Internationalising in Small, Incremental or Larger Steps?

We argue that companies may enter foreign environments either incrementally, as suggested by long-established theory, or by taking larger steps that may result in lower initial performance but, through learning and experience, lead to increased performance in future expansions. This idea is corrobor...

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Bibliographic Details
Published in:Journal of international business studies 2007-12, Vol.38 (7), p.1132-1148
Main Authors: Barkema, Harry G., Rian Drogendijk
Format: Article
Language:English
Subjects:
Business and economics
Business and Management
Business management
Business Strategy/Leadership
Business structures
Business studies
Corporate strategies
Cultural differences
Culture
Ekonomi
Expansion
Exploitation
exploitation and exploration
Företagsekonomi
Global corporations
Globalization
Hypotheses
International Business
International market
International trade
internationalisation
Internationalism
Internationalization
Knowledge
Knowledge bases
Learning
Learning experiences
Management
Market entry
Market strategy
Multinational corporations
Organization
SAMHÄLLSVETENSKAP
SOCIAL SCIENCES
South Asian culture
Southeast Asian culture
Statistical analysis
Strategic planning
Studies
Subsidiary companies
Value chain
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Summary:We argue that companies may enter foreign environments either incrementally, as suggested by long-established theory, or by taking larger steps that may result in lower initial performance but, through learning and experience, lead to increased performance in future expansions. This idea is corroborated by the experience of Dutch companies entering into Central and Eastern Europe. We also find that expansion steps may be too large, thereby limiting the exploration of foreign environments. Our study suggests that sequential internationalisation strategies do still matter, and that companies have to balance exploitation and exploration in internationalisation.
ISSN:0047-2506
1478-6990
1478-6990
DOI:10.1057/palgrave.jibs.8400315