An organismic approach to multinational enterprise failure

Abstract

PurposeThe purpose of this paper is to answer why some multinational enterprises (MNEs) fail within the international business (IB) domain.Design/methodology/approachConceptually, the study takes an organismic approach to MNE failure. Methodologically, it adopts an elite interview approach derived from the Delphi technique. Respondents are 39 IB and strategic management academics.FindingsThe paper finds that MNE failure is rooted in strategic leadership and capabilities (i.e. internal deterioration of organizational resources and strategies) and institutional pressures and differences, and these factors lead to deterioration of institutional legitimacy for an MNE.Originality/valueThe paper conducts a review of the firm failure and foreign divestment literature and undertakes an organismic approach to the analysis of MNE failure in the IB context. The paper provides useful insights on developing and implementing both market and non-market strategies for overcoming MNE internationalization failure.