Summary - Article - Limits to international entry mode learning in SMEs by Schwens, Zapkau, Brouthers & Hollender (2018)

Summary of the article 'Limits to international entry mode learning in SMEs' by Schwens, Zapkau, Brouthers & Hollender (2018)

Course: International Strategic Alliances

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4.2. Limits to international entry mode learning in SMEs
Schwens, Zapkau, Brouthers & Hollender
2018 Introduction
- Internationalization process (IP) / Uppsala model: seeks to explain firms’ cross-
border expansion behavior and changes in firm commitment with learning from
prior experiences with the mode of operation and prior experiences in a foreign
location.
- Outsidership leads to increased liabilities of foreignness when firms enter new
markets, but experiential learning from networks might help ameliorate these
challenges.
- Firms can experientially learn from their internal network of foreign operations
reducing liabilities of foreignness in new markets.
- Some experiential learning leads to non-location-bound knowledge which can be
exploited globally, but location-bound knowledge can only be exploited in one (or
similar) location and is not transferrable without high costs and significant
adaptation.
- This paper explains how the experiential learning outlined in the IP model is related
to future mode choices in new foreign locations.
- Two sources of experiential learning:
o Through multiple extended use of a specific operation mode, firms learn how
to set up and operate this mode type in an efficient and effective way. This
non-location-bound knowledge results in future uses of the same mode as a
way of exploiting these learned processes and routines, reducing uncertainty,
and improving firm performance.
o Market-specific experience reflect the accumulated experience in the region
through all sources, gaining both general internationalization knowledge and
idiosyncratic market-/region-specific knowledge. through these experiences,
firms develop location-bound institutional knowledge which can be
combined with non-location-bound mode-specific knowledge to generate
more advanced learning.

Theory and hypotheses
Experiential learning from prior foreign operation modes
- Firms develop both location- and non-location-bound learning from the repeated
use of a foreign operation mode.
- Location-bound learning: helps firms develop knowledge about specific institutional
aspects of operating a mode in a respective country.
- Non-location-bound learning: development of processes and routines for setting up
a certain mode and for managing and monitoring mode-specific activities.
- Learning from repeatedly adopting the same entry mode type represents deep
knowledge as accumulated experience can result in the development and
refinement of specific processes and routines on which the organization can draw in
subsequent operations.
- Experiential learning from prior operation modes means that firms gradually sort out
less useful knowledge obtained during past operation mode activities to refine

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Level: Universiteit
School: Rijksuniversiteit Groningen
Course: Strategic Innovation Management
Subject: International Strategic Alliances
Course code: ISA
Author: Schwens, Zapkau, Brouthers & Hollender
Document
Section: Summaries
Made on: 03-12-2019
Type: .pdf
Pages: 4
Language: English
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international strategic alliances summary article rug university groningen sim isa limits to entry mode learning SMEs schwens zapkau brouthers hollender 2018

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