Experiential knowledge in the internationalization process of service firms

Sammanfattning: Service firms constitute an important sector of today's world economy. Recently, many service firmshave begun to operate in foreign markets. This thesis focuses on the internationalization process of awide range of industrial service firms, e.g., software firms, law firms, management consulting firms,educational firms, etc. These service firms have gone abroad gradually, alone or together withcustomers. By operating abroad, they have acquired and accumulated experiential knowledge which isfundamental in the internationalization process, and also the common concept in all six papers of thethesis. The internationalization of service firms is a dynamic, resource- and time-consuming process.The thesis deals with the development of experiential knowledge in the internationalization process ofservice firms.Extensive data from 72 interviews and 409 questionnaires shows that managers of service firms perceive lack of experiential knowledge as a major obstacle in the internationalization process. The experienced firm knows that not having developed experiential knowledge is costly, whereas the inexperienced firm has less knowledge of this. The findings indicate that service firms acquire experiential knowledge by operating abroad in business relationships with customers. Service firms interact, make mistakes and learn from them to develop experiential knowledge. Three different components of experiential knowledge are identified in the internationalization process: lack of internationalization knowledge, lack of business knowledge and lack of institutional knowledge. Lack of internationalization knowledge refers to general experience gained from operating abroad. Lack of business knowledge captures knowledge about customers and markets abroad. Lack of institutional knowledge reflects knowledge about institutional conditions, the culture and language of foreign markets. Lack of internationalization knowledge has a direct effect on lack of business knowledge and lack of institutional knowledge, and an indirect effect on perceived cost of subsequent internationalization.The internationalization process is path-dependent and dependent on duration abroad. Path dependence implies that the structure of the existing knowledge base influences further development of foreign experiential knowledge in a certain way in the future. The knowledge platform opens up opportunities in the foreign market but may also put constraints on the service firm's operations abroad. The internationalization process is also dependent on the duration of international operation. There is a non-linear relationship between time and development of experiential knowledge in the long run.

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