The role of managerial cognitive reasoning on the internationalization decision-making of small ventures
DATE:
2018-09-03
UNIVERSAL IDENTIFIER: http://hdl.handle.net/11093/1046
SUPERVISED BY: González Loureiro, Miguel
UNESCO SUBJECT: 5311 Organización y Dirección de Empresas ; 5310.09 Relaciones Comerciales Internacionales ; 6109.05 Comportamiento en la Organización
DOCUMENT TYPE: doctoralThesis
ABSTRACT
This doctoral thesis synthesizes decision making theory,
internationalization theory and managerial cognitive approaches to provide
further explanation of heterogeneous internationalization patterns of small
ventures (SV´s).
This research has used a structural equation model in the first stage and
a grounding theory approach in the second stage to assess the relationship
between the components of managerial cognitive reasoning (CR, hereafter)
(Experiential and Rational) as explanatory variables of the internationalization
intentions and process of the decision making –perception, options,
evaluation, choice–. First part of this model has been tested in a representative
sample of 134 “future entrepreneurs” namely University students under
extreme conditions while the second part of the model has been tested on
international SVs in the context of the managerial cognitive reasoning
influence on internationalization decision-making process (IDMP, hereafter).
The consideration of individual-level cognitive aspects and role of cognition
from the field on neuroeconomics as an element of the internationalization
decision-making process is an original aspect of this research.
Chapter one summarises the research problem, the interest of research
topics and the research objectives. It is included the justification that
encourages research and interest in the intersection of cognitive reasoning,
decision-making theory and internationalization process theory, from the
empirical point of view for academic and practitioners’ implications.
Considering the research problem, chapter two comprises the relevant
findings from the literature regarding the CR supplement to the IDMP as a
framework for this research. It is included a literature review of the research
topics, following a model of a systematic review of relevant literature. The
literature review has been divided into three subsections: (a) A review of the
typology of internationalization process, with attention to managerial
decision-making importance; (b) A review of the main components of a
cognitive system theory in terms of decision making; (c) Finally, the
application of the Dual-Process theory to SV´s IDMP, followed by conclusions
for the research aim.
Chapter three concrete the scope of the CR on the first stage of IDMP
specifically internationalization intentions. There, the model and hypotheses to be tested are introduced. The proposed indicators for each element of
Cognitive Systems (System X - Experiential; System C - Rational) and for
measuring internationalization intentions among” future entrepreneurs” are
also detailed. Following the importance of IDMP under the interactive effect
of the two-cognitive reasoning, namely experiential and rational while making
decisions regarding speed, scope, and breath of internationalization.
The empirical test of the model is included in Chapter four, to further
investigate the importance of CR among” future entrepreneurs” international
intentions. In the second subsection of this chapter is outlined a qualitative
approach to further investigate the importance of cognitive reasoning among
the small venture managers regarding the internationalization process
through the Dual-Process theory. The methodological procedure leads to the
next chapter, for building the final specification of the structural equation
system and grounding approach to the finally proposed internationalization
decision-making framework.
In Chapter Five is detailed step-by-step statistical tests performed,
including a discussion of results obtained in the process internationalization
regarding the cognitive predominance among SV´s managers. It also includes
the results for the contrast of the six hypotheses tested.
The main challenges faced in the heterogeneous internationalization
topic were the intersections between both modes of cognitive reasoning, as
well as the need for bringing out the linkages between the components of the
neuroeconomics to internationalization decision making framework. From the
micro level of how the behavior of the individual could explain the
heterogeneous SV´s internationalization behavior. Derived from the results,
one could argue that the CR plays a significant role in SV´s IDMP are
embedded in the inborn managerial structure, the importance of environment,
perceived social norms and levels of behavioral contours. In the SV´s, the
interrelationships between components of the CR seem to have a notable role
in explaining its IDMP.
Concerning the theory of CR and IDMP, the existence of some
remarkable relations between their components to explain the heterogeneous
behavior of SV´s are highlighted. In view of accepted and not accepted
hypotheses, it seems that the starting point is the CR predominance among
managers to create initial internationalization intention which later leads
toward the how’s and whys to perform internationalization. There is not
enough evidence to support the hypothesis that CR is directly related to the internationalization intention, if not through perceived behavioral control
(PBC) (primarily), perceived social norms (PSN) and attitude toward the
behavior (ATB) (lesser extent) adopted from Ajzen (1991) Theory of Planned
Behavior. Furthermore, there is evidence that CR plays a notable role in the
internationalization opportunity perception, creation of battery of options,
evaluation of selected option and making the final choice.
In Chapter Six implications from conducted studies are detailed and
elevated to overall implications for theory as well the practitioners. Namely,
the process of internationalization decision-making parallels the psychological
process: managers are to recognize what the strategic problem is to generate a
battery of options and choose the one that yields higher satisfactory levels of
expected results. The importance of cognitive reasoning as an enhancement
for internationalization decision-making under circumstances of elevated
uncertainty and low supportive environment provides evidence of cognitive
importance for positioning managerial cognitive reasoning as an antecedent
of internationalization decision-making framework. Furthermore, since
internationalization is a key aspect for SV´s survival, and there are observed
lack of intentionality to internationalize under high uncertainty and risk
perception, decision-makers are supposed to develop the capability of
learning and adopting expertise during the process of internationalization
through the trial and error approach in order to pursue internationalization.
Chapter Seven provides the final conclusion obtained through the
empirical studies as well the notable limitations and promising research
avenues. It is noted that the decision-maker cognitive reasoning intervenes in
case that perception of markets validity is different between the host and
domestic markets. The individual’s interpretation of environmental
differences in terms of ability to maintain the international behavior chosen
under control based on the knowledge available ex-ante. The overall level of
perceived control plays a role in internationalization process and fostered by
decision-maker cognitive predominance guides the internationalization
acceleration.