Internationalization, Entrepreneurship and the Smaller Firm
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Internationalization, Entrepreneurship and the Smaller Firm

Evidence from Around the World

Edited by Marian V. Jones, Pavlos Dimitratos, Margaret Fletcher and Stephen Young

This forward-looking volume contains state-of-the-art analysis of the current research themes and challenges influencing the internationalization of SMEs.
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Chapter 10: Core Rigidities of Micromultinationals: The Scottish Experience

Pavlos Dimitratos, Jeffrey E. Johnson, Kevin I.N. Ibeh and Jonathan Slow


Pavlos Dimitratos, Jeffrey E. Johnson, Kevin I.N. Ibeh and Jonathan Slow SUMMARY While there are many studies concerning internationalized small and medium-sized enterprises (SMEs), examination of a special type of internationalized small firm, notably the micromultinational (mMNE) is particularly scant. Following the definition of Dimitratos et al. (2003: 165), the mMNE is an SME ‘that controls and manages value-added activities through constellation and investment modes in more than one country’. Drawing on the resource-based view and an in-depth case study analysis of 15 firms in Scotland, the chapter discusses core rigidities that may inhibit growth of mMNEs. Six interrelated areas of organizational rigidities are identified, namely, failure to monitor external changes; existence of production orientation; failure to prioritize opportunities; existence of an opportunistic and reactive international management style; failure to acquire access to financial resources; and the existence of a centralized and non-participative organizational culture. Propositions are developed for further empirical study, and implications are drawn for research, management and policy. INTRODUCTION Traditionally, small and medium-sized firms (SMEs) were considered seldom to proceed beyond the export stage in their internationalization ventures. Advanced modes of internationalization involving ‘constellation and investment modes’ (licensing, franchising, joint ventures, strategic alliances and wholly owned subsidiaries) were typically used to characterize the international growth of large firms. The word ‘multinational’ has 139 140 Internationalization, entrepreneurship and the smaller firm conventionally been reserved for activities of these large internationalized firms (for example Caves, 1982; Oman, 1984). Nevertheless, constellation and investment modes of internationalization have increasingly been used...

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