Knowledge that Transforms

This paper reports preliminary results of a study of how relatively large U.S. international firms assess noneconomic environments, how the resulting evaluations are integrated into decision making or planning, and how the process affects managerial strategy. A mailed survey of 455 firms was followed up by personal interviews with approximately 113 managers in 37 firms selected via a stratified quota sample of respondents. Findings support a conclusion that assessment and evaluation of nonmarket environments is emerging as a new managerial function in relatively large international firms. Over half of the respondents indicated that they have a group or groups which have been assigned formal assessment responsibility; however, both the survey results and interview data suggest a number of problems with current practice. Assessments tends to be reactive rather than active; the most important sources of information about environments are internal to the firm; assessments are typically not conducted independently of an investment or planning proposal; and resulting evaluations serve as a context in which decisions are taken rather than as input to a decision-making process.

In their comment on “The Great American Competitive Disadvantage: Fact or Fiction?”, D. Ricks, M. Czinkota, and G. DeJesus point out several criticisms of share analysis, especially those made by Houston [2] and Richardson [3, 4], and suggest that perhaps share analysis may be too suspect to be of much use. Because these issues—together with several other caveats on the use of share analysis—may have an influence on the results obtained, they are discussed in my article for the benefit of readers who are not familiar with the share-analysis technique. However, in their note, Ricks, Czinkota, and DeJesus fail to consider the reply made by Ashby [1] to the issues raised by Houston nor do they recognize that Richardson concludes his article by suggesting several ways to improve the results of share analysis rather than advocating that the method should not be used at all [3].

Experimental combinations of promotions and offers of free samples of a weaning food and a contraceptive were sent by mail to a sample of Sri Lankan households with recently born children. Based on responses to an initial mailing and a follow-up, promotions and offers significantly affected behavior, with impact greater for the weaning food than for the contraceptive. No significant gain in response resulted from joint promotions, but cost savings made joint promotion of both products to the same target group cost effective.