The "What" in Top Management Group Conflict: The Effects of Organizational Issue Interpretation on Conflict among Hospital Decision Makers

Organizational issues play a particularly important role in the top management group decision-making process by affecting information processing and, ultimately, the decisions made by the team (Dutton and Jackson, 1987). Likewise, previous research has shown that issue interpretation impacts the decision-making process (Ginsberg and Venkatraman, 1992; Thomas, et al., 1993; Thomas and McDaniel, 1990). The present study focuses on the interpretation of organizational issues as a pivot point for decision making and subsequent action in organizations (Dutton and Dukerich, 1991). Such a focus starts with an issue, as defined by a collectivity of top managers, and proceeds forward to find relevant actions and organizational processes. Issues are events, developments, and trends that an organization's members collectively recognize as consequential to the organization (Dutton and Dukerich, 1991). Indeed, organizations respond to their environments by interpreting and acting on issues (Daft and Weick, 1984; Dutton and Jackson, 1987). Top management groups tend to focus on key organizational issues that have the potential to affect organizational performance or survival (Ansoff, 1980; Kuvaas, 2002). Because such issues are often uncertain and ambiguous (Lyles, 1981), substantial interpretation by decision makers is often necessary (Daft and Weick, 1984). Despite extensive research on decision making and substantial knowledge about issue interpretation, research has yet to focus on the relationship between the interpretation of organizational issues and group conflict. This is a great oversight because conflict deals more with the task elements of the team decision-making process than other variables (Hogg, 1987), and is directly related to the overall performance of the organization (West and Meyer, 1998). So, while some recent research has demonstrated the importance of conflict between team members (e.g., Chenhall, 2004; Ensley and Pearce, 2001) and multiple studies have related conflict to previous group performance (Peterson and Behfar, 2003) and various demographic differences (Harrison et al., 1998; Jehn, et al., 1997; Nibler and Harris, 2003; Thatcher and Jehn, 1998), it appears that the interpretation of specific issues being addressed during the group decision-making process have been ignored in understanding group conflict. To address this oversight, we investigate the relationship between organizational issue interpretation and conflict during the top management group decision-making process. We begin by discussing the nature of issue interpretation and its relationship to different types of conflict in the decision-making process. We continue with the development of a series of hypotheses that relate issue interpretation to the different forms of conflict that exist in the decision-making process: cognitive and affective (Amason, 1996). A second series of hypotheses focuses on the moderating influence of the positive-negative nature of the issue on conflict. Specifically, the group's assessment is investigated with respect to the threat-rigidity thesis, which is proposed to induce a constriction of control and pressure for uniformity (Staw et al., 1981). To test the hypotheses, we use a longitudinal study of 52 hospital top management groups. We find that issue interpretation, or the "what" in the decision-making process, does impact the amount of affective and cognitive conflict experienced, although in some unexpected ways. These findings lead to a discussion of their implications and directions for future research. THEORY AND HYPOTHESES The top management group (TMG) has been the focus of a great deal of attention since Hambrick and Mason (1984) proposed the "upper echelons" theory. The "upper echelons" theory places primary emphasis on the entire TMG rather than just the chief executive and argues that top managers impact organizations through their decision making. One of the key functions of management is to interpret and provide meaning to organizational issues (Daft and Weick, 1984; Kiesler and Sproull, 1982). …