ISSN 0439-755X
CN 11-1911/B

›› 2005, Vol. 37 ›› Issue (03): 373-381.

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EFFECTS OF COGNITIVE CHARACTERISTICS ON THE PROCESS OF DECISION MAKING AND STRATEGIC CHOICE

Zhang Wenhui,Zhang Zhixue,Liu Xuefeng   

  1. Department of Human Resources, China Women’s College, Beijing 100101, China
  • Received:2004-02-23 Revised:1900-01-01 Published:2005-05-30 Online:2005-05-30
  • Contact: Zhang Zhixue

Abstract: Under uncertain environments, decision makers’ personal characteristics and behavior take important roles in making strategic decisions in an enterprise. This study was designed to examine the relationships between the cognitive characteristics of decision makers, the process of decision making and the final strategic choice for an enterprise. The scenario-based experiment was conducted to achieve this purpose. A business case that was developed from the business practices of a real company in China and rich information was included to create uncertainty. 148 students from a management school were required to analyze the case and to present their answers to some questions relating to the case on behalf of the company’s CEO. Participants were also asked to complete other scales in a questionnaire. Before the case analysis, the cognitive complexity of the sample was measured. Structural equation modeling analysis revealed the following results: both need for cognition and cognitive complexity are positively related to strategic orientation, which reflects a “rational” approach in scanning and analyzing the company’s external environment; strategic orientation is positively related to participants’ judgments of the opportunities and threats in the environments, and these judgments significantly influence participants’ decision on whether the company should enter into a new business. The findings of this study suggest that top managers in enterprises should both develop their motivation and ability to engage in rational thinking when they are making decisions under uncertainty.

Key words: need for cognition, cognitive complexity, decision making, strategic choice, scenario-based experiment

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