Information Security Compliances and Knowledge Management Capabilities in International Diversification

Information security compliance has become one of the top priorities for firms to remain competitive in this era. It is even more challenging to comply with foreign standards and laws, when a firm aims to internationalize its operations and remain competitive. This paper discusses the role of information security compliances in international diversification phenomena. Specifically, drawing from the organizational information processing theory, this paper proposes that the fit between knowledge management capabilities of a firm and the requirements of information security compliances influences the degree of international diversification of the firm. Unlike much of prior academic literature focusing on American firms, this paper discusses how certain American security compliances possess challenges for foreign firms to diversify their businesses in the US. Both implications and limitations are then discussed.