Factors Impacting Small Business Internationalization Dissertation
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Thesis and Dissertation
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This dissertation, submitted to the University of Salford, investigates the factors influencing the internationalization of small-scale businesses. The research, based on secondary data and interviews, aims to identify key drivers and challenges for Australian small businesses seeking global expansion. It examines the feasibility of internationalization, essential factors for expansion, and potential strategies to overcome challenges. The study employs a positivism philosophy, deductive approach, and exploratory design, utilizing both primary and secondary data. Findings reveal the growth of small businesses in Australia and their contribution to the economy, with internationalization seen as a crucial step for further growth. The dissertation also discusses the benefits and challenges of internationalization, offering recommendations and implications for theory, practice, and policy, while acknowledging limitations and suggesting future research directions. It includes a detailed literature review, methodology, data analysis, and conclusions, providing a comprehensive understanding of the topic.
Running head: DISSERTATION
Factors Impacting Small-Scale Business for Internationalisation
A Dissertation
Submitted to
University Of Salford
in Fulfilment of the Requirement for the
Master Degree
In
Global Management
By
Abhaya Sharma
ID:00447833
Factors Impacting Small-Scale Business for Internationalisation
A Dissertation
Submitted to
University Of Salford
in Fulfilment of the Requirement for the
Master Degree
In
Global Management
By
Abhaya Sharma
ID:00447833
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1DISSERTATION
DECLARATION
I, Abhaya Sharma, hereby declare to the evaluation committee of this dissertation that my
dissertation is a report based on secondary information, and all the sources of information
used are duly acknowledged. This work has not been submitted to any other university for
any academic purpose.
Abhaya Sharma
Word count: 12823 words
DECLARATION
I, Abhaya Sharma, hereby declare to the evaluation committee of this dissertation that my
dissertation is a report based on secondary information, and all the sources of information
used are duly acknowledged. This work has not been submitted to any other university for
any academic purpose.
Abhaya Sharma
Word count: 12823 words
2DISSERTATION
Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study.
I am indebted to my supervisor ……………………. whose guidance, advice and patience
have been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local
Education Authorities, for the time and help given throughout. Without their participation,
this research would not have been possible. In this context, I am also thankful to them, whose
research work helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or
completed! Your encouragement and support have never faltered; thank you.
Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study.
I am indebted to my supervisor ……………………. whose guidance, advice and patience
have been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local
Education Authorities, for the time and help given throughout. Without their participation,
this research would not have been possible. In this context, I am also thankful to them, whose
research work helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or
completed! Your encouragement and support have never faltered; thank you.
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3DISSERTATION
Abstract
The aim of the research is to explore the factors that contribute to the internationalization of
the small-scale businesses followed by finding out the most significant factors promoting the
business going global. The organizational mission and vision are developed in such a way
that the business organizations gain competitive advantage and sustain their position in the
market. This is because the customers have more options than before for fulfilling their needs
and desires. Considering the rapid growth, it can be said that in the international market,
small business enterprises can leave a mark and enlarge themselves significantly. The small
business enterprises are encountering challenges in terms of globalization efforts because
communication and keeping track of the foreign market fails to meet the standard.
Positivism philosophy, deductive approach, exploratory design and interview have been used.
The sample size selected is 3 by using non-probability sampling technique and 8 open-ended
questions has been developed for interviewing the samples through Skype. Both primary and
secondary data collection processes has been used followed by qualitative data analysis by
developing relevant themes that backed up with suitable graphs and tables.
From the data analysis, it can be said that small-scale businesses have risen in Australia over
the past years and is a major contributor for the Australian economy. The most preferred
small-scale businesses in Australia are catering business, cleaning, online tutoring, website
designing and many more. Hence, for further business expansion and ensuring growth, small-
scale businesses are going international. From the interview transcripts, it can be seen that the
operations managers have agreed that small-scale businesses have increased in Australia over
the years and that it have contributed largely towards the business, economic and
employment growth of the country. The limitation of the research is that confidential
information about the small businesses could not be considered because of privacy issues. In
the future, research can be conducted by focusing on particular small-scale business and how
they intend to go international. The implication of the research on theory, practice and policy
is that the current work can be used as a valid source of secondary resource for the future
researchers because the information and the findings presented in the study are authentic and
valid.
Keywords: Small-scale businesses, internationalization, Australian economy, market
saturation
Abstract
The aim of the research is to explore the factors that contribute to the internationalization of
the small-scale businesses followed by finding out the most significant factors promoting the
business going global. The organizational mission and vision are developed in such a way
that the business organizations gain competitive advantage and sustain their position in the
market. This is because the customers have more options than before for fulfilling their needs
and desires. Considering the rapid growth, it can be said that in the international market,
small business enterprises can leave a mark and enlarge themselves significantly. The small
business enterprises are encountering challenges in terms of globalization efforts because
communication and keeping track of the foreign market fails to meet the standard.
Positivism philosophy, deductive approach, exploratory design and interview have been used.
The sample size selected is 3 by using non-probability sampling technique and 8 open-ended
questions has been developed for interviewing the samples through Skype. Both primary and
secondary data collection processes has been used followed by qualitative data analysis by
developing relevant themes that backed up with suitable graphs and tables.
From the data analysis, it can be said that small-scale businesses have risen in Australia over
the past years and is a major contributor for the Australian economy. The most preferred
small-scale businesses in Australia are catering business, cleaning, online tutoring, website
designing and many more. Hence, for further business expansion and ensuring growth, small-
scale businesses are going international. From the interview transcripts, it can be seen that the
operations managers have agreed that small-scale businesses have increased in Australia over
the years and that it have contributed largely towards the business, economic and
employment growth of the country. The limitation of the research is that confidential
information about the small businesses could not be considered because of privacy issues. In
the future, research can be conducted by focusing on particular small-scale business and how
they intend to go international. The implication of the research on theory, practice and policy
is that the current work can be used as a valid source of secondary resource for the future
researchers because the information and the findings presented in the study are authentic and
valid.
Keywords: Small-scale businesses, internationalization, Australian economy, market
saturation
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4DISSERTATION
Table of Contents
Chapter 1: Introduction..............................................................................................................9
1.0 Overview..........................................................................................................................9
1.1 Problem statement..........................................................................................................10
1.2 Research aim..................................................................................................................11
1.3 Research objectives........................................................................................................11
1.4 Research questions.........................................................................................................11
1.5 Research significance.....................................................................................................12
1.6 Structure of the dissertation...........................................................................................13
1.7 Summary........................................................................................................................14
Chapter 2: Literature review....................................................................................................15
2.0 Overview........................................................................................................................15
2.1 Concept of internationalization......................................................................................15
2.2 Factors influencing small businesses to go international...............................................16
2.2.1 Owner’s international orientation...........................................................................16
2.2.2 Domestic market conditions....................................................................................17
2.2.3 Industry globalization..............................................................................................17
2.2.4 Established networks...............................................................................................18
2.2.5 Human capital.........................................................................................................19
2.2.6 Foreign ownership and internationalization............................................................20
Table of Contents
Chapter 1: Introduction..............................................................................................................9
1.0 Overview..........................................................................................................................9
1.1 Problem statement..........................................................................................................10
1.2 Research aim..................................................................................................................11
1.3 Research objectives........................................................................................................11
1.4 Research questions.........................................................................................................11
1.5 Research significance.....................................................................................................12
1.6 Structure of the dissertation...........................................................................................13
1.7 Summary........................................................................................................................14
Chapter 2: Literature review....................................................................................................15
2.0 Overview........................................................................................................................15
2.1 Concept of internationalization......................................................................................15
2.2 Factors influencing small businesses to go international...............................................16
2.2.1 Owner’s international orientation...........................................................................16
2.2.2 Domestic market conditions....................................................................................17
2.2.3 Industry globalization..............................................................................................17
2.2.4 Established networks...............................................................................................18
2.2.5 Human capital.........................................................................................................19
2.2.6 Foreign ownership and internationalization............................................................20
5DISSERTATION
2.3 Benefits of internationalization for small businesses.....................................................20
2.4 Challenges of internationalization for small businesses................................................21
2.5 Strategies for overcoming internationalization challenges for small businesses...........22
2.6 Theoretical framework of internationalization...............................................................22
2.6.1 Mercantilist theory..................................................................................................23
2.6.2 Monopolistic advantage theory...............................................................................24
2.6.3 Uppsala model.........................................................................................................25
2.7 Strategies small businesses need to take for internationalization..................................26
2.7.1 Multi-domestic strategy..........................................................................................26
2.7.2 Global strategy........................................................................................................27
2.7.3 Transnational strategy.............................................................................................27
2.8 Conceptual framework...................................................................................................28
2.9 Summary........................................................................................................................28
Chapter 3: Research methodology...........................................................................................30
3.0 Overview........................................................................................................................30
3.1 Research philosophy......................................................................................................30
3.1.1 Justification for the selection of the chosen philosophy.........................................31
3.2 Research approach.........................................................................................................31
3.2.1 Justification for the selection of the chosen approach............................................31
3.3 Research design..............................................................................................................32
3.3.1 Justification for the selection of the chosen design.................................................32
2.3 Benefits of internationalization for small businesses.....................................................20
2.4 Challenges of internationalization for small businesses................................................21
2.5 Strategies for overcoming internationalization challenges for small businesses...........22
2.6 Theoretical framework of internationalization...............................................................22
2.6.1 Mercantilist theory..................................................................................................23
2.6.2 Monopolistic advantage theory...............................................................................24
2.6.3 Uppsala model.........................................................................................................25
2.7 Strategies small businesses need to take for internationalization..................................26
2.7.1 Multi-domestic strategy..........................................................................................26
2.7.2 Global strategy........................................................................................................27
2.7.3 Transnational strategy.............................................................................................27
2.8 Conceptual framework...................................................................................................28
2.9 Summary........................................................................................................................28
Chapter 3: Research methodology...........................................................................................30
3.0 Overview........................................................................................................................30
3.1 Research philosophy......................................................................................................30
3.1.1 Justification for the selection of the chosen philosophy.........................................31
3.2 Research approach.........................................................................................................31
3.2.1 Justification for the selection of the chosen approach............................................31
3.3 Research design..............................................................................................................32
3.3.1 Justification for the selection of the chosen design.................................................32
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6DISSERTATION
3.4 Data collection process..................................................................................................33
3.4.1 Justification for the selection of the chosen data collection process.......................33
3.5 Sampling technique and sampling size..........................................................................33
3.5.1 Justification for the selection of the chosen sampling technique............................34
3.6 Data analysis technique..................................................................................................34
3.6.1 Justification for the selection of the chosen data analysis technique......................35
3.7 Reliability and validity...................................................................................................35
3.8 Ethical considerations....................................................................................................35
3.9 Research limitations.......................................................................................................36
3.10 Summary......................................................................................................................36
Chapter 4: Data analysis...........................................................................................................37
4.0 Overview........................................................................................................................37
4.1 Findings and analysis.....................................................................................................37
4.2 Summary........................................................................................................................50
Chapter 5: Findings and interpretations...................................................................................52
5.0 Overview........................................................................................................................52
5.1 Discussions.....................................................................................................................52
5.2 Summary........................................................................................................................57
Chapter 6: Conclusion and recommendations..........................................................................58
6.0 Conclusion......................................................................................................................58
6.1 Linking with objectives..................................................................................................59
3.4 Data collection process..................................................................................................33
3.4.1 Justification for the selection of the chosen data collection process.......................33
3.5 Sampling technique and sampling size..........................................................................33
3.5.1 Justification for the selection of the chosen sampling technique............................34
3.6 Data analysis technique..................................................................................................34
3.6.1 Justification for the selection of the chosen data analysis technique......................35
3.7 Reliability and validity...................................................................................................35
3.8 Ethical considerations....................................................................................................35
3.9 Research limitations.......................................................................................................36
3.10 Summary......................................................................................................................36
Chapter 4: Data analysis...........................................................................................................37
4.0 Overview........................................................................................................................37
4.1 Findings and analysis.....................................................................................................37
4.2 Summary........................................................................................................................50
Chapter 5: Findings and interpretations...................................................................................52
5.0 Overview........................................................................................................................52
5.1 Discussions.....................................................................................................................52
5.2 Summary........................................................................................................................57
Chapter 6: Conclusion and recommendations..........................................................................58
6.0 Conclusion......................................................................................................................58
6.1 Linking with objectives..................................................................................................59
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7DISSERTATION
6.2 Recommendations..........................................................................................................60
6.3 Implications of the research...........................................................................................62
6.4 Limitations and future direction of the study.................................................................62
References................................................................................................................................63
Appendices...............................................................................................................................74
Appendix 1...........................................................................................................................74
Interview questions..........................................................................................................74
Appendix 2...........................................................................................................................75
Interview transcripts.........................................................................................................75
6.2 Recommendations..........................................................................................................60
6.3 Implications of the research...........................................................................................62
6.4 Limitations and future direction of the study.................................................................62
References................................................................................................................................63
Appendices...............................................................................................................................74
Appendix 1...........................................................................................................................74
Interview questions..........................................................................................................74
Appendix 2...........................................................................................................................75
Interview transcripts.........................................................................................................75
8DISSERTATION
List of Figures
Figure 1: Mercantilist theory....................................................................................................23
Figure 2: Monopolistic advantage theory................................................................................24
Figure 3: Uppsala model of internationalization......................................................................25
Figure 4: Conceptual framework.............................................................................................28
Figure 5: Small businesses in Australia by industry................................................................37
Figure 6: Small business in Regional areas in Australia..........................................................38
Figure 7: Percentage share of industry value added.................................................................38
Figure 8: Employment by small businesses in Australia.........................................................39
Figure 9: Employment by business size and sector.................................................................40
Figure 10: Drivers of internationalization for Australian small-scale businesses....................41
Figure 11: Number of small-scale businesses in Australia......................................................43
Figure 12: Barriers to innovation for small businesses...........................................................45
Figure 13: Small business survival rates..................................................................................45
Figure 14: Business lending by banks......................................................................................46
Figure 15: Government assistance for small-scale businesses.................................................47
List of Figures
Figure 1: Mercantilist theory....................................................................................................23
Figure 2: Monopolistic advantage theory................................................................................24
Figure 3: Uppsala model of internationalization......................................................................25
Figure 4: Conceptual framework.............................................................................................28
Figure 5: Small businesses in Australia by industry................................................................37
Figure 6: Small business in Regional areas in Australia..........................................................38
Figure 7: Percentage share of industry value added.................................................................38
Figure 8: Employment by small businesses in Australia.........................................................39
Figure 9: Employment by business size and sector.................................................................40
Figure 10: Drivers of internationalization for Australian small-scale businesses....................41
Figure 11: Number of small-scale businesses in Australia......................................................43
Figure 12: Barriers to innovation for small businesses...........................................................45
Figure 13: Small business survival rates..................................................................................45
Figure 14: Business lending by banks......................................................................................46
Figure 15: Government assistance for small-scale businesses.................................................47
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9DISSERTATION
Chapter 1: Introduction
1.0 Overview
The ultimate purpose for the business organizations, irrespective of the size, is to earn
profit, maximize revenue, increase customers and expand business. The organizational
mission and vision is developed in such a way that the business organizations gain
competitive advantage and sustain their position in the market (Anand, 2015). As mentioned
by Bloch and Bhattacharya (2016), if past scenario is to be considered, the number of
business organizations in each sectors have increased significantly thereby, giving rise to
tough competition. This is because the customers have more options than before for fulfilling
their needs and desires. Hence, keeping the customers glued in the long term is challenging if
the business organizations do not keep fulfilling the needs of the customers and changing
their business strategies accordingly. However, as criticized by Mokhtar (2015), making
presence in the international market is not always easy considering the existence of already
established and successful business firms.
Going international and embracing the global market is becoming necessary for the
small business enterprises because the Australian market is slowly saturating. Hence, to
sustain the market and strengthen the position, tapping new opportunities and making new
ventures is needed. As a result, the small business enterprises can expand into new markets
that will help in attracting more customers, profit and business generations and strengthening
position in the global market (Burns, 2016).
Small business enterprises are growing rapidly in Australia and comprise almost 44%
of the shares of the employment (Dwyer and Kotey, 2015). Considering the rapid growth, it
can be said that in the international market, small business enterprises can leave a mark and
enlarge themselves significantly. Micro businesses make up large proportion of the small
Chapter 1: Introduction
1.0 Overview
The ultimate purpose for the business organizations, irrespective of the size, is to earn
profit, maximize revenue, increase customers and expand business. The organizational
mission and vision is developed in such a way that the business organizations gain
competitive advantage and sustain their position in the market (Anand, 2015). As mentioned
by Bloch and Bhattacharya (2016), if past scenario is to be considered, the number of
business organizations in each sectors have increased significantly thereby, giving rise to
tough competition. This is because the customers have more options than before for fulfilling
their needs and desires. Hence, keeping the customers glued in the long term is challenging if
the business organizations do not keep fulfilling the needs of the customers and changing
their business strategies accordingly. However, as criticized by Mokhtar (2015), making
presence in the international market is not always easy considering the existence of already
established and successful business firms.
Going international and embracing the global market is becoming necessary for the
small business enterprises because the Australian market is slowly saturating. Hence, to
sustain the market and strengthen the position, tapping new opportunities and making new
ventures is needed. As a result, the small business enterprises can expand into new markets
that will help in attracting more customers, profit and business generations and strengthening
position in the global market (Burns, 2016).
Small business enterprises are growing rapidly in Australia and comprise almost 44%
of the shares of the employment (Dwyer and Kotey, 2015). Considering the rapid growth, it
can be said that in the international market, small business enterprises can leave a mark and
enlarge themselves significantly. Micro businesses make up large proportion of the small
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10DISSERTATION
business enterprises in Australia and are a driving force for the Australian economy (Perry
and Rowe, 2015). Its economic contribution is huge and provides employment to large
portion of the Australian workforce thereby, facilitating entrepreneurship and innovations in
the business sectors (Perry and Rowe, 2015). Small business enterprises have minimum 1 and
maximum 4 employees and compose almost 98% of the Australian businesses. Moreover,
one third of the entire GDP comes from small business enterprises and they make up 98% of
the businesses in Australia (Douglas, 2015).
However, the rise of numerous small business organizations has made the business
environment highly saturated that is resulting in challenges for sustaining. As a result, the
small business enterprises in Australia are aiming to expand themselves by going
international and embracing the global market.
1.1 Problem statement
The challenges faced by the small business enterprises while going international and
entering the global market are evident. The small business enterprises are encountering
challenges in terms of globalization efforts because communication and keeping track of the
foreign market fails to meet the standard (Beelen and Jones, 2015). This is because of the
vastness of the international market and as the name indicates, small business enterprises are
unable to cope up due to evident limitations (Paul, Parthasarathy and Gupta, 2017).
Another challenge that small business enterprises are facing while internationalizing
is the availability of financial resources. The export fees and tariffs are problems when small
business enterprises are aiming to go international and embrace the global market. This is
because of limited capital and financial resources for the small business enterprises.
Moreover, inadequate financial planning is also noticed for small business enterprises that are
of utmost significance when successful international ventures are expected (Dwyer and
business enterprises in Australia and are a driving force for the Australian economy (Perry
and Rowe, 2015). Its economic contribution is huge and provides employment to large
portion of the Australian workforce thereby, facilitating entrepreneurship and innovations in
the business sectors (Perry and Rowe, 2015). Small business enterprises have minimum 1 and
maximum 4 employees and compose almost 98% of the Australian businesses. Moreover,
one third of the entire GDP comes from small business enterprises and they make up 98% of
the businesses in Australia (Douglas, 2015).
However, the rise of numerous small business organizations has made the business
environment highly saturated that is resulting in challenges for sustaining. As a result, the
small business enterprises in Australia are aiming to expand themselves by going
international and embracing the global market.
1.1 Problem statement
The challenges faced by the small business enterprises while going international and
entering the global market are evident. The small business enterprises are encountering
challenges in terms of globalization efforts because communication and keeping track of the
foreign market fails to meet the standard (Beelen and Jones, 2015). This is because of the
vastness of the international market and as the name indicates, small business enterprises are
unable to cope up due to evident limitations (Paul, Parthasarathy and Gupta, 2017).
Another challenge that small business enterprises are facing while internationalizing
is the availability of financial resources. The export fees and tariffs are problems when small
business enterprises are aiming to go international and embrace the global market. This is
because of limited capital and financial resources for the small business enterprises.
Moreover, inadequate financial planning is also noticed for small business enterprises that are
of utmost significance when successful international ventures are expected (Dwyer and
11DISSERTATION
Kotey, 2015). As a result, the small business enterprises are failing to keep up with the pace
and leave a mark among the existing giants in the international market (Ribau, Moreira and
Rapso, 2018).
1.2 Research aim
The aim of the research is to explore the factors that contribute in the
internationalization of the small-scale businesses followed by finding out the most significant
factors promoting the business for going global.
1.3 Research objectives
The objectives of the research are:
To examine the feasibility of small-scale businesses in going global
To recognise the factors essential for making the international expansion
To find out the challenges facing by Australian small business enterprises in
internationalisation
To recommend some possible strategies for going global
1.4 Research questions
The questions of the research are:
What are challenges facing the Australian small business enterprises in
internationalisation and how can they be addressed?
What could be some possible recommended strategies for going global of small
business enterprises?
How can the potential outcome of the research benefit the small-scale businesses in
Australia to go global?
Kotey, 2015). As a result, the small business enterprises are failing to keep up with the pace
and leave a mark among the existing giants in the international market (Ribau, Moreira and
Rapso, 2018).
1.2 Research aim
The aim of the research is to explore the factors that contribute in the
internationalization of the small-scale businesses followed by finding out the most significant
factors promoting the business for going global.
1.3 Research objectives
The objectives of the research are:
To examine the feasibility of small-scale businesses in going global
To recognise the factors essential for making the international expansion
To find out the challenges facing by Australian small business enterprises in
internationalisation
To recommend some possible strategies for going global
1.4 Research questions
The questions of the research are:
What are challenges facing the Australian small business enterprises in
internationalisation and how can they be addressed?
What could be some possible recommended strategies for going global of small
business enterprises?
How can the potential outcome of the research benefit the small-scale businesses in
Australia to go global?
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