Revisiting organizational interpretation and three types of uncertainty

Purpose – The aim of this paper is to move toward a holistic model of organizational interpretation under uncertainty. This paper makes a series of novel conceptual propositions regarding the associations between state, effect and response uncertainty and the organizational interpretation process. Design/methodology/approach – This conceptual paper extends existing conceptual work by distinguishing between general and issue-specific scanning and linking the interpretation process to three different types of perceived uncertainty: state, effect and response uncertainty. Findings – It is proposed that environmental scanning leads to lower state and effect uncertainty, i.e. less uncertainty regarding the estimation of probabilities of events occurring in the external environment of the organization and of their consequences. It is further proposed that scanning leads to higher levels of perceived control over events and that the actual interpretation of events, in opportunity/threat terms, drives irregular issue-specific scanning and organizational reactions to such events. Research limitations/implications – The paper suggests a way to test links between organizational interpretation and uncertainty that might help explain and untangle some of the conflicting empirical results found in the extant literature. The paper illustrates how the literature could benefit from re-conceptualizing the perceived environmental uncertainty construct to take into account different types of uncertainty. Practical implications – For practitioners, this paper emphasizes the importance of environmental scanning and how scanning practices can lead to general alertness, to more positive event interpretations and how interpretations form responses to opportunities in the environment. Originality/value – This paper extends on existing work by linking the interpretation process to three different types of uncertainty (state, effect and response uncertainty) with several novel and testable propositions. The paper also differentiates clearly general (regular) scanning from issue-specific (irregular) scanning. Finally, the paper provides a unifying view, piecing together in one picture elements that have so far been dispersed in the literature.