Interpreting disruption: how managers perceptions shape strategic responses

• Investigates how resource dependence interacts with boundary conditions to shape managers’ interpretation of disruptive strategic issues. • Identifies three perceptual boundary conditions affecting threat/opportunity perception (1) timing of incumbent market decline (2) qualification for new market, and (3) attractiveness of new market. • Reveals 11 causal factors (e.g., financial resources, technical resource transferability, market competition) that mediate interpretation beyond resource dependence alone. • Provides a nuanced framework for strategic issue diagnosis, offering practical insights for automotive suppliers navigating electrification and theoretical contributions to strategic cognition research. Strategic issue interpretation – whether managers perceive environmental changes as threats or opportunities – plays a critical role in shaping organisational responses to disruption. While prior research has identified various antecedents at the individual, group, and organisational levels, it has largely assumed a direct and linear relationship between these antecedents and interpretative outcomes. This study challenges that assumption by theorising and empirically examining the boundary conditions that influence how resource dependence affects strategic issue interpretation. Drawing on a comparative case study, in 2021 we conducted 26 interviews within 20 internal combustion engine part suppliers in the automotive industry. Each supplier faces the existential challenge posed by the emergence of electrified vehicles. We uncover how firms with similar resource dependencies interpret disruption in different ways. Our findings identify three core perceptual boundary conditions: (1) the perceived qualification to compete in the new market; (2) the perceived attractiveness of the new market; and (3) the perceived timing of decline in the incumbent market. These boundary conditions, shaped by 11 underlying causal factors, significantly alter the interpretation of strategic issues beyond what resource dependence alone predicts. By advancing a more nuanced understanding of the relationship between resource dependence and strategic cognition, this study opens new avenues for theory development and offers practical insights for firms navigating disruptive transitions.