A Study on Decision Making Strategies(MBA Marketing)

 A Study on Decision Making Strategies(MBA Marketing)


Abstract

This paper focuses on marketing decisions made by managers as their performance declines. We examine how performance decline may result in a rigid decision-making process and decision characteristics that reflect a narrowing of attention and increased risk seeking, drawing on Ocasio's (1995) reconciliation of theories of failure-induced change and threat-rigidity. Furthermore, we consider how incentive pay may affect the marketing decision-making process and decision characteristics of managers during performance decline, drawing on managerial compensation research. Using a simulation game with experienced Chinese managers, our findings show that performance decline reduces the comprehensiveness of the marketing strategy process while increasing reliance on short-term marketing decisions, strategic change, and strategic risk taking. Furthermore, incentive pay softens managers' rigid decision-making processes while heightening their risk-taking during performance decline.

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Introduction

Marketing scholars have long regarded how managers make marketing decisions as an important area of study. Bauer and his colleagues' (2013) examination of the use of adaptive heuristics in managerial decision making in the context of customer management and Tse and his colleagues' (1988) study of the effect of managers 'home country cultures on decision choices are two studies that have specifically examined managers 'decision-making processes and decision characteristics within the marketing context.

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Conclusion

This study explains and tests a model of how performance decline, as opposed to performance growth, affects the marketing decision-making process and managerial decision-making characteristics. Managers who are experiencing a decline in performance are less likely to Table 3: MSPC and dominant marketing regression results.

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