Revisiting the behavioral theory of the firm: toward a theory of forward-looking search in multinational enterprises

Purpose The behavioral theory of the firm (BTOF) traditionally posits that bounded rationality renders firm search behavior reactive and short-term oriented. However, recent research challenges this assumption by highlighting firms' increasing capabilities for proactive, long-term and forward-looking search. Despite these advances, a limited understanding exists regarding the conditions that enable firms to adopt such search strategies. Finding this gap relevant to the context of emerging economy multinational enterprises (EMNEs), this study aims to address this gap by developing a theoretical framework that explains why EMNEs are more likely than advanced economy multinational enterprises (AMNEs) to engage in proactive, long-term oriented, forward-looking search. Design/methodology/approach This conceptual article draws on the BTOF and the literature on EMNE ambidexterity to develop propositions regarding the search behavior of EMNEs and AMNEs. Findings We propose that EMNEs' firm-specific and country-specific disadvantages, combined with their imperative for sustained long-term growth and greater ambidexterity, drive their forward-looking search behavior. Building on this framework, we offer theoretical insights into the antecedents and consequences of forward-looking search for both EMNEs and AMNEs and outline key directions for future research. Practical implications This research relies on theoretical arguments without empirical validation, underscoring the need for qualitative, quantitative and cross-national studies. While we highlighted ambidexterity as the primary enabler of EMNEs' forward-looking search, future research should explore additional capabilities, mechanisms and contingencies. Our propositions centered on the broad contrasts between EMNEs and AMNEs; however, examining variations across specific types of these firms can further reveal the mechanisms and contingencies that shape the extent of their forward-looking search behavior. Originality/value This study is valuable in that it advances the BTOF by identifying EMNEs as firms that can deviate from the traditional view of short-term-oriented, uncertainty-avoiding behavior, engaging instead in long-term, forward-looking search. It also links EMNEs' ambidexterity, specifically their co-evolution and co-orientation capabilities, to forward-looking search and performance outcomes, addressing calls for greater clarity on the role of ambidexterity in EMNE behavior.