International Market Withdrawal: a strategy process study

Abstract

We set out this study with a scrutiny of three theoretical frameworks for the explanation of the internationalization of the firm: (1) the ‘stages’ models of internationalization, (2) the ‘core’ theory of international business, and (3) a global strategy framework. Through a systematic comparative analysis of these three frameworks, we came to the conclusion that all three contribute significantly to the explanation of different aspects of the internationalization of the firm. Because all three frameworks have paradigmatic qualities, we argued not to integrate the frameworks but to consider them as highly complementary for the explanation of the multi-faceted phenomenon of the internationalization of the firm. At the same time we assessed the frameworks’ power to explain de-internationalization – any voluntary or forced action that reduces a company’s engagement in or exposure to current cross-border activities. Unfortunately, we came to the conclusion that none of the three frameworks easily accommodate for de-internationalization. More in particular, all three theoretical frameworks miss a clear dynamic character, which does not allow for (much) managerial discretion and a non-linear process perspective. Therefore, we presented (1) a ‘new’ theory of the firm, which relies upon an integration of the resource-based view and evolutionary economics, and (2) a strategy process perspective on internationalization. We ended Chapter 2 by arguing that future theorizing on the internationalization of the firm – including de-internationalization and international market withdrawal – should start from one of these dynamic frameworks. Given the research questions and empirical issues of our study, we decided to adopt the strategy process framework for our study of international market withdrawal. Moreover, later analytical sections of this dissertation illustrate that both frameworks are highly complementary and even supplementary. (Excerpt from the Summary)