Encouraging Internationalization and Entrepreneurial Orientation in Small and Medium Enterprises

Encouraging Internationalization and Entrepreneurial Orientation in Small and Medium Enterprises

DOI: 10.4018/978-1-5225-2165-5.ch011
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This chapter explains the overview of internationalization; the aspects of internationalization in Small and Medium Enterprises (SMEs); internationalization, social capital, and Foreign Market Knowledge (FMK) in SMEs; internationalization and marketing capability; internationalization, innovation, and Research and Development (R&D); the implications of internationalization in SMEs; the overview of Entrepreneurial Orientation (EO); EO and firm performance; EO, organizational learning, and knowledge management; and the current trends and issues with EO in SMEs. Encouraging internationalization and EO is essential for SMEs that seek to serve suppliers and customers, increase business performance, strengthen competitiveness, and achieve continuous success in SMEs. The chapter argues that encouraging internationalization and EO has the potential to enhance organizational performance and reach strategic goals in SMEs.
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The research regarding SMEs internationalization began in the early 1970s in the Nordic countries and produced gradualist models (Johanson & Vahlne, 1977). The main output is the Uppsala model (Johanson & Vahlne, 1977). Regarding Uppsala model, the internationalization of the firm is considered as a process of the firm’s international involvement increasing as a result of different types of learning (Ruzzier, Hisrich, & Antoncic, 2006). SMEs are able to internationalize more rapidly than the gradualist models predict (Oviatt & McDougall, 2005). The two major sources in such a rapid internationalization process are knowledge and international networking (Oviatt & McDougall, 2005). The international network helps the entrepreneurs in emphasizing the opportunities, establishing the international relationships, and accessing the information (Kalinic & Forza, 2012).

Key Terms in this Chapter

Marketing: The strategic functions involve in identifying and appealing to the particular groups of consumers, often including activities such as advertising, branding, pricing, and sales.

Research and Development: The systematic activity combining both basic and applied research, and aimed at discovering the solutions to problems or creating the new products and knowledge.

Internationalization: The growing tendency of companies to operate across national boundaries.

Innovation: The process of translating an idea or invention into a product or service that creates value.

Organizational learning: The organization-wide continuous process that enhances its collective ability to accept, make sense of, and respond to the internal and external change.

Entrepreneurship: The capacity and willingness to organize and manage a business venture along with any of its risks in order to make a profit.

Knowledge Management: The strategies and processes designed to identify, capture, value, and share an organization’s intellectual assets to enhance the competitiveness.

Market Orientation: The business approach or philosophy that focuses on identifying and meeting the stated or hidden needs or wants of customers.

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