Acceleration and deceleration in the internationalization process of the firm.

JurisdictionGermany
Date01 Noviembre 2016
AuthorJohanson, Martin

Abstract By adopting a processual and dynamic view on internationalization, we develop the concepts of acceleration and deceleration, providing analytical tools to enhance our understanding of the non-linearity and multidimensionality of internationalization. We argue that acceleration and deceleration are embedded in the internationalization process and are a consequence of the firm's capability to absorb and integrate acquired knowledge, and to find and exploit opportunities. In addition, we advance the idea that changes in speed are further influenced by how the firm integrates and coordinates the resources it has deployed within and across various internationalization dimensions. Thus, it emerges that the overall evolution of commitment to internationalization is more complex than received theories tend to present; therefore, empirical studies should aim to include a wide set of international activities and processes embedded in time.

Keywords Internationalization * Speed * Acceleration * Deceleration * International commitment * Time * Process

1 Introduction

Speed has, over the last decade, gained a central position in research into firm internationalization (Jiang et al. 2014; Vermeulen and Barkema 2002; Casillas and Acedo 2013; Casillas and Moreno-Menendez 2013; Acedo and Jones 2007; McDougall et al. 2003), as it is often claimed that international expansion takes place at a higher speed than received theory predicts (Kalinic and Forza 2012). In this literature, speed of internationalization is seen as the relationship between international commitment and time (Chetty et al. 2014; Vermeulen and Barkema 2002). However, we argue that the dominant approach to studying speed is limited by its inattention to process. We provide a more dynamic perspective, moving beyond speed to consider change in speed, and from a single process to multiple interrelated processes. We argue that this shift from a static to a dynamic explanation provides new theoretical insights into the nature of internationalization processes.

In proposing a more dynamic understanding of speed, we address two gaps in current theories on firm internationalization, both of which are especially applicable to the study of bom globals. The first gap is mainly conceptual: the most popular concepts--such as speed, pace, and rapidity--are assumed to be constant throughout the process (Acedo and Jones 2007; Coeurderoy and Murray 2008). This is despite the fact that there are qualitative case studies (e.g., Bell et al. 2003; Kalinic et al. 2014) reporting that the internationalization process is usually not incremental, linear, and gradual. Rather, it can be described as leapfrogging, consisting of both small and big steps (Hedlund and Kvemeland 1985). The second gap is to be found in the literature on speed of internationalization and concerns the over-simplification of the process; that is, most studies consider the speed of one type of international commitment only (e.g., Khavul et al. 2010; Ramos et al. 2011). This overlooks the diverse activities of internationalizing firms, which can be engaged not just in international sales, but also importing and different forms of investment. As a result of these limitations of the existing literature, the view of internationalization that predominates is of a single, linear progression.

This study challenges that dominant view by theoretically accounting for changes in speed over time. We extend the scope of existing studies, beyond the limited time period and limited set of activities that are typically included, in order to develop a deeper and more relevant understanding of internationalization as a non-linear, multidimensional, and irregular process. First, in contrast to the majority of studies on speed (e.g., Khavul et al. 2010; Morgan-Thomas and Jones 2009; Musteen et al. 2010), we argue for a conceptualization that grasps the multidimensionality of internationalization (Casillas and Acedo 2013). The internationalization process is more complex than it would seem based on its treatment so far in the literature. Second, by developing the concepts of acceleration and deceleration, the study allows for a non-linear and irregular process characterized by changing speed, instead of the assumption of constant speed. Finally, we provide a theoretical explanation for patterns in the change of speed. We argue that acceleration and deceleration are consequences of the firm's capability to absorb and integrate the knowledge it acquires, and to find and exploit opportunities, but we also advance the idea that changes in speed are a result of how the firm integrates and coordinates the resources it has deployed within and across various internationalization dimensions. As the complexity of its operations increases, the need for coordination grows.

We develop our dynamic understanding of speed by anchoring the concepts we use in internationalization process theory (Johanson and Vahlne 1977). We distinguish process models from stage models (e.g., Bilkey and Tesar 1977; Cavusgil 1980). Both types of models recognize the importance of time, but the latter proposes that specific stages can be observed and that they follow a specific order. The stages are manifestations of the firm's international commitment during a specific period. Thus, they are linear models. The process models, on the other hand, focus on the dynamics of the process, and thereby make non-linearity of internationalization possible. They provide some explanation for why a firm increases or decreases its international commitment over time. Thereby, we recognize the dynamics and complexity of internationalization and we refer to the process as a course or pattern over time, whereby firms perform activities and invest resources in order to become international. The implications of this process perspective are that time is critical and that the dynamic driving internationalization is the interplay among activities performed, knowledge acquired, and commitment made in terms of resources invested in foreign markets over time.

As we need to define speed before we can discuss acceleration and deceleration, the next section provides definitions of speed by identifying its components: international commitment and time. The subsequent section outlines how internationalization involves changes in speed by means of two illustrative cases. (1) We then develop a theoretical explanation for changes in the speed of internationalization. Finally, we wrap up by suggesting promising research areas.

2 Speed of Internationalization

In physics, speed is defined as the distance traveled divided by the time taken to travel it, while acceleration or deceleration is the rate of change of speed. (2) In an internationalization context, we apply these concepts in a metaphorical way. That is, we enrich our conceptualization of internationalization speed by drawing on the concept of physical speed. In this paper, we use the concept of acceleration of internationalization to signify the increase in the rate (i.e., speed) of international commitment. For example, acceleration of internationalization has occurred if the number of established entities abroad in the current year is higher than in the previous year. However, in making use of the concept of acceleration, it is important to note that we are not suggesting that acceleration of internationalization is identical to acceleration in physics; as we shall discuss, the differences between the social and physical worlds also need to be kept in mind.

Just as we are not using the concepts speed/acceleration as they are in physics, neither are we using "acceleration" in the same way as it has been popularized in the born global literature. "Accelerated internationalization" is a label often applied to distinguish born globals by underlining that they, unlike other firms, begin to internationalize soon after inception (e.g., Shrader et al. 2000). Acceleration in this sense simply refers to the greater speed of the first steps of internationalization compared to other firms following "traditional" internationalization patterns or compared to earlier generations of firms. Previous studies, especially in the born global literature (e.g., Oviatt and McDougall 2005; Shrader et al. 2000), do not describe change in speed, and acceleration is not studied as an explicit concept or applied to specific firms' internationalization, but if we are loyal to the original meaning of the word (as used in other disciplines), "acceleration" reflects change in speed.

Deceleration has, to our knowledge, never been studied as an explicit concept in the internationalization literature. Deceleration does not mean exit from a market; increasing internationalization can be characterized by high, but decelerating, speed. While acceleration is the rate at which internationalization speeds up, deceleration is the rate at which it slows down. Thus, if we analyze a specific firm's internationalization, we can identify phases in which the internationalization occurs at a high speed but, at the same time, decelerates.

In order to be able to study acceleration and deceleration, it is necessary to analyze variations in speed. In physics, determining speed involves calculating the physical distance covered by an object in a certain period of time (speed = distance/time). Calculating the speed of internationalization therefore requires specifying how "distance"--that is, change in international commitment--is to be conceived and measured (the numerator), as well as the time unit to be used (the denominator). We will examine each of these issues in turn.

2.1 International Commitment

While in physics, physical distance is measured to determine speed, equivalent measures are not as straightforward when it comes to internationalization. In internationalization process theory (the Uppsala Model), international commitment is conceived as the extent to which...

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