This thesis investigates the processes and influential factors affecting the internationalisation of SMEs in manufacturing industries in Malaysia. Internationalisation of small and medium-sized enterprises (SMEs) has been widely researched but little is known of how and why internationalisation takes place in developing countries and this lack of evidence in the literature provides strong grounds for this study. Jones and Coviello (2005) suggest investigation of internationalisation should include the broad range of internationalisation theories, such as the Incremental and Rapid internationalisation models, Networking, Resource-based and International Entrepreneurship perspectives. These perspectives examine the awareness, process, driving forces and influential factors relevant to SME internationalisation. Therefore, the patterns and dimensions of internationalisation, including the modes of foreign entry, market selection, triggering factors, awareness of international opportunities were investigated, as were the problems and challenges faced by internationalising firms and the key drivers influencing the internationalisation process.
A critical realism paradigm and qualitative method were employed. In-depth interviews were conducted with 16 Malaysian experts and 54 Malaysian-based CEOs, owners, and/ or key executives from SME manufacturing industries using a semi-structured interview guide. The data was analysed with the statistical package NVivo 7 and also manually to improve triangulation of the results. The results are largely inductive and interpretive and are presented in qualitative-themes as well as some basic statistical analyses.
The findings indicate that interrelated factors influence the internationalisation process of Malaysian SMEs. Various paces, a myriad of entry modes and broad market scopes determine the pattern of internationalisation undertaken. A traditional internationalisation pattern is strongly evident, although some companies exhibited rapid and born global patterns, depending on their industry, products, organisational competencies, knowledge and access to information or because of a change of management. The main drivers of internationalisation centred on key personnel and firm competencies. The study also found that while domestic and global forces motivate internationalisation, aspects of Government policy, procedures and international requirements inhibit the process. More importantly, the findings suggest that networking relationships create internationalisation awareness and provide appropriate pathways to internationalisation for manufacturing SMEs in Malaysia and this is an area where strategies could be improved. The increasing emphasis on the SME sector for enhancing economic and social development in Malaysia means they can make substantial contributions to development and understanding how to improve internationalisation strategies will increase those gains. More transparent government policies and coherence among supporting agencies as well as structured and relevant networks would assist the internationalisation of Malaysian SMEs. Currently, internationalisation processes are constrained by limited resources and difficulty in accessing assistance and supports. This study provides new knowledge and important insights that will benefit manufacturing and other industries in Malaysia and other developing countries.
