The Role of Management Characteristics in the Internationalization of SMEs - Essay Example

JOURNAL ARTICLE REVIEW Introduction to the review Article under Review: Karise Hutchinson, Barry Quinn and Nicholas Alexander. 2006. The role of management characteristics in the internationalization of SMEs. Vol. 13, No. 4. The current paper under review has been aimed at evaluating the role of management towards allowing SMEs (Small and Medium Enterprises) to compete and develop on an international scale. In the present day, several firms understand the secret behind growth and have recognized the importance of evolving globally in order to expand their business. The trend towards expanding internationally has been vibrant since the preceding decade, although the pace of growth has been much more pronounced in the case of big corporations, although similar aims and efforts have also been witnessed from smaller firms as well. The article and its accompanying research has therefore aimed at not only addressing the gaps that exist within big and large firms, but also looks towards studying the practices being innovated by small time entrepreneurs and managers of such firms so as to allow them to grow internationally. In order to gather information about the related research, the authors of the article have mentioned that the evidence presented within it have been sourced from an extensive research project, which has focused on studying the internationalization of smaller firms engaged in the retail sector. the authors have further cited the deficiency of enough literature that could support their efforts, which has thus forced them to undertake the study along an exploratory pattern thereby allowing them to make the required interpretations based on a pre-conceived research paradigm. The research has made extensive use of data analysis techniques, wherein the inductive procedures used have led to in-depth and conclusive insights in addition to providing for an organized description of several SMEs that have found significance during various parts of the research. Further, several case scenarios have been used to allow the interpretation of patterns among companies, thus eliminating the occurrence of chance associations. The companies that were included in the study from the retail SME sector were selected on the basis of specific criteria that allowed for companies only with £25 million to be taken into consideration. Further, such companies also had to have a minimum form of business operations outside the UK, where the external existence could be through any valid form of operations ranging from franchises to licensed outlets. In addition, companies that were in the early stage of operation were given due consideration thereby leading to the set of 17 such firms out of which 9 were studied extensively owing to their acceptance to participate in the research. The study has shown that there was a pattern between the management cum decision making to encourage and nourish international expansion. However, given the concentration of the study solely on the retail sector, the authors have further recommended additional study in order to allow for the inclusion for more sectors in an effort to determine an overall conclusion on the subject. Critical arguments The Introduction To begin with, the authors have not specified during the few initial sections of the article as to what an SME actually stands for. to the layman, it would be hard to conclude that it stands for a ‘Small & Medium Enterprise’. Further, it is expected that the introduction would provide a brief overview of the basis tenets of an SME. However, the discussion has sought to link SMEs to international operations right from the very beginning. The introduction has however highlighted the primary relevance and importance of management in the context of industry by specifying the various objectives such as sustainability and growth, which they help achieve. Pointing that the decision making power in the case of SMEs lies in the hands of very few people has helped in the concentration of focus of the reader on this specific group, wherein all decisions and issues related to performance, strategies and growth will be studied from the perspective of this focus, thereby considering all other elements for SMEs as secondary components. The article mentions that the international growth of SMEs relies on the accessibility to resources, but has not specified even one of them. It is believed that pointing to a few of these would have helped immensely in strengthening this focus. The Literature Review In terms of the literature, review, the article has initially intended to begin by discussing the relevance of management in this context and has sought to look into the importance of an able management in the process of decision making. The literature review has further emphasized on the importance of networking as crucial to allow small firms to be able to compete international in the wake of pressure from larger competitors. The authors have made good use of literary sources to point towards the need to harness every individual opportunity to expand as it helps SMEs progress in an incremental fashion, although specifying that the pace of growth and expansion could be quite lethargic during the initial period. Numerous studies that have been performed on the retail sector with an objective to study the managerial nuances of the sector have been discussed in a detailed manner, which have been used predominantly used to support the earlier points with reference to SMEs. The literature review has further underscored the significance of foreign travel and exposure to the management as critical elements to enabling them to understand other markets, which operate differently from the dynamics that the SMEs are used to within their geographical domains. In the later part of the literature review, the focus has been on using literary sources to connect the aspect of management to non domestic market, thereby providing an insight into the importance of strategy and decision making in order to help a company to expand. The study has further explored the lack of experience as well as the ethnocentric tendencies of the managements of a few firms as one of the reasons behind their limited growth or no growth at all when an attempt is made to gain an international footing in an alien market. This argument has definitely highlighted the lethargy that exists among a few companies, which also makes them reluctant to take the required steps and risks in order to achieve external growth. As such, it is widely deemed that the literature review has been largely extensive and elaborate in introducing the reader to the subject by helping gain an overall understanding of all the elements and disciplines required to understand the subsequent discussions and arguments. Research Objectives The authors have clearly expressed that the study was meant to expand on the basis of the theoretical framework provided by Hutchinson et al., wherein the latter was about the internationalizations of retail SMEs that were based out of the UK. The study has expressed the intent to outline all management related characteristics that guide the development of SMEs in a foreign market. Further, the paper has sought to correlate the objective and subjective elements associated with decision making within retail firms. However, it would have been good had the study sough to expand the applicability of earlier findings to a broader industry domain instead of limiting to the retail sector. in this context, this has led to an initial perception that the study could perhaps be a mere filter like approach to providing the details of previous studies as the number of studies on the UK retail SMEs abound in volume. Further, there is no mention on whether the experience and decisions of some key people involved in the study will be described. The study has been rather weak on the aspect of defining a hypothesis that could help clear or emphasize upon a standpoint. Instead, it has preferred to rely on an interpretive path without providing an early belief and understanding on the subject. Methodology Does the author clearly identify the research methodology and any associated limitations of the research design? Are participants described, including the method of sample selection if appropriate? As has been mentioned before, the authors have cited paucity of research, even though the topic under study is quite concentrated solely on the retail sector. the study has therefore assumed an interpretive mode of exploring the topic, thereby requiring the need to employ qualitative data gathering techniques. Further, the authors have specifically mentioned that they have chosen to discuss the concept on the basis of a structure that is based on case studies. in order to facilitate these decisions, multiple cases from several firms have been obtained and merged to arrive at the requisite inferences. In addition, the criteria for selecting potential companies for including in the study was on the basis of turnover and territorial extent of business operations, thus succeeding in inducting 9 out 17 potential companies into the effort. given the large number of retail firms that operate at different sizes, sub-sectors and market capitalization, there is a certain sense of doubt as to whether the authors had devoted enough effort to contacting more companies apart from the 17 mentioned in the article as potential candidates for the study. There is no mention of any limitation on the number of qualifying companies based on the set criteria, which weighs the doubt even more. Are instruments adequately described, including issues of appropriateness, validity and reliability? Do any evident biases or ethical considerations arise in relation to the methodology? The primary instruments used for conducting the research has been the information from secondary literary sources such as books and journals, apart from the data obtained from primary sources in the form of interviews and questionnaires. The interviews conducted have been restricted to the top level management of the firms, which perhaps shows a deficiency in drilling down the findings to the local levels of operation. The interviews have been described as semi-structured, although there is no broader explanation as to what this semi-structure constituted. As such, it is hard to create a perspective without delving into the findings, which makes it a little hard in trying to construct the proposed case study design. There are no evidence of biases or ethical preferences in the methodology as the process has been planned to constrict itself gradually towards a level of standardization. Are the methods employed and/or used for measuring results clearly explained and appropriate? Does the author discuss factors or variables that may affect the research? Does the expected result occur? The methods used to perform the analysis and results find a vague mention in the methodology by way of techniques such as analytic coding, while secondary data from archives and company reports has been reported to be studied by triangulating the data. This has not helped create a precise understanding as to how the research was planned to proceed with the analysis other than a mere mention of the primary procedures used. The sources of the data, especially from the primary ones, have been kept confidential. As such, it would not be possible to know the company from where a specific piece of data has originated, thus casting a spell of doubt on the validity and reliability of the results. Results & Conclusions Are the author’s major findings clearly presented? Do they adequately address the stated research objectives? The results section of the article begins with a table showing the details of the 9 companies that agreed to participate in the study by specifying the years of experience, turnover and the number of countries in which the company has been operating. In doing so, four basic sectors of the retail industry have been included. However, it is felt that the authors could have scaled down their selection criteria in order to accommodate more companies given the high volume of players within the retail sector. What assumptions have been made – for example, about the generalisability of the results? What is the evidence supporting these assumptions? The most significant generalizability of the study stems from the basic semi structured approach that the authors adopted when interacting with people from the managements of the 9 chosen firms. It seems evident that data was collected solely on the basis of this structure, where only a specific set of questions were put forward to the interviewees, thereby making them mere respondents to whether they found the particular factor to be acceptable or otherwise. There does not seem to be any additional effort to understand and gain information from the interviewees if they had anything additional to share or whether they had any extra points to share with the interviewing team, which could have deprived the study from any additional valuable feedback. Are supporting data presented? Are tables, graphs or figures (if appropriate) helpful and well integrated with the text? As mentioned in the preceding section, the study has in a way restricted to a specific set of parameters, which seem to have been the only ones that the authors were keen on studying. This has further restricted them from showing any valuable analysis as any supporting data shown is presented only in the form of tables, which consist of a set of chosen of parameters as the primary columns, which are accompanies with the companies that satisfied those particular criteria. Other than knowing that a particular company believed in a particular aspect as being one of the drivers for its business, the reader has been deprived of any additional info in the form of graphs or figures, which would have enhanced the quality and understandability of the article. Discussion If considered within the structure devised as part of the methodology, the study can be deemed as fulfilling all the set objectives, although it is felt that the discussion of the findings could have included more visual elements to make it easily understandable. The conclusion further discusses the implications of the findings for managers and the organizations, yet confining itself to the specific parameter set it had chosen earlier. The authors have suggested that international expansion is a process that is learnt over time, thus providing further ground for any analysis that can be undertaken as a progression to the study currently being reviewed. There has also been mention of the limitations in terms of the finances and experiences required to efficiently manage any global expansion activities, thus suggesting some of the theoretical backgrounds, which are considered the foundations of business and management. Conclusion Is the research timely and worthwhile? Is the research design appropriately inclusive and/or sensitive to any cultural context? Are you aware of any significant omissions or methodological errors that might affect the validity or reliability of the research? Is the article well structured? Is the presentation unbiased, objective and reasonable? Is the author respectful of participants and the work of other researchers? From an overall perspective, the study has done considerable work, partly by being quite prompt in specifying most of its limitations and the specific sector of the industry, with which it has chosen to confine the scope of applicability of the project. There has not been any significant evidence of any cultural aspect to the study as it has restricted itself to concentrating on the managerial and decision aspect of the business expansion of the retail firms under study. Studying the cultural aspects of such activities would mean that it would have to move down to the lower levels of the business as well as study the target markets in order to obtain an overview of the significance of culture in such efforts. As mentioned before, following a semi-defined set of parameters is believed to have deprived the study of any special additional output especially from the interviews, thus allowing the study to answer the specific questions that it has chosen to answer. In terms of the structure, the article has been properly structured wherein the discussion has been grouped into appropriate sections and subsections, thus making reading easier. The presentation is further believed to have conducted itself in an unbiased fashion thereby showing the respect for the participants in the study. Read More