An investigation of the effects of organizational factors and personal characteristics on top executives perceiving a strategic issue as an opportunity or a threat

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Virginia Polytechnic Institute and State University


The strategic management literature makes frequent references to the need for directing the firm's responses to perceived opportunities or threats in the environment. The purpose of this study is to determine if the top executives from different firms view an important environmental development differently, in terms of it being an opportunity or threat, and, if so, do these perceptions relate to organizational factors and to personal characteristics of the top executive? A model is proposed and includes organizational strategy, organizational structure, executive locus of control and behavioral response repertoire. Fourteen operational hypotheses are formulated.

Thirty-six top executives of firms in the metalworking machinery and equipment industry are polled for their opinions of flexible manufacturing systems (PMS) developments. PMS refers to technology that is only now becoming available and consists of the integration of computer facilities and robotics mechanisms. Predecessors of PMS include numerically controlled machinery (NCM), computer aided design (CAD) and computer aided manufacturing (CAM).

The effect of locus of control on PMS perceptions is not analyzed because of measurement problems. Correlation analyses reveal that organizational strategy, some aspects of organizational structure, and certain characteristics of the top executive are related to PMS perceptions at close-to-significant levels.

Cluster analysis is applied to the data on strategy and structure to identify groups of firms on the basis of the similarity in their strategy-structure features. Executives' perceptions of PMS are compared across groups, and certain combinations of strategy type and structural characteristics relate to more opportunistic perceptions, although not at significant levels.

The results of the statistical findings are discussed and an interpretation offered. Suggestions for future research on strategic issue perceptions are proposed.