We develop a simple analytic model to study the conditions under which managers that navigate complex and novel environments change their minds. We study when new arguments persuade, i.e. when they lead to new responses to the environment. Our model is a belief revision model based on propositional logic and depicts managerial beliefs as a theory of logically connected beliefs. We use that model to derive a taxonomy of structures of prior belief systems that distinguishes four different cases of persuasion as a function of resistance against and readiness for a new response to the environment. Our approach highlights the critical role of ‘what-if?’ beliefs in facilitating persuasion but also points to a potential negative side of such beliefs as they may also prevent persuasion. We also discuss the role of persuasion by reasoning and logical arguments in management theorizing.
Authors: Timo Ehrig and Jens Schmidt