Strategic decision-making processes in internationalization: Does national culture of the focal firm matter? Pavlos Dimitratos a,1 , Andreas Petrou b, *, Emmanuella Plakoyiannaki c,2 , Jeffrey E. Johnson d,3 a Athens University of Economics and Business, Greece, 76 Patission St, 10434 Athens, Greece b Cyprus International Institute of Management, Cyprus, 21 Akademias Ave, Aglandjia 2151, Nicosia, Cyprus c Aristotle University of Thessaloniki, Department of Business Administration, Thessaloniki 54 124, Greece d Bill Greehey School of Business, St. Mary’s University, One Camino Santa Maria, San Antonio, TX 78228-8607, United States 1. Introduction This paper aims to investigate how strategic decision-making processes (SDMPs) vary among internationalized firms of different cultures. Our emphasis is on the focal internationalized enterprise that originates from a given home country; rather than on the differences between focal internationalized enterprises and their export, joint venture or wholly-owned subsidiary partners abroad. The examined issue of decision-making in internationalized firms is a theme that has considerable importance. Management stands out as a key driver behind the success of the internationalized firm (Lee & Park, 2006; McDougall & Oviatt, 1996). This argument is in line with the upper-echelon perspective (Boeker, 1997; Hambrick & Mason, 1984; Miller, De Vries, & Toulouse, 1982) that posits that top managers of the firm are the strategists who set the direction of their enterprises. Based on this logic, top managers make decisions consistent with their cognitive orientations, perceptual processes, values and experiences, which can influence organizational performance. Therefore, differences in managerial cognitive processes affect aspects of the SDMP involving information search and information processing (Cyert & March, 1963; Daft & Weick, 1984; Haleblian & Rajagopalan, 2006). The upper-echelon theory has been applied to the internationalized firm level providing some evidence on the association between top management character- istics and international growth of the firm (Carpenter, 2002; Jaw & Lin, 2009; Tihanyi, Ellstrand, Daily, & Dalton, 2000). It is posited that the role of decision-making aspects has generally been overlooked in the internationalization of the firm (Buckley, 1993; Herrmann & Datta, 2002). The national culture of the focal internationalized enterprise has significant impact on its strategic posture and activity (Bartlett & Ghoshal, 1989; Hayton, George, & Zahra, 2002; Porter, 1990). Besides, national culture may be a major variable likely to affect the development of cognitive and thinking styles of managers (Abram- son, Keating, & Lane, 1996; Allinson & Hayes, 1996; Sternberg, 1997). Therefore, in the present study we employ the cultural relativity theory (Hofstede, 1980, 1983), which posits that the nation of the focal firm is distinguished by specific value systems that can account for divergences in the types of strategies implemented by enterprises originating from different countries. On a related note, in a recent literature review, Kirkman, Lowe, and Gibson (2006) argue that there are no empirical studies investigating the national culture aspect at the organizational decision-making level. Organizational decision-making may include a mixture of modes such as the rational, intuitive and improvisational (Cunha, 2007; Mintzberg & Westley, 2001). The line of thought that Journal of World Business 46 (2011) 194–204 ARTICLE INFO Article history: Available online 17 June 2010 Keywords: Strategic decision-making process National culture Internationalization ABSTRACT We seek to examine how national culture values affect strategic decision-making processes (SDMPs) of internationalized firms. We employ the cultural relativity theory to explain how firms from different countries make international decisions. We advance hypotheses regarding the associations between three SDMP dimensions and three national culture aspects, notably the relationships between hierarchical decentralization and power distance; lateral communication and individualism; and, formalization and uncertainty avoidance. We present evidence from a large-scale study conducted on 528 internationalized small and medium-sized firms based in the USA, UK, Greece and Cyprus. The findings support our hypotheses with the exception of that concerning lateral communication and individualism. The national culture of the focal firm matters as far as SDMPs in internationalization are concerned. Implications and further research directions are discussed. ß 2010 Elsevier Inc. All rights reserved. * Corresponding author. Tel.: +357 99375522; fax: +357 22331121. E-mail addresses: pdimitr@aueb.gr (P. Dimitratos), andreas.petrou@ciim.ac.cy (A. Petrou), emplak@econ.auth.gr (E. Plakoyiannaki), jjohnson6@stmarytx.edu (J.E. Johnson). 1 Tel.: +30 2108203561; fax: +30 2108203589. 2 Tel.: +30 2310 996670; fax: +30 2310 996452. 3 Tel.: +1 2104312024; fax: +1 2104312115. Contents lists available at ScienceDirect Journal of World Business journal homepage: www.elsevier.com/locate/jwb 1090-9516/$ – see front matter ß 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2010.05.002