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MIT LIBRARIES DUPL



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WHEN MANAGERS USE

COMPUTER-BASED DATA:

A QUALITATIVE ANALYSIS

OF MARKETING PRODUCT MANAGERS

David K. Goldstein
Namjae Cho

October 1992



CISR WP No. 244
Sloan WP No. 3473-92




Center for Information Systems Research

Massachusetts Institute of Technology

Sloan School of Management

77 Massachusetts Avenue

Cambridge, Massachusetts, 02139-4307



\Ty



WHEN MANAGERS USE

COMPUTER-BASED DATA:

A QUALITATIVE ANALYSIS

OF MARKETING PRODUCT MANAGERS

David K. Goldstein
Namjae Cho

October 1992

CISR WP No. 244
Sloan WP No. 3473-92



©1992 D.K. Goldstein, N. Cho



Center for Information Systems Research

Sloan School of Management
Massachusetts Institute of Technology



LIBRARIES



10/04/92 2 When Managers Use Computer-Based Data

ABSTRACT

How are managers using computer-based data in tiieir day-to-day work'^ When are they
more likely to use these data? We addressed these questions through a qualitative study of the
use of computer-based data and analytic tools by marketing product managers focusing on 16
product management work units at five grocery manufacturers. Our results indicate that these
managers made extensive use of computer-based data to make sense of their environment and
how it was changing. Further, we found that the factors that most greatly influenced use were
characteristics of the product managers' environment. Through an inductive analysis we
developed a set of propositions that relate four environmental characteristics — complexity,
dynamism, uncertainty, and analyzability — to the degree to which managers use computer-based
data. Finally, we will describe three configurations or groupings of these characteristics and of
the marketing mix employed by these managers that further explained some of the variation in use
of data among managers.



10/04/92 3 When Managers Use Computer-Based Data

Organizations are confronted with a data explosion. Over the last twenty years MIS
groups and software vendors have developed sophisticated transaction processing systems that
capture data from the factory floor to the supermarket checkout counter. For example, marketing
managers at Kellogg's can purchase tens of gigabytes of data describing the sales of Com Flakes
and other cold cereals in the United States'. At the same time, the tools available to analyze these
data, most prominently spreadsheet software that runs on personal computers, have become both
widely available and increasingly easy to use. These phenomena have created significant
challenges for organizations, who are attempting to determine how to best use these data and
analytic tools.

Unfortunately, there is lack of empirical research examining how computer-based data and
analytic tools are being used in organizations. We will address two questions relevant to both
managers and researchers: 1) how are managers using computer-based data in their day-to-day
work and 2) under what circumstances are decision makers more likely to use these data? While
we will provide some insights into the first question, our focus will be on the second Since it is
costly to provide managers with computer-based data and the tools to analyze them and since
there is ample evidence that when information technologies are provided to managers they are not
always used (AJavi and Henderson, 1981, Nickerson, 1981), it is critical to understand when
managers most use data.

In a study of grocery product managers, we found that the use of computer-based data
was widespread. These managers made extensive use of computer-based data to make sense of
their environment and how it is changing. Further, we found that the factors that most greatly
influenced use were characteristics of the product managers' environment. In presenting our
results, we will first describe how these managers used computer-based data and the tools they
had to analyze these data. We will then present a set of propositions that relate four
environmental characteristics — complexity, dynamism, uncertainty, and analyzability — to the
degree to which managers use computer-based data. Finally, we will describe certain groupings
of these characteristics that are common and can explain some of the variation in use of data
among managers.

BACKGROUND

Since information technologies cannot benefit organizations unless they are used, MIS
researchers have focused a great deal of attention on factors that affect the use of information
technology (Swanson, 1988). As personal computers have become ubiquitous in the workplace.



Personal communication, Informauon Resources Incorporated.



10/04/92 4 When Managers Use Computer-Based Data

MIS researchers have turned their attention to factors that affect the use of end-user systems —
information technology utilized directly by non-technical knowledge workers and managers
These researchers have employed two perspectives to examine the degree to which knowledge
workers and managers use various software packages.

One set of research is based on the theory of reasoned action (Fishbein and Ajzen, 1975).
Using this model, Davis, Bagozzi and Warshaw (1989) found that perceived usefulness of
software, and to a lesser extent its perceived ease of use, predicted both subjects' intention to use
the software and their actual later use. They conducted their study with college students using
word processing software. This result was validated, using a slightly different model, by
Mathieson(1991).

A second set of research is based on the theory of diffusion of innovations (Rogers, 1983).
Brancheau and Wetherbe (1990) found that early adopters of spreadsheet sofhvare were younger,
more highly educated, and more likely to be opinion leaders than later adopters and non-adopters.
This research builds on a long tradition of applying innovation diffusion theory to the study of the
introduction of information technologies (see Cooper and Zmud, 1990).

Unfortunately, these two approaches do not adequately reflect the reality faced by many
knowledge workers and managers who use these 'end-user systems. ' These managers are
confronted with a great deal of computer-based data that emanate fi^om many sources, both
internal and external. The data might be in the form of reports, they might be accessible from a
mainirame-based decision support system, or they might be available on a PC-based spreadsheet
or data base package. Knowledge workers might then combine data from many sources and
analyze it using the PC, a calculator, or a pencil and paper Hence, use of a specific software
package is less relevant to these managers than effective analysis of computer-based data. There
is even some evidence that managers in successful organizations make more extensive use of real-
time computer-based data in their decision-making (Eisenhardt, 1989a). At the same time, there
is no evidence of any relationship between the use of spreadsheet or word-processing software
and managerial or organizational performance.

In addition, by focusing on individual managers and their attitudes, these studies do not
adequately consider the role of organizational context The environment faced by an organization
could have a significant impact on a knowledge workers' use of information technology For
example, managers facing a rapidly changing environment might monitor the environment more
closely to detect and react to the changes, and hence make more extensive use of computer-based
data This view is supported by researchers in organizational information processing, who have
found those organizations facing higher levels of uncertainty and dynamism (Leblebici and
Salancick, 1981) or complexity (Campbell, 1988, Culnan, 1983) process more information.



10/04/92 5 When N4anagers Use Computer-Based Data

METHODS

Research Sites

Data were collected at five grocery manufacturers. They were selected because each
developed and implemented their marketing programs with national product management
organizations. The companies varied in size from under $100 million to over $1 billion in sales.
Table 1 contains summary information about each company, including how it was organized, how
many people were interviewed, and how many products were studied. Contact was made through
senior marketing or general management. Within each company, senior managers were asked to
select work units that varied in use of computer-based data.

Our unit of analysis was a product management work unit. Each of these work units was
responsible for marketing a product line or a segment of a product line. The units consisted of a
single product manager or several product managers of varying ranks. Product managers^ were
responsible for developing marketing programs (eg., consumer promotions) for a particular
product line (e.g., Skippy Peanut Butter), which were then implemented by the sales force They
set prices, planned marketing activities, introduced new varieties, and monitored competition
They typically reported to the vice president of marketing. Product managers performed highly
similar functions both within and across companies (Quelch, Farris, and Olver 1987).

The products themselves varied in age, sales volume, market share, and growth rate They
ranged fi-om 1 to over 100 years old and fi-om under $50 million to over $500 million in sales
About as many were increasing as were decreasing in market share. Most products were growmg
in sales, with an average growth rate of under 5% per year. Maximum growth was about 20%
per year. Summary information on the products included in the study can be found in Table 2

The product managers were mostly in their 20s or 30s. All had undergraduate and many
had MBA. degrees. They typically started their careers as assistant product managers,
responsible for data analysis and implementing marketing programs. As their experience
increased, they became responsible for designing promotions, adjusting price, monitoring
distribution, and introducing new varieties. Product managers were accountable for the "health"
and performance of a brand (Quelch, Farris, and Olver 1987). They were supported by a market
research function and worked closely with sales, research and development, and production
managers. Product managers were evaluated based on their products' performance, typically
measured in sales or market share. Product management was viewed as a first-step (and
sometimes a fast-track) to senior general management.



For sake of brevity and clanty we will use the phrase "product managers" when referring to product
management work units.



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Online LibraryDavid K GoldsteinWhen managers use computer-based data : a qualitative analysis of marketing product managers → online text (page 1 of 4)