Internationalization of SMEs

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Methodology

The purpose of this part introduce the method and methodology used through our research. To conduct our study we used a qualitative method. Our empirical data has been gathered through semi structured interviews of Swedish Innovative SMEs Managers. This chapter explains how we conducted our research and what questions we were looking to ask in order to gather some empirical findings.

Research Philosophy

The two main paradigms for a research are the positivism and the interpretivism. Interpretivism is introducing the subjectivity of the authors, which means that they do their own interpretation about the data they collect. Positivism aims to be totally objective and the authors point of view should not be taken into account (Ryan, 2018).
Therefore, a qualitative method and open-ended questions are often associated with the interpretivism; we thus decided to follow an interpretivist method. Indeed, we wanted to bring our own judgement of what our interviewees had told us, because each of our interviewees had their own experience and their own point of view can differ from one to another. We could therefore interpret each interview constructed through our own reflexivity (Winit-Watjana, 2016).

Research approach

According to Kvale (1983) a qualitative approach can be defined as « an interview, whose purpose is to gather descriptions of the life-world of the interviewee with respect to interpretation of the meaning of the described phenomena ». We therefore believe that this approach is much more appropriate to the subject as each company has its own factors in terms of internationalization, which is why we have decided not to limit their answers, and to ask open questions. We also believe that it is not appropriate and relevant to give figures to explain our results, but rather images and words. Every company can have its own point of view, and can have a very own perception of what pushed or pulled them to go international. Hence, a qualitative research is something that corresponds to the answers we are seeking. From then on, we are able to gather different groups of responses and relate them together in order to estimate a general trend.

Research strategy

Abductive reasoning is a way of elaborating a theory from theoretical facts and potential phenomena. It is created through a model of inference, coming from an integration and a justification of ideas found from a theoretical background (Raholm, 2010). According to Peirce (2000), the abductive reasoning is the only solution to introduce new ideas, to go beyond the existing researches, and aims to respond to research questions by introducing these new elements. It is therefore used in order to accept the validity of a hypothesis, and to answer to the research questions. In this sense, abductive reasoning is not a discovery of a result by luck, but it provokes the answers wanted by the researchers (Minnameier, 2004)
To conduct the abductive reasoning of our thesis, we have first written a theoretical background, that is to have a perfect idea of the field we work on, and we can deduce research questions from this theories. Then, we needed to have interviews and interviewees who were able to answer our questions and to give us some response elements to these questions. Finally, we have analyzed all these results to elaborate our theory, and have clear answers to our question.
There are different ways of conducting a research: exploratory, descriptive or explanatory. For our research, we have used an exploratory way of searching. An exploratory research is created to obtain findings and seek insights and assess phenomena in a new light (Robson, 2002). Here, our goal is to explore and find answers to what makes SMEs want to go abroad and become international.

Method data collection

Semi structured interviews

In our thesis we have used semi structured interviews as a way to provide the opportunity to generate rich data and understand perception and values of the interviewee. The success of this type of interview is mainly based on the depth and extent of willingness to share information from the interviewee (Jones, 1985). From the interviewer perspective, this method relies on their interpersonal skills and their ability to establish a relationship and rapport with the interviewee. The semi structured interview is a method with different weaknesses and strengths. Denscombe (2007) research talks about an “Interviewer effect” to show that interviewee answers differently depending on their perception of the interviewer. The sex, the age, and the ethnic origins of the interviewer are identified as factors that have an impact on the amount of information interviewee are willing to share and their honesty. Gomm (2004) expresses the idea that the interviewee’s responses are influenced by what they think the situation requires. To ensure that interviewer and interviewee are clear about the subject it was therefore important to make clear at the beginning of the interview what the purpose and topics are to put the interviewee at ease. Another weakness of this interview style is that interviewee may say what they think the interviewer wants to hear. However this comportment depends on the nature of the topics discussed. It was then our responsibility as researchers to sort evidence from the data gathered and determine what is credible and can be reliable. Gomm (2004) describes the cooperative nature of the interview as a “fact-producing interaction”. For this reason, a responsibly engaged researcher would help the interviewee describe perceptions that would otherwise be considered irrelevant from mentioning. We therefore aimed to develop an intimate, trusting and empathetic relationship where respondents would feel able to disclose truthful and deep information. Semi structured interviews are also considered as a way to provide rich, original voices which can be used to construct research narratives that gives the method its invaluable quality.

Interview preparation

Through our research, we wanted to interview companies and managers on the reasons of their international development and their perceptions of the drivers that motivate this internationalization. We have considered the importance of interviewing multiple persons in the same company and also interviewing managers working in companies evolving in different fields of activity. Therefore we aimed to conduct our interviews that way. The positions of interviewees we were aiming for are international business managers, growth managers and expansion specialists evolving in innovative SMEs.

Sampling method

Non-probability sampling

There are a lot of different types of sampling in order to interview people. Unlike in the quantitative method, qualitative research implicates to use a non-random way of choice of participants. In this way, we chose to work on a non-probability study which involves a judgement from the researchers when it comes to select their interviewees (Henry, 1990). In our case, the interviewees were carefully selected with the confidence that they could properly answer our questions and provide us with answers. That’s why we consider that our research is a made from a purposive sampling.

Purposive sampling

A purposive sampling is the fact of choosing participants taking into account many characteristics and not interviewing as many people as possible just to reach a quota (Tansey, 2007). The goal is to have the information needed and to be sure that the interviewee will respond to criterias defined by the researchers previously, and whose experience will bring relevant information to the subject, and possibly new outcomes that were not expected from the researchers.
Here we conducted our thesis in such a way to take into account these specific characteristics and to answer equally specific questions. Hence, we defined a scope of criterias to select the companies and interviewees in order to have the answers we needed.

Choice of participants

In order to select potential interviewees to answer our questions, different criterias needed to be respected for us to contact these companies. We used 4 main criterias to define the scope of these firms. First of all, the company needed to be innovative which as defined earlier can be understood as companies with one of the following component: “Production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres: renewal and enlargement of products, services, and markets; development of new methods of production; and establishment of new management systems.” (Crossan and Apaydin, 2010). Then, our second criteria is a geographic one. As delimited previously, our research is only based on Swedish born companies that started their activities in the Swedish market. Additionally, the next criteria of selection was that these companies were SMEs which are defined in our study by Small and Medium Enterprises that are independent firms with 500 or fewer employees according to Lu and Beamish (2001). Finally as a last criteria, we defined that the interviewee must work in a company that was at the moment of the research in some form of internationalization process.
Then in order to get as much quality answers from our interviewees as possible, we were looking at companies that are already developed in in foreign markets. That way, our idea has been to understand internationalization from the perspective of a manager in the Swedish market to learn more about the drivers that are internal to the company and also some of the drivers, opportunities and limitations of the Swedish market. In this configuration our choice of interviewee was in priority international expansion managers. Then, we tried to interview another person of the company at another hierarchical level. We aimed for managers working more closely with a specific market in order to learn more about the drivers and opportunities of this external market that led to the internationalization decision and also cross results with information given by the first interviewee of this firm. We managed to conduct this double interviews in one of the seven companies we interviewed. Due to difficulties to reach more persons in the same companies, it is the only time we managed to achieve this. The main factor about this situation was the lack of employees dedicated to internationalization in firms, with usually only one manager working within international expansion.
The strategy used in order to find our interviewees was part of and extensive research of innovative SMEs on the Swedish market. This research was mainly conducted online through professional social networks like LinkedIn that has proved to be our most successful way to reach companies. To find our interviewees we also looked at the different coworking space present in Sweden and the list of their members. However, this type of research has been unsuccessful and we had negative to no results at all, even for coworking space of the Jönköping area (Science Park; GRO36) where we wanted to conduct face-to-face interviews.
Finally another way to find and raise our awareness about innovative companies was to go into shops and supermarkets to find innovative products and companies that would be interesting for us to interview.
Below is a list of the firms and managers summarized in a table, that have been interviewed for our thesis.

Interview design

After our first contact and few exchanges with our interviewees through professional social media and emails, a time and date would be found for us to conduct this interview over the phone. At the beginning of the interview, we first introduced ourselves and our respective background and have a small conversational chat to start building a trust relationship with the interviewee. After that, we introduced our research topic and all of its components in order for the interviewee to understand the scope of the questions that would be asked and the reasons that pushed us to conduct this research. Once the objective of the interview was clear we would let the interviewee know that this interview would be recorded and the information shared collected to be used in our thesis. At the same moment we would remember the interviewee that the length of the interview should be of approximately 30 minutes to make sure he had booked sufficient time for it.
Our interviews started with some general questions to go to more specific questions related to the core of our subject. Our first question of the interview usually was: “Can you give us some general information about your position and the company you are working in?” With that question we wanted to make sure that the interviewee felt confident about his ability to answer to questions and develop his ideas. Then the questions would focus on gathering information about the international situation of the company. That way we would get more knowledge on their position on the Swedish market when they made this decision, but also where they decided to internationalize first and why or also information about the barriers they could have encountered. Then, a question about the form of internationalization followed would be asked before going to questions about the drivers of internationalization, both regarding the internal and external markets but also about drivers internal to the company.

Table of contents
1. Introduction
1.1 Background
1.2 Problem
1.3 Purpose
1.4 Definitions
1.5 Research question
2. Frame of reference 
2.1 Innovative SMEs
2.2 Internationalization of SMEs
2.3 Drivers of internationalization
3. Methodology 
3.1 Research Philosophy
3.2 Research approach
3.3 Research strategy
3.4 Method data collection
3.5 Sampling method
3.6 Interview design
3.7 Data collection
3.8 Data analysis
3.9 Ethical considerations
4. Empirical findings 
4.1 Interviewees
4.2 Internationalization decision
4.3 Internationalization drivers
4.4 Barriers to international development
4.5 Empirical findings summary
5. Analysis 
5.1 Innovation and Internationalization
5.2 First international expansion
5.3 Drivers of internationalization
6. Conclusions 
7. Discussion 
7.1 Contributions and implications
7.2 Limitations
7.3 Future research
8. Reference list
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Internationalization drivers of Swedish Innovative SMEs