“Strategic Issue Diagnosis by Top Management Teams: A Multiple-Agent Model”

On Monday, February 19th, at 2.30pm the NOVAFRICA Center welcomes Kent Miller, from Michigan State University, to present his work.

Kent Miller (Michigan State University)

This study proposes a theoretical explanation for the accuracy of top management teams’ diagnoses of complex strategic issues. Key contingencies are the span of managerial attention and its allocation to the environment and to other managers, the number of members on the management team, and the decision-making process—whether decentralized, collective, or centralized. Depending on the nature of the organization’s environment, managers who reason analogically from past experience to draw inferences about current strategic issues may arrive at accurate or inaccurate diagnoses. We specify and analyze a multiple-agent model that encompasses individual, top management team, and environmental attributes relevant to the challenging problem of classifying strategic issues as opportunities or threats based on learning from experience. Collective decision making generally outperforms the other approaches. Attending to the environment improves the accuracy of strategic issue diagnoses, whereas attending to other managers’ inferences proves detrimental. Adding members to the top management team has different performance implications for decentralized, collective, and centralized decision making.

Find more information about this seminar here.