Organizational information systems, upper echelons and risky behavior

As the “chief problem solvers” of organizations, executives are forced to make decisions that put their organizations at risk. In business settings, risk is the possibility of loss of financial assets from engaging in an action. In this sense, high-risk decisions include making large acquisitions, investing in high-risk activities, or using financial derivatives, or in short, involving large financial sums that are at risk of being lost for organizations. Organizational information systems are installed to support decision-making. These information systems mainly influence the amounts and types of data that executives use, and thus they determine their attention focus. System information varies across organizations and may include finance, marketing and sales, human resources, manufacturing and operations, as well as external competitive benchmarks. Disaggregated information systems provide broad and deep information support with analytic capabilities for a wide range of executive decisions. Although executives use organizational information systems for decision making in the presence of risk, it is unknown whether this information affects or depends on executives’ perceptions in decision situations. These perceptions are key determinants of decision making under risk. Thus, preconditioned by the misunderstanding of this relationship, an attention focus on organizational information systems may disguise relevant information and prevent executives from making the right choices on behalf of their organizations. Organizational information systems influence executives’ decisions at the organizational level. Executives’ personality traits, cognitive models, and core values influence decisions at the individual level. Personality traits dispose executives toward decisions and behavior. The dissertation investigates to what extent disaggregated information assists in building profound cognitive models that resemble organizational structures. The author studies the relation between the organizational information systems risk perception and risk propensity in an organizational work context. The dissertation also addresses the executive’s core value system, which is another central psychological feature in upper echelons research, in addition to cognitive models, which constitutes to behavior. To the extent that executives’ core values incline them toward idiosyncratic behavior instead of acting for the benefit of their organizations, the author both analyzes the direct effect of political conservatism and indirect effects on risky behavior.