Jörg Hruby - NSM: Faculty Group of Information Management

tripastroturfAI and Robotics

Nov 7, 2013 (3 years and 9 months ago)


Managerial Cognition

and the International Strategy

Process in European Telecom MNCs

Doctorial Colloquium

Dipl. Kfm. Jörg Hruby

International Management

University of Graz


Early stage

: see title


0. Executive summary



1. Introduction



2. Conceptual and contextual grounding



2.1 Objectives



2.2 Missing link between managerial cognitio
n and the internationalisation



3. Research Questions



4. Methodology



5. Literature




0. Executive summary

The following research sheds light on the missing link between
managerial cognitive maps and the international strategy
making process
in the telecommunicat
ion industry of European MNCs.
Cognition refers to
belief systems that individuals use to

acquire, store, transform, and utilize
knowledge and that influence, frame, constrain and enable decision
making processes

and sense making of their environment
. This

contributes to a body of work in which different concepts and methods are
distinguished to study the basic cognitive processes that influence and
shape heuristic decision
making behaviour. In particular, the influence of
manager cognitive maps on

the internationalisation process and how the
internationalisation process is grounded in the managers´ cognitions will
be analyzed. Furthermore an attempt is made to work out which
categories of managers´ cognitions explain the propensity for
lisation process. This subject matter will be examined through
the analysis of in
depth interviews, using cognitive mapping as a method
to gain insights into the nature and significance of cognitive processes in
organizational decision making that govern t
he internationalisation
processes within MNCs.

managerial cognition, cognitive maps, strategic decision
making, internationalisation process, telecommunication industry


1. Introduction

Over the last two decades, the telecommunication i
ndustry in Europe has
undergone dramatic changes. The most significant triggers of
transformation and corporate restructuring have been the liberalisation
and privatisation of formerly government
controlled activities in the year
1998, and the arrival of v
arious generations of technological innovations
like mobile telephony and data transmission, which led to a continuing
globalisation of business activities within the sector. The
internationalization process of the European Telecommunication industry
is ap

in Europe

For example,
Deutsche Telekom

has subsidiaries in

Austria (T
Mobile, T
Online), France (T
Online), the Netherlands (T
Mobile), Portugal
(Terravista), Spain (Ya.com) and in the UK (T

has international subsidiarie
s in Ireland, Germany, Italy, Greece, the
Netherlands, Portugal, Spain, Sweden and
France Telecom

in Belgium
(Mobistar), the Netherlands (Orange), Spain (Uni2), Switzerland (Orange),
UK (Orange) etc. [European Foundation for the Improvement of Living
and W
orking Conditions, 2005].

For this reason the business environment in the telecommunication
industry can be characterized as turbulent, complex and hypercompetitive
and for MNCs it is necessary to gain and sustain competitive advantages
in the internation
al playing field.

In this complex competitive environment managers are overstrained to
make decisions and solve problems about the uncertainty of future, the
variety of targets and alternatives [Eisenführ and Weber, 2001]. The task
of the manager is to ma
ke a choice between alternatives and this in a
possibly rational manner. Although rational, managerial decisions consist
of a wide variety of heuristic strategies, ranging from careful and reasoned
examination of alternatives to simple and fast “rules of t
humb”. [Simon,
1978] made the point that managers are “bounded rational”. Bounded
rationality is used to designate rational choice that takes into account the
limitations of both knowledge, and cognitive capacity. It is concerned with


the ways in which the

actual decision
making process influences
decisions [Allingham, 2002 p. 27]. But what factors determine the strategy
a decision maker will use in one situation as opposed to another? It is
known, that choice is defined by a preference relation if ite
ms in a
given menu which you choose are precisely those which are at least as
good as every item on the menu. In somewhat ordinary decision
situations it is basically assumed that managers have a repertoire of
strategies for making judgements and ch
oices and that the use of these
strategies is contingent upon a variety of task, context, and individual
difference factors.

In contrast, an international strategy
making process is more complex.
Here it is necessary to focus on strategic cognitions at th
e individual,
group, organization and industry levels. Furthermore the inter
organizational level of cognitions in such an international strategy
process should be examined in more detail. Different cultures, beliefs, and
cognitive structures of man
agers must be coordinated and integrated and,
moreover, a shared cognitive or “global mind set” must be constructed.
Within this context it must be emphasized that the framing of strategy
takes place in an organizational, social and political context and t
hat the
art of devising strategy is inherently a political process within the firm
[Mintzberg and Quinn, 1998].

Thus, the main objective of the proposed research sheds light on the
managerial cognitive maps and the international strategy
making process
the telecommunication industry of European MNCs. The influence of
manager cognitive maps on the internationalisation process will be
analyzed as well as how the internationalisation process is grounded in
the managers´ cognitions. Furthermore an effort is
made to work out
which categories of managers´ cognitions explain the propensity for
internationalisation process. This will be examined through the analysis of
depth interviews and the methodology of grounded theory by Strauss.

2. Conceptual and conte
xtual grounding


In the last two decades there has been a growing interest in the topic of
Managerial and Organizational Cognition (i.e. the Managerial and
Organizational Cognition Division is one of 21 divisions in the Academy of

Social cogn
ition, as a subfield of social psychology studies the mental
representation and processes that underlie social perception, social
judgement and social influences that enable individuals to perform
decisions. Within the field of managerial and organizationa
l cognition it is
assumed that human thinking and social functioning are essential parts of
one another [Weick, 1979]. It is widely accepted that an organization is a
network of inter
subjective shared meaning that is sustained through a
common language an
d social interaction. Cognitions refer to belief
systems that individuals use to perceive, construct and make sense of
their environment [Weick, 1979, Swan, 1997].

Research on managerial and organizational cognition is focusing on how
exactly to explain t
o what extent an organizational member models reality
and how such models influence their behaviours [Staehle, 1999 p. 149ff.].

In addition, Managerial and Organizational Cognition includes major
topics such as how individuals and organizations as a collec
tive unit pay
attention to particular phenomena, how idiosyncratic attributions emerge
in the course of day
day behaviour and how exactly these processes
influence decision
making processes, how individual and organizational
behaviour is shaped and cons
trained through information processing,
learning, the use of memory, and the emergence of mental
representations and images [Fiske and Taylor, 1984].

Cognitive sciences (including diverse domains such as philosophy,
cognitive psychology, artificial intell
igence and anthropology) help us to
study managerial and organizational decision
making processes by
focussing on the characteristics of cognitive processes and cognitive
structures in an “
” way.

As mentioned in the introduction, bounded rational

managers rely to a
large extent on their mental constructs and cognitive structures (basically
a knowledge structure) which are elaborated assumptions about their
environment, and which are defined as personal idiosyncratic constructs


that shape individua
l information capacities and frame their attitudes and
habitual behavior. At the individual level it is assumed that existing modes
of knowledge structures are employed in order to handle complex
environmental information, basically by converting received
sensory data
into tractable chunks of information, which facilitates and frames existing
information processing and decision
making capabilities [Huff, 1990,
Porac and Thomas, 1990]. Knowledge structures are conceived as a
mental template

on which decision
making processes rely, basically
because these mental processes enforce a discriminating constraint or
filter on the perception of information. It is further argued that such a
mental template is elaborated in the course of past learning experiences,
h enables us to give complex patterns of information a meaning in
order to manage that information.

I claim that these complex cognitive processes are best analyzed as
evolutionary adaptive processes that are formed by experience and
routinized behaviour
learned at the individual level and embedded in a
social context [Boyd and Richerson, 2005; Walsh, 1995].

Within the domain of managerial and organisational cognition, different
concepts and methods are distinguished to study the basic cognitive

that influence and shape heuristic decision
making behaviour.
One proposed empirical research method

which is described in more
detail below

is termed cognitive maps.

Cognitive mapping is a theoretical and methodological approach
contending that cogn
itive maps represent managers´ causal knowledge.
Cognitive maps are defined in this proposed research as graphic or visual
representations of thought or sense
making that locate people in relation
to their information environments and can be linked to deci
[Fiol and Huff, 1992]. [Weick and Bougon, 1986 p. 102] unequivocally
state that organizational environments exist largely in the mind, and their
existence takes the form of cognitive maps. Notwithstanding such a bold
pronouncement, it is not em
pirically proven that managers actually have
cognitive maps in their heads, but it is widely accepted within the domain
of organisational and managerial cognition that cognitive maps have


become a useful metaphor that allows cognitive processes to be analy
[Huff, 1990].

It is important to note that individual decision makers rely on more than
one cognitive map. Huff 1990 has convincingly shown in her research
that, in reality,
map makers

often use more than one mapping approach.
In accordance to the bas
ic findings in managerial and organisational
cognition research, I generally assume that decision makers actually swap
one approach for another, depending entirely on the situational context of
the decision
making process.

As my proposed research will foc
us on the understanding of the strategic
making processes in the internationalisation of MNCs I do not
only propose the concept of cognitive maps as a promising tool to analyse
managerial decision
making processes. In addition I propose the
rial and organisational cognition approach as a strong tool to shed
light on the black box of decision making of internationalisation processes.

Basically, I envisage five aspects that allow me to use cognitive maps as
a promising research tool to analyse

the cognitive processes and how
these process constrain and enable the internationalization processes of

First, I simply conceive of cognitive maps as a promising tool to analyse
exactly how managers distribute and deploy attention, how they associ
different chunks of information and how the decision makers construct
concepts of meaning in the internationalization process. I argue that
cognitive maps highlight the dynamic elements of the internationalization
processes that MNCs face today and put

more light onto the unresolved
process of managerial and organizational decision making and the related
dynamics of internationalization.

Second I strongly argue that cognitive maps show how and to which
dimensions categories and cognitive taxonomies are

used to feed the
process of decision making in the internationalization of MNCs and/or
upon which categories and cognitive taxonomies heuristic decision are
based in the course of internationalization. Cognitive psychologists (cf.
Huff 1990) support the a
ssumption that a map maker draws maps by
ordering dichotomized concepts and perceptions of reality and it will be


shown that these concepts are placed into a hierarchical relationship
between broader and more specific conceptions and subcategories of the
erceived environment. Cognitive maps of this type have been used to
define the competitive environment and to explore the range and nature of
choices imposed by decision makers in a given setting to capture dynamic
and complex environmental factors, which
are perceived as threatening
and/or challenging.

Third it is contended that maps, which I use to analyse managerial
decision making in the internationalization processes, will demonstrate the
influence, causality and dynamics among cognitive elements that

employed in heuristic decision
making processes. It is important to
emphasize the fact that causal cognitive maps enable as well as constrain
the map maker to focus on a particular action

e.g. how the respondent
explains the current situation in ter
ms of previous events, a
particular/idiosyncratic perception and accentuation of current facts and
what changes he or she is expecting in the future. This kind of cognitive
map is currently the most popular mapping method in organization theory
and strateg
ic management [ for example Eden, 1992].

The fourth disposition of
maps analyzes the logic of the structure of an
argument and how exactly a conclusion is found or built [Huff, 1990]
Emphasizing these processes, it is argued that a map maker imports
icular causal beliefs from different sets of meanings in order to
construct a cognitive map. A map of this type emerges, as proposed, in
the course of being locked into a routinized and habitual behaviour that is
constrained and enabled by a specific conte
xt. Here the individual focuses
more broadly on the

as a whole to select a cumulative impact of
varied evidence and to draw the links between established chains of
reasoning, which are enacted and changed in the course of the
internationalization p
rocesses the MNC is faced with.

And finally

as a fifth perspective

I use cognitive maps simply because
there is much evidence that a cognition function exists in the course of
identifying and
specifying conceptual schemes, frames and perceptual
codes w
hich govern managerial and organisational decision
on linguistic structure, cognitive psychology,


comparative culture and artificial intelligence provide various evidence
that cognition is best conceived of as a mental framework
that is not
completely accessible to the individual involved, but nevertheless
constantly used.

I will briefly summarize the use and development of these five cognitive
theories in the following section, and I will elaborate on how they have
been evolved
in the current research in the field of managerial and
organizational cognition.

An impressive number of studies now exist that contribute to the growing
theoretical and empirical research on cognitive mapping, which is
increasingly applied to analyse th
e strategic management and
organizational challenges for practitioners and theory [Walsh, 1995]. I
have already mentioned that this research is motivated by the need to link
the current insight of the analysis of managerial and organisational
decision maki
ng to the analyses of the different phases and dynamic
steps in the internationalization processes of MNCs.

[Eden, Ackermann and Cropper, 1992] argue that the use of cognitive
maps basically helps us to identify how organisational members develop a
tual understanding of their environment upon which they act. In
addition I emphasize that cognitive maps should not been taken as
models of cognition, but rather as tools to analyse decision and/or
cognitive processes of decision makers. As such it is a to
ol for reflective
thinking, problem solving and/or simply a “model of thinking” that help to
explain the heuristics of decision
making processes [Eden, Jones and
Sims, 1979, Eden, 1992). With this as a background, it has been
emphasized that cognitive maps

can assist individuals in their work on
strategy development [Ackermann et al., 1991, Eden, 1990].
maps may also act as a means to facilitate decision
making, problem
solving and negotiation within the context of organizational intervention,
hough, as I believe, not so much as a conscious pattern but much more
as an unconscious and habitual phenomenon in which managerial and
organisational decision
making processes are grounded. Further, in this


research cognitive maps serve as a tool, providi
ng new ways of examining
and improving managerial judgments.

Current research in cognitive science and in biology [Mayr, 1999]
suggests strongly that it is a valuable and effective methodological tool
that enables managers to make sense in a growing comp
lexity [Fiol and
Huff, 1992]. The primary purpose of causal maps as a methodological tool
is simply to describe an individual´s conscious perception of reality, in
other words how someone distributes his/her limited attention to selective
phenomena in orde
r to grasp sufficient detail to construct

on the
grounds of previous experiences

an idiosyncratic world view that frames
and enacts ongoing decision
making processes. It is important to note
that what is perceived as an important fact relates basically

to a specific
situation or detailed instance of an individual experience [Langfield

1992]. As has been emphasized in the research literature, the aim is
never to map an individual’s entire set of beliefs, which is in fact
impossible. Nor is the in
tention to explicate a model that simulates actual
cognition. Rather the objective is to use cognitive maps as models

simply as a particular and idiosyncratic mode of representing the world in
which the map maker is situated.

I have to contend that cogn
itive maps are always incomplete and neither
true nor false representations of the world. A cognitive map serves much
like a road map, which does not provide a driver with much information
about road conditions, nor does it indicate traffic congestion [Fom
1994, p. 71]. Individual maps reflect both the mode of processing current
information and a myriad of factors associated with the demographic and
job characteristics of the individual [Porac and Thomas, 2002 p. 168].
Moreover I assume that managers´
mental models vary widely in detail
and depth, basically because different managerial experiences, job
training, socialization, the emergence of individual habits, educational
background and career patterns are strongly linked to differences in
mental mode
ls [Hodgkinson and Johnson, 1994]. The broader
significance of cognitive mapping as a tool for investigating individuals´
cognitive representations (basically a set of an actors´ causal belief
system) in strategic decision making and in strategic phenomena


concerning a particular issue or event is emphasized by [Hodgkinson,
Maule and Bown, 2004].

In general I will use cognitive maps as a method to gain insights into the
nature and significance of cognitive processes in organizational decision
making that g
overn the internationalization processes within MNCs.

2.1 Objectives

Building upon past and current research on the internationalization
processes of MNCs, I strongly propose to study in detail how cognition
and managerial and organisation cognitive map
s frame different stages
and modes of the internationalization process of European Telecom
MNCs. I hypothesize that both managerial cognition and the
internationalization process have to be analyzed in relation to each other
and I propose that the processe
s of managerial cognition and the dynamic
aspects of internationalizing firms influence each other in a mutually
dependent way. My major focus in this research is the
content level of
knowledge structures

in order to explain the interdependence and

processes between internationalization processes of MNCs and
managerial decision
making processes. Further, I hypothesize that
managerial cognition frames the commitment decision and enacts a
particular dynamic relation in the internationalization process
, but I do
emphasize that both processes are mutually dependent to a high degree.

In order to shed light on these processes, I study the knowledge structure
content of managerial cognition, which is perceived as very important for
this proposed research
because the identification and isolation of content
is typically the first step in the analysis of managerial cognition. Cognitive
content basically consists of the things one knows, assumes and believes,
e.g. how to identify the information knowledge stru
cture represents
[Stubbart, 1989, Walsh, 1995, Porac and Thomas, 2002].

Narrative methods to interview managers seem to be the most reliable
instrument to collect data to analyse cognitive content. Next I will try to


elaborate on the relation between cogn
itive content and cognitive
processes. For example, [Stubbart, 1989] has convincingly shown that
managerial cognitions play a key role in the strategic decision
processes (such as goal formulation, environmental analyses, strategy
formulation, evalu
ation and implementation). In addition, [Barnes, 1984]
concluded in a study that cognitive biases affect strategic decision
making. Further, [Duhaime and Schwenk, 1985] argued that escalating
commitment affects strategic decisions in important ways that ha
ve to be
considered and they have shown that escalating commitment is a
tendency to increase commitment to a failing course of action.

Therefore, I explicitly elaborate my general propositions, hypothesis and
major research questions based on the early in
sights of the Uppsala
school and the promising links that can be drawn to the managerial and
organisational cognition approach in order to analyse the
internationalisation processes of European Telecom MNCs.

2.2 Missing link between managerial cognition
and the
internationalisation process

Despite increasing emphasis on managerial and organizational cognition
in the research literature, there have been limited attempts to explore the
pivotal role of decision makers and the importance of their perceptions

and influences (cognitions) on the internationalisation process. Cultural
Management assumes that success or failure of internationalization
processes are determined by an understanding (or lack thereof) of host
country cultures. Although I do not deny th
is aspect, I propose that this is
a too naïve an approach to answer how mental construct, the construction
of meaning and the perception of environmental reality frame and are
framed by the internationalization process.

Much of the research in Internation
al Management is done under the
umbrella term “culture” to explain what some call “soft factors” in
International Management that influence the processes of
internationalization. But the main objective in this field is rather restricted if
we remain locked

into the analysis of explaining the foreign cultural


factors that constrain the internationalization of firms (An overview of the
major research questions has recently been given by [Meyer, 2005;
Leung, 2005].

Further, a large part of internationalisa
tion literature concentrates mostly
on firm, industry and other environmental factors that pertain to the host
country and which may be decisive in the internationalisation process
[Buckley and Lessard, 2005
. Although I rely on much of the current
h in International Management, I strongly believe that a somewhat
different approach

to a certain extent going back to Johansson and

is necessary to open the “black box” of managerial and
organisational decision
making processes in the course of

internationalisation of the MNCs.

Furthermore, I believe it is not only a question of how internationalisation
can be perceived as a part of the ongoing strategy process of most
business firms [Melin, 1992], but we strongly propose that the ongoing
esearch effort must concentrate on how the process of
internationalization is related to managerial cognition [Prahalad and Bettis,
1986; Calori, Johnson and Sarnin, 1994] suggest that CEO and executive
cognitive maps are more complex if they have to manag
e diverse
international businesses with a greater geographic scope rather than only
national scope

internationalization process of firms

as analyzed by [Aharoni, 1966],
[Vernon, 1966], [Johansson and Vahlne, 1977], and [Johansson and
Mattson, 1988]
illustrates that much of the past research has dealt with
the question of how information is processed within the internationalizing

In general, ]Aharoni, 1966] analysed foreign investment decisions as
complex social processes which are influenced b
y social relationships
both within and outside the firm and between home and host countries.
But he did not focus explicitly on cognitive aspects. Looking back at nearly
four decades of research in International Management, he very early
offered a rich des
cription of individual and organizational behaviour



we would call it today

that has evolved over time and is basically
grounded in the idiosyncratic perception and accentuation of uncertainty
in the course of the internationalisation of the firm [Buc
kley and Ghauri,
1999 p. X]. In a similar fashion, [Vernon, 1966] has argued that a firm is
highly stimulated by its local environment and more likely to innovate
when its immediate surroundings are more conducive to the creation of
new techniques or produ
cts (in his case the US MNC with its large
domestic markets and its early professionalized market research
departments). But Vernon himself never found it necessary to look in
more detail at that issue.

It was in the late 80s that Johansson and Vahlne mod
elled the process of
internationalization as a complex and dynamic relationship between the
current stocks of knowledge a firm relies on. And, although not explicitly,
they make the most clear concession to the dynamic processes between
given stocks of kno
wledge and the relation to managerial commitment to
foreign markets. In their research they found much evidence that
supported the fact that the actual process of internationalization is
fundamentally influenced by the dynamic evolution of managerial
ions as to what extent further market commitment is necessary and
to what extent further market commitment is invested to support ongoing
processes of internationalization. From this crucial insight they both were
convinced that the whole complex interrela
ted process is to be
investigated as a dynamic relation between the development of
knowledge during the actual internationalization process and the
emerging level of commitment within the internationalized firm. This early
insight is a major part of my res
earch focus.

Internationalization is perceived by Johansson and Vahlne as a complex
process that is driven by the existing managerial and organisational
cognition (as we would like to term it now) and the mutual influence and
impact that the incremental s
teps in the internationalization process have.
For the proposed conceptualization it is important to note that Johansson
and Vahlne emphasised the influence of a de

or increasing commitment
in the internationalizing process that is understood as the produ
ct of a
series of incremental decisions and

as I hypothesize

is a product of


the evolving cognitive map that is employed in the process of managerial
decision making. Johansson and Vahlne differentiated specific stages in
the internationalizing process

of the firm which gradually increases foreign
involvement, evolving as the firm internationalises

[Johansson and
Vahlne, 1977; 1990]

Considering this research tradition in International Management I propose
that after each successful incremental step, t
he managerial cognition and
the decision
making processes change. Although Johansson and Valhne
do not use the perspective of cognition, the “Uppsala model” focuses on
the gradual acquisition, integration and use of knowledge about foreign
markets and oper
ations, and on the incrementally increasing
commitments in foreign markets. One major assumption in the Johansson
and Vahlne model that I suggest has to be analyzed in more detail, is that
they proposed that the firm entering new markets is confronted and
deal with increasing psychic distances (other examples of “psychic
distance” can be found in [Müller and Kornmeier, 2002 p. 544ff.],
[Luostarinen, 1989].

Psychic distance is invoked and is originally defined as the sum of the
factors preventing or di
sturbing the flow of information between firm and
market, including factors such as differences in language, culture, political
systems, level of education, or level of industrial development [Johansson
and Vahlne, 1977 p. 24]. I propose that psychic or cu
ltural distance is a
major frame that has to be analyzed, because I hypothesize that
cultural/psychic distance frames the emergence of cognitive maps.

Although [Andersen, 1997] criticized the “Uppsala model” for being too
deterministic, thereby neglecting

the important emphasis on learning by
Johansson and Vahlne, I propose to pay more attention exactly to the
notion of how different cognitive maps evolve over time and how they are
related to the internationalizing processes.

Yet in today's marketplace

with flatter hierarchies, business unit
structures and more flexible inter
firm relationships

managerial and
organisational cognition’s influence is very much neglected in the current
research in International Management and I am strongly convinced that
this dissertation on “Managerial Cognition and International Strategy


making Processes in the European Telecom MNCs” closes this obvious
gap and provides some crucial insights for further research [Axinn and
Matthyssens, 2001 p. 445].

Although I contend t
hat a large amount of research already exists that
considers the dynamic aspects of the internationalization processes, I
identify a severe lack in this research domain: more attention must be
paid to the importance of managerial and organizational cogniti
on! For
example, [Johansson and Mattson, 1988] have developed a

in order to explain internationalisation of industrial firms and
emphasize the dynamic aspects of internationalisation more. It is obvious
that one of the major questions in inte
rnational management is capturing
the dynamic nature of how firms make location decisions and the
incremental stages that the firm passes through as it internationalizes
[Chandra and Newburry, 1997 p. 393].

And although the cultural impact on the internat
ionalization process of
exporting firms

has been the subject of widespread empirical research
(e.g. the important contribution by [Dichtl et al., 1984], [Welch and
Luostarinen, 1988], only a limited number of studies seem to consider the
managerial cogniti
on in decision
making processes.

For example, [Welch and Luostarinen, 1988] draw more attention to other
subjects such as the impact of individuals and the evolution of
communication patterns. They conclude that decision
attitudes and

e important factors that influence the commitment decision
as to what extent new knowledge is generated and how altered modes of
involvement in the internationalization process evolve [Dichtl et al., 1984].
In addition, [Maignan and Lukas, 1997] focus on t
he role that managers´
cognitive structures play in
entry mode decisions

and use the concept of
mental models to better understand how managers decide upon a certain
type of entry mode, arguing that the mental models are used to interpret
the environment b
efore decision making occurs [Kyvik, 2005 p. 7]. The
management decision
making process towards internationalisation
analysed by [Reid, 1981], [Cavusgil, 1984] and [Chetty, 1999] are more
related to
export strategy and decision
maker characteristics.


link between an MNC's internationalisation and its top managers´
international business experiences and their roles

in the top management
team decision process

is examined by [Daily, Certo and Dalton, 2000},
[Reuber and Fischer, 1997] and [Athanassiou and
Nigh, 2002], but they
ignore the relationship between cognitive structures of managers and
internationalisation process. [Kyvik, 2005] claims it as a paradox that the
existing internationalisation models neglect the role of individuals while
implicitly ass
uming individuals´ motivation and propensity to
internationalise, thus indicating a subtle ignorance of the relationship
between cognitive processes and internationalisation process.

Managerial characteristics and the international entrepreneurial
tion of the manager

focuses on the
behavioural elements

of global
orientation, including several basic dimensions of entrepreneurship in
general: risk taking, innovativeness and pro activeness [Knight, 2000],
[Harveston, Kedia and Davis, 2000].

In this s
tudy I conceive of internationalisation as the process of adapting
firms´ operations to international environments. Moreover I further
propose that this process of internationalization depends on the overall
firm structure, to what extent firm resources ar
e invested into the process
of internationalization and to what degree the strategy
making process is
considered as international. I further hypothesize that the managerial
cognition frames to what extent resources are committed to the

process and second, how this in turn is enacted by an
evolving strategy
making process within the firm. I accept such a definition
as useful, because it first perceives internationalisation as an
adaptive dynamic process

with changes occurring ove
r time, and second,
that internationalisation can be thought of an
evolutionary process
, where
internationalisation can also take the form of de

investment. Moreover, I
hypothesize that the idiosyncratic cognitive structures of managers have
to be adapted

in such a dynamic environment as in the telecommunication
industry. With a somewhat similar perspective [Calof and Beamish, 1995]
model internationalisation patterns through a combination of executives´
perceptions (past experience of the executives) towa
rd market potential


and modes´ costs and benefits as well as environmental, organisational,
strategy and resource change. It appears that managerial attitudes
influence perceptions of benefits, costs, risks and that these attitudes are
the major determinan
t of the internationalisation path.

This study is aiming to provide direct evidence that attitudes of executives
and not necessarily objective environmental factors drive
internationalisation (cf. Calof and Beamish 1995, p. 129).

In International Managem
ent the cognitive perspective is only applied to a
limited extent to study exactly how firms´ decision makers perceive and
interpret the global social and economic environment, the current
competitive environment and how they estimate the risks and challen
of internationalization in culturally distant host countries. I argue that
within the domain of international management, managerial and
organisational cognition has not yet been acknowledged as an important
focus that contributes to the understanding
of internationalization

Further I contend that to a far lesser extent, it is not yet questioned how
managers make sense of the environment in which they interact and how
this impacts decision making [Lyles and Schwenk, 1992], [Gupta and
rajan, 2002].

It is important to note that strategies of internationalization have to be
implemented in different complex environments, not only in different host
countries, but in various cultural institutional contexts. In addition I argue
that within t
he MNC, different contexts and competing mental models
frame the internationalisation and influence the success of the
internationalized firm.

As mentioned before, mind
sets play a crucial role in shaping individual,
organisational and inter

behaviour which, in turn, act upon
already enacted mind sets that operate within the internationalized firm.
Although it is argued that it matters how managers perceive and interpret
the global social and economic environment, and it is contended in
al that this complex cognitive process has a major impact on the
implemented strategies and the firms´ success [Gupta and Govindarajan,
2002 p. 116], no explicit study exists that has analysed in more detail the


dynamic relationship between managerial cogn
ition and operating
cognitive maps with the internationalisation process. I therefore finally
hypothesize that a particular managerial mind
set takes over the function
of a cognitive filter, because managers need to be selective in what they
absorb and bia
sed in how they interpret phenomena. And although I
contend that a mind
set is a product of idiosyncratic managerial and
organisational histories that are evolving over time as an iterative process,
I conceive of these mind
sets as changing. So far, not mu
ch research has
taken this proposition into the core of an empirical study in this domain.

3. Research Questions

Considering the above conceptual framework in which this study is
grounded, I propose the following research questions as the most

focal points to contribute to the advancement in the field of
analyzing the internationalisation process of MNCs:

First, I will ask in detail how distinct managerial cognitive maps
emerge within current and ongoing internationalization processes in
selected MNCs in the European Telecommunication industry.

Second I will elaborate on the aspect of how exactly these mental
maps influence the internationalisation processes and their stages. In
order to answer this question I will use the method of cogn
itive maps,
which I elaborate in more detail below (see section Methodology).

Linked to this second question is my third major research interest. I
am convinced that it is necessary to analyse how the
internationalisation process is grounded in the manage
rial and
organisational mindsets. A kind of sub
question to this third one is
whether or not in the decision
making manager switches between


different cognitive maps or whether the same cognitive map is
evolving over time?

All three questions mentioned a
bove engender the need to analyse in
more detail the single categories that different managerial cognitive
maps are built from. Or to put the question in a different way: how do
different categories of managerial cognition explain the propensity for
ationalisation processes within the firm?


4. Methodology

While aiming at the development of a conceptual framework that explains
the mutually dependent relation between managerial cognition and the
internationalisation process, this dissertation is ba
sically an empirical
research project. I have decided to use narrative interviews with nearly 80
leading managers in European Telecom MNCs. The interviews will be
done with a minimum of intervention from the interviewer. All interviews
will be recorded and

transcribed to make a detailed analysis possible.
Many of the contacts to the MNCs have already been made or are being
established at the moment. Similar to the methodology of the grounded
theory proposed by [Glaser and Strauss, 1998], I will rely on the
of cognitive mapping, which is a reliable tool for eliciting cognitive
structures of managers [Tyler, 2001].

Cognitive mapping as a tool has much in common with the Grounded
Theory approach by Strauss. Cognitive mapping was first used as a tool
to study the development of corporate strategy by senior managers [Eden,
1988] and it is now being applied in numerous other areas [Eden and
Ackermann, 1998]. According to Eden, a cognitive map is “a picture or
visual aid in comprehending the mapper's unde
rstanding” [Eden, 1992 p.
262. This view is basically shared by [Huff and Jenkins, 2002] who stress
that a map is a method used to visualize a particular “way of thinking”. I
use cognitive mapping as a tool to look behind the scenes of sense
making process
es. The popularity of this technique stems from its
simplicity relative to other techniques, such as repertory grids, coupled
with the inherent attraction of using maps to work interactively with
managers [Brown, 1992].

I use cognitive mapping because it
allows us to start our analysis by
observing the unique view of the interviewee’s world [ Warren, 1995].

The technique of cognitive mapping takes place during an interview
between the analyst and the subject. The starting point for the interviewer
is usua
lly in terms of a major aim (or aims) of company activity. Links are


then sought in terms of how the major objectives are achieved, and what
the consequences are if the aims are achieved [Tyler, 2001].

The final product of the analysis is a cognitive map
that illustrates the
causal beliefs between factors that have been perceived as relevant in a
particular situation. Underlying ‘causes’ will be analyzed in this research
as driving forces of the internationalisation process of the European
n industry. Resulting ‘effects’ will include managerial
cognitions and their behaviour or response to the causes. It is important to
note that if a cognitive map is confined to causal relations between its
concepts, like in this study, it is called causal
map [Weick and Bougon,

Moreover, it is important to mention that cognitive mapping techniques for
organisational analysis include simple content analysis of text [Birnhaum
More and Weiss, 1990]; therefore in addition, company documents,
annual repo
rts and strategic memos will be analysed with quantitative
analysis software.

I primarily see the advantage of cognitive mapping technique in that it
allows me to reconstruct the stock of knowledge which has been
internalised by the interviewee in or
der to open it up to critical reflection.
Therefore subjective knowledge is to some extent 'objectified' and
discussed in a less manipulating way than direct questioning [Pallant,
Timmer and McRae, 1996].

Notwithstanding, I do acknowledge problems that re
late to the validity of
reconstructed representations generated by these techniques. The
methodological problems associated with the application of cognitive
mapping techniques are usually as follows: e.g.
contextual effects

similarity judgments ar
e likely to be sensitive to contextual variables,
different cognitive maps may be elicited in different situations. Then there
is the problem of
choice of representational model: because
statistical models for representing similarity data are bas
ed upon different
assumptions, they tend to reveal different aspects of cognitive structure
and may have 'Procrustean properties' which may impose an
inappropriate structure upon similarity data [Fillenbaum and Rapoport,
1971]. And finally there is the pro
blem of objective


although elicitation techniques are associated with formal analytic tools
which generate visual representations of similarity data, the process of
interpreting cognitive maps remains largely subjective.

However, if docum
ented in detail as to what interview data the
conclusions are drawn on, these subjective elements of interpretation can
be objectified. Despite this problem the method of cognitive mapping is
conceived of as the only useful tool to get information about th
e processes
associated with the managerial and organisation cognition that provide
useful and reliable knowledge about highly complex and subjective
cognitive structures.


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