Case Study: SME retailer internationalisation: case study evidence from British retailers

Case Study: SME retailer internationalisation: case study evidence from British retailers

Research has consistently pointed to management as the principal force behind the initiation, development, sustenance and success of SME internationalisation because of the direct responsibility for, and involvement in, the decisions of the firm. For SMEs, decision-making power is generally concentrated in the hands of one or very few persons, therefore international strategy decisions are inclined to be the direct responsibility of the owner manager or senior management team. Moreover, it is argued that the performance of SMEs in international markets is not only a function of the accessibility of resources, but also of managerial competence and firm networks.

The context of the current study is placed within the retail industry. In terms of the extant literature from the field of international retailing, studies have focused principally upon the activities of large retail organisations. From the work of Hutchinson, Karise and Quinn the role of managerial knowledge, experience and attitudes have also been identified as a fundamental deciding factor in the international development of large retailers.

Research in the field of SME internationalisation has primarily been conducted within the context of the manufacturing sector, with limited research from the service sector. Since SMEs are not a homogeneous group, it has been strongly recommended that further research on SME internationalisation should examine firms in other industries. Indeed, as found by the EU Observatory of European SMEs, different business sectors will naturally be internationalised to different degrees in different ways, due to their different activities. This paper, in presenting case evidence of SME international activity within the retail industry, brings new insight into SME foreign market development in the broader context of the service industry.

While understanding of the importance of management decisions upon the internationalisation of SMEs is at a relatively developed stage, one of the less studied aspects of SME internationalisation both theoretically and empirically is the role of decision-makers' characteristics. Indeed, a review of the literature pertaining to management characteristics (objective and subjective) and the subsequent impact upon SME internationalisation carried out by Hutchinson, Karise and Quinn revealed that this is one of the most widely studied, but least conclusive areas of exporting research. Hence, further study and validation is recommended on the positive link between management support, i.e. their commitment, perceptions and attitudes, and foreign market behaviour.

This paper expands upon the recent theoretical framework by Hutchinson et al. (2005) into the internationalisation of SMEs in the UK retail sector and presents empirical findings specifically relating to the role of management characteristics in the foreign market development of retail SMEs. While it is recognised that the entrepreneur is a key variable in SME internationalisation, the focus of this study has been placed upon a holistic perspective of the firm, as opposed to a wholly entrepreneurial study. This paper therefore addresses the objective (knowledge and experience) and subjective (attitudes, perceptions, and personality) characteristics of decision-makers within smaller retail firms, and evaluates the impact ...