De-internationalisation of South African emerging firms : influence of inadequate knowledge

Abstract

De-internationalisation, defined as the reduction of international business operations in part or in full, has been theoretically acknowledged for more than a decade as a critical component of the complexities of firm internationalisation. The study explores how a firm's failure to adequately understand and adapt to the risk environment could result in the firm's de-internationalisation. Furthermore, the study explores the influence of market research and proximity on the accumulation of knowledge. Qualitative research was undertaken using semi-structured face-to-face interviews with senior managers of emerging multinational firms in South Africa. The study found that the Internationalisation of a business requires access to and growth in knowledge, with performance dependent on both changes in the risk environment and managerial adaptability. Knowledge required essentially may include varying market dynamics and customer needs, competition, and cultural differences. A lack of these could influence the decision to de-internationalise foreign business operations. Even though there is no such thing as complete knowledge, market research and proximity have been found to influence the accumulation of knowledge. However, the extent to which proximity influences knowledge accumulation is still debatable.