Employment restructuring represents a core strategic decision with far-reaching impact on a firm’s course of action (e.g., Cascio, Chatrath and Christie-David, 2021). Although having high practical relevance, prior research remains inconsistent regarding the antecendents (i.e., why firms restructure) and consequences (i.e., evaluative judgment by external stakeholders) of employment restructuring. To provide new nuances and insights to the antecedents and consequences of employment restructuring, this cumulative dissertation draws on the emerging socio-cognitive perspective in strategic management. Grounded in social psychology and socio-cognitive research, this perspective focuses on a) how the strategists’ socially construct perceptions influence their decision-making; and b) how stakeholders’ socio-cognitively perceive, interpret, and make sense of firms at the collective level (Rindova, Reger and Dalpiaz, 2012; Barnett, 2014; Pfarrer et al., 2019).
Chapter 1 of this dissertations draws on the socio-cognitive perspective to examine how the socially influenced decision-maker inside an organization shapes employment restructuring (i.e., Study 1). Based on moral foundations theory (Haidt and Graham, 2007), the study argues and finds that CEOs moral stances impact the decision to restructure a firm’s workforce. Methodologically, the large-scale archival approval in chapter 1 leverages recent advances in digital technology and uses a novel psycholinguistic approach to operationalize the CEOs moral stances to understand their impact on employment restructuring (n = 218 observations).
Chapter 2 and 3 incorporate socio-cognitive theories to understand how the mass media socio-cognitively perceives and makes sense of employment restructuring. For chapter 2 (i.e., Study 2), expectancy violation theory (Burgoon, 1993) and construal-level theory (Liberman and Trope, 2008) are employed to understand the impact of firms’ issuing employment restructuring on the tenor of media coverage as well as socio-cognitive framing tools to influence their behavior (n = 267 observations). Chapter 3, on the other hand (i.e, Study 3), examines media agents’ socio-cognitive construction processes to understand their sensemaking about employment restructuring (downsizing n = 527; upsizing n = 389). Dependent on the social approval of a firm, the underlying argument here is that media agents draft their stories about employment restructuring differently, as prior social approval act as a ‘cognitive shorthand’ to help them make sense of an organization’s action (Bitektine, 2011; Mishina, Block and Mannoer, 2012; Pfarrer et al., 2019). The two studies in chapter 2 and 3 employ computer-aided content-analysis to measure the media tenor about employment restructuring, finding strong support for the hypotheses.