The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration

The role of managerial learning and interpretation in strategic persistence and reorientation: An... This study uses a managerial learning framework to build and test a model of the decisionmaking process that drives decisions to strategically reorient an organization. The model examines the effects of past performance, managerial interpretations, and top management team characteristics on the likelihood of strategic reorientation in two distinct environmental contexts. The results indicate that poor past performance, environmental awareness, top management team heterogeneity, and CEO turnover increased the likelihood of reorientation. There are some differences in the ways in which these variables affect reorientation across the two environmental contexts. Poor past performance was more strongly associated with reorientation in the stable environment than in the turbulent environment. The tendency to make external attributions for poor performance outcomes decreased the likelihood of reorientation in the turbulent environment, but not in the stable environment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration

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Publisher
Wiley
Copyright
Copyright © 1992 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250130803
Publisher site
See Article on Publisher Site

Abstract

This study uses a managerial learning framework to build and test a model of the decisionmaking process that drives decisions to strategically reorient an organization. The model examines the effects of past performance, managerial interpretations, and top management team characteristics on the likelihood of strategic reorientation in two distinct environmental contexts. The results indicate that poor past performance, environmental awareness, top management team heterogeneity, and CEO turnover increased the likelihood of reorientation. There are some differences in the ways in which these variables affect reorientation across the two environmental contexts. Poor past performance was more strongly associated with reorientation in the stable environment than in the turbulent environment. The tendency to make external attributions for poor performance outcomes decreased the likelihood of reorientation in the turbulent environment, but not in the stable environment.

Journal

Strategic Management JournalWiley

Published: Nov 1, 1992

References

  • Cognitive biases and their impact on strategic planning
    Barnes, Barnes
  • The psychological context of strategic decisions: A model and convergent experimental findings
    Bateman, Bateman; Zeithaml, Zeithaml
  • Self‐serving attributions, managerial cognition, and company performance
    Clapham, Clapham; Schwenk, Schwenk
  • The creation of momentum for change through the process of strategic issue diagnosis
    Dutton, Dutton; Duncan, Duncan
  • Toward understanding strategic issue diagnosis
    Dutton, Dutton; Fahey, Fahey; Narayanan, Narayanan
  • Enabling change in corporate aggressiveness
    Fombrun, Fombrun; Ginsberg, Ginsberg
  • Measuring and modelling changes in strategy: Theoretical foundations and empirical directions
    Ginsberg, Ginsberg
  • Short‐term financial success in large business organizations: The environment‐strategy connection
    Jauch, Jauch; Osborn, Osborn; Glueck, Glueck
  • Cognitive simplification processes in strategic decision‐making
    Schwenk, Schwenk

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