An Entrepreneurial Lens on Backshoring Implementation by SMEs

Abstract

AbstractUsing the lenses of internationalization process theory and of effectuation theory, this study investigates how small and medium enterprises (SMEs) implement backshoring initiatives. A qualitative multiple case study is developed involving six SMEs that have relocated from China back to their respective home countries. The analysis illuminates SMEs’ perspectives on the uncertainty perceived when returning to the home country and on how SMEs dynamically manage their domestic commitment and network of relations. The study also sheds light on the different alternative approaches they employ during different phases of the backshoring process and on the outcomes of these initiatives. Notably, the study demonstrates that the conceptual frameworks commonly employed in the literature to explain internationalization can effectively be extended to the domain of backshoring. Successful backshoring for SMEs hinges on their accurate perception of domestic uncertainty and their dynamic utilization of both planning and effectuation implementation strategies. Conversely, the failure of backshoring initiatives can be traced back to SMEs’ misperception of their position within the domestic business network, a cognitive bias that can lead to suboptimal decisions and outcomes.