Configuration, Coordination, Learning And Foreign Market Entry: A Study Of Canadian Software Companies Entering The United States

This thesis examined strategic factors that affect the performance of Canadian software companies in the United States market. More specifically, this research tested a model suggesting that performance was significantly influenced by three variables. These variables were the interdependent nature of company working relationships, the configuration or entry strategy used for entry, and the learning of companies about the market over time.;The research was undertaken to identify practical applications that could help companies in the Canadian software industry improve their performance in the United States. This industry is a growth industry both in Canada and throughout the world. Practical applications stemming from the research could add to the international competitiveness of Canadian companies in the industry.;The research was also undertaken to test a research model developed from a synthesis of five theories related to foreign market entry. These theories were Porter\u27s (1990) theory of international configuration, Bartlett and Ghoshal\u27s (1989) theory of the transnational corporation, Tjosvold\u27s (1986) theory of goal interdependence, Johanson and Vahlne\u27s (1977) and Root\u27s (1987) theories of incremental foreign market entry, and Argyris and Schon\u27s (1987) theory of organizational learning. Hypotheses were developed from these theories about strategic factors that would affect entry performance. These hypotheses were tested in the thesis.;Following the development of the research model, a questionnaire was developed to measure the principal variables. The questionnaire was sent to the chief executive officers (CEOs) of the entire population of 176 larger Canadian software companies that do business in the United States.;Responses were received from seventy six companies. In addition, semi-structured follow up interviews were conducted with the CEOs of eight companies. These eight companies consisted of four pairs of higher and lower performing companies that had used four differing kinds of entry strategies.;The analysis provided support for the research model and for all hypotheses for which there was reliable data. Companies that hired Americans and linked their Canadian and American operations using cooperatively shared goals reinforced using control systems and interaction patterns had higher performance. Companies that used more mechanisms to acquire information about the United States, and perceived the United States as a less uncertain business environment had higher performance. Companies that established an international configuration of their product value chains also had higher performance. A product value chain is a set of activities that create value in products for customers, and these companies based some of these activities in Canada and some in the United States.;The product entry strategies used by companies seemed to evolve over time from a preference for export strategies to a preference for foreign direct investment (FDI) strategies. Products that used an FDI entry strategy had higher performance than products that used an export strategy.;Higher performing companies seemed to have had positive experiences in the United States and learned to value hiring American market experts and using cooperatively shared goals. Lower performing companies seemed to have had negative experiences and learned not to hire Americans or use cooperatively shared goals