Enrty Decisions of Multinational Banks (MNBs)

Abstract

After analyzing the reasons of foreign expansion for MNBs in Chapter 2, now, their decision-making process on entry strategies explained in this chapter as “phenomenon.” Foreign banks decide how to enter a distant market by considering many alternative strategies concerning their main motivation for foreign expansion, a further competitive advantage in the market, and host country conditions. However, the priorities of MNBs in the overseas market determine the entry mode. The needs to access local resources, especially soft information, and control desire over foreign entry are the main consideration points in the decision-making process of entry mode choices. In some situations, host countries may shape the decisions of foreign penetration throughout special implications such as providing incentives, requiring specific adjustments, or simply limiting activities by regulations. This chapter explains possible entry mode options for MNBs in the distant market with regard to the interests of both foreign banks and host countries. According to the priorities of foreign motives, MNBs can choose cross-border lending, greenfield investment, or acquisition as an entry mode. After examining the types of entry in altering conditions, effects of senior managers on decision-making process follow the pattern of internationalization for entry modes of MNBs. (In the following chapters, Table 5.3 shows to the pros and cons of distinctive entry strategies. It is located in Chapter 5 to evaluate managerial implications more deeply via summary of previous chapters.)