Internationalization to China: a model for Australian architectural, engineering and construction firms

The experiences of an architectural, an engineering, and a construction organization, when internationalizing to China, are compared to extant theories of internationalization to develop an enhanced explanation if these organizations’ internationalization. The research examines the explanatory power of both the Uppsala internationalization model and network theory for internationalization. The research determined that, whilst these organizations utilized an incremental internationalization process, the stages differed from those identified in the Uppsala model. Part of this difference reflects the fact that the participants are service organizations and the Uppsala model is more relevant to manufacturing organizations. Network theory was also found to predict some of the participant behaviors; however, it did not correctly predict the reasons for forming partnerships, which was to gain knowledge rather than develop networks. The stages of the internationalization into China identified were: (1) experiencing a motivation to internationalize; (2) adopting one of a variety of entry modes; (3) experiencing a motivation to increase internationalization to the level of a wholly-owned foreign entity; (4) establishment of a wholly-owned foreign entity (WOFE), either by acquisition or development; and (5) further horizontal expansion (such as movement to new locations). A range of different motivations for both stages one and three were identified.

Multi-market industrial organizational economic models for the internationalization process by small and medium enterprise construction design service firms

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.