Date of Award


Degree Type


Degree Name

Doctor of Philosophy


Modes are the institutional arrangements that allow firms to use their product(s) or services in a country change (Johanson and Wiedersheim-Paul, 1975). Mode forms include licence/franchise, indirect export, direct export, sales subsidiary, joint venture, and wholly owned production subsidiary. This dissertation focuses on three aspects of mode change and choice: (1) Change and choice. What causes firms to change their mode of operation? Why do firms choose a particular new mode? (2) Decision making. How do firms choose their mode? Does the decision-making process have performance implications? and (3) Attitudes. To what degree do management attitudes influence the decision to change the mode, the subsequent choice, and international performance?;These issues were investigated by studying 139 mode-change decisions in 38 Canadian-owned, Ontario-based firms with annual sales between {dollar}25 million and \{dollar}200 million at the time of the mode change. All mode change and choice involved activities in developed countries, and all occurred between 1980 and 1990. Interviews and an accompanying questionnaire were administered to executives significantly involved in the mode decision. Archival information on the firm and the mode change was also examined.;The results indicated that mode change and choice are complex, multifaceted phenomena generally requiring the presence of several precipitating factors. In interviews, most executives indicated that mode choice was largely determined by their view regarding potential sales volume in the foreign market, their belief that each mode could generate a certain sales volume, their beliefs regarding mode costs and the existence of such constraints as tight organizational resources. In most cases (82%), mode change was due to a change in one of these factors.;This dissertation also investigated how mode decisions are made. Most decisions (71%) relied to some extent on what executives termed "gut feel." In these cases, executives' attitudes were important determinants of the decision. For 32% of the decisions, however, "gut feel" was supplemented by some form of market investigation.;The effect of both the mode decision-making process and centricity on performance was examined.;A set of recommendations for management was provided. Firms were advised to take steps to develop more geocentric attitudes. It was also recommended that firms study the foreign market and consult individuals with product-market expertise when making mode-change and mode-choice decisions. (Abstract shortened by UMI.)



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