Disadvantages Of The Internationalization Process

To explain the phenomenon of the internationalization process, scholars have developed various internationalization models/ theories. Among all, the first and the foremost approach in explaining the pattern of internationalization is the Uppsala model. Uppsala model has conceptualized the internationalization pattern as an incremental and linear process, during which firms follow stage process through increasing commitment of resources over a period of time (Johanson and Valhne, 1977, 1990) But, subsequent research studies have revealed the drawbacks of the stage model (Johanson and Vahlne, 1977; 1990) and have challenged the model of incremental process (Bell, et al., 2003). However, the drawbacks of stage model have inspired the development

It is argued that, firm with higher commitment allocate more resources to conduct the foreign activities (Stoian et al., 2011). Further, Johanson and Valhne (1977) consider commitment in terms of size and the specialization of resources that are employed to conduct the foreign activities. Accordingly, firm with larger size will have an advantage to incorporate more human, financial resources, and production capacity (Stoian et al., 2011; Katsikeas and Piercy, 1993). Further, Ruzzier et al., (2006) observed that internationalized SMEs were largely driven by the greater amount of organizational resources (in terms of human and financial resources). For exampleWolff and Pett (2000) and Suarez-Ortega and Alamo-Vera, (2005) studies have established a positive relationship between firm size and export intensity. However, certain studies have reported no relationship between firm size and export intensity (Leonidou and Katsikeas, 1996). Correspondingly, studies have considered regular visits to foreign markets and exclusive marketing division as a firm level commitment towards internationalization (Katsikeas et al., 1996; Papadopoulos and Martin, 2010). More precise studies have highlighted both positive as well as negative relationship between firm commitment and the degree of internationalization (Johanson and Valhne 1990; Katsikeas et al., 1996). However the

Autio et al., (2000) argue that those firms that enter international market at a faster pace (early entry) are able to perform better in terms of export sales. A study by Mc Dougall and Oviatt (1996) found that new venture that had an intense international activity exhibited superior performance. Kuivalainen et al., (2007) found rapidly internationalized Finnish smaller firms exhibited better export performance. As a result, SMEs that enter early into the international market might achieve higher degrees of internationalization. However, not much research has been focused on the impact of early internationalization on the export performance of SMEs in the context of emerging