Predicting the Entry Mode Choices of the Non-profit Firms Using Eclectic Paradigm: A Proposition Development Study

Abstract

Non-profit sector which is neither state nor market has grown unprecedentedly during last few decades. Despite the growth, the internationalization of the Nonprofit sector has been relatively absent from mainstream management literature and remains as a significantly less understood sector. Therefore the objective of the study is to examine the factors which influence the entry mode choices in nonprofit internationalization process and develop propositions so that they can be tested by future studies, while keeping eclectic paradigm as the guiding theory. As far as the entry mode choices are concerned study developed four main propositions. First one proposes that irrespective of the size, NPOs prefer shared control modes as long as “natural partners” are available. Next the study proposes that experienced firm will be able to pick the right partner thus experienced firms will prefer shared control modes. Third proposition stated that when natural partners are available internationalizing NPOs will try to mitigate operational risks through a shared control mode. Finally the study looks at the influence coming from host governments, and proposes that as long as NPOs cannot find a “natural partner” they will prefer full control entry modes since it provides more autonomy for the NPO in its operations.