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Competitive Irrationality in Transitional Economies: Are Communist Managers Less Irrational?

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Abstract

Why do marketing managers in the transitional economies of Eastern Europe and China often engage in competitively irrational behavior, choosing pricing strategies that damage competitors’ profits, rather than choosing pricing strategies that improve their firm’s profits? We propose one possible reason, the moral vacuum created by the collapse of communist ideology. We hypothesize and find that managers who experienced formal communist moral ideological indoctrination are less likely to be competitively irrational than the post-communist managers who did not. Implications are discussed.

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Authors and Affiliations

  1. Western Hemispheric Trade, University of Texas at El Paso, 500 W University Ave, El Paso, TX, 79968, U.S.A.

    Lance E. Brouthers

  2. Robins School of Business, University of Richmond, 1 Gateway Road, Richmond, VA, 23173, U.S.A.

    Dana-Nicoleta Lascu

  3. Department of Management, C.T. Bauer College of Business, University of Houston, Houston, TX, 77204-6021, U.S.A.

    Steve Werner

Authors
  1. Lance E. Brouthers
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  2. Dana-Nicoleta Lascu
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  3. Steve Werner
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Correspondence to Dana-Nicoleta Lascu.

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Brouthers, L.E., Lascu, DN. & Werner, S. Competitive Irrationality in Transitional Economies: Are Communist Managers Less Irrational?. J Bus Ethics 83, 397–408 (2008). https://doi.org/10.1007/s10551-007-9627-6

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  • DOI: https://doi.org/10.1007/s10551-007-9627-6

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