Executives' perceived environmental uncertainty shortly after 9/11

Environmental uncertainty refers to situations when decision makers experience difficulty in predicting their organizations' environments. Prediction difficulty is mapped by closeness of decision makers' probability distributions of environmental variables to the uniform distribution. A few months after the 9/11 terrorist attacks, we solicited probabilities for three environmental variables from 93 business executives by a mail survey. Each executive assigned probabilities to the future state of the economy specified as categories of growth projected for a year after the 9/11 jolt, conditional probabilities of its effect on her/his organization, and conditional probabilities of her/his organizational response capability to each economic condition. Shannon entropy maps uncertainty, but the data do not provide trivariate state-effect-response distribution. We use maximum entropy method to impute the trivariate distributions from the data on state-effect and state-response bivariate probabilities. Uncertainty about each executive's probability distribution is taken into account in two ways: using a Dirichlet model with each executive's distribution as its mode, and using a Bayesian hierarchical model for the entropy. Both models reduce the observed heterogeneity among the executives' environmental uncertainty. A Bayesian regression examines the effects of two organizational characteristics on uncertainty. Presentation of results includes uncertainty tableaux for visualizations of the joint and marginal entropies and mutual information between variables.

An Exploratory Investigation into the Role of Formalized Political Activity in International Marketing Strategy

The international market environment is one in which politics plays a fundamental role. Individual firm success is, in large part, dictated by the willingness and ability of the firm to engage in non-market, political activities. While U.S. firms are generally acknowledged to incorporate political behavior into their strategic approaches to the domestic market, they have been criticized for not undertaking the same activities in the global market. This study explores the importance firms place on politics and different political activities for gaining access to foreign markets. The results show that U.S. firms who have formalized political structures do place a high level of importance on political activities in their international operations

Understanding Environmental Risk for IJVs in China

Firms still have great difficulty joint venturing successfully in China. We contend that the current understanding of environmental risk in China is incomplete. Specifically, the current conceptualization has three problems: 1) lack of integration of unique Chinese environmental characteristics, 2) incomplete distinction between different types of environmental risk, and 3) lack of a conceptualization of how the risk pattern changes as the economy transitions. We extend the current risk framework to include the unique features of the Chinese context. We offer guidelines for managing risk tradeoffs over time using two key structural decisions: Channel partner relationship and equity ownership