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Global Mindset and Entry Mode Decisions: Moderating Roles of Managers’ Decision-Making Style and Managerial Experience

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Abstract

From the managerial cognition perspective, we develop a contingency framework that empirically examines the effect of senior managers’ global mindset on their decisions regarding the choice of entry mode for foreign subsidiaries and how their cognitive decision-making style and managerial experience interact with their global mindset and thereby affect their decisions. Data were collected from both headquarters and subsidiary senior managers of 345 Chinese multinational enterprises. The results show that senior managers who exhibit a stronger global mindset tend to choose a lower-level ownership entry mode for their foreign subsidiaries. This tendency is stronger when senior managers possess a ‘thinking’ decision-making style as opposed to a ‘feeling’ decision-making style but weaker when senior managers have more experience in their managerial positions.

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Acknowledgements

We are grateful for insightful comments and suggestions received from the Editor-in-Chief Professor Michael-Jörg Oesterle and the two anonymous reviewers of Management International Review.

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Authors and Affiliations

  1. School of Management, Faculty of Business and Law, Curtin University, Bentley, WA, Australia

    Fuming Jiang, Subramaniam Ananthram & Jizhong Li

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  1. Fuming Jiang
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  2. Subramaniam Ananthram
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  3. Jizhong Li
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Correspondence to Fuming Jiang.

Appendices

Appendix 1: Global Mindset Scales (Arora et al. 2004)

Scale: 5-point Likert scale (‘1’ being strongly disagree, and ‘5’ being strongly agree)

1.1 Conceptualization

(1) In my job, the best one can do is to plan ahead for at most 1 year. (2) I think it is necessary today to develop strategic alliances with organizations around the globe. (3) Projects that involve international dealings are long term. (4) I take pride in belonging to an international organization. (5) I believe that in the next 10 years, the world will be the same as it is today. (6) In this interlinked world of ours, national boundaries are meaningless. (7) Almost everybody agrees that international projects must have a shorter payback period than domestic ones. (8) We really live in a global village. (9) In discussions, I always drive for the bigger, broader picture. (10) I believe life is a balance of contradictory forces that are to be appreciated, pondered, and managed. (11) I consider it to be a disgrace when foreigners buy our land and buildings. (12) I really believe that 5–10 years is the best planning horizon in our line of business. (13) I find it easy to rethink boundaries, and change direction and behavior. (14) I feel comfortable with change, surprise, and ambiguity. (15) I become frustrated when someone is constantly looking for context. (16) Contradictors are time wasters that must be eliminated. (17) I have no time for somebody trying to paint a broader, bigger picture. (18) I believe I can live a fulfilling life in another culture. (19) Five years is too long a planning horizon.

1.2 Contextualization

(1) I enjoy trying food from other countries. (2) I find people from other countries to be boring. (3) I enjoy working on world community projects. (4) I get anxious around people from other cultures. (5) I mostly watch and/or read the local news. (6) Most of my social affiliations are local. (7) I am at my best when I travel to worlds that I do not understand. (8) I get very curious when I meet somebody from another country. (9) I enjoy reading foreign books or watching foreign movies. (10) I find the idea of working with a person from another culture unappealing. (11) When I meet someone from another culture, I get very nervous. (12) Traveling in lands where I can’t read the street names gives me anxiety. (13) Most of my professional affiliations are international. (14) I get irritated when we don’t accomplish on time what we set out to do. (15) I become impatient when people from other cultures seem to take a long time to do something. (16) I have a lot of empathy for people who struggle to speak my own language. (17) I prefer to act in my local environment (community or organization). (18) When something unexpected happens, it is easier to change the process than the structure. (19) In trying to accomplish my objectives, I find that diversity and multicultural teams play a valuable role. (20) I have close friends from other cultural backgrounds.

Appendix 2: Cognitive Decision-Making Styles (McGuiness 2004)

How do you prefer to make decisions? (A) Thinking, or (B) Feeling (Choose either A or B for each item)

  1. 1.

    (A) Use logic to make decisions, or (B) Use personal values to make decisions;

  2. 2.

    (A) Seek honesty and truth, or (B) Seek personal approval;

  3. 3.

    (A) Need to be competent, or (B) Need to be appreciated;

  4. 4.

    (A) Analyze and critique, or (B) Empathize;

  5. 5.

    (A) Firm and tough-minded, or (B) Persuasive and warm-hearted;

  6. 6.

    (A) Focus on justice and fairness, or (B) Focus on mercy and compassion;

  7. 7.

    (A) Questioning—focus on Why? or (B) Accepting—focus on Who?;

  8. 8.

    (A) Seek logical reasons, or (B) Seek harmony with values and others;

  9. 9.

    (A) Focus on goals and tasks, or (B) Focus on people and relationships;

  10. 10.

    (A) Consider principles and consequences, or (B) Consider the impact on people.

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Jiang, F., Ananthram, S. & Li, J. Global Mindset and Entry Mode Decisions: Moderating Roles of Managers’ Decision-Making Style and Managerial Experience. Manag Int Rev 58, 413–447 (2018). https://doi.org/10.1007/s11575-018-0348-0

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