Jan-Erik Vahlne

The Mechanism of Internationalisation

The contemporary relevance of the so‐called Uppsala Internationalisation Model is discussed. This is a framework advanced by a number of Swedish colleagues describing the typical process of “going international”. Johanson and Vahlne respond to the criticisms of the model they proposed in the 1970s and relate it to the Eclectic Paradigm Model and the Networking literature. The concepts of the advantage package and the advantage cycle in the internationalisation context are also introduced.

Business Relationship Learning and Commitment in the Internationalization Process

This paper is based on a case study of an international venture and on the observations reported by a number of researchers that the received models of the internationalization process of the firm do not capture some important phenomena in the modern international business world. As several researchers argue that networks play an important role in the early internationalization the paper outlines a network model of the internationalization process of the firm. It combines the experiential learning–commitment interplay as the driving mechanism from the old internationalization process model with a similar experiential learning–commitment mechanism focusing on business network relationships. In the resulting model we can see firms learning in relationships, which enables them to enter new country markets in which they can develop new relationships which give them a platform for entering other country markets.

The Uppsala model on evolution of the multinational business enterprise – from internalization to coordination of networks

Purpose - This paper seeks to offer a model on the evolution of the multinational business enterprise (MBE). It is meant to be an alternative to the eclectic paradigm, the preeminent theoretical tool applied in studies of the multinational enterprise (MNE) and foreign direct investment. The label MBE aims at moving focus from structure of production to change processes in business relations and entrepreneurship. Design/methodology/approach - While the eclectic paradigm is grounded in neo-classical economics meant primarily to be applied in studies of macroeconomic interest and is based on assumptions not applicable in studies of individual firms, the model of the MBE is meant to be used in studies at the micro-level. It is rooted in assumptions consistent with behavioural theory consequently being more realistic. The model is based on the Uppsala model with input from studies on dynamic capabilities, entrepreneurship research and research on management under uncertainty. Findings - The realistic assumptions of the model imply that it is relevant for understanding the dynamics of strategy and management of the MBE. Research limitations/implications - As the model aims at enriching our understanding of the dynamics of the MBE the paper recommends empirical longitudinal studies of firms. Originality/value - Realistic and relevant assumptions imply that the model differs in critical respects from received theory in international business.

The internationalization process: Impact of competition and experience

The process, or evolution, through which multinational firms have reached their present international position is often referred to as “the internationalization process of the firm.” The most widely accepted theory of this phenomenon explains this slow, and sequential process in terms of organizations’ growth and learning. It is every now and then argued that this approach has lost some of its explanatory value. The purpose of this article is to discuss the validity of this model against the backdrop of assumptions in two key dimensions, namely, firms’ experience of international business and the industrys degree of internationalization.

Management of Internationalization

To view internationalization as a process has been fruitful. The propositions suggested within the stream of research based on this notion have received wide empirical support (Johanson and Vahlne, 1977, Johanson and Vahlne, 1990, Bilkey, 1978; Cavusgil, 1980, Cavusgil,1984; Dichtl et al., 1984; Denis and Depelteau, 1985; Kogut and Singh, 1986). Less effort has been spent on managerial issues of the internationalization process. This chapter has as its objective to explore some of these issues and suggest some thoughts on how they can be dealt with. We confine ourselves to discussing some aspects of entry into a foreign market, which we have cut out as a section of one of the two dimensions of the internationalization process. The entry process is a part of the development of the firm’s engagement in a particular foreign market. The entry is normally preceded and followed by other activities being integral to the internationalization process. The second dimension, the sequential entry into new markets, is not dealt with at all.

Swedish Multinationals in Central and Eastern Europe — entry and subsequent development

This paper reports on the findings from the first phase of a larger longitudinal project that focuses on the establishment process of Swedish multinational corporations in Eastern Europe. The first step of identifying and explaining the establishment mode, type of activities intensity and type of control applied in local operations of five of the firms is reported and commented here. The tentative key conclusions at that stage indicate that (1) entry into the region has been sequential and gradual, (2) old relationships are extremely important, (3) early entries are looked as ≪ learning devices ≫ in several case firms, (4) the attitude to risk varies in size and ownership, (5) there is a difference in how risk is perceived between local managers and the head office, (6) the head office generally closely monitors the operations, and (7) several case firms see the potential for using Eastern and Central Europe as a production base. [This paper was first published in Journal of East-West Business (International Business Press, an imprint of The Haworth Press, Inc) Vol.1, n°4,1996, pp 1–16.]1

MANAGEMENT UNDER UNCERTAINTY - THE UNAVOIDABLE RISK-TAKING

Purpose Accentuating the concept of management under uncertainty in the Uppsala internationalization process model, the purpose of this paper is to develop a model for describing how managers act while keeping uncertainty at an acceptable level. Design/methodology/approach The authors perform two empirical studies to underpin the model they construct. First, a survey of 309 chief executive officers and chief financial officers in large, publicly listed international firms in the Nordic region on managerial risk perceptions and, second, a case study of Volvo Car Corporation and its endeavors when developing new car models for the Chinese market on a new platform – a process characterized by unprecedented uncertainty. Findings The proposed model describing managers’ behavior under uncertainty contains elements such as adjusting/proceeding in small steps, reducing uncertainty via learning, building relationships with important parties in the environment to avoid unforeseen changes and re-dos (i.e. starting all over again) and, perhaps most important, acting despite uncertainty. Originality/value The paper highlights a central, though forgotten, concept of the Uppsala internationalization process model, i.e. management under uncertainty, and, thereby, opens a new path for research on how manager behave under the sway of uncertainty.