Managerial decision making in international business research: A forty year retrospective
By Brian Connelly, Aharoni, Tihanyi
2007
Abstract
This overview of research on managerial decision making in the multinational enterprise (MNE) identifies key theoretical developments, synthesizes how they have been employed, and discusses contributions that may emerge as researchers devote increased attention to bounded rationality. Since behavioral factors were first introduced into the international business literature, there has been an increasing trend toward acknowledging the decision makers’ role in foreign direct investment and related strategies. However, the reasoning which explains the characteristics and outcomes of managerial decision-making in the MNE remains implicit and ambiguous. There are a number of potential concerns associated with the assumptions of dominant rational decision-making models and with models that omit decision makers. We highlight these concerns and discuss the benefits of, and opportunities for, models that incorporate bounded rationality, decision-making biases, and judgments by managers. In particular, we stress the need to research differences in decision-making patterns by managers from different countries. We conclude by laying the groundwork for future research on the international decision-making process.