Making internationalisation decisions: how heuristics and biases affect the reasoning processes of leaders of small and medium-sized firms

Casulli, Lucrezia (2011) Making internationalisation decisions: how heuristics and biases affect the reasoning processes of leaders of small and medium-sized firms. PhD thesis, University of Glasgow.

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Abstract

This thesis presents an exploration of how biases stemming from the use of
heuristic-‐based reasoning processes influence the internationalisation decisions
made by the leaders of Small and Medium-‐Sized Enterprises (SMEs). Three types
of internationalisation decisions are specifically addressed in this thesis, namely
foreign market selection, entry mode and foreign market exit. The empirical
context is that of Scottish SMEs from three main industries, namely
Environmental and Recycling, Oil and Gas, and Textiles. Each of the case firms
is involved in value-‐adding activities across national borders. The theoretical
context is that of internationalising SMEs. The thesis draws on three main
strands of the internationalisation literature: the Transaction Cost Approach, the
Process Theory of Internationalisation and the International New Venture (INV)
approaches. In investigating the decisional processes involved in
internationalisation, the thesis takes a Bounded Rationality stance and assumes
the use of Heuristics-‐based reasoning (Tversky and Kahneman, 1974) in
internationalisation decisions. The level of analysis is the individual decision
maker within the internationalising firm. The unit of analysis is the
internationalisation decision, which is explored from a reasoning process
perspective.
A case study strategy is used. Data collection tools are semi-‐structured
interviews and repertory grid elicitation. The data is analysed inductively
through the construction of causal-‐cognitive maps.
Findings show that heuristics are a useful tool to explain the reasoning processes
employed in internationalisation decisions. The contribution that this thesis
makes to extant literature on the internationalisation of smaller firms is
threefold. Firstly, the thesis outlines the processes involved in an array of
internationalisation decisions (country selection, entry mode, exit decisions)
underpinning the cross-‐national border behaviour of firms. Secondly, by
observing the processes of decision-‐making through a cognitive lens, the thesis
contributes to the emerging cognitive approach in internationalisation. Thirdly,
the thesis contributes to the literature on international entrepreneurial
experience by explaining how experiential and vicarious knowledge are
leveraged and used in the process of internationalisation decision-‐making.
III
Propositions are advanced and further research is invited to progress current
understanding of the making of internationalisation decisions in SMEs.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Keywords: International entrepreneurship, cognition, decision making
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
Colleges/Schools: College of Social Sciences > Adam Smith Business School
Supervisor's Name: Jones, Prof. Marian and Paton, Prof. Robert and Morgan-Thomas, Dr. Anna
Date of Award: 2011
Depositing User: Ms Lucrezia Casulli
Unique ID: glathesis:2011-2661
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 02 Jun 2011
Last Modified: 23 Jun 2014 14:25
URI: http://theses.gla.ac.uk/id/eprint/2661

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