Academic journal article International Journal of Entrepreneurship

Entrepreneurial Firms in the International Arena

Academic journal article International Journal of Entrepreneurship

Entrepreneurial Firms in the International Arena

Article excerpt

ABSTRACT

This paper presents some of the findings of an ongoing, longitudinal study of high growth entrepreneurial firms that had successful implemented their global strategies. While most SMEs produce a service or product that could be competitive in international markets, many are unsure of the appropriate strategy for entry. In 1993-1994, in order to provide insights into how domestic SMEs could successfully enter the international arena, a study was conducted of 100 high-growth firms that had recently "gone international." The sample was drawn from Inc. magazine's list of the top 500 smaller U.S. companies. It was noted at that time, however, that the performance and relative success of these firms need to be ascertained over a period of time. Thus, the present study discusses an in-depth investigation of these same firms-ten years later- in order to assess their performance over a time span. Follow up data was obtained from each firm by mail survey and telephone and personal interview. Accordingly, we explore the changes that occurred as internationalism proceeds. The results provide more insights into patterns and experiences of foreign market entry among SMEs and suggest several recommendations for overcoming obstacles and continued growth in the international arena.

BACKGROUND

In the past, international business was frequently viewed as the domain of large enterprise. To some extent that was, and still is, true. In every country a majority of smaller enterprises continue to operate domestically because the nature of their business is oriented to personal service for local clientele. At the same time, changes that have swept through Europe and Asia as the world slipped into the 1990s, have reshaped business opportunities in the global arena.

International business is no longer the province of the large multinational firm. Many smaller firms recognize that the opportunities offered by global markets are increasingly important to the success of their operations. Most SMEs produce a service or product that could be competitive in international markets, but are unsure of the appropriate strategy for entry. This often resulted in failing to follow up on global opportunities, or in entering the international arena with insufficient knowledge of managerial and economic considerations (Barnara 1991). Academic literature and popular writings on international business are filled with cases and studies of firms that have attempted to internationalize their operations or enter the global market only to face numerous obstacles that led to failure (Johnson 2003).

Aside from the decision to launch or to end the venture, the decision to "go international" is perhaps the most important strategic decision for a firm to make. This decision must be made only after careful discussion and analysis because it must be viewed as a major, long-term commitment. In many respects, being involved in the international arena is different, and often more difficult, for the small, growing entrepreneurial firm than it is for a major corporation. For example, the large business often has more strategic alternatives; in-house staffs to direct international operations; and, in many instances, direct investments in another country.

Research on international business has proliferated during the past two and a half decades with a steady stream of studies dealing with larger multinational corporations (for example, see comprehensive literature reviews by Aaby and Slater (1989). At the same time, knowledge about the internationalization of SMEs was relatively limited until the past few years. As recently as 1988, Miesenbock pointed out in his literature review, that the literature based on empirical studies is full of inconsistencies and a conclusive theory of small business internationalization is far from being available(1988:42).More recently international entrepreneurship has received considerable interest from researchers, practitioners, and governments (Welch and Welch, 2004). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.