Decision-making in SME internationalization : The role and use of Control in decisions made under the uncertainties of foreign market expansion

Sammanfattning: Small and medium-sized enterprises (SMEs) make the backbone of virtually all economies but most of them are only marginally engaged with global markets, particularly those from developing countries. Our ability to advise these firms is currently limited for two major reasons: on the one hand, conventional International Business literature treats the firm as a black box and does not advance in decision-making dynamics that are critical to SMEs' foreign expansion; on the other, recent SME internationalization studies have achieved important progress but seem dependent on the use of Effectuation theory to represent the decisions that guide SME internationalization. This thesis focuses on closing this gap, developing a treatment of SME internationalization that focuses specifically on characterising internationalization-related decisions as being based on firms’ control of their own means, which allow them to proactively create opportunities and take advantage of contingencies (that is, the control principle). Empirically, this thesis builds on a quantitative research design based on survey data collected from 851 SMEs distributed in Brazil, China, Italy, Poland, and Sweden. Analyses of these data were performed with multiple regression equations and structural equation modelling using partial least squares. Results show that SMEs seem more inclined to adopt control-based decisions during internationalization when under uncertainties related to their business networks and when they come from emerging markets. They also reveal that the paths toward the realization of international market performance with control-based decisions seem to involve both firm-level and individual-level dynamics, with social networking playing a critical role. Finally, the findings collectively make it possible to draw a picture that clarifies the conceptualization of the control principle and hints on the multi-level nature of control-based internationalization. Despite limitations, such findings contribute to both International Business and International Entrepreneurship literatures while advancing extant understanding of the nature of the control principle and its role in SME internationalization.