Prior literature on firm internationalization 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.
Niittymies’ dissertation explores firm internationalization-related decision-making from multiple philosophical and methodological perspectives. The dissertation presents that managers’ cognitive processes that underlie perceptions, understanding, learning, and, in the end, decisions can be influenced by unexpected factors – such as frustration, the prevailing spirit of the time, and past experiences.
"Frustration and other negative feelings can be in a surprisingly central role in managers’ decision-making because human beings are cognitively lazy or, in fact, brilliantly economical when it comes to updating different knowledge structures used in decision-making", Niittymies says.
"Why go through the trouble of updating knowledge structures that help us to make sense of the surrounding world if they are working just fine?"
This, however, can lead to dangerous situations when the decision-making environment differs from the one that the decision-makers are used to, as it often does in firms’ internationalization processes. In these cases, the old knowledge structures might lead to inaccurate understandings and, consequently, decisions based on faulty reasoning, which can have critical consequences for the firm.
"It could be said that negative feelings are necessary for practicing managers from time to time so that their cognitive processes will get a good reason to update the knowledge structures that are vital for decision-making", Niittymies states.
Furthermore, the findings emphasize the – often overlooked – possibility that managers are unable to make decisions purely based on facts, independent from the prevailing spirit of the time or their own character shaped by prior experiences.
"Despite managers’ best efforts to make decisions based on known facts, the human mind is capable of unconsciously favoring the alternative that is in line with the managers’ own goals, desires, or the prevailing spirit of the time. History is full of different events, manias, and group illusions, which are good examples of how even the most bizarre decisions can feel sensible when they are aligned with personal dreams, hopes, and the prevailing spirit of the time", Niittymies explains.
The dissertation also calls for the use of diverse methodological alternatives for studying managers’ cognitions. This is because the currently prevailing methodological alternatives are relatively one-sided and cannot fully capture the complex role that cognitions play in internationalization-related decision-making. The dissertation especially argues that the use of historical and interpretive research methods could notably advance our understanding of the topic.
"My research can offer different viewpoints for the practicing managers that are dealing with firm internationalization processes and the related decisions. These decisions are made in information environment that is often extremely complex and dynamic", Niittymies says.
"Understanding and making decisions in this kind of environment can, at times, feel overwhelmingly challenging. Therefore, it is important to develop a better understanding of internationalization decisions and the underlying cognitive processes", Niittymies adds.
The doctoral dissertation of M.Sc. Aleksi Niittymies in the field of business studies titled The Cognitive Foundations of Firm Internationalization will be publicly examined at the Faculty of Management and Business of Tampere University at 12 o'clock on Friday 28 January 2022. Professor Rebecca Piekkari from Aalto University will be the opponent while Professor Kalle Pajunen will act as the custos.
The event can be followed via remote connection.
The dissertation is available online at
Photo: Timo Peltomaa