Proceedings of 28th International Business Research Conference

Proceedings of 28th International Business Research Conference
8 - 9 September 2014, Novotel Barcelona City Hotel, Barcelona, Spain, ISBN: 978-1-922069-60-3
International Market Selection of Non Profit Firms: A
Proposition Development Study
Buddhika SA
Nonprofit sector has grown tremendously both in terms of size as well as in
importance during the last few decades. Compared with other sectors most of the
non-profit organizations have involvements across borders, making non-profit
sector a key player in the global arena. Despite the growth and the importance of
the sector as an international actor, there has been very limited knowledge on the
internationalization of the nonprofit sector, even though internationalization of
organizations in general is one of the most researched topics in international
management literature. Nonprofit sector compared with the mainstream profit
sector has its unique characteristics in terms of objectives, financing and planning,
thus facing unique set of challenges, compared with their for-profit counterparts.
As a result of these factors, the internationalization of the nonprofit organizations
remains relatively poorly understood area and provides significant potential for
future research. The main objective of this paper is to use main stream
management related theory to compare and contrast nonprofits with for-profits,
and argue that the different factors have different influence to these two sectors.
The study used one key element of the internationalization process of an
organization, i.e. international market selection, and develop propositions arguing
that nonprofits and for-profits selects markets differently. International market
selection decision of the organization was selected, because many argue that, it is
the most influential decision of the internationalization process. Microfinance
industry was used as the context to develop these propositions. As a result of the
unique characteristics of the nonprofit organizations, the study argues that
nonprofit microfinance organizations operate in countries characterized by lower
levels of development compared with their for-profit counterparts, operate in
countries with weaker institutions compared with their for-profit counterparts and
non-profit microfinance organizations operates in countries with higher risk profiles
compared with their for-profit counterparts. While providing initial propositions
which can be further tested using empirical data, the study highlights the
importance of conducting more research in the area.
Key words: Nonprofit, Microfinance, International Market Selection.
Field of the research: Marketing
PhD Research Fellow, School of Business and Law, University of Agder, Norway,
Email: [email protected], [email protected]
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