Interpreting Strategic Issues: Effects of Strategy and the Information-Processing Structure of Top Management Teams

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Abstract
Understanding how managers interpret strategic issues is important to understanding strategic action, organizational change, and learning. However, little is known about how the context in which strategic issues are interpreted relates to the nature of interpretation. This study of 151 chief executive officers employed a cross-level analysis to investigate how two organization-level factors—strategy and the information-processing structure of the top management team—related to how chief executives in different organizations interpreted the same situation. Findings indicated that both strategy and information-processing structure are related to how chief executives label strategic situations and the range of variables they use during interpretation.