International market selection for small firms: a fuzzy-based decision process

By combining the advantages of systematic and behavioural-based international market selection approaches, we build and test an International Market Selection (IMS) decision process method that is able to capture, within a small firm’s risk-averse setting, the entrepreneur’s experience, reduce cognitive biases, and preserve the flexibility of the decision. The unit of analysis is the IMS decision process of a small firm venturing abroad. We adopt a ranking approach based on three-step screening. We assess the markets through a multi-criteria approach with a wider set of variables aggregated within a tree-shaped model. To obtain the ranking we use a Fuzzy Expert System (FES) as an evaluative tool. The results show that the proposed decision method is consistent with the entrepreneur’s strategic orientation and experience, while preserving the flexibility requested for decision making in small firms. Unlike traditional behavioural IMS approaches, the method demonstrates an ability to reduce the cognitive biases associated with the use of a limited set of variables and unreliable evaluation models. The single-case-study approach limits generalization of the findings. The proposed methodology helps the decision maker to improve the quality of the IMS decision by reducing the effect of cognitive biases that usually affect traditional behavioural models. For the first time, a decision-process methodology based on an FES is applied to a small firm’s IMS problem.