| An organization's institutional field—encompassing suppliers, consumers, regulatory agencies and competitors, among others—likely influences its executives' interpretations of key issues. These issue interpretations by managers influence the decisions they make and thereby affect business strategies, organizational operations, and ultimately firm performance.; An additional element in understanding executive issue interpretation is the relationship of those interpretations to subsequent organizational actions. Although executives may perceive issues in a similar manner and operate within the same institutional field, not all executives will respond in the same manner to identical issues. Understanding the degree of influence of the institutional field on an individual executive's cognitive processes may provide additional explanation of how executives interpret opportunities and threats for their organizations and of the actions they take to deal with these issues.; This research addresses two related questions. How does the institutional field affect executives' perceptions of regulatory actions as opportunities or threats for their firms? How do these perceptions relate to planned organizational actions?; To test these relationships, the author conducted a national mail survey of top executives in the biotechnology industry with responses from 111 (10%). Results of regression analysis suggest that the relationship between both the external threat and the perception of control problems with the threat and future plans for additional products is moderated by the prior patent success for the organization. The findings support prior research on prospect theory and suggest that future organizational risk assessments are influenced by the lack of prior success. Executives are willing to take more risk and invest in more new products when they have fewer successes in obtaining patents.; In addition, the author found that executives find issues to be more controllable when they perceive there is strong support from local industry groups, venture capitalists, and liaisons from educational institutions. This finding suggests that there is variance in the institutional field for biotechnology companies. Awareness and utilization of the institutional field may assist companies in addressing important industry issues. |
