Global Sourcing Decision‐Making Processes: Politics,Intuition, and Procedural Rationality

Global sourcing (GS) is a firmly established phenomenon in modern business practice that requires specific expertise from different organizational functions, such as purchasing, production, logistics, and research and development to analyze and select sourcing alternatives effectively. In this context, global sourcing decision‐making (GSDM) processes pose major challenges because two dimensions of functional politics, namely goal misalignment and power imbalance across functions, appear to influence procedural rationality in a manner not understood to date. Likewise, intuition also seems to play a role for the procedural rationality of GSDM processes. To elucidate the conditions under which procedural rationality is hampered or enhanced by politics and intuition, we studied five cross‐functional GSDM processes, in front of extant strategic decision‐making literature. We derive formal propositions on how functional politics and intuition influence the procedural rationality and present contingencies for the divergent role of intuition as well as functional politics in GDSM processes. Our research contributes to existing GS literature by providing a theoretical model of important microfoundations of how GSDM processes evolve. The findings also guide managers on how to structure GSDM processes such that GS projects can be conducted in a more rational fashion.     

Examining the Paths from Export Strategic Orientations to Export Performance: The Mediating Role of Export Resource Transformation Capability

Export strategic orientation research suggests that export entrepreneurial orientation (EO) and market orientation (MO) directly affect export performance. Based on the dynamic capability theory, this study hypothesizes that export resource transformation capability is an intervening factor that helps explain how EO and MO, individually and jointly, impact export performance. Using archival and survey data from small and medium‐sized exporters in the United Kingdom and Nigeria, the study finds that export resource transformation capability partially mediates the individual effects of EO and MO on export performance in both samples. Results further show that export resource transformation capability does not mediate the joint effect of EO and MO on export performance. The findings help provide a more complete understanding of how export strategic orientations might be related to export performance. © 2016 Wiley Periodicals, Inc.     

An empirical investigation into international entry mode decision-making effectiveness

This study examines the effect of decision rationality and hierarchical centralization on international entry mode decision-making effectiveness (DME). The role of environmental uncertainty is additionally explored as a moderating variable in this investigation. Drawing from the strategic decision-making process perspective, this research is seemingly the first to include behavioral processes in explaining how effective the decision associated with adopting an international entry mode is. Based on a study of 233 internationalized Chinese private firms, the evidence suggests that decision rationality positively influences DME, while hierarchical centralization negatively affects DME. The moderating effects of environmental uncertainty are negative for both decision rationality and hierarchical centralization.     

Adolescents' perceptions of family communication patterns and some aspects of their consumer socialization

This study examined the effects of family communication patterns (FCP) on adolescent consumers' decision‐making styles and influence in family purchase decisions. Two underlying dimensions of FCP (concept‐orientation and socio‐orientation) were measured separately for mother–child communication and father–child communication and regressed on adolescents' use of the selected decision‐making styles and influence in purchase decisions involving durable products and nondurable products for their own use. Results show that only mother–child communication patterns have significant associations with adolescents' decision‐making styles and family purchase influence. Specifically, mothers' concept‐oriented communication was positively linked to children's use of utilitarian decision‐making styles (e.g., careful and deliberate decision making) and social/conspicuous decision‐making styles (e.g., recreational and hedonic decision making) as well as to children's influence in family purchase decisions involving both durable and nondurable products for themselves. On the other hand, mothers' socio‐oriented communication was linked positively to children's use of undesirable decision‐making styles (e.g., confusion by overchoice) and negatively to children's influence in family purchase decisions. This study also investigated the presence (or absence) of a same‐gender effect in the relationships between parent–child communication orientations and children's consumer socialization outcome. If present, a same‐gender effect would be indicated by a greater influence from the same‐sex parent's communication orientations on the adolescent's decision‐making styles and influence in family decisions relative to that of the opposite‐‐ sex parent's communication orientations. Comparisons of the two gender‐group regression results revealed no systematic pattern that suggests the presence of such an effect. © 2009 Wiley Periodicals, Inc.     

The Limits of Strategic Rationality: Ethics, Enterprise Risk Management, and Governance

This article explores the links between strategic goals, enterprise risk management, and ethics. We offer a typology of managerial attitudes toward strategic goals and rationality and explore the interaction between strategic and ethical decision making. In so doing, we offer a practical framework for managers to approach ethical dilemmas in the highly complex, volatile, and risky economy that we currently find ourselves in.     

A Critical Reflection on Irish Industrial Policy: A Strategic Choice Approach

This paper offers a critical evaluation of recent Irish industrial policy (IP) experience. It argues that whilst Ireland managed to get some things “right” through its IP, substantial tensions arose through making foreign direct investment (FDI) attraction the centrepiece of policy, without at the same time adopting a more holistic approach in IP which inter alia also placed an emphasis on indigenous firms and entrepreneurship more generally. In particular, greater efforts should have been made much earlier in attempting to embed transnational corporation (TNC)-led activity better into the wider economy, in fostering domestic small firms and entrepreneurship, in promoting clusters, and more generally in evaluating IP more fully – notwithstanding the context which mitigated against such actions. As a result, Ireland as an economy remained vulnerable to strategic decisions made elsewhere by TNC decision makers, with IP effectively contributing to a situation that can be characterised as institutional and strategic failure. Overall, the paper suggests that wholesale emulation of the Irish IP approach is problematic.     

Strategic decision making in start-ups: the effect of top management team organization and processes on speed and comprehensiveness

Technology-based start-ups operate in high-velocity environments that make considerable demands on the comprehensiveness and speed of strategic choices. This study argues that characteristics of top management team (TMT) organization as well as TMT processes, namely, debate and trust, significantly influence the comprehensiveness and speed of strategic decision making in start-ups. Hypotheses are theoretically developed and tested with data from an empirical investigation of German start-ups.     

Linking Entrepreneurial Orientation and Firm Performance: The Role of Organizational Learning Capability and Innovation Performance

This research contributes to the entrepreneurial orientation (EO)–performance literature by offering a wider picture that includes two intermediate steps: organizational learning capability (OLC) and innovation performance. This study also provides an explanation of intra‐industry firm performance differences by focusing on EO. We use structural equation modeling to test the hypotheses on a data set from Italian and Spanish ceramic tile producers. The results support our conceptual model and demonstrate its usefulness in explaining differences in intra‐industry firm performance. Findings suggest that OLC and innovation performance should be enhanced by managers in order to boost the positive EO–performance link.     

Experiments on strategic choices and markets

Much of experimental research in marketing has focused on individual choices. Yet in many contexts, the outcomes of one’s choices depend on the choices of others. Furthermore, the results obtained in individual decision making context may not be applicable to these strategic choices. In this paper, we discuss three avenues for further advancing our understanding of strategic choices. First, there is a need to develop theories about how people learn to play strategic games. Second, there is an opportunity to enrich standard economic models of strategic behavior by allowing for different types of bounded rationality and by relaxing assumptions about utility formulation. These new models can help us to more accurately predict strategic choices. Finally, future research can improve marketing practice by designing better mechanisms and validating them using experiments.     

Entrepreneurial orientation and strategic alliance success: The contingency role of relational factors

This study extends entrepreneurship research into the domain of strategic alliances by hypothesizing a positive relationship between entrepreneurial orientation (EO) and firm-level alliance success. Drawing on a relational view, we further examine the focal relationship within a contingency framework, building on the distinction between cooperation (joint action and bonding) and conflict. Findings from a study of 197 partner firms suggest that a high level of joint action strengthens the positive relationship between EO and alliance success. Bonding moderates the relationship in an inverted U-shape manner such that the effect of EO on alliance success will be greatest when bonding exists at the moderate level. However, conflict has no significant moderating effect on the EO–alliance success relationship. Overall, this study provides novel insights into whether and when partner firms can translate an EO into final alliance outcomes.     

Chief executive officers' dispositional optimism,host country's rule of law,and foreign market equity mode choice of Ghanaian small and medium‐sized enterprises

Despite a growing interest in the influence of managerial characteristics on firms' strategic decision‐making process, scholarly knowledge is limited with regard to how and when psychological attributes of executives affect firms' foreign entry mode decision. Building on behavioral decision‐making theory, we address this gap by investigating the effect of chief executive officers' (CEOs') optimism on firms' foreign market equity mode choice. In addition, we examine the moderating influence of the host country's rule of law on this relationship. Using primary data from 227 small and medium‐sized enterprises (SMEs) in Ghana, we found that increases in the levels of CEOs' optimism are related to the increases in preference for equity entry mode. This relationship is amplified when CEOs perceive the host country to have stronger rule of law. The findings have theoretical, managerial, and policy implications for SMEs' foreign market entry mode strategy.     

The Effects of CEO Founder Status and Stock Ownership on Entrepreneurial Orientation in Small Firms

This paper studies how governance drives entrepreneurial orientation (EO) in small firms. We argue that founder status and ownership create powerful personal incentives for small firm CEOs to engage in behaviors that influence EO. Integrating stewardship theory and the principal‐principal branch of agency theory, we test our hypotheses on a sample of 339 Swedish firms, and find that CEO founder status is significantly and positively associated with EO, while CEO stock ownership significantly but negatively predicts EO. We additionally test two boundary conditions that show that the founder‐CEO's prior managerial experience in start‐up firms positively moderates the founder‐EO relationship, while contrary to expectations, CEO ownership diversification has no effect on the negative association between ownership and EO. Thus, our study adopts a corporate governance perspective to explain how variations in EO across small firms are driven by the goals and motivations of its leader. Our research also shows that in small, private firms the balance of power is tipped in favor of the CEO rather than the board of directors. Finally, we underline the importance of adopting alternative theoretical lens like stewardship and principal‐principal agency, given that traditional principal‐agent problems are largely mitigated in the small firm context.     

Reconceptualizing Intuition in Supply Chain Management

Studies in the psychology and management disciplines suggest that intuition might be able to complement rationality as an effective decision‐making approach. Yet, a review of how decision makers in supply chain contexts can benefit from using their intuition demonstrates that our discipline lacks a unifying conceptualization and operationalization of the complex intuition construct. Our study addresses this opportunity by following an extensive mixed‐method approach, in which we first use qualitative content analysis and quantitative testing to conceptualize intuition as a multidimensional construct consisting of experience‐based, emotional, and automatic‐processing dimensions. We then operationalize and empirically assess multidimensionality using a multiple study format, and perform an inferential analysis to begin to assess nomological validity. Our reconceptualization of intuition allows for a richer understanding of this key facet of supply chain management decision making, and our accompanying scale provides evidence of its multidimensionality and efficacy in making decisions in the uncertain and time‐constrained environments that supply chain managers often face.     

Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle

The term “entrepreneurial orientation” has been used to refer to the strategy-making processes and styles of firms that engage in entrepreneurial activities. A popular model of entrepreneurial orientation (EO) suggests that there are five dimensions of EO—autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness (Lumpkin and Dess 1996). This paper reports on two of those dimensions—proactiveness and competitive aggressiveness. Proactiveness refers to how firms relate to market opportunities by seizing initiative in the marketplace; competitive aggressiveness refers to how firms react to competitive trends and demands that already exist in the marketplace. Despite these distinctions, prior research has tended to equate these two concepts and argued that they have a similar effect on firm performance. This paper investigates how these two approaches are related to each other, how they are related to performance, and how their function differs in the environments in which firms exhibit these approaches to strategy making. These distinctions are important because proactiveness and competitive aggressiveness represent distinctly different avenues to entrepreneurial success.A field study was conducted in which 124 executives from 94 firms were surveyed. These were executives from non-affiliated, non-diversified firms who were actively involved in strategic decision making at the top level of the firm. All firms reporting had at least one respondent who was an owner. Analysis of the data was conducted in two phases. In phase 1, factor analysis was used to examine the distinctions between different dimensions of EO. Proactiveness and competitive aggressiveness emerged as two separate factors indicating that these two strategy-making modes were perceived differently by the executives in the study. In the second phase, the relationship of these two dimensions to performance was analyzed in various contexts. Initial tests found that proactiveness was positively related to performance but competitive aggressiveness tended to be poorly associated with performance.Subsequent tests of the EO-performance relationship indicated that the stage of industry life cycle tended to favor one entrepreneurial orientation over another. The performance of firms in the early stages of industry development was stronger when their strategy making was proactively oriented. In contrast, a competitively aggressive frame of mind was helpful to firms in more mature stages of industry development. These findings were supported by other tests of the business environment. In dynamic environments, characterized by rapid change and uncertainty, proactive firms had higher performance relative to competitively aggressive firms. In hostile environments, where competition is intense and resources are constrained, competitively aggressive firms had stronger performance.The findings suggest that these two different approaches to entrepreneurial decision making may have different effects on firm performance. The differences were particularly apparent in the way firms relate to their external environment. Proactiveness—a response to opportunities—is an appropriate mode for firms in dynamic environments or in growth stage industries where conditions are rapidly changing and opportunities for advancement are numerous. But such environments may not favor the kind of combative posturing typical of competitive aggressiveness. Firms in hostile environments, or in mature industries where competition for customers and resources is intense, are more likely to benefit from competitive aggressiveness—a response to threats. A further implication of this research is that the dimensions of an entrepreneurial orientation, often considered to be positively related to performance under all conditions, may not always be associated with successful outcomes. This study indicates that the dimensions of EO often vary independently rather than covary, suggesting that the extent to which an entrepreneurial approach to strategy making is useful will frequently depend on the organizational or environmental conditions under which such decisions are made.     

Exploring the relationship between strategic reactiveness and entrepreneurial orientation: The role of structure–style fit

Theory suggests that firms may derive the greatest benefits from an entrepreneurial orientation (EO) when they concurrently exhibit a high degree of strategic reactiveness. This paper explores the relationship between strategic reactiveness and EO as well as the moderating effect of structure–style fit on this relationship. Data collected from 110 manufacturing firms indicate that strategic reactiveness is not significantly related to EO. However, firms that exhibit theoretically-congruent alignments between their organization structures and top management decision-making styles tend to have positive strategic reactiveness–EO relationships.     

Consumer socialization,social structural factors and decision‐making styles: a case study of adolescents in Malaysia

The purpose of this study is to investigate how the process of consumer socialization will determine adolescents’ decision‐making styles. Eight decision‐making styles were conceptualized as outcomes of the socialization process, which is acquired via interaction with socialization agents, namely parents, peers, printed media, television commercials and in‐school education. The study also proposed five social structural variables (social class, gender, ethnicity, residence and religion) as being associated with the socialization agents and decision‐making styles. The study sample consisted of 934 adolescents between the ages of 16 and 19 years. The data were collected using a self‐administered questionnaire and analysed with the SPSS computer program. As a result of regression analyses, significant relationships were found between social structural factors and socialization processes, suggesting that the influence of socialization agents on adolescents may vary according to certain demographic characteristics. Significant relationships were also found between social structural factors and socialization processes. Peers appeared to be the most important agents of consumer socialization, contributing to a variety of desirable as well as undesirable consumer decision styles. Printed media and television commercials were also found to be significant sources of the acquisition of both desirable and undesirable decision‐making styles. Parents and in‐school education, however, were insignificant in the acquisition of any decision‐making styles among adolescents. Information obtained from this study could be useful to government agencies and consumer educators. The most revealing finding of this study is that parents did not contribute to the formulation of decision‐making orientation for adolescents. This points to the need for consumer educators to take steps in designing programmes that will involve parents as primary socialization agents at home; this may be facilitated via printed materials. Apart from this, the information can also be helpful in enabling marketers to be more effective in targeting various adolescent markets by formulating marketing strategies according to demographic factors, socialization process and decision‐making styles.     

Strategic Decision Making: from Crisis to Opportunity

Managers can perceive and categorise problems as crisis, threat, familiar everyday nuisance or even opportunity. This article focuses on the extent to which this categorisation determines the process the organisation goes through in tackling the problem. Using the case history of a big externally-triggered decision in a chemical company to illustrate these distinctions, the authors show that the characteristics of the processes can vary a lot according to how the problem is perceived: and across many dimensions – procedural rationality, generation of alternatives, politicisation, timing and lateral and horizontal communication. They argue that top managers should not only pay particular attention to the manner in which strategic issues are perceived and labelled within the company and its systems, but even in some circumstances should 'manipulate' the information provided from external or internal systems. The case described here also illustrates the crucial role of middle managers in providing expertise and information during the making of strategic decisions. Finally, it points to ways in which management teams can avoid destructive conflict and engage in constructive conflict.     

Unpacking the effect of exploration during environmental uncertainty: Evidence from the information technology sector

Environmental uncertainty can render managerial decision‐making about resource deployment particularly difficult. Integrating the knowledge‐based view of the firm and the organizational learning literature, we make a case for deploying specific knowledge‐based resources to cope with specific types of environmental uncertainty. We unbundle knowledge‐based resources into technology‐based and social‐network‐based resources and, using Milliken's (1987) typology of environmental uncertainty, we hypothesize that (a) technological exploration will be more effective during state uncertainty and (b) while being generally beneficial, social exploration will prove more effective during response uncertainty. An analysis of the financial performance of information technology (IT) firms in the United States over the period 1995–2004 generally supports our hypotheses. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Enhancing National Security and Energy Security in the Post-911 Era: Group Decision Support for Strategic Policy Analysis under Conditions of Conflict

Energy source diversity has become a fundamental principle of both US energy security and national security. The decision of whether or not to approve a new power plant facility in the US involves complex group decision and negotiation processes. These contentious, value-laden, and multi-faceted self organizing processes involve many decision makers (broad constituencies) with conflicting priorities and dynamic preferences, high decision stakes, limited technical information (both in terms of quality and quantity), and difficult tradeoffs. As population pressures and energy demands continue to mount, advances in conflict resolution can help to improve power plant siting processes as well as US energy security and national security. Specifically, this paper uses advances in the Graph Model for Conflict Resolution and its associated decision support system (DSS) GMCR II to analyze strategic aspects of a multi-party energy dispute involving the co-management of a shared air shed in the Fraser Lowland Eco-Region based on Sumas Energy 2 (SE2), a contentious power plant project proposed for the US side of the international border between the city of Abbotsford, British Columbia and town of Sumas, Washington. GMCR II provides strategic insights for enhancing energy security, national security, and environmental risk management in the United States.