Network ties in the international opportunity recognition of family SMEs

Abstract

The importance of network ties is emphasized in the current literature on opportunity recognition. However, it is unclear how firms with limited bridging networks, such as family SMEs, recognize international opportunities through their network ties. In this case study we found that in gaining foreign market entry, those family SMEs that lack existing network ties recognize opportunities through weak ties formed in international exhibitions. The findings also indicate that rather than being proactive, family SMEs respond reactively to opportunities that emerge coincidentally. The trustfulness of the tie is important when they consider these opportunities and form new ties for internationalization. The nature of the cooperator appears to be more important than the target country. From these findings we develop five propositions that are intended to lead to further studies on this topic.

A socioemotional wealth perspective on how collaboration intensity, trust, and international market knowledge affect family firms’ multinationality

“…However, family firms are rarely strategic in forming network ties and their relationships tend to remain identity-based (Kontinen & Ojala, 2011a;Musteen, Francis, & Datta, 2010;Pukall & Calabrò, 2014). Family firms are reluctant to enter new networks (Gómez-Mejía, Haynes, Núñez-Nickel, Jacobson, & Moyano-Fuentes, 2007), prefer to rely on wellestablished and long-term collaborations with other family firms as more intimate sources of information for internationalization (Musteen et al, 2010), and are more likely to draw on the rich social capital within their existing collaborative ties first to acquire information (Kontinen & Ojala, 2011b), regardless of its strategic value (Hite & Hesterly, 2001).…”

Understanding Internationalisation through the Lens of Social Network Analysis

“…In their buyer-seller activeness-passiveness comparison, Johanson and Mattsson (1988) addressed that active networking initiatives are taken proactively by sellers, whereas in passive networking sellers reactively respond to the initiations taken by buyers. Building on Johanson and Vahlne's (2009) active networking refers to a systematic search of an outsider for relevant networks and actors, yet passive networking happens as a result of ad-hoc events between insider and outsider, such as unsolicited orders (Johanson and Vahlne, 2006;Kontinen and Ojala, 2011). There are two related -perspectives: social network and resourcebased view which discuss whether overcoming the liability of outsidership and network creation is a passive or active process.…”

The Importance of Locally Embedded Personal Relationships for SME Internationalisation Processes From Opportunity Recognition to Company Growth

“…The recogni#on of an interna#onal opportunity is an important element in understanding the interna#onalisa#on behavior of companies (Chandra et al, 2009;Ellis, 2011;Johanson and Vahlne, 2009;Ovia& and McDougall, 2005;Zahra et al, 2005) as opportuni#es are "the most important element of the body of knowledge that drives the process" (Johansson andVahlne, 2009, p. 1424). The acceptance of this fact has resulted in the growth in the number of studies in this regard (Chandra et al, 2009;Ellis, 2011;Johanson and Vahlne, 2009;Zahra et al, 2005;Kon#nen and Ojala, 2011).…”

“…Business networks, network rela#onships and #es between individuals (especially managers or entrepreneurs) are seen as an important resource facilita#ng interna#onalisa#on, especially among SMEs (Crick and Spence, 2005;Hadjikhani, Ghauri and Johanson, 2005;Ellis, 2011;Kon#nen and Ojala, 2011).…”

“…Personal rela#onships facilitate the iden#fica#on of new market opportuni#es (Manolova et al, 2010;Ellis, 2011;Kon#nen and Ojala, 2011;Harris andWheeler, 2005, Chandra et al, 2009;Crick and Spence, 2005;Komulainen, Mainela and Tah#nen, 2006;Sharma and Blomstermo, 2003). However, most of the literature focuses on the role of interna#onal, or cross-border networks and personal rela#onships.…”