Managers’ cognitive capabilities and perception of market research usefulness

Abstract

The main purpose of this paper is to investigate the relationships between three theoretical constructs developed in the course of the study measuring: (a) managers' memory capacity, (b) information processing, as a part of general system of cognitive capabilities, and (c) their perception of market research usefulness. In particular, we diagnose managers' natural limitations associated with cognition which determine their capabilities to deal with the market research information storage and retrieval as well as research information processing. With this intention and theoretical assumption, we designed and implemented a two-phase process of research. In the first phase, based on the literature review; face-to-face in-depth interviews and a pilot study (a pretest) we developed measurement models for the proposed theoretical constructs. Next, we conducted quantitative research among 213 highly experienced managers working in multinational companies in a European country (Poland), where the sample included individuals who were responsible for planning strategic and tactical marketing activities. Based on the structural equation modeling as the analytical strategy, the empirical research results revealed that managers in business organizations due to limited cognitive capabilities such as lower-than-average memory capacity and poor information processing, develop wrong perceptions of the usefulness of market research. Managers, when faced with difficulties regarding information storage and retrieval, as well as information processing, react negatively towards that research. Finally, we explained the reasons as to why managers in companies perceive market research in a negative light, as well as presented the most important theoretical and managerial implications.