Internationalization

MBA General Program (Week End)-2013/2015

Semester III – First half

Individual Assignment

Summarizing of the Article “The Internationalization of the Firm — Four Swedish Cases”

Mr. M. L. M Rikaz (2013/MBA/WE/91)

Lecturer: Dr. M.P.P. Dharmadasa

Course: MBAGM 618 – International Business

Postgraduate & Mid-career Development Unit

Faculty of Management & Finance

University of Colombo

Internationalization

The process of organization carrying out its activities in abroad or leaning towards foreign activities is defined as internationalization in the ordinary world. In this case there are two main factors needs to be considered which have got close relationship which are namely attitude and the behavior. So the basic assumption could have is that organization first leans towards domestic market thereafter internationalization occurs following a series of decisions. The main obstacles for internationalization are lack of knowledge and resources. As the organization gains experiences in domestic and international markets these obstacles will be mitigated along with the risk factors.

Johanson and Wiedersheim-Paul (1975) suggests four types of stages in incremental development of operations such as,

* No regular export activities

* Export via independent representatives

* Sales subsidiaries

* Production manufacturing

More importantly Johanson and Wiedersheim-Paul argue that above steps are important because,

* Those are different from degree of involvement in the business

* Often referred to by people in business

Two authors discusses on two aspects in degree of involvement. Also, above mentioned four stages in sequence they call it as establishment chain. During the four stages firms gain different exposure and information from the market in each stages such as,

Stage 1- Firms has got no commitments of resources to the market and lack regular information and its channels in the market

Stage 2 -...