Moderating effect of uncertainty on the relationship between effectuation and internationalisation speed: a study on small and medium software firms of Bangladesh

Abstract

The internationalisation process of an entrepreneurial firm is determined by the factors relevant to the entrepreneur's internal decision-making dynamic as well as by external environment-specific factors. International entrepreneurs' selection of effectuation decision-making logic may impact the speed at which he makes foreign market entry outside the domestic market. Moreover, the uncertainty in the environment causes entrepreneurs to adopt effectuation logic. This paper examines the relationship between the adoption of effectuation decision-making logic and the resultant speed of internationalisation. It also investigates uncertainty as a moderating variable to see its impact on the relationship between effectuation and internationalisation speed. This study tested two hypotheses by taking a sample of 150 Bangladeshi small and medium-sized software firms. Data were collected using a structured questionnaire and PLS-SEM was used in order to test the hypotheses. The results of the study support the proposition that effectuation decision-making logic results in quick international market entry for the firms. The findings of the study also suggest that uncertainty has a moderating impact on the relationship between effectuation and internationalisation speed.