Skip to main navigation menu Skip to main content Skip to site footer

Vol. 8 No. 2 (2020)
June 2020

Articles

Intention to De-Internationalise: Foreign-Based Competition at Home and the Effect of Decision-Makers’ Role

https://doi.org/10.15678/EBER.2020.080211

Published 2020-06-30

Piotr Wójcik
Kozminski University

Mariola Ciszewska-Mlinarič


Abstract

Objective: The objective of the article is to investigate how decision-makers’ perception of the level of foreign-based competition in the home market affects their intention to de-internationalise and how decision-makers’ role moderates this relationship.

Research Design & Methods: A set of hypotheses is tested using regression analysis on a sample of 96 participants (entrepreneurs and managers) originating from Poland.

Findings: The results show that the perceived level of foreign-based competition in the home market is positively and significantly associated with the intention to de-internationalise. We find a statistically significant moderating effect of decision-makers’ role. In the case of managers, the intention to de-internationalise increases with the level of perceived foreign-based competition in the home industry, while in the case of entrepreneurs the relationship is negative. Firm international exposure and international experience are negatively associated with the intention to de-internationalise.

Implications & Recommendations: The results indicate the role of individual cognition and home market context in the non-linear internationalisation process.

Contribution & Value Added: We demonstrate that the perception of the increased level of foreign-based competition in the home market and decision-makers’ role should be considered with the Uppsala internationalisation process. The study findings draw attention to the nature of the manager-owner relationship, resonating with the agency theory in that the manager’s self-interest is bounded by the reciprocal behaviour of the owner.

Keywords

De-internationalisation; Uppsala model; decision-making

(PDF) Save

References

  1. Baum, J.A.C., Rowley, T.J., Shipilov, A.V., & Chuang, Y.-T. (2005). Dancing with Strangers: Aspiration Performance and the Search for Underwriting Syndicate Partners. Administrative Science Quar-terly, 50(4), 536-575.
  2. Benito, G., & Welch, L. (1997). De-Internationalisation. Management International Review, 37, 7-25.
  3. Bianchi, C.C., & Ostale, E. (2006). Lessons learned from unsuccessful internationalisation attempts: Examples of multinational retailers in Chile. Journal of Business Research, 59(1), 140-147.
  4. Bosse, D.A., & Phillips, R.A. (2014). Agency Theory and Bounded Self-Interest. Academy of Man-agement Review, 41(2), 276-297.
  5. Bowen, H.P., & Wiersema, M.F. (2005). Foreign-based competition and corporate diversification strategy. Strategic Management Journal, 26(12), 1153-1171.
  6. Buckley, P., & Casson, M. (2019). Decision-making in international business. Journal of International Business Studies.
  7. Buckley, P.J., Devinney, T.M., & Louviere, J.J. (2007). Do managers behave the way theory sug-gests? A choice-theoretic examination of foreign direct investment location decision-making. Journal of International Business Studies, 38(7), 1069-1094.
  8. Busenitz, L.W., & Barney, J.B. (1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. Journal of Business Venturing, 12(1), 9-30.
  9. Calof, J.L., & Beamish, P.W. (1995). Adapting to foreign markets: Explaining internationalisation. International Business Review, 4(2), 115-131.
  10. Cameron, K.S., & Quinn, R.E. (1988). Organizational paradox and transformation. In Paradox and transformation: Toward a theory of change in organization and management (pp. 1-18). New York, US: Ballinger Publishing Co/Harper & Row Publishers.
  11. Cerrato, D., Crosato, L., & Depperu, D. (2016). Archetypes of SME internationalisation: A configura-tional approach. International Business Review, 25(1, Part B), 286-295.
  12. Chittoor, R., Aulakh, P.S., & Ray, S. (2019). Microfoundations of firm internationalisation: The owner CEO effect. Global Strategy Journal, 9(1), 42-65.
  13. Cieślik, J. (2019). Zaangażowanie międzynarodowe polskich przedsiębiorstw. Warszawa: Wydawnic-two Akademii Leona Koźmińskiego.
  14. Clarke, J.E., & Liesch, P.W. (2017). Wait-and-see strategy: Risk management in the internationalisa-tion process model. Journal of International Business Studies, 48(8), 923-940.
  15. Cohen, J., & Cohen, P. (1983). Applied Multiple Regression/Correlation Analysis for the Behavioural Sciences. Hillsdale, NJ: Lawrence Erlbaum Associates.
  16. Contractor, F., Foss, N.J., Kundu, S., & Lahiri, S. (2019). Viewing global strategy through a micro-foundations lens. Global Strategy Journal, 9(1), 3-18.
  17. Cyert, R., & March, J. (1963). A Behavioural Theory of the Firm. Englewood Cliffs: Prentice Hall.
  18. Dew, N., Read, S., Sarasvathy, S.D., & Wiltbank, R. (2008). Outlines of a behavioural theory of the entrepreneurial firm. A Retrospective Look at a Behavioural Theory of the Firm, 66(1), 37-59.
  19. Dominguez, N., & Mayrhofer, U. (2017). Internationalisation stages of traditional SMEs: Increasing, decreasing and re-increasing commitment to foreign markets. International Business Review, 26(6), 1051-1063.
  20. Dow, D., Liesch, P., & Welch, L. (2018). Inertia and Managerial Intentionality: Extending the Uppsa-la Model. Management International Review, 58(3), 465-493.
  21. Driffield, N., & Munday, M. (2000). Industrial Performance, Agglomeration, and Foreign Manufac-turing Investment in the UK. Journal of International Business Studies, 31(1), 21-37.
  22. Dunning, J.H. (2001). The Eclectic (OLI) Paradigm of International Production: Past, Present and Future. International Journal of the Economics of Business, 8(2), 173-190.
  23. Dutton, J.E., & Jackson, S.E. (1987). Categorizing Strategic Issues: Links to Organizational Action. Academy of Management Review, 12(1), 76-90.
  24. Figueira-de-Lemos, F., & Hadjikhani, A. (2014). Internationalisation processes in stable and unstable market conditions: Towards a model of commitment decisions in dynamic environments. Jour-nal of World Business, 49(3), 332-349.
  25. Fletcher, R. (2001). A holistic approach to internationalisation. International Business Review, 10(1), 25-49.
  26. Hutzschenreuter, T., Kleindienst, I., Groene, F., & Verbeke, A. (2014). Corporate strategic responses to foreign entry: insights from prospect theory. Multinational Business Review, 22(3), 294-323.
  27. Hutzschenreuter, T., Pedersen, T., & Volberda, H. W. (2007). The role of path dependency and managerial intentionality: a perspective on international business research. Journal of Interna-tional Business Studies, 38(7), 1055-1068.
  28. Iurkov, V., & Benito, G. (2018). Change in domestic network centrality, uncertainty, and the foreign divestment decisions of firms. Journal of International Business Stud-ieshttps://doi.org/10.1057/s41267-018-0194-0
  29. Javalgi, R., Deligonul, S., Dixit, A., & Cavusgil, S.T. (2011). International Market Reentry: A Review and Research Framework. International Business Review, 20(4), 377-393.
  30. Johanson, J., & Vahlne, J. (2013). The Uppsala model on evolution of the multinational business enterprise – from internalization to coordination of networks. International Marketing Review, 30(3), 189-210.
  31. Johanson, J., & Vahlne, J.-E. (1977). The Internationalisation Process of the Firm – A Model of Knowledge Development and Increasing Foreign Market Commitments. Journal of Internation-al Business Studies, 8(1), 23-32.
  32. Johanson, J., & Vahlne, J.-E. (2003). Business Relationship Learning and Commitment in the Interna-tionalisation Process. Journal of International Entrepreneurship, 1(1), 83-101.
  33. Johanson, J., & Vahlne, J.-E. (2006). Commitment and opportunity development in the internation-alisation process: A note on the Uppsala internationalisation process model. Management In-ternational Review, 46(2), 165-178.
  34. Johanson, J., & Wiedersheim‐Paul, F. (1975). The Internationalisation of the Firm – Four Swedish Cases 1. Journal of Management Studies, 12(3), 305-323.
  35. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econo-metrica, 47(2), 263-91.
  36. Kiss, A. N., Williams, D. W., & Houghton, S. M. (2013). Risk bias and the link between motivation and new venture post-entry international growth. International Business Review, 22(6), 1068-1078.
  37. Kuivalainen, O., Saarenketo, S., Sundqvist, S., & McNaughton, R. (2012). Internationalisation pat-terns of small and medium‐sized enterprises. International Marketing Review, 29(5), 448-465.
  38. Liu, Y., Li, Y., & Xue, J. (2011). Ownership, strategic orientation and internationalisation in emerging markets. Journal of World Business, 46(3), 381-393.
  39. Malhotra, N., & Hinings, C. (2010). An organizational model for understanding internationalisation processes. Journal of International Business Studies, 41(2), 330-349. https://doi.org/10.1057/jibs.2009.75
  40. March, J.G. (1991). Exploration and Exploitation in Organizational Learning. Organization Science, 2(1), 71-87.
  41. March, J.G., & Shapira, Z. (1987). Managerial Perspectives on Risk and Risk Taking. Management Science, 33(11), 1404-1418.
  42. Matthyssens, P., & Pauwels, P. (2000). Uncovering international market-exit processes: A compara-tive case study. Psychology & Marketing, 17(8), 697-719.
  43. Mellahi, K. (2003). The De-Internationalisation Process: A Case Study of Marks and Spencer. In C. Wheeler, F. McDonald, & I. Greaves (Eds.), Internationalisation: Firm Strategies and Manage-ment (pp. 150-162). London, UK: Palgrave Macmillan.
  44. Meyer, K.E. (2014). Process Perspectives on the Growth of Emerging Economy Multinationals. In R. Ramamurti & A. Cuervo-Cazurra (Eds.), Understanding Multinationals from Emerging Markets. Cambridge: Cambridge University Press.
  45. Miles, R.E., Snow, C.C., Meyer, A.D., & Coleman, H.J. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3(3), 546-562.
  46. Miocevic, D., & Morgan, R.E. (2018). Operational capabilities and entrepreneurial opportunities in emerging market firms. International Marketing Review, 35(2), 320-341. https://doi.org/10.1108/IMR-12-2015-0270
  47. Morgan, N.A., Katsikeas, C.S., & Vorhies, D.W. (2012). Export marketing strategy implementation, export marketing capabilities, and export venture performance. Journal of the Academy of Marketing Science, 40(2), 271-289. https://doi.org/10.1007/s11747-011-0275-0
  48. Nunnally, J. (1978). Psychometric Theory. New York: McGraw-Hill.
  49. Ocasio, W. (1997). Towards an attention-based view of the firm. Strategic Management Journal, 18(S1), 187-206.
  50. Palich, L.E., & Bagby, R.D. (1995). Using cognitive theory to explain entrepreneurial risk-taking: Challenging conventional wisdom. Journal of Business Venturing, 10(6), 425-438.
  51. Pauwels, P., & Matthyssens, P. (1999). A Strategy Process Perspective on Export Withdrawal. Jour-nal of International Marketing, 7(3), 10-37.
  52. Pedersen, T., Petersen, B., & Benito, G. (2002). Change of foreign operation method: impetus and switching costs. The Internationalisation Process of the Firm, 11(3), 325-345.
  53. Porter, M.E. (1980). Industry Structure and Competitive Strategy: Keys to Profitability. Financial Analysts Journal, 36(4), 30-41.
  54. Rahu, S. (2015). The Role of Uncertainty for Export Survival: Evidence from Estonia (Working Paper No. 97-2015). The University of Tartu, Faculty of Economics and Business Administration.
  55. Salomon, R., & Shaver, J.M. (2005). Export and domestic sales: their interrelationship and determi-nants. Strategic Management Journal, 26(9), 855-871.
  56. Santangelo, G.D., & Meyer, K.E. (2011). Extending the internationalisation process model: Increases and decreases of MNE commitment in emerging economies. Journal of International Business Studies, 42(7), 894-909.
  57. Shrader, R.C., Oviatt, B.M., & McDougall, P.P. (2000). How New Ventures Exploit Trade-Offs Among International Risk Factors: Lessons for The Accelerated Internationization of the 21St Century. Academy of Management Journal, 43(6), 1227-1247.
  58. Simon, M., & Shrader, R.C. (2012). Entrepreneurial actions and optimistic overconfidence: The role of motivated reasoning in new product introductions. Journal of Business Venturing, 27(3), 291-309.
  59. Sousa, C.M. P., & Tan, Q. (2015). Exit from a Foreign Market: Do Poor Performance, Strategic Fit, Cultural Distance, and International Experience Matter?. Journal of International Marketing, 23(4), 84-104.
  60. Stewart Jr., W.H., & Roth, P.L. (2001). Risk propensity differences between entrepreneurs and managers: A meta-analytic review. Journal of Applied Psychology, 86(1), 145-153.
  61. Swoboda, B., Olejnik, E., & Morschett, D. (2011). Changes in foreign operation modes: Stimuli for increases versus reductions. International Business Review, 20(5), 578-590.
  62. Tan, Q., & Sousa, C.M.P. (2019). Why Poor Performance is Not Enough for a Foreign Exit: The Importance of Innovation Capability and International Experience. Management International Review, 59(3), 465-498.
  63. Thomas, J.B., Clark, S.M., & Gioia, D.A. (1993). Strategic Sensemaking and Organizational Perfor-mance: Linkages Among Scanning, Interpretation, Action, and Outcomes. Academy of Man-agement Journal, 36(2), 239-270.
  64. Trąpczyński, P. (2016). De-internationalisation: A review of empirical studies and implications for international business research. Baltic Journal of Management, 11(4), 350-379.
  65. Turcan, R.V. (2003). Small Firm De-Internationalisation: An Entrepreneurship Perspective. In C. Wheeler, F. McDonald, & I. Greaves (Eds.), Internationalisation: Firms strategies and manage-ment (pp. 208-222). New York: Palgrave.
  66. Turner, C. (2012). Deinternationalisation: towards a coevolutionary framework. European Business Review, 24(2), 92-105.
  67. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Sci-ence, 211(4481), 453.
  68. Vahlne, J., & Johanson, J. (1990). The Mechanism of Internationalisation. International Marketing Review, 7(4).
  69. Vahlne, J.-E., & Johanson, J. (2017). From internationalisation to evolution: The Uppsala model at 40 years. Journal of International Business Studies, 48(9), 1087-1102.
  70. Vissak, T. (2010). Nonlinear internationalisation: a neglected topic in international business re-search. In T. Devinney, T. Pedersen, & T. Laszlo (Eds.), The Past, Present and Future of Interna-tional Business & Management (Vol. 23, pp. 559-580). Emerald Group Publish.
  71. Vissak, T., & Francioni, B. (2013). Serial nonlinear internationalisation in practice: A case study. International Business Review, 22(6), 951-962.
  72. Welch, L.S., & Luostarinen, R. (1988). Internationalisation: Evolution of a Concept. Journal of Gen-eral Management, 14(2), 34-55.
  73. Wiersema, M.F., & Bowen, H.P. (2008). Corporate diversification: the impact of foreign competi-tion, industry globalization, and product diversification. Strategic Management Journal, 29(2), 115-132.

Downloads

Download data is not yet available.

Similar Articles

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 > >> 

You may also start an advanced similarity search for this article.