Problem-Solving Dissension and International Entry Mode Performance

Purpose

This paper examines international decision-making, information processing and related performance implications. We explore the relationship between international decision-making and problem-solving dissensions related to entry mode decisions. In addition, we investigate the effects of dissension on entry mode performance, and the moderating effect of the foreign direct investment (FDI) vs. non-FDI decision as it relates to dissension-mode performance. Despite their significance from an information processing perspective, these issues have not been sufficiently explored in international entry mode research.

Design/methodology/approach

This research presents data collected from 233 privately owned internationalized Chinese firms. The analysis in this investigation includes hierarchical ordinary least squares (OLS) regression.

Findings

The findings suggest an inverse U-shaped relationship between dissension and entry mode performance, as opposed to a linear one, and a moderating effect of FDI vs. non-FDI decisions on this curvilinear dissension–performance association. These findings support and refine the rationale of the information processing perspective.

Originality/value

These findings add realistic elements to the alleged “rational” international decision-making doctrine assumed in previous entry mode literature. Our findings show the importance of the heterogeneity of information processing in entry mode strategic decision-making processes (SDMPs), and its effects on specific decision types. We believe that this is the first empirical study to use an information processing perspective to examine the effects of SDMPs on entry mode performance.