Strategic partnerships and the internationalisation process of software SMEs

This research investigates the nature of strategic partnering activities of software SMEs (small-to-medium-sized enterprises), their motivations to engage in strategic partnerships as part of the internationalisation process, the key benefits achieved and the main challenges encountered. It explores managers’ perceptions of partnership activities through a qualitative research methodology focussing on Irish indigenous firms. Findings suggest that strategic partnerships were initiated to take advantage of firm synergy, reputation and credibility advantages. Partnerships also served as an important foreign market entry mechanism allowing firms to accelerate sales cycles and reduce risk in overseas markets. Challenges facing firms included partner selection and issues of control. Directions for further research are highlighted.     

Bounded entrepreneurship and internationalisation of indigenous Chinese private-owned firms

Based on 16 in-depth case studies this paper argues that the internationalisation behaviour of indigenous Chinese private-owned firms can only be partially explained by the Uppsala model and the theory of international new ventures. Instead, the so-called “bounded entrepreneurship” may be the key influence on the unique internationalisation patterns and competitive positions of these firms. Managerial and policy implications and limitations of the study are discussed.     

Path dependence,fragmented property rights and the slow diffusion of high throughput technologies in inter-war British coal mining

This article examines the importance of path dependence effects in impeding the diffusion of high throughput mechanized mining systems in the British coal industry. It demonstrates that the industry had become ‘locked in’ to low throughput underground haulage technology, on account of institutional interrelatedness between Britain’s traditional practice of extensive in-seam mining and its unique system of fragmented, privately owned mineral royalties. Fragmented royalties prevented the concentration of workings and introduction of high throughput main haulage systems that underpinned the rapid productivity growth of European producers. Meanwhile, technical interrelatedness between the haulage systems taking coal to the pit shaft and operations further ‘upstream’ created bottlenecks which both slowed the overall rate of mechanization and limited the productivity gains from the mechanization that did occur.     

The role of the internet in the internationalisation of small and medium sized companies

It is now recognised that many firms are “born global’ and initiate international business from inception or shortly thereafter. They have been influenced by both globalisation and the impact of new ICT technologies. This paper examines the role of the Internet in the internationalisation of a cross national sample of small entrepreneurial firms from Canada, Ireland, Australia and New Zealand. The findings are presented, including the role of the Internet in marketing, distribution, business processes and market intelligence and competitor analysis. The role of the Internet as a knowledge building tool is discussed, and areas for future research are presented.     

Family-centred non-economic goals and the internationalisation of family firms: Evidence from Australia

Despite the growing body of literature on the internationalisation of family firms, further research is required to understand the underlying factors that influence their international behaviour. Past research has consistently shown that family firms are less likely to adopt an internationalisation strategy compared to their non-family counterparts, yet we still have limited understanding of the underlying reasons why this is so. By incorporating the bifurcation bias concept to the socioemotional wealth perspective of family firm behaviour, we argue that greater attention needs to be given to the influence of family-centred non-economic (FCNE) goals on the family firm’s international behaviour. Using survey data collected on over 300 Australian family firms, regression analysis was used to examine the influence of FCNE goals on the family firm’s extent of international involvement. The results suggest that business families which emphasise FCNE goals are more likely to exhibit a lower attitudinal commitment towards international expansion, which in turn determines the level of international involvement of the family firm. Results also suggest that the extent of international involvement of the family firm has a significant negative effect on the level of achievement of FCNE goals.     

Process in family business internationalisation: The state of the art and ways forward

Although the internationalisation of family businesses (FBs) has received increasing attention in recent years, much remains to be learned about how FB internationalisation unfolds as a process. Our review of 172 empirical studies from the period of 1991–2018 indicates that only 25 studies included both longitudinal data and strong process theorising, even though internationalisation is inherently processual, and FBs are longitudinal in nature. We acknowledge that both variance- and process-based theorising are needed to build an understanding of the FB internationalisation process. We contribute to the field by building an FB internationalisation process model based on a review analysis. Within the model, process-based internationalisation pathways are combined with variance-based capabilities (positive influences) and liabilities (negative influences) that affect internationalisation, with economic and non-economic goals viewed as driving the various internationalisation processes. On the basis of the model, we suggest that future research could adopt more longitudinal and individually focused approaches, as a means to understand the FB internationalisation process in various FBs and contexts, over various time periods, life cycles, and FB generations.     

Local formal interpersonal networks and SMEs internationalisation: Empirical evidence from the UK

This article uses data from the UK Longitudinal Small Business Survey (2015) to empirically test the relationship between local (formal and informal) interpersonal networks and exporting. Our results suggest that local interpersonal networks increase the likelihood of exporting. More importantly, we find that the role of formal interpersonal networks (e.g. accountants) on internationalisation increases as firm size increases, while the link between informal interpersonal networks (e.g. family) and exporting becomes weaker. We argue that larger firms have more complex operations and diverse structures than smaller firms that require the engagement of formal interpersonal networks to help with the internationalisation process.     

Path dependence,change and the emergence of the first joint-stock companies

This paper presents a model of path dependence and change and focuses on the gaining of new institutional knowledge. The main thesis is that in ‘extraordinary’ historical situations the possibility of change increases as a result of external pressure and successful adaptation to it. The model is tested applying it to the case study of seventeenth-century United Provinces (Dutch Republic). Such a situation existed in the sixteenth–seventeenth-century United Provinces, due to their uprising against Spanish rule. Because there existed no strong central authority, the decision-makers had to develop new institutions in order to successfully capture the lucrative spice trade from their enemies. The solution was the joint-stock company, which, through the phases of a continuous decision-making procedure, developed into the ‘permanent’ Dutch East India Company (VOC) in parallel also to the development of the Amsterdam Stock Exchange.     

The impact of the information and communications technology revolution on the internationalisation of corporate technology

The rising pace of technological change in information and communications technology (ICT) has doubtless provoked the rise of “techno-globalism” at a cross-firm level by providing a new mode of diversification. As a result of the increasing process of technological interrelatedness, the specialisation in a core pervasive technology (as ICT is nowadays) allows the firm to develop tacit capabilities, which, in turn, facilitate its corporate activity in different kinds of technology across national boundaries in an intra-firm network. Therefore ICT can be view as a platform for entry into new products as well as an enabler of fusion of technology.This paper investigates whether the increased specialisation in ICT has influenced the geographical diversification or internationalisation of firms. The association between the two phenomena is found in the later (but not in the former) period under analysis. By adopting a more detailed level of sectoral aggregation within the ICT field, the econometric analysis seems to indicate computing (rather than communications) as the ICT component driving the relationship between internationalisation of research and development activity and ICT specialisation.     

Internationalisation and its determinants:A hierarchical approach

This study builds a hierarchical model to examine how country-level institutional dimensions impact the individual-level factors on the internationalisation by early stage entrepreneurial firms. Drawing on multiple datasets, cross-level analysis is used to explicate the influence of a country’s institution on the effects of the individual-level determinants on the internationalisation by early stage entrepreneurial firms, and this method enables the study of country-level specific effects. The results of the empirical research confirm the role of resource-based explanatory variables (i.e. innovative competence, business scale, technological commitment, and technological newness) in predicting internationalisation and also identifiy the positive moderating effects of institutions on this association.     

Evaluating the foreign ownership wage premium using a difference-in-differences matching approach

This paper seeks to identify the causal effect of foreign acquisitions on wages of skilled and unskilled workers, using difference-in-differences propensity score matching estimators. Our results suggest that there is substantial heterogeneity in the post-acquisition wage effect depending on the nationality of the foreign acquirer and the skill group of workers. We find sizable post acquisition wage effects on skilled and unskilled wages following an acquisition by a US firm. No such impacts result from acquisitions by EU multinationals. Also we discern some positive wage effects for unskilled workers resulting from acquisitions by multinationals from the rest of the world.     

Temporary social dumping,union legalisation and FDI: a note on the strategic use of standards

This paper analyses the welfare implications for a developing country of using union legalisation as a policy instrument to attract inward foreign direct investment. While its presence may discourage a foreign multinational (MNE) from locating in the host country, unionisation is an important rent-extracting instrument for the host country. We show that if the MNE benefits from dynamic effects, the host country government may have an incentive to adopt temporary social dumping: banning the union in the short run to extract higher rents in the future. However, if the government can use a fiscal instrument in conjunction with union legalisation, the former can circumvent the need to engage in social dumping.     

The Internetalisation of information,knowledge, and interaction components of the firm's internationalisation process

Abstract

Transcending traditional national borders, the Internet is an evolving technology that has opened up many new international market opportunities. However, ambiguity remains, with limited research and understanding of how the Internet influences the firm's internationalisation-process components. As a consequence, there has been a call for further investigation of the phenomenon. Thus the purpose of this study was to investigate the Internet's impact on internationalisation-process components, specifically, information availability, information usage, and interactive communication, with international market growth. Analysis was undertaken using structural equation modelling. Findings highlight the positive mediating impact of the Internet on information availability and usage, with the international market growth of the firm.     

Path Dependencies and the Long-term Effects of Routinized Marketing Decisions

The purpose of this paper is to discuss a simulation of marketing budgeting rules that is based on a simplified version of the market share attraction model. The budgeting rules are roughly equivalent to those that may be used in practice. The simulation illustrates the concept of path dependence in dynamic marketing systems and shows how it might result from decision rules potentially applied by marketers and retailers. Path dependence results from positive feedback in dynamic systems that imparts momentum to market choices. Where the potential for path dependence exists, there are implications for defining and measuring long-term effects of marketing decisions in a way that is meaningful to managers and researchers. In the simulations presented we show that limited retail assortments may contribute to path dependence when firms use either percentage-of-revenue rules or market learning experiments to set budgets. While other budgeting procedures (e.g., matching competition) may stabilize market share, this stability in the share dimension comes at the cost of instability for budgets and profits.     

Limits to growing customer value: Being squeezed between the past and the future

Marketing managers often have to balance between marketing exploitation strategies (reaping value from what already is known) and marketing exploration strategies (reaping value from new sources). However, do marketing strategies once exploited or explored in a certain way or direction leave enough potential for further exploration? Based on the various cases of Apple, Alpro, Intel, Nutella, Patagonia, and Ryanair, this article shows that several risks and limits come into play when trying to answer this question. Companies may get squeezed between the past and the future while facing the pressure of temporal consistency driven by past behavior and experiencing the limits of future growth in the dominant customer value drivers. To counter this problem, companies often start integrating new value drivers in their story, leading to other risks, such as incompatibility with existing drivers. The cases discussed in this article reveal that companies may have to accept more sacrifices in order to increase returns within their growth trajectory. Value engineering will become a crucial discipline for companies to survive in many industries. This article gives a step-by-step approach on how to implement this in an organization.     

Bank regulation and the process of internationalisation: A study of Japanese bank entry into London

The paper provides a theoretical insight into bank regulation and the process of internationalisation by examining the concepts of regulatory push and market pull within the context of Japanese bank entry into London during the 1980s. Rugman and Verbeke's [(1998). Corporate strategy and international environmental policy. Journal of International Business Studies, 29(4), 819–833] Consistency of Home and Host Government Goals model is utilised to structure the discussion, which centres on a situation where there is a conflict of goals between multinational enterprises (MNEs) and the home government but goal alignment between MNEs and the host government. As such the paper examines a relatively under-researched aspect of internationalisation and concludes that in certain circumstances internationalisation can occur despite great ‘psychic distance’. The paper also argues that although bank regulation can lead to a conflict situation it can also be conducive to the development of a strong home base and the development of firm specific advantages.     

Strategic roads that diverge or converge: GM and Toyota in the battle for the top

General Motors (GM) and Toyota competed in the global automobile industry for many decades. While GM hung on to the Number 1 position longer than any other automaker, it lost this position to Toyota in 2008. It took Toyota 71 years to beat GM but only 2 years for GM to regain the top spot in 2011. Through a brief analysis of the history of these two rivals, I explain why GM and Toyota demonstrated different ways of falling from the Number 1 spot. I argue that the reason for the reversal of leadership positions for these two automakers can be understood by examining executive hubris and the way it either facilitated path dependence or promoted a departure from an established path for the perpetuation of market leadership. I then demonstrate how GM and Toyota acted contrastingly with respect to path dependence and how their CEOs injected hubris almost the same way in their decisions to hold on to the top position. Contrary to the longstanding myth, I also demonstrate that it was hubris—as opposed to humility—that characterized executive leadership in Toyota in its last 15 years. Recommendations for practicing or budding executives of large corporations are given.     

Understanding the psychological process underlying customer satisfaction and retention in a relational service

This paper reexamines the psychological process underlying the relationship between customer satisfaction and customer retention in a relational service context. It is based on a composite model of the attitude-behavior relation, which takes both attitude toward target and attitude toward behavior into account. Data were collected from a survey with a sample of 209 clients from a major credit counseling organization in the USA. Account data indicating those clients' actual retention behavior were matched with the survey data. A two-step structural equation modeling (SEM) procedure was employed to establish the construct validity and test the hypotheses. The results revealed that the effect of customer satisfaction on retention is mediated by the more proximal determinants of the actual retention behavior. Specifically, customer satisfaction has both direct and indirect effects on customers' attitudes toward remaining in the Debt Management Program (DMP), which is the proximal predictor of customer retention. In addition, satisfaction alone cannot guarantee customer retention. Customers' perceived behavioral control exerts direct effects on their intention to remain and retention.     

Reaching for global in the Japanese cosmetics industry, 1951 to 2015: the case of Shiseido

This article examines the various factors that have shaped the internationalisation of the Japanese cosmetics industry over six decades of economic transformation from 1951 to 2015. Whilst Japanese cosmetics companies have expanded overseas, their focus has largely been in Asia. This article advances a multifactorial explanation that analyses a number of factors that led to regionalisation, including foreign consumers’ perception of Japan, managerial perceptions and strategies toward export markets, as well as the challenges pertaining to cross-border mergers and acquisitions activities by Japanese firms. Using Shiseido as the case example, the article offers a highly-textured account rooted in an understanding of the evolving historical setting, cautions against simple explanations and extends previous discussions concerning the reasons behind the regional orientation of the Japanese cosmetics industry.     

The FDI location decision: Distance and the effects of spatial dependence

We investigate how different conceptions of distance impact upon one of the fundamental decisions made by foreign investors, the choice of foreign direct investment (FDI) location within the selected host country. We argue that the attractiveness of host country locations to foreign investors depends not only upon location-specific attributes such as labor costs, but also upon the location's proximity to alternative locations. We provide theoretical rationales for how and why alternative concepts of distance might impact upon firms’ FDI location decisions, and explicitly model different measures of geographic, economic and administrative distance. Empirically we illustrate the use of a number of spatial regression models with a new dataset on FDI in Chinese prefecture-cities, and have shown, in this context, that geographic distance is not the ‘best’ measure of distance to use. We find clear evidence of spatial dependence between the cities based upon economic distance, with weaker evidence related to administrative distance. The distinctive contribution of this paper is to emphasize that city-level policy to attract FDI is more likely to succeed if the prefecture-city is economically (and administratively) close to alternative city locations, while any policy expenditure may fail to attract FDI inflows if the prefecture-city is distant from other city locations.