THE MANAGEMENT OF STRATEGIC TIME HORIZONS WITHIN BIOTECHNOLOGY FIRMS - THE IMPACT OF COGNITIVE-COMPLEXITY ON TIME HORIZON DIVERSITY

Strategic time horizons are an important but neglected area of researc h in the strategic management literature. Using inductive methods, the authors attempted to explore and develop the concept of strategic tim e horizons as well as build a theory of their antecedents and effects. In four of the eight biotechnology firms studied, they found that exe cutives managed their strategic investments as a diverse portfolio of time horizons. Overall, the time horizon diversity (operationalized as the average length and standard deviation of the time horizons in the portfolio of strategic investments) required relatively complex cogni tive structures on the part of the dominant coalition. The CEO's techn ical awareness, the dominant coalition's locus of control, and strateg ic issue array size were found to be antecedents of the firm's time ho rizon diversity. Finally, time horizon diversity was found to be assoc iated with superior financial performance.