A practice-based approach to collective decision-making in pricing

Abstract

Purpose The purpose of this paper is to analyze price decision-making through a practice-based approach. The paper investigates the micro-level practices used to arrive at sales price decisions. Design/methodology/approach In this study, a qualitative study approach is used to develop findings abductively. The data are gathered through an in-depth case study at two firms: semi-structured interviews, meeting observations, shadowing and pricing documents. Findings This paper finds that pricing is a collective decision-making process involving multiple actors across the organization. The case firms work on solving information, coordination and control problems to arrive at sales prices by enacting interlinked practices. Pricing is therefore neither a structure nor a single decision but a process consisting of multiple micro-level practices that enable firms to make pricing decisions. Originality/value This paper develops a practice-based approach to pricing that conceptualize the micro-level practices used to to make pricing decisions in the face of information, coordination and control problems. The paper is interdisciplinary and adds to the accounting literature and the market literature, which have tended to study pricing as a decision made by one decision maker, and not as an organizational process where multiple actors share, evaluate, interpret and coordinate information and decisions.