Being an FB in Internationalization

The case firms were asked whether they see value in being an FB in international markets, bring up the FB status as a marketing factor, and in general see connection between being an FB and certain type of internationalization. Next the subjective opinions of the case firms on these issues are presented, after which in the discussion part the issues are examined along with the results obtained earlier and the SEW statuses of the case firms.

5.3.1 Importance of Being an FB in International Markets

Seven of the case firms see at least some value in being an FB in international markets. As mentioned earlier, five of the case firms have more or less FBs working as partners in foreign markets or family-like relationships, which is seen as beneficial for the cooperation. These firms also see their FB status rather important. Firm A, who has just FBs as foreign partners, sees it important that Firm A itself is also an FB, making the interaction closer. FB status is also brought up as a marketing factor. For example, the partner in India said that they do business only with FBs (and in India the amount of FBs of all the firms is 98 per cent), so also in this sense having FB status enhances establishing international partnerships. Firm B, for whom building family-like relationships with foreign partners is important, believes that being an FB provides a positive, different image in international markets, which is beneficial for internationalization. Firm G, whose agent partners are also FBs in the key markets, similarly states that being an FB, despite some weaknesses, has its value in foreign market, since it provides the image of trustworthy, long-term and stable partner; the firm has brought up the fact that the FB has existed for 50 years for this reason. There is rather good mutual understanding between Firm G and the FB partners; e.g.,

owners are more involved in the business and they can be contacted easier when key decisions are made.

Firms H and J, who also have many or significant foreign partners and customers as FBs, provide mixed views on the importance of being an FB, but they lean towards seeing it valuable. The CEO of Firm H states that bringing up the FB status as a marketing factor is not so important, and foreign partners are aware of the status anyway. However, he admits that it wouldn’t be bad to bring it up, since being an FB gives the image of a trustworthy firm, who serves the customers as well as possible regardless of the time of the day. The Chairman of the Board in Firm H, the father of CEO, more positively states that bringing up FB status internationally is important; for example, in Germany and Austria it is appreciated. In Firm J, the Chairman of the Board doesn’t see FB status as having important marketing value but the nonfamily CEO does, as he states how foreign partners value the fact that the owners and founders are actively developing their innovations in the firm and have financed the firm.

Among the rest five case firms, who don’t bring up the possible FB status of their foreign partners, the importance of being an FB in international markets is not really regarded as high except in Firm I, for whom FB image is important and is brought up in foreign markets. In Firm C, FB status hasn’t really been emphasized in the international markets. The founder and CEO presents himself as a CEO, not as a biggest owner, because he wants to deliver the image of the firm as a competent manufacturer in the field as a humble employee, not as an owner of an FB. Of course when, for example, training is organized for the foreign dealers, ownership issues are brought up, but never when starting a customer relationship. The Sales Manager of Firm C, the CEO’s daughter, however says that they bring up the FB status if they are dealing with an FB but not with, for example, a big manufacturing firm. Firm E does bring up the fact that it is an FB in foreign markets, but there is not much value seen in that. However, being an FB, which is more person-centric entrepreneurship, provides a face for the business compared to faceless large corporations. Firms D and F don’t bring up the FB status internationally as a marketing factor and don’t see value in it; e.g., in the opinion of Firm F bringing the fact of coming from Finland is important.

5.3.2 Connection between Being an FB and Certain Way of Internationalizing

Despite most case firms see value in being an FB in international markets and bring the FB status up in marketing, the case firms in general don’t see connection between having an FB status and how they have internationalized. Rather, internationalization is associated with the size of the firm and limited resources.

For example, Firm D states that internationalization is not cheap, and thus it has utilized foreign agents due to their cost-effectiveness. Firm F doesn’t see that there is much significance whether you are FB or not when it comes to internationalization pathways; rather it is the size that matters, as larger firms are more able to determine their pathways and use resources, but smaller firms have

to be more careful. Firm G sees that being part of a bigger firm would help getting better resources and contacts for internationalization. Firm I states that in the early stage being a small FB has its advantages, since innovative ideas can arise and be implemented effectively in a small FB, but after that, due to limited resources, taking the next step is hard and thus there should be more networking within Finnish FBs to combine forces to capitalize on international opportunities.

Long-term orientation, persistence, growth orientation and relying on your own approach are also mentioned. Firm B ponders that if the firm had been in external ownership it wouldn’t have been so persistent even through difficult times. Firm A thinks that maybe FBs are slower to internationalize than result-oriented and quarter-by-quarter living firms. In this, however, FBs’ long-term orientation and risk-averse nature create security. Firm C sees that if the firm had been in external ownership, internationalization would have probably been executed by the textbook, having one dealer in one region, but as an FB, with a coherent mindset, the firm has hold on to its multi-dealer, multi-channel approach. Firm E sees association with growth orientation: since the Firm E is an FB and thus the identification between the CEO-owner and the business is rather strong, there is intrinsic attitude and will to grow, which has fueled internationalization.

Firm J states that being an FB affects the selection and development of foreign partner relationships; partner network mostly consists of not-so-big, person-owned and -run firms who share mutual trust and long-term orientation.

Although Firm J is the only one to explicitly state that it tries to select similar firms as partners in the foreign markets, this can be linked to many other case firms as well, since the importance of FB status and/or having FBs as foreign partners are evident in a significant number of case firms as noted earlier. For example, Firm A has only FBs as foreign partners, and while the firm doesn’t explicitly state that this has been pursued, there might be a more or less unconscious trend towards selecting these, since Firm A itself values being an FB.

5.3.3 Summary of Being an FB and Internationalization

Most case firms see FB status important in foreign markets, which is not limited to just those five case firms who explicitly state the existence of FB partners and family-like relationships with foreign partners. As discussed already in the chapter on network relationships, attributes related to the distinctive image of an FB are trustworthiness and long-term orientation, which are regarded as beneficial for internationalization and international marketing.

In spite of appreciating the FB status in internationalization, the case firms in general don’t see association between being an FB and certain way of internationalizing. While family-related attributes, such as long-term orientation, persistence and risk-averse nature, affect the internationalization process and the

FB status might make them select similar foreign partners, size and resources have greater impact in the end. Thus, in this sense, the case firms are firms among others, in which family-related factors might be secondary.