The suitability of different foreign entry modes to different environmental situations are examined based on managers’ perceptions about 124 strategic retail banking entries. The choices of acquisition, start-up or joint venture (whether start-up or minority holding) are compared against managers’ motives for control and access to foreign resources and their willingness trade these two off against each other. Complicating the mix are constraints in the form of local regulations (which may differ in developing and developed countries), home/host country market differences and the entry bank’s size – although this last appears to have little influence.

Generally, managers rated the desire for control higher than their need for local resources, and both higher than host/home country differences: so in the absence of entry constraints, acquisitions or start-ups are preferred, unless local resource requirements are extremely pressing. But where constraints exist, joint ventures can allow banks to bypass learning requirements, and also act as precursors to acquisitions.

However, regulations or lack of available targets may make acquisitions impossible and start-ups demand the swift build up of local resources. But joint ventures have their own problems – of successfully protecting parent company interests, raising equity holdings to majority levels, and negotiating with host-country governments. Against these rational considerations, the author notes the inappropriateness of  entry mode choices made according to managers’ personal (financial or reputational) motives, or which simply replicate past choices.

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