The Role of Psychic Distance In Internationalization Strategy Evaluations and Strategic Choices

Abstract

This analysis examines views of the term “psychic distance” and its application to the strategic choice process and managerial arrangements in international operations. It offers a background and conceptual framework of psychic distance, which stresses individual experience as part of the process. Individual experience is explored in terms of its components and through the use of information processing models that appear in the marketing literature. Next, applications to strategic management are made with regard to the choice to enter specific international markets, modes of entry selected, and the managerial structures that will be established.