The Resource-Based Perspective and Small Firm Internationalisation : An Exploratory Approach

Internationalization is the gradually developing process of increasing a firm’s involvement in international business.Alternative theories to the standard "incremental internationalization" approach are discussed, including the "internalization/transaction" cost paradigm; the "network theory"; and "contingency" approaches. None are claimed to satisfactorily explain the internationalization process. This chapter develops a framework for expanded understanding of internationalization derived from the resource-based model of the firm and evaluates its potential usefulness in understanding wider issues relating to growth and internationalization of smaller-sized enterprises. The resource-based view focuses on the ability to acquire and maintain resources as the key to competitive advantage and organizational survival. Important are ideas of "core business" and "core competencies." The framework is explored using the case study of an anonymous company in Scotland formed to develop a small sub-sea remote-operated vehicle. Finally, the framework and case study are evaluated in terms of previous theories of internationalization. The resource-based view alone is unlikely to have sufficient explanatory power, it is necessary to examine the relationships among other models including internationalization process models, network theory, transaction cost theory and the resource-based approach.(TNM)