Uppsala Internationalization Process Model Research Articles

Asynchronicities of growth: a process extension to the Uppsala model of internationalisation

AbstractWe contend that the Uppsala internationalisation process (IP) Model offers the basis, yet unrealised, for a process theory of growth of the internationalising firm. From the Model’s origins, particularly in Penrosean theory, we develop this potential by offering a theory extension that explicates the organisational changes within the firm required to sustain international growth. This repositioning distinguishes us from previous attempts to amend, supplant or extend the IP Model. In developing the theory extension, we specify how we remain faithful to the IP Model’s behavioural assumption ground. We provide a model of the internationalising firm that posits non-linear growth paths. This is due to the challenges of synchronising the external opportunity seeking of the firm as it expands internationally with the internal capacity building required to realise these opportunities. Introducing to the IB field this asynchronicity problem, an absence of temporal concurrence, we show its potential in explaining organisational changes and discontinuities in the internationalising firm’s development as it seeks to grow. By extending the IP Model to offer a theory of growth of the internationalising firm, we provide the basis for further process scholarship on this topic that addresses contemporary concerns and developments.

Ethnic networks in the internationalization of Turkish food producers

Abstract The Uppsala Internationalization Process Model falls short in its ability to explain how emerging market firms internationalize. In this respect, the model needs to be enhanced through theoretical and empirical contributions. In this study, we aimed to increase the relationality of the model by employing the ethnic networks approach. As a case study for emerging market companies, we focused on the internationalization processes of Turkish food companies, which have been relatively little studied until now. Based on data from qualitative interviews, we found that ethnic networks in Germany play an important role in the initial stages of export activities, in location selection, in gaining market information, and in reaching the mainstream retailers and consumers for Turkish food companies. Adopting the ethnic networks approach enables us to see the roles of previously ignored relationships. Our findings show that, in future research, the role of ethnic networks should not be overlooked in the process of applying the Uppsala Internationalization Process Model on emerging market firms.

Domestic clustered networks and internationalization of agrifood SMEs

AbstractThis paper examines how participating in domestic clustered networks in the agri‐food industry affects the export status and export intensity of small and medium‐sized enterprises (SMEs). The Uppsala internationalization process model has been revisited in light of the knowledge that these networks can contribute to promoting the presence of SMEs abroad. The study uses a sample of companies in the Spanish wine industry and characterizes 76 domestic clustered business networks (Protected Designations of Origin). The value and originality of the paper reside in its contribution in terms of measuring the degree of internationalization of domestic clustered networks to which SMEs belong. It also assesses the effect of these networks on the internationalization process of the agri‐food industry, considering that domestic clustered networks with a strong international commitment generate greater internationalization opportunities. [EconLit Citations: F14, M21, Q13, Q17].

Internationalization Patterns of European Mobile Network Operators

The mobile communication industry is one of the most important industries, because it contributes almost five percent to the global GDP and provides the platform for most technological innovations like internet of things (IoT) or digitalization. The purpose of this qualitative, multiple-case study is to explore the internationalization patterns of the four major European mobile network operators (MNO) Deutsche Telekom, Orange, Vodafone, and Telefonica using the Uppsala Internationalization Process Model (UIPM) and the cultural, administrative, geographical, and economic distance (CAGE) distance framework as conceptual frameworks. The findings suggest that European MNOs opt for an active market entry strategy while using a “buy” market entry form to benefit from business opportunities in foreign markets with a high administrative and political proximity and identified government ownership as an impact factor on the speed of internationalization. These findings confirm and add to the current research about MNO’s internationalization patterns and offer important insights for practitioners. There is a need for additional research with other case study firms to replicate the research findings and quantitative methods to strengthen their generalizability.

Internationalization Patterns of Digital Payment System Firms: A Multiple Case Analysis

The purpose of this study is to investigate the internationalization patterns of digital payment system firms through the use of the Uppsala Internationalization Process Model (UIPM) as a conceptual framework. The phenomenon is explored via a multiple-case analysis in order to understand the patterns among the different case studies. Data were collected through different sources: scientific papers, corporate websites, and reputable consulting companies’ reports websites. Data analysis found five themes to answer the research question. The results and the findings of the research suggest that: 1) digital payments system firms, when analyzed by the UIPM, express a fast internationalization process and they start to internationalize by low distance countries in cultural, administrative, geographic, and economic (CAGE) terms, 2) all those firms use a network (technical or business partnerships) to enter overseas, 3) technological and demographic elements are not suitable to understand the possibility of internationalization, 4) the regulatory barriers are not so important as the users’ ones seem to be, 5) the firm-specific advantage that every company had was directly involved in the e-commerce system. Limitations of the research are its methodology and the sampling strategy that limits the results’ generalizability. Nevertheless, the results add knowledge on the UIPM when related to digital payment systems (DPS) firms. According to that vision, it can be helpful for scholars, consultants, entrepreneurs, as well as for private or public managers to better recognize the behavior of these companies when internationalizing.

The JIBS 2019 Decade Award: The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership

The JIBS 2019 Decade Award: The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership

Chinese multinationals’ fast internationalization: Financial performance advantage in one region, disadvantage in another

Our study reveals the financial performance implications of the speed at which Chinese multinational enterprises (CMNEs) expand into intra-regional versus inter-regional host countries. In doing so, we propose a framework that integrates internationalization speed and home regionalization literatures. Using data from 767 publicly listed CMNEs from the years 2002 to 2014, we discover that the faster the intra-regional internationalization, the better the firm’s financial performance, whereas faster inter-regional internationalization demonstrates a poorer financial performance. We also find that fast-mover CMNEs’ technological and marketing resources are valuable in intra-regional host countries, but vulnerable in inter-regional host countries. We discuss the implications of these findings for studies of the Uppsala internationalization process model and regional MNEs.

Relationship Development: A Micro-Foundation for the Internationalization Process of the Multinational Business Enterprise

The interplay between knowledge development and commitments is the driving force in the Uppsala internationalization process model. We perform a qualitative thematic analysis of longitudinal data, exploring how relationship knowledge development in supplier-customer relationships leads to commitments through opportunity identification. The results validate our claim that relationship knowledge development as a dynamic capability can influence the focal organization’s ability to over time, under changing needs and contexts, harness operational capabilities that lead to at least satisfactory performance. Judging from results, the relationship knowledge development process produces a change in commitments, thereby constituting a critical micro-foundation for the internationalization and evolution process as explained in the Uppsala model.

The long-term trajectory of international new ventures: A longitudinal study of software developers

The study examines the long-term trajectory of international new ventures (INVs), departing from three theoretical perspectives: the Uppsala internationalization process model, network theory, and the international entrepreneurship perspective. Propositions emanating from these theoretical perspectives are compared with the empirical data regarding pre-internationalization behavior, motives to internationalize, attitude towards risk, speed of internationalization, choice of markets and entry modes, relationship between growth and internationalization, role of networks, and the engine of internationalization along the firm’s internationalization process. The research method is the longitudinal case study, using a multiple shot design over a period of several years. Data (both real-time and retrospective) were collected in two or more different moments in time for each unit of analysis, with the purpose of identifying changes that occurred as their international trajectory evolved. The trajectory of seven software developers was studied. The use of different sources of both primary and secondary data allowed for triangulation. Data analysis was based on pattern-matching and cross-case analysis. The results show that no single theoretical perspective examined seems to be able to explain the international trajectory of the INVs over time.

Innovation and internationalisation processes of firms with new-to-the-world technologies

While there has been considerable research into the internationalisation of high-technology firms, it mostly assumes that these firms are pursuing global opportunities for technologies which are ready to be sold. This assumption does not hold for firms with ‘new-to-the-world’ technologies still under development. We investigate the internationalisation patterns of such firms by means of a qualitative case study. Our findings show the internationalisation patterns of the case firms to be uneven and discontinuous in nature. We attribute these patterns to the dialectical tensions which decision-makers confront between expanding internationally and developing their technologies. The nature and duration of the uncertainty inherent to bringing new-to-the-world technologies to global markets explains why tensions between innovation and internationalisation dominated, rather than synergies. In these conditions of fundamental uncertainty, the case firms were unable to benefit from the positive, self-reinforcing learning mechanism that underlies both the Uppsala internationalisation process model and the accelerated (early and rapid) internationalisation postulate. Instead, the dialectical process model which we develop recognises the socio-technical nature of technology, the impact of fundamental uncertainty, and the need to account for nonlinearity and interdependencies in the internationalisation process.

Impact of Business Intelligence Solutions on Export Performance of Software Firms in Emerging Economies

The article is written with the aim of understanding how well software firms in emerging economies perform when exporting their goods. Focusing on Paraguay as a representative context, a multiple-case-study research design was adopted using different sources of evidence, including 15 in-depth interviews with founders, shareholders, and CEOs. The data were analyzed using grounded theory in order to develop patterns and categories, and to understand differences and regularities. The revised Uppsala internationalization process model was used as a theoretical framework. This article highlights the experts’ views of the impact of business intelligence on the export performance of software firms in Paraguay. Al- though only a few of the interviewees currently use business intelligence solutions to sup- port international strategic decision-making processes, most of them reveal a desire to use them because they expect it will have a positive impact on export performance and international competitiveness. The main factors for selecting a business intelligence solution are transparency of cost and benefits, excellent client service, and an attractive pricing model. The study results apply to all stakeholders who support the impact of business intelligence systems on the export performance of software firms in emerging economies. The article fulfills an identified need and call for research to study the use and impact of business intelligence on the way an emerging country’s exportation of goods actually performs, and the ability of its software firms to globalize successfully.

Market Entry Strategies and Performance of Chinese Firms in Germany: The Moderating Effect of Home Government Support

This study uses data at the firm level to examine the relationship between the market entry strategies of 556 Chinese MNEs and their performance in Germany. Based on the revisited Uppsala internationalization process model, we develop six hypotheses on the impact of different market entry modes on performance, and on the moderating effect of home government support on this relationship. The findings show significant effects of location choice, activity mode and establishment mode, as well as duration of market presence on performance. Furthermore, strong interaction effects of home government support on these relationships reveal that the advantages of different market entry strategies are amplified by home government support. We conclude with theoretical and managerial implications, as well as a reflection of limitations and directions for future research. We conclude with theoretical and managerial implications as well as a reflection of limitations and directions of future research. The study contributes to international management research by integrating performance effects and the facilitating role of home government support into the internationalization process model.

Social Network and Family Business Internationalization in South Eastern Nigeria

Social network relationships through social associations, clubs and social networking platforms are known to facilitate family business internationalization. However, this has not been empirically brought to the fore with respect to the family businesses in Nigeria. Owing to the commonplaceness of social networks and family businesses in South Eastern Nigeria and their involvement in cross border business, this study seeks to examine the effect of social network on the internationalization of family businesses in the zone. The study adopted survey design. Proportionate stratified random sampling and simple random sampling techniques were employed to determine the sample size. The generated data via questionnaire were analyzed using linear regression. The results show that the effect of social network on family business internationalization is significant and positive. The study therefore lends itself as a veritable empirical evidence and support to the Uppsala Internationalization Process Model. To promote cross border business, the researchers recommends the sensitization of family business founder/CEOs or descendant/CEOs on the need to belong to both national and international social associations. This social relationship has the potential of: fostering in founder/CEOs the use of social network platforms for communication; exposing the founder/CEOs to international business knowledge/experience; and linking founder/CEOs to foreign partners, investors, funds, facilities and markets.

Inertia and Managerial Intentionality: Extending the Uppsala Model

The Uppsala Internationalization Process Model is the most cited model within the field of international business. However, even with its most recent formulation, the model is predicated on a key set of assumptions about the limiting and releasing mechanisms in a ‘change of state’ decision. The model assumes that uncertainty, risk, lack of trust, and lack of awareness of opportunities are the main constraints, and that the accumulation of experiential knowledge, trust, and market commitment are the main releasing factors that allow a firm to overcome those constraints and progress to a higher state of commitment. We argue that the preceding view may be excessively narrow, and that inertia and managerial intentionality may also play a role as critical limiting and releasing mechanisms, respectively. This development implies that the passage of time and experiential learning may not always have a positive impact on firm internationalization. The extended model proposed in this paper highlights the role of the manager, and brings a contingent element to the model, thus broadening its applicability by providing new insights on issues typically considered outside the realm of the Uppsala model, such as rapidly internationalizing firms, regionalization, mode inertia and mode skipping.

The Limits of Guanxi for Chinese Nationals Doing Business Abroad: Empirical Investigation into Chinese Companies in Germany

AbstractIn the last ten years, Chinese outward direct investment (CODI) has undergone dramatic development. It has become increasingly important on the global stage. This paper attempts to integrate the guanxi concept into the Uppsala internationalisation process model to explain CODI motivation, location choice and knowledge acquisition channels. It reveals that Chinese investment in Germany is mainly driven by the desire to explore markets and to search for strategic resources. It favours location rich in network resources. Guanxi acts as an important channel of knowledge acquisition, but it is not as important as contractual linkage because of the limited professional and industry‐related knowledge in the local Chinese community. Chinese capitalism has been shaped into a hybrid form that incorporates both modern corporate management and traditional guanxi utilisation. Research which ignores or overemphasises the role of guanxi could lead to an incorrect understanding.

Wait-and-see strategy: Risk management in the internationalization process model

We interpret the wait-and-see strategy as a decision to maintain unchanged the firm’s commitments to its business network relationships. To explain why firms choose a wait-and-see strategy, we propose an extension to the relationship commitment decisions aspect of the Uppsala internationalization process (IP) Model. With this development, we explain that the wait-and-see strategy can result from a change in the levels of risk assumed in the firm and not only from the decision to adjust the risk that the firm encounters by changing commitments to its network relationships. This development enhances the ability of the IP model to accommodate contextual influences on relationship commitment decisions and to explain a more complete suite of internationalization trajectories. Extending the theoretical core of the IP model further confirms its efficacy, its application to international strategy, and its potential to be developed as a general process model of strategic change.

Management under uncertainty – the unavoidable risk-taking

PurposeAccentuating the concept of management under uncertainty in the Uppsala internationalization process model, the purpose of this paper is to develop a model for describing how managers act while keeping uncertainty at an acceptable level.Design/methodology/approachThe authors perform two empirical studies to underpin the model they construct. First, a survey of 309 chief executive officers and chief financial officers in large, publicly listed international firms in the Nordic region on managerial risk perceptions and, second, a case study of Volvo Car Corporation and its endeavors when developing new car models for the Chinese market on a new platform – a process characterized by unprecedented uncertainty.FindingsThe proposed model describing managers’ behavior under uncertainty contains elements such as adjusting/proceeding in small steps, reducing uncertainty via learning, building relationships with important parties in the environment to avoid unforeseen changes and re-dos (i.e. starting all over again) and, perhaps most important, acting despite uncertainty.Originality/valueThe paper highlights a central, though forgotten, concept of the Uppsala internationalization process model, i.e. management under uncertainty, and, thereby, opens a new path for research on how manager behave under the sway of uncertainty.

Competing on the edge: Implications of network position for internationalizing small- and medium-sized enterprises

Three generic competitive strategies attributed to internationalizing SMEs of targeting niches, differentiating products and leveraging networks fail to adequately explain how SMEs win customers in other countries against both large and small competitors. This study distinguishes competitive strategy (how firms compete) from competitive advantage, and from competitive engagements where firms deploy their competitive advantages to win customers within business network relationships. By abductively reasoning from the competitive engagements entered into by the internationalizing SMEs from the Fleet Management Systems industry segment in New Zealand, we show that these firms often compete with foreign rivals by using their position on the edge of a business network to leverage information asymmetries across structural holes. We contribute by integrating this conception of internationalizing SME competitive strategy with the business network foundations of the Uppsala internationalization process model.

Information Overload and the Internationalization Process Model: An Implementation Attempt

This article presents a theoretical equation set based on the information interactions that result in experiential learning. We attempt to link our equation set to the Uppsala Internationalization Process model in order to quantify information overload and operationalize the Uppsala model under longitudinal time series settings. The internationalization process has generated an increase in the diversity and overall quantity of information, resulting in an increase of the variation and amount of information that a firm needs to process. This challenges a firm's capacity to simultaneously expand and learn. Market knowledge is acquired essentially through current business activities, all of which proceed from a firm’s market experience to generate experiential knowledge. Market experience is situation-specific and therefore difficult to generalize. Nonetheless, firms tend to use general “failsafe proven courses of action” when confronted with new situations in an effort to reduce diverging, larger quantities of incoming and often discrepant information. Information overload refers to situations where the quantity of information pending analysis and consideration compels a firm to revert to older and trusted information processing methods instead of seeking adaptive solutions, clearly adopting a short-term efficiency posture leading to suboptimal performance.

The Internationalization Process Model Revisited: An Agenda for Future Research

We interpret the wait-and-see strategy as a decision to maintain unchanged the firm’s commitments to its business network relationships. To explain why firms choose a wait-and-see strategy, we propose an extension to the relationship commitment decisions aspect of the Uppsala internationalization process (IP) Model. With this development, we explain that the wait-and-see strategy can result from a change in the levels of risk assumed in the firm and not only from the decision to adjust the risk that the firm encounters by changing commitments to its network relationships. This development enhances the ability of the IP model to accommodate contextual influences on relationship commitment decisions and to explain a more complete suite of internationalization trajectories. Extending the theoretical core of the IP model further confirms its efficacy, its application to international strategy, and its potential to be developed as a general process model of strategic change.