Selection of entry modes to a specific location using AHP group decision

Authors: Ching-Sung Wu; Su-Chuan Shih;

Journal: Chia Da Management Review. Jun. 2007, 27(1): 195-219.

Keywords: Entry Mode Selection; Group Decision-Making; Analytic Hierarchy Process AHP

Abstract:
We propose an entry modes selection process for an enterprise to invest in a specific foreign nation. We illustrate the process by the case of a notebook computer company in Taiwan considers to enter Vietnam market. We established an Analytic Hierarchy Process (AHP) decision tree that base upon the main theories in International Business Management: Transaction Cost Economics and Institutional Approach. The participative selection process is particular designed to have a consensus entry mode by the group of stakeholders such as shareholders, managers, and employees. This group decision empowers employees and shareholders to become active participants in shaping the environmental context of their company. This process also enables shareholders and employees to recognize the significance of their mutually dependent relationships and to value the perspectives of others involved in the foreign subsidiaries.