Multi-Market Industrial Organizational Economic Models for the Internationalization Process by Small and Medium Enterprise Construction Design Service Firms by ProQuest

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Small and medium enterprises (SMEs) are critical to strategic initiatives in an economy; however, their contribution to foreign trade is not as significant. SMEs are one of the principal driving forces in economic development. One of the greatest challenges is the internationalization process for longevity rather than seeing the process as initial market entry. The internationalization process research has typically involved four key constructs: market selection, decision to enter, entry modes and factors affecting entry modes. Past research has focused on large manufacturing firms. The export of architectural, engineering and construction (AEC) firms has undergone growth, yet there is still significant opportunity for further growth. The majority of AEC firms are SMEs. Notwithstanding assistance provided through international trade missions, organized export firm support networks and information packages by a burgeoning number of government agencies, there are still perceived barriers to market entry and long-term economic sustainability for SMEs. There are a number of problems faced by SMEs acting in foreign trade. This investigation explores the successful initial internationalization process constructs and identifies unique project-oriented sector characteristics. The study identified similarities and differences between two firms that have been exporting to various localities, including Eastern Europe, Africa, Middle East, UK, Asia and South America, for more than two decades. The similarities and differences were identified within eight major constructs: purpose, firm type, market image and design philosophy, entry mode strategy, institutional arrangement, factors affecting mode of entry, market selection and firm strategy in relation to project selection. The primary reasons for internationalization were associated with the firms' motivations related to growth and financial viability. This article discusses the various internationalization processes and strat

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Multi-Market Industrial Organizational
Economic Models for the
Internationalization Process by Small and
Medium Enterprise Construction Design
Service Firms
Kerry London*
Faculty of Science and Technology, Deakin University, Geelong Waterfront Campus, 3217 VIC, Australia



    Abstract
    Small and medium enterprises (SMEs) are critical to strategic initiatives in an economy; however, their contribution
    to foreign trade is not as significant. SMEs are one of the principal driving forces in economic development. One of
    the greatest challenges is the internationalization process for longevity rather than seeing the process as initial
    market entry. The internationalization process research has typically involved four key constructs: market
    selection, decision to enter, entry modes and factors affecting entry modes. Past research has focused on large
    manufacturing firms. The export of architectural, engineering and construction (AEC) firms has undergone
    growth, yet there is still significant opportunity for further growth. The majority of AEC firms are SMEs.
    Notwithstanding assistance provided through international trade missions, organized export firm support
    networks and information packages by a burgeoning number of government agencies, there are still perceived
    barriers to market entry and long-term economic sustainability for SMEs. There are a number of problems faced
    by SMEs acting in foreign trade. This investigation explores the successful initial internationalization process
    constructs and identifies unique project-oriented sector characteristics. The study identified similarities and
    differences between two firms that have been exporting to various localities, including Eastern Europe, Africa,
    Middle East, UK, Asia and South America, for more than two decades. The similarities and differences were
    identified within eight major constructs: purpose, firm type, market image and design philosophy, entry mode
    strategy, institutional arrangement, factors affecting mode of entry, market selection and firm strategy in relation
    to project selection. The primary reasons for internationalization were associated with the firms’ motivations
    related to growth and financial viability. This article discusses the various internationalization processes and
    strategies intrinsic to each case study and establishes a detailed set of empirical observations from which to
    develop further a grounded theoretical model of reflexive capability for the internationalization process. This
    study contributes to the body of knowledge around the SME AEC design service firm’s internationalization
    process, as a dynamic, evolving and continuously adaptable construct for project-based sectors.

B Keywords – Design management, internationalization, reflexive capability, SMEs



INTRODUCTION                                                              Australia has become increasingly significant in the
The internationalization of architectural, engineering                    last decade. Australia’s export of AEC services as well
and construction (AEC) management design firms in                          as construction services was $604m in 2004–2005

B *E-mail: Kerry.london@deakin.edu.au

ARCHITECTURAL ENGINEERING AND DESIGN MANAGEMENT B 2010 B VOLUME 6 B 132–152
doi:10.3763/aedm.2009.0111 ª2010 Earthscan ISSN: 1745-2007 (print), 1752-7589 (online) www.earthscan.co.uk/journals/aedm
                                                 Multi-Market Industrial Organizational Economic Models 133




(ABS, 2008). It is important to note that while the       costs and communication problems (UN/ECE
export of AEC and other technical services has            Secretariat, 1997).
undergone growth, there is still significant opportunity       A variety of international markets are penetrated
for further growth in the export of these particular      with a variety of entry strategies with increasing
services. The majority of AEC firms are SMEs.              success. However, less is known about the
    SMEs are critical to strategic initiatives in an      appropriate entry mode and management of the
economy; however, their contribution to foreign           export of construction design services by those that
trade is not as significant. SMEs are one of the           have achieved long-term economic success. A study
princi
								
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