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Foreign operation methods and switching costs: conceptual issues and possible effects

Author

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  • Benito, Gabriel R. G.
  • Pedersen, Torben
  • Petersen, Bent

Abstract

Although the issue of switching costs does appear in some of the frameworks for choosing modes of foreign operation, the treatment of these costs is fairly cursory. In this article we propose a simple classification of switching costs which distinguishes between "take-down" costs and "set-up" costs. A distinction is also made between measurable and perceptual switching costs. The article outlines the assumptions regarding switching costs that are embedded in current theoretical approaches to the internationalization of firms, and discusses the possible effects of such costs on the choice and timing of foreign operation methods.

Suggested Citation

  • Benito, Gabriel R. G. & Pedersen, Torben & Petersen, Bent, 1999. "Foreign operation methods and switching costs: conceptual issues and possible effects," Scandinavian Journal of Management, Elsevier, vol. 15(2), pages 213-229, June.
    • Handle: RePEc:eee:scaman:v:15:y:1999:i:2:p:213-229
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    Citations

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    Cited by:

    1. Gabriel R.G. Benito & Torben Pedersen & Bent Petersen, 2005. "Export channel dynamics: an empirical investigation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 159-173.
    2. Jan Hendrik Fisch & Bjoern Schmeisser, 2020. "Phasing the operation mode of foreign subsidiaries: Reaping the benefits of multinationality through internal capital markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(8), pages 1223-1255, October.
    3. Petersen, Bent & Welch, Lawrence S., 2002. "Foreign operation mode combinations and internationalization," Journal of Business Research, Elsevier, vol. 55(2), pages 157-162, February.
    4. Bent Petersen & Lawrence S. Welch & Gabriel R. G. Benito, 2010. "Managing the Internalisation Process," Management International Review, Springer, vol. 50(2), pages 137-154, April.
    5. Petersen, Bent & Welch, Lawrence S., 1999. "Foreign Operation Mode Combinations and Internationalization," Working Papers 6-1999, Copenhagen Business School, Department of International Economics and Management.
    6. Krane, Ronja & Eulerich, Marc, 2020. "Going global: Factors influencing the internationalization of the internal audit function," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).
    7. Benito, Gabriel R.G. & Pedersen, Torben & Petersen, Bent, 1999. "Export Channel Dynamics: An Empirical Analysis of Changes in the Organization of Foreign Distribution," Working Papers 7-2000, Copenhagen Business School, Department of International Economics and Management.
    8. Irina Surdu & Kamel Mellahi & Keith Glaister, 2018. "Boomerang Multinationals? Strategic Flexibilities or Rigidities? A Perspective on Developed versus Emerging Market Re-entrants," John H Dunning Centre for International Business Discussion Papers jhd-dp2018-09, Henley Business School, University of Reading.
    9. Irina Surdu & Kamel Mellahi & Keith W Glaister, 2019. "Once bitten, not necessarily shy? Determinants of foreign market re-entry commitment strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(3), pages 393-422, April.
    10. Pedersen, T. & Petersen, B. & Benito, G. R. G., 2002. "Change of foreign operation method: impetus and switching costs," International Business Review, Elsevier, vol. 11(3), pages 325-345, June.
    11. Irina Surdu & Kamel Mellahi & Keith Glaister, 2017. "Once bitten, not necessarily shy? Organisational learning prior experience effects on foreign market re-entry commitment decisions," John H Dunning Centre for International Business Discussion Papers jhd-dp2017-04, Henley Business School, University of Reading.
    12. Jan Hendrik Fisch & Bjoern Schmeisser, 0. "Phasing the operation mode of foreign subsidiaries: Reaping the benefits of multinationality through internal capital markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-33.
    13. Asmussen, Christian G. & Benito, Gabriel R.G. & Petersen, Bent, 2009. "Organizing foreign market activities: From entry mode choice to configuration decisions," International Business Review, Elsevier, vol. 18(2), pages 145-155, April.
    14. Putzhammer, Moritz & Puck, Jonas & Lindner, Thomas, 2020. "Changes in foreign operation modes: A review and research agenda," International Business Review, Elsevier, vol. 29(1).
    15. Klaus E. Meyer & Modestas Gelbuda, 2006. "Process perspectives in international business research in CEE," Management International Review, Springer, vol. 46(2), pages 143-164, March.
    16. Edward A.N Dakora & André Slabbert, 2014. "Strategic Options for the Expansion of South African Retail Businesses within Africa: Consequences on Operational Management," Journal of Economics and Behavioral Studies, AMH International, vol. 6(3), pages 218-231.

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