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MARKETING STRATEGY DECISION MAKING:
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JESSICA J. HOPPNER

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MARKETING STRATEGY DECISION MAKING-
THE UNINTENDED CONSEQUENCES OF INCORPORATING COMPETITIVE
INFORMATION
By

Jessica J. Hoppner

A DISSERTATION
Submitted to
Michigan State University
in partial fulﬁllment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
Marketing

2010

ABSTRACT
MARKETING STRATEGY DECISION MAKING:
THE UNINTENDED CONSEQUENCES OF INCORPORATING COMPETITIVE
INFORMATION
By
Jessica L Hoppner
Unintended consequences in decision making result when undetected biases in judgment
are introduced through the reliance of individuals on decision heuristics to reduce the
complexity of evaluating and incorporating information into their decisions. Marketing
managers, although assumed within the extant marketing strategy literature to be
objective decision makers, are subject to the same biases within their marketing strategy
decision making when evaluating and incorporating competitive information.
Competitive information refers to information that details the actions taken by or to be
taken by ﬁrms designated as competitors. Marketing managers must evaluate the quality
and the timing of competitive information, which address whether and when a competitor
is described to take action, respectively. For instance, if marketing managers learned
about a possible new product introduction of a competitor, they would need to evaluate
the extent to which the competitive information is accurate (i.e., its quality) and the
extent to which the competitive infomiation refers to actions that have occurred, are
occurring, or will occur (i.e., its timing) Thus, this dissertation, comprised of two essays,
examines the unintended consequences in marketing strategy decision making that result
When marketing managers rely on decision heuristics to incorporate competitive

information based upon their evaluation of the quality of the competitive information

(Essay One) and the timing of the competitive information (Essay Two).

C0pyright by
JESSICA J. HOPPN ER
2010

ACKNOWLEDGEMENTS
Four years and one hundred and forty-eight pages later, my career as a doctoral student
has come to an end. Over the course of my time as a doctoral student, through the good
and the bad, it was with the unwavering support of so many people that I was allowed to

achieve my goal. It is to these people that I owe a massive debt of gratitude.

First and foremost, an innumerable amount of thanks belong to my advisor, my mentor,
and most of all to my friend, Dr. David A. Grifﬁth. Without your time, energy, and crazy
belief in the kind of scholar I could become, I would have never been able to be where I
am today. It takes a special kind of person to take on a “g.w.k.” as a doctoral student and
then give her free reign to uncover the projects and research that she truly loved. At
times I think you had much more faith in me and my abilities than I had challenging me

to be better —— for which I am truly grateful.

I would also like to thank my dissertation committee, Dr. Thomas J. Page, Jr., Dr. Cheri
Speier, and Dr. R. Dale Wilson, for their support and guidance throughout the entire

dissertation process. Their insights have helped to shape this work.

I also consider myself to be incredibly lucky to have ended up in a doctoral program
where I could ﬁnd my other two “amigos” to celebrate and commiserate important
milestones with. Ravi and Ryan, my time in the doctoral program would not have been i

the same without either of you.

iv

Last but not least, I would like to thank my family. It is easy to dream big when you
know that you will always have your family behind you supporting you, whether be it

emotionally or ﬁnancially. Thank you for always being there. I love you all.

TABLE OF CONTENTS

 

 

 

 

LIST OF TABLES
LIST OF FIGURES ............ x
INTRODUCTION ........ -- 1
ESSAY ONE:
RUMOR HAS IT. MARKETING STRATEGY REACTIONS TO
RUMORED ACTIONS BY COMPETITORS -- __ - -_ .--5
Introduction ......................................................................................................... 5
Theoretical Background ...................................................................................... 8
The Inﬂuence of Competitive Rumors on Marketing Strategy .................... 8
Evaluating Competitive Rumors: Behavioral Decision Theory ................... 1 l
Hypotheses Development ................................................................................... 13
Marketing Strategy Reactions to Competitive Rumors ................................. l3
Altering the Direction of Marketing Strategy ............................................... 18
Method ................................................................................................................ 20
Rationale for Research Design Selection ...................................................... 20
Experimental Design ..................................................................................... 21
Pretest 1 ................................................................................................... 22
Pretest 2 ................................................................................................... 23
Pretest 3 ................................................................................................... 24
Pretest 4 ................................................................................................... 25
Experimental Procedure ................................................................................ 26
Experimental Study ....................................................................................... 27
Participants, Design, and Procedure ....................................................... 27
Measures ................................................................................................. 28
Manipulation Checks .............................................................................. 29
Results .................................................................................................................. 30
Marketing Strategy Reactions to Competitive Rumors ................................. 3O
Altering the Direction of Marketing Strategy ............................................... 33
Discussion ........................................................................................................... 41
Theoretical Implications ............................................................................... 42
Managerial Implications ............................................................................... 47
Limitations and Directions for Future Research ................................................. 50
Conclusion .......................................................................................................... 53

vi

 

 

STRATEGY DECISION MAKI G ..................................................................... 54
Introduction ......................................................................................................... 54
Theoretical Background ...................................................................................... 5 7

Time in Marketing Strategy Decision Making ............................................. 5 7
Conceptions of Time: Objective and Subjective .......................................... 59
Relating to Time: Time Orientations ............................................................ 60
Connecting Events to Time: The Role of Information ................................. 62
The Inﬂuence of National Culture on Time .................................................. 64
Hypotheses Development ................................................................................... 67
The Inﬂuence of Culture on Time In Strategic Decrsrons ............................ 67
The Inﬂuence of Culture on Time Orientations ............................................ 69
The Inﬂuence of Culture on Information Utilization .................................... 74
Method ................................................................................................................ 78
Rationale for Research Design Selection ...................................................... 78
Case Scenario ................................................................................................ 79
Pretest l ................................................................................................... 79
Pretest 2 ................................................................................................... 80
Pretest 3 ................................................................................................... 81
Case Scenario Procedure ......................................................................... 82
Data Collection ............................................................................................. 83
Measures ....................................................................................................... 84
Measurement Analysis .................................................................................. 88
Measurement Validity and Reliability .................................................... 88
Measurement Invariance Testing ............................................................ 89
Results .................................................................................................................. 91
The Inﬂuence of Culture on Time In Strategic Decrsrons ............................ 96
The Inﬂuence of Culture on Time Orientations ............................................ 97
The Inﬂuence of Culture on Information Utilization .................................... .102
Discussion ........................................................................................................... 109
Theoretical Implications ............................................................................... 109
Managerial Implications ............................................................................... l 15
Limitations and Directions for Future Research ................................................. 1 18
Conclusion .......................................................................................................... 121
APPENDICES ......................................................... - ......... 123
REFERENCES ........................ . - - ------ ’39 -

 

 

 

 

 

 

vii

Table 1.1:

Table 1.2:

Table 1.3:
Table 1.4:

Table 1.5:

Table 1.6:

Table 1.7:

Table 1.8:
Table 2.1:
Table 2.2:
Table 2.3:
Table 2.4:
Table 2.5:
Table 2.6:

Table 2.7:

Table 2.8:

Table 2.9:

Table 2.10:

Table 2.1 1:

LIST OF TABLES

Likelihood to Respond to Competitive Rumors
ANCOVA Results ............................................................................. 31

Likelihood to Respond to Competitive Rumors
Marginal Mean Values .31

Changes to Marketing Strategy Based on Competitive Rumors ...... 34
Extent of Changes Made Based on Competitive Rumors ................. 36

Changes to Marketing Strategy Multinomial Logistic

Regression Results ............................................................................ 37
Interaction Odds/Odds Ratios for Major Change
vs. Maintain Strategy ........................................................................ 38
Interaction Odds/Odds Ratios for Major Change
vs. Minor Change .............................................................................. 39
Changes Based on the Conﬁrmation of Competitive Rumors .......... 4O

Correlation Matrix 87

Measurement Models ........................................................................ 89
Measurement Invariance of Reﬂective Constructs ........................... 9O
PLS Results for Temporal Framing .................................................. 93
PLS Results for Strategic Framing ................................................... 94
PLS Results for Differentials in Framing ......................................... 95
MANCOVA Results for Culture’s Inﬂuence

on Strategic Decisions .. 96
Strategic Decision Marginal Mean Values ....................................... 97
Individual Time Orientations ............................................................ 98
Differences in Time Orientations ..................................................... 100
MANCOVA Results for Culture’s Inﬂuence '03

on Differential Utilization .................................................................

viii

Table 2.12

Table 2.13

Table 2.14

Table 2.15

Table A1 .21

Table A1 .22

Table A1.23

Table A1 .41

Table A2.21

Table A2.31

Differential Utilization Marginal Mean Values ................................ 103

MANCOVA Results for Culture’s Inﬂuence
on Information Utilization ................................................................ 104

Information Utilizations Marginal Mean Values .............................. 105

Summary ofthe Results 108

Credibility of Potential Sources ......................................................... 126
Marketing Actions That Make Sense of Uncertainty ....................... 127
Competitor Distinctions .................................................................... 128
Measures............... ....................................................................... 130
Evaluation of Information Statements .............................................. 134
Measures............... ....................................................................... 136

ix

LIST OF FIGURES

Figure 2.1: Time in Marketing Strategy Decision Making ................................. 58

INTRODUCTION

Central to the practice of and research in the domain of marketing strategy is
understanding how the actions of competitors, ranging from simple moves such as a price
promotion to more complex moves such as a new product introductions and strategic
alliances, inﬂuence the subsequent reactions of marketing managers from competing
ﬁrms (Varadarajan and Jayachandran 1999). Although most examinations of competitive
behavior either explicitly or implicitly assume that marketing managers act objectively
when determining their marketing strategy reactions, it has been demonstrated that
marketing managers are subjectively inﬂuenced in their marketing strategy decision
making through the manner in which the competitive information is incorporated.

Competitive information refers to information that details the actions taken by or
to be taken by ﬁrms designated as competitors. Marketing managers must evaluate the
quality and the timing of competitive information, which address whether and when a
competitor is described to take action, respectively. For instance, if marketing managers
learned about a possible new product introduction of a competitor, they would need to
evaluate the extent to which the competitive information is accurate (i.e., its quality) and
the extent to which the competitive information refers to actions that have occurred, are
occurring, or will occur (i.e., its timing).

Unintended consequences in decision making result when undetected biases in
judgment are introduced through the reliance of individuals on decision heuristics to
reduce the complexity of evaluating and incorporating information into their decisions.
Marketing managers, although assumed within the extant marketing strategy literature to

be objective decision makers, are subject to the same biases within their marketing

strategy decision making when evaluating and incorporating competitive information.
Decision heuristics refer to the series of rules of thumb employed by decision makers
(Poulton 1994), and according to behavioral decision theory, the speciﬁc decision
heuristics employed by decision makers introduces undetected, severe, and systematic
biases in judgment (Tversky and Kahneman 1974). The speciﬁc decision heuristic upon
which marketing managers will rely and thus the bias that will develop leading to the
unintended consequences in their marketing strategy decision making depends upon the
facet of competitive information which requires evaluation.

Thus, this two essay dissertation examines the unintended consequences in
marketing strategy decision making that result when marketing managers rely on decision
heuristics to incorporate the different facets of competitive information. Speciﬁcally,

' essay one examines the quality facet of competitive information, whereas essay two
examines the timing facet of competitive information. Behavioral decision theory is
utilized as the theoretical framework in each essay to examine how the facet of
competitive information is evaluated and incorporated within the marketing manager’s
marketing strategy decision making and to analyze the unintended consequences that,
unfortunately, is likely to result. The following provides a more detailed overview for
each of the two essays.

Essay one investigates how marketing managers integrate competitive
information of an uncertain quality into their marketing strategy decision making. By
utilizing the representativeness and availability decision heuristics of behavioral decisiOn
theory as the theoretical framework, this essay examines how marketing managers

incorporate rumors about the future strategic marketing actions of competitors into the

development of their own marketing strategies. Rumors, varying in terms of their

characteristics, are studied to determine the likelihood to which marketing managers will
respond and whether rumors can cause marketing managers to irrationally alter the
direction of their marketing strategy. A two-stage longitudinal experiment is employed.
This essay demonstrates how managerial perceptions and behavioral decision biases,
enacted as a result of evaluating the information contained within a competitive rumor,
can lead a marketing manager to alter their decision making process through their desire
to respond to competitive rumors. Hence, this essay provides greater understanding for
marketing academics as well as marketing managers of the unintended consequences in
marketing strategy decision making when it comes to the pervasive impact of competitive
rumors.

Essay two investigates how marketing managers integrate the complexities of
time within their marketing strategy decision making. By utilizing the dimensions of
national culture, the social psychology of time and behavioral decision theory’s prospect
theory as an integrated theoretical framework, this essay examines how culture inﬂuences
how marketing managers incorporate their time orientation and their organization’s time
orientation as well as temporally and strategically framed information into their strategic
marketing decisions. A two country cross-cultural case scenario is employed. This essay
demonstrates how managerial perceptions and behavioral decision biases, enacted as a
result of their cultural perceptions, can lead a marketing manager to systematically make

strategic decisions of a certain magnitude, timing, and time horizon, to have the conﬂict
between their individual and organizational time orientation inﬂuence their decision

evaluations, and to over rely on minimizing competitive threats or maximizing

opportunities when developing their marketing strategy. Hence, this essay provides
greater understanding for marketing academics as well as marketing managers of the

unintended consequences in marketing strategy decision making when it comes to

strategizing from the past, the present, or the ﬁrture.

ESSAY ONE: RUMOR HAS IT: MARKETING STRATEGY REACTIONS TO
RUMORED ACTIONS BY COMPETITORS
INTRODUCTION
Rumor has it that Microsoft is planning to introduce a new smartphone to directly
compete with Apple’s iPhone and Google’s GI (Letzing 2008), that Sony is planning to
make its Playstation 3 “more competitive” against Microsoft’s Xbox in terms of price
(Pigna 2008), and that Netﬂix is planning to expand its online entertainment distribution

capabilities via intemet enabled video game consoles to further establish its market leader

status against Blockbuster (Brightman 2008).1 The competitive landscape is continually
littered with rumors regarding the strategic marketing actions to be taken by competitors
(e. g., decisions regarding products, promotion, pricing, and distribution). In a world
ﬁlled with rampant speculation and where the line between fact and ﬁction is blurred,
what are marketing managers to believe, and consequently, to do?

Rumors are deﬁned as the emergence and circulation of topically relevant
information that has not yet been publicly conﬁrmed or denied by ofﬁcial sources
(Kapferer 1990; Rosnow and Kimmel 2000). Considered to be attributions based on
circumstantial evidence, rumors develop as the direct result of the uncertainty that exists
in the surrounding environment and the desire of individuals to possess information that
makes sense of these uncertain surroundings (Kimmel 2004b; Walker and Beckerle
1987). AS such, rumors seek to serve the same function as ofﬁcial information under

circumstances where access to ofﬁcial information is restricted by providing meaningful

 

The competitive rumor regarding Netﬂix has since been veriﬁed to be true, as Netﬂix ofﬁcially
announced a partnership with Microsoft to stream online content over Xbox360’s Xbox Live service
(Wildstrom 2008). The Microsoft rumor and the Sony rumor have been veriﬁed to be false, as both
companies have, to a certain extent, issued official statements denying the competitive rumors (Harrow
2008; Pigna 2008).

explanations for events that have unexpectedly occurred and/or for what events will
likely occur in the uncertain ﬁxture (Oberlechner and Hocking 2004; Pendleton 1998).
The propensity for rumors to develop regarding a competitor’s marketing strategy is
understandable considering the uncertainty that surrounds the competitive business
environment in which marketing managers must make decisions as well as the limited
availability of ofﬁcial information pertaining to the future strategic marketing actions of
competitors.

Research on the inﬂuence that competitive rumors have on the marketing strategy

decision making of marketing managers is surprisingly lacking considering the frequency

with which they develop and the extent to which they spread.2 One area, however, where
previous research has demonstrated the signiﬁcant inﬂuence that rumors have on an
individual’s decision making ability is within the context of ﬁnancial trading (e. g.,
Difonzo and Bordia 1997; Oberlechner and Hocking 2004; Pound and Zeckhauser 1990).
For instance, it has been demonstrated that individuals persistently depart from their
previously determined trading strategy as a direct result of overweighting the importance
that the explanation that the information contained within a competitive rumor provides,
ultimately lowering their resulting ﬁnancial welfare (Nelson, Bloomﬁeld, Hales, and
Libby 2001). DiFonzo and Bordia (1997, p. 346) conclude that for rumors to powerfully
effect an individual’s decision making they “do not have to be believed or trusted,” but
rather “they simply have to make sense”. Hence, drawing from the extant rumor research

in ﬁnancial trading, is it likely that marketing managers may also react to competitive

 

2 Within the extant marketing literature, research on rumors has focused either on consumer reactions to or
management’s ability to refute conspiracy and contamination rumors (e.g., lyer and Debevec 1991; Tybout,
Calder, and Stemthal 1981). Some examples include the conspiracy rumor which stated that Proctor &
Gamble’s moon and stars logo was a symbol of Satanism or the contamination rumor which stated that
McDonald’s hamburgers were made with worm meat (Kimmel 2004b).

rumors by incorporating the information that they contain into their marketing strategy
decision making, leading marketing managers to overweight their importance and alter
the ﬁrm’s strategic direction?

Utilizing behavioral decision theory, this research examines how marketing
managers incorporate rumors about competitors’ future strategic marketing actions when
developing their own marketing strategies. Speciﬁcally, the following research questions
are addressed:

(1) How do the information components that comprise a competitive rumor
inﬂuence the likelihood of marketing managers to develop a strategic
response?

(2) Can the emergence of a competitive rumor cause marketing managers to alter
the ﬁrm’s strategic marketing direction?

(3) How do marketing managers subsequently react to the changes, if any, that
they have made to the ﬁrrn’s marketing strategy when an ofﬁcial
announcement conﬁrms the competitive rumor to be true or to be false?

By addressing these questions, this research contributes to the ﬁeld of marketing
in three distinct ways. First, this research contributes to the marketing strategy literature
by examining how managerial perceptions and behavioral biases enacted as a result of the
decision heuristics used to evaluate the information components of a competitive rumor
can increase the likelihood of marketing managers to develop a strategic response.
Second, this research extends the extant literature on competitive behavior by
demonstrating that by overweighting the importance of competitive rumors within their

marketing strategy decision making, competitive rumors can not only cause marketing

managers to alter the ﬁrm’s strategic marketing direction, but also cause them to remain
committed and/or escalate their commitment to this change in strategic direction
regardless of whether an ofﬁcial announcement conﬁrms the competitive rumor to be true
or to be false. Third, from a managerial perspective, this research provides important
guidance and caution to marketing managers for understanding the unintended
consequences that rumored actions of competitors can have on their marketing strategy

decision making.

THEORETICAL BACKGROUND

The Inﬂuence of Competitive Rumors on Marketing Strategy

Marketing strategy is deﬁned as a complex set of activities, processes, and routines
involved in the design and execution of marketing plans (Menon, Bharadwaj, Adidam,
and Edison 1999) and its development requires marketing managers to make decisions
regarding product development, pricing, channel management, marketing
communications, selling, market information management, marketing planning, and
marketing implementation (Vorhies and Morgan 2005). When developing their
marketing strategy, marketing managers are faced with a decision making situation
surrounded by uncertainty; uncertainty with respect to the business environment, the
future marketing actions of competitors, and the consequences of making inappropriate
marketing strategy responses. As such, the selection of which information to use by
marketing managers in order to reduce the surrounding uncertainty and to guide their ,
strategy making becomes critical, where information available on the business

environment provides insight into the competitive forces governing the industry and

Cl]

information on competitors helps managers prepare ﬁrture offensive or defensive
marketing strategies (Porter 1980). Traditionally, it had been concluded that a high level
of perceived credibility was critical to marketing managers when selecting which
information to use; however, it has been suggested that credibility may be less important
than the relevance of the information to the current situation (Menon and Varadarajan
1992). Complicating the marketing managers’ search for credible and/or relevant
information to help determine the proper marketing strategy actions to pursue is that the
earliest indicators of changes to come or of actions to be taken by competitors in an
uncertain environment are often no more than rumors (Sauter and Free 2005).
Rumors develop frequently within the competitive environment (Kimmel 2004b);

most notably with respect to the future actions of competitors (cf, Brightman 2008;
Letzing 2008; Pigna 2008). Rumors are deﬁned as the emergence and circulation of
topically relevant information that has not yet been publicly conﬁrmed or denied by
ofﬁcial sources (Kapferer 1990; Rosnow and Kimmel 2000). They emerge as the direct
result of uncertainty existing in the surrounding environment (Kimmel 2004b) and of the
natural desire for individuals to seek information that provides meaningful explanations
for events that have unexpectedly occurred and/or for what events will likely occur in the
uncertain future (Oberlechner and Hocking 2004). Through its emphasis on a topic of
relevance, the explicit intention of a rumor is for the information it contains to be

believed and acted upon by decision makers, as the implication of any rumor is that it
communicates some truth (Allport and Postman 1947; DiFonzio and Bordia 2002). Prior
research in the context of ﬁnancial trading has repeatedly demonstrated that rumors have

a pervasive inﬂuence on decision making as individuals repeatedly react to rumors in the

marketplace despite knowing that the information contained within rumors is unveriﬁed
(Difonzo and Bordia 1997, 2002; Pound and Zeckhauser 1990). Moreover, the inﬂuence
that a competitive rumor has on an individual’s decision making derives from the
evaluation of the information contained within a competitive rumor with respect to its
credibility and its ability to make sense of the uncertainty in the competitive environment
(Kimmel 2004a; Nelson et a1. 2001 ).

Correspondingly, the inﬂuence of competitive rumors on marketing strategy
decision making will depend on how the information contained within the rumor is
evaluated by marketing managers. The information contained in a competitive rumor can
be divided into three main components: (I) the source, which refers to from whom the
rumor was heard; (2) the charge, which refers to what the rumor is about; and (3) the
target, which refers to who the rumor is about (Koenig 1985). For example, to analyze
one of the competitive rumors introduced earlier: Microsoft (i.e., the target) plans to
introduce a smartphone (i.e., the charge) as was claimed by an industry analyst (i.e., the
source) (cf, Letzing 2008). Speciﬁcally, the extent to which the information contained
within the rumor (i.e., the source, the charge, and the target) is assessed to be credible and
to make sense will inﬂuence the likelihood of marketing managers to respond and the
nature of their marketing strategy response.

Credibility refers to the extent to which information is worthy of belief. AS
rumors lack secure standards of evidence (i.e., unveriﬁed), it is often difﬁcult for
individuals to directly ascertain the credibility of the information that they contain.
Instead, individuals evaluate the credibility of a rumor based upon the credibility of its

source (Allport and Postman 1947). Source credibility is determined based upon the

10

extent to which the source is considered to possess the characteristics of expertise and
trustworthiness (Dholakia and Stemthal 1977). Sources that possess these characteristics
are determined to be highly credible and are able to positively inﬂuence the believability
and acceptance of rumors (Pendleton 1998). Furthermore, rumors that are able to make
sense of the uncertain environment are also able to positively inﬂuence whether an
individual believes and accepts the rumor because individuals “continually seek to extract
meaning from our environment” because “we want to know the why, how, and wherefore
of the world that surrounds us” (Allport and Postman 1947, p. 37). The ability of a rumor
to make sense, which refers to the extent to which the information provides a reasonable
explanation, depends primarily on the plausibility of the connection between what the
rumor is about (i.e., the charge) and the uncertainty existing in the competitive

environment.

Evaluating Competitive Rumors: Behavioral Decision Theory

When unguided by objective evidence, the appropriateness of incorporating information
within the decision making process is made in accordance with the subjective preference
of individuals (Allport and Postman 1947). Behavioral decision theory was developed in
order to better understand decision making under conditions of uncertainty by identifying
the manner in which individuals incorporate information into their decisions (Slovic,
Fischhoff, and Lichtenstein 1977); for under behavioral decision theory, it has been
shown that the behavioral heuristics used by individuals inﬂuence how information is 0
evaluated, interpreted, and responded to (Einhom and Hogarth 1981). In managerial

decision making, often the only viable option for managers when evaluating information

11

is to represent their own feelings and judgments by using behavioral heuristics (Taylor
1984). While behavioral heuristics reduce the complexity of evaluating uncertain
information (Poulton 1994), using heuristic strategies, unfortunately, also often leads to
undetected biases in judgment that can be both severe and systematic (Tversky and
Kahneman 1974).

Under behavioral decision theory, two heuristic strategies that are commonly used
by decision makers to evaluate uncertain information are representativeness and
availability (Taylor 1984; Tversky and Kahneman 1974). An individual using the
representativeness heuristic evaluates uncertain information based upon the degree to
which the information corresponds to the typical characteristics of a given set of objects
(e.g., a sample of actors or a set of actions) (Tversky and Kahneman 1974). When using
the representativeness heuristic, the uncertain information contained within a competitive
rumor will be assessed to be appropriate to incorporate within one’s decisions if the
source from which the rumor emanates or the actions and/or actor the rumor describes
possesses characteristics that ﬁt with their beliefs of an individual or an action that is
credible. For instance, a marketing manager is likely to evaluate the information
contained within the Netﬂix rumor identiﬁed earlier (of, Brightman 2008) to be credible
using the representativeness heuristic, because the industry analyst for a reputable
securities ﬁrm (i.e., source of the competitive rumor) is representative of an individual
who is likely to be believed since the analyst embodies the characteristics of expertise
and trustworthiness (Pompitakpan 2004).

Using the availability heuristic, an individual evaluates uncertain information

based upon the ease with which similar instances can be recalled by an individual and/or

12

similar instances can be imagined by an individual (Taylor 1984). As such, if the source
from which the rumor comes or the actions and/or actor the rumor describes are easily
recallable or imaginable, using the availability heuristic, the uncertain information
contained within a competitive rumor will be assessed to be appropriate to incorporate
within one’s decisions. For instance, a marketing manager is likely to evaluate the
information contained in the Sony rumor identiﬁed earlier (cf., Pi gna 2008) to make
sense using the availability heuristic, because the price cut (i.e., charge of the competitive
rumor) in reaction to a highly competitive marketplace is not only easy to imagine, but
moreover because it has occurred before (cf., Rosmarin 2007). Thus, utilizing behavioral
decision theory, a series of hypotheses examines how marketing managers incorporate
rumors about competitors’ future marketing actions, varying in terms of its information

characteristics, into their marketing strategy decision making.

HYPOTHESES DEVELOPMENT

Marketing Strategy Reactions to Competitive Rumors

Marketing strategy decisions must be made by marketing managers within an uncertain
competitive environment where access to veriﬁed information is lacking pertaining to
both the future of the environment as well to the future strategic marketing actions of
competitors. When operating under these conditions of uncertainty, the “lack of
information and a strong interest in what is going on makes one very receptive to any
communication” (Koeni g 1985, p.24) and the uncertain information provided by
competitive rumors that emerge as a result of these conditions is better than none at all.

Speciﬁcally, how the information components of a competitive rumor are evaluated by

13

marketing managers using their behavioral heuristics, in terms of the credibility of its
source, the ability of the charge to make sense of uncertainty, the competitor described
within the target, and the interactions between these components, will determine the
inﬂuence of a competitive rumor on the marketing strategy decision making of marketing
managers and their likelihood to respond to competitive rumors.

Competitive rumors are evaluated to be credible based upon the extent to which
the source from which the rumor was heard is determined to be credible (Allport and
Postman 1947; Pendleton 1998). Utilizing the behavioral heuristic of representativeness,
marketing managers will evaluate the information contained in a competitive rumor to be
appropriate to incorporate within ones’ decisions if it is heard from a source that
consistently corresponds with the characteristics of individuals known to provide credible
information. Speciﬁcally, sources that represent individuals who are perceived to be an
expert and/or trustworthy would be evaluated by marketing managers to be credible
(Dholakia and Stemthal 1977). Once a marketing manager perceives the source of the
competitive rumor to be credible, the uncertain information contained within the rumor
becomes worthy of being believed, accepted, and acted upon when developing their
marketing strategy. Therefore, since a credible competitive rumor describes a
competitive action that marketing managers perceive as likely to occur, marketing

managers will ﬁnd that it is necessary to respond. Thus, it is hypothesized that:

H]: Marketing managers are more likely to respond to competitive rumors that
are from a source with a high-level of credibility than to competitive
rumors that are from a source with a low-level of credibility.

Competitive rumors are evaluated to make sense based upon the extent to which

the charge of the rumor provides a reasonable explanation for what may happen within

14

u]

In

 

the uncertainty existing in the environment (DiFonzo and Bordia 2007). Utilizing the
behavioral heuristic of availability, marketing managers will evaluate the information
contained in a competitive rumor to be appropriate to incorporate within ones’ decisions
if the charge describes marketing actions that are easily available within their minds.
Speciﬁcally, charges that correspond to marketing actions that are easy to imagine or are
similar to actions that have already been taken that are easily recalled would be evaluated
by marketing managers to make sense (Taylor 1984). Once a marketing manager
perceives the charge of the competitive rumor to have an ability to make sense of the
uncertainty in the environment, the uncertain information contained within the rumor
becomes worthy of being believed, accepted and acted upon when developing their
marketing strategy. Therefore, since a competitive rumor that has the ability to makes
sense of the uncertainty in the environment describes a competitive action that marketing
managers perceive as likely to occur, marketing managers will ﬁnd that it is necessary to
respond. Thus, it is hypothesized that:

H2: Marketing managers are more likely to respond to competitive rumors that
have a charge with a superior ability to make sense of the uncertainty in
the environment than to competitive rumors that have a charge with an
inferior ability to make sense of the uncertainty in the environment.

Competitive rumors that develop within the uncertain environment are often

considered to not be simultaneously from a highly credible source and have a charge with
the ability make sense of uncertainty. Rather, a tradeoff exists between competitive
rumors that are highly credible but do not have the ability make sense of the uncertainty
and competitive rumors that do have the ability to make sense of uncertainty but are not

highly credible. When selecting which information to use within their decision making,

15

it had been consistently concluded that a high level of perceived credibility was critical to
marketing managers; alternatively, whereas it has been suggested that for marketing
managers the relevance of information to the current situation may be more important
than its credibility (Menon and Varadarajan 1992). This tradeoff is proposed to occur
because relevant information, which makes sense of the uncertainty in the environment,
provides individuals with a rationale for making decisions. Previous research on the
impact of ﬁnancial rumors lends support to this supposition as it has been empirically
shown that individuals do often trade credibility for information that provides a causal
story for what is happening in their environment (i.e., ability to make sense) (Nelson et
al. 2001), leading to the conclusion that for rumors to powerﬁrlly affect decision making
in regard to the reactions that they bring forth, rumors “do not have to be believed or
trusted,” (e. g., be credible) but rather “they simply have to make sense” (DiFonzo and
Bordia 1997, p. 346). Therefore, since it provides the rationale for their marketing
strategy decisions, marketing managers will trade credibility for the ability of the
competitive rumor to make sense of uncertainty in the environment when responding to
competitive rumors. Thus, it is hypothesized that:
H 3: Marketing managers are more likely to respond to competitive rumors that
have a charge with a superior ability to make sense of the uncertainty in
the environment but are from a source with a low-level of credibility than

competitive rumors that are from a source with a high-level of credibility
but have a charge with an inferior ability to make sense of the uncertainty

in the environment.

Competitive rumors emerge describing a variety of targets, where a signiﬁcant
factor is the degree to which the target ﬁrm is identiﬁed as a major competitor, for it

inﬂuences whether a marketing manager deems it necessary to monitor a ﬁrm’s

l6

Ill

competitive behavior (Porac and Rosa 1996). Since major competitors have a substantial
market presence (e. g., more resources, market share, and market inﬂuence) and their
actions will be reported more frequently on by the press, marketing managers are more
likely to monitor major competitors when developing their marketing strategies (Clark
and Montgomery 1999). Utilizing the behavioral heuristic of representativeness, due to
the important-role that the major competitor represents to the environment, marketing
managers will evaluate information pertaining to the actions of major competitors as
having a stronger correspondence with the competitive environment within which they
operate and be more representative of the ﬁrture direction of the industry. Once a
marketing manager perceives the target of the competitive rumor to be a major
competitor, the uncertain information contained within the rumor becomes worthy of
being believed, accepted and acted upon when developing their marketing strategy.
Therefore, since a competitive rumor with a major competitor as a target describes a
competitive action that marketing managers perceive as likely to occur, marketing
managers will ﬁnd that it is necessary to respond. Thus, it is hypothesized that:

H4: Marketing managers are more likely to respond to competitive rumors that

have a major competitor as the target than to competitive rumors that have
a minor competitor as the target.

Competitive rumors develop to provide explanations that make sense of the
uncertainty in the environment pertaining to the actions to be taken by competitors;
however, a tradeoff once again exists depending not only on the credibility of the
competitive rumor and the ability of the competitive rumor to make sense of uncertainty
in the environment, but also on the competitor described as the target of the competitive

rumor. When selecting which information to use within their decision making, marketing

17

' managers will ﬁnd it necessary to respond to competitive rumors that involve a major
competitor but come from a source with a low-level of credibility and have an inferior
ability to make sense of uncertainty over those that involve only a minor competitor but
come ﬁom a highly credible source and have a superior ability to make sense of
uncertainty. This tradeoff is proposed to occur because information on major competitors
provides marketing managers with better insight into what they perceive to be the
signiﬁcant competitive threats facing the ﬁrm as well as insight into the future direction
of the industry. Utilizing the behavioral heuristic of availability, marketing managers are
able to more easily imagine the competitive rumor occurring, regardless of the rumor’s
credibility and sense-making ability, because of the signiﬁcant threat that the major
competitor represents to the ﬁrm. Therefore, since it provides insight into threats in and
the future of the competitive environment, marketing managers will trade credibility and
the ability of the competitive rumor to make sense of uncertainty in the environment for
the degree of competitor when responding to competitive rumors. Thus, it is
hypothesized that:

H 5: Marketing managers are more likely to respond to competitive rumors that
are from a source with a low-level of credibility and have a charge with an
inferior ability to make sense of the uncertainty in the environment but
focus on a major competitor than to competitive rumors that are from a

source with a high-level of credibility and have a charge with a superior
ability to make sense of the uncertainty in the environment but focus on a

minor competitor.
Altering the Direction of Marketing Strategy
Although Allport and Postman (1947, p.148) advised “that it is never under any
circumstances safe to accept a rumor as a valid guide for belief or conduct”, decision

makers, nonetheless, still act upon the competitive rumors that develop within the

18

marketplace. Due to the need for certainty, marketing managers will integrate the
information from competitive rumors into their decision making to determine the
strategic marketing direction of their ﬁrm during situations of uncertainty. Speciﬁcally,
rumors have repeatedly been shown to have a signiﬁcant inﬂuence on more than the
decision making ability of individuals in terms of changing their beliefs and expectations
for the future, but also in terms of altering their long-terrn strategy (Difonzo and Bordia
2002). ' For example, in the context of ﬁnancial trading, by overweighting the inﬂuence
of rumors into their decision making, individuals alter their long-term strategy when
making their trading decisions and consequently lowering their ﬁnancial welfare (Nelson
et al. 2001). Hence, it is likely that marketing managers, much like ﬁnancial traders, may
also react by overweighting the importance of competitive rumors by integrating the
information they contain into their marketing strategy decision making, leading a

marketing manager to alter their strategic direction. Thus, it is hypothesized that:

H6: Marketing managers will make changes to the direction of their marketing

strategy in reaction to competitive rumors.

Similar to their ability to affect a marketing manager’s marketing strategy
decision making when the truth of it is unknown, competitive rumors should also have an
effect on decision making when its lack of truth is revealed. Competitive rumors which
have inﬂuenced the decisions ofa marketing manager and that are later ofﬁcially
disconﬁrmed should inﬂuence the manager’s subsequent reevaluations of their decisions
made regarding changes to their marketing strategy. Speciﬁcally, as changes to the
strategic marketing direction were made under conditions of uncertainty, when new

information becomes available to assist in reevaluating their decision (e.g., the

19

competitive rumor was continued to be false), marketing managers will demonstrate an
“escalation of commitment” by choosing to persist with their prior decision
(Biyalogorsky, Boulding, and Staelin 2006). This occurs because marketing managers
are inﬂuenced by sunk costs in their decision making and they do not want to appear to
be wasteﬁrl by abandoning the investment of resources (e. g., money, time, and effort) to
make changes to their strategic marketing direction (Arkes and Blumer 2000).
Furthermore, managers as decision makers exhibit a need to be psychologically
consistent as demonstrated by the tendency for managers to “make decisions to justify
their earlier charted directions” (Despande and Gatignon 1994, p 278-9). Thus, it is

hypothesized that:

H 7: Marketing managers will remain committed to the changes made to the
direction of their marketing strategy when the competitive rumor is
conﬁrmed to be false.

METHOD

Rationale for Research Design Selection

To examine how marketing managers incorporate competitive rumors into their
marketing strategy decision making, a two-stage longitudinal experimental design was
selected as the appropriate research design. This research design was selected based
upon the successful employment of experimental designs in previous examinations of the
inﬂuence of rumors and on the incorporation of infomtation within marketing strategy
decision making (e.g., DiFonzo and Bordia 2002: Jaeger, Anthony, and Rosnow 1980;
Mittal, Ross, and Tsiros 2002; Tybout, Calder, and Stemthal 1981). Moreover, this

Speciﬁc experimental design provides the ability to ﬁrst manipulate the three main

information components of a rumor (e.g., the source, the charge, and the target) and then

20

to manipulate the conﬁrmation of the competitive rumor (e. g., true or false) in order to
examine the inﬂuence of the different facets of competitive rumors on the likelihood of

marketing managers to respond and the nature of their marketing strategy response.

Experimental Design

The two—stage longitudinal experimental design utilized a 2 x 2 x 2 factor between-
subjects design followed by a 1 factor between subjects design. In Stage 1, participants
were randomly assigned to one of eight experimental scenarios where the three main
information components of the competitive rumor were manipulated. The manipulated
factors were: (1) the credibility of the competitive rumor (high vs. low), which was
manipulated via the source of the competitive rumor; (2) the ability of the competitive
rumor to make sense of the uncertainty in the environment (high vs. low), which was
manipulated via the charge of the competitive rumor; and (3) the competitor described
within the competitive rumor (major vs. minor), which was manipulated via the target of
the competitive rumor. In Stage 2, participants within each of the eight experimental
scenarios were then randomly assigned to one of two experimental scenarios where the
validity of the competitive rumor was manipulated via an ofﬁcial announcement by the
competitor conﬁrming or denying the competitive rumor. Four pretests were conducted
to develop the manipulations for the experimental scenarios. The experimental scenarios
for Stage 1 and Stage 2 developed as a result of the four pretests are presented in

Appendix 1 . l .

21

Pretest 1 i

The purpose of Pretest 1 was to determine the three main information components of a
competitive rumor (e. g., source, charge, and target) with respect to (1) the level of
credibility of an information source, (2) the ability of a potential marketing action to
make sense of uncertainty in the competitive environment, and (3) the distinctions
between the competitors described. Fifty-eight undergraduate marketing majors served
as participants in Pretest 1. Each participant, on a pen and paper questionnaire, evaluated
a series of possible sources based upon their level of credibility, a series of possible
marketing actions based upon the level of insight it would provide to the uncertainty in
the environment, and a series of possible competitor descriptions based upon the degree
to which they would be viewed as a major or minor competitor. For each item evaluated,
a Simple mean was calculated. To compare the differences between the items evaluated,
a paired-difference t—test with a Bonferonni adjustment was calculated. The results of
Pretest 1 are provided in Appendix 1.2.

Based on the results of Pretest l, the following information components of the
competitive rumor were selected. For the source of the competitive rumor, an industry
research analyst (M = 6.08) was selected as the source that possesses a high level of
credibility and an industry blogger (M = 3.69) was selected as the source that possesses a
low level of credibility. The difference in level of credibility between an industry
research analyst and an industry blogger represents the largest signiﬁcant difference

between independent third party sources as is demonstrated by the paired means
difference test (M = 2.390, SD = 1.377, t mm: = 3.189, t CALC = 13.327, p). For the

charge of the competitive rumor, the introduction ofa new product to the market (M =-

22

5.12) was selected as the marketing action by a competitor that provided the most insight
and had the ability to make sense of the uncertainty existing in the competitive
environment. For the target of the competitive rumor, the direct description of the
competition was selected, where the competing company will either be described as a
major competitor (M = 6.66) or a minor competitor (M = 1.59). The difference between
the direct description of major and minor competitor represents the largest signiﬁcant

difference in level of competitor as is demonstrated by the paired means difference test

(M = 5.068, SD = 1.883, t BONF = 2.734, t CM = 20.669, p < .001).

Pretest 2

The purpose of Pretest 2 was to evaluate the experimental background and manipulations
developed and the Stage 1 and Stage 2 dependent measures selected for this experimental
design. Based upon the results of Pretest 1, it was necessary to select a background
context for the experiment where ( l) the competitive environment is highly
technologically uncertain and the introduction of a new product to the market is likely,
(2) the competitive environment has a series of different individuals following its
development (i.e., industry research analysts and industry bloggers), and (3) there is a
mix of major and minor competitors within the environment. The netbook category
within the personal computing industry was selected as an appropriate background. With
respect to the manipulation of the ability of the charge to make sense of the uncertainty in
the competitive environment, three different manipulations regarding the introduction of
a new product to the netbook market were developed and assessed within this pretest.

One hundred and twenty-four undergraduate marketing majors served as participants in

23

Pretest 2. Each participant was presented with the full two-stage longitudinal
experimmtal design as a pen and paper questionnaire, where participants evaluated the
Stage 1 and Stage 2 dependent variables based upon their. randomly assigned Stage 1 and
Stage 2 manipulations. The results of Pretest 2 allowed for the background description of
the netbook category and the experimental manipulation that was evaluated to make the

most sense of uncertainty (M = 4.667) to be further reﬁned.

Pretest 3
The purpose of Pretest 3 was to identify any ﬁnal reﬁnements that need to be made to the
experimental design and/or experimental procedure with respect to (1) the background
developed for the experimental design, (2) the experimental manipulations, and (3) the
dependent variables for Stage 1 and Stage 2. Further, conducting Pretest 3 as an online
questionnaire allowed for any issues that may arise when conducting the experimental
study online to be uncovered. One hundred and fourteen undergraduate marketing
majors served as participants in Pretest 3. Each participant was presented with the full
two-stage longitudinal experimental design as an online questionnaire, where participants
evaluated the Stage 1 and Stage 2 dependent variables based upon their randomly
assigned Stage 1 and Stage 2 manipulations.

Based upon the results of Pretest 3, some refinements were made to the
experimental design and experimental procedure. First, the manipulation of the ability of

the charge to make sense of uncertainty was reﬁned after the manipulation check for the
charge (F 1, 112 = 0.221, p = .639) indicated that there no signiﬁcant difference between

the high make sense marketing action (M = 4.561) and the low make sense marketing

24

action (M = 4.456). The remaining manipulations for the source (F 1, 1 12 = 39.721, p <
.001, M HIGH = 5.193 VS. M LOW '-= 3.5136), the target (F l, H] = 39.428,p < .001, M
MAJOR = 5.643 vs. M MINOR = 3.579), and conﬁrmation (F 1, m = 119.940,p < .001, M

FALSE = 5.357 vs. M TRUE = 2.193) were all successful. Second, in order to improve the

clarity of and the ease with which the experimental design was administered, small
changes to the background description (i.e., wording) and to the dependent variables (i.e.,
format) were made and the ﬂow of the experimental procedure (i.e., breaks between
pages) was reﬁned based upon observing the experience of the participants using the

online questionnaire.

Pretest 4

The purpose of Pretest 4 was to conﬁrm the differences between the manipulations
developed for a high and low ability of a marketing action to make sense of uncertainty in
the competitive environment based upon Pretest 3. Twenty undergraduate marketing
majors served as participants in Pretest 4. Each participant, using a pen and paper
questionnaire, was presented with three descriptions of a possible new product
introduction in randomized order (i.e., the high sense manipulation, the low sense
manipulation, and a mid-level sense manipulation). Each description was evaluated by
participants based upon its" plausibility in connection to the competitive environment.

As demonstrated by the paired means difference test with Bonferroni adjustment (M =,
1.250, SD = 2.245, t BONF : 2.394, I CALC = 2.490, p = .022), there a signiﬁcant

difference between the high manipulation (M = 4.95) and the low manipulation (M = 3.7)

in their ability to make sense of the environment.

25

Experimental Procedure

Within this experimental design, participants assumed the role of Vice President of
Marketing for Barrington Corporation3 whose responsibilities include the development
and implementation of Barrington’s marketing strategy. A description of the general
characteristics and original marketing strategy of Barrington Corporation as well as the
general characteristics and the uncertainty existing within the competitive environment
was ﬁrst provided to participants. Directly following this description, the randomly
assigned Stage 1 competitive rumor manipulations regarding Lazzard Incorporation, a
competitor of Barrington Corporation, was presented and participants then evaluated the
set of Stage 1 dependent variables. After completing Stage 1, participants completed an
unrelated ﬁller task4 in order to create a time lag between Stage 1 and Stage 2. Stage 2 of
the experimental design begins when participants were informed that six months have
passed and Barrington Corporation had begun to implement the strategic marketing
decisions that they had made. The randomly assigned Stage 2 conﬁrmation
manipulations were then presented and participants evaluated the set of Stage 2
dependent variables and the manipulation checks. The experimental procedure is

presented in Appendix 1.3.

 

3 Both ﬁrms used in this experimental design, Barrington Corporation and its competitor Lazzard
Incorporated, are hypothetical. Hypothetical ﬁrms were used in order to limit any extraneous inﬂuence that
prior beliefs of an existing ﬁrm’s marketing strategy and/or marketing actions could have on the decision
making of the participants. Further, both ﬁrm names have been used in prior research and respondents
have been found to have no signiﬁcant difference in preference based on name alone (Desai, Kalra, and
‘Murthi 2008).

The ﬁne, task took approximately ﬁve minutes to complete and required participants to evaluate their
level of agreement with a series of items pertaining to general beliefs that were unrelated to the
experimental scenario.

26

Experimental Study

Participants, Design, and Procedure

A market research ﬁrm was employed to administer the two-stage longitudinal
experimental design. The market research ﬁrm used their proprietary online panel to
contact potential participants. In order to ensure the appropriateness of the participants,
participants were screened based upon their ﬁrnctional role (i.e., marketing), their job title
(i.e., manager and above), and ﬁrm size (i.e., 50 employees and above). Participants,

who ﬁt each of the screening criteria, were then allowed to proceed to the experiment.

Participants in this experimental study were 339 marketing managers5 from the United
States. Participants were randomly assigned to one of the eight possible experimental
scenarios in Stage 1 (i.e., the credibility of the source (high vs. low), the ability of the
charge to make sense (high vs. low), and the competitor described as the target (major vs.
minor) and to one of the two possible experimental scenarios in Stage 2 (i.e., the
conﬁrmation of the competitive rumor (true vs. false). Within the experiment,
participants were instructed to assume the role of Vice President of Marketing whose
responsibilities include the development and implementation of a marketing strategy and
make a series of decisions based upon the information provided. Participants took on

average 26.5 minutes to complete the experimental study.

__~

By utrlrzrng marketing managers as partrcrpants, the external validity of the experimental results will be"
increased and a key limitation of utilizing undergraduate students as decision makers suffered by many
marketing strategy decision making studies will be avoided (Mittal et al. 2002).

27

Measures
The description of the items and response formats of the dependent measures and the
manipulation checks for Stage 1 and Stage 2 are presented in Appendix 1.4.

Stage 1 Dependent Measures. Participants evaluated their likelihood to respond
to the competitive information and the marketing strategy to be pursued after the Stage 1
competitive rumor manipulations. The likelihood to respond to competitive information
was measured with the average of two items evaluated on a seven-point scale, ranging
from “very unlikely” (1) to “very likely” (7), with an undecided point in the middle (4).
The marketing strategy to be pursued was measured with a forced choice question that
includes the options of (1) Continue the introduction of the netbook as originally planned
(i.e., Do Not Change Marketing Strategy), (2) Introduce the netbook with minor
modiﬁcations (i.e., Change Marketing Strategy/Minor Change), (3) Introduce the netbook
with major modiﬁcations (i.e., Change Marketing Strategy/Major Change), (4) Delay the
introduction of the netbook until more information is available (i.e., Change Marketing
Strategy/Delay Strategy), and (5) Drop the introduction of the netbook (i.e., Change
Marketing Strategy/Abandon Strategy).

Stage 2 Dependent Measures. Participants evaluated the marketing strategy to be
pursued in relation to their Stage 1 decisions and the Stage 2 competitive rumor
manipulations. The marketing strategy to be pursued was measured with a forced choice
question that includes the options of (1) Continue the introduction of the netbook as
originally planned, (2) Continue the introduction of the netbook as recommended six 7
months ago, (3) Introduce the netbook with minor modiﬁcations, (4) Introduce the

netbook with major modiﬁcations, (5) Delay the introduction of the netbook until more

28

information is available, and (6) Drop the introduction of the netbook. Based upon their
response to the Stage 2 marketing strategy decision, respondents who have indicated that
they would change their strategy based upon their Stage 1 marketing strategy decision
can be classiﬁed as (l) Revert to Original (i.e., Option 1); (2) Maintain Change (i.e,
Option 2); (3) Escalate Change (i.e., Option 3 and 4); and (4) Delay Change (i.e., Option
5).

Control Variables. To control for individual factors that might inﬂuence the
decision making of participants, four control variables were included: (1) Gender (i.e.,
male or female); (2) Highest degree achieved (i.e., no degree, high school, associates,
bachelors, masters, or doctorate); (3) Decision authority (i.e. the authority to make
decisions similar to those in the experimental scenario); and (4) Years of experience.

Manipulation Cheeks. After completing the dependent variables for Stage 1 and
Stage 2, participants responded to four seven-point manipulation checks. Participants
ﬁrst evaluated the three manipulations from Stage 1 regarding the level of credibility for
the source of the initial competitive information (“low/high”), the level of plausibility of
the product description of the initial competitive information (“low/high”), and the degree
to which the ﬁrm identiﬁed within the initial competitive information was a competitor
(“minor/major”). Participants then evaluated the Stage 2 manipulation regarding the
conﬁrmation of the initial competitive information by the competitor

(“conﬁrmed/denied“).

Manipulation Checks
The results of the manipulation checks conﬁrmed the successful manipulation of each of

the factors. Speciﬁcally, signiﬁcant differences were found for the Stage 1 manipulations

of (1) the credibility of the source of the competitive rumor (F 1, 333 = 8.023, p = .005, M
HIGH = 4.60 vs. M LOW = 4.16); (2) the ability of the charge of the competitive to make
sense of uncertainty existing in the environment (F 1.338 = 15.358, < .001, M HIGH = 4.65
vs. M Low = 4.14); (3) the degree of competitor described by the target of the competitive

rumor (F 1, 338 2 l35.065,p < .001, M MAJOR = 5.33 VS. M MINOR = 3.26). The
manipulation check for the Stage 2 factor of conﬁrmation of the competitive rumor was

also successful (F 1, 338 = 226.865,p < .001, M FALSE = 5.11 vs. M TRUE = 2.61).

RESULTS

Marketing Strategy Reactions to Competitive Rumors

The ﬁrst set of hypotheses (H1 to H5) focused on the inﬂuence of a competitive rumor on
marketing strategy decision making with respect to the likelihood of a marketing manager
to respond. To test the relationship between how the information contained within a
competitive rumor (i.e., the source, the charge, and the target) is evaluated and the
likelihood of a marketing manager to respond, a 2 x 2 x 2 ANCOVA was conducted.6

The results of the three—way ANCOVA analysis with interactions are presented in Table

Years Experience is a continuous variable and was entered in the ANCOVA as a covariate. However,
smce Gender, Degree Achieved, and Decision Authority are categorical variables, to include each of these
variables as covariates they were each entered in the ANCOVA as factors

30

1.1. The cell means of the eight different competitive rumor scenarios are presented in

Table 1.2.

Table 1.1: Likelihood to Respond to Competitive Rumors AN COVA Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Factor F-value Significance Observed
Level Power

Credibility 4.91 7 .027 .599
Ability to Makes Sense 0.468 .494 .105
Competitor 3.929 .048 .507
Credibility * Makes Sense 0.175 .676 .070
Credibility * Competitor 0.648 .421 .126
Makes Sense * Competitor 0.109 .742 .062
Credibility * Makes Sense * Competitor 1.005 .317 .170
Covariates

Gender 1.024 .312 .172

Degree Achieved 0.215 .956 .102

Decision Authority 0.129 .719 .065

Years Experience 0.669 .414 .129

 

Table 1.2: Likelihood to Respond to Competitive Rumors Marginal Mean Values

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Competitive Rumor Information Component Likelihood to
Source Charge Target Responda
High Ability to Major Competitor 5.885b
High Credibility Make Sense Minor Competitor 5.904:r
Low Ability to Major Competitor 6014
Make Sense Minor Competitor 5,710d
High Ability to Major Competitor 5.886e
Low Credibility Make Sense Minor Competitor 5.466:
Low Ability to Major Competitor 5.669
_ Make Sense Minor Competitor 5.414g
a Marginal means are estimated at the Years Experience covariate average of 19.19
in =46; Cn= 43; dn = 42; en =44; fn= 41; gn=40

 

 

In H], it was predicted that marketing managers are more likely to respond to

competitive rumors that are from a source with a high-level of credibility than to

31

 

 

competitive rumors that are from a source with a low-level of credibility. The main

effect of source credibility on the marketing manager’s likelihood to respond was
signiﬁcant (F 1,339 = 4.917, p = .027; M HIGH = 5.878 > M LOW = 5.609). Thus, H1 is
supported.

In H2, it was predicted that marketing managers are more likely to respond to

competitive rumors that have a charge with a superior ability to make sense of the
uncertainty in the environment than to competitive rumors that have a charge with an
inferior ability to make sense of the uncertainty in the environment. The main effect of

the charge’s ability to make sense of uncertainty on the marketing manager’s likelihood

to respond was non-signiﬁcant (F 1.339 = 0.468,p = .494; M HIGH = 5.785 vs. M LOW =

5.702). Thus, H2 is not supported.
In H3, it was predicted that marketing managers are more likely to respond to

competitive rumors that have a charge with a superior ability to make sense of the
uncertainty in the environment but are from a source with a low-level of credibility than
competitive rumors that are from a source with a high-level of credibility but have a
charge with an inferior ability to make sense of the uncertainty in the environment. The
two-way interaction effect between the source credibility and the charge’s ability to make

sense of uncertainty on the marketing manager’s likelihood to respond was non-

Signiﬁcant (F I, 339 =2 0.175, p = .676; M LOW/HlGH = 5.862 VS. M HIGH/LOW = 5.676).

Thus, H3 is not supported.
In H4, it was predicted that marketing managers are more likely to respond to

competitive rumors that have a major competitor as the target than to competitive rumors

32

that have a minor competitor as the target. The main effect of the degree of competitor

described within the target on the marketing manager’s likelihood to respond was
signiﬁcant (F 1,339 = 3.929, p = .048; M MAJOR = 5.863 > M MINOR = 5.623). Thus, H4 is
supported.

In H5, it was predicted that marketing managers are more likely to respond to

competitive rumors that are from a source with a low-level of credibility and have a
charge with an inferior ability to make sense of the uncertainty in the environment but
focus on a major competitor than to competitive rumors that are from a source with a
high-level of credibility and have a charge with a superior ability to make sense of the
uncertainty in the environment but focus on a minor competitor. The three-way
interaction effect between the source credibility, the charge’s ability to make sense of

uncertainty, and the degree of competitor described within the target on the marketing

manager’s likelihood to respond was non—signiﬁcant (F 1,339 = 1.005, p = .317; M

LOW/LOW/MAJOR = 5-669 VS- M HIGH/HlGH/MINOR = 5.904)- ThUS, H5 is “0t SUPPOFled-

Altering the Direction of Marketing Strategy
The second set of hypotheses (H6 and H7) focused on the influence of a competitive
rumor on marketing strategy decision making with respect to changes that marketing

managers make to their ﬁrm’s marketing strategy. To test the relationship between

competitive rumors and the changes made to the direction of their marketing strategy by

marketing managers, a chi-square goodness of ﬁt analysis was conducted.

33

In H6, it was predicted that marketing managers will make changes to the

direction of their marketing strategy in reaction to competitive rumors. The results of

chi-square goodness of ﬁt analysis after the introduction of the competitive rumor in

Stage 1 are presented in Table 1.3.

Table 1.3: Changes to Marketing Strategy Based on Competitive Rumors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Do Not Change Change Total l
Marketing Strategy Marketing Strategy
All Competitive 3.8% 96.2% 100%
Rumor Scenarios (13) (326) (339)
Statistical Testing:
12 Test for Expected Proportionsa {(1) = 1.063 E9 1) < .001
x2 Test for Equal Proportionsb 38(1) = 55.366 p < .001

 

 

 

a It was necessary to set the expected values to 338.9999 for the “Do Not Change

Strategy” category and 0.0001 for the “Change Strategy” category for calculation
urposes.

As there are four speciﬁc options for the “Change Strategy” category, the expected
valuate is equal to 80% of the observations. The expected value for the “Do Not
Change Strategy” category is equal to 20% of the observations.

 

 

 

The chi-square goodness of ﬁt test for the expectation that all marketing mangers
would not change the direction of their ﬁrm’s marketing strategy was signiﬁcant (12 I =
1.063E9, p < .001), indicating that not all marketing managers remained committed to
their ﬁrm’s original marketing strategy. The chi-square goodness of ﬁt test for equal
probabilities was signiﬁcant (x2 I = 55.366, p < .001 ), indicating that the distribution of
the changes made to their marketing strategy is not equivalent to random selection.

Further, the percentage of marketing managers indicating changing the direction of their

marketing strategy (96.2%) is greater than the percentage of marketing managers

indicating not changing their marketing strategy direction (3.8%). Thus, H6 is supported.

34

To get a better understanding of the changes that marketing managers make to the
direction of their ﬁrm’s marketing strategy in reaction to competitive rumors, subsequent
analyses were conducted to examine the extent of the change made and which
information components of the competitive rumors have the greatest inﬂuence on the
extent to which changes were made. To examine more fully the extent of changes made
to the direction of their marketing strategy, the “Change Marketing Strategy” was broken
down into its speciﬁc categories. Marketing managers indicated that they would make
minor changes to their marketing strategy, major changeslto their marketing strategy,
delay their marketing strategy, and to abandon their marketing strategy all together.

After testing that the distribution of the changes made to their marketing strategy was not
equivalent to random selection as indicated by the signiﬁcant chi-square goodness of ﬁt
test for equal proportions (x2 4 = 468.035, p < .001), it was found that the majority of
marketing managers that changed the direction oftheir marketing strategy indicated that
they would make minor changes (62.2%), followed by those who would make major
changes (29.2%). The results of the extent of changes made to marketing strategy and

chi-square goodness of ﬁt analysis are presented in Table 1.4.

35

Table 1.4: Extent of Changes Made Based on Competitive Rumors

 

 

 

 

Maintain Minor Major I Delay [ Abandon ] Total
Strategy Changes Changes Strategy Strategy
Competitive 3.8% 62.2%
Rumors (13) (211) (99) (15) (1) (339)

 

 

Statistical Testing:

 

x2 Test for Expected Proportions":l

98(4) = 5.455138 l p < .001

 

)8 Test for Equal Proportionsb

29.2% I 4.4% [ 0.3% [100%{
1
l
l
I

 

 

 

 

{(4) = 468.035 p < .001

 

 

a It was necessary to set the expected values to 338.9996 for the “Maintain Strategy”
category and 0.0001 for each of the other categories for calculation purposes.
bThe expected value for each category is equal to 20% of the observations.

To examine more fully which information components of the competitive rumors

have the greatest inﬂuence on the extent of changes made to the direction of their

marketing strategy, a multinomial logistic regression with interaction effects was

estimated. Three outcomes of possible changes to their marketing strategy were

examined: (1) Maintain Strategy (n == 13), (2) Minor Changes to Strategy (n = 211), and

(3) Major Changes to Strategy (n = 99). These three outcomes were speciﬁcally selected

to be able to examine what would likely cause a marketing manager to make minor

changes from their original marketing strategy, to make major changes from their original

marketing strategy, and to make major changes compared with minor changes from their

original marketing strategy. The backward elimination stepwise method was utilized to

. . . . . H 4 . . . 7
remove msrgniﬁcant interaction effects from the three-way interaction effect. The

—__

Two interaction effects were removed from the model following this procedure. The three-way
interaction between credibility, sense, and competitor information components was removed ﬁrst and the
two-way interaction between credibility and competitor information components was removed second.

36

results of the multrnomlal loglstlc regressron w1th interactlons are presented 1n Table

1.5.

Table 1.5: Changes to Marketing Strategy Multinomial Logistic Regression Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparison Predictor B r,-B I p-value J
Competitor 0.813 2.255 1 .489 1
Minor Credibility 0.939 2.556 1 .425 1
Change vs. Sense 1, 1.177 3.246 1 .283 j
5 Maintain __S:err__ﬁsc_:“_£ompctitor l 2027 0.132 L 158 j
i Strategy Credibility Sense -1 .554 0.211 j .262 j
:L Intercept 2.553 j <00] 1
Competitor 1.633 5.119 .171
Major Credibility 1.563 4.772 .191
Change vs. Sense 1.478 4.384 .196
Maintain Sense * Competitor ~2.783 0.065 .059
1 Strategy Credibility * Sense -2438 0.087 , .087
[ Intercept 1.31 1 1, .066
Competitor 9 0.820 2.270 .019
Major Credibility 0.624 1.867 .073
Change vs. Sense 0.301 1.351 .504
Minor Sense "‘ Competitor -0.756 0.470 .131
Change Credibility * Sense -0.884 0.413 .078
Intercept -1.241 <.001

 

 

1L“ ., . . .
Llh ti all (100d)

luvs (lf'FiI: -2 1.0g likelihood = 49.714. p = .019

 

 

When examining the information components of competitive rumors that increase

the likelihood of marketing managers making a major change instead of maintaining their

original marketing strategy. the results demonstrate a significant interaction effect

between the ability of the charge to make sense and the credibility ofthe source as well

as the ability of the charge to make sense and the competitor described within the rumor.

The interaction odds/odds ratios for the likelihood of marketing managers making a

____

8
Due to the exploratory nature ofthis supplemental ana1y31s. results that are Signiﬁcant at the p < .10 were

examined more closelv.

major change compared with maintaining their original marketing strategy are presented

in Table 1.6.

Table 1.6: Interaction Odds/Odds Ratios for Major Change vs. Maintain Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Odds
Credibility Sense
High Low High Low
High 6.780 16.265 . High 5.150 18.992
sense Low 17.708 3.710 compet‘t‘” Low 16.265 3.710
Odds Odds
Ratio 0.383 4.384 Ratio 0.317 5.119

 

 

First, the signiﬁcant interaction effect between sense and credibility indicates that,
given that the source of the competitive rumor has a low level of credibility, marketing
managers are more likely to make major changes than maintain their original marketing
strategy when the charge of the competitive rumor has a superior ability makes sense.
Moreover, if the source has a high level of credibility, marketing managers will be more
likely to make major changes when the ability of the charge to make sense is low.
Second, the signiﬁcant interaction effect between sense and competitor indicates that,
given that a competitive rumor with a charge that has a low ability to make sense,
marketing managers are more likely to make major changes than maintain their original
marketing strategy when the target competitor is described as a major competitor;
whereas when the competitor described is a minor competitor marketing managers will
be more likely to make major changes if the charge makes a high level of sense.

Further, when examining the information components of competitive rumors that
increase the likelihood of marketing managers to make a major change over making a
minor change to their original marketing strategy, the results demonstrate a signiﬁcant

interaction effect between the ability of the charge to make sense and the credibility of

38

the source as well as the signiﬁcant inﬂuence of the competitor described within the
rumor. The interaction odds/odds ratios for the likelihood of marketing managers making
a major change compared with making a minor change to their original marketing
strategy are presented in Table 1.7.

Table 1.7 : Interaction Odds/Odds Ratios for Major Change vs. Minor Change

 

 

 

 

 

 

 

 

 

 

Odds
Credibility
High Low
High 0.301 0.391
Sense Low 0.540 0.289
Odds Ratio 0.558 1.351

 

 

First, the signiﬁcant interaction effect between sense and credibility indicates that,
given that the source of the competitive rumor has a low level of credibility, marketing
managers are more likely to make major changes than minor changes to their original
marketing strategy when the charge of the competitive rumor makes sense. Moreover, if
the source has a high level of credibility, marketing managers will be more likely to make
major changes when the ability of the charge to make sense is low. Second, the
significant effect of the competitor (i.e., the target information component) indicates that,
given the conditions where the credibility of the sources is low and the ability of the
charge to make sense is low, marketing managers are more likely to make major changes
than minor changes to their original marketing strategy when the competitive rumor

describes a major competitor.
In H7, it was predicted that marketing managers will remain committed to the

changes made to the direction of their marketing strategy when the competitive rumor is

conﬁrmed to be false. The results of the marketing strategy decisions to the changes

39

made after the conﬁrmation of the competitive rumor in Stage 2 are presented in Table

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.8.
Table 1.8: Changes Based on the Conﬁrmation ofCompetitive Rumors
RCVCI‘l to 1\/1aintain Escalate Delay Total
. Original Change Change Change
[ False 10.7% 49.7% 39.0% 0 6% 100%
Competitive (17) (79) (62) (1) (159)
LRumor Scenarios J 1
True ‘ 4.8% 44. 3% 50.3% 06% 1 100%
Competitive (8) (74) (841 (l) j (167)
Rumor Scenarios 1
Total 7.7% 46.9% 44.8“?) 0.6% 100%
(25) (153) (146) (2) (326)
Statistical Testing:
2
F : . 1 1
alse x. Teast for Expected 112(3): 4.1343 1) < .001
Proporuons
False: 12 Test for Equal Proportionsh [2 (3) = 102.006 1) < .001
True: 72 Test for Expected r 7
' . " 3 z: ’2 ~ ‘ <
Proportionst A (J) 7'1 ”:7 i p .001 i
True: )8 Test for Equal Proportionsh 12 (3) = 134.725 j p < .001 j
F)alse \s. T rue. /2Test f01 Equalitv in X213): 6.526 L p 2 .089 T
1 1opo1tions
It was necessa1y to set the expected tables to 158 9997 for the ‘Maintain Cl tange ‘
ﬁategmy and 0. 0001 for each of the other categories fo1 calculation purposes.
bThe expected value tor each category is equal to 25% of the observations
It was necessary to set the expected values to 166. 9997 for the Maintain Change

 

Lgtegory and O 0001 for each of the other categgries for calculation purposes.

 

The chi- -square goodness o1 ht test tor equal ptob abilities was signiltcant (x 3
102.006. [2 < .001). indicating that the distribution of the marketing strategy decisions
after the rumor was conﬁrmed to be false is not equivalent to random selection. The chi-

square goodness of ﬁt test for the expectation that all marketing managers who had

changed their strategy would remain committed to the changes after the competitive

40

rumor was conﬁrmed to be false was signiﬁcant (x2 3 = 4.134E7, p < .001), indicating that

not all marketing managers remained committed to their changes. However, the
percentage of marketing managers indicating that they will remain committed to the
changes made to the direction of their marketing strategy when the competitive rumor is

conﬁrmed to be false was the largest (49.7%) followed by the percentage of marketing
managers who would escalate changes to their marketing strategy (39.0%). Thus, H7 is

not supported.

To get a better understanding of how marketing managers react to the changes in
the direction of marketing strategy when the competitive rumor is conﬁrmed to be false
compared with when the competitive rumor is conﬁrmed to be true, a subsequent analysis
was conducted to examine if any similarities exist in response. The chi-square test for
equality of proportions the response of marketing managers who had changed their

marketing strategy between competitive rumors that are conﬁrmed to be false and to be
true was non-signiﬁcant (x2 3 = 6.526, p = .089). This indicates that the proportion of

each of the possible responses with respect to the change in marketing strategy direction

is the same whether the competitive rumor was conﬁnned to be true or false.

DISCUSSION

The purpose of this research was to examine how marketing managers incorporate
rumors about competitors’ future strategic marketing actions when developing their own
marketing strategies. An integrated conceptual framework focused on how the evaluation
of the information contained within competitive rumors inﬂuenced the strategic response

of marketing managers was empirically examined within a two—stage longitudinal

41

experimental design. The ﬁndings provide a number of interesting insights of both
theoretical and managerial importance for those interested in marketing strategy decision

making.

Theoretical Implications
Although Allport and Postman (1947, p.148) advised “that it is never under any
circumstances safe to accept a rumor as a valid guide for belief or conduct,” this research
indicates that marketing managers, nonetheless, overwhelmingly respond to competitive
rumors within their marketing strategy decision making. Speciﬁcally, marketing
managers indicated a high likelihood of responding to the competitive rumor within their
marketing strategy (M GRAND = 5.80 out of 7.00), regardless of evaluating any of the
information components contained within the competitive rumor. Theoretically, this
result indicates that the natural desire for individuals to seek any information that
provides meaningful explanations for what events will likely occur in the uncertain future
overrides the need for veriﬁed information, even for marketing managers when
developing their ﬁrm’s marketing strategy in an uncertain competitive environment. It is,
however, understandable for this reaction to occur as the explicit intention of a rumor is
for the information it contains to be believed and acted upon by decision makers, as the
implication of any rumor is that it communicates some truth (DiFonzio and Bordia 2002).
Interestingly, when evaluating the information components of the competitive
rumor to determine their likelihood to respond to the rumor, marketing managers
determine that the actions described are not as important as from whom the rumor is

heard and to whom the rumor refers. Whereas the results indicate that the description of

42

the actions, or the ability of the charge to make sense of the uncertainty, has a non-
signiﬁcant effect, both of the other two information components of the competitive
rumor, the source and the target, have a direct effect. The results further indicate that
there are no signiﬁcant interaction effects between any of the three information
components on the likelihood to respond. Taken together, these results demonstrate the
importance that the behavioral heuristic of representativeness has for marketing managers
when evaluating competitive rumors. Under behavioral decision theory, the
representativeness heuristic focuses on the ability of the characteristics of information to
correspond to those characteristics that are typical to a given set of objects (Tversky and
Kahneman 1974). In this context, marketing managers rely on their perception of the
representativeness of the source and the target competitor described to determine whether
it is appropriate to respond within their decision making. Speciﬁcally, marketing
managers are more likely to respond to a competitive rumor if the source from which it
comes has a high level of perceived credibility as well as if the target described is a major
competitor. Further, when relying 011 behavioral heuristics in evaluating the source and
the target of the competitive rumor, representativeness is so critical for marketing
managers that they are unwilling to make any trade-offs on this subjective evaluation
with other heuristics, such as availability, for determining the appropriateness of
incorporating the information within their marketing strategy decision making.

More than just incorporating the competitive rumor within their marketing
strategy decision making, marketing managers overweight the importance of competitive
rumors by altering their strategic marketing direction. Consistent with the previous

literature on the signiﬁcant inﬂuence that rumors have on an individual‘s decision

43

making ability within the context of ﬁnancial trading (e. g., DiFonzo and Bordia 1997;
Nelson et a1. 2001; Oberlechner and Hocking 2004; Pound and Zeckhauser 1990), this
research demonstrated the willingness of marketing managers to alter their strategic
marketing direction. Speciﬁcally, marketing managers varied from making minor or
major changes to their original strategy to delaying the implementation of their strategy
or abandoning it altogether. Based upon the extent to which changes to the direction of
their marketing strategy were made, it appears as though the mere presence of a
competitive rumor has a signiﬁcant inﬂuence on the decision making of marketing
managers. However, examining the results further indicate that how the information
components of the competitive rumors are evaluated are inﬂuential for marketing
managers when determining the extent to which the marketing strategy should be
changed.

When determining whether to make a major change over maintaining their
original marketing strategy, marketing managers willingly make theoretical tradeoffs
between their subjective evaluations of the information components using the behavioral
heuristics of representativeness and availability. For marketing managers, the interaction
between the source and the target indicates that the possibility of a major competitor
pursing an action, even one that does not make sense, is enough to cause marketing
managers to increase the likelihood of making major changes to their marketing strategy,
but minor competitors only have the same effect when the actions pursued makes sense.
The nature of the competitor, as a result, introduces a predictable bias of marketing
managers to react even if the competitive rumor isn’t plausible. Theoretically this

implies once the marketing manager has decided to respond to the competitive rumor, the

44

information contained within the competitive rumor need only to fulﬁll either the
representativeness or the availability heuristic when determining the extent to. which
changes should be made.

Moreover, similar to the trade-off between the role of the competitor and the
ability to make sense, a trade-off exists between credibility and the ability to make sense
when marketing managers are determining whether to make a major change or to
maintain to their marketing strategy. The interaction between the source and the charge
indicates that they are more likely to make a major change to their marketing strategy if
the actions described in the competitive rumor make sense but come from a source with a
low-level of credibility or when the actions described in the competitive rumor come
from a source with a high-level of credibility but the actions do not make sense.
Theoretically this implies that, much like in the context of ﬁnancial trading, for
competitive rumors to powerfully effect marketing strategy decision making, they “do not
have to be believed or trusted,” (e.g., be credible) but rather “they simply have to make
sense” (DiFonzo and Bordia 1997, p. 346).

Further, theoretical tradeoffs on the reliance of behavioral heuristics to evaluate
the information components of the competitive rumor are made when determining
whether to make a major change over making a minor change to their original marketing
strategy. Similar to the decision to make major changes over maintaining their original
strategy, the decision to make major changes over minor changes to their marketing
strategy by marketing managers is signiﬁcantly impacted by the tradeoff between
credibility and the ability to sense. Moreover, the theoretical tradeoff between the

credibility and the ability to make sense when selecting which information to use (e.g.,

45

DiFonzo and Bordia 1997; Menon and Varadarajan 1992) is complicated by the role of
the competitor. The signiﬁcant effect of the competitor indicates that, given the
conditions where the credibility of the sources is low and the ability of the charge to
make sense is low, marketing managers are more likely to make major changes than
minor changes to their original marketing strategy when the competitive rumor describes
a major competitor. As such, marketing managers systematically react excessively to
information as long as it features a major competitor; implying that theoretically some
biases overpower the need for information to possess credibility and/or the ability to
make sense.

Not only have marketing managers been found to persistently respond to
competitive rumors within their marketing strategy decision making and systematically
make changes to the direction of their marketing strategy, marketing managers also
consistently react to the strategy changes they made when an ofﬁcial announcement
conﬁrms the competitive rumor. When the competitive rumor is determined to be false,
the majority of marketing managers were found to remain committed to their change in
strategic direction. This result is theoretically consistent with the “escalation of
commitment” bias, where the marketing managers do not want to appear to be wasteful
by abandoning the investment of resources (Arkes and Blumer 2000; Biyalogorsky et al.
2006). This ﬁnding indicates that despite their previous decision to be based on
inaccurate information, marketing managers demonstrate a need to be psychologically
consistent by not only continuing but expanding their original decision to change to 6

demonstrate that their earlier decision as justified (Despande and Gatignon 1994). What

is more, the reaction of marketing managers to remain committed to and/or escalate their

46

commitment to this change in strategic direction once an ofﬁcial announcement is
released is consistent whether the competitive rumor was conﬁrmed to be true or false.
Theoretically, this indicates that once a decision has been made to alter marketing
strategy based upon competitive rumor, the change in direction is likely to be permanent
regardless of what any additional veriﬁed information can bring to light on the nature of

the unconﬁrmed competitive rumor.

Managerial Implications

For marketing managers engaged in marketing strategy decision making, this research
provides important guidance and caution with respect to understanding the unintended
consequences that rumored actions of competitors can have on their marketing strategy
decision making in three important areas: (1) the vulnerability and persistence of
marketing managers to respond to competitive rumors; (2) the systematic bias in reacting
to competitive rumors; and (3) the permanence of changes made to the strategic
marketing direction.

First, since the competitive landscape is continually littered with rumors regarding
the strategic marketing actions to be taken by competitors, it is important to understand
the effect that competitive rumors have on the marketing strategy decision making of
marketing managers. The results of this research indicate that simply by being made
aware of a competitive rumor inﬂuenced the likelihood of marketing managers to respond
to the rumor as well as their decision to alter the strategic direction of their ﬁrm.
Moreover, this susceptibility and persistence to respond to any competitive rumor is not

deterred by the level of education achieved, the number of years of experience, or the

47

authority to implement these major marketing strategy changes that marketing managers
possess. Given these results, all marketing managers are vulnerable to the inﬂuence of
competitive rumors and no degree of education or experience overrides the natural desire
to react to rumors. Ultimately, this natural desire of marketing managers results in the
unintended consequence of using their authority to change the strategic marketing
direction of their ﬁrm. As such, marketing managers are cautioned to be careful in their
utilization of competitive rumors within their decision making and of the potential
changes to their marketing strategy that can result as although as the earliest indicators of
changes to come or of actions to be taken by competitors in an uncertain environment are
oﬁen no more than rumors; they, nonetheless, remain only rumors.

Second, when the information components of the competitive rumor are evaluated
by marketing managers, systematic biases result inﬂuencing whether the marketing
manager will respond and the extent of the changes made to their strategy. The results of
the research indicate that by relying on behavioral heuristics marketing managers
increase their likelihood to respond to competitive rumors featuring a major competitor or
from a credible source and that the presence of either of these information components
causes marketing managers to unintentionally increase the likelihood of making major
changes to their strategy in response to competitive rumors that describe actions which do
not make sense. The role of the competitor is particularly striking, for it does not matter
what marketing actions are described or from whom the rumor is heard just as long as a

major competitor is involved. Granted it is never advisable to accept a rumor as a valid
guide (Allport and Postman 1947), however the intense focus on major competitors

leaves marketing managers susceptible to credible competitive marketing actions made

48

by minor competitors that could revolutionize a competitive environment in times of
uncertainty. Thus, if there is to be a marketing strategy reaction to the rumored actions of
competitors, marketing managers are cautioned that biases within their decision making
consistently and predictably leaves the development of their marketing strategies
dependent upon major competitors and vulnerable to actions of minor competitors.
Third, although for marketing managers to react to competitive rumors may be
unintended, the reaction is not necessarily wrong if the rumor is true. It is, therefore,
important to understand the effect that the conﬁrmation of the competitive rumors, either
to, be true or to be false, has on the changes marketing managers made to their marketing
strategy. The results of this research demonstrate a psychological commitment and/or an
escalation in commitment that develops in response to the making of these marketing
strategy decisions, regardless of whether the competitive rumor is true or false.
Marketing managers reveal an unfortunate willingness to not only alter but maintain the
new strategic marketing direction developed in reaction to competitive rumors in order to
justify their previous decisions, even if their previous decisions were based on
unsubstantiated information. Further, when speculation based upon circumstantial
evidence is utilized as fact in marketing strategy decision making, interesting
implications for marketing managers and the competitive environment emerge as rumors
could possibly and effectively be used to purposively distract competitors or to shiﬁ the
direction of an industry toward the beneﬁt of a ﬁrm. Hence, marketing managers are
cautioned about the permanent effect that competitive rumors can have on their strategic

direction and the strategic direction of the competitive environment.

49

LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH
Although this research provides insight into how marketing managers incorporate rumors
about competitors’ future strategic marketing actions when developing their own
marketing strategies, the following limitations need to be considered when attempting to
generalize the ﬁndings. The three main limitations of this research are: (1) the inﬂuence
of competitive rumors on the decision making of marketing managers was examined
through a role playing experimental scenario regarding hypothetical competitors and
competitive rumors; (2) the competitive rumor was conﬁrmed to be true or to be false
based upon an ofﬁcial statement released by the competitor that was either a conﬁrmation
or a denial; and (3) the passage of time for the implementation of the marketing strategy
decisions was simulated through a two-wave longitudinal experimental design. Although
this research design was purposefully selected and designed based upon the extant
literature to allow for the maximum amount of control to be maintained over the
competitive rumor and the nature of the relationship between the competing ﬁrms
presented, this control also limits the external generalizability of the ﬁndings as the
inﬂuence of competitive rumors on the marketing strategy decision making of marketing
managers will be inﬂuenced by the history of the competitive relationship between ﬁrms
and the history of the competitive rumors emerging. To address these limitations, the
inﬂuence of competitive rumors on marketing strategy decision making should be further
examined using a context and a methodology where the marketing strategy reactions of
real companies to real competitive rumors can be connected over time.

In addition to addressing the aforementioned limitations, the results of this

research on marketing strategy decision making suggests numerous avenues for future

50

research. First, the credibility of the source of the competitive rumor was found to
signiﬁcantly inﬂuence the likelihood to respond to competitive rumors. Although within
the current research the source component of the competitive rumor speciﬁcally focused
on the individual who provided the competitive rumor (e.g., an industry research analyst
or an industry blogger), further examining the medium within which the source is
embedded could uncover interesting insights into how the competitive environment is
evolving due to the increasing important role that technology is playing. For instance, the
selection of an industry blogger as a source within this research demonstrates the
prominence that websites and blogs have gained in recent years (e. g, Baker and Green
2005; 2008). In addition to how new technology inﬂuences the development of new
sources of information (e.g., Gonsalves 2010; Woods 2009), future research on
competitive rumors could examine how the emergence of new communication

technology can inﬂuence the life-cycle of a competitive rumors with respect the

frequency with which they develop, the duration of their existence, and the accuracy of
their assertions.

Second, the ﬁndings of this research demonstrate that competitive rumors can not
only cause marketing managers to alter the direction of their marketing strategy, but also
cause them to remain committed to this change in strategic direction even if an ofﬁcial
announcement conﬁrms the competitive rumor to be false. Yet as only the marketing
strategy decision making of marketing managers from the United States was examined
within this research, any international aspect of the inﬂuence of competitive rumors Was
neglected. As competitive rumors emerge internationally (e. g., Parker, Palmer, and

Taylor 2007; Waters and Thomas 2010), ﬁiture research could extend to examine how the

51

increased internationalization of competition inﬂuences the strategic responses of
marketing managers since a country-of-competitor orientation effect may exist. Further,
as culture has been shown to inﬂuence the decision making process of individuals (e.g.,
Clark 1990; Schneider and De Meyer 1991; Tse, Lee, Vertinsky, and Wehrung 1988),
future research could examine how the cultural dimensions (e. g., uncertainty avoidance,
long-term orientation, power distance, individualism-collectivism, masculinity) could
inﬂuence the impact of competitive rumors on marketing strategy decision making.
Third, the unintended consequences that rumored actions of competitors can have
on the marketing strategy decision making of marketing managers was demonstrated by
the ﬁndings of this research. Unintended consequences caused by competitive rumors
may result in other areas as competitive rumors are likely to inﬂuence more than just
strategic decisions focused on the external competitive environment and more than just
marketing managers. For instance, as rumors have been shown to inﬂuence the decision
making of marketing managers with respect to the competitive external environment,
how do competitive rumors inﬂuence the decision making of marketing managers or
other marketing professionals with respect to the competitive internal environment? This
stream of potential future research would extend the extant rumor research (e.g.,
DiFonzo, Bordia, and Rosnow 1994; DiFonzo and Bordia 1997; 2002) by examining the
inﬂuence of competitive rumors on the development of a ﬁrm’s internal strategy and/or
the individual’s personal strategy pertaining to the performance of speciﬁc intra-company
behaviors or accumulating speciﬁc marketing human capital. Moreover, competitive
rumors may have unintended consequences within the market by not only having an

effect on the marketing strategy of competing ﬁrms as was demonstrated by this research,

52

but by also having an effect on the strategy of consumers. Since consumers are becoming
more aware of and frequently involved in the creation and circulation of competitive
rumors (e. g., Griggs 2010), research could extend the current research by examining how
competitive rumors inﬂuence the immediacy or the delay of their purchasing decision or

on the purchasing decisions of other consumers.

CONCLUSION

Unintended consequences in marketing strategy decision making occur when marketing
managers incorporate rumors about competitors” future strategic marketing actions when
developing their own marketing strategies. The results of this research demonstrates that
marketing managers overwhelmingly utilize competitive rumors within their decision
making to make changes to the direction of their marketing strategy and ultimately

remain committed to and/or escalate their commitment to this change in strategic
direction regardless of whether the competitive rumor is true or false. For marketing
academics, this research presents marketing managers as subjectively inﬂuenced decision
makers seeking any information to guide their decisions within the uncertain competitive
environment opening avenues for future research on 110w behavioral heuristics and
decision biases influence marketing strategy making. For marketing managers, this
research exposes the limitation in their marketing strategy decision making when it

comes to understanding the pervasive impact of competitive rumors.

53

ESSAY TWO: STRATEGIZING FROM THE PAST, THE PRESENT, OR THE
FUTURE? THE INFLUENCE OF CULTURE ON TIME IN MARKETING
STRATEGY DECISION MAKING

INTRODUCTION

Time enters each examination of marketing strategy as a strategic decision to be made, as
a factor inﬂuencing strategic decisions, and as a backdrop on which marketing strategy
decisions interact (Das 2004). For instance, the business press has been inundated with
articles providing information on the opportunities and threats stemming from the past,
present, and future actions of competitors (e. g., Jana and Rowley 2009; Kiley 2009;
Matlack 2009; Simon and Reed 2009). As such, underlying the examination of
marketing strategy decision making is the question of how time inﬂuences the
determination of which competitive information to use, varying in strategic and temporal
context and the subsequent strategic marketing decisions of marketing managers. For
time is an important element within and surrounding the marketing strategy decision
making of marketing managers.

Recognizing the importance of time in strategy making, there has been a
proliferation of research recently examining the role of time in marketing strategy. For
instance, within the extant marketing literature, time has been examined with respect to
strategic decisions, such as the timing of entry into a new market (Hennig-Thurau et al.
2007), into a new channel (Johnson and Tellis 2008), or of a new product introduction
(Wu, Balasubramanian, and Mahajan 2004), the time required for strategic decisions
regarding the need to appeal to customers (Fang 2008), to develop interorganizational
relationships (J ap and Haruvy 2008) or to respond to competitors (1 ayachandran and

Varadarajan 2006) and the trade-off between the desired performance in the short-term

54

(Dekimpe and Hanssens 1999) and in the long-term (Pauwels, Silva-Risso, Srinivasan,
and Hanssens 2004). Yet still the complexity of time within marketing strategy decision
making has not been fully accounted for.

Time, within marketing strategy research, is assumed to operate based upon an
external clock-and-calendar metric and be viewed in exactly the same manner by each
individual, within each organization, and within each national culture (Das 1991).
However, an alternative view of time which has received very little attention within the
marketing literature, proposes that instead of time being based upon an objective external
metric, it is socially constructed through the unique interpretation determined by the
entity (i.e., individual, organization, or society) making the judgment (Mosakowski and
Barley 2000). Specifically, the interpretation of time varies with respect to how
individuals, organizations, and societies perceive their own connection to time through
their preference for a specific time orientation as well as how events connect to the past,
the present, and the future through their preference for a specific temporal and/or
strategic framing (Butler 1995; McGrath and Tschan 2004). Neglecting the
multidimensional characteristics of time is a major limitation of the extant marketing
strategy literature, for as Das (2004, p. 59) notes “the essence of strategic decision
making is the attempt to navigate the organization overtime” and that “these decisions
are made by individual strategy makers, whose psychological views of time cannot be
ignored”.

Utilizing the social psychology of time, behavioral decision theory’s prospect
theory, and the dimensions of national culture, this research examines how culture

inﬂuences how marketing managers incorporate the complexities of time within their

55

Elli!

marketing strategy decision making. Speciﬁcally, the following research questions are
addressed:

(1) How does national culture inﬂuence the time orientations, the evaluation of
competitive information, and the strategic marketing decisions of marketing
managers?

(2) How does the dominant time orientation of marketing managers, as well as the
differences between their own and their organization’s time orientation,
inﬂuence their strategic marketing decisions?

(3) How does the evaluation of competitive information by marketing managers
in relation to temporal and strategic framing inﬂuence their strategic
marketing decisions?

By addressing these questions, this research contributes to the ﬁeld of marketing
in three distinct ways. First, this research contributes to the marketing strategy literature
by examining how national culture inﬂuences how time is incorporated within the
marketing strategy decision making of marketing managers through the prevalence of
dominant time orientations and how competitive information is evaluated to ultimately
result in strategic decisions that differ in magnitude, timing, and time horizon. Second,
this research extends the extant literature on decision making by demonstrating that
predictable biases in the decision making of marketing managers emerge with respect to
time not only the strategic decisions made but also the evaluation of the strategic
decisions. Third, from a managerial perspective, this research provides important

guidance and caution to marketing managers for understanding the unintended

S6

consequences that the complexities of time can have on their marketing strategy decision

making.

THEORETICAL BACKGROUND

Time in Marketing Strategy Decision Making

Marketing strategy decision making refers to the process by which marketing managers
make their most ﬁmdamental decisions (Das and Teng 1999), where these decisions are
“important, in terms of the actions taken, the resources committed, or the precedents setT’
(Mintzberg, Raisinghani, and Theoret 1976, p. 246). Every marketing strategy decision
involves a decision regarding time. For example, whether deciding to introduce a new
product or respond to a competitor’s action, marketing managers not only must determine
how much of their resources should be committed to their strategic decision (i.e., the
magnitude of the strategic decision) (White, Varadarajan, and Dacin 2003), but also the
most apprOpriate time as to when to implement their strategic decision (i.e., the timing of
the strategic decision) and the appropriate time to subsequently elapse before evaluating
the outcomes of their strategic decision (i.e., the time horizon of the strategic decision)
(Wright and Weitz 1977). Some marketing strategy researchers have suggested that the
best solution for managing the complexities associated with time is to have each
marketing manager individually determine how time should properly be incorporated
within their marketing strategy (Menon, Bharadwaj, Adidam, and Edison 1999). This
approach would be appropriate if each marketing manager experiences time similarly;

however, time varies based upon the perceptions of the individual.

57

Time can be abstractly referred to as a nonspatial continuum in which events
occur in apparently irreversible succession from the past through the present to the future.
The time continuum ofan individual is inﬂuenced by the conception oftime adopted. by
the manner in which different entities. whether it is at the individual, the organizational,
or the societal level, relate to time, and by the way events are connected to time (Ancona.
Okhuysen. and Perlow 2001). Together these factors determine an individual‘s
psychological view 01‘ time: which. as shown in Figure 1. will be directly inﬂuenced by

the national culture to which the individual belongs and will directly inﬂuence their

marketing strategy decision making.

Figure 2.1: Time in Marketing Strategy Decision Making

 

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Conceptions of Time: Objective and Subjective

Within the extant strategy literature, the most prevalent conception of time is the
objective view (Mosakowski and Barley 2000). In fact, it is presumed that within
organizations all decision makers, inclusive of marketing managers, share this conception
of time (Das 1991). The objective view is commonly associated with clock-and-calendar
time, where cumulating equalized units allows for speciﬁcity for the agreement among
and communication to diverse pepulations of individuals (Bluedorn and Denhardt 1988;
Harvey, Grifﬁth, and Novicevic 2000). For marketing managers, this allows for the
‘minutes’ needed to make a strategic marketing decision based on the competitive
information they possess, the ‘weeks’ needed to develop and introduce a new product, or
the ‘years’ needed to evaluate the consequences of their decisions to have a consistent
structure across different individuals when developing marketing strategies and making
signiﬁcant strategic decisions.

While the inﬂuence of the objective view is apparent within the strategic
decisions made by marketing managers as they are forced to equate time with this view
(.Das 1991), the resulting strategic decisions will also be subtly inﬂuenced by the
subjective view. The subjective view posits that each entity experiences time
idiosyncratically to determine their own meaning of time and their preference for the
past, the present, or the future (Mosakowski and Barley 2000). Marketing managers
experience both views of time simultaneously, which has the potential to cause conﬂict
between their own objective and subjective views or between their individual conception
and the conception of the organization within which they are embedded (McGrath 1988).

Moreover, when these conﬂicts exist, the effects will not only be seen within the strategic

59

decisions, but also in how marketing managers evaluate their strategic decisions with
respect to decision commitment (i.e., the willingness to invest effort to ensure that the
strategic decision is successful) (Dooley and Fryxell 1999), and decision quality (i.e., the
evaluation of the appropriateness of the strategic decision with respect to overall strategy

and effectiveness) (Dooley and Fryxell 1999).

Relating to Time: Time Orientations

Throughout the marketing strategy decision making process, the psychological view of
time inﬂuences strategic decisions through how entities relate to time (Bluedom and
Denhardt 198 8). DevelOped in response to the permeating inﬂuence that temporal
considerations have on everyday life, the descriptive theoretical framework of the social
psychology of time proposes that individuals and groups differ in real and meaningful
ways with respect to their time perspectives and that these differences inﬂuence their
behavior and interactions (Jones 1988; McGrath 1988). The manner in which an
individual relates to time, via their time perspective, is demonstrated through their time
orientation. A time orientation refers to the relatively stable psychological tendency to
emphasize a particular temporal frame, such as the past, the present, or the future
(Kluckhohn and Strodtbeck 1961). An individual would ideally be able to “switch
between thinking about the past, the present, or the future according to the demands of
the situation,” yet prior research has demonstrated that individuals develop a consistent
temporal bias by adopting a dominant time orientation (McGrath and Tschan 2004, p.
38). These dominant orientations have been found to be correlated with different

preferences with regard to risk in decision making (McGrath and Tschan 2004) and that

60

prior research in strategic management has demonstrated that these different dominant
time orientations lead to differing abilities of individuals to evaluate the future
consequences of their decisions, with a future—orientation demonstrating the most concern
for the consequences of decisions over a long-term time horizon (Das and Teng 2001).
For marketing managers, as a result, the dominant time orientation that they have
assumed within their psychological view of time will consequently inﬂuence their
strategic marketing decisions as well as their selection of which information to utilize.
As marketing strategy decisions are made by marketing managers for and within
organizations, the time orientation of both entities, the individual marketing manager and
the organization, needs to be considered. At the individual level, the time orientation
inﬂuences the decision making preferences of marketing managers (Bluedom and
Denhardt 1988). It has been similarly proposed that at the organizational level the time
orientation of the ﬁrm creates a unique temporal bias that significantly inﬂuences the
strategy formulation and decision making process of their managers (Bluedom 2000;
Thoms and Greenberger 1995). Since time orientations develop independently at the
different levels of analysis, there is the potential for differences to exist between how the
marketing manager relates to time and how the organization relates to time. These
differences in time orientation between the individuals and the organizations in which
they are embedded, as described by the social psychology of time, can lead to conﬂicts
when “misunderstandings occur when intention and action are judged, by different
participants, on different temporal scales” (Jones 1988, p. 27; McGrath 1988).
Specifically for marketing managers, the existence of differing time orientations and the

resulting conﬂicts creates significant problems for developing coherent marketing

61

strategies (Harvey and N ovicevic 2001). Unfortunately, the differences in how the
entities relate to time, the reason behind the conﬂict between the marketing manager and
their organization, often goes unrecognized by those involved (Jones 1988); thereby,

leading to unintended consequences When making their strategic marketing decisions.

Connecting Events to Time: The Role of Information
The psychological view of time also inﬂuences strategic decisions of marketing managers
by how the individual makes and emphasizes the connection between events and time.
Events are related to time through both the temporal reference point and the strategic
reference point of information. For example, a piece of information about an event could
state that a competitor has introduced a new product to the market six months ago, is
introducing a new product now, or will be introducing a new product in six months. The
temporal reference point of information refers to the direct connection of the event to
time through the description of when the event has, is, or will occur. Further, events are
indirectly connected to time through the urgency that the information‘s description of the
event creates via the strategic reference point. The strategic reference point of
information refers to whether the information describes events that are opportunities or
threats. The emphasis that marketing managers place upon specific temporal (i.e., past,
present, or future) and strategic (i.e., opportunities or threats) reference points will
subsequently inﬂuence how a decision maker interprets and responds to information
(Bluedom and Denhardt 1988).

Theoretically, the inﬂuence that the psychological view of time has on the

information processing of marketing managers is consistent with and best explained by

the propositions of prospect theory. Prospect theory developed under behavioral decision
theory as a descriptive decision making theory focusing on how the preferences and
decisions made by individuals are inﬂuenced by the manner in which information is
interpreted (Kahneman and Tversky 1979). Speciﬁcally, prospect theory proposes that
imperfections in the perceptions of decision makers can cause them to emphasize
particular decision frames and that decision makers are unaware of the potential effects
that the different decision frames have on their preferences (Tversky and Kahneman
1981). Two dominant decision frames, the certainty frame and the gains/loss frame, have
been identiﬁed within the literature to inﬂuence the interpretation of information and
subsequent decision preferences. The certainty frame refers to the extent to which the
information and the decision outcomes related to the information are viewed to be certain
or to be probabilistic, while the gain/loss frame refers to the extent to which the
information and the decision outcomes related to the information are assessed to result in
a gain or a loss (Kahneman and Tversky 1979). The decision frame that will inﬂuence
the decision making of marketing managers (i.e., certainty vs. probability; gain vs. loss)
is partially controlled by how the marketing strategy problem is formulated and partially

controlled by their own individual norms and tendencies when selecting which reference
point to emphasize (Tversky and Kahneman 1981).9 The selection of a reference point,
therefore, is critical to the decision making process because it is from this point that the

enactment of decision frames and the interpretation of information begins (Levy 1992).

 

In this research, the enactment of the decision frames will only be inﬂuenced by the individual
characteristics of the marketing managers. The marketing strategy problem will be formulated to be
balanced between each potential frame, thereby allowing the marketing manager to select their own
dominant emphasis.

63

Prior research in managerial decision making has argued that the selection of
temporal and strategic reference points of information are critical determinants of
whether the information will be used by marketing managers and of the manner in which
a manager will respond with their strategic marketing decisions (Menon and Varadarajan
1992; Dutton and Jackson 1987). Consistent with prospect theory, the rationale for why
the selection of the temporal and strategic reference point by marketing managers will
subsequently have an effect on their decision preferences is that it is from these reference
points that the dominant decision frames exert their inﬂuence. Speciﬁcally, it is from the
temporal reference point where the inﬂuence of the certainty frame is evidenced, for
information on events that have occurred in the past and that are occurring in the present
are assessed to be more certain, while information on the events that are likely to occur in
the future are assessed to be more probabilistic (Mitchell, Russo, and Pennington 1989).
The inﬂuence of the gain/ loss frame is evidenced from the strategic reference point, for
opportunities represent positive situations that involve the likelihood of gain without loss,
while threats represent negative situations that involve the likelihood of loss without gain
(Jackson and Dutton 1988). As such, how marketing managers emphasize the temporal
reference point, for certainty is preferred over probability, and the strategic reference
point, for losses loom larger than gains, should inﬂuence their strategic marketing

decisions.
The Inﬂuence of Culture on Time

Moreover, impacting the relationships within the psychological view of time will be the

culture of the marketing manager. The relationship between the culture and the

64

interpretation of time is so fundamental that it has even been asserted that “time is
culture,” as the individual time perspectives as well as the characteristics of events and
the time in which they occur vary signiﬁcantly from culture to culture (Jones 1988, p.
21). National culture has been deﬁned as the values-based collective programming of the
mind which distinguishes members from one society from another society (Hofstede
2001).10 As such, these cultural differences manifest themselves within individuals via
persistent preferences for speciﬁc social processes and general rules for attention,
interpretation, and responses to information in the decision making process (Tse, Lee,
Vertinsky, and Wehrung 1988). Speciﬁcally, Hofstede’s (2001) norms and values
approach to culture identiﬁes three dimensions of cultural values that are directly related

to the inﬂuence of the psychological view of time on strategic decision making: long-

terrn orientation, individualism-collectivism and uncertainty-avoidance.H

Long-term orientation refers to the extent to which strategic actions are valued
either for their effects in the future or valued only for their effects in the short-term
(Bearden, Money, and Nevins 2006). A long-term orientation is characterized by a
dynamic, future-oriented mentality evidenced by the adoption of a long-term outlook and
values emphasizing achieving success in the future; whereas a short-term orientation is
characterized by a static, present-oriented mentality evidenced by the adoption of a short-

term outlook and values emphasizing achieving success in the present (Hofstede 2001).

0 . . . . . .
Although other approaches for examining culture exrst wrthm the extant literature (e. g., Tnandis 1994),
this study employs Hofstede‘s dimensions of culture as its values-based approach is theoretically the most
appropriate for examining culture’s inﬂuence on marketing strategy decision making at the national level.

Researchers contend that only the cultural dimensions that are strongly related to the theoretical basis of
the study should be examined (e.g., Hofstede 1983; Hofstede 1985; Grifﬁth, Hu, and Ryans 2000). For this
Study, only the cultural dimensions of long-term orientation, individualism-collectivism, and uncertainty
avoidance, are strongly related to time, the relationship between the individual and their organization, and
the utilization of information; as such, these are the only cultural dimensions examined.

65

As a cultural dimension, long-term orientation is a reﬂection of a society’s outlook
orientation, with long-term oriented societies demonstrating a preference for patience and
perseverance when making investments over time (Barkema and Vermeulen 1997). The
cultural preference toward investments as well as their outlook on time will manifest
themselves in the strategic decision making process through their inﬂuence on the
marketing strategy decisions as well as the time orientations of the individuals.
Individualism-collectivism refers to the extent to which people in a society either
prefer to act as individuals or prefer to act as members of a group (Steenkamp, Hofstede,
and Wedel 1999). Societies which can be described as more individualistic are
characterized by an emotional independence from the organization and a strong belief
that their individual decisions are better than group made decisions; whereas societies
which can be described as more collectivistic are characterized by an emotional
dependence on the organization and a strong belief that group decisions are better than
individually made decisions (Hofstede 2001). As a cultural dimension, individualism-
collectivism is a reﬂection of a society’s self orientation (Dawar et a1. 1996), with
societies higher in individualism demonstrating a preference for individual initiative
(Newman and Nollen 1996). The cultural preference for emphasizing the individual
compared to the group will manifest itself in the strategic decision making process
through its inﬂuence on the existence and effect of differences in time orientations
between the individual and organizational level.
Uncertainty avoidance refers to the extent to which uncertain situations are ~

perceived to be threatening and the extent to which it is attempted to avoid these

situations (Kirkman, Lowe, and Gibson 2006). Societies higher in uncertainty avoidance

66

are characterized by a “fear of failure” where they prefer to seek stability by avoiding
change and taking additional risks; whereas societies lower in uncertainty avoidance are
characterized by their “hope for success” evidenced by their greater tolerance for the
unknown and their willingness to make risky decisions (Hofstede 2001). The cultural
dimension of uncertainty avoidance is a reﬂection of a society’s risk orientation (Dawar,
Parker, and Price 1996), with societies higher in uncertainty avoidance demonstrating a
preference for both maximizing certainty and for minimizing the potential for loss
(Diamantopoulous et al. 2003; Schenider and de Meyer 1991). These cultural
preferences for certainty and risk as well as their association to time will manifest
themselves in the strategic decision making process through their inﬂuence on the

utilization and effect of speciﬁc temporal and strategic reference points of information.

HYPOTHESES DEVELOPMENT
The Influence of Culture on Time in Strategic Decisions
Under the guidance of the dimensions of national culture, it has been demonstrated that
decision making is inﬂuenced by the cultural values of the society to which the individual
belongs (Hofstede 2001). Speciﬁcally, cultural dimensions result in persistent
preferences for speciﬁc social processes that signiﬁcantly inﬂuence the manner by which
individuals respond in their decision making (Tse et al. 1988). Thus, for marketing
managers, it is proposed that their cultural values inﬂuence the nature of time within their
strategic marketing decisions.

The strategic decisions that a marketing manager must make regarding the

appropriate level of investment, the appropriate time to implement, and the appropriate

67

{ll

time to evaluate the outcomes will be inﬂuenced by the alignment of the marketing
manager on the cultural value of long-term orientation. The long-term orientation
dimension of culture reﬂects patience, perseverance, and thrift with respect to time when
making decisions (Barkema and Vermeulen 1997; Newman and Nollen 1996). Cultures
with a long-term orientation are described as possessing willingness and commitment to
making investments that will be valuable to the future (Bearden et al. 2006; Hofstede
2001). In contrast, cultures with a short-term orientation are described as possessing
concern for any investments necessary that have an effect in the present in order to
maintain their current situation (Bearden et al. 2006; Hofstede 2001). Emerging from
this cultural preference for investment and time within decision making, marketing
managers from a short—term oriented culture will make more strategic marketing
decisions of a greater magnitude, of quicker timing, and of a shorter time horizon that are
able to achieve more immediate ﬁnancial gains so as to maintain their current situation
(Nakata and Sivakumar 2001). In contrast, marketing managers from a long—term
orientated culture will make strategic marketing decisions of a smaller magnitude, of
slower timing, and with a longer time horizon in order to achieve signiﬁcant ﬁnancial
beneﬁts so as to allow for their situation to improve in future. Thus, it is hypothesized

that:

H1: Compared with marketing managers from a short-term oriented culture,
marketing managers from a long-tenn oriented culture will make strategic
decisions with (a) a smaller magnitude, (b) a slower timing, and (c) a
longer time horizon.

68

The Inﬂuence of Culture on Time Orientations

Under the guidance of the social psychology of time, it has been demonstrated that
decision making is inﬂuenced by how an individual develops their relationship to time
(McGrath and Tschan 2004). Speciﬁcally, time orientations develop to'form the
relationship between an individual and time by creating a dominant time orientation,
which signiﬁcantly inﬂuences the manner by which individuals respond and utilize
information in their decision making (McGrath1988; Mosakowski and Barley 2001).
Complicating the relationship between the time orientation of an individual and his/her
decision making is that these relationships to time arise from and are inﬂuenced by
culture (Jones 1988). Thus, for marketing managers, it is proposed that their cultural
values inﬂuence the nature of their relationship to time.

The time orientation of the marketing manager will be inﬂuenced by the
alignment of the marketing manager on the cultural value of long-term orientation. The
long-term orientation dimension of culture also provides insight into the time outlook of
the individual. Cultures with a long-term orientation have been described as possessing a
long-term outlook (Hofstede 2001), which suggests that individuals from these cultures
have a concern for and emphasis on what will happen in the future. In contrast, cultures
with a short-term orientation have been described as possessing a near-term outlook
(Hofstede 2001), which suggests that individuals from these cultures have a concern for
and emphasis on what is happening currently. Emerging from this cultural preference for
time outlook, marketing managers from a long—term orientated culture will most likely
develop a dynamic, future-oriented mentality commonly associated with a dominant

future time orientation due to their emphasis on what will happen over time, whereas

69

marketing managers from a short-term orientated culture will most likely develop a
mentality focusing on either the past or present due to their emphasis on examining what

has and is happening now (Nakata and Sivakumar 2001). Thus, it is hypothesized that:

H2: Compared with marketing managers from a short-term oriented culture,
marketing managers from a long-term oriented culture are more likely to
possess a future time orientation.

The time orientation, where the emphasis is placed upon the past, the present, or
the future, will elicit different time horizons for evaluating strategic decisions depending
upon which orientation is dominant for the marketing manager. The dominant time
orientation of an individual determines the tendency of the individual to focus on a
speciﬁc time frame and the events that are occurring with that time frame as well as the
consequences of ones decisions within a speciﬁc time frame (Kluckhohn and Strodtbeck
1961). According to the social psychology of time, an individual with a present
orientation would consider only the immediate consequences of their decision as their
tendency is to primarily focus on what is happening currently and not what may happen
in the future, whereas an individual with a future orientation would consider the future
consequences of their decision as their tendency is to primarily focus on what will happen
in the future (McGrath and Tschan 2004). Resulting from their temporal tendency,
marketing managers with a future orientation will establish a longer time horizon due to
their concern to be able to fully examine the long-term consequences of their decisions.
Further, empirical support has previously been provided for the link between a dominant
future time orientation and the establishment of a longer time horizon by managers for
planning and evaluating strategic decisions (Das 1987; Das and Teng 2001). Thus, it is

hypothesized that:

70

H3: Compared with marketing managers with a past or present time
orientation, marketing managers with a future time orientation will make
strategic decisions with a longer time horizon.

F urtherrnore, time orientation will inﬂuence the marketing manager’s selection of
which information to utilize within their decision making process depending upon which
orientation is dominant for the marketing manager. Within the decision making process,
individuals have been found to have different preferences for information on events in
relation to time and in relation to strategic issues depending upon their dominant time
orientation (Das 1991 ). For marketing managers, the information on events has a
temporal reference point that associates the event to a speciﬁc time period (i.e., the past,
the present, or the future). Moreover, the information on events has a strategic reference
point that associates the events to opportunities and threats. Regardless of an actual time
period associated, opportunities are theorized to be perceived by individuals to have a
future emphasis, whereas threats are theorized to be perceived by individuals to have a
past-and-present emphasis (Das 2004). According to the social psychology of time, a
dominant time orientation is characterized by an individual’s preoccupation with a
particular time period and events that occur in that time period; thereby leading
individuals to demonstrate a distinct preference in their decision making to focus on
information pertaining to events associated with their focal time period (McGrath and
Tschan 2004). Drawing directly from the temporal focus of time orientations,
information on events that is future-oriented in temporal framing will be utilized more by
marketing managers with a future orientation as this information is aligned with the
individual’s preoccupation with the future and events that are likely to occur in the future.

Moreover, information on events that is opportunity-framed will be utilized more by

71

marketing managers with a future orientation as future-oriented individuals have been
found to emphasize detecting opportunities within their decision making (West and

Meyer 1998). Thus, it is hypothesized that:

H4: Compared with marketing managers with a past or present time
orientation, marketing managers with a future time orientation will utilize
a greater amount of (a) future framed information, and (b) opportunity
framed information.

As marketing strategy decisions are made by marketing managers within
organizations, the time orientation of both entities needs to be considered (Bluedom
2000). Since the dominant time orientations develop independently at the different
levels, there is the potential for differences to exist between how the marketing manager
views time and how their organization is predisposed to time. The existence of
differences between the time orientation of the manager and their organization will be
inﬂuenced by the alignment of the marketing manager on the cultural value of
individualism-collectivism. The individualism-collectivism dimension of culture reﬂects
self orientation (Dawar Parker, and Price 1996) demonstrated via the extent to which
people of a culture prefer to act as individuals or as members of a group (Steenkamp,
Hofstede, and Wedel 1999). Cultures higher on individualism are described as valuing
standing apart and determining their own course of action (Nakata and Sivakumar 2001).
For individuals from individualistic cultures, autonomy and independence are viewed as
positive traits (Hofstede 2001; Newman and Nollen 1996), and as such they will prefer to
pursue their own individual initiatives rather than adapt to their organizations beliefs. In

contrast, cultures higher on collectivism are described as valuing belonging to the group

(Nakata and Sivakumar 2001). For individuals from collectivistic cultures, conformity

72

and the subordination of personal preferences are viewed as positive traits (Hofstede

2001; Newman and Nollen 1996), and as such they will prefer to adapt their
organization’s perspective rather than maintain. their own point of view. Emerging from
this cultural preference pertaining to the relative importance of the individual versus the
organization, differences in time orientation between the marketing manager and their
organization are more likely to occur when the marketing manager is from an
individualistic culture because the marketing manager will emphasize their independence
from the organization, than when the marketing manager is from a collectivistic culture
as the marketing manager will emphasize their desire to conform to the organization.
Thus, it is hypothesized that:

H5: Compared with marketing managers from a collectivist culture, marketing
managers from an individualistic culture are more likely to have
differences between their individual time orientation and their
organization’s time orientation.

The existence of differing time orientations between the marketing manager and
their organization creates signiﬁcant problems for developing coherent marketing
strategies (Harvey and Novicevic 2001). Within marketing strategy decision making, the
time orientation of the marketing manager and the time orientation of the organization
simultaneously inﬂuences the strategy formulation of marketing managers as well as their
preferences for strategic decisions (Bluedom 2000; Bluedorn and Denhardt 1988; Thoms

and Greenberger 1995). When differences do exist between the time orientations of the
individual and the organization, misunderstandings emerge pertaining to the need for

action and the intentions behind the action, which subsequently creates conﬂict in the

strategic decision making process (Jones 1988); leading marketing managers to be less

73

willing to take signiﬁcant strategic decisions out of caution. As a result, marketing

managers will make smaller size investments with a slower timed introduction so that the

strategic decision can be changed or aborted if subsequently determined to be made in an
inappropriate direction. Further, as marketing managers are unable to determine the
proper action due to the conﬂict created by the inability to reconcile their own time
orientation with the time orientation of their organizations, marketing managers will be
less committed to the decisions that they have made as well as believe their decisions to
be overall lower in quality when evaluating their strategic decisions. Thus, it is

hypothesized that:

H6: Compared with marketing managers in organizations where their time
orientations are aligned, when differences exist between the individual
time orientation of marketing managers and their organization’s time
orientation,

(a) The magnitude of the strategic decision will be smaller.

(b) The timing of the strategic decision will be slower.

(c) The commitment to the strategic decision will be lower.

((1) The quality of the strategic decision will be lower.
The Inﬂuence of Culture on Information Utilization
Under the guidance of prospect theory, it has been demonstrated that decision making is
inﬂuenced by how an individual connects events to time. Speciﬁcally, the utilization of
information describing events with temporal and strategic frames signiﬁcantly inﬂuences
the manner by which individuals respond (Tversky and Kahneman 1981). The national
culture of the individual determines the preference for attention, interpretation, and
utilization of specific framed information (Tse et a1. 1988). Thus, for marketing

managers, it is proposed that their cultural values inﬂuence the nature of connecting

events to time.

74

The utilization of speciﬁc temporally and strategically framed information will be
inﬂuenced by the alignment of the marketing manager on the cultural value of
uncertainty avoidance. The uncertainty avoidance dimension of culture reﬂects a
society’s risk orientation (Dawar et al. 1996). Cultures higher in uncertainty avoidance
prefer to seek stability and predictability by avoiding change and risk—taking (Nakata and
Sivakumar 2001). This is evidenced by the emphasis placed upon maximizing the
potential for certainty and minimizing the potential for loss (Diamantopoulous et a1.
2003; Schneider and De Meyer 1991). As such, higher uncertainty avoidance cultures
are characterized by a “fear of failure” (Hofstede 2001). In contrast, cultures lower in
uncertainty avoidance are characterized by a “hope for success” as evidenced by their
greater tolerance for the unknown and their willingness to make risky decisions (Hofstede
2001). Emerging from this cultural preference for uncertainty, marketing managers from
higher uncertainty avoidance cultures will pursue efforts to reduce the level of
uncertainty within their decision making by utilizing information on events that already
has or is currently happening (i.e., certain information), whereas marketing managers
from lower uncertainty avoidance cultures will utilize information on events that might
happen in the future (i.e., probabilistic) as they are more comfortable basing their
decision making on the unknown. Further, derived from their cultural risk preferences,
through their need to reduce the possibility of failure, marketing managers from higher
uncertainty avoidance cultures will monitor for and utilize information from their
environment that describes events that have the possibility to cause a loss to their '
situation (i.e., threats), whereas marketing managers from lower uncertainty avoidance

cultures, through their desire to increase the possibility of success, will monitor and

75

' utilize information from their environment describing events that have the ability to result
in a gain to their situation (i.e., opportunities) (Nakata and Sivakumar 2001; Sallivan and

Nonaka 1988). Thus, it is hypothesized that:

H7: Compared with marketing managers from a low uncertainty avoidance
culture, marketing managers from a high uncertainty avoidance culture
will utilize a greater amount of (a) past-and-present framed than ﬁiture
framed information, and (b) threat framed than Opportunity framed
information.

The connection to time provided by the temporal reference point of information,
where events are described in relation to either the past, the present, or the ﬁrture, evokes
different strategic decisions depending upon which frame the marketing managers
emphasize. Within the decision making process, individuals have been found to react
differently to information that is certain than to information that is probabilistic (Tversky
and Kahneman 1981). According to prospect theory, certainty is preferred over
probability by individuals as it eliminates the element of risk from their decision making;
thereby leading individuals to demonstrate a willingness in their decisions take greater
action to immediately address events that are considered to be certain than on events that
are considered to be probable (Kahneman and Tversky 1979). For marketing managers,
the information that they posses on events that have occurred in the past or that are
occurring in the present is interpreted to be certain, whereas the information on events
that are likely to occur in the future is interpreted to be probabilistic (Mitchell et al.
1989). Drawing from the preference of certainty over probability, marketing managers
who predominately utilize information describing events in the past-and-present will

make strategic marketing decisions of a greater magnitude and of quicker timing in order

to prepare their situation to react to events that are guaranteed to have an inﬂuence.

76

Moreover, motivated by their concern for certainty, these marketing managers will also
employ a shorter time horizon to evaluate their strategic decisions so as to ensure that the
actions have been successfully employed with respect to the events that are inﬂuencing

their operating environment. Thus, it is hypothesized that:

H 3: Marketing managers who utilize a greater amount of past-and-present
framed information will make strategic decisions with (a) a greater
magnitude, (b) a quicker timing, and (c) a shorter time horizon.

Furthermore, the connection to time provided by the strategic reference point of

information, where events are described in relation to opportunities or threats, evokes
different strategic decisions depending upon which frame the marketing managers
emphasize. When making decisions, individuals have been found to react differently to
information that is interpreted to be a gain than to information that is interpreted to be a
loss (Kahneman and Tversky 1979). According to prospect theory, losses loom larger
than gains since individuals value what they have comparable to the things which they do
not (Levy 1992); thereby leading individuals to demonstrate a willingness in their
decisions to take greater action to immediately address events that are considered to
result in a loss than to events that are considered to result in a gain (Tversky and
Kahneman 1981). For marketing managers, the information that they possess on events
that are positive situations are interpreted to be opportunities, which involve the
likelihood of achieving a gain, whereas information on events that are negative situations
are interpreted to be threats, which involve the likelihood of acquiring a loss (Jackson and
Dutton 1988). Drawing from the preference of individuals to prevent losses over
acquiring gains, marketing managers who predominately utilize information describing

events identiﬁed as threats will make strategic marketing decisions of a greater

77

magnitude and of quicker timing in order to prevent the chance for any losses to accrue to
their current situation. Moreover, motivated by their loss aversion, these marketing
managers will also employ a shorter time horizon to evaluate their strategic decisions so
as to ensure that their preventative actions have successfully achieved the consequences

that they have desired. Thus, it is hypothesized that:

H9: Marketing managers who utilize a greater amount of threat framed
information is utilized will make strategic decisions with (a) a greater
magnitude, (b) a quicker timing, and (c) a shorter time horizon.

METHOD

Rationale for Research Design Selection

To examine how time inﬂuences marketing managers and their marketing strategy
decision making, the case scenario methodo was selected as the appropriate research
design. This research design was selected because it allows for the micro-level aspects of
time (e.g., information processing) to be captured within the experimental manipulations
of the case scenario, while it also allows for the macro—level aspects of time (e. g., time
orientations at the individual and organization level) to be captured through multi-item
measures in a survey questionnaire. This feature of the design was important because it
has been argued that selecting the proper method to examine the inﬂuence of time can be
problematic since time can serve as an independent variable, a dependent variable, or as
an element of the research design; and as such, laboratory experiments are more useful
for examining the micro—level aspects of time, whereas surveys are more useful for
examining the macro-level aspects of time issues (Menon and Varadarajan 1992).

Moreover, the case scenario method has been successfully employed in previous

78

examinations of marketing strategy decision making (e. g., White, Varadarajan, and Dacin

2003).

Case Scenario

Developed based upon the procedure described in White et al. (2003), the case scenario
focused on information on events related to competitors that pertain to the introduction of
a new product. This context was selected because the magnitude, timing, and time
horizon are important marketing strategy decisions when introducing a new product that
must be appropriately made by marketing managers to ensure the ﬁrm’s success
(Bowman and Gatignon 1995). In administering the case scenario, participants were
presented the complete case scenario questionnaire, which includes the case scenario
followed by a series of survey measures. To develop and reﬁne the case scenario, three
pretests were conducted. The case scenario developed as a result of the three pretests is

presented in Appendix 2.1.

Pretest I

The purpose of Pretest 1 was to determine the information statements pertaining to the
actions of competitors to be included within the case scenario. A list of possible
information statements to include within the case scenario was generated by drawing
from leading academic journals, case studies, and articles in the popular press. Fifty-
eight undergraduate marketing majors served as participants in Pretest 1. Each
participant, on a pen and paper questionnaire, evaluated a series of possible information

statements based upon whether they were perceived to be an opportunity or a threat as

79

well as the strength of the information statement. For the opportunity/threat perception of
each information statement, a frequency count was conducted. For the strength of each
information statement evaluated, a simple mean was calculated. To ensureno differences
in relative strength, a t-test with a Bonferonni adjustment was calculated. The results of
Pretest 1 are provided in Appendix 2.2. Based on the results of Pretest 1, the following
information statements pertaining to the actions of competitors were selected: (1) Patent
license (Threat; M = 5.085), (2) Problems in product launch (Opportunity; M = 4.559),
(3) New product design does not deve10p excitement among consumers (Opportunity; M
= 4.525), (4) Hire new talented product deveIOpment manager (Threat; M = 4.695), (5)
Increasing R&D capabilities (Threat; M = 4.339), and (6) Dropped the release of a
product (Opportunity; M = 3.983). There were no signiﬁcant differences in the

evaluation of the strength of any of the information statements.

Pretest 2

The purpose of Pretest 2 was to evaluate the context and information statements of the
case scenario as well as the survey measures developed. Based upon the results of Pretest
1, it was necessary to select a context for the case scenario where (1) the competitive
environment is highly technologically uncertain and the introduction of a new product to
the market is likely, and (2) each of the information statements pertaining to the actions
of competitors could occur. The digital camera category within the consumer
photography market was selected as an appropriate background. The case scenario was
then drafted, where each piece of information was manipulated with temporal and

strategic framing. Speciﬁcally, one of the opportunity-evaluated and one of the threat-

80

evaluated information statements were each described to occur in the past, the present, or
the future. Prior to Pretest 2, the case scenario was evaluated by a marketing manager
working within the digital camera category for its presentation of a realistic description of
information that may be encountered when developing their marketing strategies. Based
upon the marketing manager’s feedback, minor revisions in wording were made to the
case scenario. One hundred and twenty—four undergraduate marketing majors served as
participants in Pretest 2. Each participant was presented with the complete case scenario
questionnaire. The results of Pretest 2 identiﬁed some reﬁnements needed for the survey
measures following the case scenario. First, the survey measures related to the strategic
decisions of magnitude, timing, and time frame needed to be reworded and scale
reformatted. These changes were made to more closely align with the measures from
White et al. (2003). Second, the survey measures developed for the time orientation at
the individual and organizational level were reformatted to more closely resemble the

time orientation scale developed by Kluckhohn and Strodtbeck (1961).

Pretest 3

The purpose of Pretest 3 was to identify any ﬁnal reﬁnements that needed to be made to
the case scenario and/or procedure with respect to (1) the background deveIOped for the
case scenario, (2) the information statements of the case scenario, and (3) the survey
measures utilized. Further, conducting Pretest 3 as an online questionnaire allowed for
any issues that may arise when conducting the case scenario online to be uncovered. One
hundred and fourteen undergraduate marketing majors served as participants in Pretest 3.

Each participant was presented with the complete case scenario questionnaire. Based

81

upon Pretest 3, in order to improve the clarity of and the ease of which the case scenario
was administered, small changes in the background description (i.e., wording) and the
dependent variables (i.e., format) were made and the ﬂow of the case scenario procedure
was reﬁned based upon observing the experience of the participants using the online

questionnaire.

Case Scenario Procedure

Within this case scenario, participants assumed the role of Vice President of Marketing
for PhotoMax Incorporated12 whose responsibilities include making recommendations
regarding the development and introduction of new products. PhotoMax was described
as having an organizational culture virtually identical to the culture at the participant’s
current organization.l3 Next, a description of the general characteristics and original
product marketing strategy of PhotoMax as well as the general characteristics and the
uncertainty existing within the competitive environment was provided to the participants.
The case scenario, inclusive of six speciﬁc information statements, was then presented.
Directly following the case scenario, participants were asked to make strategic decisions
based upon the case, evaluate the decisions that they made and evaluate the extent to
which the information in the case was used to make their decisions. Lastly, participants

evaluated a series of individual and organization related survey measures.

 

‘2 PhotoMax Incorporated is a hypothetical ﬁrm, whose name derives from the PhotoWars strategy
simulation of Sawhney and Malholtra (1999). A hypothetical ﬁrm was used in order to limit any
extraneous inﬂuence that prior beliefs of an existing ﬁrm‘s marketing strategy and/or marketing actions
could have on the decision making of the participants.

Participants were informed of the identical organizational culture to ensure that the participants would
make the decisions as if it were occurring within their current organization and that their responses to the
organizational survey measures corresponded to an evaluation of their current organization. This process
was utilized in White et a1. (2003).

82

Data Collection

Since this research seeks to examine how culture inﬂuences how marketing managers
incorporate the complexities of time within their marketing strategy decision making, it
was necessary to select samples that not only had cultural differences on the dimensions
examined but also possessed cross-cultural comparability. First, since this study employs
Hofstede’s cultural dimensions, with the intention of comparing cultural differences in
decision making based upon the dimensions of uncertainty avoidance, long-term
orientation, and individualism-collectivism between countries, the method of maximum
differentiation proposed by Sivakumar and Nakata (2001) was employed to select the
national cultures of the United States and Japan. Speciﬁcally, the United States was
selected as the national culture that is lower on the uncertainty avoidance dimension (46),
lower on the long-term orientation dimension (29), and higher on the individualism-
collectivism dimension (91); whereas Japan was selected as the national culture that is
higher on the uncertainty avoidance dimension (92), higher on the long—term orientation
dimension (80), and lower on the individualism—collectivism dimension (46) (Hofstede
2010). M Second, cross-cultural comparability was achieved through the use of
homogeneous samples to control for extraneous factors (Reynolds, Siminitras, and
Diamantopoulous 2003) by utilizing a matching procedure based on the position of the
respondent (i.e., marketing manager).

A market research ﬁrm was employed to administer the case scenario. The case

scenario was ﬁrst developed in English for administration in the United States, and

 

'4 . . . . . . .
The maximum differentiation procedure resulted rn two countries With very srmrlar proﬁles (i.e., Japan

and South Korea). Japan was selected as the second national culture to be examined because it had the
largest minimum difference between its score and the United States’ score on any of the three cultural
dimensions investigated (i.e.. uncertainty avoidance, long-term orientation, and individualism-
collectivism).

83

'l ' “I .lxc-.ln uni..- a

 

I!!! .n ... r . ha 1..

translated into Japanese for administration in Japan. The market research ﬁrm used their
proprietary online panel to contact potential participants in both the United States and
Japan. In order to ensure the appropriateness of the participants, participants were
screened based upon their functional role (i.e., marketing), their job title (i.e., manager
and above), and ﬁrm size (i.e., 50 employees and above). Participants, who ﬁt the
screening criteria, were then allowed to proceed to the case scenario. Participants in this
case scenario were 309 marketing managers from the United States and 309 marketing
managers from Japan. To complete the case scenario, participants from the United States
took on average 27.2 minutes while participants from Japan took on average 21.5

minutes.

Measures

The measures utilized within this study were adapted from existing scales identiﬁed
within the literature. A description of the items and response formats are provided in
Appendix 2.3. The correlation matrix of the measures for the combined sample is
presented in Table 2.1.

Strategic Decisions: Magnitude, Timing, and Time Horizon. Respondents will
make three strategic decisions: magnitude, timing, and time horizon. The magnitude
refers to the amount of resources that should be committed to their strategic decision, the
timing refers to the most appropriate time as to when to implement their strategic
decision, and the time horizon refers to the appropriate time to elapse before evaluating
the outcomes of their strategic decision. Following White, Varadarajan, and Dacin

(2003), two items, combined as a formative construct, are used to measure each of the

84

strategic decisions. The ﬁrst item asked respondents, on a nine-point scale ranging from
a substantial decrease to a substantial increase, how they would recommend changing the
strategic decisions from the ﬁrm’s average decision, while the second item asked
respondents to provide a speciﬁc estimate of the strategic decision. Higher values
indicate strategic decisions of a greater magnitude, a slower timing, and a longer time
hoﬁzon.

Decision Evaluation: Commitment, and Quality. In response to their strategic
decisions, respondents will make two different evaluations of their strategic decisions:
commitment, and quality. Decision commitment refers to the willingness to invest effort
to ensure that the strategic decision is successful, and was measured with a four item
seven-point Likert scale adapted from Dooley and Fryxell (1999). The Cronbach’s alpha
for the decision commitment scale for the combined sample was .866. Decision quality
refers to the evaluation of the appropriateness of the strategic decision with respect to
overall strategy and effectiveness, and was measured with a four item seven-point Likert
scale adapted from Dooley and Fryxell (1999). The Cronbach’s alpha for the decision
quality scale for the combined sample was .894.

Time Orientation. Time orientation refers to the relatively stable psychological
tendency to emphasize a particular temporal frame, such as the past, the present, or the
future (Kluckhohn and Strodtbeck 1961). This tendency exists at the individual level
(i.e., individual time orientation) and at the organizational level (i.e., organizational time
orientation). Both the individual time orientation and the organizational time orientation
were measured with a three option rank-order scale adapted from the value orientation

scale developed by Kluckhohn and Strodtbeck (1961). Respondents are coded as having

85

a past—orientation, a present-orientation, and a future-orientation at both the individual
and organizational level based upon which description was ranked to be the most similar
to their own beliefs or their organization’s beliefs, respectively. Differences between a
respondent’s dominant individual time orientation and the dominant time orientation for
their organization are also coded. The same time orientation at the individual and
organizational level was coded as 0. A different time orientation at the individual and
organizational level was coded as 1.

Information Use. The extent to which speciﬁc pieces of information from the
case scenario would be used within their strategic decisions was measured following
White et a1. (2003). The case scenario contains six distinct pieces of competitive
information that possessed both a temporal and a strategic frame (e. g., one piece of
information is opportunity-framed and future-framed); where the six pieces of
information are equally balanced between the three types of temporal framing (e.g., two
past-framed, two present—framed, and two future-framed) and the two types of strategic
framing (e.g., three opportunity-framed and three threat-framed). Respondents were
asked to rate, on a seven-point scale, the extent to which they would use each piece of
information to make their decisions. The pieces of information pertaining to a speciﬁc
type of framing were treated as a formative indicator.

Control Variables. Based upon the extant managerial decision making literature,
managerial expertise was operationalized as a formative indicator including job title,
education, and years of experience (White et al. 2003) was included to control for
differences in the expertise of individual respondents, whereas organization size was

operationalized based upon ﬁrm sales to control for differences in organizations.

86

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87

Measurement Analysis

Measurement Validity and Reliability

Conﬁrmatory factor analysis with EQS 6.1 (Bentler and Wu 2006) was used to estimate a
measurement model composed of the reﬂective multi-item latent constructs of decision
commitment, and decision quality for both the sample from the United States and from
Japan. The results of the measurement models are presented in Table 2.2.

The overall chi—square goodness-of—ﬁt index for the model for the United States is
88.721 with 19 degrees of freedom (p < .05) and for the model for Japan is 80.554 with
19 degrees of freedom (p < .05). For the sample from the United States, the comparative
ﬁt index (CF I) is .956, the normed ﬁt index (NF 1) is .945, the root mean square error of
approximation (RMSEA) is .109 and the standardized root mean square residual (SRMR)
is .052, whereas for the sample from Japan, the CFI is .959, the NH is .947, the RMS‘EA
is .103 and the SRMR is .045.; each of which meet the critical values for a model of good
ﬁt (Bollen 1989; Browne and Cudeck 1992; Hu and Bentler 1999). All of the factor
loadings are large (range: .563 to .870) and signiﬁcant (t-values > 2.00), providing
evidence of convergent validity for both models.

Discriminant validity was assessed two ways. First, the constructs exhibit
discriminant validity because the correlation between each construct is less than 1 by an
amount greater than twice its standard error (Bagozzi and Warshaw 1990). Second, a
series of chi-square difference tests were conducted between the model in which the
correlations between all possible pairs of constructs is freely estimated and thenbetween
a series of models where each correlation was set to unity. The chi—square for the freely

estimated model was signiﬁcantly better than any of the unity-constrained models

88

(United States: 12 cossmmm (20) = 230.834, A x2 (1): 142.113, p < .01; Japan: x2

CONSTRAINED (20) = 151.330, A x2 (1): 70.776, p < .01). As such, both constructs from

each model show evidence of discriminant validity. Lastly, the composite reliability of

constructs ranged from .771 to .828, indicating acceptable levels of reliability for each

construct of both models.

Table 2.2: Measurement Models

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States Japan
Construct Standardized Standardized
Loadings Loadings
Decision Commitment
DCOI .676 .751
DC02 .868 .855
DCO3 .843 .563
DCO4 .845 .797
Composite Reliability .819 .771
Decision Quality
DQl .870 .863
DQ2 .761 .733
DQ3 .71 1 .826
DQ4 .846 .868
Composite Reliability .810 .828
Overall model ﬁt indices:
{(dr) 88.721 (r9) 80.554 (19)
CFI .956 .959
NFI .945 .947
SRMR .052 .045
RMSEA .109 .103

 

 

 

 

 

 

Measurement Invariance Testing

The ﬁve step sequential procedure outlined by Steenkamp and Baumgartner (1998) was

followed to assess the measurement invariance of the two reﬂective constructs of

89

 

 

 

 

 

 

 

 

decision commitment and decision quality. The results of the measurement invariance

testing for the reﬂective constructs are presented in Table 2.3.

Table 2.3: Measurement Invariance

 

 

 

 

 

 

 

f 7} value 011‘ RMSEA CAIC err NFI
Conﬁgural Invariance 169.273 38 .106 2734.587 ,9 58 .946
Metric Invariance 181.1 13 44 .101 2734.587 .956 .944
Scalar Invariance 263.025 50 .102 2981.791 958 .946
Factor Variance Invariance 264.315 52 .100 2981.791 .958 .946
Error Variance Invariance 304.209 384 .105 2948.445 .948 .934

 

 

 

- « . 1 '7 7 - "ﬂ - > . ‘3
Partial Error Varranee 373.482 1 56 .097 2957.886 957 .943
Invariance

 

 

 

 

 

 

 

 

C onﬁgural invariance]5 was assessed by testing that the pattern of loadings were
the same across the two countries. The ﬁt of the model was satisfactory: 12 = 169.273.
d.f. : 38. p < .01; RMSEA = .106; C‘..\1C : 2734.587: CFI = .9581NF1 = .946. indicating
contigural invariance. Metric invariance was assessed by constraining all the factor
loadings to be invariant across the countries. There was not a signiﬁcant increase in the
chi-square between the full metric invariance and the conﬁgural invariance models (le2
(6) = l 1.84. p > .05). indicating full metric invariance. Scalar invariance was assessed by
constraining all the intercepts to be invariant across countries. Although there was a
signiﬁcant increase in the chi-square between the scalar invariance and metric invariance

models (A)? (6) = 81.912, p < .05) as well as between the scalar invariance and conﬁgural

- . 7 , _ .. . .
Invariance models (Ax-(12) = 97.752, p < .05). there was not a substantial change in the
ﬁt indices of RMS EA, CFI, or NFI between any of the models. Hence, it can be
concluded that scalar invariance is supported. Factor variance invariance was assessed

15 _. . .
For estimation purposes, the loadings of DCO3 and DQ3 were set to l rn the models for both countrres.

90

by constraining all the factor variances to be invariant across countries. The factor
variance invariance model was essentially the same as for the scalar invariance model as
there was not a signiﬁcant increase in the chi-square between the factor variance
invariance and the scalar invariance models (1338(2) = 1.295 p > .05), indicating factor
variance invariance. Error variance was assessed by constraining all the error variances
to be invariant across countries. Full error variance was not supported due to the
signiﬁcant increase in the chi-square between the error variance invariance and the factor
variance invariance models (Ax2 (6) = 39.894, p < .05) and the signiﬁcant decrease in the
ﬁt indices. After releasing two of the error variance constraints (i.e., DC02 and DQ4),
there was not a signiﬁcant increase in the chi-square between the partial error variance
invariance and the factor variance invariance models (ME (4) = 9.167, p > .05), indicating
partial error variance invariance. Through utilizing this procedure, the reﬂective
measures of decision commitment, and decision quality were deemed to meet the

requirements of measurement invariance to allow for further hypothesis testing.

RESULTS

The three sets of hypotheses focused on the inﬂuence of culture on the incorporation of
time within their marketing strategy decision making, with respect to strategic decisions
(H I), time orientations (Hz to H6), and information utilization (H7 to H9). To test the
proposed hypotheses pertaining to how culture and time inﬂuence the strategic marketing
decisions of marketing managers, partial least squares analysis via Smart PLS was used.
Since a primary concern of these hypotheses was with the prediction of dependent

endogenous variables and the model incorporates both formative and reﬂective

91

indicators, a PLS analysis is the most appropriate (Diamantopoulous and Winklhofer
2001; Fornell and Bookstein 1992; White et a1. 2003). Since PLS analysis makes no
distributional assumptions, the bootstrapping method was used to examine the stability
and the signiﬁcance of the parameter estimates, with t-values computed on the basis of
500 bootstrapping runs. Three PLS models were estimated with the combined sample in
which information utilization was divided into temporal framed information, strategic
framed information, and differentials in temporal and strategic framing. The results of
the PLS analysis for the temporal framed information are presented in Table 2.4 and the
results of the PLS analysis for the strategic framed information are presented in Table
2.5. The results of the PLS analysis for differentials in framing are presented in Table
2.6. Further, to test the proposed hypotheses, a series of tests for the differences between
means and proportions were also conducted. The results are ﬁrst discussed in detail and

then summarized in Table 2.15.

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The Inﬂuence of Culture on Time in Strategic Decisions

In H], it was predicted that marketing managers from a long-term oriented culture will

make strategic decisions with a smaller magnitude (Hm), a slower timing (H 1b), and a

longer time horizon (H 1c) than marketing managers from a short-term oriented culture.

To test the relationship between culture and the strategic decisions made, a MANCOVA

was conducted. The results of the MANCOVA analysis are presented in Table 2.7. The

means of strategic decisions by culture are presented in Table 2.8.

Table 2.7: MANCOVA Results for Culture’s Inﬂuence on Strategic Decisions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multivariate Tests Test for Between Subjects
Hotellmg’s Significance Significance
Factor Trace F-value
Level Level
F—value
Culture 7.524 < .001
Magnitude 14.398 < .001
Timing 3.910 .048
Time Horizon 7.160 .008
Covariates
Years Experience 0.398 .755
Magnitude 0.1 10 .740
Timing 0.691 .406
Time Horizon 0.030 .863
Job Title 3.219 .004
Magnitude 0.993 .371
Timing 1.891 .152
Time Horizon 8.595 < .001
Degree Achieved 2.069 .009
Magnitude 3328 .006
Timing 1.069 .376
Time Horizon 2.496 .030
Organization Size 0.953 .527
Magnitude 0.614 .766
¥Timing 0.876 .536
L__Time Horizon 1.275 .254

 

96

 

Table 2.8: Strategic Decision Marginal Mean Valuesma

 

Long-Term Oriented Short-Term Oriented
(Japan) (United States)

 

l

 

 

Magnitude 0.999 I 1.237

 

 

 

Time Horizon 0.874 I 0.941

 

 

a Marginal means are estimated at the Years Experience covariate average of 20. 1 9

The mean magnitude of the strategic decision was signiﬁcantly smaller for
marketing managers from a long-term oriented culture (M JAPAN == .999) than for
marketing managers from a short-term oriented culture (M UNITED STATES = 1.237). The
mean timing of the strategic decision was significantly faster for marketing managers
from a long-term oriented culture (M JAPAN = .838) than for marketing managers from a
short-term oriented cu1ture (M UNITED STATES = .880). The mean time horizon of the
strategic decision was significantly shorter for marketing managers from a long-term
oriented cu1ture (M JAPAN = .874) than for marketing managers from a short-term
oriented cu1ture (M UNITED STATES = .941). Thus, H13 is supported. H [b and we are

contradicted.

The Inﬂuence of Culture on Time Orientations
In H2, it was predicted that marketing managers from a long-term oriented culture are

more likely to possess a future time orientation than compared with marketing managers

 

16
The formative measures for the strategic dCClSIOIIS of magnitude, timing, and time horizon were re-

scaled in order to allow for more ease in interpretation. The items were centered around the no change
value for the ﬁrst item in each scale and the average strategic decision for the second item. For each
strategic decision, a value of 1 indicates maintaining the average strategic decision, a value about 1
indicates increasing the average strategic decision, and a value below 1 indicates decreasing the average
strategic decision.

97

J
Timing 0.838 1 0.880 U]
1

from a short-term oriented culture. To test the relationship between culture and time

orientations, a two sample Z-test for differences in proportions was conducted. The

results of the proportion difference testing are presented in Table 2.9.

Table 2.9: Individual Time Orientations

 

Long-Term Oriented
(Jami!)

Short-Term Oriented
(United States)

 

Past Orientation

12.9% (40)

13.9% (43)

 

Present Orientation

40.8% (126)

29.1% (90)

 

Future Orientation

46.3% (143)

57.0% (176)

 

 

Total

 

100% (309)

100% (309)

 

 

Statistical Testing 3:

 

 

 

 

Past: Equality in Proportions Z = -.354 g = .723
Present: Equality in Progortions Z = 3.037 I = .002
Future: Equality in Proportions Z = -2.656 p = .007

 

 

a In each of these statistical tests, the long-term oriented culture was group one and the
short—term oriented culture was group two.

 

 

The most frequent individual time orientation in both the short-term and long-

term oriented cultures was a future orientation. However, the proportion of marketing

managers from a short-term oriented culture with a future time orientation (P UMTED

STATES = 57.0%) was significantly greater than the proportion of marketing managers

from a long-term oriented culture with a future time orientation (P JAPAN = 46.3%).

Thus, H2 is contradicted.

 

To further understand the inﬂuence of culture on the adoption of an individual
time orientation, the differences in proportion between the adoption of a present
orientation and of a past orientation were also examined. The second most frequent
adopted time orientation in both cultures was a present orientation. The results indicate

that the proportion of marketing managers from a long-term oriented culture with a

present time orientation (P ] ApAN = 40.8%) was significantly greater than the proportion

98

of marketing managers from a short-term oriented culture with a present time orientation
(P UNITED STATES = 29.1%). A past time orientation was the least frequently adopted time

orientation in both cultures and there was no signiﬁcant difference in the proportion of
marketing managers who adopted this time orientation between the long-term and short-
term oriented cultures.

In H3, it was predicted that marketing managers with a future time orientation will

make strategic decisions with a longer time horizon than marketing managers with a past
or present time orientation. The PLS analysis for the combined sample in both the

temporal and strategic framing models indicates that the effect of a future time
orientation on the time horizon was non—signiﬁcant (B TEMPORAL = -.058, t = 1.028; B
STRATEGIC == -.057, t = 1.065). Thus, H3 is not supported.

In H4, it was predicted that marketing managers with a future time orientation will
utilize a greater amount of future framed information (H43) and opportunity framed

information (H4b) than marketing managers with a past or present time orientation. The

PLS analysis in the temporal framing model indicates that the effect of a future time

orientation on the utilization of future framed information was positive and significant (B
TEMPORAL = .130, t = 3.187), while the strategic framing model indicates that the effect of
a future time orientation on the utilization of opportunity framed information was positive
and significant (B STRATEGIC = .125, t = 3.135). Thus, H43 and H410 are supported.

To further understand the influence of time orientation on the utilization of
framed information, its effect on the utilization of past-and-present and threat framed

information were also examined. The PLS analysis in the temporal framing model

99

indicates that the effect of a future time orientation on the utilization of past-and-present
framed information was positive and signiﬁcant (B TEMPORAL = .123, t = 2.842). Further,

the PLS analysis in the strategic framing model indicates that the effect of a future time

orientation on the utilization of threat framed information was positive and signiﬁcant (B
STRATEGIC = .1 10, t = 2.789). Moreover, the inﬂuence of a future time orientation on the

differential preference for the utilization of speciﬁc temporal and strategic framed
information was examined. The PLS analysis in differential framing model indicates that

the effect of a future time orientation on the utilization of temporal framed information (B
pp_F = -.001, t = 0.030) and on the utilization of strategic framed information (B T-O:

.033, t = 0.891) was non-signiﬁcant.

In H5, it was predicted that marketing managers from an individualistic culture are
more likely to have differences between their individual time orientation and their
organization’s time orientation than marketing managers from a collectivist culture. To
test the relationship between culture and time orientation differences, a two sample test
for differences in proportions was conducted. The results of the proportion difference
testing are presented in Table 2.10.

Table 2.10: Differences in Time Orientations

 

 

 

 

 

 

 

 

 

 

 

 

Collectivistic L lndividualistic
(Japan) (United States) _\
No Differences 49.5% (153) \ 41.4% (128) W
Differences 50.5% (156) 1 58.6% (181) j
iota] L 100% (309) J 100% (309) 1
: 7
itatistical Testing“: _l
No Differences: qulitj in Proportions l Z = -2.020 l L: .043 j
mferences: Eﬂuality in Proportions 1 Z = 2.020 \ p = .043 l
a In each of these statistical tests, the collectivistic culture was group one and the
individualistic culture was group two.

 

 

100

The proportion of marketing managers from an individualistic culture with

differences existing between their individual orientation and their organization’s
orientation (P UNITED STATES = 58.6%) was signiﬁcantly greater than the proportion of
marketing managers from a collectivistic culture with differences existing between their
individual orientation and their organization’s orientation (P JAPAN = 50.5%). Thus, H5 is
supported.

In H6, it was predicted that when differences exist between the individual time
orientation and their organization’s time orientation marketing managers will make
strategic decisions with a smaller magnitude (H63) and a slower timing (Héb) than

marketing managers who have aligned time orientations to their organization. The PLS
analysis in both the temporal and strategic framing models indicates that the effect of a

difference in time orientation has a non-significant effect on both the magnitude of the

strategic decision (B TEMPORAL == -.006, t = 0.143; B STRATEGIC = -.007, t = 0.176) and the
timing of the strategic decision (B TEMPORAL == .044, t = 0.954; B STRATEGIC = .041, t =
0.855). Thus, H63 and H61, are not supported.

Further, it was also predicted that the commitment to (H60) and the quality of the

strategic decisions (Hod) will be lower when differences in time orientation exist than

compared to when no differences exist. The PLS analysis in both the temporal and

strategic framing models indicates that the effect of a difference in time orientation has a

non-signiﬁcant effect on the commitment to the strategic decision (B TEMPORAL = -.059, t

= 1.421; B STRATEGIC = -.060, t = 1.475) and a signiﬁcant negative effect on the quality of

101

. “has... .1

 

the strategic decision ([3 TEMPORAL = -.092, t = 2.344; [3 STRATEGIC ='-.093, t = 2.354).

Thus, H6c is not supported and Hbd is supported.

The Inﬂuence of Culture on Information Utilization

In H7, it was predicted that marketing managers from a high uncertainty avoidance
culture will utilize a greater amount of past—and-present framed than future framed
information (H72) and threat framed than Opportunity information (H7b) than compared
with marketing managers from a low uncertainty avoidance culture. To test the
relationship between culture and the differential preference for the differential utilization
of temporal and strategic framed information, a MANCOVA was conducted. The results
of the MANCOVA analysis are presented in Table 2.11. The means of differential
utilization by culture are presented in Table 2.12.

There was no signiﬁcant difference in the means between high uncertainty
avoidance and low uncertainty avoidance cultures in their differential preference to
utilize a speciﬁc type of temporal framing. The mean of the differential preference for
utilizing strategic framed information for marketing managers from a high uncertainty

avoidance cu1ture (M JAPAN = 0.125) was signiﬁcantly different from the mean for

marketing managers from a low uncertainty avoidance cu1ture (M UNITED STATES = -

0.252). This indicates that marketing managers from a high uncertainty avoidance
cu1ture utilize more on threat framed information than opportunity framed information,

whereas marketing managers from a low uncertainty avoidance cu1ture utilize more

102

 

opportunity framed information than threat framed information. Thus, H7a is not

supported and H7), is supported.

Table 2.11: MAN COVA Results for Culture’s Inﬂuence on Differential Utilization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multivariate Tests Test for Between Subjects
Hotelhng’s Significance Significance
Factor Trace F—value
Level Level
F—value
Culture 8.760 < .001
PP - F 0.208 .648
T-O 15.291 <.001
Covariates
Years Experience 1.947 .144
PP - F 0.353 .552
T - O 3.104 .079
Job Title 1.210 .305
PP - F 0.022 .978
T - O 2.365 .095
Degree Achieved 0.214 .995
PP - F 0.252 939
T - O 0.179 .971
Organization Size 1.282 .200
PP - P 0.724 .670
T - O 1.730 .089
Table 2.12: Differential Utilization Marginal Mean Valuesa
High Uncertainty Low Uncertainty
Avoidance Avoidance ‘\
(Japan) (United States)
PP - F -0.018 0.047 ‘1
T - o 0.125 -0252 1
a Marginal means are estimated at the Years Experience covariate average of 2019—1

 

Moreover, the inﬂuence of culture on the utilization of speciﬁc temporal and
strategic framed information was examined. To test the relationship between culture and

the utilization of speciﬁcally framed information, a MANCOVA was conducted. The

103

results of the MAN COVA analysis are presented in Table 2.13. The means of
information utilization by culture are presented in Table 2.14.

Table 2.13: MAN COVA Results for Culture’s Inﬂuence on Information Utilization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multivariate Tests Test for Between Sutiects
Factor H0;:l:l;g 3 Significance F-value Significance
Level Level
F-value
Culture 1 1.297 < .001
Past-and-Present 16.893 < .001
Future 8.530 .004
Opportunities 29.489 < .001
Threats 2.201 .138
Covariates
Years Experience 1.803 .146
Past-and-Present l .089 .297
Future 1.878 .171
Opportunities 0042 .838
Threats 3.920 .048
Job Title 0.896 .497
Past-and-Present 0.2 16 .806
Future 0.266 .766
Opportunities 0.846 .430
Threats 0.768 .464
Degree Achieved 0.375 .985
Past-and-Present 0.572 .721
Future 0.743 .592
Opportunities 0.526 .757
Threats 0.630 .677
Organization Size 1.307 .146
Past-and-Present 1 .426 . 182
Future 0.995 .439
Opportunities 1 .563 .13 3
Threats 1.339 .221

 

 

 

 

 

104

 

Table 2.14: Information Utilizations Marginal Mean Valuesa

 

 

 

 

 

 

 

 

 

 

High Uncertainty Low Uncertainty
Avoidance Avoidance
(Japan) (United States)
Past-and-Present 4.364 4.716
Future 4.383 4.670
Opportunities 4.308 4.827
Threats 4.433 4.575
a Marginal means are estimated at the Years Experience covariate average of 20.19

 

The mean of past-and-present framed information utilization was signiﬁcantly
less for marketing managers from a high uncertainty avoidance cu1ture (M JAPAN = 4.364)
than for marketing managers from a low uncertainty avoidance cu1ture (M UNITED STATES
= 4.716). The mean of future framed information utilization was signiﬁcantly less for
marketing managers from a high uncertainty avoidance culture (M jAPAN = 4.383) than
for marketing managers from a low uncertainty avoidance culture (M (”.1le STATES =
4.670). The mean of threat framed information utilization was not signiﬁcantly different
for marketing managers from a high uncertainty avoidance cu1ture (M jAPAN = 4.433)
than for marketing managers from a low uncertainty avoidance cu1ture (M UNITED STATES
= 4.575). The mean of opportunity framed information utilization was signiﬁcantly less
for marketing managers from a high uncertainty avoidance culture (M JAPAN = 4.308)
than for marketing managers from a low uncertainty avoidance cu1ture (M UNlTED STATES
= 4.827).

In H8, it was predicted that as marketing managers utilize a greater amount of
past-and-present framed information they will make strategic decisions with a greater

magnitude (H83), a quicker timing (Hgb), and a shorter time horizon (ch). The PLS

105

analysis in differential framing model indicates that the effect of a differential preference

for utilizing temporal framed information on magnitude was negative and signiﬁcant (B
Pp_F = -.105, t = 2.008), on timing was positive and signiﬁcant (B pp-F == .095, t = 1.788),
and on time horizon (B pp-f: == .054, t = 0.968) was non-signiﬁcant. This indicates that

marketing managers utilizing a greater amount of past-and-present framed information

over future framed information will make strategic decisions of a smaller magnitude and
of a slower timing. Thus, Hga and Hgb are contradicted. ch is not supported.

To further understand the inﬂuence temporal framed information on strategic
decisions, the effect on the utilizing past-and-present and a greater amount of future
framed information were also examined. The PLS analysis in the temporal framing
model indicates that utilizing a greater amount of past—and-present framed information

has a positive and signiﬁcant effect on magnitude (B TEMPORAL:- .154, t = 3.634) and a

non-signiﬁcant effect on timing (B TEMPORAL: .097, t = 1.245) and on time horizon (B
TEMPORAL = .003, t = 0.035). This indicates that as marketing managers utilize a greater

amount of past-and-present framed infomiation their strategic decisions will be of a
greater magnitude. Moreover, the PLS analysis in the temporal framing model indicates

that utilizing a greater amount of future framed information has a positive and signiﬁcant
effect on magnitude (B TEMPORAL = .294, t = 7.284), a negative and signiﬁcant effect on
timing (B TEMPORAL : -.156, t = 2.506) and a non-signiﬁcant effect on time horizon (B

TEMPORAL = -.049, t = 0.959). This indicates that as marketing managers utilize a greater
amount of future framed information their strategic decisions will be of a greater

magnitude and with quicker timing.

106

In H9, it was predicted that as marketing managers utilize a greater amount of
threat framed information they will make strategic decisions with a greater magnitude
(H93), a quicker timing (Hgb), and a shorter time horizon (H96). The PLS analysis in the
differential framing model indicates that the effect of a differential preference for

utilizing strategic framed information on magnitude (B T-0= .058, t = 1.221), on timing (B

To: -.018, t = 0.277), and on time horizon (B T-O: .039, t = 0.875) were each non-

signiﬁcant. This indicates that there is no difference in the magnitude, timing, and time

frame of the strategic decisions of marketing managers who utilize a greater amount of
threat framed information over opportunity framed information. Thus, H93, Hob, and ch

are not supported.

To further understand the inﬂuence strategic information on strategic decisions,
the effect on the utilizing a greater amount of threat and a greater amount of opportunity
framed information were also examined. The PLS analysis in the strategic framing

model indicates that utilizing a greater amount of threat framed information has a positive

and signiﬁcant effect on magnitude (B STRATEGIC = .322, t = 8.1 13) and a non—signiﬁcant

effect on timing (B STRATEGIC = —.1 10, t = 1.521) and on time horizon (B STRATEGC = -

.020, t = 0.410). This indicates that as marketing managers utilize a greater amount of
threat framed information their strategic decisions will be of a greater magnitude.
Moreover, the PLS analysis in the strategic framing model indicates that utilizing a

greater amount of opportunity framed information has a positive and signiﬁcant effect on

magnitude (B STRATEGIC = .140, t = 3.669) and a non-signiﬁcant effect on timing (B

STRATEGIC 7:024, I = 0.304) and on time horizon (l3 STRATEGIC = -.048, l = 0.814). This

107

indicates that as marketing managers utilize a greater amount of opportunity framed

information their strategic decisions will be of a greater magnitude.

Table 2.15: Summary of the Results

 

Hypothesis

Result

 

: Compared with marketing managers from a short-term

oriented culture, marketing managers from a long-term

oriented culture will make strategic decisions with (a) a
smaller magnitude, (b) a slower timing, and (c) a longer
time horizon.

H13: Supported
H161 Contradicted
ch: Contradicted

 

: Compared with marketing managers from a short-term

oriented cu1ture, marketing managers from a long-term
oriented culture are more likely to possess a future time
orientation.

H 2: Contradicted

 

: Compared with marketing managers with a past or

present time orientation, marketing managers with a
future time orientation will make strategic decisions with
a longer time horizon.

H32 Not
Supported

 

: Compared with marketing managers with a past or

present time orientation, marketing managers with a
ﬁrture time orientation will utilize a greater amount of
(a) future framed information, and (b) opportunity
framed information.

H43: Supported
H4b: Supported

 

: Compared with marketing managers from a collectivist

culture, marketing managers from an individualistic
culture are more likely to have differences between their
individual time orientation and their organization’s time
orientation.

H5: Supported

 

 

: Compared with marketing managers in organizations

where their time orientations are aligned, when
differences exist between the individual time orientation
of marketing managers and their organization’s time
orientation,
(a) The magnitude of the strategic decision will be
smaller.
(b) The timing of the strategic decision will be slower.
(c) The commitment to the strategic decision will be
lower.
((1) The quality of the strategic decision will be lower.

 

H632 Not
Supported
H6132 Not
Supported
H60: Not
Supported
HM: Supported

 

108

 

 

Table 2.15: Summary of the Results (continued)

 

 

 

 

 

 

Hypothesis Result

H7: Compared with marketing managers from a low H73: Not
uncertainty avoidance cu1ture, marketing managers from Supported
a high uncertainty avoidance culture will utilize a greater H761 Supported
amount of (a) past—and-present framed than future
framed information, and (b) threat framed than
opportunity ﬂamed information.

H3: As a greater amount of past-and-present framed H33: Contradicted
information is utilized, marketing managers will make H863 Contradicted
strategic decisions with (a) a greater magnitude, (b) a H 8C. Not
quicker timing, and (c) a shorter time horizon. Supported

H9: As a greater amount of threat framed information is H9a2 Not
utilized, marketing managers will make strategic Supported
decisions with (a) a greater magnitude, (b) a quicker H961 Not
timing, and (c) a shorter time horizon. Supported

chr Not
Supported
DISCUSSION

The purpose of this research was to examine how cu1ture inﬂuences how marketing

managers incorporate the complexities of time into their marketing strategy decision

making. An integrated conceptual framework focused on the inﬂuence of culture on the

time orientations, the evaluations of competitive information, and the strategic marketing

decisions of marketing managers was empirically examined within a two country case

scenario. The ﬁndings provide a number of interesting insights, of both theoretical and

managerial importance, for those interested in marketing strategy decision making.

Theoretical Implications

Culture, as identiﬁed in previous examinations of decision making, results in persistent

preferences for speciﬁc social process that signiﬁcantly inﬂuence the manner by which

109

 

individuals respond (Tse et al. 1988). Results of this research demonstrate that the
national culture of the marketing manager has a signiﬁcant effect on the strategic
decisions that they make when the same competitive marketing strategy decision making
situation is presented. Speciﬁcally, marketing managers belonging to a long-term
oriented culture made strategic decisions that were of a smaller magnitude of investment,
of quicker timing for introduction to the market, and with a shorter time horizon for
evaluation when compared with marketing managers from a short-term oriented culture.
Although signiﬁcant differences in the strategic decisions between cultures on the long-
term orientation dimension were proposed, only the differences in magnitude were as
expected. The effects of the long-term orientation dimension of culture on the objective
time—based strategic decisions were quite surprising, for the marketing managers from a
long—term oriented culture were in fact more short-term in their horizon for evaluation
and immediate in their timing. When these time-based strategic decisions were further
examined, it was identiﬁed that although marketing managers from a short-term oriented
culture may have had a more long-term outlook in their timing and time horizon, they
were also more likely to make time-based strategic decisions that were similar to
previously made decisions. Alternatively, marketing managers from a long-term oriented
cu1ture made strategic decisions that departed more from the current decision norm.
These results theoretically extend understanding on the inﬂuence of culture within
marketing strategy decision making by indicating the long-term orientation dimension of
culture may not explicitly be related to long-term time-based strategic decisions (e.g.,
Bearden et al. 2006), but rather in the willingness to dynamically depart from what has

traditionally been accepted (i.e., remaining static in strategic decisions).

110

More than directly inﬂuencing the strategic decisions, the dimensions of culture
inﬂuence the marketing strategy decision making process through the manner in which
the marketing managers relate to time. The results indicate that between long-term and
short-term oriented cultures a consistent pattern in the dominant time orientations of
marketing managers exists; with a ﬁrture time orientation as the most frequent, a present
time orientation as the second most frequent and a past time orientation as the least
frequent in both cultures. Despite this commonality, when compared across cultures, the
proportion of marketing managers possessing a future time orientation is greater in the
short-term oriented culture, whereas the proportion of marketing managers possessing a
present time orientation is greater in a long-term oriented culture. The proportion of
marketing managers possessing a past time orientation was equivalent. Taken together,
these results seem to highlight two interesting theoretical insights. First, regardless of
culture, marketing managers tend to not be oriented to the past. This may indicate that
the dimension of long-term orientation may have less of a holistic view of past and future
as previously theorized (e.g., Bearden et al. 2006). Further, this may have occurred
because a more present or future time oriented outlook is desirable for navigating
uncertain competitive environments in order to better focus on competitive events that are
or will be occurring. Second, it appears as though the dominant time orientation for a
marketing manager develops irrespective of national culture. This finding is contrary to
the previous literature on the social psychology of time that asserted that the relationship
between culture and the interpretation of time is so fundamental that “time is cu1ture,”

(Jones 1988, p. 21). This might indicate that marketing managers across cultures are

111

trending toward certain orientations due to the advantages they provide in the decision
making process of an increasingly culturally complex competitive environment.

As time orientations exist at both the individual and the organization level, culture
again inﬂuences the relationship between how marketing managers relate to time with
respect to how their organization relates to time (Bluedom and Denhardt 1988; Thorns
and Greenberger 1995). Speciﬁcally, differences in the dominant time orientation of
marketing managers and their organization were found to more likely exist in
individualistic cultures than collectivist cultures. From this result, it could be inferred
that marketing managers from an individualistic culture are more likely to maintain their
own time orientation independent from their organization, whereas marketing managers
from a collectivist culture are more likely to assimilate their time orientation to that of the
group. This would support the cultural dimensions’ theoretical supposition that for
collectivistic cultures the group is more important than the individual, whereas for
individualistic cultures the individual is more important than the group (Hofstede 2001;
Newman and Nollen 1996).

Interestingly, neither the differences in time orientation that exist between
marketing managers and their organization nor the individual time orientation of the
marketing managers have a signiﬁcant effect on their strategic decisions. There was no
effect on the magnitude and timing of strategic decisions whether differences in time
orientation existed. Contrary to previous research (e. g., Das and Teng 2001), the time
orientation of marketing managers did not have a signiﬁcant effect on the time horizon of
their strategic decision. These non-signiﬁcant effects remained constant regardless of

culture examined. Where the differences in time orientation between the individual and

112

the organization had an effect was on the evaluation of the strategic decisions;
speciﬁcally, the strategic decisions will be evaluated to be of a lower quality. Further, the
time orientation of the marketing managers has an effect on the utilization of competitive
information; with marketing managers with a future time orientation utilizing a greater
amount of competitive information than marketing managers with a past-or-present
orientation. Theoretically, these results serve to reﬁne the social psychology of time by
indicating that the inﬂuence of time orientations may not be directly observable within
the strategic decisions made (e.g., McGrath 1988; McGrath and Tschan), but rather
within the evaluation stage or the decision making process itself.

Culture also inﬂuences the marketing strategy decision making process through
its effect on the preference of marketing managers to utilize speciﬁc framed competitive
information (Tse et al. 1988). Speciﬁcally, marketing managers from a high uncertainty
avoidance culture demonstrated a preference for utilizing a greater amount of threat
framed than opportunity framed competitive information whereas marketing managers
from a low uncertainty avoidance culture demonstrated a preference for utilizing a greater
amount of opportunity framed than threat framed competitive information. There were
no signiﬁcant differences in the differential preference for past-and-present framed or
future framed between cultures. These results are theoretically consistent with cultural
dimensions theory as marketing managers from a high uncertainty avoidance and a low
uncertainty avoidance cultures exhibit their cultural biases to minimize the potential for
loss and maximize the potential for gain, respectively, through their preference for
utilizing strategic framed information (Diamantopoulous et a1. 2003; Nakata and

Sivakumar 2001; Schneider and De Meyer 1991). These cultural biases may lead to

113

unintended consequences in the marketing strategy decision making of marketing
managers as marketing managers from a high uncertainty avoidance culture have the
potential to have their strategic decisions become based more on the reactions to the
developments of competitors due to their tendency to rely more on threat framed
competitive information. Moreover, due to their tendency to rely more on opportunity
framed competitive information, marketing managers from a low uncertainty avoidance
culture may face unintended consequences as well by potentially overlooking a
signiﬁcant competitive action.

Within marketing strategy decision making, the utilization of temporal and
strategic framed competitive information inﬂuences the strategic decisions made by
marketing managers (e.g., Menon and Varadarajan 1992; Dutton and Jackson 1987). The
results indicate that marketing managers will make strategic decisions of a larger
magnitude as the extent to which utilization of each type of temporal (i.e., past-and-
present, future) and strategic (i.e., opportunity, threat) framed competitive information
increases. Surprisingly, only the strategic decision of timing was affected when
marketing managers utilized more future framed information; otherwise, the time-based
strategic decisions of timing and time horizon were unaffected by the utilization of
competitive information. Taken together, these results seem to indicate that marketing
managers are simultaneously willing to adjust the magnitude of their investment but are
not willing to alter the average time-based strategic decisions based upon the competitive
information utilized. Unintended consequences may result as within increasingly
competitive environments success is not guaranteed to those who are able to spend more;

rather the ability to time the introduction and establish the time for evaluation, based

114

upon the competitive environment, have become critical. By maintaining the status quo,
marketing managers may lose out on many opportunities.

Moreover, the results of the marketing managers preference for the utilization of
competitive information indicates that while there is no signiﬁcant effect of the
differential utilization of strategic framed information on any of the strategic decisions,
there is a signiﬁcant effect on magnitude and timing of the differential utilization of
temporal framed information. Speciﬁcally, marketing managers who utilize more past-
and-present framed information will make strategic decisions of a smaller magnitude and
of slower timing. Theoretically, although these results were not hypothesized, they do
demonstrate that within marketing strategy decision making the preferences for
information based on prospect theory does not hold (e.g., Kahneman and Tversky 1979;
Tversky and Kahnemanl981). This potentially occurred due to differences in the
decision making context. For marketing managers, their strategy decision making
focuses on guiding their organization over time with the consequences of their decisions
to unfold over time in relation to the uncertain competitive environment. These decisions
are not based purely the probability versus certainty of competitive actions but also the
ability of the decisions of the marketing managers to succeed within a combination of

probability and certainty.

Managerial Implications
For marketing managers engaged in marketing strategy decision making, this research
provides important guidance and caution with respect to understanding the unintended

consequences that incorporating the complexities of time and culture can have on their

115

marketing strategy decision making in three important areas: (1) the effects of culture on
strategic marketing decisions; (2) the effects of culture on the preference for utilizing
certain temporally and/or strategically framed competitive information on strategic
marketing decisions; and (3) the effects of differences in time orientation on strategic
marketing decisions.

First, since strategic decisions are made by marketing managers who belong to
various national cultures, it is important to understand the effect that culture has on their
marketing strategy decision making. The results of this research indicates that when
facing the same competitive environment and situation surrounding the development of
their marketing strategy, marketing managers from different cultures will make
signiﬁcantly different strategic decisions in terms of magnitude, timing, and time horizon.
Speciﬁcally, it was found that marketing managers from Japan, which represents a long-
term oriented, high uncertainty avoidance, and collectivistic national culture, will make
strategic marketing decisions of smaller magnitude, with quicker timing, and a shorter
time horizon than marketing managers from the United States, which represents a short-
term oriented, low uncertainty avoidance, and individualistic national culture. Given
these results, a cultural bias is demonstrated regarding the incorporation of time when
making strategic decisions regarding the magnitude of investment, and the time needed
for implementation and evaluation. As such, marketing managers are cautioned to
recognize not only their own inclination but also the inclination of other marketing
managers, for unintended consequences can result. For instance, as ﬁrms and V

competition intemationalize, misaligned cultural biases could result in a competitive

116

disadvantage for the ﬁrm creating difﬁculties in developing coherent marketing strategies
or in competing in the marketplace.

Second, when utilizing information from a competitive analysis, systematic biases
inﬂuencing the strategic marketing decisions of marketing managers can result based
upon the preference for utilizing certain temporally and/or strategically framed
competitive information. The results of this research indicate that relying on their
cultural bias related to uncertainty avoidance, marketing managers tend to rely more on
threat framed (i.e., high uncertainty avoidance) or opportunity framed information (i.e.,
low uncertainty avoidance). Hence, marketing managers are cautioned that these cultural
biases may lead to unintended consequences in the marketing strategy decision making as
the tendency to rely more on threat framed competitive information could result in
strategic decisions becoming based more on the reactions to the developments of
competitors, whereas relying more on Opportunity framed competitive information could
cause marketing managers to potentially overlooking a signiﬁcant competitive action.

Third, since marketing managers make marketing strategy decisions within and
for their organization, it is important to understand the inﬂuence on strategic decisions
that results based upon whether the individual and the organization are aligned. Although
the differences in time orientation that exist between marketing managers and their
organization do not have a signiﬁcant effect on the strategic decisions of marketing
managers, they do have a signiﬁcant effect on their evaluations. The results of this
research demonstrated that when differences in time orientation exist the strategic
decision will be evaluated to be of a lower quality. This evaluation of their strategic

decision being of a lower quality could result from marketing managers believing that

117

their time-oriented view of the strategy that the organization should pursue is different
from the strategy it is currently pursuing. Hence, marketing managers are cautioned to be

aware of doubt in their decisions that a misalignment may cause.

LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH
Although this research provides insight into the pervasive inﬂuence that culture has on
how marketing managers incorporate time within their marketing strategy decision
making, the following limitations need to be considered when attempting to generalize
the ﬁndings. The three main limitations of this research are: (1) the inﬂuence of time on
the decision making of marketing managers was examined through a hypothetical case
scenario focusing on general competitors in only one highly technologically uncertain
environment; (2) the information statements were restricted in amount, strength, and
detail in order to balance between temporal and strategic frames to minimize information
overload; and (3) the inﬂuence of culture was restricted to be examined within two
countries at the national level. Although this research design was purposefully selected
and designed based upon the extant literature to allow for the maximum amount of
control and comparability to be maintained over the decision making scenario presented,
this control also limits the external generalizability of the ﬁndings as the inﬂuence of
time in the marketing strategy decision making of marketing managers will be inﬂuenced
by the nature of speciﬁc relationships between competing ﬁrms and of the industry
context.

To address these limitations, the inﬂuence of culture and time in marketing

strategy decision making should be further examined using a context and a methodology

118

 

where the strategic decisions of real companies to real competitive information can be
evaluated with respect to their magnitude, timing, and time horizon. In addition to
addressing the aforementioned limitations, the results of this research suggest numerous
avenues for future research. First, the greater utilization of temporal and strategically
framed information was found to signiﬁcantly inﬂuence the magnitude of the strategic
decisions. Although within the current research the information statements of the
competitive analysis speciﬁcally focused on equivalently framed temporal and strategic
actions, further examining the depth of the temporal framing (e. g., long vs. short) and the
strength of the strategic framing (e.g., weak vs. strong) could identify clearer distinctions
in the utilization of competitive information. In addition to how the depth and strength of
framing inﬂuences the utilization of competitive information within marketing strategy
decision making, future research could focus more on the interplay of speciﬁc
competitors (e. g., new vs. established, minor vs. major). This future direction would
build upon the current research’s examination of the general competitive events within
the industry to gain insight on the possibility of marketing managers to not only strategize
based upon the past, present, or future, but in relation to certain identiﬁed competitors
(Clark and Montgomery 1999).

Second, the ﬁndings of this research demonstrate the important inﬂuence that
time orientations have on marketing strategy decision making. For instance, the
dominant time orientation of the marketing manager inﬂuences the utilization of
competitive information and differences between the dominant time orientation of the
marketing manager and their organization causes marketing managers to evaluate the

quality of their strategic decisions to be lower. Yet, as only the effect of the time

119

orientation of the organization was examined relative to the individual time orientation
and only the general differences between the time orientations were examined within this
research, any direct inﬂuence of the organization’s time orientation or of the speciﬁc
differences were neglected. Future research could extend to examine the role that the
time orientation of the organization has on as well as the differential effects that speciﬁc
differences between the time orientation of the individual and organization have on the
development of marketing strategy (Bluedom 2000). Further, as the time orientation of
the organization potentially develops as a result of the individuals involved in its
formation, future research could examine the process by which temporal preferences of
both organizations and individuals become entrained. This stream of potential ﬁrture
research would extend the extant research on marketing strategy by examining the
process by which temporal factors become norms.

Third, the unintended consequences that can result when marketing managers
attempt to incorporate the complexities of time within their marketing strategy decision
making was demonstrated by the ﬁndings of this research. Unintended consequences
caused by the multidimensional and multilevel characteristics of time may result in other
areas as time inﬂuences more than just strategic decisions focused on the external
competitive environment and more than just marketing managers. For instance, as time
has been shown to inﬂuence the decision making of marketing managers with respect to
the competitive external environment (e.g., J ayachandran and Varadarajan 2006;
Montgomery, Moore, and Urbany 2005), how does the interpretation of time inﬂuence
the decision making of marketing managers or other marketing professionals with respect

to the competitive internal environment? This stream of potential future research would

120

extend to examine the inﬂuence of time on the development of a ﬁrm’s internal strategy
and/or the individual’s personal strategy pertaining to the performance of speciﬁc intra-
company behaviors or accumulating speciﬁc marketing human capital. Moreover, insight
on the dispositional dimensions of time could be further uncovered by not only
expanding the type of the strategic decisions examined, but by also including situational
time factors within the decision making context. For instance, how would the
interpretation of time in relation to the connection of the entity to time as well as events

to time interact with the objective time available to inﬂuence decision making behavior?

CONCLUSION

Unintended consequences in marketing strategy decision making occur when marketing
managers incorporate their unique interpretation of time with respect to their own
connection to time as well as how competitive information connects to the past, the
present, and the future when developing their own marketing strategies. The results of
this research demonstrate that the strategic decisions of marketing managers and the
subsequent evaluation of these decisions are inﬂuenced, varying by culture, by their
utilization of speciﬁcally temporal and/or strategic framed competitive information as
well as their dominant time orientation and the differences between the individual and
organizational time orientation. For marketing academics, this research presents
marketing managers as decision makers subjectively inﬂuenced by the interpretation of
time operating at the individual, organizational, and societal level opening avenues for
future research on how time-based decision biases inﬂuence marketing strategy making.

For marketing managers, this research exposes the limitation in their marketing strategy

121

decision making when it comes to understanding the pervasive impact of culture and

time.

122

APPENDIX 1.1
STAGE 1: COMPETITIVE RUMOR MAN IPULATIONS

Scenario 1: High Credibility; Makes Sense; Major Competitor

In a recently published research report, an industry research analyst claims that Lazzard
Incorporated, a major competitor Of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the 10-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 2.5 pounds, have an increased
battery life to 9 hours, and run the newest Windows 7 Operating system. The price is
speculated to be around $300.

Scenario 2: High Credibility; Makes Sense; Minor Competitor

In a recently published research report, an industry research analyst claims that Lazzard
Incorporated, a minor competitor of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
ﬁrnctionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the 10-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 2.5 pounds, have an increased
battery life to 9 hours, and run the newest Windows 7 Operating system. The price is
speculated to be around $300.

Scenario 3: High Credibility; Does Not Make Sense; Major Competitor

In a recently published research report, an industry research analyst claims that Lazzard
Incorporated, a major competitor of Banington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the 10-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 1 pound, have an increased battery
life to 14 hours, and run a brand new operating system. The price is speculated to be
around $100.

Scenario 4: High Credibility; Does Not Make Sense; Minor Competitor

In a recently published research report, an industry research analyst claims that Lazzard
Incorporated, a minor competitor of Banington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the lO-inch screen and a keyboard 85% the size of standard
laptOps. However, the new netbook will weigh only 1 pound, have an increased battery
life to 14 hours, and run a brand new operating system. The price is speculated to be
around $100.

123

Scenario 5: Low Credibility; Makes Sense; Major Competitor

In a recently published online posting, an industry blogger claims that Lazzard
Incorporated, a major competitor of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the lO-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 2.5 pounds, have an increased
battery life to 9 hours, and run the newest Windows 7 Operating system. The price is
speculated to be around $300.

Scenario 6: Low Credibility; Makes Sense; Minor Competitor

In a recently published online posting, an industry blogger claims that Lazzard
Incorporated, a minor competitor of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
ﬁrnctionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the 10-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 2.5 pounds, have an increased
battery life to 9 hours, and run the newest Windows 7 operating system. The price is
speculated to be around $300.

Scenario 7: Low Credibility; Does Not Make Sense; Major Competitor

In a recently published online posting, an industry blogger claims that Lazzard
Incorporated, a major competitor of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the 10-inch screen and a keyboard 85% the size of standard
laptOps. However, the new netbook will weigh only 1 pound, have an increased battery
life to 14 hours, and run a brand new operating system. The price is speculated to be
around $100.

Scenario 8: Low Credibility; Does Not Make Sense; Minor Competitor

In a recently published online posting, an industry blogger claims that Lazzard
Incorporated, a minor competitor of Barrington Corporation, will be introducing a new
netbook model to the market next year for the purpose of improving general computing
functionality and accessing web-based applications. The new netbook will retain the
Intel Atom Processor, the lO-inch screen and a keyboard 85% the size of standard
laptops. However, the new netbook will weigh only 1 pound, have an increased battery
life to 14 hours, and run a brand new operating system. The price is speculated to be
around $100.

124

STAGE 2: CONFIRMATION MAN IPULATION S

Scenario 1: Conﬁrmed to be False (Denied)

The Vice President of Marketing for Lazzard Incorporated released an ofﬁcial statement
denying the competitive rumor that has been spreading for the last six months indicating
that they will be introducing a new netbook to the market.

Scenario 2: Confirmed to be True (Confirmed)

The Vice President of Marketing for Lazzard Incorporated released an ofﬁcial statement
conﬁrming the competitive rumor that has been spreading for the last six months
indicating that they will be introducing a new netbook to the market.

125

APPENDIX 1.2

PRETEST 1

Credibility of Potential Sources
Individuals use different sources from which to acquire information on events, trends,

and developments within the business environment. Each of these sources vary in terms
of their credibility, where credibility refers to the extent to which the information they
provide on events, trends, and developments within the business environment is worthy
of belief. Rate each of the following sources listed below on a scale from 1 to 7, where a
score of 1 indicates “a very low level of credibility” and a score of 7 indicates “a very
high level of credibility”.

Table A1.21: Credibility of Potential Sources

 

 

 

 

 

 

 

 

 

 

 

 

 

Potential Source Mean SD.
Industry Research Analyst 6.08 0.772
Business focused newspaper (cg, WSJ) 5.92 0.877
Business focused magazine (e.g., BusinessWeek) 5.63 0.963
Industry insider 5.3 1 1.004
General focused newsEper (e.g., USA Today) 4.83 1.262
Employee of your own company 4.46 1.104
Organizational grapevine 3.81 0.982
Industry blogger 3.69 1.380
Employee of your competitor 3.24 1.331

 

 

126

Marketing Actions That Make Sense of Uncertainty
Uncertainty exists within the business environment pertaining to what general trends and

events will likely occur in the future. Sometimes the actions of competing ﬁrms serve to
provide some insight into the uncertainty occurring in the environment. The industry
within which your company operates is characterized by high uncertainty. Speciﬁcally,
there is a high degree of instability and unpredictability pertaining to the technological
environment as there has been many major technological developments leading the
technology in the industry to change quite rapidly. Please rate each of the following
actions listed below on their ability to provide insight into the uncertainty present within
the industry on a scale from 1 to 7, where a score of 1 indicates “a very low level of
insight” and a score Of 7 indicates “a very high level of insight”.

Table Al.22: Marketing Actions That Make Sense of Uncertainty

 

 

 

 

 

 

 

 

 

 

 

Potential Marketirlg Action Mean SD.
Entering a new market 5.25 1.504
New product to the market 5.12 1.487
Rebranding product line 5.05 1.157
New advertising campaign 4.75 1.139
Open owned retail stores 4.67 1.330
Increase spendingon advertising 4.41 1.146
New retailer added 4.34 1.334
Decrease price 4.15 1.324
Increase price 4.05 1.292

 

 

 

 

127

Competitor Distinctions

F irms of various sizes and of various strategies compete within the business environment,
where they can be identiﬁed as a major or a minor competitor. Please rate each of the
following descriptions of a competing ﬁrm listed below on a scale from 1 to 7, where a
score of 1 indicates “a minor competitor” and a score of 7 indicates “a major competitor”.

Table Al.23: Competitor Distinctions

 

 

 

 

 

 

 

 

 

 

Potential Competitor Description Mean SD.
Direct
Company B is a major competitor Ofyour ﬁrm. 6.66 0.921
Company B is a minor competitor of your ﬁrm. 1.59 1.176
Supply-Based & Demand-Based
Company B operates in many of the same product and 6.20 0.846
geographic markets and serves the same customer market
as your ﬁrm.
Company B operates in very few of the same product and 1.88 0.966
geographic markets and serves a different customer market
as your ﬁrm.
Supply-Based: Markets
Company B Operates in many of the same product and 6.07 0.944
geographic markets as your ﬁrm.
Company B Operates in very few of the same product and 2.61 1.365

geographic markets as your ﬁrm.
Absolute Size: Market Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company B has a large share of the total market. 6.14 0.888
Company B has a small share of the total market. 2.90 1.227
Relative Size: Sales
Company B has annual sales of $15 million greater than 5.68 1.370
your ﬁrm.
Company B has annual sales of $15 million less than your 3.19 1.152
ﬁrm.
Relative Size: Market Share
Companj B has a larger market share than your ﬁrm. 5.90 1.078
Company B has a smaller market share than your ﬁrm. 3.54 1.056
Supply Based: Strategy
Company B employs a very similar strategy than your 5.46 1.023
ﬁrm.
Company B employs a very different strategy than your 3.57 1.299
ﬁrm.
Absolute Size: Sales '
Company B has annual sales of $50 million. 5.12 1.233
Company B has annual sales of $5 million. 3.86 1.279

 

128

APPENDIX 1.3
EXPERIMENTAL PROCEDURE

Imagine that you are the Vice President of Marketing for Barrington Corporation, and it
is your responsibility to develop and implement Barrington’s marketing strategy. You
have complete authority over all marketing decisions.

Barrington Corporation develops, manufactures and sells personal computers for the
consumer market. Barrington has operated in the personal computing industry for over
ten years, where their product strategy focuses on marketing high quality industry
standard models.

The personal computing industry has changed with the emergence of netbooks.

Netbooks are a rapidly evolving category of small and inexpensive laptop computers
designed for the purpose of general computing and accessing web-based applications.
Netbooks, for the industry standard, are small (1 0-inch screen; weigh 3 lbs; 8 hour battery
life; keyboards that are 85% the size of a laptops), inexpensive ($350), less powerful
(Intel Atom CPU running at 1.6-GHz; 16OGB hard drive), and run an earlier operating
system version (Windows XP).

However, the future of the netbook market is highly uncertain. The characteristics and
functionality that the next generation of netbooks will provide is becoming increasingly
unclear as rapidly developing new technologies for improving personal computing has
created a high degree of unpredictability of what will come next.

TO take advantage of this growing market, consistent with their product strategy,
Barrington Corporation plans to develop and introduce an industry standard netbook to
the market one year from now to augment its current product line.

In the process of conducting a competitive analysis in preparation to ﬁnalize Barrington’s
marketing strategy for the upcoming year, you become aware of the following
information:

[Insert Stage I Manipulation; Followed by Stage 1 Dependent Variables]

For a moment, take a step away from the Barrington Corporation scenario.
[Insert Filler Task Here]

Referring back to the Barrington Corporation scenario, consider the following:
Six months have now passed. Over this time period, Barrington Corporation has begun
to implement the strategic marketing decisions that you have made. Now, you are made
aware of the following information:
[Insert Stage 2 Manipulation; Followed by Stage 2 Dependent Variables]
[Insert Manipulation Checks]

129

 

APPENDIX 1.4

MEASURES

Table Al.41: Measures

 

Stage 1: Dependent Measures

 

Likelihood to Rgspond to Information (r = .650)

 

How likely are you to use to this new competitive information in developing your
marketipg strategy?

 

How likely are you to respond to this new competitive information?

 

Vepy Unlikely (1) to Very Likely (7)

 

 

General Changes to Strategr

 

Regarding the introduction of the netbook, which of the following actions are you
most likely to pursue?

 

(1) Continue the introduction of the netbook as originally planned

 

(2) Introduce the netbook with minor modiﬁcations

 

(3) Introduce the netbook with major modiﬁcations

 

(4) Delay the introduction of the netbook until more information is available;

 

(5) Drop the introduction of the netbook

 

 

Stage 2: Dependent Measures

 

General Changes to Strategy

 

Regarding the introduction of the netbook, which of the following actions are you
most likely to pursue?

 

(1) Continue the introduction of the netbook as ori ginally planned

 

(2) Continue the introduction of the netbook as recommended six months ago

 

(3) Introduce the netbook with minor modiﬁcations

 

(4) Introduce the netbook with mgjor modiﬁcations

 

(5) Delay the introduction of the netbook until more information is available

 

(6) Drop the introduction of the netbook

 

 

gontrol Variables
Gender

 

 

What is your gender?

 

 

(1) Male

 

(2) Female

 

 

 

 

 

130

Table A1.41: Measures (continued)

 

Highest Degree A chieved

 

What is your highest degree achieved?

 

(ILNO Degee

 

(2) High School

 

(3) Associates

 

(4) Bachelors

 

(5) Masters

 

(6) Doctorate

 

 

Decision A uth my

 

In your position, would you have the authority to make decisions similar to those
addressed within the scenarios?

 

(1)Yes

 

(2) NO

 

 

Years Experience

 

How many years of experience do you have?

 

Amount

 

 

Manipplation Checks

 

Stage 1 Manipulations

 

Credibility of the Source of the Competitive Rumor

 

The level of credibility for the source of the initial competitive information.

 

Veg Unlikely (l) to Very Likely (7)

 

 

The Abiligg of the Charge to Make Sense of Uncertainty

 

The level of plausibility of the product description of the initial competitive
information.

 

Very Unlikely (1) to Very Likely (7)

 

 

The Degree to which the Target is Described as a Competitor

 

The initial competitive information was about a competitor.

 

Minor (1) to Major (7)

 

 

Stage 2 Manipulations

 

Veriﬁcation of the Competitive Rumor

 

The initial competitive information was by the competitor.

 

 

Conﬁrmed (1) to Denied (7)

 

131

 

APPENDIX 2.1
CASE SCENARIO

Imagine that you are the new Vice President of Marketing for PhotoMax Incorporated,
and it is your job to make recommendations regarding the development and introduction
of new products. At PhotoMax, the organizational culture is virtually identical to the
culture at your last organization, and so you have a good sense of the shared values and
vision of this organization.

PhotoMax Incorporated develops, manufactures and sells digital cameras for the
consumer photography market. The transition from ﬁlm to digital cameras created
instability in the technological environment through the development of innovative new
products and in the competitive environment through the demise of traditionally
dominant ﬁrms and the introduction Of many new ﬁrms competing for a share of the
market. Of the ﬁve major ﬁrms that compete within the digit camera market, PhotoMax
is currently the third largest with a 12% market share.

The digital camera market has been experiencing double digit growth for the past few
years and is expected to continue to grow for the next few years, primarily due to users
upgrading to more technologically advanced models. As such, the development and
introduction Of a new digital camera is a priority for the continued success of PhotoMax
Incorporated. PhotoMax invests approximately $2 million in the development of each
new digital camera, where the development cycle for a digital camera (i.e., from idea
generation to introduction) takes 12 months on average. The success of each new digital
camera in the marketplace is evaluated after an average of 9 months. However, there
have been numerous changes within the competitive environment that suggest a possible
need to change aspects of PhotoMax’s new product development process.

Please read the following competitive analysis. Questions that relate to this competitive
analysis will follow.

Competitive Analysis for the Digital Camera Market:

The competitive landscape within the digital camera market over the past year regarding
the development of new products has experienced many changes. First, an article last
year in the business press proclaimed that “The Next Big Thing in Digital Cameras is
Here,” as it detailed the patents pending for several technological processes developed by
competitors which promised to change digital cameras. For instance, one process
promised to create a digital camera with the ability to instantaneously eliminate red eye
from digital images. Second, last year a series of manufacturing errors and production
problems hindered the launch of several competitors’ digital camera models. For
instance, one competitor was forced to issue a product recall due to faulty LCD display
screens, whereas a warehouse ﬁre destroyed another competitor’s primary inventory of
digital cameras.

132

The current competitive landscape within the digital camera market regarding the
development of new products continues to experience many changes. A national
consumer opinion marketing ﬁrm evaluated the current product portfolios of the ﬁrms
competing in the digital camera market in a recent report. The report indicates that the
excitement elicited by the features of the digital camera was a critical factor for digital
camera users. The report indicates that consumers are not excited by the current features
offered by the products of competitors on the market. On the other hand, in the
competition to recruit the best talent, several competitors just announced hiring a new
product development manager. Each of these‘new product managers has a successful
track record in high tech consumer products and would immediately be in charge of all
aspects of the development and introduction of new digital cameras.

The competitive landscape within the digital camera market over the next year regarding
the development of new products will likely continue to experience many changes. The
digital camera market will likely continue to be ﬁercely competitive as market research
indicates that competitors may be increasing their research and development capabilities
through creating many new engineering positions to focus on improving product
technology and design over the course of the next year. Although it has been suggested
that changes to the new product development process may be necessary to remain
competitive, it has also been speculated in variety of sources (e. g., industry research
reports, digital camera blogs and popular press articles) that a series of highly anticipated
new product introductions slated for next year by competitors are likely to be delayed
and/or ultimately dropped due to problems in the manufacturing process and an
underwhelming consumer response in market pretesting.

133

APPENDIX 2.2
PRETEST 1

Evaluation of Information Statements

For each of the information statements listed below, indicate whether you would consider
it to be an opportunity or a threat, if a competing ﬁrm were to take the action described.
Further, please rate the strength of each statement, with a score of 1 indicating a weak
statement and a score of 7 indicated a strong statement.

Table A2.21: Evaluation of Information Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

. Evaluation Strength
Information Statement Opp. Threat Mean SD.
Developed brand new 17 42 5.712 1.068
technology (29%) (71%)

High quality product 16 43 5.407 1.176
reputation (27%) (73%)
New product design does 46 13 4.525 1.513
not develop excitement (78%) (22%)
among consumers
Patent license expired 47 12 SD“ 1357
(80%) (20%)
Eliminating engineering 44 15 3.864 1.319
ositions (75%) (25%)
Problems in product launch (21:4) (723/0) 5695 1055
Reducing manufacturing 46 13 3.672 1.276
capacity (78%) (22%)
Dropped the release Of a 40 12 3.983 1.516
new product (69%) (31%)
Increasing R&D 12 47 4.339 1.458
capabilities (20%) (80%)
Unsuccessful launch of a 46 13 4.559 1.465
new product (78%) (22%)
Delay in building ﬂagship 46 12 3.086 1.274
manufacturing plant (79%) (21%)
Product line was not 46 13 4.407 1.452
adopted by consumers (78%) (22%)
Low quality product 44 15 4.847 1.483
reputation (75%) (25%)
Slow new product 44 15 4.356 1.573
development process (75%) (25%)
Hire new talented product 12 47 4.695 1.393
development manager (20%) (80%)

 

134

 

Table A2.21: Evaluation of Information Statements (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

Patent license received (2123/0) (788/10 5'085 1500

New product design does 25 34 4.746 1.397

develop excitement among (42%) (58%)

consumers

Creating engineering 14 45 3.897 1.165

positions (24%) (76%)

Releasing a new product 13 46 4'797 12”
(22%) (78%)

Talented product 46 13 4.458 1.291

development manager left (78%) (22%)

ﬁrm

Fast new product 12 47 5.103 1.360

development process (20%) (80%)

Building a new 12 47 4.254 1.421

manufacturing plant (20%) (80%)

Decreased spending on 45 14 3.508 1.278

R&D (7 6%) (24%)

 

135

 

APPENDIX 2.3

MEASURES

Table A2.31: Measures

 

Strategic Decisions

 

Magnitude

 

Recall that, on average, Photomax Incorporated spends $2,000,000 (2 million) on
each new product.

 

How much would your recommend changing the amount of money invested in
Photomax’s new product development budget?

 

Substantial Decrease (l) to Substantial Increase (9)

 

Please provide a speciﬁc estimate of the amount of money you would
recommend to be invested in the new product develppment budget.

 

Amount ($)

 

 

T iming

 

Recall that, on average, Photomax Incorporated new product development cycle
(i.e., the time to introduction) takes 12 months.

 

How much would you recommend changing the timing of Photomax’s new
product introduction?

 

Substantial Decrease (l) to Substantial Increase (9)

 

Please provide a speciﬁc estimate of when you would recommend the new
product to be introduced.

 

Amount (Months)

 

 

Time Horizon

 

Recall that, on average, Photomax Incorporated evaluates the success of new
products 9 months after introduction.

 

How much would you recommend changing the time frame designated for
evaluating Photomax’s new product introduction?

 

Substantial Decrease (1) to Substantial Increase (9)

 

Please provide a speciﬁc estimate of the amount of time you would recommend
in order to pppropriately evaluate the success of the new product introduction.

 

Amount (Months)

 

 

Decisions Evaluations

 

Decision Commitment

 

I am proud to tell others that I was involved in making this decision. (DCOl)

 

I am willing to put in a great deal of effort to see this decision as successful.
(DC02)

 

I am willing to talk this decision up as being good for the ﬁrm. (DCO3)

 

I really care about seeing this decision be successful. (DCO4)

 

 

Strongly Disagree ( l) to Strongly Agree (7)

 

 

136

Table A2.31: Measures (continued)

 

Decision Qualigr

 

This decision helps the ﬁrm achieve its objectives. (DQl)

 

This decision makes sense in light of the ﬁrm’s current ﬁnancial situation. (DQ2)

 

This decision is consistent with the ﬁrm’s current strategy. (DQ3)

 

This decision contributes to the overall effectiveness of this ﬁrm. (DQ4)

 

Strongly Disagree (1) to Strongly Agree (7)

 

 

Time Orientations

 

Individual Time Orientation

 

Rank order the following three descriptions depending on how similar the
description is to your beliefs.

 

(Past) I tend to think about what has happened in the past and base my
decisions upon similar decisions I have previously made.

 

(Present) I tend to think about what is happening no and base my decisions
upon what is happeninpin the moment.

 

(Future) I tend to think about what will happen in the future and base my
decisions upon ml plan for the future.

 

 

Organizational Time Orientation

 

Rank order the following three descriptions depending on how similar the
description is to your organization.

 

(Past) My organization keeps its policies and procedures the same as they have
been in the past, trains employees to follow the methods that have traditionally
been used, and makes decisions based upon the decisions that have been made
previously.

 

(Present) My organization adjusts its policies and procedures to accept some
changes as they develop, trains employees to adopt any methods that will help
them perform today, and makes decisions based upon what is happening in the
moment.

 

 

(Future) My organization actively changes its policies and procedures to keep
everything moving along, trains employees to actively ﬁnd new methods to
replace the old methods, and makes decisions based upon their plan for the
future.

 

137

 

Table A2.31: Measures (continued)

 

Information Use

 

Please rate the extent to which you used each of the following pieces of competitive
information to make jour decisions.

 

Competitors had patents pending for new technological processes a year ago.
(IUPT)

 

Manufacturing errors and production problems hindered the launch of several
competitors’ digital camera models a year ago. (IUPO)

 

The digital cameras currently Offered by competitors do not create excitement
amorg consumers. (IURO)

 

Competitors hired successful new product development managers to starts now.
(IURT)

 

Most competitors in the market may be increasing their research and
development capabilities a year from now. (IUFT)

 

A series of highly anticipated new product introductions by a few competitors
slated for next year are likelﬂ) be delayed and/or ultimately dropppd. (IUFO)

 

Small Extent (1) to Great Extent (7)

 

 

Control Variables

 

Individual Characteristics

 

Experience: How many years experience do you have?

 

Amount (Years)

 

 

Education: What is your highest degree achieved?

 

(1) No degree

 

(2) High school

 

(3) Associates

 

(4) Bachelors

 

(5) Masters

 

(6) Doctorate

 

 

Organizational Characteristics

 

Size: Approximately, how many people are employed by your organization

 

51 — 100 employees

 

101 — 500 employees

 

501 — 1,000 employees

 

1,001 — 5,000 employees

 

5001 — 10,000 employees

 

 

10,001+ employees

 

138

 

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