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An eclectic theory of the choice of international entry mode
Author(s) -
Hill Charles W. L.,
Hwang Peter,
Kim W. Chan
Publication year - 1990
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250110204
Subject(s) - mode choice , mode (computer interface) , industrial organization , isolation (microbiology) , relation (database) , microeconomics , business , economics , marketing , computer science , engineering , public transport , microbiology and biotechnology , database , transport engineering , biology , operating system
The choice of entry mode into a foreign market has a major impact on the success of a firm's international operations. However, the existing literature on the entry mode decision has either presented a list of considerations without identifying underlying constructs, or treated each entry decision in isolation. Here, a unifying framework is developed. This framework identifies three underlying constructs that influence the entry mode decision. These constructs are linked to considerations that have been previously discussed in the literature. It is argued that a firm's choice of entry mode depends on the strategic relationship the firm envisages between operations in different countries. A particular entry decision cannot be viewed in isolation. It must be considered in relation to the overall strategic posture of the firm. Further, the paper argues that different variables often suggest different entry modes, and that resolving these differences involves accepting trade‐offs.