The role of networks in the internationalization process of Small-and Medium-sized Enterprises

Aim: The aim of the study is to increase the understanding of the role of networks in the internationalization process of SMEs. Method: The study applies a qualitative method based on the hermeneutic research tradition and an inductive research approach. A multi-case study research has been conducted, through ten semi-structured interviews. Nine interviews with the upper management at Swedish SMEs, and one interview with a Business Advisor with experience of helping SMEs reach international markets. The empirical findings were thematically analyzed. Result & Conclusions: Networks play a crucial role and are a key factor in helping SMEs find potential business relationships, which in turn helps them to internationalize. Networks create new opportunities for SMEs, add knowledge and experience, and the use of networks has synergistic effects. This adds value to SMEs and helps them become more attractive and competitive in international markets. To establish business relationships for internationalization, SMEs use different approaches in order to find the right people, as well as they are considering cultural differences in order to develop trust with international actors. Suggestions for future research: The limitations of the study are the number of interviews on which the study is based, that the study only adopts a Swedish perspective, and the wide range of company sizes included in the definition of SMEs. Suggestions for future studies are therefore to focus on SMEs of the same size, with similar financial capabilities and international experience. Another suggestion is to include SMEs from different cultures and countries, which would enable a deeper understanding of aspects such as trust. Furthermore, it is suggested to conduct a similar study with a sustainability perspective. Contribution of the thesis: The study gives a theoretical contribution by presenting a model, which is based on previous research in combination with the empirical findings of the study. The model shows which parts from previous literature that are confirmed by the study, and contributes with new aspects that are used by SMEs within their internationalization process. These new aspects are; honesty, which is an important part of the trust-building process, and outsourcing, as an approach SMEs use in their internationalization process. The main managerial contribution is that the study gives a directional guide of the importance of various aspects of the internationalization process. In this way, the study can help SMEs to find new ways to establish business relationships. The societal contribution of the study is that the internationalization process of SMEs are important in terms of economy and growth, both at a firm level as well as a national level. Moreover, the study highlights the importance of cultural differences, which helps create a diverse community where differences are accepted