The power of mindset: Managerial mindset effects on international marketing decisions

The importance of managerial decision-making processes in international marketing was highlighted more than 50 years ago; nevertheless, there is a distinct lack of empirical micro level research on the cognitive attributes of managers. Even when managers are included in the conceptual model, they are depicted as rational individuals that act as stipulated by their firm’s governance. In an attempt to answer researchers’ calls for more sophisticated and advanced research on decision-making processes within firms, the author sheds light on the reasons that lie behind the way managers take international marketing adaptation and entry mode decisions. Three studies provided evidence for the assumption that managerial mindset drives international marketing decisions. First, the construal level mindset was suggested as the underlying psychological process that explains how perceptions of distance affect a manager’s decisions related to the level of adapted pricing marketing strategy. In particular, psychic distance significantly influenced price adaptation decisions, while construal level mindset mediated this effect. Second, the examination of moderator effects yielded interesting results; the effect of psychic distance on price adaptation decisions was strongest for low promotion-oriented managers with an analytic thinking style (study 1). Third, the conditions under which fixed and growth mindsets affect managers’ decisions regarding the level of adaptation and involvement in cross-border strategies were examined. Grounded in the implicit theory from psychology, the author developed a model that included psychic distance as the boundary condition and construal level mindset as the underlying mechanism of this effect. The direct effect of mindset on adaptation decisions was initially tested on consumers, before being replicated in a managerial context. As expected, mindset was proved to be a significant determinant of adaptation decisions (study 2 and study 3), while the otherwise positive relationship between mindset and entry mode turned negative under high psychic distance (study 3). Together, results suggest that mindset and perceptions of distance drive international marketing decisions, and additionally, mindset discloses the mechanism of this effect. The current research extends the literature on international marketing and consumer behaviour by proposing a new behavioural outcome of mindset, namely adaptation intentions and by presenting psychic distance as a new antecedent. Finally, on a managerial level, mindset can be a powerful tool with extensive applicability to a wide range of marketing-related decisions within the domain of international marketing strategies.