International market selection for small firms: a fuzzy-based decision process

Abstract

Purpose – This study aims to build and test an International Market Selection (IMS) decision process method that is able to capture, within a small firm’s risk-averse setting, the entrepreneur's experience, reduce cognitive biases, and preserve the flexibility of the decision, by combining the advantages of systematic and behavioural-based international market selection approaches. Design/methodology/approach – The unit of analysis is the IMS decision process of a small firm venturing abroad. We adopt a ranking approach based on three-step screening. We assess the markets through a multi-criteria approach with a wider set of variables aggregated within a tree-shaped model. To obtain the ranking, we use a Fuzzy Expert System (FES) as an evaluative tool. Findings – The results show that the proposed decision method is consistent with the entrepreneur’s strategic orientation and experience, while preserving the flexibility requested for decision-making in small firms. Unlike traditional behavioural IMS approaches, the method demonstrates an ability to reduce the cognitive biases associated with the use of a limited set of variables and unreliable evaluation models. Research limitations/implications – The single-case-study approach limits generalization of the findings. Practical implications – The proposed methodology helps the decision-maker to improve the quality of the IMS decision by reducing the effect of cognitive biases that usually affect traditional behavioural models. Originality/value – For the first time, a decision-process methodology based on an FES is applied to a small firm’s IMS problem.