David Forlani

Effects of organizational and decision-maker factors on new product risk taking

Abstract Using samples of evening MBA students having considerable managerial experience, two experiments were conducted, through which we explore the effects of organizational and decision-maker factors on managers’ new product investment decisions. Subjects were asked to choose among new product development projects having equal investments and expected values but differing degrees of risk. Riskier projects were chosen by managers whose organizationally imposed goals were based on aspirational versus survival reference points, whose prior project decisions had resulted in the accumulation of additional financial resources, for whom prior project outcomes were attributed to the manager’s guidance of the project versus competitive factors, and by managers whose propensities to take risks were higher. These results have important implications for the design and staffing of new product decision processes, for the creation of organizational cultures that foster new product risk taking, and for other organizational practices.

Managerial risk perceptions of international entry‐mode strategies

Purpose – The primary purpose of this paper is to investigate how opportunity for control and firm capability interact to moderate the amount of risk that managers associate with various international entry‐mode strategies. A secondary goal is to investigate how managers perceive the need to retain control over three core functional areas (marketing, production, and R&D) when making entry‐mode decisions.Design/methodology/approach – A field experiment design was implemented in a sample of US business owner/executives. Using an online data collection method, the study asked a sample of small‐business owners and managers to assess the amount of risk they associated with three modes of entering the Japanese market: non‐ownership (export), equal partnership (50/50 joint‐venture), and sole‐ownership. They were also asked how much control they needed to retain over R&D, production, and marketing for the venture to be successful.Findings – Ownership‐provided control interacts with capability to influence manager...

Dynamic market definition: an international marketing perspective

Starting from the premise that market definition is critical to developing effective and efficient market entry strategies, shows that current approaches to market definition are unable to meet these challenges, that their deficiency is compounded for multinational entry strategies, and that the crux of their weakness is reliance on a static interpretation of a dynamic construct – time. Next, advances the proposition that accounting for the time‐based effects can improve the strategic planning process, and then, following the percepts of diffusion theory, develops a framework that conceptualizes multinational markets in terms of their media availability and economic development, key variables that reflect an innovations rate of adoption at distinct stages of the diffusion process. Finally, applies the framework to data that illustrate its ability to help marketing managers achieve greater effectiveness and efficiency from their global, market expansion strategies.

Seeing Differently, Acting Differently? New Venture Perceptions and Decisions of Managers and Successful Entrepreneurs

An experimental study was conducted in a sample of America’s most successful entrepreneurs and one of comparable large company managers to examine three research questions: Why do some individuals choose riskier ventures than do others? Do managers and successful entrepreneurs perceive new venture risk and potential differently? What accounts for differences, if any, in their decision‐making behavior? The findings are equally interesting for the effects we found and did not find. We found that differences in risk propensity and in situational factors like the market competencies brought to a particular venture influence risky new venture decision‐making; that perceptions of new venture risk and potential differ between managers and successful entrepreneurs, though in a direction opposite to that we hypothesized; and that individual differences, rather than group‐level differences, are primarily responsible for the degree of risk taken by managers and successful entrepreneurs. Taken together, our results call for further research at the marketing/entrepreneurship interface and research into differences between managers and entrepreneurs, using samples of highly successful entrepreneurs and comparable managers in established firms.