NTERNATIONAL R EVIEW OF I NDUSTRIAL AND O RGANIZATIONAL P SYCHOLOGY 2005 dimensions: (1) the effort involved in deriving a response and the degree of

238 I NTERNATIONAL R EVIEW OF I NDUSTRIAL AND O RGANIZATIONAL P SYCHOLOGY 2005 dimensions: (1) the effort involved in deriving a response and the degree of

openness, and (2) constructiveness of the information search. Combining values on these dimensions produces the following four strategies: direct access processing (low effort/closed search), motivated processing (high effort/closed search), heuristic processing (low effort/open search), and substantive processing (high effort/open search). Mood congruence effects are most likely when some degree of open, constructive processing is used (heuristic and substantive strategies), and less likely when closed strategies are used (direct access and motivated processing).

Individual, task, and situational factors determine the information- processing strategy that the individual engages in, and thus whether or not mood congruence occurs (see Forgas, 1995, 2002 for comprehensive reviews). Individual, or person features that influence processing strategy include personal goals, the personal relevance or significance of the task to adaptive well-being, cognitive capacity, and, of course, affective state (Forgas, 2002). If the task or situation is relevant to the attainment of personal goals or well-being, then the individual will employ direct access or motivated processing to assimilate information efficiently in order to attain personal goals. In these situations, individuals will be less likely to rely on their affect as information, and consequently are less likely to show mood effects on their cognitions and judgements. Task features such as familiarity and typicality will promote the use of heuristics and schematic or ‘closed’ processes, for the purpose of effort minimization. As such, individuals do not show affect congruence for habitual tasks in which only direct access pro- cessing is required. Complex, novel, or difficult tasks, however, require constructive or substantive processing and, hence, facilitate affect infusion. Situational features also influence the effect of mood on cognition and behavior inorganizations. Need for accuracy, publicity, social desirability, and scrutiny are all examples of situation features that can motivate individuals to process information in a way that is consistent with desired outcomes (Forgas, 2002). Hence, moods and emotions are not likely to affect individuals’ cognition in these situations.

As Forgas and George (2001) have argued, many tasks in the workplace involve substantive processing, and are thus likely to be influenced by affective states. While the impact of emotions on the performance of every- day, habitual tasks may not be detectable or have significant implications for personal outcomes, the impact of moods and emotions on cognition may be most significant in the workplace, and, hence, important to understand. The conditions under which important managerial decisions occur are the very conditions in which substantive processing is going to be most likely: high complexity, ambiguity, and uncertainty requiring constructive and substan- tive processing (Forgas & George, 2001). In accordance with the principles of the AIM, therefore, it is likely that strategic organizational decisions are affected by the decision-makers’ affective states. In support of this, there is

E MOTION IN O RGANIZATIONS

a growing body of research demonstrating the mood-congruent impact of positive and negative mood on strategic decision-making in organizations.

Mittal and Ross (1998), for example, have shown that people are more willing to take risks in conditions of uncertainty when in a positive rather than a negative mood. Consistent with the AIM, this is because positive mood facilitates the availability of knowledge, experiences, and memories that are associated with positive rather thannegative outcomes. As such, in the assessment of risk, managers in a positive mood will be more likely to identify opportunities than threats, and consequently are likely to be more optimistic intheir situationappraisals and to take more risks. While risk- taking may be inappropriate and dysfunctional in many organizational contexts, strategic managers are often required to take risks in conditions of uncertainty in order to harness market opportunities. For example, the decision to launch a new product into the market, or to increase the price of a product already on the market involves some risk. Research by Mittal and Ross (1998) and others (Au, Chan, Wang, & Vertinsky, 2003; Kuvaas & Kaufmann, 2004) suggests that managers in a positive mood are more opti- mistic in their risk assessments and more confident in their decisions and, hence, are more likely to take risks in order to achieve organizational goals.

In summary, we have described the neurobiological mechanisms that mediate employees’ affective reactions to organizational events and empha- sized that individual differences in brain structure and function moderate the experience and expression of emotion. Furthermore, positive and negative affective responses to organizational events influence organizational cogni- tion. In a positive mood, employees are less vigilant in their decision-making and more optimistic in their assessments of risk than employees in a negative mood. In the following section, we move on to discuss individual difference effects specifically.