The Cognitive Foundations of Firm Internationalization

Individual managers and their cognitions play a crucial role in how a firm’s internationalization process unfolds over time. While this is acknowledged in foundational theories of firm internationalization, our understanding of how managers and their cognitions shape the internationalization process remains surprisingly incomplete. This is because prior literature on firm internationalization mainly operates at the firm, industry, or national levels and assumes a relatively high level of managerial rationality, with few studies focusing on how managers and their decision-making processes shape firm internationalization. In addition, the studies that have addressed the cognitive foundations of firm internationalization have done so by drawing on a relatively narrow set of philosophical and methodological alternatives, thus generating a one-sided understanding of the matter. Consequently, scholarship on decision makers’ roles in firms’ internationalization processes remains underspecified and incomplete, which hampers the field’s capacity to fully understand firms’ international operations. This dissertation aims to unpack the black box of managers’ roles in firm internationalization processes by investigating how cognitive foundations influence firm internationalization and showing how we can further advance the research on the cognitive foundations of firm internationalization in the future.

The dissertation approaches these questions through two review studies and two case studies that explore the cognitive foundations of firm internationalization from different perspectives. The first review study investigates the current state of the research field by describing the research domains that have been studied and those that have been underexplored and thus provides an integrative understanding of the research on the cognitive foundations of firms’ internationalization processes. The second review study explores how the existing literature has approached the cognitive differences that stem from decision makers’ cultural, national, ethnical, and geographical characteristics and the influence that such differences have on firm internationalization processes and integrates these findings into the broader literature on managerial and organizational cognition. The first case study examines heuristic decision-making in firm internationalization and the role of context-specific experience in this process. It advances a theoretical model indicating that managers become able to harness the positive impact of heuristics in internationalization-related decision-making only after they have accumulated a certain level of context-specific experience and when this experience is triggered to transform into usable heuristics by a stimulus of an unexpected event. The second case study explores how different historical approaches can be used to analyze the temporal embeddedness of firms’ internationalization and de-internationalization processes unfolding over time.

This dissertation contributes to the literature on the cognitive foundations of firm internationalization in two ways. First, it improves the existing understanding of how cognitive foundations shape firm internationalization by reviewing the existing literature to generate integrative understanding of the topic and by empirically explicating novel ways of how cognitions drive internationalization via three philosophical perspectives— qualitative positivism, interpretivism, and poststructuralism. Second, it outlines ways to further advance the research on the cognitive foundations of firm internationalization by pointing out the research gaps that warrant further attention and by proposing that subjective approaches, historical research methods, and the microfoundational approach constitute productive avenues for future research.