Emerging market entry strategy and decision-making : the influence of tacit knowledge and explicit knowledge

Abstract

This research posits that tacit knowledge, explicit knowledge and hubris influence the decision-making process of managers when deciding to enter an emerging market. The literature on emergent market strategy and the decision-making process is abundant but tends to focus on the extant explicit information available. However, the prevalence of literature on the influence of tacit knowledge or experience needs to be further developed. Given the focus on Africa as an area for economic development and the complexity that comes with doing business in Africa, this study seeks to explore what homage is given to tacit knowledge and experience by strategy makers during the process of strategy development, how this knowledge is harboured and developed. The study also seeks to explore the transferability of the knowledge between countries, and if this knowledge can become an inhibitor in developing strategy. A review of the relevant literature is undertaken and a model is developed to map out this decision-making process. A qualitative tool is developed and eight interviews with managers responsible for emergent market strategy development are held to obtain an understanding of how tacit knowledge and explicit knowledge feature on the decision-making process. Key learnings from the study includes a disparity between literature on the importance of tacit knowledge and the growing tendency to formalise the country entry process; the prevalence of heuristics and hubris in the decision-making process, and absence of a review process to validate strategies and decision making.