Policy and Strategy Perspectives
The McGill International Entrepreneurship series
Edited by Hamid Etemad and Richard Wright
Chapter 11: Managing Relations: The Essence of International Entrepreneurship
Hamid Etemad* INTRODUCTION Competition in international markets was traditionally the realm of large companies, with smaller businesses remaining local or regional. The global competitive environment has changed dramatically. The drivers of globalization are removing the barriers which segmented the competitive environments of small and large ﬁrms. Firms of all sizes are beginning to share the same competitive space (Etemad, 1999; Dana et al. 2000 and 2001). As a consequence, it is increasingly diﬃcult for independent, small ﬁrms to thrive on their own unless they become internationally competitive – whether they actually enter the international markets or not. As smaller ﬁrms are increasingly forced to compete in the new global arena, new forms of internationalization are devised and utilized. They cover a wide range: collaborative networks, strategic alliances, integrated outsourcing, etc., some of which are rival models to the operations of multinational enterprises (MNEs). Such new arrangements are used by newly internationalizing competitors to compete in the global marketplace with others, including MNEs. However, neither traditional internationalization models nor theories of entrepreneurship can adequately explain them. These new models of international business involvement require a new, or modiﬁed, approach to explain them as they rely on diﬀerent kinds of relations, capabilities and skills. Paramount among them is the ability to manage such inter-ﬁrm relationships. The primary objective of this chapter is to demonstrate that internationalization is increasingly based on the management of an enterprise’s commercial, industrial, personal and even political interactions – i.e., simply, relations, regardless of size – with...
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