The Role of Organizational Structure in Senior Managers' Selective Information Processing

Junge S, Luger J, Mammen J (2023)

Publication Type: Journal article

Publication year: 2023

Journal

Journal of Management Studies Wiley-Blackwell: No OnlineOpen

DOI: 10.1111/joms.12918

Abstract

CEOs' perceptions of the environment and the information processing shortcuts (or heuristics) they use to develop these perceptions are important to organizations. We study whether organizational structure, an important channel and filter for the flow of information in organizations, affects CEOs' perception gaps pertaining to the competitive environment. Perception gaps are defined as systematic deviations of subjective perceptions of the competitive environment from conceptions based on objective data. Studying 281 CEOs based in 216 firms, we find that functional structures are associated with wider environmental perception gaps, whereas divisional structures are associated with narrower gaps. To address endogeneity concerns, we control for firms' exposure to varied environments and only sample newly appointed CEOs, who, by definition, inherit predefined organizational structures exogenous to their own choices. Our study advances understanding of senior managers' information processing shortcuts by clarifying how organizational-level influences (i.e., organizational structure) affect CEOs' (mis)perceptions of the competitive environment.

Authors with CRIS profile

Sebastian Junge Lehrstuhl für Allgemeine Betriebswirtschaftslehre, insbesondere Unternehmensführung

Additional Organisation(s)

FAU Profilzentrum Licht.Materie.Quantentechnologien (FAU LMQ)

Involved external institutions

Copenhagen Business School (CBS) DK Denmark (DK) Technische Hochschule Nürnberg "Georg Simon Ohm" DE Germany (DE)

How to cite

APA:

Junge, S., Luger, J., & Mammen, J. (2023). The Role of Organizational Structure in Senior Managers' Selective Information Processing. Journal of Management Studies. https://dx.doi.org/10.1111/joms.12918

MLA:

Junge, Sebastian, Johannes Luger, and Jan Mammen. "The Role of Organizational Structure in Senior Managers' Selective Information Processing." Journal of Management Studies (2023).

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