THE DECISION-MAKER AND EXPORT ENTRY AND EXPANSION

THE DECISION-MAKER AND EXPORT ENTRY AND EXPANSION

Fall 1981 | STAN D. REID
This paper examines the relationship between firm and individual characteristics and foreign entry and expansion behavior. It argues that foreign entry and expansion are not solely determined by structural or managerial factors but result from the interaction between these types of variables. The paper proposes that foreign entry and expansion can best be understood as an adoption of innovation-type behavior. Despite evidence suggesting that foreign entry and expansion behavior may result from complex interactions between firm and decision-maker variables, few researchers have investigated export expansion behavior with this in mind. Most studies have focused on either the association of specific individual characteristics with past export behavior or the isolation of particular contextual determinants. As a result, the process by which foreign entry and expansion decisions are made and how export performance is affected by the interaction between firm and individual characteristics remains relatively unexplored. The existing export studies rely on one-shot, cross-sectional studies and correlational methodologies, which are consistent with the search for typologies. However, if exporting as a foreign entry process is to be adequately understood, more dynamic models of export behavior and appropriate methodologies are needed. The export literature contains theoretical and methodological flaws, and there is a lack of consistency in findings and programmatic research. This has prompted the search for middle-range theories and new orientations in exporting research that are behaviorally oriented. The work of some researchers has two important limitations: they do not distinguish between the foreign entry expansion process in small and large firms, and their studies focus on past export behavior rather than decision-making. Cavusgil’s study is the only one that can be considered as focusing on decision-making. The paper proposes a conceptual model explaining the impact of the decision-maker on foreign entry and export expansion behavior, develops propositions about these relationships, and provides a summary comment on their implications for export behavior research and policy. The model emphasizes the role of organizational incumbents in discretionary decision-making. The export expansion process is represented as a five-stage hierarchy: export awareness, export intention, trial, evaluation, and acceptance. Each stage involves specific firm and decision-maker variables. The paper highlights the importance of understanding the interaction between firm and decision-maker characteristics in small firms and their relationship with export behavior.This paper examines the relationship between firm and individual characteristics and foreign entry and expansion behavior. It argues that foreign entry and expansion are not solely determined by structural or managerial factors but result from the interaction between these types of variables. The paper proposes that foreign entry and expansion can best be understood as an adoption of innovation-type behavior. Despite evidence suggesting that foreign entry and expansion behavior may result from complex interactions between firm and decision-maker variables, few researchers have investigated export expansion behavior with this in mind. Most studies have focused on either the association of specific individual characteristics with past export behavior or the isolation of particular contextual determinants. As a result, the process by which foreign entry and expansion decisions are made and how export performance is affected by the interaction between firm and individual characteristics remains relatively unexplored. The existing export studies rely on one-shot, cross-sectional studies and correlational methodologies, which are consistent with the search for typologies. However, if exporting as a foreign entry process is to be adequately understood, more dynamic models of export behavior and appropriate methodologies are needed. The export literature contains theoretical and methodological flaws, and there is a lack of consistency in findings and programmatic research. This has prompted the search for middle-range theories and new orientations in exporting research that are behaviorally oriented. The work of some researchers has two important limitations: they do not distinguish between the foreign entry expansion process in small and large firms, and their studies focus on past export behavior rather than decision-making. Cavusgil’s study is the only one that can be considered as focusing on decision-making. The paper proposes a conceptual model explaining the impact of the decision-maker on foreign entry and export expansion behavior, develops propositions about these relationships, and provides a summary comment on their implications for export behavior research and policy. The model emphasizes the role of organizational incumbents in discretionary decision-making. The export expansion process is represented as a five-stage hierarchy: export awareness, export intention, trial, evaluation, and acceptance. Each stage involves specific firm and decision-maker variables. The paper highlights the importance of understanding the interaction between firm and decision-maker characteristics in small firms and their relationship with export behavior.
Reach us at info@study.space
[slides and audio] The Decision-Maker and Export Entry and Expansion