Selection of foreign market entry mode by knowledge-intensivesoft-service companies : a case study of the staffing andrecruitment industry in Norway and Sweden.

Abstract: Due to the decreasing trade barriers the internationalization of companiestoday becomes more common, especially among service companies. In the area of services, it can be found that there are soft and hard services, andknowledge-intensive and not-knowledge-intensive services. This study isfocusing on the internationalization process in knowledge-intensivesoft-service companies. According to previous studies there is a lack ofresearch on this part of the service industry concerning the foreign marketentry mode decision and the factors influencing the choice of foreign marketentry mode.When entering a foreign market there are several different factorsinfluencing the choice of entry mode. The purpose of this study is to provide a better understanding of which entry modes are used byknowledge-intensive soft-service companies and what the entry mode decisionis based on. In this study two research questions were designed to reach theresearch purpose. Based on the research questions a frame of reference wascreated, this was the base for the layout of the data collection. Theresearch approach in this study is qualitative.The companies selected for this study are four staffing and recruitmentcompanies, two from Norway and two from Sweden. The study shows and explainswhich entry modes these four companies adopt and what factors are influencing their choice of foreign market entry mode. The collected datafrom the four companies is presented, discussed and analyzed firstcase-by-case and then by a cross-case comparison, which then leads to thefindings and conclusions of the study.The study gives a deeper insight into which entry modes that are used byknowledge-intensive soft-service companies and which factors that affect thedecision of entry mode. All the companies in this study consider wholly owned subsidiaries to be the default entry mode and consider only whollyowned subsidiary or franchising as feasible entry modes. The factor thatappears most important for staffing and recruitment companies in the choiceof entry mode is the organizational culture, which is a result of the natureof the product. The organizational culture also affects the other factorsinfluencing the choice of entry mode, such as the reputation and the need for control.