The Decision-Making Process in International Business Strategies: Factors of Influence on Small and Medium Enterprises

The Decision-Making Process in International Business Strategies: Factors of Influence on Small and Medium Enterprises

Fabio Musso (Department of Economics, Society and Politics, University of Urbino, Urbino, Italy) and Barbara Francioni (Department of Economics, Society and Politics, University of Urbino, Urbino, Italy)
Copyright: © 2013 |Pages: 22
DOI: 10.4018/ijabe.2013040101
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Abstract

This paper investigates the relationship between the contextual factors related to the firm’s decision-maker and the process of international strategic decision-making. The analysis has been conducted focusing on small and medium-sized enterprises (SME). Data for the research came from 111 usable responses to a survey on a sample of SME decision-makers in international field. The results of regression analysis indicate that the context variables, both internal and external, exerted more influence on international strategic decision making process than the decision-maker personality characteristics.
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Theoretical Background

Strategic Decision-Making Process

The process of making strategic decisions has emerged as one of the most important themes of strategy research over the last two decades (Papadakis, 2006; Papadakis & Barwise, 2002).

According to Harrison (1996), the SMDP can be defined as a combination of the concepts of strategic gap and management decision making process, with the former “determined by comparing the organization’s inherent capabilities with the opportunities and threats in its external environment”, while the latter is composed by a set of decision-making functions logically connected, that begins with the setting of managerial objective, followed by the search for information to develop a set of alternatives, that are consecutively compared and evaluated, and selected. Afterward, the selected alternative is implemented and, finally, it is subjected to follow-up and control.

Other authors (Fredrickson, 1984; Mintzberg, Raisinghani, & Theoret, 1976) developed several models of strategic decision-making process since 1970, mainly based on the number of stages (Nooraie, 2008; Nutt, 2008).

Although different researches investigated SDMP with specific reference to either small firms (Brouthers, et al., 1998; Gibcus, Vermeulen, & Jong, 2009; Huang, 2009; Jocumsen, 2004), or internationalization process (Aharoni, Tihanyi, & Connelly, 2011; Dimitratos, et al., 2011; Nielsen & Nielsen, 2011), there is a lack of studies that examine the SDMP in both perspectives.

In this study we decided to mainly follow the SDMP defined by Harrison (1996) adapted to the international arena and particularly referred to market development decisions. Thus, for the definition of objectives (first phase) we refer to those in international field, for search for information, development and comparison of alternatives related to foreign markets (second phase) we refer to the systematic International Market Selection (IMS), and to the Entry Mode Selection (EMS) methodologies. For the implementation of the selected alternative (third phase) we mainly mean the entering in a particular foreign market with a specific entry mode, and finally, for follow-up and control (fourth phase) we refer to the control and evaluation of international activities.

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