Customer Interaction Uncertainty, Knowledge, and Service Firm Internationalization

Uncertainty in production processes has proven to be a useful lens through which to explain the international entry mode choices of large manufacturing firms. This paper adapts that approach to suggest that service firms determine their internationalization mode based on the uncertainty arising from their interactions with customers. In our model, service firms counter customer interaction uncertainty by deploying knowledge in two primary forms: in processes and procedures or within workers themselves. We suggest that the location of this knowledge deployment impacts the choice of which mode firms will use when they deploy their services internationally. Also, befitting the greater alternatives available for conducting business internationally for service firms, we explore and model a wider range of modes than traditionally suggested by manufacturing-centric scholarship.