Export Performance and Managerial Capabilities in German SMEs

Abstract

Within the last decade, a more profound interest emerged in International Business (IB) to discuss managerial capabilities, such as international experience and market knowledge. This perspective can enhance our understanding of how firms internationalize and of how they learn from distant cultures and foreign markets. In addition, this view may improve our understanding of how foreign market knowledge is translated into organizational routines and habits that sustain and lead to successful international ventures. A prominent focus in IB research is on the question of how firms learn from distant markets. The behavioural theory of the Uppsala School models the internationalization process mainly by explaining an increasing resource commitment to foreign markets and assuming learning processes that are gradually transformed into more sophisticated foreign market experience (Johanson/Vahlne 1977, 1990, Nordstrom/Vahlne 1994). Much of this foreign market experience is accumulated in firms as capabilities, which are embedded in organizational routines. It is imperative to understand how these firms built up experience. The Uppsala model clarifies how the process of internationalization is tied to resource commitments and experiential learning, but it does not give details on what these processes look like and how they determine the success of internationalizing firms. So the demanding question is: how do managerial capabilities influence international performance? Furthermore, how do firm resources interact with the emergence of organizational capabilities that maintain the internationalization process?