The research subject being addressed by this author is "Australian Owned Small to Medium Enterprises Operating within an International Marketplace" and intends to concentrate on what benefits the Australian SME can gain from internationalisation. The reason for undertaking this research is, not only because of an interest in international trade but also because of a personal involvement in a SME operating in an international environment. The chosen thesis subject however is proving to be difficult from a research perspective not from a quantity point of view but more from a quality perception. Many of the peer reviewed research papers readily available relating to this topic seem to be outdated. However five relevant papers have been reviewed and this paper will address the research contained within the literature and answer the question of how this literature review informed the methodology. Each of the papers will be considered and design, methodology and the outcomes will be reviewed. An overview of each paper's purpose is presented giving an individual outline, which is then complimented by comparing the various aspects of the research. The methodology of each is then discussed by comparing the various approaches taken and whether the authors were able to successfully argue their hypotheses or not and what, if any, gaps were evident in their research. In conclusion each paper will be reviewed as to how it relates to this authors own research.
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Examining the Role of International Entrepreneurship, Innovation and International Market Performance in SME Internationalisation (O'Cass and Weerawardena, 2008).
The stated purpose of this study was to look at small to medium manufacturing firms in the context of examining them in relation to the role of international entrepreneurship and innovation in SME's that are pursuing international market entry. O'Cass and Weerawardena argue that, "entrepreneurial SMEs pursuing international market entry undertake organisational innovation" and that this results in "enabling such firms to achieve a higher market place performance".
The writers state that they undertook this research due to a growing interest in the internationalisation of SME's driven by the policy planners' desire to increase participation in this sector which is "hindered by the lack of a well developed body of knowledge" on the subject. O'Cass and Weerawardena have focussed their research primarily in the areas of entrepreneurship, innovation and SME internationalisation in light of current research that has substantially been interested only in the "activities of large multinational firms" and is research that, according to Coviello and McCauley (cited in O'Cass and Weerawardena, 2008), "tends to rely on large firms as the traditional unit of analysis". The authors conclude that this paper expands our understanding of strategic factors that differentiate exporters from non-exporters however this is not the response expected from the central argument which, as previously stated was how internationalisation assisted a SME in undertaking organisational innovation.
Transitions towards an entrepreneurial economy: A case study based investigation of the SME internationalization process (Cruz-Carreon, 2007).
This study seeks to make a theoretical contribution to the growing field of International Entrepreneurship by investigating the process of internationalisation of SME's. The paper is looking to "conduct exploratory, in depth analysis to generate qualitative insights that will further substantiate the process view of internationalisation". As an introduction to this research the authors cite Naisbitt who states that "the bigger and more open the world economy becomes, the more small and middle-sized companies will dominate" (cited in Cruz-Carreon, 2007). To this end Cruz-Carreon pursues the argument that the late 20th and early 21st centuries has seen the emergence of SMEs into the global market place and that this is in line with Schumpeters arguments involving "the constant creation of new ideas by innovative firms disestablishes the positions of stagnant non-innovating firms" (cited in Cruz-Carreon, 2007).
The author looks at what he sees as the constructs that hinder Australian SME's from achieving internationalisation by citing factors such as geographical isolation, a dominance of large companies exporting, a smaller number of firms contributing to the export market, internal geography and the inward looking policies of successive governments. With this as the basis of his methodology it was found that a common characteristic amongst those firms that were able to overcome the previous hindrances' was that they all had considerable overseas exposure and that they saw the Australian market as limited. It was also reported that success was based on having an innovative product that conformed to international standards, a well planned approach to international markets and a connection to well-defined niche markets.
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"From garage to global" The internet and international market growth, an SME perspective (Mathews & Healy, 2008).
The aim of this research was to "explore the influence of the internet on international market penetration and development for SMEs in Australia". The authors argue that the internet has "the capability to generate international market expansion and future growth for firms" and then in support, they look at both market penetration and development from an international perspective surmising that both are achievable for the internet enlightened SME. Considering that the internet has the capability for international expansion and growth the authors have cited Bell et al, and Buttriss and Wilkinson as calling this concept internetalisation (cited in Mathews and Healy, 2008).
Mathews and Healy support their arguments by looking at the role that SMEs play in the private sector and the overall Australian economy and what influence the internet has had on these firms. The authors also look at the internal factors of the firms such as "human and capital resources, readiness of firms, company size and what industry specific factors are considered when using the internet in international markets".
With the previous in mind the researchers then proposed three issues on which this paper is based. These were;
How has the internet affected the process of internationalisation for SMEs?
How has the internet affected the path and pace of internationalisation for SMEs?
How has the internet affected international market growth direction vectors?
Each of the above questions then drove the methodology, that used non-probability purposive sampling, which identified that SMEs embarking on a path of internationalisation are heavily dependent on the internet not just for marketing but also for communications and that the internet is reducing the "perceived high risks associated with internationalisation".
It is also argued that the internet, based on research by Aspelund and Moen, is positively influencing the mindset of the decision makers within the firms that are expanding internationally. The main influence argued though is that "the internet has influenced the traditional way in which firms' access and process knowledge through rapid communication interactions and as suggested by Overby and Min "the internet gives firms a greater ability to manage the relationships in international supply chains (cited in Mathews and Healy, 2008).
The internet, strategy and performance: a study of Australian export market ventures (Lu and Julian, 2008).
The primary stated objective of this research was to "examine the antecedents of export marketing from an Australian perspective". The research was carried out with reference to SMEs because it was felt that research in this area was of interest due to the potential for growth. The authors state in their introduction that "despite considerable research attention inconclusive and sometimes contradictory findings still leave the antecedents of export marketing performance as being largely unresolved". However, adding to their argument, O'Cass and Julian state that "Australian firms are increasingly looking beyond their domestic market and are focussing on high growth foreign markets to enhance their international competitiveness" (cited in Lu and Julian, 2008). From this statement it may be interpreted that internationalisation is not just a matter of choice but a means of survival within the technologically driven business market.
Lu and Julian, while attempting to achieve a definition of export marketing performance, have looked at three principal methods being financial and strategic indicators and perceptual measures. They have taken the theoretical perspective, as proposed by Julian and Zou et al, that export marketing performance is firstly measurable, secondly that it incorporates the major perspectives as used in previous studies and finally that it is consistent with existing export marketing performance measures used by studies in different countries" (cited in Lu and Julian, 2008).
The authors argue that export marketing performance is enhanced, when considering firm-specific characteristics and only through some of these characteristics, they suggest, that the firms' gains are improved if sufficient resources are allocated to make the most of export market opportunities. When committed to an export market, entry plans need to be carefully considered and sufficient managerial and financial resources are allocated to the venture. This commitment reduces uncertainty as formal planning and resource allocation is more likely to lead to better performance.
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Further to the export strategy, the research also concludes that if a firm's products or services are adapted to meet the demands of a foreign market then the evidence supports the conclusion that this is more successful than offering "undifferentiated standardized products".
Internationalization of Australian Family Businesses: A Managerial Capabilities Perspective (Graves and Thomas, 2006)
This research has addressed the unique challenges facing family owned firms in building their managerial capabilities with the authors focussing their study in the area of comparison between the managerial capabilities of family (fb) and non-family (non-fb) owned firms according to their degree of internationalisation. This paper is largely quantitative as it is dependent on its main source for research which is the business longitudinal study carried out by the Australian Bureau of Statistics. Graves and Thomas have chosen FB SMEs firstly because, as reported by Smyrnios and Walker, over 90% of Australian FB's are SMEs (cited in Graves and Thomas, 2006). Secondly, as reported by Austrade, "increasing the number of internationally active SMEs is high on the Australian government's agenda" (cited in Graves and Thomas, 2006).
The authors suggest that the research highlights that "the managerial capabilities of FBs lag behind that of non-fb's as they grow internationally" and that the evidence for this increased along with the firms level of internationalisation. However where non-FB's increased their level of management capability in the areas of management capacity, expertise and processes as internationalisation increased in the case of fb's there appeared to be little difference in capability between firms operating at a mid or a high level of internationalisation.
The authors concluded though that "despite having less managerial capabilities when compared to non-fb's, fb's were still able to achieve a high degree of internationalisation". The conclusion though was that Graves and Thomas believe that their argument was supported by the research that the management capabilities of fb's lag behind those of non-fb's particularly at high levels of internationalisation. The authors however were not convincing in their arguments though, due mostly to the high level of quantitative research, as they did not adequately explain why this is so.
Comparing the Statements of Purpose
The Statement of Purpose is the initial question upon which the research is based. It is argued that defining the research project in one sentence excludes irrelevant data and facilitates the researcher in considering every concept so its importance to the outcome is not to be underestimated (Quinlan, 2011). Each of the researchers, whose literature is being compared, has presented a research question but not all are clear or concise as each other.
O'Cass and Weerawardena state that their research "examines the role of international entrepreneurship and innovation in SME internationalism" however the authors did not make this question clear as it was enveloped in narrative explaining the limited attention given to the subject. In comparison Cruz-Carreon has devoted a specific chapter entitled "Focus of the Study" in an effort to define the research purpose which is stated as "aiming to extend the theory of Internationalisation Entrepreneurship by investigating the internationalisation process of Australian SMEs". To do this the author has proposed two specific questions
RQ1. "What are the unique and in-depth processes that take place as part of the internationalisation of SMEs"?
RQ2. "How do insights from Australian SMEs enhance the knowledge within the International Entrepreneurship domain"?
Mathews and Healy are also concise in stating their research question "how is the internet influencing international market growth for Australian SMEs?" Graves and Thomas, though they refer to a general purpose of their study which is to look at the managerial capabilities of family owned and non family owned businesses, they fail to clearly postulate a hypothesis or ask a specific question. Similar to Graves and Thomas, Lu and Julian also fail to clearly define a research question though they do specify a primary objective for their study which is to "examine the antecedents of export marketing performance from an Australian perspective". At best this is a broad statement rather than a question and at worse is vague and ignores Quinlan's supposition that the question needs to facilitate the direction of the research.
Summary of Purpose Comparison
When reviewing the purpose of each research paper the most telling point is a general lack of focus and clarity by the authors other than for Cruz-Carreon who is particularly clear in the direction in which he wishes to take his research. Generally there is no clear research direction with the other papers and this has the effect of creating a poorly structured argument for their hypotheses.
Comparison of Methodologies
The various authors utilised different types of methodologies covering self completed surveys, case studies and ABS data drawn from the Business Longitudinal Study (BLS). The various methodologies have yielded different results from research papers that are all generally based on a similar theme however one commonality between them all is the singularity of research. All of the reviewed researchers have drawn their data from only a single source choosing not to employ triangulation as a means of verifying or improving the quality of the results achieved. Of the five papers reviewed the methodology of two were based on self-completed questionnaires, two based their research on case studies and one used published data sourced from the Australian Bureau of Statistics' Longitudinal Business Study.
Self-Completed Surveys: O'Cass and Weerawardena developed a self-completed survey sent to managers whose names were gained from a list of manufacturing firms retrieved from an earlier study and were located in a single state. The reason given for this was a perceived need to ensure a "common business environment" so that external effects such as government regulation, labour costs and taxes are controlled however according to the Department of Foreign Affairs and Trade (2011) the main factor that affects exports is population size rather than regulation and is not a hindrance as such but mainly influences outputs. O'Cass and Weerawardena subscribe to the theory postulated by Glick et al that by collecting data from the senior managers of a firm the information gained is more likely to pertain to the whole organisation rather than just sections (cited in O'Cass and Weerawardena, 2008).
Lu and Julian also used a self-completed survey questioning firms that use the internet and exported goods from Australia but gave no explanation as to where or how they generated the list of recipients. No specific reason for using this methodology, over others, was given in either paper and neither annexed a copy of their questionnaires however Lu and Julian did include a copy of their "Summary of Principal Components Analysis" which details the loadings given to each individual factor within the survey. Lu and Julian though did, unlike O'Cass and Weerawardena, give the sample size that they mailed their questionnaire to and the number of responses that they had returned.
Third Party Data: Graves and Thomas also used a self-completed questionnaire in their methodology however not one of their own design. The ABS had conducted a longitudinal study of Australian businesses covering the financial periods of 1994/95 to 1997/98 inclusive with their findings published in 1999. This survey was extensive in its design and had a response rate of over 90% due to the data being collected under authority of legislation. Included in the Confidentialised Unit Record File (CURF) released by the ABS was data on 9,731 SMEs though Graves and Thomas's study is only concerned with manufacturing businesses which accounted for 12% of this number. The research though was intentionally skewed to only include those SMEs that were incorporated because according to Freedman and Godwin incorporated firms are more likely to be growth orientated (cited in Graves and Thomas, 2006). It is assumed that due to the size of the questionnaire and perhaps because of copyright it was also not annexed to this paper so it is difficult to gain a sense of direction to the research due to a lack of narrative explaining the tabled raw data gleaned from the CURF.
Case Studies: The final two papers both used case studies but though the methodology was similar there are significant differences between them. Mathews and Healey used non-probability purposive sampling and explained this by citing Gummesson who argues that "multiple case studies give a holistic perspective of a complex phenomenon, thus constructing a theoretical platform where no set procedures or standards are in place" (cited in Mathews and Healey, 2008). The researchers interviewed, during in-depth 1Â½ hour sessions, strategic decision makers from 12 Australian SMEs that operate internationally and also use the internet in their internationalisation. Unlike the authors using self-completed questionnaires Mathews and Healey have reported concisely the logic for case study selection, while incorporating ethical considerations by protecting the names of the subject organisations by giving them aliases. The authors have also annexed the raw results and the interviewer's comments for each section of questions which assists in giving the reader clarity whilst reviewing the research.
In contrast the case study methodology utilised by Cruz-Carreon covered only four firms with the criteria being that they fitted within the OECD definition for Small and Medium sized Enterprises, were independent and owner managed and were also in the technology sector. The author decided on a small sample in order to "achieve a rich understanding of the internationalization process" rather than attempting to "establish causal relationships or generate hypotheses and generalisations" which he argues is typical of large sample sizes. As was the case with the earlier papers discussed this author also did not include any annexes to assist the reader in considering the research results being presented to them.
While reviewing the methodologies of the five papers it was evident that they all experienced one flaw or another with these flaws including small sample sizes, a lack of sample size reporting, aged data being used and all five failing to annexe their questionnaires. Additionally, they are all deficient in providing in-depth reasoning as to why the various methodologies were used except for Mathews and Healey.
Summary of Methodology Comparison
As methodology is a critical component of the research design it is interesting that all five papers reviewed have taken such a simplistic approach. I would particularly argue the relevance of using a longitudinal study with the data collected being over 8 years old at the time the research began. A better use of this data may have been as a base line from which to compare a smaller sample of respondents from a new questionnaire that may have used a similar line of questions to the original survey. It should also be noted that none of the researchers expounded upon their questions raised either in self-completed surveys or in case studies and sample size against population size was also studiously ignored.
The Research Question Argued
An important aspect of any research is the outcome and how well the research question was argued and the hypotheses presented. In the opinion of this writer this was achieved with varying degrees of success in each paper with some authors arguing their suppositions better than others.
O'Cass and Weerawardena didn't seem to have a particular question or hypothesis noted until the conclusion where it was stated that "the central argument of the study is that entrepreneurial SME's pursuing international market entry undertake organisational innovation, which enables them to gain positional advantages". Whether this was successfully argued is doubtful as little supporting discussion was made however there is a lot of comment regarding what hasn't been looked at. The authors concluded that this paper "expands our understanding on strategic factors that differentiate exporters from non-exporters" however this is not the response expected from the central argument. Cruz-Carreon's arguments also fell short as it mostly seemed that the author reported on his observations from which he drew conclusions without really arguing his hypothesis but rather he made a conclusion without any real discussion on the research.
Mathews and Healy didn't argue their question either but merely laid out a large amount of data that agreed with their assertions. This is not to say that their assertions are not correct however there was no opposing point of view put forward either to argue their hypothesis from all sides. In comparison Lu and Julian's paper was well written with the research question well argued. Findings were presented in a detailed manner and the arguments were unbiased and limitations noted. The authors were concise and to the point and arrived at conclusions supported by the data presented.
Finally Graves and Thomas admit that their report fails in identifying the difference between the managerial capabilities of family and non family owned businesses however this was the research question. It would seem that if the authors admit that an area for further research is the very research question that they posed then they have not successfully argued their point.
Summary of the Research Argument Comparison
The ability for the research question to be successfully argued relates back to the ability of the authors to clearly define the question which, as discussed earlier, was poorly done in all but one of the papers. Interestingly it was only Lu and Julian that argued their question well even though their question was not as clear and concise as their answer. It will be important to note in my own research the necessity to clearly define the question as this obviously has a bearing on the outcome and the ability to successfully argue the points made.
The Research Gap
Each of the authors have identified areas of further research and articulated opportunities to build onto the body of knowledge in this field of study. Some gaps though weren't identified but nonetheless remained. O'Cass and Weerawardena's research design and the regional nature of the sample limited their findings. Only firms that manufacture were studied leaving the gap of other industries such as distribution, finance, service industries and tourism for examples. However this gap is in response to previous research that has not looked at this particular area of study. Cruz-Carreon in choosing to use only qualitative research and not use any quantitative research created a potential skew and an obvious gap in the data as the cross section looked at were very narrow.
Mathew and Healy's research only looked at the very narrow question of how the internet assists SMEs wishing to be part of the international market and with only 12 firms having been looked at the research gap is quite wide. For instance there is no mention of organisations that have had a negative experience and neither is there a comparison with organisations that have expanded globally without the use of the internet to determine the benefits or otherwise. It would seem that the authors with their question in mind only looked at research that agreed with their supposition. Lu and Craig in comparison looked at a number of different factors including measuring performance using three principal methods including financial and strategic indicators as well as perceptual measures. The research was written with the resulting outcome that the subject was well covered although they recognise some limitations such as a lack of a cross sectional design and that the study is not longitudinal. They also recognise that they have not looked at using the internet for communication such as interactive websites. Graves and Thomas concluded, based on quantitative data, that family owned businesses lag behind the non family owned counterparts however due to a lack of qualitative data provided they have made no firm conclusions as to why this may be leaving an obvious gap in their research.
Summary of the Research Gap Comparison
In all the papers considered there are substantial gaps in the research due to the narrowness of their subject matter. Mostly the authors have focussed on their subject of research without deviation though not necessarily arguing their hypotheses in a successful manner sometimes due to the size of the research gap. In relation to my own research these gaps will assist me in defining further my own question and assist in further defining the methodology.
While reviewing the five research papers chosen for this assignment it quickly became evident that there are many different approaches that can be taken when undertaking a research project. Each author approached their subject with a different perspective on how to address their research question, the research methodology utilised and the method by which they argued their findings. However as an author embarking on my own research it was the negatives found in these five papers that I believe will primarily assist in the writing of my thesis.
In relation to my own research proposal these five papers should prove to be a good literary base as they are all based upon a similar supposition that the internationalisation of SMEs offers a benefit to the organisation by improving management capabilities, increasing entrepreneurship opportunities and as a result strengthening their businesses. The research gaps identified in these papers will also aid in laying a foundation as to which direction my research should be guided so as to increase the body of knowledge rather than just reiterate what has already been done.
In conclusion though it is necessary to clearly articulate the research question or the purpose of the research as this is the critical factor that will set the direction for the paper. As Quinlan argues, so that irrelevant data is excluded and the researcher is facilitated in considering every concept (2011). By doing this it is hoped that a clear focussed question will be a key component in my own thesis. Additionally having reviewed the methodologies used in the five papers and assessing the shortcomings of each, I am now more likely to use two types of data collection being a self-completed survey followed up by in-depth interviews with senior managers currently involved in the internationalisation of their own SMEs. It will also be important to understand the data collected so that valid conclusions can be drawn and inferences made on the subject to ensure a convincing argument.