Heuristics and decision rationality in entry mode choice: Implications for decision effectiveness and international performance

This study explores how heuristics (availability and representativeness) and analytic rational decision-making influence the selection of international business entry modes and their subsequent impact on decision effectiveness and international performance. Grounded in dual-process theories, the research develops hypotheses linking heuristics, analytic rationality, decision effectiveness, and international outcomes. Utilizing a quantitative survey approach, the findings reveal that integrating the availability heuristic with analytic rational decision-making enhances the quality of internationalization decisions, whereas combining analytic decision-making with the representativeness heuristic can diminish decision effectiveness. These results emphasize the critical role of balancing heuristic and analytical approaches in managerial decision-making for international entry, contributing to dual-process theories within the international business context and providing valuable insights into the cognitive strategies shaping entry mode selection and organizational performance. • This study shows how availability and representativeness heuristics with rationality shape entry mode choice. • It extends dual-process theory by revealing how heuristics and analysis together affect global decision outcomes. • Findings show availability with rationality improves entry choices, while representativeness reduces effectiveness. • Managers gain insights on balancing heuristics and analysis to craft effective internationalization strategies.