Looking back to move Forward

Abstract

By now, it is known that multinational enterprises (MNEs) make important decisions associated with entering international markets for the first time, dealing with competitors in their host markets via their international subsidiaries, exploiting firm-specific resources while acquiring new ones in order to organize their global value chains most effectively. However, firms also divest their operations and exit foreign market operations. The stigma associated with divesting from international markets previously entered may cause managerial decision makers to become more risk-averse, or to be removed from their current positions and replaced with other, more internationally experienced managers. The chapter discusses the antecedents and outcomes associated with the decision to divest international operations. It is proposed that a more comprehensive understanding of the divestment process can be achieved by understanding organizational and individual behavior through the lens of attribution theory.