Facing crisis periods: a proposal for an integrative model of environmental scanning and strategic issue diagnosis

Abstract

The aim of this study is to examine the way top managers scan environmental conditions to diagnose and interpret issues during periods of crisis. Despite each of these processes being widely and individually represented in the research literature, there is a lack of integrative models that examine their internal dynamics in-depth. In this study, structural equation modeling methodology (EQS 6.3) was applied to a sample of 120 top managers to examine how the cognitive orientation of scanning (rational vs. intuitive analysis of environment) may influence final issue categorizations. Results confirm that not only is procedural rationality needed when scanning the environment, as traditional arguments have posited, but also that intuition plays a relevant role, complementing rational processes and configuring a mixed set of competencies to assess different issue dimensions, such as favorability, urgency, and influence.