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SMEs’ Barriers Towards Internationalisation and Assistance Requirements in the UK: Differences Between Exporters and Firms Employing Multiple Modes of Market Entry Dave Crick, Business School, University of Central England, Perry Barr, Birmingham, United Kingdom ABSTRACT. Existing studies have identified a number of barriers, both perceived and actual, that affect firms’ internationalisation. Arguably, these factors have primarily been identified via an exporting perspective that has tended to feature heavily in previous studies in comparison to firms engaged in multiple modes of market entry (joint ventures, licensing, etc.). This paper reports on findings from a survey of UK SMEs, investigating managers’ perceptions of barriers towards internationalising and support required to overcome those same barriers. Analysis of survey data and subsequent findings from interviews indicate that differences exist between two groups of firms, that is, those that employ an export strategy compared with those that employ multiple modes of market entry in respect of both perceived barriers and assistance requirements. Implications for policy makers are also discussed that contribute to work at the public/private sector interface. SOMMAIRE. Les études actuelles ont identifié un certain nombre d’obstacles, imaginaires et réels, qui affectent l’internationalisation des entreprises. Ces facteurs ont sans doute été identifiés dans la perspective d’exportation qui a souvent joué un rôle de premier plan dans les études antérieures, au détriment des entreprises engagées dans des modes multiples d’entrée dans les marchés (coentreprises, concessions de licences, etc). Cet article rend compte des résultats d’un sondage de petites et moyennes entreprises au Royaume-Uni sur la façon dont leurs directeurs perçoivent les obstacles à l’internationalisation ainsi que le soutien nécessaire pour surmonter ceuxci. L’analyse de ces données ainsi que les résultats ultérieurs provenant d’entrevues, indiquent qu’il existe des différences portant sur la perception d’obstacles et de besoins d’assistance entre deux groupes d’entreprises : celles qui se servent d’une stratégie d’exportation, et celles qui utilisent des modes multiples d’entrée dans les marchés. On examine également les implications pour les stratèges dans le cadre des activités situées à l’interface des secteurs public et privé.
Introduction A wide body of research has entered the domain of studies termed as “international entrepreneurship” over the last decade. Although an accepted definition has not been agreed upon, McDougall and Oviatt (2000: 903) suggest this to be “a combination of innovative, proactive and risk-seeking behaviour that crosses national borders and is intended to create value in organisations.” Consequently, this covers a range of value-adding activities in an international context in terms of modes of market entry outside of the exporting studies that have largely dominated the existing literature (Bilkey, 1978; Czinkota, 1982; Miesenbock, 1988; Aaby and Slater, 1989). While a body of knowledge exists in respect of exporters’ practices including their perceived barriers and the support required to help overcome these obstacles, a more limited research literature exists in respect of the practices and perceptions of firms employing multiple modes of market entry (Calof and Beamish, 1995; Bell et al., 2004; Crick and Spence, 2005). In addressing this identified gap in the literature, the objective of this study is to investigate whether differences exist between exporting firms and those employing
Journal of Small Business and Entrepreneurship 20, no. 3 (2007): pp. 233–244
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multiple modes of market entry in respect of their obstacles in overseas markets and their support requirements to overcome these same barriers. The results consequently have relevance to policy makers, that is, in order that management teams’ international support requirements can be addressed and in turn assist a more effective public/ private sector interaction in the provision of trade assistance. This paper contains five sections starting with this introduction that has identified the background, objective and relevance of the study. The next section contains a review of the literature in order to contextualise the study within the existing body of knowledge and states two hypotheses that are subsequently tested in the context of the overall objective. This is followed by a discussion of the methodological approaches employed, that is, both quantitative and qualitative phases. Subsequently, the findings are summarised before a discussion of the main conclusions and recommendations are considered. Literature Review Previous studies have tended to treat terms such as “barriers,” “obstacles” and “problems” as somewhat interchangeable (see, for example, Bell, 1997; Katsikeas and Morgan, 1994; Morgan and Katsikeas, 1998; Crick and Chaudhry, 2000; Scharf et al., 2004). However, allowing for the differences in terms, this investigation focuses on the problems and assistance requirements at the operational level, since macro-economic policies are, in the main, outside the influence of SMEs’ management teams. In reviewing the literature on problems affecting SMEs’ internationalisation strategies, it becomes evident that the broad topic has been approached from a number of different directions. No single theory exists to account for either the way in which SMEs are motivated to internationalise or more specifically in the context of this paper, to explain how they overcome certain barriers both perceived and actual. Indeed, in terms of entrepreneurial considerations, issues such as a management team’s available resources, networks, knowledge base and even serendipitous events, indicate that particular firms (and more specifically key decision-makers) are likely to react differently to the same opportunity based on the individual circumstances they face and respective perceptions of risk. For example, Spence and Crick (2006) provide evidence of Canadian and UK entrepreneurs whose internationalisation strategies varied depending on a variety of factors related to objectives but were influenced by issues such as the financial resources available (and therefore the ability to absorb losses), plus knowledge from experience and networks (where such knowledge was perceived as minimising risk); therefore some were more risk averse than others. Indeed, some entrepreneurs wanted to maintain a given lifestyle whereas others wanted to grow and sell their businesses; therefore, particular entrepreneurs reacted to opportunities in different ways. As such, a “holistic” approach has been suggested, that is, one that encompasses a range of different considerations, namely: the resource-based view, networking and contingency factors in an attempt to more accurately recognise international entrepreneurial decision-making (see, for example, Ibeh, 2003; Bell et al., 2004; Crick and Spence, 2005; Spence and Crick, 2006). A number of studies have identified barriers to internationalising that are perceived or actual in nature (see, for example, reviews such as Katsikeas and Morgan, 1994; Morgan and Katsikeas, 1998). Commencing with a consideration of problems perceived by management teams, these are important because they tend to limit the expectation of the desirability and profitability associated with engaging in overseas operations. Various problems are widely reported in the existing literature and include issues such as: limited
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demand (Groke and Kreidle, 1967), bureaucratic procedures (O’Rourke, 1985), trade impediments (Kaynak and Kothari, 1984), high costs abroad (Cannon, 1980), and lack of human and financial resources together with inadequate management skills (Edmunds and Khoury, 1986). However, these examples point to the fact that there is an issue about what factors are really perceptual or actual in nature. For example, the issue of “limited demand” might depend on the experience of the management team in deciding whether enough research has been undertaken to establish if in fact there is an opportunity in the market worth exploiting, and whether the resource base (both human and financial) is being utilised effectively and in fact there are enough resources to identify and exploit opportunities. Consequently, this argument leads to the identification of issues termed as actual constraints in the existing literature. Issues include factors such as the difficulty in raising finance (Bilkey and Tesar, 1977); information on markets, regulations, foreign trade connections and the like (Tesar and Tarleton, 1982); insufficient capacity (Yaprak, 1985); difficulties in distribution (Cannon, 1980); and export marketing (Weinrauch and Rao, 1974). However, it has been suggested that the types of problems vary between size of firm (O’ Rourke, 1985), industries (Pinney, 1970), and by firms’ stages of international development which includes experience (Tesar, 1975). Research has also suggested for some time that certain firms do not internationalise due to managerial apathy (Simpson, 1973), which is influenced by perceptions towards problems that in reality may not be so significant. Also, some management teams believe that the responsibility for encouraging them to internationalise lies with someone outside of the firm (Doyle and Schommer, 1976). The review of the literature emphasises the need for government policy makers to obtain a greater understanding of the needs of the management teams in internationalising firms in order to surmount problems that are either perceived or actual. However, in a pragmatic sense, it must be appreciated that since trade policy operates within governments’ budgetary constraints, there is only so much they can do to assist internationalising firms (Hibbert, 1990; Lesch et al., 1990; Seringhaus and Rosson, 1990; Diamantopoulos et al, 1993; Kotabe and Czinkota, 1993; Naidu and Rao, 1993; Chaudhry and Crick, 2002). For example, while the trade assistance offered to internationalising firms has received a great deal of criticism, Chaudhry and Crick (2002) argue that UK policy makers are embracing new technology and offering tailored assistance rather than that of a generic nature, and are consequently moving towards a more effective public/private sector interaction. Policy makers have therefore recognised that firms internationalise via a number of market-entry modes outside of exporting that has arguably been the focus of a great deal of earlier literature (Bell et al., 2004). They have therefore offered individualised support to assist firms internationalising via particular modes of market entry (Crick and Chaudhry, 2002). This study builds on earlier research and the objective is to investigate whether differences exist between exporting firms and those employing multiple modes of market entry in respect of their obstacles in overseas markets and their support requirements to overcome these same barriers. Arguably, the exporting literature has become dated and management teams are influenced by a number of factors; this affects the strategy employed, including market-entry modes. Consequently, two hypotheses are proposed and placed in the null-hypothesis format. The study therefore contributes to knowledge in the growing body of research in international entrepreneurship, specifically in relation to
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the interface between the problems of managers of internationalising firms and the trade assistance to support their efforts. H1: there are no significant differences between internationalising SMEs adopting either an exporting strategy or multiple modes of market entry in relation to the perceived and actual problems they face. H2: there are no significant differences between internationalising SMEs adopting either an exporting strategy or multiple modes of market entry in relation to their assistance requirements in addressing the perceived and actual problems they face. Methodology In the course of this study a postal questionnaire was formulated after undertaking a review of the pertinent literature relevant to this area of study and conducting a series of exploratory interviews with managers and policy makers. This was subsequently tested using academics deemed knowledgeable in the area of research. A sampling frame containing firms in various trade sectors was considered important to avoid trade sectoral bias and the FAME database was used. This allowed firms engaged in various degrees of overseas activities (modes of market entry, ratio of overseas to total sales etc.) from both mature and knowledge-intensive industries to be contacted. Service firms were excluded in this research. In an attempt to obtain a reasonable sample size to allow representative analysis to be undertaken, it was considered necessary that a fairly high number of questionnaires should be sent. Based on cost implications, 2,000 questionnaires were mailed, an assumption being that about 20% might optimistically be obtained as a response rate due to the known problem of this nature. Allowing for potential bias from using key respondents, the cover letter was addressed to the Managing Director since he/she was deemed likely to handle international activities in SMEs. However, the cover letter asked that in the event of responsibility for overseas activities being handled by someone other than the contact person, the questionnaire be passed to the executive with responsibility in this area. To facilitate a high response rate, the postal questionnaire was printed in a professional format and a reply-paid envelope was enclosed. Follow-up questionnaires were sent after one month to firms that had not replied the first time around. After the second mailing, letters were received from 45 firms in which executives refused to participate in the investigation; in all cases the reason provided was lack of time, work pressures, or some other similar reason. Only indigenously and independently owned firms with up to 250 employees were under investigation in this study to avoid potential resource bias and bias from parental influence. In total, 446 usable questionnaires were received, representing an overall response rate of 22%. Of these, 170 firms were found to employ only an export strategy in comparison to 276 that adopted a strategy employing multiple modes of market entry. Analysis was undertaken to determine whether statistical differences existed between respondents to the first and second mailing and none were found over selected variables. Additionally, 20 firms were telephoned to determine their reason for non-response; their replies related to time pressures. The potential for non-response bias was considered as minimal. In order that the study was not restricted to a statistical analysis of a postal survey, twenty interviews (representing the two groups of firms) were subsequently undertaken to supplement the quantitative data. Firms were selected primarily on the basis of proximity and willingness to be interviewed; this was affected by cost implications. A non-probability sample was therefore used in this respect. The semi-structured interview approach, lasting
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about one-to-two hours, allowed managers to freely provide rationales to account for their international strategies. In an attempt to reduce bias at the qualitative stage, due account was taken of the nature, trustworthiness (credibility, confirmability, etc.), and authenticity of the research. Findings Despite the overall sample size being relatively large, the Mann-Whitney U test was employed as a widely accepted non-parametric technique in the course of this study for analysing differences between two uneven samples (see, for example, Diamantopoulos and Schlegelmilch, 1997). When interpreting the findings from the Mann Whitney U test within this investigation, firms’ mean responses are provided for both exporters and firms employing multiple modes of market entry, and data are provided to indicate whether significant differences exist between the two groups in relation to managers’ barriers in internationalising and assistance requirements. Table 1 shows the two groups of firms’ responses in relation to managers’ barriers in internationalising. Data were collected on a five-point scale ranging from “1 = none at all,” to “5 = to a large extent.” Nineteen statistical differences were found to exist between the groups of firms out of the twenty-four variables. Hypothesis 1 was consequently rejected. Interestingly, a large number of items were rated quite low by both groups of firms, suggesting that they are not considered to be large barriers to internationalising; indeed, in aggregate terms exporters rated no items on or above the mid-point on the scale while those employing multiple modes only rated four items in this respect. Apart from a few items, the rank ordering of the problems was found to be fairly consistent between the two groups and therefore, together with the low overall ratings of particular barriers, the extent of the number of statistical differences observed should not be overemphasised. The interviews provided some interesting data that supplemented the quantitative results. It was clear that, since the majority of both groups of firms were relatively established in international activities, managers were knowledgeable about basic overseas procedures: for example, obtaining payment, handling paperwork, etc. A greater problem appeared to be what may be termed as “operational”—i.e., associated with working with others cultures and geographic distances. As one manager explained, “we have been exporting for some years but running plants (subsidiaries) overseas is a different matter altogether. I could give you lots of examples but it’s even down to basic things like the time difference. I mean, like taking calls through the night, but that’s nothing compared to when there’s a problem and one of us has to drop everything and get on a plane to sort it out!” (Firm involved in multiple modes). Exceptions did exist in firms that were less experienced in overseas activities and in particular those involved in multiple modes of market entry. One manager provided an example to illustrate this: “it’s down to basic things like trying to locate partners, I mean where do you go to for advice?” (Firm involved in multiple modes). However, it was evident in smaller firms with fewer staff that there was more of a problem in time constraints handling day-to-day activities compared with their larger counterparts. Consequently, this manifested itself in a number of ways such as time in finding distribution channels, handling various documentation, etc. To emphasise, knowledge based on experience was considered to be present in the firms and the problem was more to do with the time demands of business activities, not least those involved in overseas sales. As one manager explained: “I start at before 8 o’ clock in the morning and finish late in the evening most of the time, but that’s the way it goes. Its not that the issues (research
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Table 1. A Comparison of Firms’ Perceived Barriers in Internationalising
Perceived Barrier Different foreign customer habits/attitudes Different product standards/ specifications abroad Difficult to understand business practices Difficult/slow collection of payments abroad Difficult handling of documents/procedures Difficult to locate/obtain adequate representation Existence of language/communication problems High risks/costs involved in selling abroad Imposition of high tariff barriers Inability to offer competitive prices abroad Inability to offer technical/after sales service
Mean of Firms Multiple Rank Modes (n=276)
Exporters (n=170)
Rank
2.34
=8
2.87
2.42
6
2.45
Z Value
Sig
=6
-4.310
.000*
2.88
5
-3.598
.000*
5
2.57
14
-.555
.579
2.66
3
3.00
=3
-2.504
.012*
2.55
4
3.09
2
-4.007
.000*
2.72
2
3.00
=3
-2.026
.043*
1.86
17
2.67
11
-6.877
.000*
2.14
13
2.69
10
-4.491
.000*
2.05
14
2.79
8
-5.148
.000*
2.02
15
2.50
15
-2.894
.004*
1.82
18
1.94
22
-.471
.638
Untrained export staff
1.64
23
1.67
23
-.602
.547
Insufficient production capacity
1.71
22
1.57
24
-.927
.354
2.41
7
2.87
=6
-3.561
.000*
1.81
19
2.45
=16
-5.466
.000*
2.31
11
2.43
18
-1.342
.179
1.93
16
2.29
19
-3.120
.002*
1.88
20
2.45
=16
-4.929
.000*
2.33
10
2.60
12
-2.537
.011*
1.78
21
2.28
20
-5.427
.000*
2.34
=8
2.73
9
-3.171
.002*
2.85
1
3.15
1
-2.152
.031*
Red tape in UK public bodies
2.18
12
2.59
13
-2.695
.007*
Difficulty in obtaining insurance
1.60
24
2.12
21
-4.884
.000*
Keen competition in foreign markets Lack of adequate foreign distribution channels Lack of government assistance/incentives Lack of managerial personnel/ time Shortage of capital to finance overseas business Limited information to locate/analyse foreign market Transport/high shipping costs Restrictions imposed by foreign rules/regulations Unfavourable exchange rate/ non-convertible currency
1 = none at all, to 5 = to a large extent.
variables under discussion) you are asking me about are problems, its just that there doesn’t seem to be enough hours in the day to handle things properly” (Exporting firm). More important however, were issues outside of managers’ control such as the unfavourable exchange rate. This was especially important to exporting firms who were more vulnerable to exchange-rate risks compared to those employing multiple modes of market entry who were involved in activities overseas (joint ventures, subsidiaries and the like) that helped offset the impact of exchange-rate fluctuations given that they were operating in markets overseas rather than simply a UK base. As one manager pointed out: “it’s becoming too difficult (to export) due to the (rate of the) pound, especially when you look at what our competitors are charging” (Exporting firm).
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Table 2. A Comparison of Firms’ Assistance Requirements in Addressing Perceived Barriers in Internationalising
Assistance in Addressing Perceived Barrier
Mean of Firms Multiple Rank Modes (n=276)
Exporters (n=170)
Rank
1.91
=14
1.75
2.12
12
2.47
Z Value
Sig
21
-1.396
.163
2.28
13
-.717
.473
6
2.33
12
-1.559
.119
2.40
=7
2.80
4
-2.809
.005*
2.28
10
2.82
3
-3.750
.000*
2.40
=7
2.50
=7
-.722
.470
1.82
=18
2.07
16
-1.431
.152
2.21
11
2.18
14
-.336
.737
2.36
9
2.89
2
-3.157
.002*
1.85
17
2.40
10
-2.461
.014*
1.80
20
1.60
22
-2.645
.008*
Untrained export staff
1.78
21
1.59
23
-1.753
.080
Insufficient production capacity
1.52
22
1.42
24
-1.387
.165
1.97
13
1.89
18
-1.929
.054
1.82
=18
1.87
20
-1.662
.097
2.81
=1
2.44
9
-2.478
.013*
1.48
24
1.88
19
-3.611
.000*
1.91
=14
2.10
15
-1.427
.154
2.52
4
2.50
=7
-.037
.970
1.88
16
2.05
17
-1.756
.079
2.49
5
2.59
6
-.587
.557
2.81
=1
2.92
1
-.626
.531
Different foreign customer habits/attitudes Different product standards/ specifications abroad Difficult to understand business practices Difficult/slow collection of payments abroad Difficult handling of documents/procedures Difficult to locate/obtain adequate representation Existence of language/ communication problems High risks/costs involved in selling abroad Imposition of high tariff barriers Inability to offer competitive prices abroad Inability to offer technical/after sales service
Keen competition in foreign markets Lack of adequate foreign distribution channels Lack of government assistance/ incentives Lack of managerial personnel/ time Shortage of capital to finance overseas business Limited information to locate/analyse foreign market Transport/high shipping costs Restrictions imposed by foreign rules/regulations Unfavourable exchange rate/ non-convertible currency Red tape in UK public bodies
2.73
3
2.63
5
-.840
.401
Difficulty in obtaining insurance
1.49
23
2.37
11
-7.382
.000*
1 = none at all, to 5 = to a large extent.
However, given the diversified sample, issues also varied across trade sector that affected perceived problems and/or those actually experienced. For example, in low-tech markets speed of market entry and changing environmental circumstances were typically less of a problem than in high-tech markets. As such, this had influenced managers’ perceptions in respect of the barriers they faced. As one manager of a firm operating in hightech products explained: “our operation in the US works hand in hand with our major customer so we know pretty much what is required and the best way to deal with the customer. We simply could not react in the same way if we were just based here (UK)” (Firm involved in multiple modes).
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In short, the statistical data was found to be rather generalised and different problems were either perceived or actually experienced based on factors involving overseas experience, between sizes of firm, and between sectors. Consequently, it was considered interesting to compare firms’ barriers in internationalising with their assistance requirements in respect of the same 24 variables. Table 2 indicates managers’ responses on a five-point scale ranging from “1 = none at all,” to “5 = to a large extent.” Eight statistical differences were found to exist between the groups of firms, so hypothesis 2 was therefore not fully rejected. The rank ordering of the mean scores for firms was fairly inconsistent and the noticeable exceptions were largely supported by the statistical differences observed. However, as with Table 1, it should be noted that most items were rated low and in aggregate terms; none were rated on or above the mid-point on the scale employed. It was evident from the interviews that, despite the fact that the overall statistical data suggested most factors were rated low, management teams had their own respective stories to account for the way in which support might be offered. It was clear that management teams were invariably prepared to pay for outside assistance as long as the valueadded benefit of doing this could be established. As one manager illustrated, “to be honest I can’t complain since the support I have had has been excellent. In a firm like mine I simply don’t have the time to manage everything like I would want to and I could not have done all this (a discussion had taken place about entering certain markets) without them… Actually, the fees are not too bad when you think of the business it has generated” (Exporting firm). The problem was that trade-support organisations were in many cases viewed as having a low credibility in addressing the needs of firms. As one manager commented: “a while back I needed some help getting some stats on Australia. Some little s**t (expletive deleted) came to talk to me from (name of organisation excluded) and I knew more than he did” (Firm involved in multiple modes). The nature of the support required was in line with the findings in respect of the problems. Here, different support was required depending on the management teams’ resources, including experience through to issues associated with the individual critical incidents that occurred in the general running of the business. Consequently, it was difficult for managers to comment on the support they needed until a problem arose, as they were aware of general procedural issues for the most part and wanted specific help. For example, this ranged from demand information in a specific country through to technical regulations that might affect the requirement to adapt the firm’s products for a certain market. Moreover, some issues were viewed as macro-economic (like exchange rates affecting competitiveness) and therefore a Treasury Department matter outside of the day-to-day support that could be offered by many organisations. Indeed, some firms had circumvented the effects of these by entering into modes of market entry other than exporting, since they considered that government policy makers would not help them in this respect. One manager commented, “I suppose by having the links overseas we are cushioned from the effects of the pound but otherwise we would be struggling like the rest of them” (Firm involved in multiple modes). Furthermore, a key complaint was the bureaucracy of adhering to the continuallychanging legislation in running a business (only some of which involved international operations) as compared to years gone by, and the need for policy makers to reduce this so more time could be spent identifying and exploiting opportunities rather than being overloaded with red tape. This was summed up by one manager as follows: “look at the
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state of my desk (the respondent points to his desk that is covered in paperwork)—my role should be getting the orders not dealing with this pile of s**t (expletive deleted)” (Exporting firm). In short, the findings suggested that a variety of factors affected managerial perceptions, based on external issues such as industry sector, through to internal factors like experience, the time available to deal with problems, and strategies employed—e.g. mode and speed of these in particular markets. Consequently, this supports the need for policy makers to work closely with managers on an individual basis rather than offering generic support since, subject to budgetary constraints, this appears to be the most useful way of addressing managers’ requirements. It is therefore important to address this further in the context of earlier studies in the final section that follows. Discussion The contribution of this study has been to investigate differences in respect of managers’ problems and assistance requirements between two groups of firms, namely those employing an exporting, as opposed to multiple modes of, market entry. The relevance of this study is clear, given that previous studies suggest that policy makers are unsure how to most usefully assist firms and stimulate international activities (Hibbert, 1990; Lesch et al, 1990; Seringhaus and Rosson, 1990; Diamantopoulos et al., 1993; Kotabe and Czinkota, 1993; Naidu and Rao, 1993; Chaudhry and Crick, 2002). The findings indicated that a number of statistical differences existed between the two groups of firms in respect of problems in internationalising, so hypothesis 1 was not supported, although closer examination of the data suggested that the rank ordering of a number of variables were largely consistent. Moreover, the mean ratings for most variables were rather low, suggesting that in overall terms most issues were not seen as major problems. Indeed, the same could be argued about the issues in respect of management teams’ assistance requirements, except here fewer statistical differences were observed and hypothesis 2 was not fully rejected. Nevertheless, the aggregated data did not identify particular issues and the subsequent interviews suggested different problems and assistance requirements were needed by firms with various backgrounds—that is, affected by factors like resource constraints, industry-wide issues, and experiential factors. In other words, the aggregated data masked certain issues by the very nature of averaging out responses across a number of firms. Furthermore, the statistical data was somewhat static in the sense that responses were at a given point, whereas the follow-up interviews were able to uncover perceptions in a broader sense because strategies are likely to change over time, with the corresponding problems experienced and assistance requirements also changing. In-depth discussions with managers could more accurately reflect this. The entrepreneurial stance of managers in learning from doing and overcoming barriers when identifying and exploiting opportunities profitably in overseas markets is a key consideration that is perhaps more difficult to measure in a statistical sense. Consequently, the results support the need for policy makers to identify differences between SMEs employing particular market-entry strategies in respect of their problems in internationalising, so that support can be tailored to address the needs of management teams. The results suggest that it is difficult to generalise about internationalising firms’ problems and support requirements from surveys, as critical incidents affect firms given the dynamic nature of the changing environment in which they operate (Scharf et al., 2004). Particular support may be required to address issues at certain periods of time (Chaudhry and Crick, 2002).
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Given the findings in this study, it appears reasonable to conclude that policy makers must continue to work with management teams rather than offer generic assistance to address problems in internationalising. Situational factors over time are likely to present entrepreneurs with problems that need to be addressed in order to assist their ability to identify and exploit opportunities on a profitable basis. In turn, this supports the need to investigate international entrepreneurial activities in a ‘holistic’ sense, that is, to recognise that decisions are influenced by a whole range of factors (Ibeh, 2003; Bell et al., 2004; Crick and Spence, 2005). The recommendation is that policy makers and practitioners continue with their efforts to work together in ensuring that support providers offer tailored assistance in addressing problem issues. These issues may be based on a variety of factors, ranging from management teams’ experience through to resources that are available in the context of the industry and markets in which firms operate. More specifically, this reflects the different problems and assistance requirements encountered in employing multiple modes of market entry beyond that of exporting that has dominated previous studies (Bilkey, 1978; Czinkota, 1982; Miesenbock, 1988; Aaby and Slater, 1989). For example, some inexperienced firms will need basic advice of a “how to” nature (e.g. starting exporting) whereas experienced firms will need specific advice to assist their competitiveness. Naturally, this will depend on the circumstances affecting individual firms but might include advice on locating joint venture partners overseas, guidance on regulations in operating subsidiaries in particular countries and so on—i.e., more detailed advice than simply of a “how to” nature. However, the credibility of support providers also needs reviewing to ensure that not only is the support offered aligned to the needs of managers, but that those interfacing directly with practitioners can communicate in the way managers expect—i.e., they have an affinity to needs and expectations! In the meantime, this study provides a basis on which other investigations can build in order to establish in greater depth what problems are encountered by, and what assistance is required for, different types of internationalising firms. Opportunities exist to investigate this in more detail, taking issues from this study further to account for various factors such as industry considerations, markets served, and resources of the management teams. A key recommendation for further research is to track firms in a longitudinal sense to examine how problems and assistance requirements change over time, in order to facilitate a more effective public/private sector interaction for international entrepreneurs. Acknowledgements The author gratefully acknowledges participants’ comments from the McGill International Entrepreneurship Conference where an earlier version of this paper was presented.
Contact Information For further information on this article, contact Dave Crick, Business School, University of Central England, Perry Barr, Birmingham B42 2SU. United Kingdom. Telelephone: 44 121 3316768; Fax: 44 121 3316366 Email:
[email protected]
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