Business and Management
Submitted By only4me
PROCESS OF THE THE INTERNATIONALIZATION DEVELOPMENT FIRM-A MODELOF KNOWLEDGE FOREIGN AND INCREASING MARKET COMMITMENTS
JAN JOHANSON* Center of International Business Studies University of Uppsala JAN-ERIK VAHLNE* Institute of International Business Stockholm School of Economics
Abstract. On the basis of empirical research, a model of the internationalization the firm is developed. The model focuses on the gradual acquisition, integration knowledge about foreign markets and operations, and on the incrementally commitments to foreign markets. In particular, attention is concentrated on the involvement in the individual foreign country.
process of and use of increasing increasing
* Several studies of international business have indicated that internationalization of the firms is a process in which the firms gradually increase their international involvement. It seems reasonable to assume that, within the frame of economic and business factors, the characteristics of this process influence the pattern and pace of internationalization of firms. In this paper we develop a model of the internationalization process of the firm that focuses on the development of the individual firm, and particularly on its gradual acquisition, integration, and use of knowledge about foreign markets and operations, and on its successively increasing commitment to foreign markets. The basic assumptions of the model are that lack of such knowledge is an important obstacle to the development of international operations and that the necessary knowledge can be acquired mainly through operations abroad. This holds for the two directions of internationalization we distinguish: increasing involvement of the firm in the individual foreign country, and successive establishment of operations in new countries. In this paper we will, however, concentrate on the extension of operations in...