Analysing the decision approach of the SME entrepreneurs relating to internationalisation of firms: the study of Kenyan SME entrepreneurs

Abstract

Purpose The purpose of this study is to analyse the internationalisation decision-making process using causation and effectuation. Design/methodology/approach The proposed hypotheses are tested with a survey data set of 148 Kenyan small and medium-sized enterprises (SMEs) to assess the pre-internationalisation decision-making of the firm. Multinomial logistic regression has been used to predict the categories from total effectuation to total causation. Findings The results of this study show that firm resources and capability provide a solid basis for firms' internationalisation. The entrepreneur becomes more effectual commence as they assess the firm's resource and capability. Entrepreneurs with a high entrepreneurial self-efficacy use both causation and effectuation with a bias towards effectuation. Increasing environmental predictability led the firms to use less effectuation, and increasing psychic distance entails high effectuation relative to high causation in the Kenyan context. Research limitations/implications The sample choice of the category is Kenyan SMEs which may raise some questions. This study assumed that SMEs sampled had the same level of internationalisation experience regardless of the number of years in business. Originality/value This study theoretically advances the field of international business by combining the Uppsala internationalisation model with effectuation; this study defines four antecedents of decision-making to form its conceptual framework to study internationalisation decision-making approach for SMEs using the effectuation logic and adds to the stream of literature that has reviewed the factors that influence the internationalisation decision-making process for SMEs in developing countries.