Effects of Mindset on International Marketing Decisions: The Moderating Role of Psychic Distance: An Abstract

Abstract

The current study examines the conditions under which a fixed and growth mindset affects managers’ decisions regarding the level of adaptation and involvement in cross-border strategies. Grounded in the implicit theory from psychology, we developed a model that includes psychic distance as the boundary condition of this effect. To test our hypotheses, a 2 (fixed vs. growth mindset) by 2 (low vs. high psychic distance) between-subjects experimental design was employed. Two hundred and fifty-two international marketing managers from firms based in Greece were recruited to take part in the study and were randomly assigned to one of the four experimental conditions. Results revealed that mindset had a significant effect on adaptation intentions. Furthermore, psychic distance moderated the above effect; more specifically, in the low psychic distance condition, growth mindset managers demonstrated higher adaptation intentions than fixed mindset managers, whereas, in the high psychic distance condition, both growth and fixed mindsets opted for similar levels of adaptation. In addition, the effect of mindset on entry mode was strengthened for low psychic distance as growth mindset managers tend to select higher involvement business arrangements than their fixed mindset counterparts. The current study offered insights into the international marketing and consumer psychology literatures by introducing mindset as a new antecedent of adaptation and entry mode decisions, and showed under which conditions managers take internationalization decisions. Moreover, the proven effect of mindset on international marketing decisions has equally important implications for organizations. We support the view that managers are boundedly rational, therefore neglecting their cognitive orientation and perception would generate flawed results. Therefore, chief stakeholders should not take for granted that their international marketing managers’ way of thinking will be aligned the firm’s idiosyncrasy and follow the intended cross-border strategies. In order to cultivate or acquire a desirable mindset, relevant and carefully designed internal and external training sessions are deemed necessary for senior and international marketing managers.