Organizational Climate and Decision Framing An Integrated Approach to Analyzing Industrial Buying Decisions

Abstract

The authors examine the ability of prospect theory to explain industrial buyer decision behavior and explore the benefits of using organizational climate as one of the factors affecting the decision-framing process of industrial buyers. They develop a conceptual model of the industrial buying decision process, hypothesizing that factors such as the organizational climate and the buyer's general orientation toward risk affect the decision frame and, subsequently, the buyer's choice. The model was tested empirically in a field experiment using a national sample of industrial buyers. The results for the experimentally manipulated factors support the hypotheses about the way industrial buyers form decision reference points, compare alternatives, and eventually make choices. The results for the organizational climate factors, which were measured rather than manipulated experimentally, are mixed.