Mutual trust as a key to internationalization of SMEs

Abstract

Purpose

The purpose of this paper is to offer an understanding as to whether trust‐based coordination is feasible in the context of small and medium‐sized enterprises (SME) internationalization processes, and if so, what impact these cooperative arrangements can have on corporate success.

Design/methodology/approach

To answer the research hypotheses, multiple regression analyses based on a postal questionnaire survey (n = 58 SMEs from Austria, the Czech Republic and Slovenia) were computed.

Findings

It is found that self‐commitment facilitates the establishment and maintenance of heterarchic cross‐border cooperation relationships of SMEs that cannot evolve based on market or hierarchical coordination. It is also found that the establishment of trust‐based cooperation relationships with foreign partners positively affects the success of the participating companies.

Research limitations/implications

Only Slovenian and Czech enterprises and their internationalization have been investigated and compared to Austrian enterprises. Only SMEs have been investigated, no large companies. It is not clear that the presented empirical findings also hold true for larger enterprises.

Practical implications

Active measures such as building more knowledge (getting to know) and openly approaching other enterprises should be encouraged in internationalization processes. Thus, protectionist labor market politics on the macro level are highly counterproductive. At the micro level, parties involved should acquire specific knowledge (e.g. languages or social codes) as well as that they replace prejudices and skepticism by profound knowledge on and openness towards the other, e.g. through exchange programs for employees.

Originality/value

The paper is the first to analyze the role of trust‐based cooperation relationships on the internationalization processes of SMEs in the context of Austrian and Central and Eastern Country (CEEC) enterprises. The results of this research can become important for SMEs which want to pursue an internationalization strategy in the context of the CEEC.

Citation

Fink, M. and Kraus, S. (2007), "Mutual trust as a key to internationalization of SMEs", Management Research News, Vol. 30 No. 9, pp. 674-688. https://doi.org/10.1108/01409170710779980