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Establishment of Insidership Positions in Institutionally Distant Business Networks
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics. (Linnaeus Baltic Business Research Center)
2011 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Since the opening of formerly closed markets in Eastern Europe and China in the early 1990s, numerous firms have sought to capture the growth opportunities prevailing in the virgin but institutionally distant business networks in these countries. I claim that the entry process into an institutionally distant business network has been realised when the entering firm has reached an insidership position in the network. To advance this idea, the thesis introduces the overlooked medium-sized multinational exporter (MME) and answers the following overarching research questions: (I) how do MMEs establish insidership positions in institutionally distant business networks, and (II) what critical abilities are developed by MMEs in the process of entering an institutionally distant business network? To answer these questions, qualitative and quantitative methods have sequentially been mixed to first give an in-depth understanding of the empirical field, and second to verify and generalise some of the most central tentative findings. Empirically, the study reports from a case study of eight firms in the Baltic Sea Region and from an on-site survey of 203 Swedish firms with experience of entries in Eastern Europe and/or China. Five individual essays are presented—all designed to reflect different aspects of the institutionally distant network entry process. The findings are condensed in the cover of the thesis, where it is claimed that an insidership position is reached through three main phases: the Scouting phase, the Qualifying phase and the Shielding phase. Furthermore, it is found that that the most critical abilities developed through the institutionally distant network entry process is local experience-based knowledge of high specificity. It is shown that previous experiences, generated in different business networks in mature markets, are not useful in the network entry process in immature markets. As a consequence, there is reason to believe that the entering firm needs to develop unlearning abilities to replace obsolete or misleading experience.

Place, publisher, year, edition, pages
Växjö, Kalmar: Linnaeus University Press , 2011. , 116 p.
Series
Linnaeus University Dissertations, 52/2011
Keyword [en]
internationalisation process, entry process, network insidership, emerging markets, institutional distance, business networks, liability of outsidership, liability of foreignness, SME, export
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-11799ISBN: 978-91-86491-82-6OAI: oai:DiVA.org:lnu-11799DiVA: diva2:418278
Public defence
2011-06-14, Ny 200, Kalmar Nyckel, Gröndalsvägen 19, Kalmar, 10:00 (English)
Opponent
Supervisors
Available from: 2011-06-07 Created: 2011-05-20 Last updated: 2011-06-07Bibliographically approved
List of papers
1. Balancing Intermediated Relationships in Emerging Country Markets
Open this publication in new window or tab >>Balancing Intermediated Relationships in Emerging Country Markets
2009 (English)In: International Journal of Trade and Global Markets, ISSN 1742-7541, Vol. 2, no 3/4, 317-335 p.Article in journal (Refereed) Published
Abstract [en]

This study concerns a major strategic issue for firms entering

emerging country markets via intermediaries, namely, how to make an efficient

trade-off between linking up to the final customer and the intermediary.

We argue that an effective trade-off is a long-term relationship building process

based on business and social exchange that creates knowledge reciprocity

and a mutual orientation. It occurs through feedback processes in which

the knowledge of the exporter is exploited and new knowledge about the

local market is explored together with the intermediary. This is a balancing

act, where the roles of the parties’ changes over time as new capabilities are

developed based on joint experiences.

Place, publisher, year, edition, pages
InderScience Publishers, 2009
Keyword
entry modes and internationalisation processes, foreign market entry, organisational learning, international relationship marketing, inter firm relationships, foreign market knowledge
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
urn:nbn:se:lnu:diva-11800 (URN)10.1504/IJTGM.2009.028996 (DOI)
Available from: 2011-05-20 Created: 2011-05-20 Last updated: 2013-07-24Bibliographically approved
2. International Network Extension Processes to Institutionally Different Markets:: Entry Nodes and Processes of Exporting SMEs
Open this publication in new window or tab >>International Network Extension Processes to Institutionally Different Markets:: Entry Nodes and Processes of Exporting SMEs
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This article is about how SMEs reduce their liability of network outsidership in the process of establishing a network insider position in foreign business networks. By examining how SMEs establish insidership positions in institutionally different business networks, the authors contributes to the network approach to firm internationalization. From a detailed longitudinal and retrospective case study of four SMEs from mature market entering emerging country markets and four SMEs from such immature markets entering mature markets, the authors develop propositions based on intra-group and inter-group analysis. The propositions concern how the exporter initiates and develops relationships when plugging into the foreign network (the entry node), and how the firm reaches an insider position in this network (the entry process). Three distinct network types are identified along this entry process: the exposure network, the formation network and the sustenance network.

Keyword
internationalization processes, SMEs, liability of outsidership, emerging and mature markets, network extension, entry node, entry process
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
urn:nbn:se:lnu:diva-11801 (URN)
Available from: 2011-05-20 Created: 2011-05-20 Last updated: 2011-06-07Bibliographically approved
3. Experiential Knowledge Types and Profiles in the Emerging Market Entry Process
Open this publication in new window or tab >>Experiential Knowledge Types and Profiles in the Emerging Market Entry Process
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Although experiential knowledge is a well-documented construct in internationalisation literature, research on the multidimensionality of the construct remains limited and we do not know how different knowledge combinations among internationalising firms are composed. This paper therefore seeks to answer the following research questions: is experiential knowledge in the internationalisation process a multidimensional construct and is there a pattern to be found among the experiential knowledge profiles of emerging market entering firms? By analysing a unique dataset collected on-site at 203 Swedish SMEs, with recent entries into emerging countries in two sequential stages, this paper identifies four experience-based knowledge profiles of internationalising firms. The four profiles identified are Inexperienced exporters, Customer focused exporters, Societal focused exporters, and Experienced exporters. Thus, it is concluded that experiential knowledge is a multidimensional construct and that emerging market entrant firms develop heterogeneous experiential knowledge profiles.

Keyword
experiential knowledge, internationalisation knowledge, societal knowledge, business network knowledge, social capital, factor analysis, cluster analysis, knowledge profile, emerging markets, entry process
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
urn:nbn:se:lnu:diva-11802 (URN)
Available from: 2011-05-20 Created: 2011-05-20 Last updated: 2011-06-07Bibliographically approved
4. The Effect of Specificity of Experiential Knowledge on the Degree of Perceived Uncertainty in the Foreign Entry Process
Open this publication in new window or tab >>The Effect of Specificity of Experiential Knowledge on the Degree of Perceived Uncertainty in the Foreign Entry Process
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This study examines the uncertainty reducing effects of experiential knowledge in the foreign market entry process. From a literature review, three types of experiential knowledge, ranging from low to high specificity, are identified and discriminated. A theoretical model is developed, and the three types of knowledge are hypothesised as uncertainty reducing in the foreign market entry process. The theoretical model is confronted with a dataset collected on site at 203 Swedish SMEs. The results of the structural equation model reveal that societal knowledge and business network knowledge have an uncertainty reducing effect in the foreign market entry process. Internationalisation knowledge on the other hand has no significant uncertainty reducing effect. As a consequence, the analysis supports the argument that the more specific the experiential knowledge is, the greater the uncertainty reducing effect in the market entry process.

Keyword
internationalisation process; foreign market entry; experiential knowledge; internationalisation knowledge; societal knowledge; business network knowledge; uncertainty; knowledge specificity
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
urn:nbn:se:lnu:diva-11803 (URN)
Available from: 2011-05-20 Created: 2011-05-20 Last updated: 2011-06-07Bibliographically approved
5. Perceived institutional distance in the emerging market entry process
Open this publication in new window or tab >>Perceived institutional distance in the emerging market entry process
2011 (English)In: International Journal of Business Environment, ISSN 1740-0589, Vol. 4, no 3, 268-286 p.Article in journal (Refereed) Published
Abstract [en]

We claim that difference in business environments is the result of differences between institutions. In this paper, a network perspective is taken on business markets and we set out to examine how differences in institutions are perceived in business relationships between firms originating from disparate business networks. The concept of perceived institutional distance is developed in three sequential stages. First, we conceptually develop the concept as an anchored theoretical construct. Second, we try out the concept empirically. Third, we verify the dimensions in which perceived institutional distance is manifested. The study reports from an on-site survey of 203 SMEs with experience of entering emerging markets. Five dimensions in which perceived institutional distance is manifested are presented: patience and rationality from the cognitive institutional pillar, distrust and reliability from the normative pillar, and sanctions from the regulative pillar.

Keyword
internationalisation processes; institutional network approach; institutional distance; on-site survey method; managerial perceptions.
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
urn:nbn:se:lnu:diva-11804 (URN)10.1504/IJBE.2011.041596 (DOI)
Available from: 2011-05-20 Created: 2011-05-20 Last updated: 2013-06-04Bibliographically approved

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