Document Type : Research Paper

Authors

• Faramarz Nouri ¹
• Alireza Fazlzadeh ²
• Seyedsamad Hosseini ³
• Samad Rahimiaghdam ²

¹ Ph.D. Candidate in Strategic Management, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran

² Associate Prof., Department of Management, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran

³ Associate Professor, Department of Management, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran

Abstract

This research aims to design a model for the internationalization of companies operating under uncertainty, seeking to address the shortcomings of existing one-dimensional approaches that ignore the dynamic and behavioral complexities of stakeholders. This research is applied and developmental in terms of its purpose, and mixed and exploratory in terms of its type. Data were collected through interviews and questionnaires from managers and experts involved in the internationalization process of small and medium-sized companies, who were selected through purposive sampling. The final model was developed using fuzzy soft systems methodology and fuzzy structural interpretive modeling. The final model identifies key dimensions for the internationalization of companies under uncertainty. These dimensions include: monitoring macro trends, developing a technology ecosystem, financial and advisory support, developing standards, managing stakeholder relationships, developing specialized training centers, advanced intelligent systems for forecasting, developing flexible entry strategies, networking and strategic alliances, optimizing product quality and processes, and managing supply chain complexity. The presented model serves as an analytical tool for a deeper understanding of the complexities of internationalization in small and medium-sized enterprises and for more effective policymaking in the face of uncertainties in the business environment.
Introduction
To maintain and improve their competitive standing in the dynamic global marketplace, many businesses are adopting an internationalization strategy. The increasing volume of international trade and investment, coupled with the central role of firms in this arena, has made corporate internationalization a crucial topic in international business studies. The internationalization of a company is the process through which a business expands its operations beyond national borders and enters foreign markets. This process encompasses a wide range of activities, from establishing subsidiaries abroad to exporting goods and services internationally. By adopting an internationalization approach, companies can mitigate their business risks and achieve potentially greater returns compared to operating solely in domestic markets. However, the successful implementation of this strategy is influenced by numerous factors that must be carefully considered. When a company decides to enter international markets, it encounters distinct institutional and cultural characteristics that vary from country to country. Consequently, to succeed in this arena and owing to the inherent complexity and uncertainty of the process, managers require sufficient knowledge and awareness to efficiently process and analyze information and make sound decisions. This knowledge base enables them to effectively address the challenges arising from cultural and institutional differences.
In theoretical literature, the process of company internationalization is usually explained through two main perspectives. The first perspective suggests that the internationalization of companies occurs via an incremental process involving stages, beginning in the domestic market and gradually expanding to international ones. Conversely, the second perspective, derived from international entrepreneurship, posits that a company can access several global markets from the outset. Considering the diverse perspectives in international business research, Glaum & Oesterle contend that establishing a unified definition for company internationalization has remained difficult and challenging, even after several years of dedicated research in the field.
Johanson & Vahlne categorize company internationalization into four main stages: start-up, full launch, independent international activities, and joint international activities. Their viewpoint is predicated on the idea that internationalization involves creating and expanding connections with other actors within a foreign network. They assert that a company’s internationalization process initiates with interactions in local networks, subsequently extending to other countries as the business relationships within these networks mature. This development is accomplished through establishing new connections within networks new to the company, strengthening existing relationships in these networks, and ultimately integrating networks across different countries. Johanson & Vahlne define internationalization as the process of developing business relationship networks in other countries through expansion, penetration, and integration. The focus of this definition is clearly on relationships and networks, which subsequently facilitate companies’ entry into foreign market networks.
Liu & Ko view internationalization as the process of organizing and deploying global economic resources, such as capital, raw materials, human resources, information, markets, and management capabilities. Costa et al. believe that internationalization enables companies to access new markets to create novel business activities and generate profit. Finally, Dominguez & Mayrhofer state that, according to the born global model, certain companies rapidly enter a significant number of markets from inception. In fact, born global companies are those that have achieved a considerable degree of internationalization right from their inception or early operational stages. Therefore, considering the presence of diverse and influential stakeholders and actors, dynamic and behavioral complexities, and inherent uncertainties in the internationalization process of SMEs, coupled with the significant share of SMEs, the main research question is as follows:
What is the internationalization model for companies in small and medium-sized industries (SMEs) under conditions of uncertainty?
Methodology
This research employs a mixed-methods approach (both qualitative and quantitative) with an applied-developmental purpose and a descriptive-exploratory strategy. The primary aim is to provide solutions for the challenges of SME internationalization and to provide decision-making support to relevant stakeholders. Furthermore, due to a scarcity of sufficient information, the study also seeks to develop a comprehensive model for SME internationalization under conditions of uncertainty. The qualitative phase commenced with a literature review encompassing articles, books, projects, and documents related to SME internationalization. Subsequently, expert opinions, gathered through a Soft Systems Methodology (SSM) framework and Fuzzy Interpretive Structural Modeling (FISM), were integrated to develop a final model for SME internationalization under uncertainty.
Results
This research utilized the Soft Systems Methodology (SSM) to investigate the internationalization of SMEs. In the initial stage, dedicated to encountering and understanding the problematic situation, in-depth interviews with experts and stakeholders were conducted to extract actors from both the distant and near environments, leading to the development of a Rich Picture. The findings of this research confirm that the internationalization of SMEs is a multifaceted and dynamic process fundamentally dependent on the coordination and synergy between various factors across different levels. The conceptual model developed illustrates that success hinges upon a systematic approach that simultaneously integrates internal company factors, environmental dynamics, and institutional frameworks. Effective implementation of this model is contingent upon continuous monitoring of global activities and trends, rigorous assurance of methodological compatibility, proactive prediction and consideration of inherent uncertainties, and the committed participation of all key stakeholders, including SMEs, governmental bodies (such as the Industry, Mining, and Trade Organization), supporting entities (like the Chamber of Commerce and Industrial Estates Company), and regulatory agencies (Customs and the Standards Organization).

Keywords

• SME internationalization
• uncertainty
• fuzzy systems methodology
• ISM

Main Subjects

• uncertainty