TY - JOUR
T1 - Problematizing the internationalization decision
T2 - Terrorism-induced risk
AU - Liesch, Peter
AU - Steen, John
AU - Knight, Gary
AU - Czinkota, Michael R.
PY - 2006/6/20
Y1 - 2006/6/20
N2 - Purpose - This paper offers a conceptualization of the internationalization decision confronted by a firm in an environment of terrorism-induced risk. Design/methodology/approach - The approach taken is a conceptualization of the internationalization decision framed from theoretical reasoning and informed by the literature. Findings - The model presents the internationalization decision, a product/market/mode (PMM) combination, in the case of a terrorism-free context and in a with-terrorism context. Using indifference curve mapping of risk/return tradeoffs, an opportunities set of possible PMM combinations and the notion of efficiency, it traces the most attractive opportunities set to show that within this set, the frontier of attractive opportunities is constrained in the with-terrorism case. Propositions are framed to guide future research. While conditions of risk can be calculated, it is concluded that remaining uncalculable is the true uncertainty incited by the systemic effects of international terrorism that call for managerial judgment. Originality/value - The literature in this field reports little on the effects of international terrorism on the firm. With heightened awareness of international terrorism, and the changed environment for the firm operating internationally, it is timely that the effects of terrorism on decision-making in firms be investigated. Advancing beyond description to substantive conceptualization of this decision is an essential step for better understanding of this now pervasive phenomenon.
AB - Purpose - This paper offers a conceptualization of the internationalization decision confronted by a firm in an environment of terrorism-induced risk. Design/methodology/approach - The approach taken is a conceptualization of the internationalization decision framed from theoretical reasoning and informed by the literature. Findings - The model presents the internationalization decision, a product/market/mode (PMM) combination, in the case of a terrorism-free context and in a with-terrorism context. Using indifference curve mapping of risk/return tradeoffs, an opportunities set of possible PMM combinations and the notion of efficiency, it traces the most attractive opportunities set to show that within this set, the frontier of attractive opportunities is constrained in the with-terrorism case. Propositions are framed to guide future research. While conditions of risk can be calculated, it is concluded that remaining uncalculable is the true uncertainty incited by the systemic effects of international terrorism that call for managerial judgment. Originality/value - The literature in this field reports little on the effects of international terrorism on the firm. With heightened awareness of international terrorism, and the changed environment for the firm operating internationally, it is timely that the effects of terrorism on decision-making in firms be investigated. Advancing beyond description to substantive conceptualization of this decision is an essential step for better understanding of this now pervasive phenomenon.
KW - Decision making
KW - Risk management
KW - Terrorism
KW - Uncertainty management
UR - http://www.scopus.com/inward/record.url?scp=33745095636&partnerID=8YFLogxK
U2 - 10.1108/00251740610673350
DO - 10.1108/00251740610673350
M3 - Article
AN - SCOPUS:33745095636
SN - 0025-1747
VL - 44
SP - 809
EP - 823
JO - Management Decision
JF - Management Decision
IS - 6
ER -