Changes in foreign operation modes: Stimuli for increases versus reductions

This article explores the reasons leading executives to change foreign operation modes by contrasting mode increases and reductions. Our study is grounded on stimuli identified through in-depth interviews by a former IBR study which we employ through two different measures in the course of analyzing data from 265 German firms on 320 mode changes. The results show that executives recognize a wide range of reasons for mode change, but the importance and magnitude of those stimuli differ for mode increases and reductions. While performance and external environment increase the likelihood of mode reductions, internal environment and managerial attitudes induce mode increases. Moreover, stimuli for incremental and radical mode changes differ as well.

Research Highlights
► We examine reasons for foreign operation mode change as perceived by executives.
► Our measures of the reasons for mode change are grounded on a former IBR study.
► Performance and external environment increase the likelihood of mode reductions.
► Internal environment and managerial attitudes increase the likelihood of mode increases.