MAKING SENSE OF AN INSTITUTIONAL CHANGE: THE ROLE OF MANAGERIAL COGNITIONS

Abstract:

Institutional changes have an well known impact on organisational outcomes. Yet this impact depends on how individual top managers make sense of institutional changes. This study describes how managers perceive and create representations about an institutional change, and which factors influence these representations. A specific situation of institutional change in the textile industry (the phasing out of the Multifiber Agreement) is explored and studied in a deductive, empirical manner. Twenty Indian managers are interviewed and the interviews are coded using a conceptual mapping technique. The results of the study show partial support the hypotheses that the cognitive complexity is influenced by factors like age organizational tenure or type of expertise. Two aggregate cognitive maps are analyzed and the results are interpreted using the fundamental link between cognition and behaviour.

Keywords: managerial cognition, institutional change, cognitive maps