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Article
Publication date: 20 November 2007

Henrik Agndal and Sylvie Chetty

The purpose of this paper is to study how existing relationships influence changes in SMEs' internationalisation strategies in terms of markets and modes.

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Abstract

Purpose

The purpose of this paper is to study how existing relationships influence changes in SMEs' internationalisation strategies in terms of markets and modes.

Design/methodology/approach

This paper provides a detailed examination of the dynamics of 116 strategy changes, which are influenced by a firm's relationships in 20 New Zealand and Swedish internationalising SMEs. It uses the qualitative research method to develop theory. A conceptual model with eight categories relating to relationships and strategic change during the internationalisation process of the firm is developed.

Findings

Using the conceptual model as a framework to analyse the data, it was found that existing relationships play an important role in 59 market strategy changes and 57 mode strategy changes. The main findings are that business relationships are more influential in internationalisation strategy changes than social relationships, especially with regard to mode changes in foreign markets. Most mode changes are reactive. Market strategy changes, however, are evenly balanced between proactive and reactive changes. Overall, more changes can be attributed to direct relationship influences than indirect third party influences. The findings from this study are used to develop seven propositions.

Originality/value

The paper focuses on strategic change and highlights the importance of relationships, in particular their influence in market and mode changes.

Details

European Journal of Marketing, vol. 41 no. 11/12
Type: Research Article
ISSN: 0309-0566

Keywords

Book part
Publication date: 20 October 2011

Birger Maekelburger, Christian Schwens and Rüdiger Kabst

Purpose – The purpose of this chapter is to suggest a dynamic framework to investigate foreign market mode choices of small- and medium-sized enterprises (SME) over…

Abstract

Purpose – The purpose of this chapter is to suggest a dynamic framework to investigate foreign market mode choices of small- and medium-sized enterprises (SME) over time.

Design/methodology/approach – We introduce a dynamic economic perspective drawing on the behavioural Uppsala Internationalisation Model (UIM) and the economic Transaction Cost Economics (TCE) framework. Often stigmatised as being static, TCE can benefit from the dynamic nature of the UIM. The UIM framework, however, can benefit from the economic determinants of the TCE.

Findings – We test the framework and our hypotheses in a dataset of 206 internationally operating German SMEs with the two data points initial and subsequent mode choice in the same foreign market. Thereby we demonstrate the hypothesised shifting effects of asset specificity and learning on the chosen foreign market mode over time.

Originality/value: The contribution of this chapter is on the link between the UIM and TCE. Particularly for SMEs, dynamics are relevant due to limited international experience and the notion of efficiency is important due to resource constraints. The investigation along the two data points, initial mode and subsequent mode, provides new insights into the effects of asset specificity and learning over time.

Open Access
Article
Publication date: 11 July 2018

Sérgio Rezende, Kátia Galdino and Bruce Lamont

The purpose of this paper is to establish a conversation between international business and international entrepreneurship literatures by analyzing if and how international…

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Abstract

Purpose

The purpose of this paper is to establish a conversation between international business and international entrepreneurship literatures by analyzing if and how international opportunities are related to the internationalization process of the firm.

Design/methodology/approach

This paper reports finding from a backward-looking longitudinal, qualitative, embedded case study of an internationalized Brazilian firm, covering all 13 foreign markets where the firm has operated over 18 years.

Findings

Modal shifts within foreign markets were rare. Over time, the firm learned how to refine, rather than change, the servicing modes within each foreign market; it also learned how to better develop internal and exploitative opportunities, manage a portfolio of servicing modes across foreign markets, and use more complex mode servicing packages. Overall, international opportunities and the internationalization process of the firm were inextricably connected.

Research limitations/implications

The authors acknowledge limitations related to the statistical generalizability of the research method and suggest that statistical validation is needed as the research on opportunities and the internationalization process of the firm progresses.

Practical implications

Internationalizing firms should carefully consider the choice of entry mode in foreign markets. They should also understand that learning is not necessarily associated with change.

Originality/value

The authors show that the internationalization process of a traditional firm can be analyzed through an opportunity lens. This means associating characteristics of international opportunities with mode continuation and modal shifts in all foreign markets where the firm operates.

Details

RAUSP Management Journal, vol. 53 no. 3
Type: Research Article
ISSN: 2531-0488

Keywords

Book part
Publication date: 24 August 2011

Breda Kenny and John Fahy

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network…

Abstract

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

Details

Interfirm Networks: Theory, Strategy, and Behavior
Type: Book
ISBN: 978-1-78052-024-7

Keywords

Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…

86938

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

Article
Publication date: 7 September 2012

Edith Olejnik and Bernhard Swoboda

The purpose of this paper is to identify the internationalisation patterns of small‐ and medium‐sized enterprises (SMEs) quantitatively, to describe SMEs as they follow different…

12027

Abstract

Purpose

The purpose of this paper is to identify the internationalisation patterns of small‐ and medium‐sized enterprises (SMEs) quantitatively, to describe SMEs as they follow different patterns over time and to discuss the determinants of these patterns through empirical study.

Design/methodology/approach

The authors conducted a questionnaire survey among mature German SMEs (n=674). To identify internationalisation patterns, a latent class clustering approach was applied. Because of the large sample, a multinomial logistic regression analysis could be used to analyse the factors influencing these patterns.

Findings

The authors empirically find three internationalisation patterns: traditionals, born globals and born‐again globals. Comparing modern SMEs with the same SMEs from ten years ago, it was found that firms may change their patterns. Moreover, the patterns are determined by international orientation, growth orientation, communication capability, intelligence generation capability and marketing‐mix standardisation.

Research limitations/implications

Combining elements of the Uppsala model (countries and operation modes) and born global research (time lag and foreign sales ratio), three internationalisation patterns of established international SMEs from traditional sectors were identified empirically. Because of the multidimensional nature of internationalisation, the patterns may change over time. Different firm‐level factors determine the internationalisation patterns.

Originality/value

Instead of applying “arbitrary” thresholds, the paper provides a quantitative approach to identifying internationalisation patterns. These patterns confirm the three main internationalisation pathways discussed in the international marketing literature. The paper further advances the field by describing the patterns, showing evidence that the patterns may cross over time and providing information on the factors that influence the patterns.

Article
Publication date: 17 June 2009

Tao (Tony) Gao and Talin E. Sarraf

This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging markets

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Abstract

This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging markets. Favorable changes in the host government policies, market demand, firm strategy, and infrastructural conditions are hypothesized to influence the MNCs’ decision to increase resource commitments during a crisis. The hypotheses are tested with data collected in a survey of 82 MNCs during the recent Argentine financial crisis (late 2002). While all the above variables are considered by the respondents as generally important reasons for increasing resource commitments during a crisis, only favorable changes in government policies significantly influence MNCs’ decisions to change the level of resource commitments during the Argentine financial crisis. The research, managerial implications, and policy‐making implications are discussed.

Article
Publication date: 25 September 2019

Katia M. Galdino, Sérgio Fernando Loureiro Rezende and Bruce T. Lamont

By bringing together the IB and IE literatures, the purpose of this paper is to examine the internationalization process as an entrepreneurial process related to the development…

Abstract

Purpose

By bringing together the IB and IE literatures, the purpose of this paper is to examine the internationalization process as an entrepreneurial process related to the development of international opportunities. It explicitly connects different types of knowledge (i.e. market and internationalization), international opportunities and the internationalization process comprising both new foreign market entry and sequential moves that happen after entry.

Design/methodology/approach

This is a conceptual paper that reviews the literature on knowledge, opportunities and the internationalization process. Moreover, the paper identifies the current gaps in the literature and builds new theory that sheds light into how these three concepts are related. The paper also presents a model and propositions that should guide future research.

Findings

The proposed model shows that market and internationalization knowledge combine to form the international knowledge stockpile of the firm, which moderates the relationship between the development of international opportunities and the internationalization process, comprising not only new foreign market entry but also sequential moves that happen after entry using either mode continuation or modal shift. Moreover, it shows that the development of opportunities only leads to modal shifts after a certain threshold is achieved.

Research limitations/implications

The propositions suggest that market and internationalization knowledge are positively related to international opportunities, which, in turn, are related to foreign market entry and sequential moves using mode continuation. International opportunities, however, are related to modal shifts only beyond a threshold. Moreover, the international knowledge stockpile of the firm moderates the relationship between international opportunities and the internationalization process. Because this is a conceptual paper, the propositions have not been tested and, therefore, lack empirical validation. Nonetheless, the model is a starting point to new research on internationalization distinguishing different types of knowledge as well as different sequential moves.

Originality/value

This study shows that the internationalization process is contingent on the different types of knowledge associated with it. It also introduces the idea of a threshold that shapes the internationalization process. The bulk of the research on internationalization suggests that such a process is gradual and incremental. This study offers a non-linear alternative.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 25 no. 7
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 11 November 2010

Rolf Mirus and Bernard Yeung

We examine the mode of international expansion as an equilibrium governance contract between home country and host country factor owner. The focus is on agency costs, a form of…

Abstract

We examine the mode of international expansion as an equilibrium governance contract between home country and host country factor owner. The focus is on agency costs, a form of transactions costs. Two phenomena are shown to be related to the agency costs imposed by factor owners: (i) the choice of different modes of international expansion by one firm in different locations, and (ii) the simultaneous occurrence of several forms of foreign involvement in the same location. We attempt to characterize the dynamic relationship between the mode of an offshore operation and changes in factor market conditions that affect agency costs.

Details

Multinational Business Review, vol. 18 no. 4
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 1 June 1991

Abbass F. Alkhafaji

The study of international business has become increasinglyimportant in recent years. So important that the American Assembly ofthe Collegiate Schools of Business (AACSB) has…

3910

Abstract

The study of international business has become increasingly important in recent years. So important that the American Assembly of the Collegiate Schools of Business (AACSB) has called for the internationalisation of business curricula. In 1992 and beyond, successful business people will treat the entire world as their domain. No one country can operate in an economic vacuum. Any economic measures taken by one country can affect the global economy. This book is designed to challenge the reader to develop a global perspective of international business. Globalisation is by no means a new concept, but there are many new factors that have contributed to its recently accelerated growth. Among them, the new technologies in communication and transport that have resulted in major expansions of international trade and investment. In the future, the world market will become predominant. There are bound to be big changes in the world economy. For instance the changes in Eastern Europe and the European Community during the 1990s. With a strong knowledge base in international business, future managers will be better prepared for the new world market. This book introduces its readers to the exciting and rewarding field of international management and international corporations. It is written in contemporary, easy‐to‐understand language, avoiding abstract terminology; and is organised into five sections, each of which includes a number of chapters that cover a subject involving activities that cross national boundaries.

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