Exploring the relationship between a global mindset and performance during foreign market entry. A quantitative study of the qualitative topic of global mindsets

Elise Bendix Marthinsen

Student thesis: Master thesis

Abstract

The international business literature has recently begun to investigate the concept of global mindsets, but little is known about the extent to which this concept plays a significant role in the foreign market entry (FME) processes of multinational enterprises (MNEs). This paper takes on this new and neglected question and probes the notion that firms embracing a global mindset experience a superior foreign market entry performance in their internationalisation processes. More specifically, the research question is “Can a global mindset aid multinational enterprises in their foreign market entries?” This topic is relevant as it explores the benefits added to MNEs by developing a global mindset, which can increase overall performance and profitability of the MNE. To answer the research question an in-depth theoretical review was conducted on the key focal concepts. This allowed for definitions to be explicated and an overall critical reflection of the study phenomenon. The review also uncovered that the empirical research undertaken on global mindsets is mostly qualitative in nature, and if quantitative, focused on interviews with a large amount of managers. To fill this research gap, the methodology is of a quantitative nature, aiming at measuring the presence or lack of a global mindset in large MNEs, and their following performance during FME processes. Using the Transnationality Index as a sample frame, 32 MNEs were selected for closer scrutiny and followed over the 2003-2013 period. Using a multi-faceted measure of global mindsets (including Bloomberg’s Executive Profiles, a qualitative and an Nvivo analysis of the annual reports, and a management nationality analysis) and measuring FME performance as the three-year average growth in subsidiaries sales performance in comparison to the overall group performance, the results of the data collection provide some interesting trends. First, the overall results support the hypothesis that a global mindset aid multinational enterprises in their foreign market entries. Secondly, this overall trend prompted some additional analyses of the data, which pointed towards industry heterogeneity. More specifically, it showed that MNEs operating in the Electrical & Electronics and Motor Vehicle industry are more likely to have a high global mindset and high subsidiary

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2015
Number of pages100