eThesis - School of Business electronic theses

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ABSTRACT

Foreign operation modes and their use are of crucial importance to any company that operates in an international environment. The previous research on foreign operation modes has tended to view these modes from a rather simple, static perspective, which, arguably, does not necessarily reflect the reality of foreign operation mode use in many international companies.

To better capture the nuances of the foreign operation mode use in contemporary international business environment, the newest research regarding foreign operation modes was reviewed in this study. It was seen that the new thinking of foreign operation modes significantly challenges the previous thinking on this field.

This study offered further research on foreign operation mode topics that have been somewhat neglected in the previous research. This research provided further evidence of mode switching that has not been covered extensively in the literature previously. This study also shed some more light on mode stretching and mode combinations, which are topics that are quite novel in the field of foreign operation modes. This research did one’s bit in offering further research that has been called for by different scholars of foreign operation modes.

To shed some more light on the more novel approaches to foreign operation modes, this study analyzed empirically the foreign operation mode strategies of a selected group of Finnish firms in South Korea. A special emphasis in this analysis was placed on mode switching, mode stretching and mode combination strategies. The analysis was guided by a theoretical framework that was developed in the theoretical part of this study.

In the empirical analysis of the foreign operation mode strategies of a selected group of Finnish firms in South Korea, inter-mode switches turned out to be quite common. The inter-mode switches were mainly triggered by changes in the external environment of the studied case companies. Some evidence on mode combinations was received, although mode combinations did not turn out to be common among the case firms studied. Mode stretching was not common, either and intra-mode switches were very uncommon. The firms that did not change their foreign operation mode strategies mainly had their reasons in switching barriers and mode myopia.

The paper was finalized with the discussion of recommendations for future research. Clearly, more research is needed on these rather underresearched aspects of foreign operation modes and their use.