This study examines foreign market re-entry after exit, demonstrating with empirical evidence that exit is not an irreversible, win or lose process characterised by location and asset specificity. Organisations repeatedly attempt to return to once failed internationalisation projects. Drawing upon insights from organisational learning and institutional perspectives, this study examines the changes (if any) in commitment mode between exit and re-entry, the timing of re-entry, and whether developed and emerging market re-entrants differ in their re-entry choices. The highlights of this research are as follows; 1) for some re-entrants, re-entry carries with it learning inertia in that (both developed and emerging market) firms tend to re-enter via the same commitment modes in which they were operating prior to exit irrespective of prior knowledge and experience accumulated over time; 2) favourable host institutional changes, in turn, lead to commitment escalation; 3) early re-entries are motivated by the quality of host institutional environments, the choice to imitate the behaviour of other foreign (re)entrants to gain legitimacy, and the re-entrant’s strategic intent; and 4) how firms interpret exit plays a key role in their re-entry commitment and timing decisions, together with institutional pressures for legitimacy. Contrary to prior studies on de novo foreign market entry, this study proposes that it is not just the experience accumulated over time that influences the effectiveness and applicability of organisational learning. For re-entrants, prior experience does not necessarily lead to learning and more relevant tend to be institutional changes and pressures for legitimacy, how re-entrants interpret the market exit process and the re-entrant’s strategic objectives concerning the previously abandoned market. From a practitioner’s viewpoint, there may be significant consequences of not being able to transform prior knowledge and experience into learning and routines in the short term, and subsequently, leverage the lessons learned when making re-entry decisions.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:714953 |
| Date | January 2016 |
| Creators | Surdu, Irina |
| Publisher | University of Warwick |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://wrap.warwick.ac.uk/89167/ |
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