Do Digitally Embedded Workforce Make Decisions Differently? Evidence from Organizational Purchasing

39 Pages Posted: 22 Apr 2017 Last revised: 2 Feb 2018

Haris Krijestorac

University of Texas at Austin, Red McCombs School of Business, Students

Rajiv Garg

University of Texas at Austin - Department of Information, Risk and Operations Management

Prabhudev Konana

University of Texas at Austin - Department of Information, Risk and Operations Management

Date Written: March 1, 2017

Abstract

Popular media and business thought leaders suggest that the emerging millennial workforce makes business-to-business purchase decisions differently because of its increased reliance on digital sources (e.g., blogs, social media, and online forums). This argument contends with extant research which indicates that organizational buyers rely on decision shortcuts (e.g., brand, loyalty, and peer opinions) to mitigate risks or to simplify purchase decisions. One can argue that decision makers gain more information from digital sources and, hence, buyers may be more objective in their decision-making and rely less on decision shortcuts. At the same time, digital sources can also strengthen prior beliefs, which might increase reliance on decision proxies. In this study, we evaluate the role of digital sources of information on decision-making using information processing theory. We introduce a new Digital Embeddedness construct to conceptualize the extent to which information from digital sources is integral to an individual’s decision-making. This construct is developed using the Accessibility-Diagnosticity framework, which posits that information processing depends on the ease with which information can be retrieved (accessibility) and its perceived relevance (diagnosticity). Analysis of survey responses from 196 purchasing managers suggests that more digitally embedded buyers are more willing to adopt innovations, yet interestingly, rely more on decision shortcuts such as brand and peer opinions. We also find that while more digitally embedded buyers feel more attached to their existing vendors, they are less likely to re-purchase from them. Thus, while digital sources may help buyers make decisions more objectively, they may also help buyers justify prior beliefs. By systematically and habitually justifying their use of decision shortcuts, buyers may develop an “illusion of objectivity,” and effectively rely on these shortcuts even more. This research has implications for digital marketing and for understanding the effect of digital sources on organizational decision-making.

Keywords: digital embeddedness, digital information, millennials, b2b purchasing, decision-making, information processing theory, Accessibility-Diagnositicy, dual process theory, heuristic systematic model

JEL Classification: M15, L86, D81, D83, D79

Suggested Citation

Krijestorac, Haris and Garg, Rajiv and Konana, Prabhudev, Do Digitally Embedded Workforce Make Decisions Differently? Evidence from Organizational Purchasing (March 1, 2017). Available at SSRN: https://ssrn.com/abstract=2954805 or http://dx.doi.org/10.2139/ssrn.2954805

Haris Krijestorac

University of Texas at Austin, Red McCombs School of Business, Students ( email )

Austin, TX
United States

Rajiv Garg (Contact Author)

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States

HOME PAGE: http://www.RajivGarg.org

Prabhudev Konana

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States

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