Exploring management and entrepreneurial factors in the internationalisation of SMEs: evidence from the Bangladeshi apparel industry

Abstract

The study aims to explore the internal management and entrepreneurial factors that affect the internationalisation process of ready-made-garment (RMG) SMEs in Bangladesh. The study collects information from 46 apparel SMEs located in Chittagong, Bangladesh, and is followed by a pilot survey. Results reveal that entrepreneurs' management capability, foreign language skill, and e-commerce orientation play an instrumental role in the internationalisation process. In addition to common institutional impediments, the study finds entrepreneurial and managerial capabilities that make a difference in the internationalisation of apparel SMEs. Since the nature of the apparel business is buyer driven, establishing and maintaining a 'network' and 'learning' are the most important aspects for internationalisation process, which are dependent on the entrepreneur's management capability, foreign language skill and the extent to which e-commerce is adopted in the firm. In studying these buyer-driven firms, i.e., RMGs, researchers not only should consider the traditional theories of internationalisation, but take into account the perspectives of both lead firms and supplier firms within the global value chain in which both interact and conduct their operations.

Supplier Internationalization Through Upgrading in Global Supply Chain: Evidence from the Garments Industry of Bangladesh

“…Our study is partially in line with the previous studies of Rana and Sørensen (2013), Ahmed et al (2016), Choksy et al (2017), andBanu (2019). While earlier studies either focused on upgrading or on internationalization in isolation, our study shows a link between upgrading and internationalization.…”

“…There is no denying the fact that the fashion industry has emerged as a global industry (Sondhi & Singhvi, 2006). Rana and Sørensen (2013) argue that internationalization is the central issue for any firm in order to reap the most benefit from globalization. Intense competition in the domestic market, technological advancements, geopolitical rebalancing, and low cost of production also pushes the local apparel manufacturers to venture into international markets (Evans et al, 2008).…”

Exploration of Chinese SMEs' export development: The role of managerial determinants based on an adapted innovation‐related internationalization model

“…Decision makers’ perceptions and interactions with change agents are antecedents of export commencement (Johanson & Vahlne, ). SMEs that appear to have similar environments can differ in their views of internationalization (Andersson, ), because their export behavior is influenced by the decision maker's predispositions regarding export activities (Hosseini, Hamedani, & Nikbakht, ; Rana & Sørensen, ). For example, it has been found that managers with more favorable attitudes are less concerned with export barriers, whereas negative perceptions lead to more concerns on export barriers to exporting (Uner et al, ).…”

Gearing Up for the Future of Manufacturing in Bangladesh

“…Many Bangladeshi firms have limited English communication skills, constraining their capacity to interact directly with foreign buyers and suppliers, and learn from them about new technologies and managerial practices. According to a study of export-oriented SME garments firm owners in Chittagong, only about two-thirds of the firms' owners/managers had the language skills needed to be able to communicate directly in English with foreign counterparts (Rana and Sorensen 2013). Most export-oriented garments SMEs do not interact directly with foreign counterparts.…”