Drivers of internationalization success: a conjoint choice experiment on German SME managers

Internationalization is a common growth strategy for small and medium-sized enterprises (SMEs). However, SMEs face several challenges within the internationalization process. As SMEs are characterized by limited resources, managers are constantly involved in a decision-making process concerning the allocation of the SMEs’ resources. Therefore, internationalization can be understood as a complex, multidimensional decision process. Based on a set of 2244 internationalization decisions made by German SME managers, the present study examines how eight strategic and structural factors drive the perceived international success of SMEs. When applying conjoint choice analysis, the results suggest that especially equity financing in the internationalization process, an appropriate market selection as well as proactive motives, and a long-term scope can drive SMEs’ international success. Moreover, it becomes evident that strategic factors are more relevant for successful internationalization than structural factors.     

Constructing a typology for networks of firms

Companies are now economically bound to collaborate with other enterprises, forming horizontal networks that are generally goal-based and are of a limited duration. This article specifically addresses networks of industrial small and medium enterprises (SMEs). Thanks to a five-years study, some of the main characteristics of such networks will be clarified. One upshot from the experiment was that such networks are rarely guided by formal and deliberate strategies, and that their evolutions and mutations cannot be forecast with the usual strategic planning tools. This paper presents a formal framework to analysis and design the trajectories of networks of firms, with the aim of facilitating the strategic guidance of the network. First, approaches dealing with strategic evolution are presented. Next, organizational trajectories are examined, based on the relative situation of activities and competencies between the companies inside the network. Then, a typology of SMEs networks is given and illustrated by industrial cases. Finally, a formal frame based on the typology and on the degree of achievement of the network (as expressed by a six-levels Maslow's pyramid) is presented, which allows location and guidance of SMEs networks according to their needs. As an illustration a real network trajectory is also given.     

Countering Overseas Power in Global Value Chains: Information Asymmetries and Subcontracting in the Plastics Industry

Resource Dependency Theory (RDT) and Global Value Chain (GVC) analysis have been deployed in the strategic and international management literatures to address questions of power in dyadic relationships and global production networks, respectively. This paper integrates the two theoretical approaches in order to expand RDT, using insights from Hirschman's exit/voice model to show the options available to some firms but not others. Using the relationship between buyers and contract manufacturers from GVC analysis, we find a correlation between firm size and choice of strategic action in response to contract manufacturers' dependence on buyers. Large firms follow an acquiescence strategy while small manufacturers follow an avoidance strategy, able to use both exit and voice strategies. Enabled by scale or control over information, both of these approaches successfully reduce uncertainty and provide a source of sustained competitive advantage. Using a study of the production chain in consumer plastics manufacturing in China, we show how dependent firms respond to GVC induced pressure. We find that based on the size of the contract manufacturer, the range of strategic responses to power is constrained by the nature of the dependency in global value chains. This opens important insights into the role that structural characteristics of organizations (like size) play in determining strategic freedom.     

Internationalization of Emerging Economy SMEs: A Tripod Approach

Research suggests that internationalizing SMEs in the West enjoy far greater institutional support. There is, however, little understanding of the internationalization processes of emerging economies' SMEs (EESMEs) and yet they are notable contenders in international trade. Accordingly, this research draws from an integrated strategy tripod framework to develop new perspectives accounting for how Iranian-based EESMEs internationalize and compete in international markets. A comprehensive analysis of Iranian EESMEs' survey data revealed that, other than their owner's managerial perceptions of their industry, firm, and institutional constraints, international market knowledge (IMK) significantly moderated their internationalization strategies. Such understanding advances research on firm internationalization by pinpointing the central role of IMK in forming internationalization strategies by EESMEs in hard-to-reach contexts, which has implications for academic research and policy-making, leading to needed reform based on theory and practice.     

Knowledge management in SMEs and MNCs: matching knowledge mobility mechanisms to supply network configuration profiles

Abstract

While ‘knowledge mobility’ presents significantly different challenges for SMEs and MNCs, it is strongly influenced by two common factors: the type of knowledge to be integrated and the configuration of the operations network. Here, SMEs and MNCs are required to make critical decisions about ‘levels’ of collaboration and knowledge sharing with network partners. A Knowledge Mobility Configuration (KMC) framework was developed, tested and refined using five case studies indicative of a growing shift towards information and knowledge-intensive activities. In terms of contribution, there has been limited empirical research to-date into the determinants of successful knowledge transfers in MNC-SME network contexts. The network configuration element of the KMC framework provides insights on how such networks evolve, and how specific knowledge mobility profiles may evolve over time. This more nuanced approach may be used as a basis for a proactive and differentiated approach to knowledge mobility and integration across SME and MNC networks.     

Strategic planning for small and medium-sized enterprises: The COMPASS project

The paper introduces a methodology and a set of software tools designed to support the definition and implementation of enterprise strategies particularly for small and medium-sized enterprises SMEs . The COMPASS method and tools support a stepwise refinement of basic strategic options and a simulation-based evaluation taking into account the objectives the SME has given itself. They assist in the derivation of detailed project plans, and they help monitoring the success of the chosen strategy. Inexperienced users can taken advantage of the built-in knowledge and experience in the field of strategic planning which reflects the actual state of the art in economic science. The paper describes the method and tools which were developed in the ESPRIT project 6617 COMPASS, and discusses their strong and weak points in the light of experience gained during test applications in three SMEs.     

Enhancing the learning advantages of newness: The role of internal social capital in the international performance of young entrepreneurial firms

In this paper, we draw on social capital theory to explore the role of internal social exchanges in contributing to the international performance of young entrepreneurial firms. We argue that internal social capital embedded within young ventures helps them cultivate international learning effort pertaining to the effective alignment of resources and activities related to their international growth. The empirical analysis, based on a sample of 150 young internationalizing SMEs from India, demonstrates both direct and indirect effects of internal social capital on international performance. Whereas previous research focuses on the importance of social networks with external actors, our study emphasizes internal social capital linked to the underlying learning advantages of newness and opportunity capture and contributes to the literature on early and rapid internationalization.     

Entrepreneurship and strategy in the international SME

Small and medium enterprises (SMEs) have begun to play a critical role in international trade. Statistics from the Organization for Economic Cooperation and Development (OECD) and other sources indicate that SMEs now account for a very substantial proportion of exports from most industrialized nations. But very little is known about the effect of having an international entrepreneurial orientation, or the role of specific strategies associated with this construct, on the foreign performance of such firms. Using data from an empirical study of SMEs, we devise a structural model that reveals the role of international entrepreneurial orientation, key strategic activities, and the collective effect of these constructs on the international performance of the modern, international SME. These findings and their implications for scholars and managers are discussed.     

战略和愿景提升中小企业创新能力机制研究

本文首先根据企业调研和问卷分析的结果,对阻碍中小企业创新能力提升的内在原因进行了分析,发现创新过程中的战略不协调是阻碍中小企业创新的重要内因.接着,本文对创新能力内涵和影响创新能力的战略因素方面进行了文献综述.然后采用文献研究和案例研究结合的方法,对前人的理论进行了分析总结,将昆药、海尔等案例进行了分析,提出通过战略和愿景提升中小企业创新能力的三条机制:一,清晰的在组织层面上共享的愿景通过指引创新资源配置方向来实现创新能力的提升;二,战略和组织结构的协调通过影响创新资源的配置和组织学习的方式来影响核,心能力的构建;三,战略和文化的协调通过影响组织学习的方式来影响核心能力的形成和积累.最后,本文针对中小企业创新中普遍存在的问题,提出了一些建议.     

Preeradication Vaccine Policy Options for Poliovirus Infection and Disease Control

With the circulation of wild poliovirus (WPV) types 1 and 3 continuing more than a decade after the original goal of eradicating all three types of WPVs by 2000, policymakers consider many immunization options as they strive to stop transmission in the remaining endemic and outbreak areas and prevent reintroductions of live polioviruses into nonendemic areas. While polio vaccination choices may appear simple, our analysis of current options shows remarkable complexity. We offer important context for current and future polio vaccine decisions and policy analyses by developing decision trees that clearly identify potential options currently used by countries as they evaluate national polio vaccine choices. Based on a comprehensive review of the literature we (1) identify the current vaccination options that national health leaders consider for polio vaccination, (2) characterize current practices and factors that appear to influence national and international choices, and (3) assess the evidence of vaccine effectiveness considering sources of variability between countries and uncertainties associated with limitations of the data. With low numbers of cases occurring globally, the management of polio risks might seem like a relatively low priority, but stopping live poliovirus circulation requires making proactive and intentional choices to manage population immunity in the remaining endemic areas and to prevent reestablishment in nonendemic areas. Our analysis shows remarkable variability in the current national polio vaccine product choices and schedules, with combination vaccine options containing inactivated poliovirus vaccine and different formulations of oral poliovirus vaccine making choices increasingly difficult for national health leaders.     

SMEs' formation of minority international joint ventures and level of internationalization: The moderating role of a global versus regional focus

The purpose of this paper is to investigate the relationship between the number of minority international joint ventures (MIJVs) formed and the level of internationalization attained in the context of small and medium-sized enterprises (SMEs). We argue that this is an inverted U-shaped relationship that is negatively moderated by a global (versus regional) focus. We test our hypotheses on a comprehensive sample of Spanish manufacturing SMEs from 2006 to 2013. Whereas our empirical analysis does not provide enough support for a curvilinear relationship, the results we obtained show a positive linear association between SMEs' number of MIJVs and internationalization and corroborate the negative moderation of a global focus. Thus, this study enhances our understanding of the specific impact of an internationalization strategy based on the formation of MIJVs in the context of SMEs. Moreover, it emphasizes the importance of considering contingencies at the regional frontier to understand the effect of SMEs' foreign expansion strategies.     

Antecedents and Outcomes of Political Tie Intensity: Institutional and Strategic Fit Perspectives

Although international nonmarket strategy research has highlighted the importance of political ties, it is still unclear why some foreign subsidiaries are more politically active than others and what conditions may render political practices beneficial in a host country. We argue that foreign subsidiary political tie intensity—the extent to which senior managers provide time and resources in informally dealing with government officials for nonmarket purposes—will be influenced by political institutions in their parent's home country, especially when the MNE parent attempts to protect foreign subsidiary resources. Additionally, we assert that fit between a parent's home country political institutions and foreign subsidiary political tie intensity will positively affect subsidiary performance. We employ primary data collected from 181 foreign subsidiaries in the Philippines and find support for our hypotheses. This study advances international nonmarket strategy research by highlighting how an MNE's home country political institutions shape subsidiary political networking and strategic performance outcomes in host country environments.     

The ties that lead: A social network approach to leadership

This article investigates, for leadership research, the implications of new directions in social network theory that emphasize networks as both cognitive structures in the minds of organizational members and opportunity structures that facilitate and constrain action. We introduce the four core ideas at the heart of the network research program: the importance of relations, actors' embeddedness, the social utility of connections, and the structural patterning of social life. Then we present a theoretical model of how network cognitions in the minds of leaders affect three types of networks: the direct ties surrounding leaders, the pattern of direct and indirect ties within which leaders are embedded in the whole organization and the interorganizational linkages formed by leaders as representatives of organizations. We suggest that these patterns of ties can contribute to leader effectiveness.     

How does job-related diversity affect boards' strategic participation? An information-processing approach

More than ever, corporate leaders consider the presence of different skills, knowledge, and experience in their boardrooms being important for boards' involvement throughout the whole strategy process. However, even though of great practical relevance, we have limited knowledge about how such diversity affects boards' active contribution to corporate strategy. Applying information-processing theory, we explore how job-related diversity may be an important determinant for boards' strategic participation. Using a survey database collected in Norway, we find that job-related diversity contributes to boards' strategic participation through directors' use of knowledge and skills.     

When managers become leaders: The role of manager network centralities,social power,and followers' perception of leadership

We explore how formal managers' centralities in both positive and negative networks predict followers' perceptions of their leadership. By incorporating social networks and social ledger theory with implicit leadership theories (ILTs), we hypothesize that formally assigned group leaders (managers) who have more positive advice ties and fewer negative avoidance ties are more likely to be recognized as leaders by their followers. Further, we posit that managers' informal networks bring them greater social power, an important attribute differentiating leaders from non-leaders. We conducted two survey-based studies in student and field teams to test the hypotheses. Based on nested data in both studies, we found support for our hypotheses. These results remain robust across the two studies even though they used different designs (cross-sectional versus longitudinal), different samples (field versus students) across different countries (United States versus India), and a host of control variables at both the leader and follower levels. We find that managers who are central in the advice network are socially powerful and are seen as leaders by individual followers. In contrast, managers who are avoided by followers lack informal social power are not seen as leaders. We conclude by discussing the theoretical and practical implications of our findings and the ways in which our theory and results extend ILTs and social network theory.     

Where business networks and institutions meet: Internationalization decision-making under uncertainty

Both business networks and institutional forces are relevant to firm internationalization but they have seldom been studied together. We investigate under what circumstances firms are more likely to adopt non-predictive strategy in light of the influence of the business networks, the institutional forces, and the home market background affecting their internationalization. Based on survey data from 758 small and medium-sized enterprises (SMEs) from Brazil, China, Poland, Italy, and Sweden, our results support the effects of formal institutional distance and cultural differences on the use of non-predictive strategies by SMEs in internationalization decisions, as well as the contingency effects of business network stability and of having an emerging market background. We integrate research on the liability of foreignness and the liability of outsidership and find that business network stability is critical. It does not moderate the relation between cultural difference and NPS adoption but attenuates the negative relation between institutional distance and NPS adoption, indicating that the liabilities of foreignness and outsidership play different roles in internationalization.     

PIMS: A tool for developing competitive strategy

PIMS (Profit Improvement of Market Strategy) is a programme of the Strategic Planning Institute designed to provide a factual and scientific tool for strategic planning. Its great strength lies in the data base of comprehensive data, covering market, competitive and production structure, on over 2000 businesses spanning a period of at least 5 years. It reflects strategic experience of a wide range of industries, in a wide range of competitive environments.Research is carried out on the data base, focusing on those structural and operational characteristics which determine longer term performance, to discover the empirical ‘laws’ of business strategy. These are incorporated in a series of profit and cash flow predicting models encapsulating the strategic experience in the data base. The models are used to analyse members' businesses to highlight current strengths, weaknesses and strategic potential as well as to indicate and evaluate strategic options, all on the basis of real business experience.     

Strategy implementation and organizational change: How formal reorganization affects professional networks

Strategy implementation is difficult, particularly as it often requires changes in formal organization structures. Prior research has shown that change in the formal structure may affect employee networks. Yet, we know relatively little about how such changes affect different network ties. This paper considers how formal structural change affects senior managers’ ability to maintain their intraorganizational networks. The hypotheses are tested on sample of 884 work-related relationships of 96 partners in a global professional services firm. This firm had recently implemented a new strategy, which led to a change in the product-market focus and the resulting formal structure. Our findings reveal that the characteristics of a specific network tie determine whether it is affected by formal structural change. In particular, we find that network ties that are highly embedded in the social structure are more likely to be affected by change in the formal structure. In contrast, ties that are relationally embedded are less likely to be affected by change in the formal structure. We discuss the theoretical and practical implications of these results. In particular, the findings may have consequences for the success of strategy implementation and strategic transformation efforts.     

Internationalization Orientation in SMEs: The Mediating Role of Technological Innovation

This study examines the relationship between internationalization orientation and international performance of small and medium-sized enterprises (SMEs), and the mediating effect of technological innovation. Prior research suggests that internationalization is a prominent strategic choice for SMEs growth and profitability. However, there is still no explicit agreement on how internationalization affects international performance. Similarly, the role of innovation on performance has long been emphasized, but the implications of technological innovation on international performance are still eluding us. Our investigation of 116 SMEs in the United Kingdom reveals that internationalization orientation has a significant effect on their international performance, with SMEs adopting simultaneously an inward and outward international orientation achieving superior results. We further demonstrate that there is an inverted U-shaped relationship between technological innovation and international firm performance among SMEs. Meanwhile, we find that technological innovation positively mediates the effect of internationalization orientation on international firm performance, particularly for the SMEs exhibiting moderate levels of technological innovation activities. The findings of this study suggest that managers can improve international performance by combining inward and outward internationalization orientation with technological innovation activities in their strategic decisions.     

Mobilising networks to achieve strategic difference

This article examines the strategies for achieving differentiation through a network approach. The generic strategies models of positioning and the resource-based view have opened up the possibility of strategic difference, but, drawing on a social network approach, this article argues that, rather than accepting strategy as simply market given or internally driven, firms can draw on their unique social networks of relations to make a difference to their strategies. Illustrations from three successful Taiwanese computer firms seeking to secure differentiation of action show that one enjoys a policy-driven network advantage over its domestic rivals, another has developed both technological and familial networks, while the third exploits its established management and production links in the Taiwanese industrial culture. These comparative case studies illustrate that strategies for achieving differentiation can be based on a wide variety of external social networks of relationships (including political, familial, friendship and alumni links, as well as alliances via boards, trade unions and banks etc). The implications for managers are that firms need to expand their external networks of relationships to secure their survival and growth, and should seek to identify and develop structures that are resourceful, rare and inimitable.