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Journal ArticleDOI

Network ties in the international opportunity recognition of family SMEs

01 Aug 2011-International Business Review (Elsevier Limited)-Vol. 20, Iss: 4, pp 440-453
TL;DR: In this article, the authors found that in gaining foreign market entry, those family SMEs that lack existing network ties recognize opportunities through weak ties formed in international exhibitions, and the trustfulness of the tie is important when they consider these opportunities and form new ties for internationalization.
About: This article is published in International Business Review.The article was published on 2011-08-01 and is currently open access. It has received 290 citations till now. The article focuses on the topics: Interpersonal ties & Internationalization.

Summary (2 min read)

Introduction

  • It is well established that network ties are an important resource facilitating internationalization.
  • In several studies (Coviello, 2006; Crick & Spence, 2005; Ghauri et al., 2003) such ties have been seen as major factors in initiating the internationalization process, with firms following their networks to foreign markets.
  • The aim of this study was to understand how the network ties of family SMEs function in recognizing opportunities to enter foreign markets.
  • Family SMEs were selected as a target group for several reasons.
  • To address these issues, the following questions are of interest:.

2. Theoretical background

  • The authors shall first look at the network model of internationalization, and in so doing introduce certain key terms related to networking.
  • In the present study, individual-level network-tie analysis is applied to clarify how family SMEs recognize international opportunities within social interaction.
  • In addition, strong ties contain more trust, and are more easily available than weak ties (Granovetter, 1992).
  • There is little doubt that opportunity recognition is also related to success in international markets, and further, to the speed of internationalization (Chandra et al., 2009; Dimitratos & Jones, 2005a; Hohenthal et al., 2003; Oviatt & McDougall, 2005).

3. Methodology

  • Given the current limited understanding of opportunity recognition among family SMEs, it appeared that a qualitative research method would be the most appropriate for the study reported here.
  • The authors therefore utilized a multiple case study approach similar to the methodology introduced by Eisenhardt (1989) and Yin (1994).
  • The case study method is also relevant when the study covers a real-life environment in which a particular action (such as opportunity recognition) takes place (Yin, 1994).
  • On the basis of general information on entry to the French market, more detailed questions were then asked about the following issues: (i) important persons, firms, or organizations that influenced the entry to France, (ii) the nature and development of network ties in relation to the French entry, and (iii) the firm’s activeness in pursuit of entry to France.
  • This increased the validity of the interview data, and enabled us to formulate further questions to clarify incoherent information (Yin, 1994).

4. Findings

  • In this section the authors shall present the network ties through which the opportunity to enter France was recognized by the individuals belonging to the case firms.
  • Hence, Firm A became interested in entering France, because a French trustworthy partner was found in the exhibitions.
  • 2. Strength of ties Concerning the strength of the network ties, in five out of eight case firms, the network ties essential for French opportunity recognition were weak (see Table 2).
  • Based on this and the sales trips the authors undertook together to France, where they faced and also solved many problems, it was easy for me to trust him more and more.
  • Nonetheless, they would not be not placed on the furthest edge of the continuum, since they had a general will to expand their business; moreover, they traveled to international exhibitions (Firms B, E, and H) or had a background import business (Firm G).

5. Discussion

  • It seems that although family firms have strong internal ties (Arregle et al., 2007; Salvato & Melin, 2008), these ties do not enhance their internationalization.
  • Interestingly, none of the intermediary ties were mediated by, for instance, the export-promoting organizations (cf. Ojala, 2009).
  • It seems that the entrepreneurs in the family SMEs studied here wanted to select their network ties for themselves, based on a feeling of trust (discussed in more detail below).
  • Here the importance of this aspect is also highlighted with regard to foreign market entry.
  • From this, one can derive the following two propositions: Proposition 3: In family SMEs, international opportunities are more often recognized through weak ties than is the case in other types of firm.

6. Conclusions

  • This study contributes to the network theory of internationalization in the context of family SMEs and research on international opportunity recognition.
  • It responds to the call for more research on international opportunity recognition (Dimitratos & Jones, 2005a; Ellis, 2008; Oviatt & McDougall, 2005; Zahra et al., 2005) and to the need for studies on the importance of network ties in recognizing opportunities for internationalization (Ellis, 2000, 2008; Singh, 2000).
  • While contributing to an understanding of the topic, this study also points to aspects requiring further research.
  • Having regard to the small size of the firms and the role of the persons interviewed, one can see that these informants had the kind of crucial knowledge required for the purposes of this study.

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Citations
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Journal ArticleDOI
TL;DR: In this article, the authors review the literature on the exporting challenges and problems of small and medium scale enterprises in this era of globalization and identify gaps in the literature and provide directions for future research, which serve as a basis to understand the research gaps, opportunities, and undertake new research projects based on the propositions and the future research agenda outlined.

471 citations

Journal ArticleDOI
TL;DR: In this paper, the authors systematically review and critically examine 72 journal articles published from 1980 to 2012 on the internationalization of family firms and propose an integrative theoretical model integrating the concept of socioemotional wealth with the revised Uppsala model.
Abstract: This article systematically reviews and critically examines 72 journal articles published (from 1980 to 2012) on the internationalization of family firms. Stemming from existing literature, core aspects and main gaps are identified. We aim to overcome the inconclusiveness of findings of previous research by offering an integrative theoretical model integrating the concept of socioemotional wealth with the revised Uppsala model. Our framework helps understand behaviors of internationalizing family firms by focusing on when and how they internationalize, especially related to risk attitudes, the role of knowledge and networks. Ultimately, we provide future research themes flowing from our suggested model.

324 citations


Cites background from "Network ties in the international o..."

  • ...Family firm principals though might be able to compensate this negative effect via their rich social capital (Kontinen & Ojala, 2011c)....

    [...]

  • ...…(Nahapiet & Ghoshal, 1998), and SEW (Berrone, Cruz, Gomez-Mejia, & Larraza-Kintana, 2010) are becoming more popular to explain the impact of family involvement on internationalization (Kontinen & Ojala, 2011c; MenéndezRequejo, 2005; Sciascia et al., 2012b; Segaro, 2010; Roida & Sunarjanto, 2012)....

    [...]

  • ...Also within the literature of this analysis four articles explicitly refer to this framework (e.g., Kontinen & Ojala, 2011a)....

    [...]

  • ...However, knowledge about the role of networks in the internationalization process of a family firm appears to be still limited (Kontinen & Ojala, 2011b, 2012b)....

    [...]

  • ...…of this business network view is especially valuable when investigating family firms, as these often enter into new networks, creating new relationships to find a position in foreign markets in relation to foreign family firms (Fernández & Nieto, 2006; Kontinen & Ojala, 2011c; Yeung, 2000)....

    [...]

Journal ArticleDOI
TL;DR: In this article, the authors draw from entrepreneurship research and present alternative conceptualizations of opportunities as a basis for more in-depth study of international opportunities in International Entrepreneurship (IE).
Abstract: Recent research in the field of international entrepreneurship (IE) has emphasized the concept of international opportunity. The entrepreneurial behaviors focused on international opportunities have been found to be critical in IE.International opportunities, however, are often depicted in rather abstract and unspecified ways, and the research suffers from narrow theoretical discussion in relation to the concept of opportunity.To address these issues, the authors draw from entrepreneurship research and present alternative conceptualizations of opportunities as a basis for more in-depth study of international opportunities in IE. To further articulate a future research agenda, the authors review the state of knowledge on opportunities in the IE field by contentanalyzing articles published between 1989 and 2012.All the analyzed articles incorporate the concept of opportunity into their studies. It is found that, although the IE research has investigated many relevant elements, it is rather limited in the articulation of the conceptual features of international opportunities and opportunity-focused behaviors. Building on these observations, the authors propose a definition of international opportunity and research questions and strategies to advance IE research on international opportunities.

241 citations


Cites background from "Network ties in the international o..."

  • ...…Survey Learning advantage of newness and international performance Ellis (2011) Survey Networks in opportunity recognition in internationalization Kontinen and Ojala (2011) Case study Network ties and IO recognition Vasilchenko and Morrish (2011) Case study Entrepreneurial networks in…...

    [...]

  • ...On the contrary, Kontinen and Ojala (2011) demonstrate that, in terms of recognition of possibilities for international exchange by family SMEs, weak ties are more important than strong ones....

    [...]

Journal ArticleDOI
TL;DR: In this article, the role of structural and relational embeddedness of international networks in firm internationalization was examined and it was found that firms with chief executive officers who had developed strong and diverse international networks exhibited greater knowledge of foreign markets prior to internationalization.
Abstract: In this study we draw on the social network and international entrepreneurship literatures to examine the role of structural and relational embeddedness of international networks in firm internationalization. Based on a sample of 169 small- and medium-sized enterprises in the Czech Republic, we found that firms with chief executive officers who had developed strong and diverse international networks exhibited greater knowledge of foreign markets prior to internationalization. However, contrary to our expectations, no relationship was found between network density and such knowledge. In addition, our findings indicate that foreign market knowledge prior to the first international venture had a positive impact on venture performance.

213 citations


Cites background from "Network ties in the international o..."

  • ...…by small firms and start-ups consisted primarily of case-based studies focusing on firms in Western economies (e.g., Chandra, Styles, & Wilkinson, 2009; Chetty & Campbell-Hunt, 2004; Coviello & Munro, 1997; Harris & Wheeler, 2005; Kontinen & Ojala, 2011; Vasilchenko & Morrish, 2011)....

    [...]

Journal ArticleDOI
TL;DR: In this paper, a systematic literature review of the entrepreneurial opportunity research field and its status is presented, showing that only a handful of authors have contributed specifically to developing dialogues related to opportunity recognition and that the topic is considered primarily as an ancillary issue by many authors and academic journals.
Abstract: In the last three decades, research studies investigating how individuals recognize entrepreneurial opportunities have advanced rapidly and have become a key topic in the modern entrepreneurship literature. To advance this important concern further, we present a systematic literature review of the entrepreneurial opportunity research field and its status. Contrary to conventional wisdom, this research suggests that the field is fragmented and empirically underdeveloped. A comprehensive literature analysis shows that only a handful of authors have contributed specifically to developing dialogues related to opportunity recognition and that the topic is considered primarily as an ancillary issue by many authors and academic journals. Based on analyzing 180 articles, we classify existing contributions into six influential factors: prior knowledge, social capital, cognition/personality traits, environmental conditions, alertness, and systematic search. Moreover, by developing a framework, we communicate critical insights regarding the opportunity recognition process. The contribution of individual articles to the proposed factors is presented in a research synthesis table. We conclude by presenting several directions for future research related to opportunity recognition.

207 citations

References
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TL;DR: In this article, buku ini mencakup lebih dari 50 studi kasus, memberikan perhatian untuk analisis kuantitatif, membahas lebah lengkap penggunaan desain metode campuran penelitian, and termasuk wawasan metodologi baru.
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Abstract: Matthew B. Miles, Qualitative Data Analysis A Methods Sourcebook, Third Edition. The Third Edition of Miles & Huberman's classic research methods text is updated and streamlined by Johnny Saldana, author of The Coding Manual for Qualitative Researchers. Several of the data display strategies from previous editions are now presented in re-envisioned and reorganized formats to enhance reader accessibility and comprehension. The Third Edition's presentation of the fundamentals of research design and data management is followed by five distinct methods of analysis: exploring, describing, ordering, explaining, and predicting. Miles and Huberman's original research studies are profiled and accompanied with new examples from Saldana's recent qualitative work. The book's most celebrated chapter, "Drawing and Verifying Conclusions," is retained and revised, and the chapter on report writing has been greatly expanded, and is now called "Writing About Qualitative Research." Comprehensive and authoritative, Qualitative Data Analysis has been elegantly revised for a new generation of qualitative researchers. Johnny Saldana, The Coding Manual for Qualitative Researchers, Second Edition. The Second Edition of Johnny Saldana's international bestseller provides an in-depth guide to the multiple approaches available for coding qualitative data. Fully up-to-date, it includes new chapters, more coding techniques and an additional glossary. Clear, practical and authoritative, the book: describes how coding initiates qualitative data analysis; demonstrates the writing of analytic memos; discusses available analytic software; suggests how best to use the book for particular studies. In total, 32 coding methods are profiled that can be applied to a range of research genres from grounded theory to phenomenology to narrative inquiry. For each approach, Saldana discusses the method's origins, a description of the method, practical applications, and a clearly illustrated example with analytic follow-up. A unique and invaluable reference for students, teachers, and practitioners of qualitative inquiry, this book is essential reading across the social sciences. Stephanie D. H. Evergreen, Presenting Data Effectively Communicating Your Findings for Maximum Impact. This is a step-by-step guide to making the research results presented in reports, slideshows, posters, and data visualizations more interesting. Written in an easy, accessible manner, Presenting Data Effectively provides guiding principles for designing data presentations so that they are more likely to be heard, remembered, and used. The guidance in the book stems from the author's extensive study of research reporting, a solid review of the literature in graphic design and related fields, and the input of a panel of graphic design experts. Those concepts are then translated into language relevant to students, researchers, evaluators, and non-profit workers - anyone in a position to have to report on data to an outside audience. The book guides the reader through design choices related to four primary areas: graphics, type, color, and arrangement. As a result, readers can present data more effectively, with the clarity and professionalism that best represents their work.

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"Network ties in the international o..." refers methods in this paper

  • ...By comparing the interview data with other documents from the case firms, we conducted triangulation of the information (Miles & Huberman, 1994)....

    [...]

  • ...In addition, checklists and event listings were used to identify critical factors related to determinants that could contribute to network ties in opportunity recognition (Miles & Huberman, 1994)....

    [...]

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01 Feb 2009
TL;DR: In this paper, the authors describe the process of inducting theory using case studies from specifying the research questions to reaching closure, which is a process similar to hypothesis-testing research.
Abstract: Building Theories From Case Study Research - This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.

40,005 citations

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TL;DR: In this paper, it is argued that the degree of overlap of two individuals' friendship networks varies directly with the strength of their tie to one another, and the impact of this principle on diffusion of influence and information, mobility opportunity, and community organization is explored.
Abstract: Analysis of social networks is suggested as a tool for linking micro and macro levels of sociological theory. The procedure is illustrated by elaboration of the macro implications of one aspect of small-scale interaction: the strength of dyadic ties. It is argued that the degree of overlap of two individuals' friendship networks varies directly with the strength of their tie to one another. The impact of this principle on diffusion of influence and information, mobility opportunity, and community organization is explored. Stress is laid on the cohesive power of weak ties. Most network models deal, implicitly, with strong ties, thus confining their applicability to small, well-defined groups. Emphasis on weak ties lends itself to discussion of relations between groups and to analysis of segments of social structure not easily defined in terms of primary groups.

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TL;DR: In this article, the extent to which economic action is embedded in structures of social relations, in modern industrial society, is examined, and it is argued that reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong.
Abstract: How behavior and institutions are affected by social relations is one of the classic questions of social theory. This paper concerns the extent to which economic action is embedded in structures of social relations, in modern industrial society. Although the usual neoclasical accounts provide an "undersocialized" or atomized-actor explanation of such action, reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong. Under-and oversocialized accounts are paradoxically similar in their neglect of ongoing structures of social relations, and a sophisticated account of economic action must consider its embeddedness in such structures. The argument in illustrated by a critique of Oliver Williamson's "markets and hierarchies" research program.

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"Network ties in the international o..." refers background in this paper

  • ...4 However, it can be argued that these relationships are also embedded within social ties and are essentially social (Adler & Kwon, 2002; Granovetter, 1985)....

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  • ...However, it can be argued that these relationships are also embedded within social ties and are essentially social (Adler & Kwon, 2002; Granovetter, 1985)....

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Frequently Asked Questions (9)
Q1. What contributions have the authors mentioned in the paper "Network ties in the international opportunity recognition of family smes" ?

In this case study the authors found that in gaining foreign market entry, those family SMEs that lack existing network ties recognize opportunities through weak ties formed in international exhibitions. From these findings the authors develop five propositions that are intended to lead to further studies on this topic. 

However, the authors extend the understanding about weak ties in this context by revealing that the possibility to develop a new weak tie into a trustworthy one is particularly important for family entrepreneurs in recognizing opportunities for foreign market entry, with a sense of the “ rightness ” of the tie emerging as essential. However, while contributing to an understanding of the topic, this study also points to aspects requiring further research. Thus, further studies are needed in relation to the network development, international opportunity identification, and opportunity exploration of early-internationalizing firms, and of firms having different kinds of ownership structures. It would also be of interest to study the international opportunity recognition of firms by comparing two markets, one with higher and another with lower psychic/cultural distance. 

Since it is the entrepreneur, not the organization, that recognizes opportunities, it is important to study opportunity recognition at the individual level (Chetty & Blankenburg Holm, 2000; Ellis, 2008). 

Another option for networking could be export-promotion organizations that could mediate relationships between family SMEs and potential foreign customers or distributors. 

Although both weak and strong ties may be considered equally important in international opportunity recognition, Söderqvist and Chetty (2009) found that stronger ties were more often used in the early internationalization phase. 

Firm C is the only firm that can be considered proactive in its approach to moving into the French market: it actively sought out opportunities, in other words people who could start to establish a subsidiary there. 

Because the interviews focused on entrepreneurs’ past experiences, the authors followed the guidelines for retrospective studies given by Miller et al. (1997). 

In describing their new French cooperators, the interviewees described how the persons they started their cooperation with were agreeable, and how they trusted their instincts as to whether the tie “felt good”. 

4.1. Types of networksAs Table 2 illustrates, the network ties involved in the international opportunity recognition of family SMEs were intermediary ties, formal ties, and informal ties.