Don’t Get It Misconstrued: Executive Construal-Level Shifts and Flexibility in the Upper Echelons

Abstract

Much of upper echelons research focuses on the background characteristics and traits of executives to explain their strategic choices, but much less is understood about the information-filtering process by which those characteristics manifest in strategic decisions. We develop theory to explain how executives process information by integrating construal-level theory with upper echelons theory. Construal-level theory describes how the same event can be interpreted in different ways, thus influencing the type of information people pay attention to, how they process that information, and their resulting decisions and actions. Our theoretical framework explores the dynamic nature of construal levels by developing two new constructs: construal shifts and construal flexibility. In doing so we draw on self-regulation research to detail how executives can develop the capacity to modify how they process information to best meet changing situational demands. As an illustrative example, we apply our theory to the acquisition context and demonstrate the vital role played by construal shifts and flexibility for executives attempting to manage complex strategic actions. The end result is a framework that executives can use to effectively navigate the challenging acquisition process.