Strategic Marketing Lectures
Organizational learning & knowledge management
How to transfer knowledge/insist learning
- Classes & training
- Write it down (not always possible e.g. when information is to complex.)
- Set up meetings
- Individual learning vs. organizational learning
- Single-loop learning vs. double-loop learning
o Single-loop learning: certain target. Occurs within a set of recognized and
unrecognized constraints that reflect the organization’s assumptions about is
environment and itself. This type of learning solves problems but ignores the
question of why the problem arose in the first place.
o Double-loop learning (generative learning) occurs when the organization is
willing to question long-held assumptions about its mission, customers,
capabilities or strategy. It uses feedback from past actions to question
assumptions underlying current views. Thinking about the causes what went
wrong here, instead of single loop learning. Exam failing for the resit you going
to learn harder with the single loop learning and with the double loop you are
going to think oke what did I do wrong. I went to all the classes how did I fail?
So, think about the reasons.
- Explicit vs. tacit knowledge
o Explicit knowledge you can write down, like how to make a smoothie.
o Doctor is someone that not can easily wrote down.
Lecture 2
Slide 9. The steps you have to take if you want to learn as an organization.
Difference between culture and climate
Culture = the moral thing, the way we think
Climate = structures, processes and rules.
You need both in a firm.
Cultural values are the necessary foundation for organizational learning
- Market orientation
- Entrepreneurship
Create a climate in which these cultural values can flourish
- Need for a facilitative leader (opposite of a dictator) someone who is going to
challenge you, not make decisions for you.
, - Adopt an organic organization form: different from the hierarchic organisation. There
are a lot of connections between the departments.
- Decentralize strategic planning to foster creativity: allow your employees to make
decisions.
Achievement Goal Theory
- But what motivates individuals and organizations to learn?
- Concept of ‘Goal Orientation’ (GO):
o = nature of the desire and reactions of an entity (individual, organization) in
an achievement context.
- Individual goal orientation
o Performance GO – ability to achieve = fixed driven to demonstrate their
ability to others
o Mastery GO – ability to achieve = dynamic, amendable to improvement
driven to learn and improve
E.G, ‘students with a performance GO seek to prove their
competences, but students with a mastery GO seek to improve their
competences’. So, learn to pass your exam or maximize your score.
- Collective (firm) goal orientation:
o Shared perceptions of group norms: translates individual GO into group norms
Performance norms = fixed
Mastery norms = dynamic
Tools for the learning organization: Marketing Management Support Systems
- Software that helps in translating hard data into meaningful information through
summary statistics etc. that may facilitate decision making.
Research shows that Marketing Management Support Systems (MMSS) sometimes help, but
sometimes also harm.
- Distinguish between 4 different marketing problem-solving modes (MPSM, MMSS)
o Optimizing
o Reasoning
o Analogizing
o Creating
There is often a miss-match. Companies use the wrong system for the wrong marketing
problem-solving mode. (So, MPSM and MMSS do not match).
3. Irrational or ‘Biased’ Managerial Decisions
1. Confirmation bias = the tendency to search for confirming info to lower dissonance.
a. Dissonance theory: inconsistency between belief and new info
i. Dissonance reduction: avoiding dissonant info, search for confirming
info
ii. Selective perception: disconfirming info is regarded as inaccurate
2. Escalation bias = commitment to/continuation of a losing course of action. =
tendency to continue investing in a strategy, despite negative feedback
, a. Often in high commitment, high involvement decisions
i. Bad marriages
ii. Waiting for a bus
iii. Investing in shares
iv. New product development
b. Escalation of commitment reinforced by:
i. Psychological factors
1. Internal justification (justifying choice towards yourself)
2. Sunk cost (past investments, economically irrelevant). Sunk
cost fallacy: when you already made a lot of investments, you
should not take them into account when making decisions.
3. Reason for negative feedback (endogenous reasons are more
difficult to accept than exogenous reasons)
ii. Social factors
1. External justification (justifying your choice towards others)
c. Solutions: how can we reduce escalation of commitment bias?
i. More information: the more info the harder it will become to continue
and to motivate
ii. Emphasize uncertainty and external events: influence the outcome.
Stress more on numbers and uncertainty, it will motivate them to quit.
iii. Use analytic or systematic approach to evaluate the project.
iv. Establish a rule a priori that determines when to stop
v. Sequential decision decoupling (effective but not very efficient).
Different managers to start up and to promote, but another manager
involved to quit the project.
3. Myopia and selective perception (focus on just short term)
a. Three forms of learning myopia:
i. The tendency to overlook distant times: decisions that favour short-
term returns at the expense of long-term firm performance
ii. The tendency to overlook distant places: overemphasize effects that
occur near the decision maker
iii. Tendency to overlook failures: firms oversample successes and under
sample failures
4. Framing bias = decision frame: the decision maker’s conception of the acts,
outcomes, and contingencies associated with a particular choice.
a. Contextual and presentation biases emerge when people make different
decisions as a function of how information is presented to them, even though
the substance of the information is unchanged.
3 robust context effects in marketing (framing biases).
1. Compromise effect = predicts that a product obtains a relatively larger utility and
choice probability when it become an intermediate or ‘compromise’ in the
assortment. Suppose that there are only 2 products in the market. One is high quality
(B) and the other lower quality, low in price (A)e. By adding an option C of high
quality, option B will in the middle, people like that.
Organizational learning & knowledge management
How to transfer knowledge/insist learning
- Classes & training
- Write it down (not always possible e.g. when information is to complex.)
- Set up meetings
- Individual learning vs. organizational learning
- Single-loop learning vs. double-loop learning
o Single-loop learning: certain target. Occurs within a set of recognized and
unrecognized constraints that reflect the organization’s assumptions about is
environment and itself. This type of learning solves problems but ignores the
question of why the problem arose in the first place.
o Double-loop learning (generative learning) occurs when the organization is
willing to question long-held assumptions about its mission, customers,
capabilities or strategy. It uses feedback from past actions to question
assumptions underlying current views. Thinking about the causes what went
wrong here, instead of single loop learning. Exam failing for the resit you going
to learn harder with the single loop learning and with the double loop you are
going to think oke what did I do wrong. I went to all the classes how did I fail?
So, think about the reasons.
- Explicit vs. tacit knowledge
o Explicit knowledge you can write down, like how to make a smoothie.
o Doctor is someone that not can easily wrote down.
Lecture 2
Slide 9. The steps you have to take if you want to learn as an organization.
Difference between culture and climate
Culture = the moral thing, the way we think
Climate = structures, processes and rules.
You need both in a firm.
Cultural values are the necessary foundation for organizational learning
- Market orientation
- Entrepreneurship
Create a climate in which these cultural values can flourish
- Need for a facilitative leader (opposite of a dictator) someone who is going to
challenge you, not make decisions for you.
, - Adopt an organic organization form: different from the hierarchic organisation. There
are a lot of connections between the departments.
- Decentralize strategic planning to foster creativity: allow your employees to make
decisions.
Achievement Goal Theory
- But what motivates individuals and organizations to learn?
- Concept of ‘Goal Orientation’ (GO):
o = nature of the desire and reactions of an entity (individual, organization) in
an achievement context.
- Individual goal orientation
o Performance GO – ability to achieve = fixed driven to demonstrate their
ability to others
o Mastery GO – ability to achieve = dynamic, amendable to improvement
driven to learn and improve
E.G, ‘students with a performance GO seek to prove their
competences, but students with a mastery GO seek to improve their
competences’. So, learn to pass your exam or maximize your score.
- Collective (firm) goal orientation:
o Shared perceptions of group norms: translates individual GO into group norms
Performance norms = fixed
Mastery norms = dynamic
Tools for the learning organization: Marketing Management Support Systems
- Software that helps in translating hard data into meaningful information through
summary statistics etc. that may facilitate decision making.
Research shows that Marketing Management Support Systems (MMSS) sometimes help, but
sometimes also harm.
- Distinguish between 4 different marketing problem-solving modes (MPSM, MMSS)
o Optimizing
o Reasoning
o Analogizing
o Creating
There is often a miss-match. Companies use the wrong system for the wrong marketing
problem-solving mode. (So, MPSM and MMSS do not match).
3. Irrational or ‘Biased’ Managerial Decisions
1. Confirmation bias = the tendency to search for confirming info to lower dissonance.
a. Dissonance theory: inconsistency between belief and new info
i. Dissonance reduction: avoiding dissonant info, search for confirming
info
ii. Selective perception: disconfirming info is regarded as inaccurate
2. Escalation bias = commitment to/continuation of a losing course of action. =
tendency to continue investing in a strategy, despite negative feedback
, a. Often in high commitment, high involvement decisions
i. Bad marriages
ii. Waiting for a bus
iii. Investing in shares
iv. New product development
b. Escalation of commitment reinforced by:
i. Psychological factors
1. Internal justification (justifying choice towards yourself)
2. Sunk cost (past investments, economically irrelevant). Sunk
cost fallacy: when you already made a lot of investments, you
should not take them into account when making decisions.
3. Reason for negative feedback (endogenous reasons are more
difficult to accept than exogenous reasons)
ii. Social factors
1. External justification (justifying your choice towards others)
c. Solutions: how can we reduce escalation of commitment bias?
i. More information: the more info the harder it will become to continue
and to motivate
ii. Emphasize uncertainty and external events: influence the outcome.
Stress more on numbers and uncertainty, it will motivate them to quit.
iii. Use analytic or systematic approach to evaluate the project.
iv. Establish a rule a priori that determines when to stop
v. Sequential decision decoupling (effective but not very efficient).
Different managers to start up and to promote, but another manager
involved to quit the project.
3. Myopia and selective perception (focus on just short term)
a. Three forms of learning myopia:
i. The tendency to overlook distant times: decisions that favour short-
term returns at the expense of long-term firm performance
ii. The tendency to overlook distant places: overemphasize effects that
occur near the decision maker
iii. Tendency to overlook failures: firms oversample successes and under
sample failures
4. Framing bias = decision frame: the decision maker’s conception of the acts,
outcomes, and contingencies associated with a particular choice.
a. Contextual and presentation biases emerge when people make different
decisions as a function of how information is presented to them, even though
the substance of the information is unchanged.
3 robust context effects in marketing (framing biases).
1. Compromise effect = predicts that a product obtains a relatively larger utility and
choice probability when it become an intermediate or ‘compromise’ in the
assortment. Suppose that there are only 2 products in the market. One is high quality
(B) and the other lower quality, low in price (A)e. By adding an option C of high
quality, option B will in the middle, people like that.
