[EMBARGOED] Fear of failure in the context of making internationalisation decision of a firm

The thesis addresses the broad research problem exploring fear of failure as experienced by small-and medium-sized enterprise (SME) owners in the context of their making decisions about internationalising their ventures. The success of SME internationalisation pursuits is associated with the decision maker’s capacity to appropriately evaluate and to make relevant decisions in the context of the risk, uncertainty and complexity of the international business environment. The possibility of failure, in particular, contributes to the difficulty of decision-making, with failure in international markets a widespread phenomenon. Fear of failure is well researched in Psychology and is studied extensively in Entrepreneurship research; however, these findings cannot be simply extended into new contexts including international business settings, because individuals may generate unique feelings, thinking and behavioural responses when moving into a new environment. A number of empirical studies indicate the effect of emotions on internationalisation decisions, including direct foreign investment and the impact of fear of failure on the exporting behaviour of SMEs. Although fear of failure is recognised as being real and a contributor toward other behaviours, SME owners’ emotions, cognition and behavioural responses are unclear when experiencing fear of failure in the context of making internationalisation decisions. The thesis advances the field of international business by providing insights into the relevance and complexity of the fear of failure in the process of SME internationalisation. The research builds upon existing theory and extends the conversation about “connecting people with internationalisation”, exploring the micro- level characteristics and actions of the individual driving firm-level internationalisation outcomes. The thesis explores the scholarly conversation between ‘emotion and internationalisation’ by leveraging insights from Psychology and Entrepreneurship in order to better understand the fear of failure experiences of individuals and by identifying ways in which they respond differently. Such in-depth understanding cannot be achieved if this complex phenomenon is explored within the process of internationalisation alone. The contexts for making internationalisation decisions provide greater insights as a conduit for in-depth exploration of the fear of failure experience and its dynamic and complex nature. This is because new market entry decisions are often made in unfamiliar, foreign business environments underpinned by risk and uncertainty. They provide environmental stimuli to trigger cognitive re-appraisals and to impact the SME owners’ perceptions relating to venture growth potential and/or potential threats to venture survival. This empirical investigation answers two research questions: (1) How do SME owners experience emotional and cognitive aspects of fear of failure in the context of making internationalisation decisions for their firms? (2) How do SME owners learn when experiencing fear of failure in the context of making internationalisation decisions for their firms? Due to the exploratory nature of these research questions, this study applies a qualitative methodology and employs interpretive phenomenological analysis of data collected via semi-structured interviews with 18 owners of SME-exporters from China. The research is conducted in China due to its contextual uniqueness, including its export- led SME growth associated with international networks, as well as the socially deep- rooted culture of fear losing ‘face’. The research findings conclude with a greater understanding of the dynamism of fear of failure as experienced by SME owners in the context of making internationalisation decisions. These findings focus on the interaction between emotional expression of fear of failure and cognitive assessment of sources of fear of failure: fear of failing to manage risk and uncertainty, as well as fear of the consequences of failing to enter an international market. Furthermore, fear of failure triggers individuals to learn as a behavioural response. In turn, this learning contributes to pacifying the fear of failure emotions, and further activating hope of success as indicating emotional change, as well as enhancing knowledge development of risk and uncertainty management strategies to gain clarity of thinking as part of cognitive change. As such, the research findings contribute to entailing emotion, cognition and behaviour response when experiencing the fear of failure in the context of making internationalisation decisions. The thesis contributes to International Business literature by centralising the role of the individual decision-maker in the IP model and extending it from the fear of failure perspective. Research contributions are made at both theoretical and applied levels with results that are relevant for SME owners. Furthermore, implications for designing internationalisation education and training programs are offered, so contributing to proactive strategies formulated to deal with fear of failure.Thesis (Ph.D.) -- University of Adelaide, Adelaide Business School, 201