Internationalization of Born Global and Gradual Globalizing Firms: The Impact of the Manager

INTRODUCTION March and Simon (1958) argue that, due to a large behavioral component, strategic choices reflect the idiosyncrasies of decision-makers. To each administrative situation, each decision-maker brings his or her own set of givens, which reflect his/her values and principles. Research has supported this assertion and shown that the characteristics of the owner/founder contribute to the decision to internationalize (Bilkey, 1978; Reid, 1981). Indeed, more attention and greater examination of the entrepreneur and managerial characteristics have been called for in international entrepreneurship research (McDougall, Shane, & Oviatt, 1994). At the managerial level, the attitudes and mindset of the management team play an important role in determining the extent to which a firm engages in international activities. The managerial mindset can be defined as the propensity of managers to engage in proactive and visionary behaviors in order to achieve strategic objectives in international markets. Conceptually, this line of reasoning has its foundations in the work of Perlmutter (1969). The idea of a managerial mindset affecting internationalization is supported by many researchers. For example, Bartlett and Ghoshal (1989) argue that managers' cognitive processes affect the international strategic capabilities of the firm. More simply put, the mindset of the entrepreneur and the top management team affects the firm's expansion into international markets. In terms of managers of born global and gradual globalizing firms and their mindsets, there is very little research. One exception is the work of Cavusgil and Knight (1997). In examining managerial mindset of born global firm managers, they further delineated the mindset concept and its subsequent link to firm performance. Their results show that managers of born global firms have a global orientation which is a bundle of dispositions and competencies the sum of which appears to be positively correlated with export-marketing performance (Cavusgil & Knight, 1997: 5). In support of this finding, Kobrin (1994) had previously found that firms with managers with more world-oriented mindsets (geocentric) are more likely to enter international markets quickly. In this research, it is expected that managers of gradual globalizing firms will have more of an ethnocentric mindset but will be open to international opportunities if they arise. As suggested by Eriksson, Johanson, Majkgard and Sharma (1997), managers of gradual globalizing firms are expected to have more ethnocentric mindsets and only act when they are able to detect the opportunities and reduce the uncertainties of going abroad (342). In contrast, managers of born global firms are expected to have more geocentric mindsets with more positive attitudes toward internationalization. A recent case study found that geocentrism is linked to the ability of born global firms to make their own opportunities in the international marketplace (Cavusgil & Knight, 1997). Based on the preceding arguments, the following hypothesis is given. Hypothesis 1: Born global firms will have managers with more geocentric mindsets than managers of gradual globalizing firms, Managerial experience abroad has also been shown to affect the internationalization process. This concept is defined as the amount of experience that a manager has accumulated in an international context. Roth (1992) posits that mere exposure to the international arena is not sufficient for development of a deep understanding. Rather, managers are more likely to develop a deeper understanding when they have been posted in other countries or are required to spend considerable time overseas than domestic managers who are responsible for overseas functions. Consequently, managers with international work experience or who have attended schools in ,other countries (outside the U.S.) would tend to be more familiar with the foreign market conditions and opportunities than managers without such experience. …