Beruflich Dokumente
Kultur Dokumente
Research Proposal
Table of contents
1. Introduction
1.1. Research Aim
1.2. Objectives
1.3. Research Questions
2. Literature Review
2.1. Different approaches to the Internationalisation process
2.1.1. Internationalisation as a gradual process
2.1.2. New approaches to the Internationalisation process
2.1.3. The distinguishing features of International SMEs
2.2 Determinants of export performance for SMEs
2.2.1. The resources of the firm
2.2.2. The characteristics of the company
2.2.3. The Internal and External Environments
2.2.4. Through a consensus ?
2.3. Interest of the Food-Processing Industry
2.3.1. Specific features of the sector
2.3.2. Innovation as a key factor for success
2.3.3. Determinants of innovation capabilities
2.4. Conclusion
3. Research Design
3.1. Methodological Approach
3.2. Data Set
3.2.1. Data Collection
3.2.2. Sample
3.3. Data Analysis Plan
3.4. Time Scale for the Research
3.5. Difficulties
4. Conclusions
5. References
6. Resources
1. Introduction
1.1. Research Aim
In Business, the concept of International Development is used to describe the
expansion of a company outside its national boundaries. It has, for a long time, been seen as
the domain of large firms. Indeed, Small and Medium Enterprises (SMEs) were thought not to
have enough resources to cope with the negative impacts of global expansion (Dileep 2012,
cited in Toulova, Votoupalova and Kubickova, 2014, pp. 419). However, today, their ability
to successfully enter foreign markets is largely recognised. In a context of economic crisis,
going global might even be considered by SMEs as a condition to expand and survive, by
enhancing competitiveness (Bijman, Tulder and Van Vliet, 1998).
Based on this assumption, a lot of studies have been conducted about the
internationalisation of smaller firms, with an emphasis on the determinants of their
performance in foreign markets. However, the changing and pluralistic nature of
organizations makes it difficult to identify generally applicable best practices (Bryman and
Bell, 2011, p.5), and justify a focus of the research on certain industries.
In France, SMEs represent nearly 80% of the companies, but account for only 15% of the
export in value, which shows that there is room for improvement. In the Food Processing
Industry, leading sector, expanding its operations abroad is very complex, but it can also be
very valuable, given the reputation of the French gastronomy (cf the success story of
Michel et Augustin in Asia, or Bonne Maman, etc...). For SMEs, there are good opportunities
to seize, on markets neglected by larger firms. However, although being of high interest, the
case of agrifood firms has been largely underused by the Literature.
From that perspective, this research aims, through a study of the Food Processing Industry, to
enrich the knowledge regarding global expansion of SMEs. Existing theories and models
regarding the determinants of performance will be tested on several French SMEs from the
sector, whose specific features (perishability of the products, low margins, transportation,
regulations to comply with...) might lead to significantly different findings, and offer new
research avenues.
1.2. Objectives
This project starts with a literature review to underline the different approaches that
can be found regarding the international development of firms, and acquire general
knowledge about the topic. The next step is to point out the gaps in the existing literature, in
order to define a focus for our research, and adress several questions that should be answered.
Then, the formulation of various hypotheses will lead us to the investigation part of the
project, which aims to measure the impact of several factors on the performance of Global
SMEs from the Agrifood sector. Different methods for collecting and analysing data will be
used, in order to confirm or reject the hypotheses, and explore new research avenues.
1.3. Research Questions
These research questions will constitute the starting point of our project. By defining a
focus, they prevent from a massive collection of useless data (Bryman and Bell, 2011).
Regarding the international development of Small and Medium Enterprises, several issues
emerged from the literature, and made us adress a few questions we would like to answer :
Is the success of Small and Medium Enterprises into foreign markets solely dependent on
their resources ?
Do the characteristics of the industry influence the international development of firms ?
What are the motives and obstacles to going global in the Food Processing Sector ?
To what extent is Strategic Management the core determinant of a firms performance in
foreign markets ?
From that perspective, the main question of this research project is :
What are the determinants of Export Performance for French SMEs of the Food Processing
Industry ?
2. Literature Review
Many studies have been written over internationalisation of SMEs and, interestingly,
they often came to very different conclusions. The aim of this literature review is to critically
analyse the different approaches found in the literature, in order to highlight the existing gaps
and lay the foundations for further research, as suggested by my research questions.
The experience of the firm, which depends on its age and its export experience, is also
assumed to positively influence its performance in foreign markets, due to its association with
maturity in terms of management and business partnerships (Ursic and Czinkota, 1984, pp.
159168). However, an older firm might be less likely to implement innovative strategies,
which are considered as a key success of factor in the Food Processing Industry (Maurel,
2009, pp. 118142). Moreover, these determinants, because of their static nature, have a
limited scope.
From that perspective, several authors focused on dynamic characteristics. For example, an
export-oriented management is believed to enhance the performance of SMEs abroad
(Maurel, 2009, pp. 118142 ; Remaud and Couderc 2006). Stevenson, Roberts and Grousbeck
(1985) go further, by linking performance not only to the export orientation, but also to the
entrepreneurial behaviour of the firm and the characteristics of its decision-maker, in terms of
innovation, proactivity and risk-taking. This approach has been reiterated by Beamish and
Dhanaraj (2003), and later by Favre-Bonte and Giannelloni (2007, cited in Maurel, 2009,
pp. 118142).
Nevertheless, even if the literature largely recognises the impact of the intrinsic qualities of
the firm, many other factors have to be considered to explain the performance of a business
aborad.
2.2.3. The Internal and External Environments
For Holzmuller and Stottinger (1996, cited in Maurel, 2009, pp. 118142), the
performance of SMEs depends not only on their management-related features, but also on
their internal and external environment. This view is shared by Pantin (2006, p.77). Maurel,
based on the Contingency Theory from Mintzberg, underlines the impact of the context in
which the firm operates (2009, pp. 118142). Indeed, factors such as trade barriers,
relationships with suppliers or exchange rate fluctuations can significantly impact companies
performance in foreign markets (Wilkinson and Brouthers, 2006, pp. 233252 ; Majocchi,
Bacchiocchi and Mayrhofer, 2005, pp. 719738).
However, this approach does not seem sufficient to explain by itself the success or failure of a
business.
companies and industries, which means that findings might not be the same for SMEs of the
Food Sector.
innovation is due to the fact that managers only react to perceived business opportunities
(2006, cited in Becheikh, Landry, Amara 2006, pp. 275300).
2.3.3. Determinants of innovation capabilities
Commercial, financial and technical success of innovations can be assessed with
indicators such as sales growth, Return On Investment and costs (Griffin and Page, 1996,
pp. 478496). However, the ability of a firm to innovate cannot be directly measured (De
Jong and Brouwer, 1999; St-Amant and Renard, 2003; Koivisto, 2005, cited in Becheikh,
Landry, Amara 2006). Nevertheless, the literature highlights factors that are believed to
positively influence the innovation capabilities of SMEs, supposedly correlated to their export
performance.
Thus, the speed of implementation of the innovation is considered as a source of competitive
advantage for the First Mover (Becheikh, Landry, Amara 2006). Various authors also insist on
the influence of regional networks over the innovation capabilities of exporting businesses
(Gellynck, Vermeire and Viaene, 2007, pp. 209226).
The link between regional networks and internationalisation may seem surprising, but
regional networks, becoming more and more globally integrated (Lu and Beamish, 2001,
pp. 565586), can help small exporters in overcoming internal restrictions (Van Gils and
Zwart, 2004, pp. 685692), and gradually move from a regional to an international scale. The
Clusters Theory and the models of Milieux Innovateurs or Industrial Districts (BenyahiaTaibi 2011) also suggest that networking positively influences innovation capabilities, thus
leading to better export performance. However, it is to mention that, despite globalisaton,
countries remain different from each other, which means that localised capacities acquired
through networks are useful but not sufficient to gain a competitive advantage in foreign
markets (Malmberg and Maskell, 2006, pp. 118).
2.4. Conclusion
Based on the existing literature, different approaches are found regarding the factors of
success for exporting SMEs, which help in understanding the multi-dimensional influences
that should be considered when entering foreign markets. However, despite attempts to
combine all the models into ones, there are still some gaps between the research and the
reality of the business. Moreover, the different methods of performance measurement used
makes the comparison of the approaches difficult.
Little has been written about SMEs of the Food Processing industry, which present some
specific features that make the sudy of their internationalisation even more interesting. And it
appears that, except partially in the approach through resources, financial determinants of the
export performance have not been studied. The same applies to cultural factors, that should be
paid more attention as possible environment-related determinants.
3. Research Design
3.1. Methodological Approach
This research relies on the hypothesis that the performance of international SMEs is
influenced by financial, but also non-financial factors (e.g. characteristics of the
Management), which cannot be easily translated into numeric data. On one hand, a
quantitative approach is needed to set up a basis for what we consider as good and bad
performance, which will be used later to analyse the data collected. The same approach is also
needed to assess the impact of various financial factors (e.g. invested capital, promotion
budget) over the performance of the firm. However, the lack of theories and models about
this specific concern implies that we use an inductive approach.
On the other hand, a qualitative approach is needed to study non-financial factors, whose
correlation with the firms performance cannot be scientifically measured, and relies more on
the researchers interpretation. Qualitative research is often associated with an inductive
approach (i.e. establish theories based on the results of specific cases) (Bryman and Bell,
2011). However, given the large amount of study that has already been done regarding the
performance of SMEs in foreign markets, and the fact that this research aims to test this
theories on the under-studied Food Processing sector, a deductive approach will be used. The
null hypothesis will be as follows: In the Food Processing industry, the determinants of
International SMEs performance are the same as in other industries.
Using mixed methods seems the most suitable approach for our project. The quantification of
findings from qualitative research might be useful to uncover the generality of the
phenomena being described (Silverman 1984, 1985, cited in Bryman and Bell, 2011). These
approaches have long been considered not compatible (Hughes 1990, cited in Bryman and
Bell, 2011). However, today, their complementarity is largely recognised, and is even
considered as a strength to overcome the possible issues going with data collection and
analysis (Bryman and Bell, 2011, p. 630). Moreover, a qualitative approach might facilitate
the quantitative research, by providing hypotheses that could be tested, while the quantitative
method will be useful in selecting people to be interviewed or companies to be studied
(Bryman and Bell, 2011).
3.2. Data Set
3.2.1. Data Collection
Research using the quantitative method (i.e. the criteria for assessing performance and
financial determinants) will be conducted using secondary data, relative to the companies
sales, expenses, growth and so on.
To find this data, different sources will be used, including:
Data will also be collected directly from companies considered as relevant, through the use of
mail or online questionnaires, whose response rate can be limited, but which offers the
advantage of not being costly and time-consuming. Structured interviews, with a clearly
specified set of questions (Bryman and Bell, 2011, p. 466), might also be undertaken to ensure
the relevance of the findings.
Where a qualitative approach is involved, data will mainly be collected using personal
interviews (both depth-interviews and focus-groups). Offering the advantage of being flexible
(Bryman and Bell, 2011, p. 465), this method seems the most appropriate for this research.
Indeed, great attention should be paid to the environment of the firm, but also to its intrinsic
characteristics. From that perspective, a focus on the people and their perceptions seem
crucial. Thus, the study will be made using semi-structured interviews, for they give the
interviewee a great deal of leaway in how to reply (Bryman and Bell, 2011, p. 467).
3.2.2. Sample
Small and Medium Enterprises are defined as companies with less than 250
employees, and/or with annual turnover lower than 250M, and/or with annual balance sheet
lower than 43M (The new SME definition - User guide and model declaration [no date]).
This research will be conducted among SMEs involved in the development of any
international operation or activity even without going beyond national borders (Tarpczynski,
Wrona 2013 cited in Toulova, Votoupalova and Kubickova 2014). Thus, both exporting and
globally integrated companies will be studied.
While, for the quantitative approach, the use of online resources will allow to investigate
across a quite large sample, for the qualitative research, the sample will be smaller (around 30
companies), due to time restrictions, the cost of collecting data, but also to the homogeneity of
French Agrifood SMEs. To offer a good overview, focus will be on SMEs from different
markets within the Food Processing industry.
To ensure the validity and reliability of the findings, companies with different levels of
performance will be investigated.
Most of the interviews will be adressed to the owner of the business, who is expected to give
insights of what he/she sees as relevant and important, about fairly specific topics mentioned
in the Interview Guide. Most of the questions will be open-ended, and deal with topics such as
the motives for going global, the general strategy of the business, the owners view over the
firms performance, the strategic plans for the future, etc
3.4. Data Analysis Plan
For this research, the first step is to determine what to consider as good or poor
performance. According to Shoham (1998, cited in Maurel, 2009, pp. 118142), export
performance is a composite outcome of a firms international sales, which includes three
dimensions : export sales, export profitability and export growth . This definition will be
used as a frame of reference. To assess the performance of a firm, two different methods will
be used. First, the STEP Scale Model (Lages and Lages, 2004, pp. 3656), which focuses on
short-term performance and short-term exporting intensity. Then, the EXPERF Scale Model,
which also consider strategic performance and perceived export success (Maurel, 2009,
pp. 118142). Export Intensity (the percentage of export sales over the total sales) is
considered as the main performance indicator, as it allows the comparison between firms of
different sizes. However, these approaches are mainly short-term-oriented. Thus, long-term
indicators (e.g. long-term growth, health, etc...) will also be considered.
To analyse the secondary data obtained from databases or through questionnaires, statistics
softwares such as SPSS and Excel Stat will be used.
For the analysis of qualitative data, we will use, amongst others, a language-base approach,
relying on discourse and conversations analysis. This will be particularly useful to measure
the impact of the owners characteristics over the firms performance.
However, it might be difficult to find relationships between variables. Thus, for every possible
determinant, we will look for an intervening variable, influenced by the independent variable,
and in turn having an effect on the dependent variable (Bryman and Bell, 2011, p. 639).
3.5. Time Scale for the Research
This provisional calendar reduces the risks of lacking time to complete the research. It can
evolve over time, depending on how our study has progressed. Given that the final
dissertation has to be submitted on the 7 th of May 2015, we will have 16 weeks to complete
the project. (based on the return date for the proposal, 21st of January).
3.6. Difficulties
For this project, it might be difficult to find out enough managers/owners to interview,
due to the limited number of French SMEs from the Food Processing industry that followed
the path of internationalisation. Then, given the semi-structured format chosen for interviews,
a clearly defined interview guide need to be realised, to avoid missing important information.
Also, it is essential not to analyze the data only in relation to the existing theories. New
research avenues should at the same time be considered.
Last, while conducting this research, particular attention should be paid to the compliance
with ethics. Data collected might be sensitive, and it is our responsibility to ensure that its
integrity is preserved. The same applies to the interviewees, whose identity should not be
disclosed in the dissertation.
4. Conclusions
The performance achieved by a firm depends on several factors, which are not always
financial. Indeed, the manager makes decisions, which, combined with other variables,
influences the firms strategy, itself impacting the firms performance. The latter is assumed to
result from a multitude of interdependent forces, whose impact is even greater when it comes
to international development. Given their smaller size and their less complex organizational
structure, SMEs are believed to be more strongly impacted by those variables. Based on this
assumption, a lot of research has been done over the topic and, interestingly, the authors often
came to conclusions that were different but, to some extent, complementary. The influence of
the firms resources, its intrinsic characteristics and its environment has been highlighted.
However, the financial determinants of the post-internationalisation performance have been
paid little attention. Moreover, despite its leading position in France, the Food Processing
Industry case has been underused. As far as I am concerned, the interest of this sector lies in
its very specific features, which might lead to different findings regarding the determinants of
performance abroad. From that perspective, I would like to contribute, through this project, to
the development of new research avenues regarding Global SMEs.
WORDS COUNT : 4044
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6. Resources
Category of resources needed
Example of resources
doi:
Analytical Tools
Access to online-databases
(for the collection of financial information)