Uncertainty and Environmental Decision Making

Abstract

In order to function, a marketing channel must have a certain amount of consensus and coordinated decision making among its members. Marketing channel theory has focused on the internal mechanisms of achieving integrated actions; however, the external forces affecting the channel have not received much attention. External forces must be considered since they are the source of uncertainties that can affect the internal coordination mechanisms used by channel members. To address this issue, a framework is developed for describing marketing channel environments based on well-defined concepts that provide a comprehensive dimensionalization of the environment. Fifteen environmental effects are tested for, using data gathered by mail questionnaire and a LISREL factor analysis. The findings indicate that the principal dimensions determining decision-making uncertainty are: 1. diversity among consumers, 2. dynamism, 3. concentration, and 4. capacity. No other dimensions are found to be significant.