many business experts contend that

many business experts contend that

The Impact of Business Experts’ Contention on Decision-Making

1. Introduction to Business Experts’ Contention

International relations and business experts have suggested that ideas and ideologies play a substantial role in shaping the world of business and politics. Yet scholars have barely begun to examine the processes by which experts’ policy ideas are formed and then how their contention affects policy or decision-making. Much of the literature examines the way ideas influence or reflect policy decisions without fully examining how they shape key parts of the decision-making process and does not take account of experts’ contestation of ideas or consider multiple competing ideas within an issue area. Most of the research that is concerned with ideas treats them as static, overlooking the process through which a diversity of ideas is formulated, formed, and disseminated by experts. Moreover, in international relations at least, the literature has exaggerated the homogeneity and cohesion of experts’ beliefs, which may fluctuate, be ambivalent, or lead to a change in policy preferences.

This thesis advances the study of the impact of experts’ ideas and ideology on the international political economy by showing that business experts partake in an intradisciplinary battle of ideas. This means that it examines concept formation within the business community, deals with the contestation of ideas by business experts, and then studies the role of the ideational preferences of business experts in shaping the form that international political economy (IPE) policy decisions take. The central argument is that the contention of business experts makes policy responses ambiguous or problematic, which in turn constrains the choices made by politicians and accounts for observed contradictions between and within international institutions that are set up to regulate commerce. On the downside, the strategic use of business experts’ contention may also shape policy outcomes and ensure the survival of some supranational institutions.

2. Factors Influencing Business Experts’ Views

Experts’ contention is multidimensional, though this article refers to experts’ differences of opinion over the decision to be taken as a form of contention. These differences of opinion may arise from various sources, making contention a complex issue. The main factors predisposing contention are the level of ambiguity in the decision context, personal dispositions (e.g., attitudes, education and function), interpersonal interaction and the quality of the information exchanged. These factors operate in a decision-making process context that encompasses a series of activities during which the decision is made. In describing and discussing these factors in subsequent sections, the assertion made in the introductory section on the relevance of the theoretical viewpoints of the experts to the discussion in this article was taken at face value. This was done to show that the focus of the discussion would be on the actual communication between business experts, and not simply on business experts’ theoretical knowledge.

3. Case Studies and Examples

For example, although the CEO’s endorsement of the chief financial officer’s proposal to adopt expensing for stock options at Sun Microsystems was highly influential – in that proposal’s reaching the board’s agenda – it was not decisive. The CEO’s proposal, enacted over board opposition, was the result of combining his own advocacy with a variety of persuasive arguments presented by proponents both within and outside of the company. In that case, a descendible proposal would have been presented to the board without the CEO’s support. Similarly, the proposal to expense unvested options had broad-based support on the board, the compensation committee (excluding the directors who were employed by Sun), directly from major investors (including some who initiated the idea), and from the influential proxy-advisory firm, Institutional Shareholder Services, Inc. The broad-based support on the board and the successful arguments by proponents – others both within and outside the company – were consistent with arguments enabling the proposal to meet the “fair argument” test for purposes of SEC Rule 14a-6(3).

Contrasting with these examples, Henry presented a case in which the principal business expert was the CEO. Because convincing the compensation committee of the folly of expensing was perceived as more important to the future of the company than the economic merits of the proposed accounting method, the CEO expended great efforts to debunk his advisory group’s research. Indeed, the CEO’s conviction was so powerful that he even accused an academic researcher, who presented evidence to the compensation committee, of either perpetrating fraud or being a victim of “garbage in, garbage out.” The CEO’s credibility was seen as the most significant factor influencing the board’s acceptance of his arguments. The board was presented divergent views when it voted on both expensing proposals, as the proponent was the same, his arguments remained the same, and he was marginally successful with only one voting member of the compensation committee.

4. Implications for Decision-Making Processes

Understanding the impact of business experts’ contention on managerial decision making is crucial. Managers are usually required to evaluate many strategic alternatives under high levels of uncertainty, and often in conditions where the behavior of important strategic contingencies is not well-defined. Exhaustive rational evaluation of numerous complex and diverse issues open to debate certainly should not be expected, but selective attention is necessary to narrow the universe of choices to a manageable field for consideration. We anticipate that businesses (and managers within them) of all types can benefit from a greater understanding of the impact of strategy issues, the arguments of potential business experts and the likely impact of those experts and their contentions on the managerial decision-making process. The resolve of strategy is often not a matter of objective fact but one of judgment.

We questioned a proposed theory (the analysis of middle management ‘harness’) that CEOs act to limit contention in their top decision-making bodies. While most managers are likely to welcome additional or better-quality strategic pronouncements, the conclusion of too many able persons bearing idiosyncratic, probably controversial and potentially conflicting, strategic data (contentions) simply may provide more grief than good on the average decision. The decision process might well become lightened, short-revisited, subjected to sub-optimal, opportunity-related or incomplete resolution for that reason. We do not wish to leave the impression that a perceived need to limit contention is at all only a reflection of potential cognitive overload on the part of the top management decision team. It might be a reflection of an attenuation in decision outcomes that the business of a business is the sale of goods or services, not the option of ad hoc laryngitis.

5. Conclusion and Future Directions

The present study addresses the under-researched topic of contention in decision-making in business organizations, examining the characteristics of business experts that foster or hinder contention in the group during decision-making, as well as their effects on decision quality. The current work highlights the importance of cognitive inflexibility and lack of cognitive empathy and perspective taking in business experts and contributes to a fuller understanding of how personality traits can affect contention and decision-making processes and results in a business context. We hope the results from our research demonstrate the importance of moderator influence on group dynamics and decision quality and offer some insight into how to deal with controversial characteristics and behaviors of business experts in practice.

In conclusion, this study advances our understanding of how the specific competences and expertise of business experts may lead to more or less contention in group decision-making, contributing to the group decision-making literature and providing future studies with new research opportunities. We encourage future research to further investigate more curvilinear or multidimensional relations, and to combine at least two of the models tested in the present paper. In this regard, studies might contribute to more complex relationships among business experts’ self-regulatory and cognitive mechanisms and competences, which, ultimately, affect decision-making dynamics and quality. Moreover, studies could examine the relationships between several business experts interacting in a decision-making group. In line with the increasing interest in competences and competency – particularly in the mathematical and scientific fields, as well as in mathematics instruction and educational research – our results may also be useful in the academic field.