How Room Atmosphere Impacts Strategic Choices

A recent study by Bayes Business School, published in the Academy of Management Journal, reveals that the atmosphere within a group significantly impacts strategic decision-making. Co-authored by Professor Paula Jarzabkowski from Bayes and researchers from the University of Queensland, Macquarie University, and Leuphana University of Lüneburg, the research highlights how different group atmospheres affect interactions and decision processes.

The study found that when the atmosphere was pensive, participants were cautious in their approach. Conversely, a curious atmosphere encouraged exploratory discussions. However, in tense or dismissive environments, participants became argumentative and struggled to reach consensus.

The researchers analyzed video recordings, workshops, interviews, and direct observations of a strategic team at an Australian electronic bank over 18 months. This team was assessing a digital product enhanced with AI to help manage customer spending.

The findings indicate that subtle changes in tone of voice, speech, and body language rapidly alter the atmosphere, which in turn influences how groups process information and make decisions. Professor Jarzabkowski emphasized that strategy making is affected not only by the quality of decisions but also by the emotional tone of the room.

The study, according to Professors Eric Knight and Jaco Lok from Macquarie Business School, is unique in its systematic examination of how atmospheric factors impact complex decision-making. Matthias Wenzel from Leuphana University added that the shared atmosphere in meetings plays a crucial role in shaping the decisions made.