| Positive Mindsets and Exaggerated Beliefs: Interpretive Frames as Key Determinants of Firm Performance |
| | Weber, Klaus | U. of Michigan | weberk@umich.edu | (734)-764-4613 |
| | Sutcliffe, Kathleen M. | U. of Michigan | ksutclif@umich.edu | (734)-764-2312 |
| | Classic adaptation theories propose that performance is a consequence of the fit between a firm and its environment. Presumably, decision makers assess their external context and tailor strategies and structures to fit the environment they have "accurately" perceived. Yet, organizational environments are often ill defined, increasingly dynamic, and characterized by conflicting interests. In such a context, accurate perceptions are difficult to obtain and generalized interpretive frames may play a more prominent role in managing strategically. In this study we argue that distorted perceptions are likely and that they may positively influence strategic action and performance over time. Our framework links perceptual distortions and interpretive frames to organizational action and financial performance. We test the hypotheses using archival and survey data gathered from a cross-industry sample of 75 single-business organizations. We find that strategic action is influenced positively when executives over-perceive environmental instability, that generalized interpretive frames related to potency and positiveness more strongly influence the direction and magnitude of action than do environmental perceptions, and that these cognitive frames are stronger predictors of firm financial performance than perceptual or action variables. The findings suggest that top executives' interpretive frames play a key role in successful strategizing and organizational change. Strategic change is not a linear process controlled by an omnipotent leadership team. Rather, successful strategic management is an ongoing journey that must be constantly navigated by organizational leaders equipped with a positive mindset and without exaggerated beliefs in their own potency.
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| | Keywords: Firm performance; Interpretive frame; Adaptation |
| The Effects of Increased Managerial Discretion on the Top Executive Cognition: The Implications for Strategic Change |
| | Cho, Theresa S. | Rutgers U. | cho@everest.rutgers.edu | 732.445.5648 |
| | In this study, we examine the effects of a drastic increase in discretion brought about by an environmental shift on the collective mindset of the op executies. By considering the linkage between the changes in top teams' collective cognition and composition and the firm-level strategic changes following an environmental shift. The results indicate that as the executives became more short enured, experienced in output-functions, diverse in their functional background, they tended to shift away from the outdated mode of attention and adopt more proactive and entrepreneurial mindset; in turn, these cognitive changes induced greater magnitude of strategic change. |
| | Keywords: Top Management Team |
| Top Managers' Efficacy Beliefs and Organizational Outcomes:An Application of Social Cognitive Theory |
| | Yun, Seokhwa | U. of Maryland | syun@rhsmith.umd.edu | (301) 405-7190 |
| | Top managers have been an area of active research in strategic management.
The difficulty in accessing top managers has limited researchers
to focusing on top managers' demographic characteristics
to explore their influence on organizational outcomes.
These demographic characteristics have been considered
as surrogates of top managers' cognition.
However this approach has critical limitations (Markoczy, 1997),
and a cognitive approach will enhance our understanding of top managers' influence on the organization.
Recognizing this issue, I propose a cognitive approach to top management research.
Specifically, top manager's efficacy beliefs are conceptualized, based on Social Cognitive Theory.
Further, I develop several propositions on the effect of top managers' efficacy beliefs on organizational outcomes. |
| | Keywords: Top Managers' Efficacy Beliefs; Social Cognitive Theory; Cognitive Approach |
| Psychological Team Composition and Strategy Making: Team Level Locus of Control in Relation to Planning Quality and Action Consistency |
| | Boone, Christophe | Maastricht U. | C.Boone@mw.unimaas.ni | 31.43.883880 |
| | van Olffen, Woody | | | |
| | The current paper deals with the impact of team composition with regard to the lcous of control personality trait. People with external perceptions of control (so-called externals) tend to believe that what befalls them is the outcome of forces outside themselves, like luck, fate, or powerful others. Internals, on the other hand feel 'masters of their own fate' and attribute what happens to them to their own (lack of) skill or experience. As a consequence of these different perceptions, internals are generally more motivated and better at carrying out difficult or ambiguous tasks that require skills, wheras externals tend to show more passive behavior as they do not feel they can influence the outcomes in such circumstances.
We will focus not the content of strategies, but on the way teams arrive at and integrate their decisions to form strategies. In particular, we wish to investigate how to control perceptions of a team of young mangers relates to the way strategies are made through a process of planned actions and the configuration of action patterns that are coherent and consistent over time. We study a relatively controlled context of a large international management game involving 58 teams of young mangers. Results show that teams that contain predominatntly internal members, achiever better integration across actions through planning. Moreover the internals are more aware of the enviornmental contingencies, and they seem to exhibit more adaptive behavior than external teams.
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| | Keywords: team composition |