Global Strategy and Multinationals' Entry Mode Choice

This paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals' entry mode. Specifically, it is our contention that beyond the environmental and transaction-specific factors well established in the literature to affect the entry mode decision, we should also consider the strategic relationship a multinational envisages between its operations across borders in reaching this decision. After incorporating various global strategic variables into an electric framework of the factors influencing the entry mode choice, this paper tests both the validity of the overall framework and the importance of each entry mode determinant in differentiating among entry modes. This is done based on ninety-six multinational managers' responses to a survey questionnaire concerning their entry mode decision experiences. The results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted.