CEOs’ Personality and Interpretation Process

In times of changes, why are some CEOs more certain than others in their responses? As posited by upper echelon theory, this difference could be due to CEOs’ different interpretation process, which in turn are shaped the personalities of CEOs. Yet, the mechanisms of how CEOs’ personality shapes their interpretation process remain a black box of upper echelon theory. To address this black box, we integrate two constructs from the interpretation and personality literatures to build a conditional process model. The model was tested using a novel survey dataset of 251 founder-CEOs in Iran who had to interpret UN-led sanctions and respond accordingly. This model receives broad support and helps shed light on the black box of upper echelon theory.