The literature on problemistic search has not sufficiently delved into how firms differentially navigate search landscapes and distinctively respond to performance shortfalls relative to their aspirations. We examine the significant role of organizational scope in shaping firms' problemistic search. Specifically, we investigate how generalists and specialists differ in their market category expansions in response to performance shortfalls. We posit that variations in the audience structure and decision-making routines of generalists and specialists shape their problemistic search, influencing both search tendency and direction. Regarding search tendency, we suggest that although firms typically become more inclined to expand their market category as performance shortfalls increase, generalists are less likely to do so than specialists. Regarding search direction, compared to specialists, generalists are more likely to focus on short-distance category expansion while concurrently engaging more deeply in the new category. We test our hypotheses using the data from the U.S. recorded music industry between 1963 and 2005. The results support our theoretical predictions. This research contributes to the problemistic search literature by underscoring the pivotal role of organizational scope in guiding problemistic search.
