| This study addressed the dynamics involved when firms face the decision of whether or not to enter a foreign market. An upper echelons perspective was taken, employing the framework that the person of the top manager matters in the strategic direction of the firm. Demographic and cognitive characteristics of top managers were studied to explain the international expansion and entry mode decisions made by small and medium sized Iowa manufacturing firms. Cognitive factors (mental models) were operationalized as managers' perceptions of the environment, their firm, and themselves. The study also examined the relationship between demographic and cognitive variables, a relationship often assumed to exist in the literature.; The results indicated that managers' mental models, specifically cultural familiarity and perceptions of foreign country risk, affect internationalization decisions. However, it did not appear that managers of these smaller firms attended to the amount of information explicated in studies of larger firms. Small firm Chief Executive Officers (CEOs) seemed to view internationalization with less complexity than their large firm counterparts. CEOs' demographic characteristics had no significant effects on the decisions, but more intriguing was the very slight relationship between the demographic and cognitive variables. These results suggest that researchers should take care before assuming this relationship and that it may indeed be situation specific. |
