Affordable Loss in Entrepreneurial Internationalisation: A Focus on Finnish Biotechnology Firms

This paper develops the concept of affordable loss in the context of decision-making in entrepreneurial internationalisation and offers both an in-depth conceptual analysis and practical application in the biotechnology sector. Based on our findings, affordable loss seems to be connected to short-term, operative decisions, but is less applicable for long-term, strategic decisions. Furthermore, the use of the affordable loss principle appears to be more common in decisions involving a single decision-maker than in shared decision-making. However, we also challenge the premise of effectuation theory, as affordable loss and expected reward do not seem to present alternative elements when viewing decision-making in the context of entrepreneurial internationalisation. Instead, they are used in parallel, indicating that making a single decision may include the use of both causation and effectuation-based logic.