Before internationalisation : reflections of lateral rigidity on managerial decision making

The purpose of the study is to analyse lateral rigidity in the framework of pre-internationalisation to find out its reflections on managerial decision making. The interest of the study lies in the intersection of the meaningful but relatively stagnant concept of lateral rigidity, and the pre-internationalisation phase of companies that has received only a limited amount of research attention. The theoretical basis for the study is drawn from managerial decision making and internationalisation literatures. Firstly, the study aims to define the concept of lateral rigidity in order to secondly find out how it influences managers’ pre-internationalisation decision making. The study is theoretical in nature, and is based solely on literature examination. Concept analysis method is used to determine the attributes of lateral rigidity for the purpose of recognising the concept in the pre-internationalisation framework. The attributes that are found to comprise lateral rigidity are culture, know-how, uncertainty and attitude. Furthermore, these attributes are more specifically found to consist of environmental, personal and operational matters. Through the analysis of the pre-internationalisation literature it is discovered that all the attributes appear there, and present a variety of influences on pre-internationalisation decision making that can be characterised as being negative. The study finds that culture influences managers’ decision making via subjective reasoning and behaviour that stem from a domestic inclination, and via unfamiliarity with foreign markets. Against assumption, home cultural factors, e.g. values and customs, do not appear to have an influence. Know-how is found to influence decision making via managers’ previous experiences, subjective abiding perceptions, and the usage of previous operation patterns. Uncertainty, then again, influences managers’ risk perception, unfamiliarity avoidance, and the scope of potential international operations. Attitude is found to have a robust influence on managerial decision making via the usage of familiar processes and decision regimes, subjective preference of convention, and plausible results of operations. Ergo, the effects of lateral rigidity on managers show to represent an encumbrance in the pre-internationalisation phase; even though internationalisation would take place, the related decisions and actions are highly constrained. Especially the subjectivity of managers is seen to have a meaningful role in the decision making process.