The dynamics of entry mode choice in challenging business environments: an exploratory study of medium sized exporters' entry into Africa

Abstract

This article studies the entry modes adopted by medium-sized enterprises (MEs) seeking market access to challenging business environments in Africa. Based on a review of the extant literature on entry mode choice and organisational learning in internationalisation, we develop a dynamic model for analysing entry mode choice of exporting MEs. Via a longitudinal study of 14 Danish MEs' attempted entry into the Kenyan market, we found that gaining better knowledge of own resources in relation to the Kenyan business environment did not make the MEs adjust their entry mode. The only behavioural adjustments in lieu of better knowledge were that several MEs, rather than changing their preferred entry mode, decided to abandon entry altogether. We ascribe this lack of adaptation of entry mode strategy to organisational inertia. In conclusion, we argue that our findings have important implications for the theory of organisational learning in internationalisation.

International entrepreneurship by African firms: a discussion on constraints and capabilities

“…Although the dynamic capabilities literature has developed considerably (Baía and Ferreira, 2019;Barreto, 2010;Jie et al, 2021;Schilke et al, 2018), there is still a lack of clarity (Wilden et al, 2016) and consensus (Baía and Ferreira, 2019), especially concerning the contribution of dynamic capabilities to firm's performance, particularly in emerging markets like Africa. While the impacts of absorptive capacity (e.g., Ayebale, 2021), organisational inertia (e.g., Gundelach and Hansen, 2020) and managers ' individual values (e.g., Jean-Denis, 2018) on the internationalisation of African entrepreneurial firms have been examined, our understanding of the main constraints to international entrepreneurship in Africa is rather limited, especially from a dynamic capabilities (development) perspective. Our paper aims to fill this clear gap in the extant literature.…”