Management decision-making in the transition of a multinational company’s internationalisation strategy

Abstract

In a globalized world economy, it is more beneficial for companies to have international activities because a larger group of customers can be served (Hollensen, 2017). As the business environment is continuously evolving (e.g. through enhanced transport systems), international active companies need to constantly investigate whether their strategy for an international activity (e.g. working with a local distributor) is the most appropriate or not and if not, to efficiently switch to a new market strategy (mode switching). This decision-making process of mode switching is considered as critical for companies since finding the most appropriate strategy for an international activity results in maximizing the profit of companies (Sachse, 2010). A literature review process combined with a qualitative thematic analysis of the selected studies have shown that within multinational companies (MNC) there can be multiple simultaneous switching processes because MNC have a global network of several international activities (Rezende, 2006; Hollensen, 2017). These simultaneous decision-making processes can be connected within the network of the MNC and can impact each other (interdependencies). One example of interdependence is that the used human resources for one process are only available for a limited extent of a simultaneous decision-making process (Rezende, 2006; Asmussen et al., 2009). Ignoring the interdependencies of this network within MNC can result in increasing complexity, costs and not using synergistic effects to raise the efficiency within MNC (Rezende, 2006; Asmussen, 2009). Using a single case study approach from a phenomenological philosophical position, the mode switching process of one MNC has been investigated by conducting 15 semi-structured interviews with managers of the decision-making process and by documentation reviewing. This detailed and in-depth analysis has led to the outcome of a new process model which illustrates three set-ups for the decision-making process of mode switching within MNC including the interdependencies existing between multiple simultaneous mode switches.