Entrepreneurial
Internationalizing the Small and Medium Sized Firm – four cases
Internationalization per se could be seen as an entrepreneurial act since it is about opening up new markets (new to the company and sometimes to everybody) and seeing new solutions to problems (free translation from Schumpeter 1934). A more extensive discussion on why and how the internationalization is an entrepreneurial act can be followed in Andersson (1996).
When looking at the internationalization process within an SME, the individual entrepreneur needs to be discussed and analyzed. Entrepreneurship often means different things to different people. In this thesis we define it as a company’s formal and informal activities aimed at increasing innovation and venturing (Zahra et al 2001). Many small (even larger ones as Andersson (1999) shows) companies have one strong person with both the power and the will to determine the strategy of the company. Andersson (1999) concludes that the individuals are important for the internationalization process of the firms. He also argues that the individual has impact on the mode of internationalization. This can work in both positive and negative ways, since most individuals have differing experiences and therefore see the internationalization process from different perspectives it is important to take other persons’ views into account.
Zahra et al (2001) mean that companies can significantly increase the likelihood of success of the international expansion by behaving entrepreneurially. “Successful companies work hard to adapt their products to local cultures, or develop new products that specifically target those markets.” They further mean that the learning arising from the internationalization process is crucial for further success. The new obtained skills are combined to build new competencies that lead to more entrepreneurship through innovation and venturing, which in turn leads to more internationalization.
Figure 2. Fostering Entrepreneurship during International Expansion, model from Zahra et al (2001)
A study made by Chaston, Badger and Sadler-Smith (2001) concludes that the interest for the concept of organizational learning can be traced in the vast amount of literature on the area. However, they claim that too few empirical studies are made and therefore they contribute to the subject with a study that gives support for the reasoning that entrepreneurial companies tend to utilize higher order learning and thereby become more efficient in managing information.
