Research that size of the organization is not

Research topic: The role of
internationalization process in the U.S based small and medium-sized firms

            Many small and medium companies face
difficulties and challenges, not at the initial stage of their
internationalization process, but at the stage of making international
investment. The sources of the problems are – first, the firms are lack of
experiences about several differences and barriers in international markets and
secondly, they are smaller organizations and have limited resources and
capabilities to achieve in international market objectives. However, the small
organisations can compete with the larger player in the international market by
offering the flexible, customized products and services through creativity and
innovation.

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The
purpose of the paper is to review past empirical studies on the
internationalization of small and medium-sized enterprises and, to identify
which extent small and medium sized companies take a systematic approach in
their internationalization process and the performance differences between
systematic and unsystematic approaches. The research questions are –

–      
How U.S based small and medium-sized companies
take a systematic approach to new internationalization?

–      
What is the performance differences between
systematic and unsystematic approaches?

–      
How smaller firms differ from larger firms in
terms of their managerial style, ownership and scope of operations in the
international markets?

 

Small
and medium-sized enterprises are increasingly active in international markets, thus
contributing to economic growth. Karagozoglu and Lindell (1998) stated that the
lack of resources and capacities of small and medium firms is the barrier for
them to compete with larger businesses in the international market (Yip et al.,
2000). Hoorn (1979) argues that smaller companies have informal structures;
insufficiently developed administrative procedures and techniques; and
unsystematic non- rational decision-making processes. On the other hand, Calof
(1994) identifies that size of the organization is not necessarily the obstacle
in internationalization and SMEs have also been found to find unique ways to
overcome their smallness (as cited in Coviello and McAuley, 1999). However,
small and medium size firms have very limited operations abroad, which is the
main barrier for them to make systematic international expansion.

 

Existing
studies are characterized by several shortcomings such as the low response rate
and small sample size. The recent studies investigated a number of existing
internationalization paradigms but they emphasize more on larger experienced
firms and failed to explain the internationalization behavior of smaller firms.
Despite the past studies provide valuable frameworks for analysis of
international operations, the patterns of international growth, and the
expansion of foreign markets, there has been very few scholarly work for the
explanation of the complex internationalization processes and issues faced by
small and medium size businesses.

 

Due
to the global expansion of the markets, small and medium sized firms are
becoming involved more in international activities. In recent times, the
literatures focus their research on the activities of the multinational
enterprises, but now they are shifting their certain attention to the small and
medium sized enterprises. By applying the descriptive research, secondary
sources will be gathered and researched, and the analysis of empirical studies
based on SME behavior in order to find the answers to the formulated research
questions.

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