Internationalization of SMEs

entrepreneurs evaluate and exploit opportunities across national borders to create future goods or services 

1. innovativeness
2. proactiveness
3. risk-taking 

• entrepreneurial internationalisation; entrepreneurship crossing national borders
• international comparison of entrepreneurship: compares entrepreneurship in different countries
• comparative entrepreneurial internationalisation: analyses entrepreneurial internationalisation cross-nationally 

factors that caninfluence SME in its decision to internationalize 

consequences of early internationalisation, international involvement 

• environment level
  • country
  • industry
• firm level
  • competitive advantage
  • organization characteristics
  • resources and capabilities 
  • strategy 
• individual level 
  • managerial socio-cognitive properties
  • demographics of manager
  • personal networks 

• controllable: strategy, founder values, perceptions, firm entrepreneurial orientation
• uncontrollable: founder characteristics, firm's characteristics and competences 

uncontrollable 

• domestic and foreign market characteristics
• industry characteristics
• geographic location 

resource based view theory: firm has one bundle of controlled resources to implement strtegy 

industrial organization theory: firm adapts to external environment to survive and prosper 

intangible resources embedded in human capital, structure, processes and interpersonal relationships 

• embedded in different contexts
• developed over time 
• not mobile across business organizations 
• not available for purchase in market 

1. personal internationalisation orientation
2. experiential market knowledge
3. experiential knowlegde of organizations capability and resources  
4. experiential knowledge of institutional frameworks 

situation where new goods / services / raw maerials / markets / organizing methods / partnerships are introduced through new means or ends 

discover and exploit opportunities to enter new international markets, new ventures and agreements 

search: rational and systematic search process to identify opportunities

discovery: unsystematic discovery of unknown opportunities (trhough skills, prior knowledge, networkes) 

1. prior knowledge
2. international network
3. marketing seeking behavior
4. dynamic managerial capabilities 
5. entrepreneurial orientation of firm 

• objective: standard methods of info collection
• experiential: country.specific
  • business knowledge
  • institutional knowledge 
  • internationalisation knowledge 

the greater the international experience, the more systematically the SME will scout for international opportunities 

discovery used for 1st international opportunity 

-> international experience useful to reduce risk, costs and uncertainty 

• formal ties: business partners
• informal ties : social ties 
• intermediary ties: third parties 

• active networking: seller
• reactive networking: buyer 
• intermediairy networking: attendance 

• strong tie, closed network: trust, long-term, less new knowledge 
• weak tie, open network: superficial, dynamic and instable 

• in open networks, SMEs are less systematic and more passive in IO scouting 
• closed netowrk SMEs: systematic scout for opportunities 
• importance of weak ties for informal firms 

capacity of managers to create or modify way in which organization makes profit or fulfils mission 

• managerial cognition
• manaherial human capital and learning capabilities
• managerial social capital and network capabilities 

assumptions or knowledge about future events, atlernatives and their consequences

learned skills

through training, education and learning 

• sum of resources embedded in relationships 
  • public good 
  • private good 

• managers view of the world as their market
• motivation to deal w intenraitonal customers and partners 
• commitment of resources to encourage international activities 

• international mindset
• international experience
• international human capital 

• world as market 
• culture actively seeking 
• adjust products 
• emphasised toward employees 
• developing resources 

• individual actions 
  • cross cultural traning programs
  • cultural and language program
  • meetings
• firm actions 
  • hire foreign studiers
  • hire foreign nationals
  • collaborae w foreign partners
  • expatriate 

entrepreneurial orientation + market orientation 

organization-wide generation of market intelligence (regarding customer's needs), dissemination of that intelligence throughout the firm, responsiveness to it 

• degree of orientation of international business activities towards customers and competitors
• degree of coordination of activities across functional areas of the firm 
• dimensions
  • customer orientation
  • competitor orientation
  • interfunctional orientation 

• superior market oriented activities that offset costs of implementation
• firms benefit from letting others bear costs or market orientation and respond to their immediate orders