Question

QUESTION 22 See below model and describe the key concepts of Upper Echelons Theory. Selective Perception Interpreta tion Values Management Perceptions Strategic Choice Performance The situation (all potential environmental and organizational stimuli) Cognitive Base TTTF Paragraph Arial 3 (12pt) E-T. . %DO QOFESSST' T, 25 --- fx Mashups - T « © © £ DEI MTL CSS

Answer 1

Upper Echelon's theory is a theory in strategic management published by Hambrick and Mason in 1984. the underlying concept is that, the executives' values and cognitive base influences their perception of the external and internal stimuli. it implies that,since the interpretation is based on the executives' perception about the stimuli ,interpretation of the stimuli is also influeced by the value systems of the executives. hence the strategic choice made by executives , for which perception and interpretation of te stimuli forms the basis , are also influenced by these factors. Thus, the performance of the organization is dependendent on the cognitive base and values followed by the executives of the organization. further , the experiences resulting from the performance any such strategic decision , act as feedback to the executives. this feedback forms the cognitive base for the next decision.

the theory follows that the if the personality ,value systems and previous experiences of the executives are known , then the stratgic decisions of any organization can be predicted. in the same way , the perfomance of the competitor also can be predicted.