Comparing Maximizing and Satisficing Decision Making Styles: The Impact on Managerial Performance - PDF Document

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  1. Comparing Maximizing and Satisficing Decision Making Styles: The Impact on Managerial Performance Brandon William Soltwisch University of Northern Colorado, Assistant Professor of Management, USA Brandon.soltwisch@unco.edu Maximizers prefer to seek out more alternatives when making a decision, while satisficers are inclined to select options that meet their minimum criteria. Thus, maximizers exert more resources in the decision making process to seek the best outcomes rather than settling for ones that are good enough. Schwarz and his colleagues (2002) developed a measure that identified key differences between maximizers and satisficers. Since then, maximizing has been associated with a variety of findings (See Cheek & Schwartz, 2016; Parker, Bruine de Bruin & Fischoff, 2007 for review). Although these decision-making styles have begun to revealed some interesting findings, little work has been done connecting these decision-making styles to managerial performance. Therefore, the goal of this study is to understand how managers’ decision-making style (maximizing or satisficing) affects their performance and effectiveness on the job. The study obtained a final sample of 319 working managers in the USA, with an average of 12 years of experience as a manager. These managers had experience in 15 different industries ranging from sales to manufacturing. Maximizing and Satisficing was measured using the Maximizing Tendency Scale (Diab et al. 2008). The focal dependent variable was managerial effectiveness, measured using the Gupta (2008) Managerial Effectiveness Scale. In addition, personality, local of control, decision making flexibility, job satisfaction, gender, age, years of management experience, and industry were also measured. Gender, age, and industry were controlled for in the current study. The study utilizes a multiple regression technique. The results show a strong correlation between maximizing and decision making effectiveness, suggesting that managers who maximize are more effective on the job. In addition, there was a significant relationship between maximizing decision making style and an internal local of control, suggesting that those who are more likely to seek out additional information are also more likely to feel like they are in control of their life outcomes. This research provides an important first look at how decision-making style impact managerial effectiveness. The results suggest that managers who maximize tend to be more effective on the job. Employers could utilize a maximization inventory to help identify individuals who are ready to take on the role of managers. These findings identify many opportunities for new interdisciplinary enquiry. Future research could utilize qualitative methods to better understand the psychological processes underlying key business decisions. Replicating these findings in an international context will help in understanding how decision making styles may vary in different national and organizational cultures. This exciting new area of research holds many promising opportunities to improve decision making theory and practice. Keywords: maximizing, satisficing, decision making References: Cheek, N. N., & Schwartz, B. (2016). On the meaning and measurement of maximization. Judgment and Decision Making, 11(2), 126. Diab, D. L., Gillespie, M. A., & Highhouse, S. (2008). Are maximizers really unhappy? The measurement of maximizing tendency. Judgment and Decision Making, 3(5), 364. 153

  2. Gupta, S. (1996). Managerial effectiveness: Conceptual framework and scale development. Indian Journal of Industrial Relations, 31(3), 392-409. Parker, A. M., De Bruin, W. B., & Fischhoff, B. (2007). Maximizers versus satisficers: Decision- making styles, competence, and outcomes. Judgment and Decision Making, 2(6), 342. Schwartz, B., Ward, A., Monterosso, J., Lyubomirsky, S., White, K., & Lehman, D. R. (2002). Maximizing versus satisficing: happiness is a matter of choice. Journal of personality and social psychology, 83(5), 1178. Simon, H. A. (1955). A behavioral model of rational choice. The quarterly journal of economics, 99- 118. Simon, H. A. (1972). Theories of bounded rationality. Decision and organization, 1(1), 161-176. 154