It Takes Two to Tango: Signaling Behavioral Intent in Service Multinationals’ Foreign Entry Strategies

Stevens, C., Makarius, E., Mukherjee, D (2015). It takes two to Tango: Signaling behavioral intent in SMNC’s foreign entry strategies, Journal of International Management, 21(3), 235-248.

46 Pages Posted: 29 Jan 2018

See all articles by Charles Stevens

Charles Stevens

Lehigh University - Department of Management

Erin Makarius

University of Akron - Department of Management

Debmalya Mukherjee

University of Akron - College of Business Administration

Date Written: April 20, 2015

Abstract

An unresolved tension exists in the literature on the foreign entry strategies of service multinational corporations (SMNCs). Prior research indicates that SMNCs face higher levels of transaction costs than non-service firms, making them more likely to prefer foreign entry strategies with greater hierarchy and control. Another stream of research suggests that less hierarchical entry strategies could increase SMNCs’ flexibility and their ability to learn about the local environment, allowing them to adapt products and services to local needs. This suggests that there are important, underappreciated tradeoffs involved with the degree of hierarchy in SMNCs’ foreign entry mode. To address this tension in the literature, we build a conceptual approach that integrates TCE with signaling theory to argue that firms’ reputation for behavioral intent could have wide-ranging impacts on SMNCs’ entry mode strategy and partner selection likelihood. Integrating these theories suggests the need to acknowledge that it takes “two to tango”: the attributes and preferences of both the foreign entrant and the local partner need to be factored into foreign entry strategies. We develop propositions using this integrative approach in order to contribute to further theoretical development in this important and growing stream of research.

Keywords: Service multinationals, foreign entry, signaling theory, behavioral intent, reputation

Suggested Citation

Stevens, Charles and Makarius, Erin and Mukherjee, Debmalya, It Takes Two to Tango: Signaling Behavioral Intent in Service Multinationals’ Foreign Entry Strategies (April 20, 2015). Stevens, C., Makarius, E., Mukherjee, D (2015). It takes two to Tango: Signaling behavioral intent in SMNC’s foreign entry strategies, Journal of International Management, 21(3), 235-248., Available at SSRN: https://ssrn.com/abstract=3106003

Charles Stevens

Lehigh University - Department of Management ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

Erin Makarius

University of Akron - Department of Management ( email )

259 S. Broadway
Akron, OH 44325
United States

Debmalya Mukherjee (Contact Author)

University of Akron - College of Business Administration ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
5
Abstract Views
174
PlumX Metrics