Mutual commitment and experiential knowledge in mature international business relationship

This paper examines how market knowledge and market commitment are developed in mature supplier/customer relationships in international markets. It reports the empirical testing of a model of increasing commitment and experiential knowledge development in international business relationships. The assumption is that the connected relationships in a business network are the basis for forming a relationship and it will influence how the focal relationship develops. The model shows the process when a supplier increases his or her knowledge of the business network that a foreign customer is embedded in and what happens as their relationship with the customer becomes mature, stable and profitable. In this situation the firm does not invest as much as it did early on in the relationship but diverts its attention to firms that are more embedded in the local business network context. The model thus explicates a process of transition as a firm moves from one mature relationship to create new relationships as it increases its foreign market involvement.     

The role of social networks and institutions in the internationalization of Russian entrepreneurial firms: Do they matter?

Drawing upon network theory and institutional theory, this paper examines the influence of networks on the internationalization of Russian entrepreneurial firms. Our case analysis suggests that within the context of the Russian environment, networks play a much less important role in the internationalization process than it is usually assumed in the literature. For the Russian entrepreneurial firms examined in our study, the most important factor in their internationalization was their engagement in honest business practices that established trust and commitment in their relationships with international business partners. This study underscores the importance of the institutional context of an entrepreneurial firm’s country.     

International network extension processes to institutionally different markets: Entry nodes and processes of exporting SMEs

This article is about how SMEs reduce their liability of network outsidership in the process of establishing a network insider position in foreign business networks. By examining how SMEs establish insidership positions in institutionally different business networks, the authors contributes to the network approach to firm internationalization. From a detailed longitudinal and retrospective case study of four SMEs from mature market entering emerging country markets and four SMEs from such immature markets entering mature markets, the authors develop propositions based on intra-group and inter-group analysis. The propositions concern the parties to which the exporter initiates and develops relationships when plugging into the foreign network (the entry node), and how the firm reaches an insider position in this network (the entry process). Three distinct network types are identified along this entry process: the exposure network, the formation network and the sustenance network.     

Internationalization of Korean banks during crises: The network view of learning and commitment

This study addresses the effect of crisis on bank internationalization from the perspective of network theory. Employing the internationalization process (IP) model, we particularly examine the role of learning and commitment in overseas expansion for banking services under stable and critical periods. Following the IP model and business network approach, the study develops a theoretical view for analysis of international banks from South Korea. South Korean banks are selected as they experienced two global crises, one in 1998 and the other in 2008. Findings show that while the first crisis in 1998 stopped internationalization, the 2008 crisis stimulated firms to find new markets, especially in developing countries. Different from the studies showing that commitment increases in stable periods and decreases in crisis, this study contributes to the finding that experiencing earlier crises enhances learning and increases commitment needed for expansion and strengthening of the business network.     

Experiential knowledge antecedents of the SME network node configuration in emerging market business networks

This paper aims to determine experiential knowledge antecedents of the network node configuration (i.e., dyad or triad) of SMEs entering emerging market business networks. Three kinds of knowledge of different degrees of specificity are assessed, namely, general internationalization, market-specific, and customer-specific knowledge. The sample consists of 203 SMEs in southern Sweden with experience of entering the Baltic State, Polish, Russian, or Chinese markets. The theoretical framework integrates network theory and internationalization process theory in order to understand and explain the internationalization of smaller firms. The hypotheses formulated are tested using logistic regression, which indicates that market- and customer-specific types of knowledge favor a dyadic network node configuration into the emerging market business network, while general internationalization knowledge has no significant effect. In addition, interaction effects were seen to moderate relationships between knowledge antecedents and the network node configuration of the sampled SMEs.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.     

Small firm internationalization through experiential learning: The moderating role of socialization tactics

The importance of experiential knowledge for small firm internationalization has been emphasized in the process model of internationalization, the international new venture or born-global frameworks and the management characteristics perspective in the exporting literature. However, none examines in detail under what conditions experiential learning is more important for internationalization. We borrow insights from the socialization tactics literature to theorize how the context, content and social aspects of a foreign sojourn offer different opportunities for the acquisition of experiential knowledge to support the internationalization of small firms. We suggest that socialization tactics moderate the relationship between individual international experiential knowledge and small firm internationalization. We propose that the opportunities for international experiential learning are superior when the socialization context is individual and formal (rather than collective and non-formal), the socialization content is sequential and fixed (rather than random and variable) and when socialization involves serial and investiture (rather than disjunctive and divestiture) social aspects.     

Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India

Small- and medium-sized enterprises (SMEs) make sizeable contributions to the economic success of nations. Research concerning the internationalization of SMEs is available in the context of developed economies but less is can be found dealing specifically with the entrepreneurial behavior and international expansion of SMEs in emerging markets such as India. This research extends the literature addressing the relationships surrounding the internationalization of SMEs in India as related to entrepreneurial behavior, firm resources, and commitment to internationalization. Entrepreneurial orientation, a commitment to internationalization, and the ability to leverage human capital influence the international success of Indian SMEs, based on the analysis of data collected from 150 Indian SMEs.     

Internetization as the necessary condition for internationalization in the newly emerging economy

The internationalization of entrepreneurship is becoming increasingly facilitated through the use of the internet. This article introduces the term “internetization” to refer to the process of increasing adoption, diffusion, and deployment of internet-based technologies and processes that increasingly serve as the back bone of internationalization, especially in the innovative entrepreneurial firms. This process may be compared to the firm’s adoption and use of the internet and the internet-based processes in transforming the firm to a hybrid network internally and externally within the firm’s home and international markets, especially when the members of its external network have already internationalized. Internationalization of the firm, which has been much studied in the international business literature may provide a parallel analogy for study of internetization. Based on these analogies and within the context of previous literature in internationalization, a brief examination of a typical rapidly-internationalizing firm through the use of the Internet, and the user-generated provisions of Web 2.0 in particular, points to the impact of internetization on internationalization. Various theoretical and research issues are highlighted and discussed, including the important interactions that exist between the processes of internetization and internationalization. Conclusion suggests that internetization may have become the necessary condition for internationalization. The paper calls upon the IE scholars to respond to the theoretical challenge of integrating internetization processes into internationalization, especially for the smaller, entrepreneurial and innovative firms.     

Born globals: A cross-country survey on high-tech start-ups

The paper empirically investigates what drivers affect the decisions of high-tech start-ups to internationalize from the outset, and their degree of born-globalness. The empirical data have been obtained from a cross-country survey on internationalized high-tech start-ups operating in the ICT and electronics sectors. The present findings show that the presence of a small domestic market and the scalability of the product put on sale have a positive effect on the probability of a start-up internationalizing from its inception. We have also observed that the niche strategy and the network relationships built up by the entrepreneur are key drivers for both an early internationalization and the scope of international expansion. The experiential knowledge and international commitment of an entrepreneur, as well as the diversity of team competences and organizational flexibility of a firm, have a significant impact on a born global's degree of born-globalness, although it is not a fundamental precondition for early internationalization.     

Internationalization through business model innovation: In search of relevant design dimensions and elements

Internationalization through business model innovation involves the creation, or reinvention, of the business itself. This paper aims to integrate basic insight from the literature on business model innovation, internationalization of the firm, international entrepreneurship, and global marketing into a conceptual model. Our model illustrates that internationalization through business model innovation includes design dimensions, which are domestic or globalized in upstream production as well as in downstream markets. The outcome of this paper is four international business model types each with a specific resource allocation for dealing with differences across geographical locations and entry mode elements. We address the interrelation of these dimensions and elements in firms’ international activities.     

An ambidextrous learning model for the internationalization of firms from emerging economies

Emerging economies are playing an increasingly important role in the global economy. The rising phenomenon of the internationalization process of firms in emerging economies, or emerging market firms, particularly their capacity to increase their presence in the markets of developed economies, has been insufficiently studied. Because of the unique characteristics of emerging economies, some assumptions of traditional international models are irrelevant. This paper provides a theoretical framework that explains the importance of different types of knowledge and the relationships between them in the internationalization process. We delineate an ambidextrous learning strategy that is contingent on different levels of firm competitiveness.     

Latin American franchise internationalization: The impact of institutional environment

We analyze the internationalization of Brazilian franchise chains in Latin America. A total of 119 observations verify international commitment in each country in relation to institutional environment factors and how they are moderated by chain size and industry. The results show that despite all institutional aspects having a significant effect, their explanatory power depends on chain size. Larger franchise chains usually choose countries with better institutional aspects in terms of contract compliance and business freedom, even if the efficiency of business conditions in these countries are not the best in Latin America. In this study, were used public data from international organizations that report on the ease of doing business, level of corruption, political risk, and legal regulations. Specifically, it contributes by using institutional theory in franchising in order to understand the process of chain internationalization originating from emerging markets. Our results, in part, contradict the idea that the origin disadvantage is always an advantage of internationalization.     

Internationalization of Small Family Firms: The Influence of Family from a Socioemotional Wealth Perspective

We explore the factors influencing the internationalization of small family firms. Based on interviews with six family firms in Singapore, we highlight the importance of (1) family harmony, (2) trust in external relationships, (3) social and business networks, and (4) organizational resources and capabilities in the internationalization process. We show how the socioemotional wealth factors of trust and harmony affect networking and resources, which in turn affect internationalization. We find that initial internationalization through exports is enabled through trust in family networks, but the typical family characteristics of a desire to maintain family harmony and distrust of outsiders have a negative impact on network creation and resource development, which constrains the extent to which the firm internationalizes beyond exporting. In order to move from the first stage (exports/similar markets) to the second stage (joint ventures/different markets) of internationalization, less emphasis on trust and family harmony accompanied by more emphasis on building external networks and resources may be necessary. We propose a new model of internationalization of family firms based on our findings. © 2015 Wiley Periodicals, Inc.     

Retailers׳ expansion mode choice in foreign markets: Antecedents for expansion mode choice in the light of internationalization theories

Whenever a retail company expands its store network in a foreign market, decisions have to be made about how this can be achieved. Existing studies of retail internationalization have usually analyzed the “entry mode” choice as an end in itself, and not as the start of a firm׳s international development. In addition, there is much debate in the academic literature about the antecedents for retail foreign operation mode choice and the relevance of generic internationalization theories to international retailing. Therefore, the objectives of this research are (1) to investigate the paths of entry and subsequent expansion modes pursued by retailers in international markets and (2) to develop and test a model of expansion mode antecedents in the light of generic business internationalization theories. This is achieved on the basis of data collected from 43 French fashion retailers and a PLS-SEM approach. Results show that (1) retailers clearly differentiate between entry and expansion modes; (2) the international marketing plan, the perceived attractiveness of the foreign market, and strategic and ownership conditions are the key antecedents for the choice of an expansion mode. After comparing the results with the explanations proposed by the generic internationalization theories, a multi-theoretical framework is proposed which draws from the Uppsala internationalization process model, network theory and the born-global theory. The findings provide a wealth of information for retailers׳ use in choosing appropriate foreign operation modes.     

Domestic Activity and Knowledge Development in the Internationalization Process of Firms

This paper is based on behavioral theory on internationalization, examining the effect of firms operations in the domestic market on experiential knowledge development in the internationalization of the firm. Five hypotheses are developed on the effects of business operations in the domestic market on: internationalization knowledge, business knowledge and institutional knowledge. The LISREL analysis of 206 firms shows that domestic operations effect the accumulation of experiential knowledge in internationalizing firms. We found that it is harder for a firm with long domestic experience to change their mental models and processes in the internationalization process.     

Entrepreneurial orientation and international scope: The differential roles of innovativeness,proactiveness, and risk-taking

This research integrates the international business and entrepreneurship literatures by examining the independent influences of innovativeness, proactiveness, and risk-taking on the ability of a firm to broaden its scope across international markets. For each dimension of entrepreneurial orientation, a cost–benefit framework is applied to highlight the trade-offs associated with different levels in the internationalization context. Based on a unique dataset of 500 SMEs spanning 10 industries, the results reflect the consequences of being “stuck in the middle” with respect to their strategic posture on innovativeness and proactiveness, but reveal a nuanced role for risk-taking behavior. The non-uniform and non-linear relationships from the findings contribute to a better understanding of when the individual dimensions of entrepreneurial orientation help or hinder entrepreneurial firms in the internationalization process.     

The impacts of network relationships on SMEs' internationalization process

In today's globalization era, more and more firms are striving to have an international presence, even though they face many challenges. Based on a multisite case study method, this article examines how indigenous Malaysian small and medium‐sized enterprises (SMEs) use their network relationships to facilitate their internationalization process. The evidence from the case of three software firms and one control firm in this study support the firms' internationalization process in the ways that network relationships trigger and motivate them to internationalize, influence their marketselection decision and mode‐of‐entry decision, help them gain initial credibility, allow access to additional relationships and established channels, help in lowering cost and reducing risk, and influence their internationalization pace and pattern. © 2006 Wiley Periodicals, Inc.     

Firm Size and the Nature of International Relationships: The Case of Globally Integrated Small Firms

During the past quarter of a century or so there was a marked increase in the number of studies exploring the internationalization of the small firm. The basic premise of this body of literature was that the size of the firm mattered in the process of internationalization. Research in this area focused heavily on types of forward integration (particularly exporting), and examined a handful of key research questions: which national markets shall a small firm enter, how, and when, as well as the impact of internationalization on business performance. Rather unexpectedly, to date there have been no studies exploring the impact of firm size on the nature of relationships created by small firms. This paper aspires to address this gap in the literature by focusing upon globally integrated small enterprises. Drawing on the evidence of 755 firms in five EU countries the paper argues that there are no profound differences in the nature of international relationships created by globally integrated small firms in comparison to their large‐scale counterparts. More importantly, however, the paper suggests that power asymmetry and mutuality may coexist in international relationship, and small firms may often occupy positions of power in global commodity chains.     

Top management team characteristics and firm internationalization: The moderating role of the size of middle managers

This paper examines the influence of the top management teams' (TMTs) characteristics, including tenure and international experience, on the degree of firm internationalization. In addition, this study explores the moderating effect of the size of middle managers (MMs) on the relationship between the TMT characteristics and the degree of firm internationalization. This study use the information-process perspective to emphasize that MMs provide information processing capabilities that assist TMTs as they cope with the high information-processing demands of the strategic decision-making process in international markets. We test the hypotheses using a sample of listed manufacturing firms in the electro-optical and textile industries during the 2006–2010 period. The findings indicate that TMT tenure has an inverted U-shaped relationship with firm internationalization and TMT international experience has a positively affect the firm internationalization. Furthermore, we find that large MM size positively enhances the inverted U-shaped relationship between TMT tenure and firm internationalization.