The impact of relationships on changes in internationalisation strategies of SMEs

Abstract

Abstract Purpose – The purpose of this paper is to study how existing relationships influence changes in SMEs' internationalisation strategies in terms of markets and modes. Design/methodology/approach – This paper provides a detailed examination of the dynamics of 116 strategy changes, which are influenced by a firm's relationships in 20 New Zealand and Swedish internationalising SMEs. It uses the qualitative research method to develop theory. A conceptual model with eight categories relating to relationships and strategic change during the internationalisation process of the firm is developed. Findings – Using the conceptual model as a framework to analyse the data, it was found that existing relationships play an important role in 59 market strategy changes and 57 mode strategy changes. The main findings are that business relationships are more influential in internationalisation strategy changes than social relationships, especially with regard to mode changes in foreign markets. Most mode changes are reactive. Market strategy changes, however, are evenly balanced between proactive and reactive changes. Overall, more changes can be attributed to direct relationship influences than indirect third party influences. The findings from this study are used to develop seven propositions. Originality/value – The paper focuses on strategic change and highlights the importance of relationships, in particular their influence in market and mode changes.