Linking Issue Labels And Managerial Actions: A Study Of Participation In Crisis Vs. Opportunity Issues

Abstract

The way in which top level executives frame strategic issues is likely to affect how these e3xecutives go about resolving issues and deciding on a course of action. The particular label given to a strategic issue may alter how much information is processed in resolving the issue. Specifically, differences in the way strategic issues are labeled are believed to affect the amount of top level executive participation in deciding the issues Dutton and Jackson, 1987), although there has been no empirical support of this claim. Data from high ranking executives in 21 defense contracting companies indicate that the participation of top level executives is significantly reduced when responding to issues labeled as crises than when responding to issues labeled as o9pportunities. Further, the absolute extent of these differences is modified by the information processing and participation climate in organizations. The results suggest that top level executives should be aware of the labels given to strategic issues, recognize the implications of such labels, and make special efforts to overcome the tendency to reduce information processing capacity when confronting crisis strategic issues.