Integrating Organizational and Individual Information Processing Perspectives on Choice

Abstract

Existing information processing theories of strategic choice focus on either the organizational or individual level of analysis. This single level focus makes these theories incomplete representations of how strategic decisions are actually made in organizations. We believe an integration of these two levels is necessary for a comprehensive view of choice. This paper thus proposes a parallel process model of strategic decision making that integrates organizational and individual level information processing perspectives. The integrated, comprehensive view afforded by the proposed model enhances understanding of strategic decision making by identifying (1) multiple ways in which bias can enter into choices and (2) dual level influences on decision activities such as information gathering and alternative generation. The proposed model portrays strategic decision making as complex, multilevel information processing and choices as emergent outcomes of that processing. The model is developed as follows. First, the individual level of the model is generated by recognizing that people process information in stages. The notion of stages is used because it depicts the basic structure of information processing and is widely supported by empirical research. Second, the organizational level of the model is articulated by acknowledging organizations (1) process information in stages and (2) exhibit information processing activities analogous to those at the individual level. Third, a series of linking mechanisms connecting individual information processing stages to analogous organizational level ones is proposed. These linking mechanisms thus conceptually operationalize the integration of the two levels. Fourth, three contingency variables are presented to flesh out the model and formulate propositions. Contingency variables specifically acknowledge differences in information processing across organizations. A final section of the paper explains how key variables in the proposed model can be operationalized and outlines a test for the presence of multiple levels of information processing in a strategic choice context.