Hassan Sherwani ROLE OF SALES AND MARKETING IN ... - Oulu

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Table 1. Internationalization process models (Blomstermo & Sharma, 2003)
Authors Time Theory Approach Size Stages
Johanson & unbounded Learning Adaptive All firms n/a
Vahlne(1977)
theory
Bilkey &
Bounded
Innovation
Reactive SMEs Six
Tesar(1977)
theory
Cavusgil (1980) Bounded Learning Reactive SMEs Five
theory
Czinkota (1982) Bounded I & M theory Proactive SMEs Six
Reid
(1981)
Bounded Management
theory
Proactive SMEs Five
Process approach of internationalization is limited to resource based view where firms
tend to enter a new market incrementally depending on their market knowledge
(Johanson & Vahlne, 1977). The problem may arise when this approach is replicated to
different size of firms in different countries. This provoked the interest in network
theory which implies that relationships are investments in assets so there must be a
stronger need for networks for a firm. As the world changed and started becoming one
huge global village, organizations could not compete on individual level rather they need
networks that include domestic or foreign suppliers and customers (Johanson &
Mattsson, 1988). This network theory emphasized more on intra relationships among the
firms within a network and thus, it challenged traditional process based view of
internationalization.
This network model presumes that international business happens in a network where
companies are linked to each other through relationships. The networks create stability
by business transactions that usually take place within the framework of established
relationships. However, those existing relationships are continually changing through
activities in the network and the parties should be aware of this. It is also important that
the network parties are aware of each other’s resources, organization and development
possibilities. In networks and business relationships, the confidence plays extremely