Organizational Learning: A Perspective from the Choice and Pattern of Sequential Modes of Foreign Market EntryPerformance Improvement Quarterly (2000)
This study examines the choice, pattern, and timing of sequential modes of entry among multinational corporations investing in China. Specifically, we examine how earlier choices of entry modes influence decisions ahout subsequent modes of entry in a targeted host country. Six hypotheses are developed and tested using a longitudinal sample of 228 Fortune Global 500 firms that have had multiple entries in China between 1979 and 1996. The results provide supportive evidence of our hypotheses. Specifically, firms employed entry modes reflecting low commitment in early stages that were gradually escalated to higher commitment in subsequent decisions. This is consistent with the “incremental in vestment” approach that underlies traditional and contemporary theories and research in market entry decisions. An analysis of entry mode choices over time reveals different learning patterns: the logic of incremental investments (i.e., the escalation of low to high resource commitments); the logic of the “catch-up” follower (i.e., relatively heavy commitment at later stages); and the logic of stable, consistent investments (i.e., the continuation of the same entry mode throughout the time period. There is moderate but inconclusive support for country of origin as a moderating factor. The implications of this study for theory and practice are discussed, as well as its limitations.
Publication DateJune, 2000
Citation InformationMarshall, R. S., Ungson, G. R., & Pan, Y. (2000). Organizational learning: A perspective from the choice and pattern of sequential modes of foreign market entry. Performance Improvement Quarterly, 13, 117-137.