SME Internationalization: A Descriptive Review of Nontraditional Approaches

Abstract

The literature surrounding SME internationalization is still in its infancy but growing rapidly as SMEs become prominent in global markets. This paper outlines that, although stage theories of internationalization have dominated the literature in the past, newer theories deviate from this line of thinking. Notably, theories originating from the field of entrepreneurship, such as effectuation and bricolage, have been found to be quite informative in explaining the behaviour of SMEs, yet they are greatly underrepresented in the internationalization literature. Our study critically reviews the SME internationalization literature and highlights concepts such as resource scavenging, social capital, muddling through, and dynamic experimental internationalization – all reflective of a nontraditional pattern of thinking. These approaches explain the spontaneity and improvisation that is inherent in a lot of SME internationalization. We find that ‘nontraditional’ approaches to internationalization hold great value for both academics and professionals. Our findings reveal that many of the nontraditional approaches are still within the early stages of development, and thus require greater theoretical and empirical analysis. This study forms a foundational basis upon which future researchers can build a stronger understanding of nontraditional SME internationalization. For SMEs contemplating internationalizing, this study provides key insights into the complex process of engaging with foreign markets. Nontraditional approaches introduce strategies that SMEs can employ in both foreign market selection and foreign market entry processes.

Keywords

• Effectuation
• SME
• internationalization
• nontraditional theory
• strategic processes