Network Mechanisms in the Entry and Post‐Entry Phases of Internationalization: Evidence from Finnish Family Firms

Abstract

In this study, we posed the questions: (i) What network mechanisms do family firms (FFs) use in their entry and post‐entry? (ii) How do they use these network mechanisms? (iii) Why do they use these mechanisms? We based our study on social network theory, and on two opposing network mechanisms, network closure and structural holes, referring also to research on FFs and international networking. Applying a multiple case design with 15 Finnish FFs, we identified four types of FFs – trotter, preserver, explorer and conqueror – based on how they used their network mechanisms at entry and post‐entry. We offer a new mechanism that we label network termination and explain the heterogeneous networking behaviour of the investigated cases. During post‐entry, bifurcation‐biased FFs used network mechanisms differently from FFs that were able to rely on non‐family relational assets. The study contributes to social network theory, and sheds light on FF heterogeneity in the context of international networking.

Family firm competitiveness and owner involvement

“…Family firm identity is a source of competitive advantage in the marketplace (Sundaramurthy and Kreiner, 2008;Lepp€ aaho et al, 2021;Jocic et al, 2021) and can make a positive contribution to an organization (Zellweger et al (2010)). Habbershon and Williams (1999) introduce the concept of "familiness" to increase understanding about the nature of family firm competitiveness.…”

“…Family firm identity is a source of competitive advantage in the marketplace (Sundaramurthy and Kreiner, 2008; Leppäaho et al. , 2021; Jocic et al.…”

“…The family firm is the oldest and most ubiquitous commercial organizational form in the world. Globally, family businesses comprise over 80% of companies (Leppääho et al. , 2021).…”

Understanding the De‐internationalization of Entrepreneurial SMEs in a Volatile Context: A Reconnoitre on the Unique Compositions of Internal and External Factors

“…As result, SMEs with less experience in international market expansion have a less realistic perception of the given international markets, as they underestimate the complexity of the internationalization process and enter unknown foreign markets too rapidly and/or early (Reiljan, 2004). Moreover, the disruption of business networks is another sensing factor that inevitably leads to reverse international expansion (Leppäaho, Jack and Plakoyiannaki, 2021;Meneses and Pinho, 2019). Being inside a relevant network enables small internationalizers to decide on the targeted geographic markets and entry mode, which are very important for the exploration and exploitation of international market opportunities (Johanson and Vahlne, 2009;Newman et al, 2018).…”

Creativity development and Mode 2 theory development: Event system and experiential learning perspectives

“…Yet, efforts to undertake this type of research in HRM are modest (Bleijenbergh et al., 2020; Chang & Chen, 2011) with various reasons suggested for the lack of progress. These reasons include that both HRM academics and stakeholders have different priorities (Sætre & Van de Ven, 2021), with scholars being less interested in practical knowledge (Leppäaho et al., 2021), and the notion that HR stakeholders are less willing to engage with researchers because they view the collaboration as a potential threat (Gill, 2018). Bartunek and Rynes (2014) suggest that another possible reason for the lack of progress is that too much emphasis has been given to the ‘gap’ and ‘bridging the gap’ rather than viewing the gap as being of fundamental importance to research and theorising.…”