chapter  10
20 Pages

Straight Ahead or Wandering Through the Woods?

Decision-Making in Entrepreneurial Internationalization
WithNiina Nummela, Leila Hurmerinta, Eriikka Paavilainen-Mäntymäki

This chapter seeks to answer two research questions: how does decision-making change during internationalization, and what is the role of networks in the entrepreneurial decision-making of internationalizing firms? International entrepreneurial decision-making suffers from lateral rigidity, namely, the decision makers’ limited understanding of the environment and relevant factors. The company’s business network may be an important source of the knowledge needed in decision-making related to internationalization. A number of studies, however, take an alternative approach and assume that firms’ decision-making is more intuitive and a-rational. Mainela and Puhakka find that effectual decision-making is preferred in markets with high uncertainty, but Chetty et al. report that, in such an environment, companies prefer to base decisions on causation. Given the small size of the respondent companies and the subjective, cognitive nature of the entrepreneurial decision-making process, it was decided that focusing on a single decision-maker, typically the entrepreneur or managing director, is sufficient for the study purposes.