An Effectual–Causal View of Managerial Decisions in the Internationalization of Indian MNEs

Rupanwita Dash and Kumar Rakesh Ranjan

Journal of International Management, 2019, vol. 25, issue 1, 101-120

Abstract: We use effectuation theory to understand the internationalization of emerging market multinational enterprises (EMNEs), specifically answering the questions of: (a) how managerial decision logic differs across EMNEs that face disadvantages vs. those that do not, and (b) what managerial decision logic helps EMNEs to mitigate disadvantages. We employ a case research approach to analyze decision events across eight firms that internationalized from India between 1990 and 2015. We find that EMNEs are attuned to welcoming and leveraging surprises in order to transform challenging markets into opportunities; form cautious partnerships with self-selecting stakeholders, and; balance all-or-nothing opportunities with losses they can afford. Furthermore, while EMNEs adopt relatively balanced effectual-causal actions to mitigate the liability of multinationality (LoM), they are more effectual than causal in mitigating the liabilities of foreignness (LoF) and liabilities of origin (LoR).

Keywords: Effectuation; Emerging economy; India; Internationalization; Liability; Managerial decision (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intman:v:25:y:2019:i:1:p:101-120

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DOI: 10.1016/j.intman.2018.09.001

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