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Adapting to Unfamiliar Environmental Events: A Look at the Evolution of Interpretation and Its Role in Strategic Change

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  • Pamela S. Barr

    (Georgia State University, P.O. Box 4014, Atlanta, Georgia 30302-4014)

Abstract

This paper argues that a key component in a firm's strategic response to unfamiliar environmental events is the interpretations managers develop about the event itself and about key dimensions of their strategy. Using historical data from the pharmaceutical industry, the revealed interpretations of top management from six firms over a ten-year period are analyzed and are compared to the timing and content of the changes in strategy each firm undertook following a significant change in regulation. The results reveal two distinct patterns of interpretation development that appear to be linked to whether or not the target of interpretation is familiar. Further, interpretations appear to be linked both temporally and in terms of content to the strategic change undertaken by each firm. Both sets of results suggest that the interpretations of managers are linked to organizational actions.

Suggested Citation

  • Pamela S. Barr, 1998. "Adapting to Unfamiliar Environmental Events: A Look at the Evolution of Interpretation and Its Role in Strategic Change," Organization Science, INFORMS, vol. 9(6), pages 644-669, December.
    • Handle: RePEc:inm:ororsc:v:9:y:1998:i:6:p:644-669
    DOI: 10.1287/orsc.9.6.644
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    References listed on IDEAS

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    1. Liam Fahey & V. K. Narayanan, 1989. "Linking Changes In Revealed Causal Maps And Environmental Change: An Empirical Study," Journal of Management Studies, Wiley Blackwell, vol. 26(4), pages 361-378, July.
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