ABSTRACT

New competition, shorter product lifecycles, globalization, and frequent technological disruptions create market environments in which organizations’ ability to renew themselves is critical for their sustained success and long-term survival (Agarwal & Helfat, 2009). Strategic renewal, however, constitutes a major challenge for organizations as it requires fundamental changes to the core business as well as the development of new competences (Agarwal & Helfat, 2009). Such organizational events can elicit strong emotions among large groups of employees that can influence the way those groups think and behave in relation to the strategic transformation (Barsade, 2002; Sanchez-Burks & Huy, 2009; Volberda et al., 2001). The composition of collective emotions might be diverse with groups of distinct roles, values, and interests as they perceive implications differently (Cyert & March, 1963). For instance, some employees may react with fear to the unknown, others with hope and relief, and others with anger or contempt as they feel that their ideas have not been heard. Thus, emotion represents an important dimension in major renewal projects (Huy, 1999, 2005, 2011).