An integrated framework for understanding the driving forces behind non‐sequential process of internationalisation among firms

Abstract

PurposeIs non‐sequential internationalization process solely technology enabled or a product of mutually interdependent forces? This paper aims to show that even though the sequential approach in the process model is intuitively appealing, not all firms follow such a path. Hence, integrated framework to explain how the international market entry process has changed with respect to the sequential approach is presented.Design/methodology/approachThe data banks of the Swedish Trade Council and the Chambers of Commerce are used to identify small and medium‐sized enterprises (SMEs) with between 50 and 250 employees (in compliance with European Union's definition of SMEs). Data are collected through the use of questionnaires and in‐depth interviews from 60 Swedish SMEs operating in other countries and foreign SMEs operating in Sweden that tends not to develop in incremental stages with respect to their international.FindingsSome of the findings are: that the sequential model is by no means reflective of, or appropriate for all firms' approaches to international business; the usefulness gained by using an international network approach to study the international activity of a firm; and the interplay between the identified driving forces behind a non‐sequential internationalization process.Research limitations/implicationsEven though market entry patterns of firms investigated demonstrate a non‐sequential internationalization process, they are still within the general theoretical framework where the basic assumption of the sequential internationalization model can maintain its validity. Firms are indeed exposed to irrecoverable transaction costs that hamper their behaviours and complicate export supply responses in international markets. However, the magnitude of the costs and speed of internationalization is dependent on the ability of the firms to take advantage of the enablers of non‐sequential internationalization pattern. This is particularly important for firms to and from developing countries and emerging markets and their propensities to succeed in their internationalization endeavours.Originality/valueKnowledge acquired from the empirical study of firms that tend not to develop in incremental stages with respect to their international activities, and therefore start international activities by entering very distant markets and multiple countries right from birth without prior experience, is used to develop an integrated framework which aptly depicts that non‐sequential internationalization process is not solely enabled by technology, as commonly envisaged in literature, but a product of mutually interdependent forces. Consequently, this study provides a holistic view on the driving forces behind the rapid internationalization process encountered by many SMEs today.