Strategic decision-making process characteristics, Confucian values and their effects on international entry mode decisions: a study of Chinese private firms.
PhD thesis, University of Glasgow.
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Based on the literature of SDM (strategic decision-making), cultural studies, and international entry mode, this study examines the effects of managerial cultural values and characteristics of SDMP (strategic decision-making process) on the Chinese private firms’ international entry mode decisions. Although the international entry mode decision is one of most frequently studied strategic decisions in the domain of international business, prior studies tend to neglect the effects of the decision-maker and decision-making process by assuming a rational decision model employed in the entry mode decision-making. However, SDM literature indicates that the decision-maker and decision process also play important roles in making a strategic decision. In order to address two aforementioned less explored elements, this study develops an integrative framework by introducing managerial cultural values - Confucian dynamism - and characteristics of SDMP into the extant rational framework to explain Chinese firms’ international entry mode decisions.
This study adopts a mixed-method research approach by employing the survey method as the main design, supplemented by a follow-up case study method. Following a pilot paired questionnaire mailing, a large-scale mail survey was carried out in China, which generated 233 usable replies. CFA (confirmatory factor analysis) and binary logistical regression techniques were used to conduct construct validation and hypothesis testing respectively. In order to further understand the phenomenon in the real setting, a case study approach was conducted in four Chinese firms, which used different entry modes in their most important international entries.
The findings of this study largely confirm the theoretical arguments of SDM literature and cultural studies that managerial value and decision process affect the outcome of strategic decision. Confucian dynamism was found to have both direct and moderating effects on the international entry mode decision. Characteristics of SDMP were also found to exert a moderating role in adjusting the effect of managerial value on the perceived situation. The evidence of case study also reflects that managers with varying degrees of Confucian dynamism tend to evaluate situational conditions differently, and different decision process dimensions are likely to limit or increase the chance of the subjective treatment of situational information.
The major contribution of this study is that seemingly for the first time, Confucian dynamism, a traditional Chinese cultural trait, was found to have a directly negative influence and a moderating effect on international entry mode decision. In addition, characteristics of SDMP also were found to play an important role in adjusting the cultural preferential treatment of situational information. In short, besides the impacts from environmental and firm conditions, this study found that the decision-maker and the SDMP can also explain entry modes.
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