The Psychology Of Decision Making In Network Marketing – Identifying the factors affecting strategic decision-making ability to promote entrepreneurial performance: A hybrid structural equation modeling – artificial neural network approach
This study builds a conceptual model of strategic decision-making ability that leads to entrepreneurial performance (EP) based on the two-system decision-making theory and logical analysis. An empirical approach was performed using structural equation modeling – artificial neural network (SEM-ANN) to describe the linear and non-linear relationships in the proposed model. The empirical results reveal that strategic decision-making abilities are affected by five factors: attention, memory, thought, emotion, and feeling, and their influence mechanisms and degrees are varied. Results also describe that these abilities have a positive effect on overall EP. Therefore, results suggest that the strategic decision-making processes of businesses are usually strengthened when entrepreneurs have a clear understanding of these influential elements, and that the interaction between them leads to better performance.
The Psychology Of Decision Making In Network Marketing
Entrepreneurship is believed to be a means of developing performance and wealth. With the knowledge economy expanding so rapidly, knowledge-based decision-making is seen as a key tool for success and prosperity (Yang et al., 2018; Jiatong et al., 2021a). The key factor influencing the performance and profitability of organizations is strategic decision making (Feng et al., 2022). Because, the willingness to take risks and make decisions, as well as organizational product invention and market innovation, are all related to an individual’s entrepreneurial performance (Li et al., 2020a). Furthermore, there is a correlation between value creation and creative thinking, recognition of opportunities, as well as time, resources, risk, and other components of strategic decision-making and EP (Theriou and Chatzoudes, 2015; Li et al., 2020a) . In the current green environmental pressure, businesses must include competitive issues in their strategic plans to build innovative initiatives and gain a foothold in the highly competitive business world (Abbas, 2020). Research has shown that the decision-making skill of managers affects the organization’s innovative strategies. It is really important to investigate what affects and improves managers’ ability to make decisions (Pan et al., 2020).
Pdf) Impact Of Social Media On Consumer Behaviour
Since the 21st century began, organizational culture has integrated IT and industries (Shahzad et al., 2017; Agarwala and Chaudhary, 2021). Strategic decisions to engage in innovation are significantly influenced by global technological growth, which produces new patterns of doing business (Xu et al., 2022). In order to increase the ability to make management decisions, enterprises should optimize the governance system, raise awareness of development, design development plans based on long-term sustainable growth, and encourage the implementation of enterprise strategy (Feng et al., 2022; Hu et al., 2022; Wang and Liu, 2022). Furthermore, strategic decision-making behavior requires organizations to match the external environment and internal resource capabilities; however, most are limited by internal resources and cannot develop flexible strategies (Li et al., 2020b). Several studies use the theory of cognitive behavior to evaluate cognitive behavior, claiming that it is essential to organizational decision making, especially in the areas of entrepreneurship, technology adoption decisions, social media, and consumer behavior (Dwivedi et al., 2017; Chou et al. et al., 2020; Wang et al., 2022). Strategic decision making has not been linked to EP in previous research. Therefore, to fill a research gap in organizational psychology, this study examines the factors that influence an entrepreneur’s strategic decision-making abilities that ultimately lead to improved EP.
In new current theory, behavior change is used as a proxy for success or failure, and cognitive and affective aspects can be investigated as predictors of decision-making quality (Feng et al., 2022). The level of cognitive acuity not only allows for more information sharing but also reduces the stress of arguing (Kang and Lee, 2017). Likewise, as the importance of being able to make strategic decisions as an entrepreneur increases, the study of such talents has attracted considerable interest in academic and business communities (Bilancini et al., 2019). The link between influential factors and the ability to make strategic decisions is complex because strategic decision making involves a cognitive and psychological transformation process (Narayanan et al., 2011). However, because the model is too complex, parameters are difficult to estimate, a lot of work is required, and the model is unstable, it is difficult to implement in practice (Kaplan, 2011). Therefore, it is also essential to determine whether the main factors that influence strategic decision-making are linear or non-linear in their interaction with each other to shape the DA. The aim of the research is to establish a linear and non-linear model between a specific attitude and the ability to make strategic decisions. SEM and ANN are used to express non-linear relationships between variables and have excellent self-learning capabilities. Academics have paid little attention to research structure because of its complexity. A lack of research hinders the establishment of a thorough research system to determine the impact on strategic decision making.
The performance of entrepreneurial ventures is the output of entrepreneurial activities at the organizational level and is an important embodiment of entrepreneurial success. Although entrepreneurs have unique entrepreneurial advantages, their EP is uneven in the face of the dual uncertainties of market and technology. An enterprise environment is characterized by dynamic, uncertain and complex characteristics, rather than being in a static and stable state. Enterprises need to ensure flexibility between their resources and opportunities pursued in accordance with their environment and develop a strategic plan that can best match external environmental opportunities with internal resources. Strategy adaptation is a process of “matching” or “matching the organization’s resources” with the opportunities of the environment (Ruobing et al., 2022). Currently, there is a lack of relevant reasons in the academic circle, and only the difference in creativity characteristics during entrepreneurship is considered as the influencing factor (Jiatong et al., 2021b; Xie et al., 2021) , but the creativity characteristics are more the external expression of technical ability and knowledge transfer (Zhou et al., 2021), which do not reflect the personal characteristics that affect the main decisions and management of enterprises. Therefore, the key research questions of this study are framed as (1) What are the cognitive and affective factors that affect strategic decision-making abilities? (2) What is the impact of strategic decision-making capabilities on EP? This research collection may be filling the research gap in organizational psychology, and provide countermeasures and suggestions for improving enterprise EP.
An enterprise’s strategic decision-making ability combines many capability factors. The research on the ability to make strategic decisions focuses on the composition of the ability to make strategic decisions and the factors that influence it (Wally and Baum, 1994; Bilancini et al., 2019). According to the literature, the ability to make strategic decisions encompasses three abilities: firstly, the ability to locate, anticipate and seize strategic opportunities by assessing the environment. Second, is the ability to make strategic decisions such as setting a goal and deciding on a business strategy. The third stage is resource integration through the selection, acquisition, and use of resources (Milliken and Vollrath, 1991; Wally and Baum, 1994). The study by Schønning et al. (2019) believe that the strategic decision-making capability system has three dimensions: strategy analysis, strategy selection, and optimization, and adaptation and updating capability. All elements work together to develop and perfect for making strategic decisions. By carefully studying the variables of rational decision making, a comprehensive and practical driving model is created (Spanuth et al., 2020).
Getting Organizational Decision Making Right
Furthermore, improving a person’s ability to make strategic decisions allows one to better understand the special characteristics of the environment and the ever-changing trend (Bilancini et al., 2019). Strategic decision-making, especially in the field of environmental sustainability, is a focus of academic research (Bilancini et al., 2019). Since demographic characteristics are mainly related to human capital and theoretical explanations are limited, scholars have begun to study the impact of entrepreneurial and executive team characteristics on the quality of strategic decision-making (Friedman and Carmeli, 2018; Feng et al., 2022). Evidence from previous research suggests a link between aggression, core self-evaluation, and the strategic decision-making abilities of the senior management team (Clohessy and Acton, 2019; Gao et al., 2021).
Recently, there has been great interest in how the psychological makeup of decision makers affects their ability to make sound strategic choices. The cognitive approach, complexity, demands, and variation are the main intellectual considerations (Forbes, 2007; Nadkarni and Narayanan, 2007). Seen from a cognitive perspective, the strategic decision-making process includes three stages: scanning the environment, interpretation and action (Kumbure et al., 2020). In this research, we divide the ability to make strategic decisions into three categories: scanning, interpretation, and action ability. The ability to scan the environment for vital information. The ability to make smart and original sense of the data one has collected. The ability to evaluate and judge rationally, and then choose appropriate actions in response to the environment, is what we mean when we talk about behavioral ability (Li et al., 2019).
An analytical, logical decision-making system and a heuristic, empirical system have been recommended in decision-making circles (Bryant, 2007; Shukla et al., 2019). The first is slow because your brain needs to do the heavy lifting of applying the rules of logic and calculating probabilities. Cognition also plays a significant role in this process, as it is a form of decision making. The latter make snappier judgments due to less deliberate engagement and use of
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