Doctoral Dissertations

Date of Award

3-1986

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Business Administration

Major Professor

Max S. Wortman Jr.

Committee Members

Dudley Dewhirst, Gary Dicer, Robert Sentell, Robert Maddox

Abstract

The purpose of this study is twofold: (1) to analyze possible common environmental and decision characteristics of an international market entry decision that are related to executive participation; and (2) to test empirically the relationship between evaluation of these strategies and executive participation. This study examines the way top administrators of a multinational firm conceptualize the strategic decision process.

The methodology consisted of a field study of the market decision to enter a new product/market overseas in 30 American multinational firms. To guide the collection and analysis of data, relevant literature in the strategic management and human resources areas was synthesized into a research model. The collection of data was done primarily through personal interviews with top management personnel in the 30 subject companies.

A semi-structured questionnaire format was used to conduct the interviews. The analysis of data consisted of two parts: (1) a generation of descriptions of the strategic decision-making process and the role played by executives at different levels in the multinational firm; and (2) a quantitative analysis of the data focused on testing hypotheses suggested by the research model. Both multivariate and univariate regression analyses were used in the study.

The results of the study indicate that international market entry decisions which were shared by executives at regional, subsidiary and corporate levels were most strongly linked with these environmental characteristics:

(1) importance of corporate goal

(2) industry conditions and competition crucial, and

(3) firm highly multinational

Therefore, the hypothesis suggesting a relationship between environmental and decision characteristics and the participation of executives at different levels in the organization was strongly supported by the data. The backward stepwise multiple regression statistical tests indicated the importance of the previously listed conditions.

The research model suggested that the amount of executive participation at corporate, regional and subsidiary levels would be a significant influence on the evaluation of such a strategy. This hypothesis was supported by the univariate statistical tests using successfulness and goal attainment of strategy as measures of strategy evaluation. Although all measures of strategy evaluation were positively related to participation, goals of subsidiary sales and profit contribution were not shown to be significant.

The study has several implications for the academician and practitioner. For the academician, this study suggests that the human perspective is a very important mediating variable in environmental analysis of strategic decisions and the outcome of such decisions. The study suggests that academics in strategic management should focus on the strategic management process and the development of management skills which would foster understanding of when and how fully to utilize participative decision-making in multinational firms.

For the practitioner, the strategy formulation process should ensure compatibility between the environmental conditions of the particular strategy ana the participation of executives at different levels within the multinational. The executive may be able to redesign the decision-making process to new environmental conditions and to ensure a more successful strategy through the use of this research.

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