Manager, are you aware of beliefs guiding your actions?

M.Sc. Timo-Pekka Uotila from the University of Vaasa explores managers' perceptions on firm performance. In his dissertation Uotila studied the ways how the managing directors understand firm performance.

"It is important that managers are aware of their beliefs related to the firm performance," says Uotila

According to the dissertation managers approach firm performance differently. Even though growth and profitability can be seen as unifying factors in managers' thoughts, the elements considered leading to successful action differ between managers.

"One managing director emphasizes partnership with customers, where as other emphasize fine tuning of production."

It is important to identify the factors that the managing directors emphasize. Only changes in the business environment which are considered meaningful are reacted to.

"Business environment is in constant move. To identify meaningful changes in it depends on the managers' beliefs related to factors leading to firm performance."

Uotila states that managers should stop for a while despite the continuous rush present in the managers' position and make their beliefs visible for themselves.

Forming beliefs within the social environment

Various things influence managers' perceptions. For instance different management tools and pressures and demands from customer firms influence managers' perceptions.

"Performance models that are used the most, such as Balanced scorecard, provide a rather clean cut, ideal view to firm performance. However, sometimes it is forgotten that even though these tools offer a good way to make sense of firm performance, reality is always a bit more complex and fuzzy."

Uotila states that sometimes within an industry sectors certain industry recipes may be found. These recipes consist of issues that are considered important for firm performance within the industry.

"Own experiences and lessons learned from competing firms influence on the recipes for good performance. In addition, business schools, consultants, and media all influence on the topics that are on the top of the conversations related to firm performance. These forces guide the managers thinking towards similarity."

Uotila states that despite the industry pressures managers' have to form their own perceptions for the firm performance.

"The cause-and-effect chains related to the firm performance are ambiguous. That leaves room for managers' own interpretations on firm performance and elements leading to it," says Uotila.

Multi-method research as a tool to study managers' perceptions

Uotila used qualitative multi-method approach in his dissertation. The approach is relatively little used in the area of business studies. Twenty-two managing directors gave their views on firm performance. Interview material was explored through the means of content analysis, cognitive mapping, and rhetorical analysis.

Find more information at: http://www.uva.fi/materiaali/pdf/isbn_978-952-476-725-5.pdf