Upper echelons theory | top management team theory | strategic leadership [Game of Theories: #14] 

[Game of Theories: #14] Echelons means ranks in an organization. Upper echelons, as the name suggests, are those who are at the upper level of an organization. The word “echelons” is a plural noun. It means that the upper echelons theory does not focus on a single leader, but the top management team. This is why the upper echelons theory is also called “top management team” theory.
There are two core arguments of the upper echelons theory: (1) top management team members’ knowledge, experience, values, personalities, preferences, and even idiosyncrasies shape how they interpret the situations they face, and (2) those personalized interpretations influence their decisions and behaviors. The organization can be considered as a reflection of its upper echelons.
Top management team members’ characteristics (e.g., knowledge, experience, values, personalities, and preferences) function as a filter and a processor of information. To do so, they go through a three-step process. Top management team members’ knowledge, experience, values, personalities, and preferences influences:
field of vision, which refers to the directions leaders look and listen;
selective perception, which refers to what leaders actually see and hear; and interpretation, which refers to how leaders attach meaning to what they see and hear.
As we can see, if we place different people in the same situation, they look at different aspects of the situation, perceive them differently, and make different senses. Feeding different leaders with the same information, they may reach different decisions. This is because different leaders process the same information differently with their own knowledge, experience, values, personalities, and preferences. One team member’s construction of reality may not be same one constructed by other team members.
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