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This paper aims to focus on understanding three dimensions of international alliance formation by small to medium‐sized enterprises (SMEs): the role of internal actors…
This paper aims to focus on understanding three dimensions of international alliance formation by small to medium‐sized enterprises (SMEs): the role of internal actors, planning/opportunity management, and organizational learning.
The three dimensions form a proposed model of international alliance formation which is examined using semi‐structured interviews with 16 biotechnology SMEs from Montreal (Canada) and 12 from Boston (USA).
Findings deepen the understanding of the firm's internal development of international alliance strategy. Results generally support different roles of organizational actors in international alliance formation, often a combination of planning and opportunity management, and signal rather weak administrative routines to ensure organizational learning from the alliance experience. Interestingly, alliance formation strategies vary across the two cities (countries). Age of the firm, development phase, human and financial resources, and competencies may explain these differences.
Limitations include a single respondent in each firm, sample size, and single sector (biotechnology). Future longitudinal research could combine information from and about the implication of all actors and their networks during alliance formation and examine the process by alliance functions (R&D, production, marketing) and governance modes (equity, non‐equity).
Results suggest weaknesses and potential avenues to be explored by managers.
To the authors' knowledge, this is a first attempt to model the internal dimensions of alliance strategy formation for SMEs, integrating the role of actors, planning and opportunity, as well as learning. Multiple quotations provide a rich environment for understanding practice.
Over the last 10 years, small- and medium-sized enterprises (SMEs) in developed countries have faced increasingly stiff competition in their local markets, which has put…
Over the last 10 years, small- and medium-sized enterprises (SMEs) in developed countries have faced increasingly stiff competition in their local markets, which has put the survival of many of them at risk. To reduce their vulnerability, many SMEs have targeted sales to other countries. Recently, however, the pace and intensity of these firms’ export activities appear to have decreased, as their traditional markets (i.e., the United States and Europe) have been experiencing slow growth. This situation has led some SMEs to explore the possibility of exporting to less traditional countries presenting more opportunities. However, a good number of entrepreneurs remain hesitant to go down this road, in particular given the uncertainty that prevails in those regions and the risks they represent in terms of exports. This study, which was conducted with a sample of 582 Canadian manufacturing SMEs, reveals that two characteristics help explain the fact that some SMEs choose to export to higher risk countries, more specifically to Asia. These characteristics are a positive attitude towards risk-taking among managers and the implementation of certain risk management mechanisms.