- Elgar original reference
Edited by Subhash C. Jain
Pieter Pauwels and Paul Matthyssens This study focuses on the decision-making process of international market withdrawal within the scope of international market portfolio management. A comparative study of eight withdrawal cases in four multinational ﬁrms results in a six-phased decision-making model that is driven by threatrigidity behavior, failure-induced learning and political dynamics. Two types of international market withdrawal are identiﬁed. On the one hand, a tactical withdrawal is the outcome of threat-rigidity and exploitative learning at the level of executive management. A strategic withdrawal, on the other hand, is characterized by a process of failure-induced exploratory learning initiated by middle-level challengers. In contrast to a tactical withdrawal, which remains an isolated decision and does not interfere with other international ventures of the business unit, a strategic withdrawal turns out to be a germ of strategic (re)orientation of the business unit’s entire international market portfolio. Whether a market withdrawal turns out to be tactical or strategic ultimately depends on the autonomy, the amount and the relevance of challengers’ market and business knowledge. INTRODUCTION A multinational ﬁrm regularly optimizes its international market portfolio through expansions, extensions and retractions. Given limited resources, changing market opportunities may require resetting priorities in the current portfolio, including the withdrawal of less promising ventures. However, market interconnectedness and other exit barriers may turn this exercise into a complex decision (Douglas and Craig 1995, 1996). This study focuses on international market withdrawal as a strategic instrument within the logic of international market portfolio management. International market...
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