If you’ve been reading my other blog posts, you’ll know the quest for accurate and insightful global market intelligence is crucial for any company with international business. However, gathering this intelligence must be done carefully. Primary data collection can be susceptible to a curious phenomenon known as the Hawthorne Effect. This effect describes change in behavior that occurs when people know they are being observed. In the context of global market intelligence, the Hawthorne Effect can disrupt data collection efforts, potentially leading to the formation of bad conclusions and misguided business decisions being made.
One way the Hawthorne Effect manifests is through observer bias. When researchers conduct interviews or surveys with local market experts, the participants might adjust their responses to portray what they believe the researcher wants to hear. This may not even happen consciously. For example, if the company emphasizes the importance of cost-effectiveness in a particular market, research targets might downplay the role of brand loyalty and prioritize price points in their responses. They might even try to make their own market numbers sound better to make themselves look good (AKA the social desirability bias). To mitigate this bias, researchers should develop standardized questionnaires and interview procedures that minimize subjectivity as much as possible. Emphasizing open communication and building rapport with participants can also encourage them to provide unbiased responses.
The Hawthorne Effect can also occur in internal data collection. When employees in overseas offices know their markets are being closely monitored, they might hesitate to report negative or unexpected trends. This can create a situation where headquarters receives a false picture of the market. To combat this, companies should try to establish a culture of transparency and open communication. Though that’s easier said than done in practice, employees and local management should feel comfortable reporting negative findings without fear of retaliation. Additionally, implementing (truly) anonymous reporting systems can encourage honest feedback from the field.
While the Hawthorne Effect presents challenges, its existence does not sour primary data collection entirely, and can still improve the quality of global market intelligence. One way we have discussed in class to do this is by triangulating data. This involves collecting information from multiple sources, such as in person interviews, surveys, and all manner of secondary data reports. Thus, by comparing data across many different different sources, companies can gain a more complete understanding of the market and mitigate any single response bias.
The Hawthorne Effect is often underappreciated, and presents a unique challenge for global market intelligence. By understanding its sources and implementing strategies to mitigate its impact, companies can gather more accurate and insightful intelligence.
Citation:
https://www.formpl.us/blog/history-of-12-survey-market-research-disasters
https://www.qualtrics.com/experience-management/research/response-bias