Marketing in Turbulent Environments: Decision Processes and the Time-Sensitivity of Information

Abstract

The authors study the relationship among information processing, marketing decisions, and performance in turbulent markets—i.e., markets in which the time-sensitivity of information is a major factor in decision making. Drawing on both organizational contingency theory and individual behavioral decision research, the authors suggest that successful performance depends on the congruence between the level of marketplace turbulence and the information-processing style and associated decisions adopted. They focus by way of example on the decision processes embodied in formal planning procedures. Using the results from an experiment conducted with a strategic marketing simulation game, they show that “planning” leads both to an underweighting of the time-sensitivity of marketplace information and toward a bias in favor of certain marketing decisions over others—decisions that, in this case, result in inferior performance in turbulent markets when compared with that of decision makers not engaged in formal planning. They discuss the implications of the findings for managerial behavior in turbulent markets.