A Theoretical Framework for Foreign Divestment Decision: Emerging Markets

Abstract

The decision making process and execution of foreign divestment has been an increasing phenomenon which has been noted by researchers over the years as a very terrifying decision, however, a holistic framework has yet to be developed to address this issue. The theory of Bounded rationality and real option theory have been independently analyzed and used to explain the decision to divest. We examine the usage of both theories in unison to determine divestment decision and propose a theoretical framework. In this paper the author seeks to give insight based on organization theories which can be used a basis to build a model of FD.