . . . if I notice a deficit of personal
❑ ❑ ❑ ❑ ❑ ❑
contact to my employees.
1—2—3—4—5
5. . . . if I notice that my employees do
❑ ❑ ❑ ❑ ❑ ❑
not agree with my conception.
1—2—3—4—5
6. . . . if I assess my employees’ model
❑ ❑ ❑ ❑ ❑ ❑
to be unsuitable.
1—2—3—4—5
7. . . . if the cohesion in the work
❑ ❑ ❑ ❑ ❑ ❑
8. I have personal contact ❑ day.
to every one of my ❑ week.
employees at least ❑ month.
________ times per
6. Control
not don’t
1—2—3—4—5
1. A precise control of my employees
❑ ❑ ❑ ❑ ❑ ❑
regarding their individual
1—2—3—4—5
2. I do not control the individual
❑ ❑ ❑ ❑ ❑ ❑
contributions of my employees.
1—2—3—4—5
3. I do not provide detailed
❑ ❑ ❑ ❑ ❑ ❑
instructions to my employees on
what they have to do.
1—2—3—4—5
4. I do not provide detailed
❑ ❑ ❑ ❑ ❑ ❑
how they have to achieve their
tasks.
1—2—3—4—5
5. I do not control my employees’
❑ ❑ ❑ ❑ ❑ ❑
output regarding its quantity.
1—2—3—4—5
6. I do not control my employees’
❑ ❑ ❑ ❑ ❑ ❑
output regarding its quality.
not don’t
1—2—3—4—5
7. I do not talk to my
❑ ❑ ❑ ❑ ❑ ❑
employees mainly by
formal means like
7. Coordination
not don’t
1—2—3—4—5
1. I do not have to provide detailed
❑ ❑ ❑ ❑ ❑ ❑
what they
have to do.
1—2—3—4—5
2. I do not have to provide detailed
❑ ❑ ❑ ❑ ❑ ❑
how they can achieve their tasks.
1—2—3—4—5
3. My employees know what
❑ ❑ ❑ ❑ ❑ ❑
to do in extraordinary situations.
1—2—3—4—5
4. The communication
❑ ❑ ❑ ❑ ❑ ❑
among my employees
functions smoothly.
1—2—3—4—5
5. I grant substantial liberties
❑ ❑ ❑ ❑ ❑ ❑
to my employees regarding
the achievement of their
tasks.
8. Motivation
not don’t
1—2—3—4—5
1. My employees engage above
❑ ❑ ❑ ❑ ❑ ❑
average for the company unit
also in such cases when they cannot
benefit personally
from their behavior.
not don’t
1—2—3—4—5
2. The interests of my employees
❑ ❑ ❑ ❑ ❑ ❑
conform to the company unit’s
interests.
1—2—3—4—5
3. My employees show initiative.
❑ ❑ ❑ ❑ ❑ ❑
1—2—3—4—5
4. My employees show creativity.
❑ ❑ ❑ ❑ ❑ ❑
Appendix B: Figures and table data
from the study
160
140 *49
Score outliers
120
100
80
60
N= 107
sample 1
Note: The interquartile range (IQR) stretches from the 25th percentile (the lower hinge)
to the 75th percentile (the upper hinge). It is marked by the box. The line across the box
marks the median. The whiskers indicate the range of the data. Extreme values are values
exceeding the upper quartile range + 1.5 times the IQR and the lower quartile range – 1.5
times the IQR, respectively. The score of participant 49 is thus considered an outlier.
Figure B.1 Boxplot of the distribution of the score ‘outliers’ for all 107
participants
130
Data from the study 131
Eigen value
3
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Component number
Figure B.2 Screeplot of the characteristic items
14
12
10
Frequency
2 Std. Dev = 1.00

Mean = 0.00
N = 106.00
0
–2.75
–2.25
–1.75
–1.25
–0.75
–0.25
0.25
0.75
1.25
1.75
2.25
REGR factor score
Figure B.3 Distribution of the factor values Factor 1 Trust in the

Employees
20
Frequency
10
Std. Dev = 1.00

Mean = 0.00
N = 106.00
0
–2.50
–2.00
–1.50
–1.00
–0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
REGR factor score
Figure B.4 Distribution of the factor values Factor 2 Determinants of

Conveyance
16
14
12
10
Frequency
4
Std. Dev = 1.00
2 Mean = 0.00
N = 106.00
0
–1.75
–1.25
–0.75
–0.25
0.25
0.75
1.25
1.75
2.25
2.75
3.25
REGR factor score
Figure B.5 Distribution of the factor values Factor 3 Stimulating

Working Conditions
Data from the study 133
20
Frequency
10
Std. Dev = 1.00

Mean = 0.00
N = 106.00
0
–2.25
–1.75
–1.25
–0.75
–0.25
0.25
0.75
1.25
1.75
2.25
2.75
3.25
3.75
4.25
REGR factor score
Figure B.6 Distribution of the factor values Factor 4 Renunciation of

Formalisms’
16
14
12
10
Frequency
4
Std. Dev = 1.00
2
Mean = 0.00
N = 106.00
0
–1.75
–1.25
–0.75
–0.25
0.25
0.75
1.25
1.75
2.25
2.75
3.25
REGR factor score
Figure B.7 Distribution of the factor values Factor 5 Detailedness of

Business Conception
16
14
12
10
Frequency
8
4
Std. Dev = 1.00
2
Mean = 0.00
N = 106.00
0
–1.75
–1.50
–1.25
–1.00
–0.75
–0.50
–0.25
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
REGR factor score
Figure B.8 Distribution of the factor values Factor 6 Impact of Group

Size
14
12
10
Frequency
2 Std. Dev = 1.00

Mean = 0.00
N = 106.00
0
–3.00
–2.50
–2.00
–1.50
–1.00
–0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
REGR factor score
Figure B.9 Distribution of the factor values Factor 7 Conveyance of the

Maxim
Table B.1 Rotated component matrix of the factor analysis on the characteristic items limited to seven factors
(extraction method: principal component analysis; rotation method: varimax with Kaiser normalization;
rotation converged in 16 iterations)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
135
Item 6.1 0.729 0.026 −0.107 0.114 0.039 −0.094 −0.132
A precise control of my employees regarding their individual
Item 6.2 0.696 −0.046 −0.206 −0.124 0.011 −0.132 −0.157
I do not control the individual contributions of my employees.
Item 6.3 0.642 0.083 0.121 0.019 −0.014 −0.038 0.020
I do not provide detailed instructions to my employees on
what they have to do.
Item 6.4 0.637 0.180 0.178 0.259 −0.057 −0.021 0.198
I do not provide detailed instructions to my employees on
how they have to achieve their tasks.
Item 6.6 0.613 −0.189 −0.162 −0.037 −0.149 0.215 −0.229
I do not control my employees’ output regarding its quality.
Table B.1 (continued)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
Item 6.5 0.451 0.039 −0.186 0.056 −0.294 −0.268 0.102

I do not control my employees’ output regarding its quantity.
136
Item 4.5 0.181 0.729 0.041 0.192 0.021 −0.039 −0.005
conveyed if my employees assess my conception to be sound.
Item 5.4 −0.170 0.620 0.185 −0.131 0.157 0.033 −0.168
I resort to counteractive measures if I notice a deficit of
personal contact to my employees.
Item 4.2 0.198 0.601 −0.096 0.005 −0.100 0.043 0.373
conveyed if the personal ideas of my employees coincide
with it.
Item 4.1 0.162 0.534 0.084 0.137 0.071 0.303 0.086
conveyed if I have frequent personal contact with my
employees.
Item 4.6 −0.154 0.466 0.124 0.203 0.198 −0.368 0.004
conveyed if my employees perceive my conception to
advance the company unit.
Item 5.7 −0.217 0.436 0.257 −0.273 0.026 −0.302 −0.294
I resort to counteractive measures if the cohesion in the work
Item 4.3 −0.127 0.374 −0.040 −0.109 −0.304 0.284 0.353
conveyed if my employees’ models share my conception.
Item 4.10 −0.001 0.039 0.857 0.153 0.065 −0.053 0.024
I design the organizational processes in my company unit
137
so that my employees have to show creativity.
Item 4.9 0.005 0.045 0.855 0.030 0.098 0.077 0.098
I design the organizational processes in my company unit
so that my employees have to show initiative.
Item 5.5 −0.173 0.259 0.573 −0.112 0.043 0.038 0.181
I resort to counteractive measures if I notice that my
employees do not agree with my conception.
Item 5.6 −0.311 −0.077 0.336 −0.290 −0.168 −0.290 0.094
I resort to counteractive measures if I assess my employees’
model to be unsuitable.
Item 3.5 −0.061 0.166 0.011 0.672 0.145 −0.041 −0.313
I do not convey my conception to my employees by formal
means like holding speeches or circulating memos.

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
Item 6.7 0.253 0.203 0.078 0.633 −0.074 −0.088 −0.084

I do not talk to my employees mainly by formal means like
138
Item 4.8 −0.048 −0.047 0.069 0.611 0.161 −0.235 0.179
I prefer change like that induced by innovations over routine.
Item 3.2 −0.067 0.126 0.080 −0.484 0.314 −0.145 0.111
I convey my conception to my employees by being a model
to them.
Item 2.2 −0.036 0.061 0.150 −0.062 0.755 0.015 −0.140
I have a detailed idea of how my company unit shall achieve
this conception.
Item 2.1 −0.073 0.000 −0.079 0.154 0.745 −0.012 0.127
I have a detailed conception of what my company unit shall
achieve.
Item 4.4 −0.132 0.032 0.031 −0.012 −0.047 0.704 0.011
conveyed as long as the group of employees is relatively small.
Item 4.7 −0.056 0.123 −0.097 −0.130 0.010 0.576 −0.182
conveyed if my employees perceived my conception to be
personally rewarding to them.
Item 4.11 −0.089 −0.140 0.241 −0.032 0.051 0.560 0.359
With growing numbers of employees I had to change my
leadership style.
139
Item 3.4 −0.207 −0.066 0.191 −0.149 −0.029 −0.074 0.624
I convey my conception to my employees by pointing out
suitable models to them.
Item 3.1 −0.071 0.216 0.116 −0.280 0.459 0.022 0.495
I emphasize the importance of conveying my conception as a
Item 3.3 0.020 0.237 0.319 0.056 0.419 −0.084 0.468
I convey my conception to my employees by talking about it
with them.
Table B.2 The correlations of the characteristic factors differentiated in four extents (very high (1) to very low (4))
with the effect items (Spearman’s rho)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
140
H1. Under the regime of cognitive leadership the 1 −0.062 0.541** 0.130 −0.021 0.133 −0.355* −0.142
employees’ interests are more coherent to their unit’s 2 −0.378* 0.114 0.207 0.059 −0.243 −0.225 −0.080
interests than under other leadership regimes. 3 0.153 0.246 0.448** −0.573** 0.173 0.169 0.105
(Item 8.2: The interests of my employees conform to 4 −0.347* 0.036 −0.026 0.082 0.116 −0.385* −0.060
the company unit’s interests.)
H2. Under the regime of cognitive leadership 1 0.574** 0.169 0.276 0.164 0.212 −0.111 0.597**
employees have a lesser need for detailed 2 0.209 −0.103 0.389* 0.105 0.152 −0.075 −0.342*
instructions on their tasks than employees under 3 0.043 −0.668** −0.085 −0.034 −0.179 0.113 0.039
other leadership regimes. 4 0.320 0.166 −0.615** −0.150 0.128 0.010 −0.028
(Item 7.1: I do not have to provide detailed inst
ructions to my employees on what they have to do.)
H3. Under the regime of cognitive leadership 1 0.279 0.367* 0.316 0.254 0.126 −0.069 0.231
employees have a lesser need for detailed inst 2 0.139 −0.302 0.324* 0.046 0.126 −0.093 −0.196
ructions on the manner of how to achieve their tasks 3 0.220 −0.534** −0.012 −0.147 −0.132 0.187 0.187
than employees under other leadership regimes. 4 0.274 0.199 −0.155 0.245 0.264 −0.245 0.201
(Item 7.2: I do not have to provide detailed
instructions to my employees on how they can
achieve their tasks.)
H4. Under the regime of cognitive leadership 1 −0.497** 0.076 −0.034 −0.081 0.119 0.006 0.137
employees are more able to make adequate decisions 2 −0.137 −0.061 0.387* 0.060 0.153 −0.474** 0.164
on behalf of their unit (and within their realms of 3 0.010 0.033 −0.060 −0.018 0.022 0.158 0.178
141
discretion) in extraordinary situations than employees 4 0.205 0.444* 0.172 −0.199 −0.053 −0.124 0.078
(Item 7.3: My employees know what to do in extra
ordinary situations.)
H5. Under the regime of cognitive leadership the 1 −0.124 0.085 −0.079 −0.132 0.371* −0.068 0.210
communication among the employees functions 2 0.468** 0.113 0.167 0.204 −0.190 −0.117 −0.303
more smoothly than the communication among the 3 0.354* −0.318 0.320 0.092 0.098 −0.116 0.305
employees under other leadership regimes. 4 −0.402* 0.281 −0.066 −0.030 −0.067 −0.214 −0.310
(Item 7.4: The communication among my employees
functions smoothly.)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
H6. Under the regime of cognitive leadership the 1 0.142 0.154 0.157 −0.378* 0.080 −0.240 −0.054
employees have suitable models more often than 2 −0.274 −0.051 0.371* 0.363* −0.068 −0.167 −0.390*
under other leadership regimes. 3 0.220 0.367* 0.349* −0.395* 0.164 0.025 −0.037
142
(Item 5.1: My employees have suitable models.) 4 0.058 −0.149 −0.016 −0.094 0.165 −0.220 0.066
H7. Cognitive leaders have personal contact to their 1 −0.251 −0.299 0.211 0.042 −0.031 0.274 0.058
employees more often than other leaders. 2 −0.105 −0.357* −0.005 −0.163 0.161 −0.113 0.087
(Item 5.8: I have personal contact to every one of my 3 −0.027 −0.010 −0.032 0.114 −0.359* 0.103 0.160
employees at least ________ times per day/week/ 4 0.104 0.029 −0.011 0.128 0.068 −0.031 0.009
month.)
H8. Cognitive leaders give a smaller upper limiting 1 0.029 0.025 −0.048 0.005 −0.081 −0.110 0.374*
number of employees for the conveyance of their 2 −0.156 0.110 0.072 −0.297 0.244 0.038 −0.167
business conception than other leaders. 3 0.031 −0.080 −0.198 −0.107 0.083 0.114 0.093
(Item 4.12: According to my experiences, the 4 −0.028 −0.052 −0.153 0.111 −0.055 0.360* −0.137
conveyance of my business conception is facilitated if
the number of my employees is not higher than ______.)
H9. Under the regime of cognitive leadership the 1 −0.106 0.022 −0.139 −0.159 0.401* −0.072 0.374*
cohesion among the employees is higher than under 2 0.220 0.021 0.213 0.132 0.110 0.090 −0.287
other leadership regimes. 3 0.100 0.115 −0.057 −0.502** 0.525** 0.095 0.065
(Item 5.2: The cohesion of my employees is high.) 4 0.112 −0.051 −0.212 −0.222 −0.024 −0.130 −0.229
H10. Under the regime of cognitive leadership the 1 −0.211 0.473** −0.075 −0.235 0.347* −0.209 0.177
employees pull together more often than under other 2 0.059 0.196 0.086 0.128 0.025 −0.236 0.102
leadership regimes. 3 0.145 −0.113 0.159 −0.209 0.175 −0.054 −0.058
(Item 5.3: All my employees pull together.) 4 −0.046 0.151 −0.68 −0.078 −0.138 −0.251 −0.003
H11. Under the regime of cognitive leadership more 1 −0.144 −0.024 0.023 0.033 0.018 −0.032 0.133
freedom is granted to the employees in the fulfillment 2 0.025 −0.021 0.348* 0.085 −0.231 −0.093 0.032
143
of their tasks than under other leadership regimes. 3 0.290 −0.318 −0.130 0.141 0.203 −0.134 0.144
(Item 7.5: I grant substantial liberties to my 4 −0.024 0.336* 0.183 0.082 0.145 −0.058 0.083
employees regarding the achievement of their tasks.)
H12. Under the regime of cognitive leadership the 1 0.012 0.096 −0.094 −0.192 −0.029 −0.178 0.077
employees more often engage for their unit more 2 −0.049 −0.171 0.068 −0.115 0.270 −0.325* −0.093
than is expected of them even if they do not 3 0.009 −0.130 −0.336* −0.237 0.365* −0.091 −0.094
personally benefit from their engagement than under 4 0.244 0.029 0.032 −0.055 −0.051 −0.245 −0.183
(Item 8.1: My employees engage above average for
the company unit also in such cases when they
cannot benefit personally from their behavior.)

Employees
of Conveyance
Working Conditions
of Formalisms
Factor 6: Impact of
Group Size
of the Maxim
144
H13. Under the regime of cognitive leadership the 1 0.124 0.477** 0.023 0.030 0.239 −0.010 0.145
employees show more initiative than under other 2 0.067 0.007 0.378* 0.195 −0.221 −0.363* −0.215
leadership regimes. 3 0.158 −0.277 0.063 −0.377* 0.167 0.022 −0.178
(Item 8.3: My employees show initiative.) 4 −0.121 0.120 0.163 0.290 −0.143 −0.234 −0.050
H14. Under the regime of cognitive leadership the 1 0.298 0.292 0.145 0.184 0.284 −0.130 0.124
employees show more creativity than under other 2 0.239 −0.103 0.405* 0.154 0.007 −0.174 −0.290
leadership regimes. 3 0.156 −0.135 0.206 −0.341* −0.010 −0.069 0.056
(Item 8.4: My employees show creativity.) 4 −0.105 0.200 0.015 0.160 0.004 −0.245 0.016
Note: ** indicates a significant correlation on a 0.01 level, * a significant correlation on a 0.05 level.
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Index
action plans 58 characteristics of message sender 45
advice seeking 33 charismatic leadership, qualities 5, 6, 7
affiliation, need for 33 classical conditioning 35, 36, 40
agenda setting effect 31 cognitive coherence 10, 16
alignment of company unit 125 of employee 109
appreciation, atmosphere of 40 cognitive frame 24
ASA theory 65, 78 cognitive leadership 3–6, 7–8, 13–19,
assets, intangible 1 23–4, 28
attenuation theory 19 coherence 80
‘attribute substitution’ 47 qualities 6, 7
authority, relation model 46 source of information 34–5
automated behavior 19 summary 28–9
theory of 79–108
background information 59 versus charismatic leadership 5, 6
behavior patterns of successful models ‘wrestling for’ 15
42 cognitive limitations 24
behavioral conformity and liking 46 cognitive psychology 12–30, 19–28
belief in employees 85 cohesion of work group 83–4, 114
bonding with work group 115 collective experiences 58
bounded rationalism 8, 14 collective identity 6
boxplot 130 common attributes in employees 116
business conception 3–4, 13–16, 24, communication 70, 109, 125
28–9 informal 43, 44
alternative 70–72, 76 learning from 35, 43–9
detailedness 95, 102–3, 105–6, 133 smooth 82
overarching 18 success in 125–6
qualities 46–9, 68, 114–15 company unit 87
rival 66, 70, 75 competence of employee 112
business maxim, conveyance 95, conditioned reaction 36
102–7 ‘confirmation bias’ 26, 28
conforming newcomers 59
career histories 68 consistency in work 65
career imprint 11 contact with oldtimers 64
career options 46, 48 contextual performance 85
causal relation, behavior and contracts 1
consequence 39 with incentives 3
certainty levels 32 control of employees 127
certainty, oldtimers’ need for 63 conversation and socialization 62
change momentum 71 coordination 2–3, 74, 79–84, 128
characteristic factors, correlations of in organizations 55
140–44 correlations of factors 95–102
167
costs of contracts 3 4. Renunciation of Formalisms 95,

creativity 86 133
of employees 2 5. Detailedness of Business
loss of 18 Conception 95, 133
critical mass phenomenon 71, 72 6. Impact of Group Size 95, 134
cultural values of organization 117 7. Conveyance of Maxim 95, 134
culture conveyance 75 factor values 131–4
Federal Association of Small
decision-making, self-determined 16 Businesses, Thuringia 86
demographic background of feedback, positive or negative 68
employees 116
dependence of newcomers on work fellow employees, influence of 53
group 66, 67 figures and table data in study 130
deviant behavior 9, 10, 15 ‘filtering process’ 19
attraction of 69–72, 115, 121–2 firm founder 1, 3, 4
extreme 71 firms, study of 86–8
fruitful source 66 formal role of group member 59
origins 66–9 formalisms, renunciation of 95, 102–4,
work groups 65–72 106, 133
distance keeping 67 freedom under cognitive leadership
divided entrepreneurship 18 84, 85
duties and obligations 61
dyadic interactions 31–52, 109–12 goal coherence 117
goal congruence 118, 122
economies of scale 1 governance 2
effects of cognitive leadership 87, 88 governmental regime shift 18
emotional stability 44 group members as models 54–5
emotional state 25 group processes 53–78
employee selection 115–16 shaping of 113–15
employee and work group 53–78 group size, impact 95, 103, 105–7,
employee’s behavior 112 134
‘encapsulating’ 64 group-related knowledge 23, 73, 84
engagement under cognitive leadership group’s culture 23
86
entrepreneurial services 3, 30 ‘heuristic attribute’ 47
expectations 26 hierarchical neural network 20
explicity of mental models 114 hierarchical organization, plan 2, 23
external information 20 hierarchy of managers 17
external stimulus 21–2, 35 homogeneity versus heterogeneity 116
extrinsic incentives 16, 17 human cognitive system 25
extrinsic motivation 38
extrinsic reward 39, 49, 85, 86 identification with organization 85
extroversion 44 impressions 25
incentives, extrinsic 4, 11
factor analysis 87–95, 106, 135–9 incentives for employee 2, 3
1. Trust in the Employees 89, 131 independence of newcomers 75
2. Determinants of Conveyance 89, independence from work group 66–7
132 influence of business conception 110
3. Stimulating Working Conditions influence in charismatic leadership 5
89, 132 information overload 54, 110
Index 169
information processing 8, 14, 19–21, market changes 110

24–8, 45–7, 80 maxim, conveyance of 134
by employee 111 Max Planck Institute of Economics
information provision 62, 114 124
motivation for 61–4 ‘meaning manager’ 31
information sharing 33, 64–5 memory 20
lack of 67–8 mental models 21–4, 26, 80
information withholding 75 accessibility
initiative under cognitive leadership 86 deviant 69
innovation capacity 110 established 31, 32
inspiration and empowerment 5, 6 fit 115–18
intellectual stimulation 5, 6 higher- or lower-order 69–70
intelligence 27, 35, 70 shaped by learning 35–49, 110
interests, congruent 110 shared 22–3, 55–61, 81–2
interquartile range (IQR) 130 mentor role 62–3
intrinsic motivation 10, 16–17, 38–9, mentors and models 64
49, 85–6 meta-analysis 116–17
models
job satisfaction 117 in observational learning 41
judgments 25 suitable under cognitive leadership
82
knowledge monitoring 2, 17, 18, 25
group-related 54, 55 moral hazards 2
task-related 54 motivation 84–6
of employee 2–3, 7, 17, 34, 125–6
leader intrinsic 4, 11
characteristics 87, 88 multi-tasking problems 3
as model 112
person of 16 negative punishment 37
leader–follower values 118 negative reinforcement 37
leadership new ideas 67
and cognitive leadership 80–83 newcomer
process 12 adaptation to work group 63
skills 44 contribution to work group 62
learning 109 independent minded 70
from communication 8, 9 motivation 32–5
mechanisms 58
opportunities for oldtimers 62 observational learning 31, 35, 40–43,
trial and error 112 58, 70
legitimization 33 oldtimer
need for 63–4 interaction with 58
Likert-Scale 87 mentor 75
limited capacity control system 19, 20 oldtimers to newcomers, ratio 122
‘locus of control’ 38 openness 44
long-term memory 8, 23, 25 operant learning 31, 35–40, 58
access to 27 opponents to work group culture 64
organization 20–24 opportunistic behavior of employee
2
majorities and minorities 72 organizational effectiveness 45
managerial services 30 organizational performance 85
pattern matching processes 20, 21 remuneration as motivator 17

Pavlov’s dogs, classical conditioning results of analysis 88–105
36 rewards
perception 25 and punishments 64, 65
and information processing 28, 29 and sanctions 37
personal characteristics tangible, role of 49
of cognitive leader 44 verbal and tangible 39
positive 111–12 rights and privileges 61
personal communication 31, 43–4 rival business conceptions 110, 111
personal contact 15, 83, 89, 110 role assignments for newcomer 71
absence of 67 rotated component matrix of factor
with employee 16 analysis 135–9
personal dispositions 68
personal enhancement 46, 48 schemas 21
personal growth 6 screeplot of characteristic items
personal interaction 18 131
personal opinions 113 scripts 21
personal position, risk of loss 114 self-esteem 33, 34, 62, 66
personal relationship 39 positive 74
personal rewards 47 self-perception theory 38
person–goal fit 117 shared knowledge 14
person–group fit 117, 118 similarity
person–organization fit 115–18, 122 in group members 83–4
person–supervisor fit 116–18, 122 and liking 46
persuasion 43, 46 social behavior 56
positive attitudes 110 social dimension 23
positive attributes of leaders 42–3 social identity 54, 62
positive dependence positive 33, 66
on colleagues 115 social intelligence 44
of oldtimers 122 social interaction, necessity for 4
positive punishment 37 social knowledge 55
positive reinforcement 37 social norms 55–8, 60
power of cognitive leader 42–3 explicitness 113
powerful models 70 social role 55–8, 60, 71, 113
primacy, acceptance of 57 socialization 14, 55
principal–agent model 2 and interaction 113, 115
procedural justice 46 of newcomer 7, 9–11, 53
professional qualifications 46, 48 training for work groups 120
‘prototype heuristic’ 47 stable membership 114
standard operation procedures 58
quality of personal contact 119, 122 statistical thinking 27, 70
questionnaire for study 124–9 status and influence 74
stereotypes 26
reasoning 25 stimuli 26
references, common pool 19 stimulus generalization 40
reinforcement for employees 112 sub-entrepreneurs 18
reinforcers 37–8 supervision of work 17
negative 40
positive 111 task-related knowledge 73, 84
remuneration 46, 48 tasks, close collaboration in 114
Index 171
threat, potential, from newcomer 63, ‘warning signals’ 19

74 work group
time frames 53, 115 cohesive 61–2
time pressure 81 concepts 55–60
trade 124 and employee 53–78
training for cognitive leaders 120, expulsion from 67
123 perspective 60–65
transaction-costs economics 1 work process and personal contact 110
trust in employees 89, 90–91, 102–3, work routines 68
106, 131 work-related mental model 24
working conditions
validity from numbers 72 excellent 46, 48
values 117 stimulating 10, 89, 103–6, 132
voluntary job seeking 34 workload processing 119

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The Entrepreneur as Business Leader

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Edward Elgar Publishing, Inc.

A catalogue record for this book

Library of Congress Control Number 2009922770

ISBN 978 1 84844 333 4

Printed and bound by MPG Books Group, UK

Appendix A: Questionnaire used in the study 124

cannot be achieved by entrepreneurial or managerial order. They hinge

distributed asymmetrically, which may result in moral hazards. Employees

1.1 FINDING SOLUTIONS TO THE PROBLEM

Solutions that have been suggested to the problems of coordinating

incentive compatible contracts may reduce the need for monitoring.

1.2 COORDINATION AND MOTIVATION FROM AN

The theory of cognitive leadership suggests an alternative approach for

To be able to simultaneously exploit [the] benefits of distributed and localized

The firm founder – or cognitive leader – conveys her business concep-

Contingent on the described processes, the theory of cognitive leader-

1.3 DIFFERENCES FROM CHARISMATIC

communication and modeling processes, it neither includes the shaping of

1.4 AIMS AND STRUCTURE OF THE BOOK

this can be achieved is explained. Before the hypothesized benefits of cog-

forms of learning that, on the one hand, are important to observational

mental models and that individual employees who cannot be socialized

1. Other constellations of a firm founding, for example by a group of entrepreneurs, are

2.1 THE THEORY OF COGNITIVE LEADERSHIP

The Firm Founder as a Cognitive Leader

and observational learning (Bandura 1986) are key to the realization of

Shaping the Employees’ Cognitive Frames

In order to realize cognitive leadership the cognitive leader aims at occupy-

It is assumed that the predominance over the employees’ cognitive frames

Benefits of Cognitive Leadership

The benefits of cognitive leadership are argued to be twofold and inter-

Cognitive Leadership in Growing Firms

Up to this point, the theory of cognitive leadership has been described as

benefits of cognitive leadership regarding the internal coordination of the

2.2 FOUNDATIONS OF THE THEORY OF

Attention Management and Information Processing

Humans perceive and process information selectively, because the human

by means of which stimuli can be assessed as (un)important. We adapt our

Organization of the Long-term Memory

As a starting point for the approach to the pattern-matching process we

a relation, the more easily related propositions are accessible if a neighbor-

Figure 2.1 The cognitive processing of an external stimulus

our long-term memory and, potentially, an action plan is developed and

Schemas and Scripts

Schemas and Scripts

Figure 2.2 Stylized portrayal of the hierarchical organization of an

cognitive leader’s business conception is adopted as a maxim in relation

Effects of Limited Information Processing Capacities

From an evolutionary point of view our cognitive limitations in informa-

With the path-breaking research Kahneman did mainly in collaboration

Elster 1998). In the theory of cognitive leadership it is assumed that the

which individuals are likely to switch to a cognitively more effortful way of

the fast and automatic perception and information processing on a System

organized propositions, schemas and scripts. The cognitive leader’s busi-

1. Additional literature that is referred to is cited according to Witt.

3.1 A NEWCOMER’S MOTIVATION TO LEARN

Furthermore, we have a need for affiliation (see Schachter 1959) or legit-

theory). This boosts the newcomer’s self-esteem. Second, assuming that we

conception. Since the cognitive leader is in a powerful position compared

3.2 SHAPING MENTAL MODELS BY LEARNING