An Exploration of Decision-Making under Threat

Abstract

ABSTRACT Purpose The use of threats to force supplier compliance is a common practice in current business affairs. Unfortunately, little is known regarding the supplier’s decision process to comply to or resist such a coercive strategy. The paper aims to develop a more comprehensive view of the decision process used by suppliers when threatened by their customers, as well as discover new phenomena regarding supplier Decision-Making Under Threat (DUT). More specifically, it aims at (1) gaining a better understanding of threats by looking at their patterns and commonalities and (2) identifying which consideration factors are relevant when suppliers evaluate threats. Method To identify which consideration factors are relevant to suppliers when deciding how to react to threats, the study employed an exploratory approach by interviewing 17 marketing practitioners with experiences in DUT. The in-depth interviews lasted between thirty-five and sixty-five minutes and were transcribed. Descriptive coding and template analysis generated thirty-nine descriptors and nine categories that are deemed important when considering DUT. The authors also evaluated the intensity of each of the consideration factors present in the decision process. Findings The results reveal that it is possible to categorize threats into three components: Objectives, Penalties and Manifestations. Objectives are what the customer is trying to achieve by using the threat, namely demanding price reductions, appropriating intellectual property, procuring financial statements, receiving a bribe, increasing technical requirements, accessing a cost breakdown, modifying delivery terms, and modifying payment terms. The penalty is what the supplier can expect to happen when refusing to comply, such as losing the customer’s sales. Finally, manifestations describe how the threat is presented by the customer. Study results show that these manifestations may be categorized according to their level of ambiguity, predictability, and candor. The results also reveal that at least five cognitive decision criteria are typically considered during the decision process although at different intensity levels from each participant. These criteria include: Dependence, Cost-Benefit Analysis, Relationship Quality, Relational Norm Violations, and Mimetic Isomorphism. Several interesting discoveries were made. For example, Dependence is both the consideration factor for which most people emphasized its influence on their decision and for which most people said that it had no influence at all. Relational norm violations is unique by being the only criterion for which no participant mentioned that it does not influence their decision. The overwhelming majority of study participants considered more than three criteria during the DUT process. Finally, participants said that they experienced negative emotions such as anger and frustration when exposed to threats albeit most did not recognize that it played a role in their decision. These emotions are however believed to be a factor in reducing the supplier’s willingness to comply. Overall, the study finds that DUT is a complex decision process regarding supplier adaptation, and can be a highly emotional experience with long-lasting effects. Research implications The face-to-face interviews used to collect narratives of participants being exposed to customer threats is deemed an appropriate and highly recommendable methodological approach. When collecting data on reactions to threats and their accompanying emotional reaction several non-verbal signs that the participants physically demonstrated were an essential component in fully interpreting the data. As such, future research on the topic could include video recordings of the interviews. The narratives were also very efficient in recalling the emotions associated with the coercive event though the interviews sometimes occurred several years afterward. The participants’ opinions are consistent with academia’s view regarding the ambiguous role of emotions during decision-making. On the one hand, emotions are recognized to play an important role, they should be acknowledged and understood, while on the other hand, many believe that emotions should not contaminate the decision process. By combining five cognitive criteria with emotions in a DUT framework, the paper incorporates knowledge from the field of psychology into the business-to-business marketing literature. The article highlights the fact that the study of both threats in a business setting and the role of emotions in decision-making are neglected topics that deserve more academic attention. Practical implications From the customer’s perspective an improved understanding of the supplier’s DUT may help customers limit the damage to relationships when using coercive influence strategies such as threats. From the supplier’s perspective, the results emphasize the importance to decompose their customer’s threat in order to better respond to its use. By also taking into account all consideration factors suppliers can take better quality decisions. The results provide several recommendations such as to include intangibles in the cost-benefit analysis instead of solely focusing on the short-term financial impact. Emotional control has been stressed by the participants as a key managerial ability to master when faced with threats. Originality/value/contribution By merging the influence strategy research stream and the supplier adaptation research stream together, the study generates a few original and noteworthy contributions. A better understanding of threats is garnered by breaking them down into three components, which consequently extends our understanding of influence strategies. The study also contributes to a deeper understanding of the supplier’s DUT, a new concept described in the paper, by identifying how decision makers include multiple criteria in their decision process. Very few academic papers have specifically looked into threats as a coercive strategy despite its prevalent use in business environments. Those that did focused on a limited set of criteria when analyzing the decision to adapt. The article expands on these previous studies by proposing five decision criteria, which are often considered collectively by participants when examining adaptation under threat, and emphasizes a factor neglected in previous research, namely the role of emotions.