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Managerial Reactions to Ambiguous Environmental Changes: Attention, Reasoning, and Erratic Decisions
Abstract
Managers in organizations are typically faced with changing and ambiguous signals in their operating environment. Based on interpretation of these signals, managers react with appropriate strategies. This chapter presents critical organizational issues in decision making process and its outcomes, including the manager's selective attention, interpretation, and reasoning of uncertain operating environment. In particular, the chapter first discusses why individual managers in the same organization who are faced with same environmental changes may differently interpret threat and opportunity aspects of these changes. Second, the chapter links outcomes of such interpretation to investigate different types of organizational actions. Third, the chapter drives into a greater depth to explore how the manager's experience and characteristics of the environment affect forms of reasoning in interpretation process and performance of subsequent organizational actions.
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