Succeeding in the French market: recommendations for small businesses

Purpose – The purpose of this research is make managerial recommendations for firms operating or planning to operate in the French market. Design/methodology/approach – This study reports findings from an in-depth case study covering eight Finnish SMEs operating in the French market. To facilitate the understanding of the recommendations, the findings are discussed through typical features of the French culture. Findings – The findings report the best practices of eight Finnish SMEs operating in France. Research limitations/implications – Although the case study method made it possible to acquire detailed knowledge about the firms' internationalization, the findings can be generalized only to some extent. Practical implications – Managers of family and other types of SMEs will find several practical tools to facilitate their business in the French market. Originality/value – Prior research has focused on managerial practices in France to a limited extent as compared to other countries.peerReviewe

Biohit: A Global, Family-Owned Company Embarking on a New Phase

This case concerns Biohit, a family-owned biotechnology company established in Finland in 1988, selling liquid handling and diagnostics products in the global market. The case also describes the entrepreneurial career of Biohit’s CEO Osmo Suovaniemi, since the company is mainly based on the know-how that Osmo gained as ownermanager of his two earlier companies, Labsystems and Eflab, during the 1970s and 1980s. Hence, this case describes the prior and initial phases of Biohit, examining also its commitment to innovation and its management practices. The case ends with the situation as of March 2010, and includes the reflections of Biohit’s managers on the future of the company. At this point, Osmo was intending to hand over his executive position to someone from outside the family, on the grounds that none of his three sons was able or willing to take up the position. However, he planned to continue as owner, inventor, and full-time board member of Biohit. The managers of Biohit had high hopes of making a breakthrough with diagnostics products that had been under intensive development over a long period.peerReviewe

Social capital in the international operations of family SMEs

Purpose – The aim of this study is to discuss how social capital is developed in the internationalization process of small and medium-sized family enterprises (family SMEs). Design/methodology/approach – This paper reports findings from an in-depth multiple case study with four Finnish manufacturing family SMEs. The data were analyzed through the perspectives of (i) structural holes, (ii) network closure, and (iii) the interplay between these two mechanisms. Findings – Our material demonstrated that family entrepreneurs had a large number of structural holes when launching international operations, but also after several years of running international operations. Instead of trying to span structural holes, they concentrated merely on developing the network closure with agents and subsidiary staff. The case firms spent a lot of resources on finding suitable network ties and on developing good network closure with the selected social capital ties. Research limitations/implications – There are some aspects that might differ depending on the home and target country of firms. For instance, firms in some Asian countries are able to utilize emigrant relationships that help them with networking, which was not the case here with Finnish family SMEs. Practical implications – Family entrepreneurs seem to have a tendency to concentrate on a limited number of foreign partners, and to neglect the building of new relationships that could help them in future challenges. Originality/value – In this study, we (i) respond to calls for more research on network development in the entrepreneurial process, especially in the context of internationalization, (ii) we introduce the notions of network closure and structural holes to the internationalization context, and (iii) we reveal how social capital restricts and facilitates family SMEs’ international operations.peerReviewe

Internationalization pathways of family SMEs: psychic distance as a focal point

Purpose – The purpose of this paper is to investigate how psychic distance affects the internationalization process, foreign market entry (FME), and entry mode choice of Finnish small and medium-sized family enterprises (family SMEs) operating in France. Design/methodology/approach – The paper reports findings from an in-depth case study covering four Finnish manufacturing family SMEs operating in the French market. The data were analyzed using the Uppsala model and distance creating and distance-bridging factors encountered in the FME to France. Findings – The findings reveal that the family SMEs mainly followed a sequential process and favored indirect entry modes before entering the French market. The French market was psychically distant, but the case firms were able to overcome the distance by using different distance-bridging factors. Based on the findings, it can be argued that psychic distance has an especially important role in the internationalization and the FME of family SMEs, mainly because of their general cautiousness caused by family presence. Research limitations/implications – Although the case study method made it possible to acquire detailed knowledge about the firms' internationalization, the findings can be generalized only to some extent. Practical implications – Managers of family SMEs and family members should be provided with the capacity to overcome distance-creating factors, they might encounter in their FME. The decision to internationalize is a strategic change that will most probably change the historical harmony of the firm. Originality/value – Prior research has mainly focused only on general internationalization pathways of family SMEs. In addition and contrast to the previous studies, this paper investigates the role of perceived psychic distance in family SMEs' FME and entry mode choice in a certain target market.peerReviewe

Social capital in relation to the foreign market entry and post-entry operation of family SMEs

Scholars in the discipline of international entrepreneurship have mainly studied rapidly internationalizing firms. However, the majority of entrepreneurial firms are family-owned businesses (85% of all firms in the EU and the USA). Research on family business has focused on the importance of bonding social capital whereas, despite its importance, bridging social capital has not so far attracted much attention. It has been argued that bridging social capital plays an important role in firms’ internationalization processes. The purpose of this article is to examine the role of bridging social capital in the initial entry and post-entry operations of eight family SMEs with regard to the French market. We found that in foreign market entry social capital generally had a serendipity role, based on weak and intermediary relationships. In the post-entry situation, the role of strong and formal ties emerged strongly, and social capital most commonly took on efficacy or liability roles. Thus, it seems that the social capital of family entrepreneurs is limited to their strong bonding social capital, and perhaps to their strong national social capital. However, when such firms start to internationalize, they have to find new networks to gain the bridging social capital that will enable foreign operations. It seems that having a limited number of international ties drives family SMEs to search for relevant contacts at international trade exhibitions and trade fairs.peerReviewe

The dynamic role of social capital and high technology INVs

International entrepreneurship is a promising field to examine the dynamic aspect of social capital. International New Ventures (INVs) are companies that internationalize their operations rapidly and their nature is very dynamic. The purpose of this article is to examine the different roles of social capital, efficacy role, serendipity role and liability role in the international operations of seven Scottish and Greek SMEs. We argue that the different roles of social capital are not clearly demarcated in the current literature. We found that the efficacy role of social capital played a more important role in the initial stages of internationalization. However, the serendipity role of social capital was more important for companies with many structural holes that did not have the necessary network relationships to bridge them. All in all, we highlight that virtual social capital in the digital era is becoming more and more important

International opportunity recognition among small and medium-sized family firms

Current research in the field of entrepreneurship emphasizes the importance of opportunity recognition as a key element in the entrepreneurial process. It has been recognized that network ties, activeness and alertness, and prior knowledge are related to how entrepreneurs recognize new opportunities. However, it is unclear how important these factors are when a firm explores opportunities for entry into a foreign market. In this exploratory case study, covering the international opportunity recognition of eight family-owned SMEs, we found that the firms in question mainly recognized international opportunities by establishing new formal ties rather than using existing informal or family ties. The findings also indicated that due to the small size and the flexibility of the management team in family SMEs, these firms were able to react quickly to new international opportunities. However, there was no direct relationship between the prior knowledge of the firms and their international opportunity recognition. In addition, we found that trade exhibitions formed the primary context for the international opportunity recognition of the SMEs in this study. These findings motivate a set of five propositions that may lead to further studies on this topic.peerReviewe

Internationalization pathways among family-owned SMEs

Purpose: The purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family-owned small to medium-sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family-owned SMEs. Design/methodology/approach: This paper reports findings from an in-depth multiple case study with eight Finnish family-owned SMEs. Findings: The ownership structure had the most important role in defining the internationalization pathways followed by the family-owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born-again global pathways. Practical implications: Family entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in addition to their primary co-operators. Originality/value: The authors extend the integrative model of small firm internationalization by Bell et al. toward family-owned SMEs and highlight the most important dimensions in the different internationalization pathways of family SMEs. The ownership dimension is integrated within discussion on differing internationalization pathways. The authors utilize a family business specific perspective (the stewardship perspective), in order to understand the specific features of internationalization among family SMEs, and also how these features differ between family SMEs and other firms.peerReviewe