Business School
MANAGERIAL ANTECEDENTS OF SMES INTERNATIONALIZING INTO THE SWEDISH MARKET:
a multiple-case study of three Finnish SMEs in the furniture industry
Master's thesis, Innovation Management Tuuli Vepsäläinen (207593) 6.9.2019
Abstract
UNIVERSITY OF EASTERN FINLAND Faculty
Faculty of Social Sciences and Business Studies
Department
Business School
Author
VEPSÄLÄINEN, TUULI, M
Supervisor
Kaisa Henttonen D.Sc. (Econ. and Bus.
Adm.)
Title
Managerial antecedents of SMEs internationalizing into the Swedish market: a multiple- case study of three Finnish SMEs in the furniture industry
Main subject
Innovation Management LevelMultiple-case study
Date
6.9.2019 Number of pages
104 p., 2 appendices (3 p.)
Abstract
Master’s thesis focuses on the internationalization of SMEs from the viewpoint of Finnish SME managers. The primary goal of this thesis was to recognize and research the managerial antecedents of internationalization in Finnish SMEs in the furniture industry, which are internationalizing to the Swedish market. Another goal of this thesis was to study and create an understanding of what kind of role managerial antecedents play in the companies’ internationalization process. The subject is highly relevant today, as the global market has caused major challenges for the Finnish furniture industry in recent decades due to the global cost competition, making it challenging to hold on to the essential values of the industry, such as keeping manufacturing in Finland. Internationalization as such has been seen as especially challenging in this industry. The majority of enterprises in the furniture industry are SMEs which operate on the domestic market, thus limiting growth possibilities.
The furniture industry has significant hidden potential to create internationally well-known export brands, but this potential has not been successfully identified and utilized. The role of the manager in the internationalization process of an SME is significant. The manager’s abilities, competencies, and leadership know-how - these may be seen as a group of managerial antecedents – play a key role in the internationalization process of an SME, which is why the manager and managerial antecedents were chosen to be the study angle of this thesis. The theoretical framework was formed by studying the previous literature on SME internationalization. The existing models and internationalization theories were examined from the viewpoint of the research questions as well as the goals of the thesis, and of the existing models the ones that suited the thesis goals and were the most adaptable were used in a combination. There is very little literature available on the internationalization of Finnish SMEs in the furniture industry, so this thesis utilizes literature on internationalization more broadly, for example studies on SME internationalization in Europe. The data was gathered through semi-structured interviews, and from each of the case companies two managers in charge of export were interviewed. Semi-structured interviews were used because through them it was possible to obtain as precise information as possible by presenting possible follow-up questions to the interviewees.
Based on the empirical material, the managerial antecedents for internationalization can be named and grouped: global mindset, knowledge, competence and management know-how, language skills, experience, age, education, personal networks, gender, entrepreneurial orientation, commitment, level of risk tolerance and international entrepreneurship. It is possible to state that the managerial antecedents play a significant role in the internationalization process, but also noteworthy is that for the internationalization process, different antecedents have a different amount of weight. The managers have specifically underlined their personal networks and global mindset as highly important antecedents. A finding that can be considered somewhat contradictory to the previous literature is that the Finnish managers do not see language skills as a crucial antecedent for internationalization. Based on the study results, some procedure recommendations can be given to the Finnish SME managers who seek internationalization for their company. The managers should be encouraged to be more open-minded and not to be so afraid of taking risks. Also polishing of language skills, especially that of the target market if that is the Swedish market, should be of help in the internationalization process based on the gathered data. In addition, the managers should create personal networks in advance in the target market and develop them further. Furthermore, sharing thoughts and experiences with other companies facing similar challenges is encouraged. The old boy network in the Finnish furniture industry is harmful to the development of the field – so, sharing of experiences may enable further development and improve the conditions for internationalization.
Key words
SME internationalization, SMEs (Small and Medium-sized Enterprises), furniture industry, manager, antecedents, managerial antecedents
Tiivistelmä
ITÄ-SUOMEN YLIOPISTO Tiedekunta
Yhteiskuntatieteiden ja kauppatieteiden tiedekunta YksikköKauppatieteiden laitos
Tekijä
VEPSÄLÄINEN, TUULI, M.
Ohjaaja
KTT Kaisa Henttonen
Työn nimi (suomeksi ja englanniksi)
Johtajien kansainvälistymisen ennakkoehdot suomalaisten pk-yritysten kansainvälistymisessä Ruotsin markkinalle: Monitapaustutkimus kolmesta pk-yrityksestä huonekalualalla.
Managerial antecedents of SMEs internationalizing into the Swedish market: a multiple-case study of three Finnish SMEs in the furniture industry.
Pääaine
Innovaatiojohtaminen Työn laji Monitapaustutkimus Aika 6.9.2019 Sivuja 104 s., 2 liitettä (3 s.)
Tiivistelmä
Pro gradu- tutkielma käsittelee pk-yritysten kansainvälistymistä suomalaisten pk-yritysten johtajien näkökulmasta.
Tutkimuksen ensisijainen tavoite oli tunnistaa ja tutkia johtajien kansainvälistymisen ennakkoehtoja suomalaisissa huonekalualan pk-yrityksissä, jotka ovat kansainvälistymässä Ruotsin markkinalle. Toisena tavoitteena oli tutkia ja luoda ymmärrystä siitä, minkälainen rooli johtajien kansainvälistymisen ennakkoehdoilla on yrityksen kansainvälistymisen kannalta. Aihe on ajankohtainen, sillä globaalit markkinat ovat aiheuttaneet kotimaiselle huonekalualalle viime vuosikymmeninä haasteita kansainvälisen hintakilpailun myötä ja valmistajien on ollut haastavaa vaalia alalla kotimaassa tärkeinä pidettyjä arvoja, kuten huonekalujen valmistuksen säilymistä Suomessa. Erityisen haastavana toimialalla on koettu kansainvälistyminen. Valtaosa huonekaluteollisuuden yrityksistä on pk-yrityksiä, jotka toimivat kotimarkkinoilla ja toimialan kasvumahdollisuudet ovat haasteelliset. Huonekalualalla on piilossa olevaa potentiaalia tulla kansainvälisesti tunnustetuksi vientibrändiksi, mutta tätä potentiaalia ei olla onnistuttu tunnistamaan ja hyödyntämään. Johtajan rooli pk- yrityksen kansainvälistymisprosessissa on merkittävä. Johtajan taidot, kompetenssit ja johtamisen tietotaito, jotka ovat ryhmä johtajan ennakkoehtoja, ovat avainroolissa pk-yrityksen kansainvälistymisessä, minkä vuoksi johtaja ja johtajan ennakkoehdot on valittu näkökulmaksi tutkimukseen. Teoriaviitekehys muodostettiin tutkimalla aiempaa pk-yritysten kansainvälistymisen syitä käsittelevää kirjallisuutta. Olemassa olevia malleja ja kansainvälistymisen teorioita tarkasteltiin tutkimuskysymysten sekä tutkimuksen tavoitteiden kautta ja tutkimuksen tavoitteisiin sopivimpia olemassa olevia malleja yhdisteltiin. Suomalaisten huonekalualan pk-yritysten kansainvälistymisestä on olemassa erittäin vähän kirjallisuutta, joten tutkimuksessa hyödynnetään laajemmin eurooppalaista pk-yritysten kansainvälistymistä käsittelevää kirjallisuutta.
Empiirinen tutkimusaineisto koostuu kolmesta tapauksesta suomalaisia huonekalualan pk-yrityksiä, jotka tekevät tai ovat aloittamassa vientiä Ruotsin markkinalle. Tutkimusaineisto kerättiin teemahaastatteluilla, joihin osallistui jokaisesta tapausyrityksestä kaksi viennistä vastaavaa johtajaa. Teemahaastatteluun päädyttiin, sillä sen avulla voidaan hankkia mahdollisimman tarkkaa tietoa esittämällä mahdollisia lisäkysymyksiä haastateltaville. Empiirisen materiaalin perusteella johtajien kansainvälistymisen ennakkoehdot voidaan nimetä ja ryhmitellä seuraavasti: globaali ajattelutapa, tieto, kompetenssi ja johtamisen tietotaito, kielitaito, kokemus, ikä, koulutus, henkilökohtaiset verkostot, sukupuoli, yrittäjämäinen orientaatio, sitoutuminen, riskin sietokynnys ja kansainvälinen yrittäjämäisyys Empiirinen aineisto osoittaa johtajien ennakkoehtojen näyttelevän merkittävää roolia kansainvälistymisessä, mutta huomionarvoista on, että eri ennakkoehdoilla on erilainen painoarvo kansainvälistymisprosessin kannalta. Johtajat ovat kokeneet erityisen merkittäviksi ennakkoehdoiksi henkilökohtaiset verkostonsa sekä globaalin ajattelutavan. Joissain määrin ristiriidassa aiemman kirjallisuuden kanssa voidaan pitää sitä, että suomalaiset huonekalualan pk-yritysten johtajat eivät pidä kielitaitoa ratkaisevana ennakkoehtona kansainvälistymiselle. Tutkimustulosten perusteella voitiin tehdä joitain toimenpidesuosituksia suomalaisille pk-yritysten johtajille, jotka pyrkivät yrityksensä kansainvälistymiseen. Voidaan kehottaa johtajia olemaan avarakatseisempia ja pyrkiä olemaan pelkäämättä riskejä. Myös kielitaidon kohentamiseen ja erityisesti kohdemarkkinanan kielen osaamiseen erityisesti Ruotsin markkinalla voidaan tulosten perusteella kannustaa johtajia. Lisäksi johtajia voidaan kannustaa kehittämään henkilökohtaisia verkostojaan ja luomaan niitä kohdemarkkinalla ennakkoon. Johtajia kehotetaan myös jakamaan ajatuksiaan ja kokemuksiaan toisten vastaavien haasteiden edessä olevien yritysten kanssa. Huonekalualalla Suomessa on hyväveli-verkosto, mikä on haitallista toimialan kehitykselle, joten kokemusten jakaminen voi mahdollistaa toimialan kehittymisen ja parantaa kansainvälistymisen edellytyksiä.
Avainsanat
pk-yritysten kansainvälistyminen, pk-yritykset (pienet ja keskisuuret yritykset), huonekaluteollisuus, johtaja, ennakkoehdot, johtajan ennakkoehdot
TABLE OF CONTENTS
1 INTRODUCTION ... 6
1.1 The topic of research, background, and the chosen approach ... 6
1.2 Research Objectives and Research Questions ... 8
2 PREVIOUS LITERATURE ON SME INTERNATIONALIZATION AND MANAGERIAL ANTECEDENTS ... 10
2.1 Key Concepts ... 11
2.1.1 The internationalization of SMEs………..11
2.1.2 SME (Small or Medium-sized Enterprise) ... 13
2.1.3 Furniture Industry ... 14
2.1.4 The manager ... 14
2.1.5 Antecedents ... 15
2.1.6 Managerial Antecedents ... 16
2.2 The key models for classifying the antecedents of internationalization ... 17
2.3 Antecedents of SME internationalization at the managerial level ... 20
2.3.1 Global mindset ... 22
2.3.2 Knowledge, skills, competence, and management know-how ... 24
2.3.3 Language skills ... 25
2.3.4 Manager’s attributes ... 26
2.3.5 Gender ... 27
2.3.6 Entrepreneurial orientation, Commitment and Level of risk tolerance ... 28
2.3.7 International Entrepreneurship ... 29
2.4 Summary ... 31
3 METHODOLOGY, DATA AND ANALYSIS ... 33
3.1 The Research design ... 33
3.2 Qualitative research method ... 34
3.3 Case study ... 36
3.4 Data collection ... 38
3.4.1 Internationalization of the Finnish Furniture industry ... 39
3.4.2 Case Companies ... 44
3.4.3 Research Interviews ... 50
3.4.4 Circularity of the research process and the position of the researcher ... 55
3.5 Analyzing the research data ... 67
3.6 Reliability and validity ... 60
4 EMPIRICAL ANALYSIS AND THE RESULTS ... 64
4.1 Modes of entering the international market………..64
4.2 Managerial antecedents………..………66
4.3 Summary of the research results ... 94
5 CONCLUSION AND DISCUSSION ... 97
5.1 Summary of the results ... 97
5.2 Key results ... 99
5.3 Limitations of the study, suggestions for future research, and managerial implications... 101
REFERENCES……….105
INTERVIEWS………..111
ELECTRONIC SOURCES………..111
TABLES………...113
FIGURES……….113
APPENDICES………..114
1 INTRODUCTION
1.1 The topic of research, background, and the chosen approach
Finnish furniture industry is a traditional industry and well known of its high quality and values considering design, long life cycle of the products, entrepreneurship, and local manufacturing. The companies operate in an industry with a long experience in craftsmanship and have typically been owned and run on a family basis for generations (Otero-Neira et. al 2009). However, globalization has set its own challenges for the Finnish furniture manufacturers during the last decades as the core competencies and ideas the local manufacturers have traditionally been able to value, such as keeping manufacturing in Finland, have become impossible or difficult because of global cost competition. The subject is highly relevant, because export and internationalization have been major challenges commonly in the Finnish furniture industry. The furniture industry is a traditional European industry branch where the vast majority of firms are SMEs (small-and-medium-sized- enterprises) and Finland represents a relatively small home market base. There is a great, hidden potential to become a globally noticed export product and brand. Moreover, various opportunities and advantages lie undiscovered and have not been made use of yet when discussing international brand building possibilities and marketing of the Finnish furniture SMEs in global markets. In the previous literature, furniture is a non-globalized sector where competitive variables are very diverse. Additionally, internationalization of Finnish furniture industry lack academic research (Otero-Neira et. al 2009).
Previous literature in the field of international business focusing on describing SME internationalization indicates that internationalization is “an entrepreneurial activity” (Lu &
Beamish 2001), and managers are seen as key factors in the internationalization of SMEs. The managers’ skills, competencies, and management know-how are in a key role in the internationalization process, and those can be seen as one group of managerial antecedents (Korsakienė & Tvaronavičienė 2012). Because there is a need for analysis in the managerial level in the research field, in purpose to identify determinants and antecedents of SME internationalization (Kuivalainen et al. 2012), my interest in this thesis is to focus on studying managerial antecedents of internationalization of Finnish SMEs. Due to my long, personal
experience in the furniture industry and a willingness to develop export activities of the industry in the future, and due to a gap in the research on the industry, I chose three Finnish furniture industry SMEs for a multiple case study. I conducted the study by using a qualitative research method in order to gain an understanding of the internationalization of Finnish furniture industry SMEs expanding to Sweden, and to grasp the idea of different managerial antecedents of internationalization, as well as to find answers to what kind of role these antecedents play in the internationalization process of the case companies. I chose the Swedish market as an object market for the case study, because it is usually the most important export market for the Finnish furniture industry companies due to the short geographical distance. The case companies which participated in my research are Adea Oy, Artek Oy Ab, and Hakola Oy. Two managers who are responsible for export activities of each case company were interviewed in a qualitative research interview to collect data for the multiple case studies which were analyzed by the qualitative analyzing methods.
This research aims to search for a better understanding to the phenomenon of SME internationalization of furniture industry SMEs in Finland which are expanding to the Swedish market. The research problem is approached through asking what the managerial antecedents of internationalization in the Finnish furniture industry SMEs are. Additionally, in order to deepen the understanding of the managers’ perspective, the interest of this study is to ask what managerial antecedents of internationalization are perceived by the managers themselves in the Finnish furniture industry SMEs. Furthermore, to gain a deeper understanding of the internationalization of the Finnish furniture industry SMEs, another interest of the research is to find out what kind of role the managerial antecedents play in the internationalization of the Finnish furniture industry SMEs, and this research aims to describe that phenomenon.
In the previous SME internationalization literature various perspectives and theoretical models can be found in purpose to separate and explicate the antecedents of internationalization, and it is necessary to briefly classify different antecedents of internationalization to differentiate the managerial antecedents, which is the key interest of this study. The topic of research is the antecedents of SME internationalization in the managerial level, which constructs the theoretical framework. It focuses on the managerial antecedents of SME internationalization by following the model by Kuivalainen et al. (2012), complemented by another relevant model by Martineau and
Pastoriza (2016), which is the framework of “the antecedents, outcomes, and moderators of SME international involvement”. In the previous SME internationalization literature the latest researches relate antecedents to international involvement. In the previous literature among the three levels of antecedents individual-level antecedents have received relatively less attention within previous studies (Martineau & Pastoriza 2016), which justifies the importance to study especially the managerial level antecedents, and this is one reason to my interest to focus on this topic within this thesis.
1.2 Research Objectives and Research Questions
The objectives of this research are to gain an understanding of internationalization of Finnish furniture industry SMEs, to gain an understanding of different managerial antecedents of internationalization and what kind of role these antecedents play in the internationalization.
Additionally, by the means of understanding these issues on a deeper level, it may be possible to give some advice to the Finnish furniture industry SMEs’ managers on how to develop their companies’ internationalizing processes and how to create more value for the industry’s export activity in general.
As I have defined above, the object of this study is internationalization of three Finnish furniture industry SMEs and managerial antecedents within those companies’ specific internationalization projects. For a more specific focus in empirical research, I chose a relevant case of each company, namely, the internationalization process for the Swedish market in which the case company has operations in a store or a showroom as a main distribution channel. The theoretical focus of my study is the internationalization of SMEs and managerial antecedents of internationalization.
Within this context it is possible to examine the main characters of Finnish furniture industry SMEs’ internationalization by examining the managerial antecedents. With this knowledge it is now possible to draw the research question and a sub-question.
The research question and the sub-question are the following
• What are the managerial antecedents of internationalization perceived by the managers themselves in three Finnish furniture industry SMEs ?
• What kind of a role do the managerial antecedents play in the internationalization of three Finnish furniture industry SMEs expanding for the Swedish market?
2 PREVIOUS LITERATURE ON SME INTERNATIONALIZATION AND MANAGERIAL ANTECEDENTS
The purpose of this literature review is to create a theoretical framework for empirical research. In order to do that, this chapter examines previous academic studies in the field of international business, international entrepreneurship, and SME (Small or Medium-sized Enterprise) research.
The theoretical framework is based on literature in the field of study on international business, entrepreneurship, and international entrepreneurship. The previous studies discussed in this review concern the internationalization of SMEs, antecedents of SME internationalization, the furniture industry in Finland, and Scandinavia as a destination for furniture industry in SME internationalization. The furniture industry in Finland has been previously studied academically from different perspectives, such as competition strategies, logistics, multicultural awareness (Tammela et al. 2008), the new product management practices adopted by low‐tech small and medium‐sized enterprises in the context of design‐intensive products (Lindman et al. 2008), how innovations are linked with organizations’ performance (Otero-Neira et al. 2008), and the approach of design management (Pitkänen 2012). Because there are not many previous studies on the internationalization of the Finnish furniture industry, especially on the SMEs’ managerial focus, the previous studies of antecedents of internationalization are mostly taken from SMEs in other industries. For this literature review, I chose the studies which are the most relevant ones to create the needed theoretical background. The internationalization of Finnish firms is seen as a response to domestic and global challenges, however, it is a relatively narrowly researched area. To introduce some researcher, Luostarinen (1994) as an example has studied the internationalization of Finnish firms.
This literature review is built following the objectives of this research. It begins with definitions of the key concepts of this study, which are internationalization of SMEs, SME (small or medium- sized enterprise), Furniture Industry, Manager, Antecedents and Managerial Antecedents. There is an inevitability to understand what these concepts refer to in the context of this study. The next phase is to review the antecedents of SME internationalization, where the internationalization antecedents are classified by first identifying the antecedents of internationalization. The following section is interested in the antecedents of SME internationalization concerning the managerial
level. It explains how being a manager occurs in the SME internationalization context. The previous literature emphasizes that analysis on the level of managerial antecedents is important to collect, because of the interest to identify the determinants and antecedents of SME internationalization that are of essential interest in this study. Finally, the literature review ends with a theoretical framework proposing and explaining what the proposed antecedents or the reasons and preceding conditions for the Finnish furniture industry companies are, and, especially, what the proposed managerial level antecedents of internationalization for Finnish companies in the furniture industry are. The proposed theoretical framework is a base for the data collection, analysis, and discussion presented later in this study.
2.1 Key Concepts
Internationalization of SMEs, SME (small or medium-sized enterprise), Furniture Industry, Manager, Antecedents, Managerial Antecedents
2.1.1 The internationalization of SMEs
Traditional Process Theory of Internationalization, called the Uppsala Model (Johanson & Vahlne 1977), discusses the SME internationalization on the firm level. The model submits a firm’s resources and experience in the home market define the firm’s ability to go to the international markets. Even though this theory is not developed further in this thesis study it is justified to mention it as it is a classic theory, building the basis for the more previous internationalization theories. More previously in a research by Luostarinen (1994), internationalization is also seen as
“a step-by-step process of international business development, whereby a firm becomes increasingly committed to and involved in the international business operations through specific products in selected markets”.
In order to understand a concept of internationalization, it is crucial to make a definition of what it refers to this study’s context. Globalization has made it inevitable for SMEs to internationalize their business activities (Fabian et al. 2009; Raymond et al. 2014). This may be done with the intent
to respond to small, mature, or highly competitive domestic markets, or because they perceive greater opportunities in the foreign markets (Fletcher 2004). SMEs’ internationalization process has been noticed to differ substantially from large, multinational enterprises (Musteen et al 2010).
Kraus et. al (2017) describe internationalization as “a common growth strategy for small and medium-sized enterprises”, despite several challenges SMEs may face in their internationalization process.
A selection of the country and the choice of an entry mode have been seen as the most important strategic decisions in a firm’s internationalization (Andersen 1993). Internationalization is described as “managerial or entrepreneurial activity” (Lu & Beamish 2001) in previous studies.
Because SMEs have been characterized by limited resources, managers are constantly involved in a decision-making process concerning the allocation of the SMEs’ resources (Kraus et. al 2017, 691), and the owner is the key resource in internationalization (Kannieß 2010). Additionally, Marinova and Marinov (2017) argue it is in fact the owner-manager who makes the decision about internationalization. Hence, internationalization of SMEs can be understood as “a complex, multidimensional decision process” (Kraus et. al 2017, 691).
Bell and Young (1998) state that a single theory cannot fully explain a firm’s internationalization, and that a more holistic perspective in which different theories are used to analyze the same phenomenon should be taken. Korsakienė et. al (2012) carried out a research in Scandinavian countries which proved that the firm’s domestic markets no longer seem to be as important a
“learning place”. McDougall et al. (1994) stated that the stage models of internationalization fail to explain why such firms operate in international markets rather than just in the home markets, and existing internationalization models do not adequately reflect the underlying factors of the internationalization processes in the firms (Bell 1995). Although managerial activity is the approach of this thesis considering internationalization, it is possible to focus on internationalization through the phenomenon of early and accelerated internationalization, which contrasts with the conventional pattern of gradual, incremental internationalization (Cavusgil &
Knight 2015). The latter is more relevant in the context of the case firms in this study.
Hutchinson et. al (2007, 97) represent “the reasons for internationalization are given numerous names by different authors in the broader literature, including ‘initiating and auxiliary forces’
(Aharoni 1966), ‘motives’ (Alexander 1995), ‘triggering cues’ (Wiedersheim-Paul, Olson, and Welch 1978), ‘facilitating factors’ (Treadgold and Gibson 1989), ‘stimuli’ (Leonidou 1998),
‘drivers’ (Winch and Bianchi 2006), and ‘antecedents’ (Vida and Fairhurst 1998)”. In the study context of this thesis, “antecedents of managers and entrepreneurs” are accepted as one reason for internationalization in the case SMEs.
2.1.2 SME (Small or Medium-sized Enterprise)
The analysis of this study focuses on small and medium-sized enterprises, in which “the behavior of the owner or manager is known to have a determining influence on the strategy and performance of the firm”, which is the key definition this thesis follows (Acedo & Florin 2006). Companies operating in the Finnish furniture manufacturing and retailing industries are mainly small or medium-sized enterprises (SME). In this research, the object companies are small or medium-sized enterprises. They are usually companies that employ about 10–250 people (Suomen Yrittäjät, 2018;
Statistics Finland 2016.) Gunasekaran et. al (2011, 18) state: “SMEs are known to contribute significantly to the economic development of the regions or countries where they exist”. SMEs account for the great majority of all firms operating in most developed economies. In Finland, SMEs employed 65 percent of all employees, having a turnover of 344 billion euros in total in 2016. It is noticeable in the context of the furniture industry that microenterprises employing 1-9 people are 93,3% of the total number of the Finnish companies, and in the furniture industry a big amount of the companies are these microenterprises (Suomen Yrittäjät, 2018; Statistics Finland, 2016).
In his review, Tikkanen (1998) points out it has been stated in many recent studies of SMEs in the Nordic countries that a great number of firms in many industries have entered into various cooperative relationships in order to enhance their competitiveness in often declining markets.
SMEs have traditionally seen their own resources as very limited to be able to act competitively in the global market, especially such areas as research, development, and international marketing.
Thus, the SMEs have seen inter-organizational cooperation as the only way to survive in the ever
fiercer domestic and global competition. Korsakiene and Tvaronaviciea (2011, 295) represent that SMEs are in a significant role in the growth and change of the economy, and they are confronted with international competition in the international markets. Thus, the internationalization of SMEs has engaged significant interest from researchers, and it still remains as one of the most important areas to be investigated in the future.
2.1.3 Furniture Industry
Furniture manufacturing is a considered to be a typical low-tech industry. Furniture industry is a traditional European industry branch where the vast majority of firms are SMEs (Otero-Neira et.
al 2008). In the context of this study the interest is in furniture industry in Finland, which belongs to wood processing industry (Tekes 2003). The Finnish firms are “small in size with a long experience in craftsmanship and they have typically been owned and run on family basis for generations” (Otero-Neira et. al 2008). Pavitt (1984) defines the furniture industry belonging to a sector of production which can be called “supplier-dominated”. This means that the innovations made are mainly process innovations, embodied in capital equipment and intermediate inputs originated by firms whose principal activity is outside these sectors.
2.1.4 The manager
Szczepańska-Woszczyna (2014) has defined the manager of an SME as “a person who is responsible for implementation of the managerial process, especially for planning and decision making, organizing, leading people and controlling human, financial, material and information resources”. The manager is the head of the team (people, organization, organizational unit), and their role is to make the team able to achieve the established goals in the context of the changing market, meaning internationalization in this study context. This definition is relevant in the context of this study. Szczepańska-Woszczyna (2014) points out the importance of characteristics of managers in small organizations where most employees know each other, as is the case with the firms studied in this thesis context. Those characteristics are the manager of a company as “a universal leader, who becomes almost a member of the organization family, and he is not an anonymous jumper, typical for large corporations. Manager extracts efficiency out of existing
resources, especially the human ones, and neutralizes their weaknesses”. It is important to make clear in these concept definitions, that this study does not focus on differentiating a manager and an entrepreneur, rather they are discussed in the same context and as a same concept of managerial antecedents in this thesis.
2.1.5 Antecedents
To briefly classify different antecedents of internationalization despite the focus of this study is only on managerial level antecedents, the following classifications can be introduced to make a better understanding of what the concept of “antecedent” consists of. In the previous literature on SME internationalization, various perspectives, and theoretical models have been used to separate and explicate the antecedents of internationalization. Considering the general definition of an
”antecedent”, Vida and Fairhurst (1998, 145) have proposed a model focusing on antecedents, process, and outcome factors in the retail internationalization process. They define: “The model is dynamic in the sense that the outcome, i.e. entry mode and market selection, along with retail management considerations and performance of international retail operations, will influence the model’s antecedents, i.e. the firm’s and the decision maker’s characteristics, in the next cycle”.
The authors presume that the interplay of the firm as well as the decision maker's characteristics along with the external environment serve as facilitators or inhibitors which can be called antecedents, which influence on whether a firm will initiate international retailing activities, preserve a constant level, increase or decrease its level of international involvement, or completely withdraw from its international activities. The focus has been given to the critical impact of the decision maker's characteristics, e.g. experience and attitudes of management (Vida 2000).
Martineau and Pastoriza (2016) found out that the most previous research directly relate antecedents to international involvement. Their analysis revealed that in previous studies, among the three levels of antecedents, individual level antecedents have received comparatively less attention, and that is the definition this thesis follows. Additionally, the model by Kuivalainen et al. (2012) proposes that the antecedents of internationalization have to be contemplated on “the managerial level”, “firm level”, and “environmental level”. Circumstances impacting on SME
internationalization decisions have been investigated under different concepts in comprehensive SME literature, such as “motives, stimuli, facilitating factors, antecedents, and drivers of internationalization” (Hutchinson et al. 2007, 97), whereas the concept of “antecedent” is relevant to SME internationalization. The term “antecedents” focuses on describing the sources or reasons for a certain action, and this why I chose to use the term “antecedent” in this study when identifying and analyzing the reasons for SME internationalization.
2.1.6 Managerial Antecedents
It was necessary to briefly classify different antecedents of internationalization in order to define
”managerial antecedents”, which is the key interest of this study. Managerial level antecedents of SME internationalization has been studied and found that the entrepreneur, more precisely the manager in this context, appears as the key element for SME internationalization, as the entrepreneur is often responsible for all of the essential business activities and decisions made in the firm (Hutchinson et al. 2007). In previous studies, it is common that certain characteristics of the manager together with competence have a positive correlation to the level of internationalization of an SME.
The key managerial antecedents based on the model by Kuivalainen et al. (2012) consist of the entrepreneur’s global mindset, skills and competence, know-how, previous international experience, the manager’s education and age, entrepreneurial orientation and commitment to internationalization. Additionally, the gender of the manager (Orser et al. 2010) has a significant influence on the export propensity and can be accepted as a managerial antecedent. In addition, the view by Martineau and Pastoriza (2016) is considered, as they found entrepreneur demographics and socio-cognition properties as antecedents of propensity and intensity to export, whereas managerial antecedents found in this model are additionally the manager’s personal networks and their socio-cognitive characteristics, such as, proactivity and risk aversion. This view is followed by the international entrepreneurship, which explains the manager’s “willingness to take risk and act as a change agent and innovator” to push the firm into foreign markets (Hutchinson et al.
2007). The approach of this research takes into consideration all of these previously introduced aspects of managerial antecedents.
2.2 The key models for classifying the antecedents of internationalization
The most simplistic models in the previous literature separate antecedents of SME internationalization to external and internal factors. Cavusgil and Godiwalla (1982) have then notably emphasized the internal and external stimuli in the decision for internationalization of SMEs. Katsikeas and Piercy (1993) have used the following categorization: “decision-maker characteristics, firm-specific factors, environmental factors, and firm characteristics”.
Additionally, Luostarinen (1994) introduces that analysis can be conducted on three levels, which are “country level, industry level, and firm level.” Additionally, Luostarinen (1994) introduces different forces which require a closer analysis, when the factors that explain internationalization are studied, and those are “global, international, domestic, and company-specific”. Hutchinson et al. (2007) have also introduced additional model and they conclude that the antecedents of internationalization can be divided into “environmental” and “firm level” dimensions. However, this study focuses on the managerial level and analyses of these other levels have been left outside any closer investigation.
Even though this literature review introduces various different options to perceive the antecedents of SME internationalization, to create a more comprehensive understanding of the concept, I decided to structure the core part of the literature review, the antecedents of the SME internationalization in managerial level, which constructs the theoretical framework of this study, focusing on the antecedents of SME internationalization following a model developed by Kuivalainen et al. (2012). It is noticeable that because the focus of this thesis is in identifying managerial antecedents of internationalization, but not on identifying other antecedents more comprehensively, or on identifying relationships of antecedents and internationalization outcomes, the managerial level antecedents is the framework which is only captured for more comprehensive investigation in this literature review in the following paragraphs and for the analysis later on. The model by Kuivalainen et al. (2012) proposes an overview of conceptual frameworks and concepts for SME internationalization research. The model is a relevant choice as a framework for this study, because it is constructed of various types of different perspectives of other classifications of internationalization antecedents, which this literature review additionally briefly introduces, but it is still comprehensive and clear. “The simplified model of internationalization patterns,
antecedents, and outcomes” by Kuivalainen et al. (2012) proposes that the antecedents of internationalization have to be investigated on the “managerial level, firm level, and environmental level”. Different factors are analyzed at each level of the model. At the managerial level factors consist of, for instance, manager’s experiences, entrepreneurial orientation and the managers’
mindset. The firm level antecedents are, for instance, resources and knowledge. And the environmental level antecedents consist of environmental dynamism and industry factors, as examples. Various factors require analysis in purpose of comprehensively understand internationalization antecedents of SMEs. The relationship between different antecedents and internationalization outcomes, as well as environmental and firm level antecedents are left outside of this thesis study, in which the focus is on antecedents at the managerial level. In the following figure 1, Antecedents of SME Internationalization (Kuivalainen et al. 2012) are presented.
Figure 1: Antecedents of SME Internationalization (Kuivalainen et al. 2012, p. 452)
Additionally, as a complementary model, the literature review combines a model by Martineau and Pastoriza (2016, 463), which is an integrative framework that examines “the antecedents, outcomes, and moderators of SME international involvement”, and I have chosen “the antecedents”
to be in the focus of my study. The authors describe “at the firm level of the analysis, the most
studied antecedents in previous literature are SME size, firm networks, and product innovation capacity, whereas at the individual level of the analysis, the most important questions have been focusing on the importance of the manager’s personal networks and their socio-cognitive characteristics (e.g. proactivity and risk aversion)” (Martineau & Pastoriza 2016, 459). Below the figure 2. illustrates ”Antecedents of SMEs’ international involvement”, captured of an integrative framework by Martineau and Pastoriza (2016).
Antecedents of SME’s international involvement
Environmental level Firm level Individual level
Country competitive advantages managers’socio-cognitive
properties
Industry organizational characteristics demographics of the manager
Other resources and capabilities personal networks
strategy
Figure 2: Antecedents of SME’s international involvement (Martineau & Pastoriza, 2016, p. 458–
470)
It is noticeable that the concepts of this literature review occur interlocked in different previous studies, and the most important criteria for choosing the specific previous studies and models is that the specific frameworks could provide the most precise way to answer my research questions.
Using a combination of different models is relevant in this study context, as Jansson and Sanberg (2008) state, combination of views is preferred since it is difficult to capture the internationalization concept using only one theoretical framework. The leading models to construct the theoretical framework of this study are represented with figures 1 and 2 previously, and additionally the complementary theoretical perspectives are represented. Finally, in the summary paragraph 2.3, there will be a framework to collect the managerial antecedents of different models to illustrate the chosen perspective of this study in the research field.
2.3 Antecedents of SME internationalization at the managerial level
Acedo and Florin (2006) argue it is crucial to consider the decision maker’s ability to identify opportunities and evaluate threats in purpose to fully understand the internationalization process.
There have been found explanations on individual differences in decision making because of a constrained view of problems faced, different ways of searching and selecting information, and different cognitive styles. Within the study of SMEs this focus becomes increasingly important, because strategic decision making is often centralized in a single individual (Westerberg et al.
1997.) Previous studies indicate that internationalization is an entrepreneurial activity (Lu &
Beamish 2001), and that the owner is a key resource of the internationalization (Kannieß 2010).
Marinova and Marinov (2017) have investigated that the internationalization of SMEs has been associated with the features of “entrepreneurs concerning their international vision” (Andersson 2003), “internationalization drive” (Zucchella et al. 2007), “international orientation” (Covin &
Miller 2014), “motivation” (Dimitratos et al. 2016), “international experience” (Reuber & Fischer 1997), and “network connections” (Kontinen & Ojala 2011). Then Kuivalainen et al. (2012) accentuate that analysis on the managerial level is crucial in order to identify determinants and antecedents of SME internationalization. The decision maker, manager, entrepreneur, CEO, and owner play similar role in this thesis study’s theoretical framework, depending on the theoretical source when investigating managers in this study. In the core part of this literature review, it is relevant to consider the issues such as manager’s mindset, international experience, and entrepreneurial orientation. In addition, a new stream of SME internationalization study
“international entrepreneurship” will be introduced in order to understand the role of entrepreneur as a driver of SME internationalization (Kuivalainen et. al 2012).
The integrative framework by Martineau and Pastoriza (2016) introduced above, which studies
“the antecedents, outcomes, and moderators of SME international involvement”, is benefited in this study on the individual level of the analysis. Antecedents of internationalization on the individual level in this framework are managers’ socio-cognitive properties, demographics of the manager, and manager’s personal networks. The most important questions of this framework are focused around the importance of the manager’s personal networks and their socio-cognitive characteristics (e.g., proactivity and risk aversion). The authors state in their analysis that of the
different levels of antecedents, individual level antecedents have received comparatively less attention in prior research. The majority of empirical studies analyzing individual level antecedents are based on three theoretical perspectives: “upper-echelons”, “the cognitive perspective”, and
“the rational-analytical perspective”. The previous studies have focused on the managers’
personal and cognitive characteristics, and they suggest that international involvement is a person- driven phenomenon. As Martineau and Pastoriza (2016, 464) found “entrepreneur demographics and socio-cognition properties as antecedents of propensity and intensity to export, and the manager or owner of the SME is a key resource who gathers human capital and social capital in both domestic and international markets. Therefore, the exposition to foreign markets may develop an international orientation that makes the manager predisposed to international involvement”.
Marinov and Marinova (2017) have found in their research that the owner-manager’s personal contacts play a key role concerning internationalization, which means family related, friends in the domestic and foreign contexts, professional contacts, and institutional contacts which bring opportunities for export potential or serve as channels for finding international clients.
Additionally, Mort and Weerawardena (2006) viewed network relationships as offsetting small firm resource scarcity within born global firms’ context. This can also be relevant for the study context of this thesis, as the case SMEs have similar characteristics as born global firms. Mort and Weerawardena (2006) determined that “born global firms leverage networking capability to identify and exploit market opportunities, facilitate developing knowledge-intensive products, and to support international performance”. Additionally, Zhou et al. (2007) have found social networks to provide knowledge of the foreign market opportunities, international business know-how, and increased trust and solidarity. They argue it is important for managers to leverage social networks in order to help internationally oriented SMEs internationalize themselves faster and more profitably.
The focus on the individual as the driving force behind the internationalization of SMEs on derives from the field of entrepreneurship (Acedo & Florin 2006). When focusing at the individual level of the analysis of antecedents of internationalization, various studies support the view of manager’s socio-cognitive properties as an influential antecedent of international involvement (Martineau &
Pastoriza 2016). The study states manager’s attitudinal barriers (e.g., fear to lose control or
intolerance for ambiguity) are the greates internal barriers to SMEs’ foreign expansion (Hutchinson et al. 2006). It has been found by Jones and Coviello (2005) that previous personal and professional international experience of the manager remarkably reduce negative attitude and perception towards foreign markets, and also lead the manager to more realistic expectations of the effects of exporting. Additionally, Chrisman et al. (1999) argue that the entrepreneur’s personality, skills, and values affect their behavior and decisions.
Jones and Coviello (2005) have represented two process dimensions of the general model of entrepreneurial internationalization, which are time and internationalization behavior. In the context of this thesis, the general model will not be necessary, but this is mentioned because in the context of managerial antecedents, the latter, internationalization behavior, is related to the antecedents of an entrepreneur or a manager. The constructs of the entrepreneur in this concept are the philosophic view, social capital, and human capital. The philosophic view is described as ”the value placed by the entrepreneur on internationalization. Additionally, their perceptions and attitudes regarding internationalization risk, cost, profit, potential and complexity”. The social capital is described as ”the entrepreneur’s proprietary network relationships such as communication or social networks and informal contacts”. The third construct, the human capital, is described as ”the entrepreneur’s innovativeness, tolerance for ambiguity and flexibility, commitment, need for achievement. Also, their general perception of risk and risk tolerance, entrepreneurial and management competence, international experience, education and language proficiency” (Jones & Coviello 2005).
2.3.1 Global mindset
Manager’s or CEO’s mindset, which is associated with examples of risk taking, proactiveness, etc., is accepted as one aspect of managerial antecedents of internationalization (Kuivalainen et al.
2012). In their study, Acedo and Florin (2006) have developed an understanding of how the selected aspects of cognition, i.e. elements of the manager’s mindset relate to internationalization, and specifically, on its speed. In the study context of this thesis, the speed of internationalization is left outside of the investigation, but this study serves as a relevant perspective to manager’s mindset as an antecedent of internationalization. Acedo and Florin (2006) have found that entrepreneurs who are familiar with foreign markets of traveling, language knowledge or through
having lived abroad would have a more positive attitude towards considering international expansion of a firm as an opportunity for growth, than those without such international experiences.
A similar view has been made by Moen and Servais (2002) who also argue that language proficiency, international traveling, and gaining international experiential knowledge are used as measures for international orientation. This reveals that international subjects contribute to the development of an international mindset that leads to an entrepreneur, or a manager in the context of this study, to act more confidently and have and own ability to effectively handle the uncertainties associated with foreign entry (Herrmann and Datta 2002).
With regards to internationalization, a perceived risk of international expansion has been found to diminish with knowledge of the foreign markets (Knight et al. 2002). It has been found that CEOs with an international orientation, a proactive disposition, an intuitive cognitive style, and higher tolerance for ambiguity will perceive lower levels of risk associated with international expansion strategies (Acedo & Florin 2006) and those factors have also been found to influence positively with the early internationalization of a firm, because a highly international orientation appears to foster higher levels of proactivity and lower perceptions of risk in internationalization (Acedo &
Jones 2007; Zhou 2007). Additionally Moen and Servais (2002) have found out that the owner- manager’s international orientation leads to higher levels of proactivity and a lower perception of risk. Language proficiency, international travel, and gaining international experiential knowledge are used as measures for international orientation Korsakiene and Tvaronaviciea (2011) have studied the theory of antecedents of internationalization of Norwegian and Lithuanian SMEs. The study shows a definite link between the entrepreneur’s characteristics and internationalization, but the study also assemled knowledge and the varied experience of entrepreneurs, or managers, are among the most important criteria of Norwegian SMEs’ decision-making when internationalizing.
The CEO’s global mindset and other CEO attributes have additionally been stated as a cognitive driver of SME internationalization and global mindset has been associated with better internationalization performance also (Nummela et al. 2004). Miocevic and Crnajak-Karanovic (2012) define global mindset as “a multidisciplinary concept comprised of cognitive and cultural dimensions which both influence the international behaviour and decision making of the firm”, and that global mindset consists of “openness and awareness of differences among markets and aims
to synchronize them.” However, it is remarkable global mindset and international experience are independent antecedents from each other. Thus, both global mindset and international experience are accepted as antecedents of SME internationalization (Miocevic & Crnajak-Karanovic 2012.) Managerial experience and market characteristics are important drivers of the global mindset, which is one of the key parameters of international performance, as discussed previously. In addition, managers with good language skills and experience from working, living, or traveling abroad seem to have a positive influence on SMEs expanding and the operations overseas (Hutchinson et al. 2007; Weng-Tsung et al. 2013.) The management’s competence, international orientation and global mindset have been noticed to correlate positively with the SME’s level of international orientation and its willingness to seek market possibilities abroad (Hutchinson et al.
2007).
2.3.2 Knowledge, skills, competence, and management know-how
The findings in the previous literature confirm that the entrepreneur’s, or the manager’s in this context, skills, competence, and management know-how must be analyzed in order to completely understand the reasons behind SME internationalization. Thus, the knowledge and varied experience of entrepreneurs, entrepreneur’s skills, competence, and management know-how can be seen as one group of managerial antecedents (Korsakienė and Tvaronavičienė, 2012).
Korsakienė & Tvaronavičienė (2012) found in their study of Norwegian SMEs that the questions about internal barriers impacting internationalization reveal that the firms indicate limited management skills, communication issues, and a lack of marketing knowledge which can be relevantly suited with the Finnish SME context. Additionally, Lithuanian SMEs were studied in the research by Korsakienė and Tvaronavičienė (2012), and when evaluating the most important internal barriers, costs, limited financial resources, and limited managerial skills appeared.
Whereas, limited managerial skills have been noticed to be one of the main barriers to internationalization, the firms do not acquire learning abilities which might transform them into international growth. Therefore, the limited managerial skills are seen as one of the restricting factors for both Lithuanian and Norwegian SMEs in the study by Korsakienė and Tvaronavičienė
(2012), and it is relevant to assume that there is a similar issue with the Finnish SMEs, because there is not enough relevant empirical research available. However, a deeper understanding of
knowledge and varied experience of entrepreneurs, entrepreneur’s skills, competence, and management know-how as managerial antecedent is important.
Marinova & Marinov (2017) found in their study that the role of previous international experience of the entrepreneur fosters early internationalization, implying personal business contacts abroad suggested by experiential learning studies (Kolb 1984), and by the classic of the internationalization models, the Uppsala model (Johanson & Vahlne 1977). Because the behavior of the entrepreneur has influence on the behavior of the firm, assembled knowledge and varied experience of the entrepreneur are one of the most important criteria in the selection of the international market. Further, entrepreneurial knowledge, experience, capabilities, and motivation, which are seen as most important competences, have an effect on entrepreneurial efforts.
Additionally, management and inter-personal skills are seen as the most important factors in networking and cooperation with partners, and they also have an influence on the success of networks’ formation (Korsakienė & Tvaronavičienė 2012.) Especially the social networks that play a remarkable role in the starting point of internationalization, are those that contain international industry and market-specific knowledge (Zaevarian et. al 2016).
2.3.3 Language skills
Hurmerinta et al. (2015) have studied that language and language skills have been studied in previous research, although usually from a very limited perspective. They consider it surprising, due language skills are accepted as an influential antecedent of export performance. Hurmerinta et al. (2015) argue managers’ linguistic knowledge matters and that the role it plays varies according to the phase of internationalization. The study supports the view that matching linguistic proficiency particularly helps managers recognize international opportunities, especially if it is accompanied by language diversity and culture-specific knowledge. Companies internationalize
“incrementally through increasing commitments to foreign markets, and that one of the key determinants in the process is the decision-makers’ perceptions of psychic distance between home and host markets” (Hurmerinta et al. 2015, 1083; Johanson & Vahlne 1977). Hurmerinta et al.
(2015) point out that language is one of the key elements of that experienced psychic, and a lack of appropriate language proficiency can be a significant obstacle to internationalization (Eriksson et al. 1997). Hurmerinta et al. (2015) have found that researchers have continued to consider
language as a barrier to internationalization, but a various studies have also shown that the decision- maker’s language skills may increase the firm’s possibilities of expanding its business internationally (e.g. Dichtl et al. 1984; Dichtl et al 1990; Fernandez-Ortiz & Lombardo 2009;
Holzmuller & Kasper 1990).
However, Hurmerinta et al. (2015) point out that, interestingly, the role of language seems to be changing, and language differences were no longer a significant barrier to SME internationalization (e.g. Leonidou, 2004; Suarez-Ortega (2003). In this study by Hurmerinta et al. (2015), it is remarkable that language skills enable to acquire deep, contextual knowledge. Thus, it can be drawn, that language skills are related to firm’s internationalization and that some internationalization patterns may even be driven by the manager’s language skills, that may lead firms and managers towards regional expansion into countries with shared linguistic heritages.
“The ability to speak English may be the prerequisite to open doors to the market, but the local language would be the ‘trust-building’ language, whereas the decision-maker is able to benefit from those skills in internationalization” (Hurmerinta et al. 2015, 1083).
2.3.4 Manager’s attributes
Marinova and Marinov (2017) represent in their review that “international orientation” – depending on education, language proficiency, age, perceptions of risk, and psychic distance – is crucial in shaping managers’ propensity for exporting. It has later been associated with the concept of “global orientation” (Cavusgil & Knight 2015). The manager’s education, especially higher education, international experience, previous work experience, network and knowledge of foreign languages are known to support the international orientation of managers (Marinova & Marinov 2017). Manager’s or owner’s personal characteristics, experiential learning and professional contacts are noticed to be the key entrepreneur characteristics in the internationalization inducement of the firms in the study by Marinova and Marinov (2017). Additionally, Hutchinson et al. (2007) found out in their study that knowledge acquired through the experience of the foreign markets and business behavior predicts SME’s propensity for internationalization. Furthermore, by traveling abroad the management have learned about foreign business practices, met prospective business partners, and identified market opportunities.
Weng-Tsung et al. (2013) have found in their study that, for example, CEO’s (or manager’s in the context of this study) age, level of education and international experience have influence on the firm’s internationalization and motivation to internationalize themselves. Weng-Tsung et al. (2013) found also in their study that the CEOs (or manager’s in the context of this study) age matters the way that, the higher the age is, the less likely the manager is to identify potential international opportunities for the firm. In addition, the level of education of a CEO can be considered as an antecedent for internationalization in a similar way. Weng-Tsung et al. (2007) represent more educated and younger entrepreneurs (or manager’s in the context of this study) with high language proficiency may be more willing to take the risk and expand abroad. The latter study by Weng- Tsung et al. (2013) presents that CEOs (or manager’s in the context of this study) with a higher level of education appeared to be more likely to tolerate ambiguity and take risks, which has a positive correlation with the firm’s internationalization also. According to Weng-Tsung et al.
(2013) CEOs, or managers in the context of this study, with previous international experience appeared to have profitable market knowledge and confidence to make internationalization decisions. It means the firms under these CEO’s, or managers’ in the context of this study, leadership tend to expand to foreign markets more often than other firms. In sum, based on the study by Weng-Tsung et al. (2013), internationalization of the firm seems to increase if the CEO, or the manager in the context of this study, of the firm is young, highly educated, and has international experience.
2.3.5 Gender
In this context, as one perspective of antecedents, it is interesting to also discuss the gender of the manager or entrepreneur concerning different demographics. Surprisingly, gender has not occurred in rarely any of the previous literature focusing on the antecedents of internationalization, and gender does not take place in the core models represented above. However, Orser et al. (2010) argue the role of the entrepreneur’s or manager’s gender in the international business context has been virtually unexplored in the previous literature while other studies have previously reported that gender differences in experience may (Reuber 1992; Orser et al. 2004) or may not account for differences in export propensity, and the study by Orser et al. (2010) appears that other firm and
owner attributes supersede or mitigate the influence of management experience on the likelihood of exporting.
As a clarification for the confusing gender, Orser et al. (2010) represent, that gender has a significant influence on export propensity, due gender mediates the influence of other determinants of exporting. Thus, the role of the manager’s or entrepreneur’s gender and hostile domestic environments moderate the impact of a firm’s demographics and owner’s or manager’s attributes on propensity to export. Within this context, it is relevant to consider gender as one of the manager’s antecedents of internationalization in this theoretical framework.
2.3.6 Entrepreneurial orientation, Commitment and Level of risk tolerance
The concept of an entrepreneur is relevant in the context of a manager’s entrepreneurial characteristics regarding antecedents, and also because the studies on SME internationalization are closely related to an entrepreneur. The concept of an entrepreneur is reasonably complex and has various definitions. Schumpeter (1934) presented one of the classical definitions that entrepreneur is “an innovator, who implements change within markets through the carrying out of new combinations.” Schumpeter’s old definition embodies a characteristic of entrepreneurship, innovation, that is widely recognized today (Schumpeter 1934, cited in Ahmad & Seymour 2008, 8.)
Entrepreneurial orientation is accepted as one of the managerial antecedents of internationalization in previous literature. Entrepreneurial orientation and commitment as managerial antecedents are discussed together in one paragraph in this literature review, on one hand because they are closely intertwined factors, and on the other hand because commitment is only narrowly discussed in the previous literature. The role of the entrepreneur as a participant and a manager of social systems and networks has been highlighted in the previous literature (Jones et al. 2005). Miller (1983, 771) has studied entrepreneurial orientation and defined that an entrepreneurial firm is one that "engages in product market innovation, undertakes somewhat risky ventures, and is first to come up with 'proactive' innovations, beating competitors to the punch". Accordingly, he used the dimensions of "innovativeness", "risk taking", and "proactiveness" to characterize entrepreneurship. Two other
