C11BU – RESEARCH

PHILOSOPHY AND PRACTICE

Introduction

A business is said to be internationalized when it operates in more than one country. Most of the
time, the reason for going international is to overcome the domestic competition by increasing
the demand for their product and branding their trademarks. According to Brooks and Rosson
(1982), there are several reasons for a firm to internationalize its operations, including "excess
capacity, search for growth in new markets, saturated home market amongst other reasons." To
expand their operations and ultimately to balloon their pockets, businesses strive to build their
business internationally. Globalization and the rapid increase in the number of small and medium
size industries have been made easy by globalization. Owing to the important role of the small
and medium-sized industries, many scholars are investing their time exploring this sector.
However, the research done by these scholars is mostly focused on the marketing side, leaving
room to explore from the management and organizational perspective. This paper will try to help
the readers and keen observers of the phenomenon of internationalization of businesses
understand the reasons and challenges faced by small and medium sized industries in setting up
their business on the international from the management and organizational angle.

Aims and objectives

After establishing the need, the current paper will expand the previous research by addressing the
factors affecting internationalization and will try to examine the internationalization of Small and
Medium size Enterprises by taking into thought the impact of the creativity of the firm, the
pioneering abilities of the business visionary who established the Small and Medium size
Enterprises just as the intention of the business visionary for beginning the business. As an
outcome, we will uncover which sorts of enterprising abilities of these organizations influence all
things considered the development of fare situated global firms. By filling in this gap, this paper
will also look into the factor influencing the internationalization of the small and medium size
industries. Another reason to carry out this study is to explore whether by building up the
business on the international level, the entrepreneurs always look for the above stated
relationships. The outcomes of this paper will interest the stakeholder in deciding future policy
decisions and strategic planning. It will be a reference for industries mainly which are export
oriented and will aid researchers and students in further investigating this field.

Context
As mentioned earlier, due to globalization, the small and medium-sized enterprises have gained
much attention. The underlying reason is removing barriers by the different countries, making
consensus through trade agreements to lessen the burden, and easing the way for carrying out
businesses. The result is the internationalization of small and medium size enterprises. These
small and medium enterprises' main aim is to accumulate benefit from the global market by
encroaching in other markets as the trade liberalization has given a great chance to integrate and
connect within different countries (Apec, 2011). With the role over of time, the competition is
increasing in the market, and it is difficult for small businesses to survive. Internationalization
has provided the small and medium sized industries a breathing space and hence their survival.
According to Sousa et al. (2008), the rapid increase in the connection of multinational companies
and the volume of trade has realized the significance of business interdependence and countries
through exports and imports. Because of this, small and medium size industries internationalize
as the international trade volume is increasing. The amount of exportation which these small and
medium enterprises are carrying out is a major concern for policy makers of that particular SME.
According to Fletcher and Prashantham (2011), to understand internationalization, it is necessary
to look into the causative elements that have initiated the process at the first step and how that
process is being carried out in taking the business to the international level. Some scholars like
McGougall and Ovaiatt (1994) consider the advancement in technology and the complexity
brought by the changing economic situation are the key influencers that have forced the small
and medium enterprises to internationalize rapidly. Further, the scarcity of resources on the
domestic level and organizational strategies have also played a more significant role in the
globalization of small and medium industries. In line with the above authors, Kiss et al. (2013)
argue that there is two interest a small or a medium enterprise will internationalize. It is either
because of the proactive or reactive mode of the enterprise. Additionally, these modes are
triggered when such enterprises face some macro environmental turbulence. In the case of
proactive actions, the motivation for implementing the strategic plan is greater and yields in
greater outcomes that control the enterprise.

Literature review

The vast majority of the examination led to the internationalization of firms' traces all the way
back to the 1970s. After the 1980s, because of globalization's impact, a fast increment was seen
in mechanical turns of events, inventive data, and innovative exercises everywhere on the world.
Because of these impacts, the idea of business should have been concentrated in additional detail
along with the internationalization cycle of companies and Big corporations. The expression
"born global" originally used by Rennie (1993), that was used by him in observational
investigation on Australian dares which depict youthful Small and Medium Enterprises that take
part in fair exercises from the get-go in their corporate sphere (Vadana, 2013). In order to
comprehend the thoughts coined for spearheading chips away at business, one necessity to
inspect the fast internationalization hypotheses previously. In the writing, essentially three
fundamental hypotheses have been proposed, to be specific: Conventional models that
incorporate the Uppsala and Innovation-related Model; Organization Theoretical framework; and
the new way of looking at the phenomenon, referred to as BG theory. To separate between the 3,
creator need to give brisk data on each. According to the conventional approach a firm before
venturing on international level it first exhaust it domestic market, after that it tries to lower its
prices which will further give it standing position after that it will go global and trade its
products. One of the spearheading and generally perceived customary hypotheses, the Uppsala
Model, which was invented in 1977 by Johansson and Valhne. The model primarily focuses on
the hurdles which a firm can face due to lack of data, physically being apart, the factor that
hampers the process and accelerated growth of a firm on global level. This all can be minimized
by collecting data at the first place and becoming fully aware of the international market before
venturing on it (Johansson and Valhne, 1977).”

Another Traditional Internationalization Theory is the Innovation-related framework planned by

Bilkey and Tesar in 1977. As indicated by the methodology, an organization needs to adjust
better approaches for working together by utilizing creative methods. A firm can connect with
the international market by taking care of a spontaneous request from an unfamiliar organization
and to launch its business in a country where the organization can triumph over the existing
market by exporting it product to that country (Bilkey and Tesar, 1977). For the most part,
advancement exercises can be distinguished by comparing the principal ingredients of going
global, like business qualities, abilities, and profitability. Fruitful item advancements specifically
are essential to doing well in global business sectors. Having severe and forceful qualities, with
more noteworthy resilience of danger than his/her partner in the firm and roused by apparent
prizes stemming straightforwardly from the sending out as procedure of association's
development (Simmonds and Smith 1968). K.J. Miesenböck (1988) even expressed that in
independent venture internationalization, the critical variable is the leader of the firm (Vissak,
2003: 16). This is the result of the visionary leader of the firm who can look out the problem in
the market in advance and can prevent its firm form indulging in such problems. Network
Theorists, Johansson and Mattson (1988) have a conviction that the trademark of a firm plays a
key role in making bonds within a new market. According to the above stated theory companies
can establish their feet in new markets by connecting with other business through different
associations. This ultimately will decide the future of the firm. It can be drawn form the stated
study that the more strong a firm makes association the more there are the chances of the firm to
prosper in the new market. This could be a good start for a small and medium industry to go
global and conquer the world market.

As of late, the field of business venture has mostly concentrated on explain few primary
characteristic of the business people to further understand the phenomenon of going global a
cycle of BG companies (Danskin, 2000; Oviatt and McDougall, 1995). According to this theory
taking a firm on international level and make it a success primarily is due to the strong
association making power of that firm. Adding more this can be the vision of the firm and by
going global the firm is furthering its vision by knowing its limits and acting in such limits also
by assessing its strengths and weaknesses.

Utilizing factor investigation this examination has investigated the elements impacting the factor
of taking the firm international mostly of small and medium scale industries. In the current study
four main points regarding taking a firm on international level are assessed. The factors will
serve the managers, the owners and the representative of the firm in making the decision of
internationalization of SME's set up worldwide organizations, and unfamiliar market potential.
Effective firms were likewise found to have proprietor administrators with a global direction
with set up worldwide contacts. This investigation was restricted by its moderately little example
size.
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