The effects of emotions on strategic decision-making: A China-U.S. cross-cultural experimental study

This dissertation examines how two different emotions---pride and guilt---experienced by managers influence their strategic decision-making. Four different aspects of strategic decisions are investigated: risk, comprehensiveness, speed, and resource commitment. The dissertation also investigates how culture moderates the relationship between emotions and different aspects of the strategic decision-making process.;The hypotheses of this study were tested using a 2 x 2 experimental design with two emotions (guilt and pride) and two cultures (U.S. and China). The experimental design used scenarios to elicit these two emotions. Next, PANAS-X scale was used to check the effectiveness of emotion manipulation. Finally, respondents were asked to make a strategic decision about international market entry.;The results show that higher levels of guilt lead to higher levels of comprehensiveness and resource commitment but lower levels of risk and speed in strategic decision-making, while higher levels of pride lead to higher levels of risk and speed but lower levels of resource commitment in strategic decision-making. In addition, the empirical results support the interaction effects of emotions and culture on strategic decision-making. Managers from a high collectivistic culture take lower levels of risk, and more comprehensive, slower strategic decisions at high levels of guilt, while managers from a high individualistic culture will take similar risk, and have similar levels of comprehensiveness, and speed at low and high levels of guilt. However, managers from a high individualistic culture take higher risks and make quicker strategic decisions at high levels of pride, while managers from a high collectivistic culture will take similar risks and time in making strategic decisions at either low or high levels of pride.;The findings not only provide evidence that emotions play an important role in managers' strategic decision-making process but also illustrate that culture interacts with emotions to influence this process. The last part of this dissertation discusses the limitations of this study and offers suggestions for future research.