Embed Size (px)
Citation preview
Halmstad University School of Business and Engineering European Business Programme (180 ECTS) Bachelor Thesis (15 ECTS) Spring 2013
Business across borders -‐ A study of Swedish family businesses and their international activities Authors: Malin Gylling and Frida Schlosza Supervisor: Timurs Umans Examiner: Ingemar Wictor Halmstad, 21-‐05-‐13
Abstract The global market has always been interesting for companies who want to expand.
More and more companies extend their operations abroad to be able to compete and
meet customer demands. Family businesses, which traditionally were mainly focused on
their domestic markets, now play a bigger role in the world economy.
They have to face problems and barriers that are connected with the process of
internationalisation. There are already several studies on family business and their
internationalisation existing, however, there was a lack of identification of
characteristics of family businesses that have gone through some sort of
internationalisation. This thesis aims to fill that gap.
This study is performed on three Swedish family businesses from different industries.
They all have some form of international activities in common. Both internationalisation
processes and family businesses are complex in nature and all cases are individual.
The results of this thesis indicate that there are some main characteristics that are more
important and prominent amongst the family businesses. The findings are only a minor
contribution to this field of study, which needs further investigation to be able to make a
larger generalisation. However, thou the findings in this thesis cannot be generalised,
they may be used as a guiding tool for further research.
Acknowledgement Lincoln, United Kingdom, May 2013
With this thesis we complete our bachelor studies at the European Business Programme,
at Halmstad University.
First of all, we would like to express our gratitude towards Timurs Umans for the
constant support, guidance and supervision during this semester.
We would also like to thank all the participants for taking their time to help us in our
research, it is highly appreciated.
Finally, we would like to thank family and friends for their support.
Thank you!
________________ ________________
Malin Gylling Frida Schlosza
Table of contents 1. Introduction 1
1.1 Background 1 1.2 Problem 3 1.3 Purpose 4 1.4 Research question 4 1.5 Limitations 5 1.6 Definitions 5
1.6.1 Internationalisation 5 1.6.2 Characteristics 5 1.6.3 Family businesses 5
1.7 Key concepts 5 1.8 Outline 5
2. Literature Review 7 2.1 Historical overview of internationalisation 7
2.1.1 Foreign direct investment 7 2.1.2 Uppsala model 8 2.1.3 Eclectic paradigm 9 2.1.4 Summary 9
2.2 Family businesses characteristics and internationalisation 10 2.2.1 Family businesses 11 2.2.2 Characteristics 12 2.2.3 Internationalisation 13
2.3 Model 15 3. Research and Empirical method 20
3.1 Introduction 20 3.2 Research approach 21 3.3 Choice of theory 22 3.4 Choice of methodology 22 3.5 Research design and strategy 24 3.6 Time horizon 24 3.7 Data collection 25 3.8 Sampling 25
3.9 Method of Analysis 26 3.10 Operationalization 26 3.10.1 Interview description 27
3.10.1.1 Internationalisation 27 3.10.1.2 Slow pace, patience and persistence 27 3.10.1.3 Similarities, risk awareness and control 28 3.10.1.4 Economic and non-‐economic goals 28 3.10.1.5 Importance of family 28 3.10.1.6 Strategic alliances 28
3.11 Credibility 28 3.11.1 Reliability 28 3.11.2 Validity 29 3.12 Ethics 30 4. Result 32 4.1 Introduction 32 4.2 Interview with Company A 33
4.2.1 Strategic alliances 33 4.2.2 Similarities, risk awareness and control 34 4.2.3 Economic and non-‐economic goals 35 4.2.4 Importance of family 35 4.2.5 Slow pace, patience and persistence 35 4.3 Interview with Company B 36 4.3.1 Strategic alliances 36 4.3.2 Similarities, risk awareness and control 37 4.3.3 Economic and non-‐economic goals 37 4.3.4 Importance of family 37 4.3.5 Slow pace, patience and persistence 38 4.4 Interview with Company C 38 4.4.1 Strategic alliances 38 4.4.2 Similarities, risk awareness and control 38 4.4.3 Economic and non-‐economic goals 39 4.4.4 Importance of family 39 4.4.5 Slow pace, patience and persistence 39 4.5 Summary of results 40 4.5.1 Strategic alliances 40 4.5.2 Similarities, risk awareness and control 40 4.5.3 Economic and non-‐economic goals 40 4.5.4 Importance of family 41 4.5.5 Slow pace, patience and persistence 41 4.5.6 Clarifying matrix 41 5. Analysis 43 5.1 Company A 43 5.2 Company B 44 5.3 Company C 45 5.4 Summary of analysis 46 5.4.1 Strategic alliances 46 5.4.2 Similarities, risk awareness and control 46 5.4.3 Economic and non-‐economic goals 47 5.4.4 Importance of family 47 5.4.5 Slow pace, patience and persistence 47 5.4.6 Adjusted Model 47 6. Conclusion 50 6.1 Conclusion of findings 50 6.2 Practical implications 51 6.3 Critical reflections 52 6.4 Ethical implications 52 6.5 Future research 53 References 54
Appendices Appendix 1: Interview guide – English 59 Appendix 2: Interview guide – Swedish 60 Appendix 3: Interview guide – description of questions 61
List of figures Figure 1 – Analysing model 18 Figure 2 – The research ‘onion’ 20 Figure 3 – Research approach model 21 Figure 4 -‐ Matrix over the interviewees 32 Figure 5 – Clarifying matrix over the answers from the interviewees 41 Figure 6 – Adjusted model 48 Figure 7 – Comparison between analysing model and adjusted model 51
1
1. Introduction
In this chapter of the thesis the background, problem, purpose, research question and key
concepts are being presented. It ends with an outline of how this thesis will be presented.
1.1 Background
Researchers define the terms family businesses and internationalisation in different
ways. The process of internationalisation refers to an increase of involvement in
international operations, in other words the expansion of the business across borders
(Akpinar, 2009). Internationalisation has during the last couple of years become one of
the most important strategies for businesses to achieve a more sustainable growth.
There are different motives for businesses to internationalise, depending on their scale,
size of business and what kind of ownership it has. There is also showed that business in
different industries has different levels of motivation for internationalisation (Ruochen
et al., 2012).
The development for businesses into international markets has increased dramatically
over the time. Internationalisation of these businesses brings opportunities of growth
and the ability to access knowledge in foreign markets and cultures, but it also brings
higher cost and uncertainties (Hsu, Chen & Cheng, 2013). To further explain a family
business, one can say that a family business is an actively owned and/or managed
organisation where more than one member of the same family has the most influence
over the business (Farrington & Merwe, 2012). Family involvement in businesses is
what makes the family business different from non-‐family businesses. One can interpret
family involvement such as ownership and management (Chua, Chrisman & Pramodita,
1999).
A family business can also be defined as an organisation where at least one
representative from the family is involved in the managing part of the business and also
the fact that the family owns and possesses more then 25% of the decision-‐making
capital. A family business can be very diverse; it can for example be of small, medium or
large size as well as listed or unlisted (The European Commission, 2012).
The importance with a family business is that they have the potential to change and
2
adapt to different environments as well as to enter markets that other businesses are
unable to address (Kontinen & Ojala, 2012). One could argue that a family business as
well as a non-‐family business has a certain amount of entrepreneurship involved,
elsewise they would not exist. Shane and Venkataramans (2000) suggest that the
entrepreneur is the decision maker, who acts and takes the innovative idea to the
market. There is various definitions of what an entrepreneur is, according to Oxford
dictionaries (2013) it is ” a person who sets up a business or businesses, taking on
financial risks in the hope of profit” or ” a person who organizes and manages any
enterprise, especially a business, usually with considerable initiative and risk”
It is also argued that if entrepreneurship is going to be able to exist, there have to be
business opportunities available on the market, which can generate profit. Those
opportunities are often exploited in situations where the entrepreneur has a high
expected value in the entrepreneurship. Such situations could for example be where the
expected demand is rather high, in certain markets where profits are high, in markets
where the products life cycle is in an early stage or where the cost of capital is low
(Shane & Venkataramans, 2000). This thesis will not be focusing on the entrepreneurial
part of the family business, but since it is an arguably large part of the business
environment it was of importance to mention.
One of the main problems for a family business is the fact that both managing a family
and the business seems to be a constant challenge (Farrington & Merwe, 2012). In many
cases family businesses let personal and emotional factors determine who will take over
the business, especially in the case of father to son, where emotions rather then the level
of suitability makes a decision (Miller et al., 2003). “No business can’t escape family
involvement, because even the decisions of a widely held corporations CEO are
sometimes influenced by a spouse or children” (Chua et al., 1999, p.19).
Today family businesses are said to be the most common form of business organisation
in most countries. Melin and Nordqvist (2007) describe the family businesses unique
features in the so-‐called three-‐circle model where the family business is being
characterised by the ownership, the business and the family itself.
3
Some of the big businesses in todays market are family owned and it has recently been
more recognised that those play an important role in the international market, which
has led to that family internationalisation has become an interesting and important
research area (Kontinen & Ojala, 2012). Some well-‐known family businesses, half public
and has been on the market for more then 20 years are Michelin, Hallmark, IKEA, Estee
Lauder, Wall Mart and the New York Times Company (Miller & Breton-‐Miller, 2005).
1.2 Problem
From the start of the twentieth century the name “family business or family-‐owned”
wasn’t needed. Back then all businesses was family-‐owned, and it was taken for granted
that a business included the presence of the family members. The globalisation and
internationalisation did later change the business world, but still, it is argued that the
presence of family businesses could be of importance for the world economy. There is
research showing that in the European Union and the USA around 85% of todays small
and medium enterprises are family-‐owned and an even bigger number in the developing
countries (Kontinen & Ojala, 2012).
Several studies have shown that family businesses do internationalise their business,
but that they are relatively slow in their process of doing so (Astrachan, 2010).
Family businesses and non-‐family businesses are confronted with similar strategic
choices, such as internationalisation. Studies have also shown that family businesses
want to internationalise, but often lack the resources to do it. An alternative for those
businesses is to involve external owners and board members, which in turn leads to a
broader social network and contact with important stakeholders (Holt, 2012). This can
be difficult for some, since owners of family businesses can be reluctant to do this since
they lack the trust to non-‐family members and that is a fact in many of the Italian family
businesses (The Economist, 2011). There are researches saying that important
characteristics to consider is the different level of the family ownership and control
(Chrisman et al., 2005) and there are studies that conclude that managerial capabilities
and ownership of a family business may lead to that the company is falling behind,
leading to a lower level of internationalisation (Graves & Thomas, 2004). The ownership
has an important role when family business wants to internationalise, family businesses
that is past the first generation of family members are more likely to internationalise
then the ones still on the first generation (Menedez-‐Requejo, 2005).
4
Family obligations may cause different strategic choices, more then in the case of non-‐
family businesses. Studies have shown that family businesses often invest with a 10 to
20 year time horizon, so that the investment can benefit future generations in the
business. It is also reported that 30% of all companies with sales in excess of $1 billion
are family owned or family controlled businesses, which means that they play an
important as well as powerful role in the world economy (Bloch et al., 2012).
Family businesses internationalise in different ways depending on industry and
business. The reasons for why they choose to internationalise has been argued. Profit,
the wish of benefitting the next generation or to keep up with competition is frequently
found reasons. But regardless of this, there has been little research on whether the
internationalisation process of family businesses is intentionally or just opportunistic
(Astrachan, 2010) but more important what the main characteristics of the different
family businesses are.
While there has been a lot of research on the fact that family businesses do
internationalise, it has not been establish what the main characteristics for these
companies are. An interesting aspect is that there are previous research that has
indicated that family involvement in a business do matter for the case of
internationalisation, but the precise effects and the special characteristics for the family
businesses remain unclear (Arregle et al., 2012).
1.3 Purpose
The purpose of this thesis is to uncover and explore which types of characteristics that
family businesses that have undergone some type of internationalisation possess.
1.4 Research question
There is limited research on how family businesses choose to internationalise and the
drivers behind it. This study aims to explore what the main characteristics for them are
since that is the drive behind internationalisation. Thus, the research question for this
thesis is:
What characterises the internationalisation process of family businesses?
5
1.5 Limitations
In this thesis the research are limited to qualities such as time and resources. This thesis
aims to explore the characteristics of family businesses and their internationalisation
processes. Because of the fact that only a limited number of Swedish family businesses
were examined this research will probably not be sufficient to draw general conclusions
but hopefully come up with information that will help guide future research.
1.6 Definitions
1.6.1 Internationalisation
To explain the term internationalisation from a business perspective, it is the extent to
which a company is active abroad on foreign markets. The internationalisation process
can differ; it can refer to a geographic reach, export activities, building businesses in a
foreign market etc. (George et al., 2005).
1.6.2 Characteristics
A characteristic is a feature or quality belonging to a person, item, phenomenon or place,
in the matter of identifying them (Oxford Dictionaries, 2013). Some of the characteristics
that later will be presented in this thesis can also be referred to as factors. In this thesis
they will all be addressed as characteristics since they play important parts in a family
business internationalisation process.
1.6.3 Family business
A family business can be defined as an actively owned and/or managed organisation
where more then one member of the same family has the most influence over the
business (Farrington & Merwe, 2012).
1.7 Key concepts
Internationalisation, characteristics and family business
1.8 Outline
This thesis consists of six chapters. The first chapter is an introduction, which includes
background, problem, purpose, research question, limitations, definitions and finally key
concepts. In the second chapter one could find the literature review, which contains a
6
historical overview of internationalisation, family businesses and their characteristics
and finally an analysing model and a description of it.
Chapter number three contains an introduction of research and empirical method, the
research approach, the choice of theory, the choice of methodology, research design and
strategy, time horizon, data collection, sampling, operationalization, credibility and
finally ethics. In the fourth chapter one could find the results of the interviews, there is
an introduction of the results, the interviews with the companies and the findings from
them. In the fifth chapter an analysis of the interviews and findings are being conducted.
In the sixth and final chapter, one could read the conclusion of findings, practical
implications, critical reflections, ethical considerations and future research.
7
2. Literature Review
This chapter includes the historical overview of internationalisation, different
internationalisation theories as well as definition and characteristics of family businesses.
In the end of this chapter a new model has been developed.
2.1 Historical overview of internationalisation
There has been several different internationalisation patterns over time. From the
beginning the process of internationalisation begun with the desire to trade.
Trading begun a long time ago, when people moved to bigger cities and realised that
they couldn’t produce everything that they needed and wanted, and therefore began to
exchange e.g. milk, meat, grain and pottery with each other at local market places.
Cities started to trade different goods with other cities as well when they realized that
they could gain not only a wider range of goods, that they couldn’t produce themselves,
but also knowledge, money and establish new relationships (Whipps, 2008).
Adam Smith, who established the first acknowledged internationalisation theory, is
known for his theories of international trade and also as the founder of modern
economics. His theories shows that free trade between nations, that have an absolute
advantage in their production, are more beneficial for a country (Myint, 1977).
According to Smith trade is “the consequence of human propensity to truck, barter and
exchange on thing for another”. International trade is beneficial for a country because it
gives value to their surplus. By trading it for something else, people’s desires can be
satisfied. (Schumacher, 2012, p.57).
From Adam Smiths theory of trade several other theories have been developed. In this
thesis three of them are presented. They all are of interest for family businesses and
how they chose to internationalise their businesses.
2.1.1 Foreign direct investment (FDI)
FDI is a process of where one country acquires ownership of assets for the purpose of
controlling the production, distribution or other activities of a business in another
country. It is an investment involvement a long-‐term relationship with an interest of
8
control. IMF is defining FDI as an investment that is made to acquire a lasting interest in
another, new enterprise (Campos & Kinoshita, 2008). An investment is considered to be
a FDI when the host country has significant control over the company’s shares and when
parts of the company’s assets, production or sales are shifted to the host country.
The importance lies in the words control and controlling interests, which are the main
goals for FDI. Some argue that the element of control gives FDI an informational
advantage over the foreign investors and other domestic investors. FDI is also making
countries less vulnerable to unforeseen stops or reversals of flows (Moosa, 2002).
An example of a family business that has been using FDI as a tool in their
internationalisation process is Michelin. They started up their business in France in the
late nineteenth century, and as early as 1925 they bought a huge area of land in Indo
China to be able to open up a rubber plantation, to be able to benefit their own
production of tyres (Michelin, 2013).
2.1.2 Uppsala model
Johanson and Vahlne created the Uppsala model in 1977 at the University of Uppsala in
Sweden. The Uppsala model is assuming that organisations often start to
internationalise in one or a few nearby neighbour countries rather then to start operate
in several other countries at the same time. Employees from the business are operating
in the new market so that the new investments are carried out with great caution and
accuracy. Companies are then later suppose to start enter new markets with greater
psychic distance then their neighbour markets (Johanson & Vahlne, 1990).
IKEA is a great example of a family business that have internationalised according to the
Uppsala model. IKEA was founded in Sweden in 1943, expanded to neighbour country
Norway in 1973 and Denmark in 1969, later on were Switzerland and Germany. Today
IKEA is a highly globalised family business, with stores worldwide (IKEA, 2013).
Businesses chooses to internationalise gradually and progressive, which means they go
from simpler to more complex, both when it comes to entry modes and of the countries
chosen (from closer to a more far distance). The biggest hindrance to
internationalisation is the lack of knowledge about the new market. But only by
internationalise and doing business in a new country can give you that valuable
knowledge (Silva et al., 2012).
9
2.1.3 Eclectic Paradigm (OLI)
The eclectic paradigm, also known as the OLI-‐model, is a framework for determining the
extent, form and pattern of international production (Dunning, 2001). The framework
was developed to evaluate the factors influencing both the initial act of foreign
production and the growth of foreign production by big companies. To simplify the
model, one can say that it describes if a company have the right possibilities for start to
operating abroad or not. (Whitelock, 2002).
OLI refers to ownership advantages, location advantages and internalization advantages.
Ownership advantage can arise from ownership or access to specific resources such as
entrepreneurial skills, production techniques or trademarks. Ownership advantage is
not only about the resources created internally in the company, but also the competence
to find and use resources generated by others.
Location advantage result from a company using different marketplace characteristics to
its advantage, such as existence of raw material, low wages or special taxes or tariffs.
When a company feel that they can combine products produced in their home market
with other intermediate products from other countries they will engage in foreign
productions (Wilson & Baack, 2012)
Internalisation advantages is when companies get advantages by own production
instead of using licensing or partnership arrangements in the foreign country. The
eclectic paradigm suggests that companies will internalize ownership advantage when
an action can increase the financial performance in the company, but the internalization
advantage is often viewed as an efficiency choice (Arnett & Madhavaram, 2012).
2.1.4 Summary
It´s important to understand that internationalisation is not a new phenomenon and that
it can be identified in different ways. The three frameworks that have been presented
are well known and frequently used in many different aspects of business. In previous
research there has been showed that family businesses starts their internationalisation
process by expand to nearby, similar countries or by exporting. That is the main reason
for why these three frameworks will be discussed further in this thesis. But one should
consider that the Uppsala model has been criticised by other researchers and there are
studies showing that companies today might not follow the steps that the Uppsala model
10
and other frameworks suggested. At todays market with lower custom duties and
controls, internet development, the common market and the technical base which makes
the distance between countries shorter, it is easier for companies to go abroad and
internationalise themselves (Andersson & Wictor, 2003).
There has been argued that for companies to succeed in an international market today
they need to establish a market quickly and rather in several markets at the same time,
companies no longer have the same time horizon to establish their business as before
(Wictor, 2012). The Uppsala model can be used on different businesses today, but one
should be critic when it comes to entrepreneurial businesses, like for example family
businesses (Andersson & Wictor, 2003).
One should also consider the fact that the business world of today is highly globalized,
where international business is happening frequently. As a result of doing business
across borders business has become increasingly intercultural and an understanding for
cultural differences when doing business have become of more importance (Gong,
2011).
Because of the fact that this thesis will look closer into the different characteristics of
family businesses when they internationalise, these three frameworks will be used so
that one can understand the reason behind the internationalisation process. It’s also
important to understand the background of how family businesses are managing their
internationalisation process so that the research question in this thesis can be fully
evaluated. To understand and explain the characteristics for the family business one
must also understand how the internationalisation of family businesses are being
conducted and also how they are behaving. This will provide this thesis with a broader
understanding and knowledge of the characteristics of internationalisation of the family
business.
2.2 Family Businesses, characteristics and internationalisation
In this chapter this thesis will discuss the different characteristics of family businesses
and also the characteristics for internationalisation. This is necessary for the thesis
because of the fact that it aims to understand what it is that characterise the
11
internationalisation process of family businesses. Its also important so that one can get a
better understanding of the two elements and better understand where the
characteristics for the family businesses are coming from. Together this will create a
model that later will be tested and analysed on different family businesses.
2.2.1 Family businesses
Family businesses, which traditionally were focused on their domestic markets, but now
a days play a bigger role in the world economy, have to deal with problems due to the
fact of their internationalisation process. It is stated that different kind of ownership of a
business can affect the internationalisation process, due to the fact that different owners
value things differently and take into consideration temporal preferences (Lin, 2012). In
the case of family businesses, it has been found that ownership plays an important role
in the internationalisation process. If the owners of the first or second generation of the
family business haven’t completed any kind of internationalisation, it is highly unlikely
that the family business will ever do so (Okoroafo & Perry, 2010) and at the opposite, a
multigenerational family business that has been doing internationalisation are more
likely to achieve a higher level of internationalisation (Menedez-‐Requejo, 2005).
Family businesses have shown to outclass public non-‐family businesses in factors like
revenue growth, market valuation, return on assets, return on equity and total
shareholder returns. This is because family businesses invest more in things including
human resources and training, social benefits for their employees, and developing in
equipment. Family businesses can also benefit from better cash positions, more stable
earnings and lower debt to equity. Some well-‐known family businesses that have been
on the market for more then 20 years are Michelin, Hallmark, IKEA, Estee Lauder, Wall
Mart and the New York Times Company (Miller & Breton-‐Miller, 2005).
Both Gomez-‐Mejia et al., (2007) and Holt (2012) suggests that family businesses make
strategic choices considering non-‐financial values as why to start internationalise.
Instead of wanting to maximize their economic returns they tend to want to achieve
non-‐economic goals. These non-‐economic goals includes advance the family values
through the business, keep the family´s control over the business and also fulfil the
family obligations. This doesn´t mean that family businesses are unaware of the
12
importance of financial wealth and economic performance. As for strategy they consider
both the economic as well as the non-‐economic outcomes and one of them does not
necessarily come at the expense of the other (Holt, 2012).
2.2.2 Characteristics
It has been found that family businesses tend to optimize their efforts to create financial
wealth with their efforts to fulfil non-‐economic goals. There has been proved that if a
family business have a non-‐economic goal as ground for decision-‐making, and if that
decision would jeopardize or destroy investments, a family business would avoid taking
that risk to begin with (Holt, 2012).
According to Miller and Breton-‐Miller (2005) there are four driving priorities found
among the most successful family businesses. Those are called the 4C’s.
Command: Leaders of family businesses, together with their teams are prioritising
freedom to be decisive, quick and innovative in running and renewing the business.
They serve their shareholders not by being slaves, but by independently taking actions.
Continuity: The continuity of the business and its contribution to the world are valued
very high. Leaders of family business have both the desire to pursuing a dream and the
core competencies to do it.
Community: The desire to bond the “business society” and get them psyched to achieve
the missions is made by a culture of genuine values, continuous indoctrination and a
deep concern for the employees at all levels.
Connection: The connection refers to the relationships outside the business. Rather then
choosing one-‐shot, opportunistic transactions, these businesses often instead choose to
build long-‐term relationship with customers, suppliers and the broader community.
When the elements from those 4 C’s are blended together correctly with the right
strategies and the competitive advantage of the company, it translates in to a company
that will last for many years (Miller & Breton-‐Miller, 2005).
There are some main characteristics when looking at family businesses and
internationalisation, many argue that when family businesses internationalise they tend
to keep their unique and individual features and those include the long-‐term orientation
and cautiousness (Calabro et al., 2013).
13
Other key characteristics include the desire to maintain the importance of the family
that comes from the strong personal connection, the commitment and identification
with the business and the desire to control the risks that comes from the concentration
of family prosperity in a single organisation (Lin, 2012).
Many family businesses have been on the market for a long time and that may be
because of the fact that they have incorporated different beliefs in ownership, business
and social areas. They also have their individual approaches in leadership, strategy,
organisation and relation with the environment that differs very much from the
established knowledge and practises of many public non-‐family businesses (Miller &
Breton-‐Miller, 2005). Family businesses often possess a more indebt knowledge about
the business in matter and the commitment, as mentioned before is very high (Sciascia
et al., 2012). Other positive characteristic that has been acknowledged is their way of
having open channels of communication, more organic structures in the business’
strategy and also the interactions among their members of the family and business. This
is often taken away the pressure for other structures that will limit the inputs they have
when considering to internationalise. In addition and as mentioned before, the long-‐
term orientation that comes from the family control is important for them so that they
can resist the demand of taking investments that are needed for internationalisation
only for the sake of the short-‐term efficiencies (Arregle et al., 2007).
The most referred characteristic of family business and the one distinguish them from
other businesses is the integration of family and business. One has to understand that
decisions and actions of key individuals in the company is the same as decisions and
actions of members of a specific family. A difficulty when researching family business is
to understand the interaction between the business, the family and also the individual
family members. The long-‐term relationship, history, traditions, emotions and ways of
thinking do have a strong impact on the business and need to be considered when
researching different characteristics of family businesses (Melin et al., 2009).
2.2.3 Internationalisation
To explain the term internationalisation one can say that it is the extent to which a
company is active abroad on foreign markets. The internationalisation process can
differ; it can refer to a geographic reach, export activities, building businesses in a
14
foreign market etc. (George et al., 2005). There are previous research that has indicated
that family involvement in a business do matter in case of internationalisation, but the
precise effects and the special characteristics for them remain unclear (Arregle et al.,
2012).
Operating a business across borders can provide ones business with new opportunities
for value creation due to the fact of access to new resources, foreign stakeholders and
the possibility to gain knowledge. By gaining the benefits from learning, ones business
can implement new business processes and practises and in that way overcome
obstacles, innovate and provide resources to R&D. Those kinds of opportunities can in
turn provide a business with higher returns, if it is used in the right way.
Internationalisation can also help ones business to reduce income fluctuations by
spreading the risk over a number of countries (Lin, 2012).
Kontinen and Ojala (2012) explain that the present of a family member in the board or
at the decision making process will have an effect on the outcome. This results in that
the outcome and decisions more often is based on the thinking of the next generation.
More focus on the commitment and dedication are put on the organisation when the
manager is a family member. They then feel more duty towards the business and want
to have a higher well being on the employees (which often is other family members) and
also have the goal to improve the business performance. Why is because the view of
sustaining the business over the next generations (Kontinen & Ojala, 2012). Different
features for family businesses show that there is a strong bond between the family and
the business, and because of that fact, family businesses often have a longer time
horizon to increase the growth of the business. This in turn will create opportunities for
the next generation of the family business as well as protection from assertive
competitors, and therefor managers are more likely to take in to consideration proactive
activities such as operations across borders (Lin, 2012).
As mentioned above, when family is involved in the managerial process and decisions
the internationalisation is a longer process with more risk awareness. There has been
mentioned in several studies that the characteristics for internationalisation within
family businesses is that they are slow in the process and risk advert. Family businesses
have a more long-‐term orientation when it comes to internationalisation (Kontinen &
15
Ojala, 2012). Why that is, is because that managers of family businesses are more willing
to dedicate a certain amount of time and effort to screening, selecting and
implementation of acquisitions of the new markets because of the bond between them
and the business. In other words, those managers are more likely to carefully explore
the environment of the international market in order to make a successful decision of
internationalisation of the business, therefore the process of internationalisation of a
family business is slower then for a non-‐family business (Lin, 2012).
To be able to internationalise requires a lot of resources for a business. The need for
financial, managerial and also knowledge is all-‐important when doing business in an
unknown market (Hitt et al., 2006). As many previous researches is saying, most family
businesses have limited resources to access and that is one reason till way that result
sometimes lower inclination to internationalisation (Gomez-‐Mejia et al., 2010). But the
global economic growth together with the opening of business activities worldwide,
internationalisation is a good way strategically for all different types of businesses.
Previous research has pointed out that internationalisation for family businesses can be
a harder challenge. They face several risks and limitations due to the family nature of the
business (Calabro et al., 2013).
2.3 Analysis Model
A model has been created based upon the facts that have been found in different
published academic sources. Different characteristics and internationalisation theories
has been selected and put together in a way that will explain the characteristics in family
businesses and their internationalisation processes. The model will be tested on family
businesses in Sweden. This to see if they have any resembling’s regarding the
characteristics and internationalisation process. It will then be found if the model is
correct and valid and if any generalisations can be made. Here five of the main
characteristics will be explained and put together in a model.
Slow pace – Several previous researches have indicated that family businesses are
having a very long-‐term orientation when it comes to internationalisation and the
process (Astrachan, 2010; Sciascia et al., 2012; Arregle et al., 2007; Calabro et al., 2013).
They are often slow in their internationalisation process and some argue that this is
because of their high-‐risk awareness and that they value non-‐economic goals while
16
other is saying that the slow pace can be a result of their limited growth objectives and
restricted financial capital (Gomez-‐Mejia et al., 2010; Astrachan., 2010). Lin (2012) also
argue that family businesses value long-‐term relationships, which cannot be built over
night and that the process takes longer time because of the fact that managers of family
businesses are more concerned with risk and keeping family control. Because of the fact
that family businesses are concerned with risk, they tend to carefully explore the new
market to be able to make the business successful without risking to much, which take
it’s fair amount of time, especially if the family business doesn’t have enough resources
to do this.
Risk awareness and control – Because of the fact that family businesses are concerned
with avoiding risk and keeping family control of the business, the internationalisation
process takes more time. But by making careful decisions and explore and research the
new market during a longer period of time family businesses have, according to
Kontinen and Ojala, (2012) the potential to change and adapt to different environments
as well as enter markets that other businesses are unable to address (Calabro et al.,
2013; Arregle et al., 2007; Chrisman et al., 2005). One can argue that this in turn will
help eliminating risks that could occur when fast decisions and poor research is made.
By avoiding risk and aim for long-‐term investments the business could benefit future
generations. A way of reducing the risk and keeping the control, but still be able to
expand and work towards the company goals is to start the internationalisation process
to a nearby country with lots of similarities.
Similarities -‐ According to Johansson’s and Vahlne’s, (1990) Uppsala model, when a
business are about to start the internationalisation process, it is easier to expand to a
nearby country which often have similar demographics, culture and language as the
country of origin. One could argue that this will save both time and resources regarding
research of the new market and product adaptation. When employees from the business
are operating in the new market the new investments are carried out with great caution
and accuracy. In the case of a family business, this will keep the family in control.
According to Bloch et al., (2012) family businesses often start to internationalise trough
small local acquisitions, without big cash outlays. By doing this in a close-‐by country
they can easier keep control while there is similarities with their domestic market
(Chrisman et al., 2005). This form of internationalisation is also a way of building a long-‐
17
term relationship with a broader community.
Patience and persistence – Family businesses tend to be very patient and persistent
when entering a new market. They carefully explore the international environment to
make the business successful. Family managers are also more willing to devote more
time and effort to be able to build, screen, select and implement strategic alliances. Bloch
et al., (2012) suggests that family businesses often invest with a 10 to 20 year horizon,
so that the investment can benefit future generations in the business. The long-‐term
orientation that comes from the desire to keep the family control is important for family
businesses, so that they are able to resist the demand of taking investments that are
needed for internationalisation only for the sake of the short-‐term efficiencies (Arregle
et al., 2007).
Strategic alliances -‐ It’s not unusual that family business have strategic alliances to
make up for the lack financial and non-‐financial resources. When family businesses
involve external parties they could gain those resources and they will also have access to
broader social networks, which can help establish important relationships with
stakeholders in new markets (Holt, 2012).
But to involve external parties can sometimes be risky due to the fact that some owners
of family businesses can be reluctant to do this since they lack the trust to non-‐family
members (The Economist, 2011). One could argue that the lack of trust can lead to
errors in communication and a hampered internationalisation process.
Economic and non-‐economic goals
According to Miller and Breton-‐Miller, (2005) family businesses have shown to outclass
public non-‐family businesses in factors like revenue growth, market valuation, return on
assets, return on equity and total shareholder returns. This is because family businesses
invest more in things including human resources and training, social benefits for their
employees, and developing in equipment. One could argue that family businesses invest
in such things because by investing time and capital and in their employees and their
wellbeing they have a greater chance to make good decisions that will in turn benefit the
business and the long term goals of the family business.
Family businesses tend to optimize their efforts to create financial wealth with their
18
efforts to fulfil non-‐economic goals. There has been proved that if a family business have
a non-‐economic goal as ground for decision-‐making, and if that decision would
jeopardize or destroy investments, a family business would avoid taking that risk to
begin with (Holt, 2012).
Importance of family
Family businesses often possess a more indebt knowledge about the business in matter
and that the commitment is very high (Sciascia et al., 2012). Other positive characteristic
that has been acknowledged is their way of having open channels of communication,
more organic structures in the business’ strategy and also the interactions among their
members of the family and business (Arregle et al., 2007).
Figure 1 – Analysing model (own construction).
In this model five circles contain different characteristics that have been found to have
some sort of meaning and effect on family businesses when they internationalise. Below
the characteristics there will be a score of either minus or plus, where one minus is the
lowest and three pluses is the highest. The plusses indicate how important the
characteristic is for the internationalisation process of family businesses. These are all
19
based on what have been found from earlier studies. This model will later be compared
with a new model that has been taken forward from the findings that will be conducted
through the interviews in this thesis. The new model will be scored in a similar way to
be able to find similarities or differences in the characteristics.
20
3. Research and Empirical Method
In this chapter the methodology are presented. It includes research philosophy, research
approach, choice of theory, choice of methodology, research design and strategy as well as
time horizon and data collection. It will outline the methods that will be used in this thesis.
3.1 Introduction
There are different and several steps that need to be taken into considerations when
writing a thesis. The steps are highly depended on each other and to easier understand
them “the research onion” will be used. The research onion is being used to explain and
demonstrate the different layers and stages that there are in a research methodology
process.
The research onion is designed and structure in the way that one starts with the outer
layer and then work towards the middle. In this thesis a similar structure is being used
and the different layers are research philosophy, research approaches, research
strategies, research choices, research time horizon and finally in the middle, the data
collection and data analysis (Saunders et al., 2012).
Figure 2 -‐ The research ´onion´ (Saunders et al., 2012, p.128).
21
3.2 Research approach
There are two different approaches regarding research; the deductive and the inductive
(Saunders et al., 2012). The deductive approach, or “from theory to empiricism” implies
that the research process starts out with one or more general expectations about a
certain idea/subject, based on previous theories and empirical findings, and there after
one collect empiric data to see if the expectations are inconsistent with reality. There are
some criticism regarding this approach where it is stated that when a researcher collect
the empirical data, he or she only search for that specific information that he or she finds
relevant and thereby tends to support the expectations that the researcher had when
the study began. By starting out with concrete expectations, the researcher is limiting
the information access and there is a risk that important information is overlooked.
The inductive approach is the complete opposite from the deductive one; “from
empiricism to theory”. Here the researchers start by collecting relevant information and
when finished with doing so they systemising the collected data and from this open
approach the theories are then formed. The aim with this approach is that nothing at all
should be able to limit the information access that the researches are collecting
(Jacobsen, 2002).
Figure 3 – Research approach model (own construction).
This thesis will take a deductive approach since a lot of literature and theories on the
subject have been used to build a new model. The model will be tested and the answers
22
found will confirm the validity of the new model. For this thesis it was important to have
a deeper understanding to be able to develop and test the new model as well as to know
what to look for and from where. Due to the fact that the problem and research question
to this thesis was to enlighten the characteristics of family businesses in the
internationalisation process, it was needed to gain, process and understand information
before creating a model that would fit the characteristics of the thesis.
3.3 Choice of theory
Since this thesis aims to find out what characterise the internationalisation of family
businesses it has been both international theories and academic information about
family businesses that has been gathered. Internationalisation theories have been
introduced so that a better understanding of how businesses internationalise can be
reached. Important is also to get a understanding of the different characteristics that
family businesses obtain and also how family businesses do tend to internationalise
themselves.
The reader will be introduced to the terms family business and internationalisation so
that an understanding of the characteristics and the main purpose of the thesis can be
reached.
3.4 Choice of methodology
There are two types of data, qualitative and quantitative. The two types are designed to
answer different types of questions, and they also provide different types of answers.
Quantitative research is used when collecting data that generates or uses numerical
data; questionnaire, graphs and statistics are here examples. Qualitative research on the
other hand used for data that generates or uses non-‐numerical data, interviews is here
an example (Saunders et al., 2012).
In this thesis the qualitative research will be used. This because the thesis aims to get a
deeper understanding of what characterise the family business when it comes to their
internationalisation process. The special characteristics of family businesses can easier
and better be found by using a qualitative research. This because a qualitative research
tries to understand the “problem” from the subjects, in this case the interviewed
23
companies, point of view. By doing a qualitative research one can really understand the
experience that the subject have and learn from it (Kvale & Brinkmann, 2009)
3.5 Research design and strategy
There are three main research designs mentioned by Saunders et al., (2012), these are
exploratory, descriptive and explanatory. The Exploratory study is used when you need
to simplify and better understand the problem and get a better insight about the topic. It
is both flexible and adaptable to change which means that the researcher need to be
open to the idea of changing the direction (Collins & Hussey, 2009). The second
research, the descriptive, is used to gain a more accurate profile on persons, situations
or events. It´s important to have a clear vision of the phenomenon before you start to
collect information. This sort of research can be linked as an extended version of
exploratory research or an explanatory research. The third research, the explanatory, is
used when to explain a relationship between two or more variables, often by studying a
situation or a problem. This sort of research will often end with statistical tests such as
correlation to get a clearer and better overview of the relationship (Saunders et al.,
2012).
The purpose of this thesis is to identify what characterise internationalisation of family
businesses and therefore an exploratory research will be used to explain and
understand this thesis research question. The reason for why the exploratory research
is being used is the fact that it will help this thesis to understand and to get a better
insight, a more deep insight of what it is that really characterise the internationalisation
process of family businesses. Due to the fact that in-‐depth interviews will be conducted,
which will be unstructured and rely on the contribution of the participants the
exploratory approach will be the most suitable for this thesis. This question has not fully
been clarified in earlier studies so there is need for insight to solve this “problem”.
Flexibility and adaptability are of great importance to get a deeper understanding of the
topic.
A qualitative research interview also seeks to find and cover both a factual and a
meaning level (Kvale & Brinkmann, 2009) In this thesis it is important to get the
understanding of both the values that lies behind a family business but also the factual,
24
the real information behind the internationalisation of them. When conducting an
interview it is therefore important to listen to both the words expressed but also what is
being said “between the lines” (Kvale & Brinkmann, 2009) The research strategy is a
plan for how the researcher will answer the research question and according to
Saunders et al., (2012) there are several different choices of research strategies.
Due to the fact that the research question of this thesis is what characterise
internationalisation, interviews with family businesses that have been internationalised
will be the most suitable alternative. When doing an interview, it is common to use a
variety of data collection techniques, and for this thesis in-‐depth interviews, together
with documentary analysis will be used to ensure that the data is valid. This will be the
most suitable alternative for this thesis because it will provide the thesis with real
information and characteristics from businesses that have actually been through the
process the thesis is about. An in-‐depth interview is being made so that there will be a
chance to really find and understand the research question on more then one level. Also
to mix it with scientific articles will give it the more deep and understanding. A
qualitative interview gives knowledge in normal language and it does not aim at
quantification. The interviews intentions is to get an understanding of the interviewees
own life experiences (Kvale & Brinkmann, 2009) This is important for this thesis
because of the fact that it is the characteristics in the different family businesses that the
thesis want to uncover.
3.6 Time horizon
There are two different types of time horizons, the cross-‐sectional and the longitudinal.
The longitudinal research allows you to study one area of topic over a long period of
time to see developments and change, while the cross-‐sectional research is more like a
snapshot of the phenomenon (Saunders et al., 2012).
The cross-‐sectional time horizon was used, since this thesis aims to find out what
characterise internationalisation in family businesses the interviews was being
conducted with family businesses that had already been internationalised and therefore
its not necessary to have a longitudinal time horizon. The fact that an
internationalisation process often is a long period of time is not the important in this
thesis. To get to understand the characteristics of the family business, this thesis will
25
only need the information that they have collected during the time of the
internationalisation process.
3.7 Data collection
When collection data there are two different types of data, primary and secondary data.
Primary data is data can be explained as new information, information that will be
gathered specifically for one purpose (Saunders et al., 2012). Primary data can be
obtained by different methods such as, survey research, experiments and observations.
Secondary data is information that has already been collected by some one else for
another purpose. This can be either raw data where little or nothing have been
processed or complied data where the data has either been analysed and/or
summarised (ibid).
In this thesis primary data will be used. The primary data is being used because of the
fact that this thesis aims for a deep understanding about and for the chosen area of
topic. The primary data will be collected thorough in-‐debt interviews. The interviews
will take place with different persons from different family businesses in Sweden. We
are also going to complement the findings from the primary data together with the
academic journals and books to be able to ensure the validity.
3.8 Sampling
Samples are sub groups of the population and by studying samples the researcher
should be able to draw conclusions that are generalizable to the population of interest
(Sekaran & Bougie, 2011). To collect data from all possible members of a population is
called a census. This is often impossible to achieve due to restrictions both in time,
access and money (Saunders et al., 2012).
There are two types of sampling techniques, probability and non-‐probability. The
probability sampling indicates that the chance of a member of the population to be
chosen is known and is usually equal for all cases while non-‐probability sampling
indicates that the chance of a member from the population to be selected is not known
(Sekaran & Bougie, 2011). This thesis is using a non-‐probability sample technique but
with a combination of opportunity sampling and a purposive sampling. The respondents
were randomly chosen within the framework of family businesses, the selected sample
26
is three family businesses in the producing industry in Sweden. The respondents in the
different family business that were chosen were both family members and non-‐family
members, this to get a more correct and valid picture of the company. The choice of
companies was based on two facts, that they were a family business and that they have
had some sort of internationalisation activity.
3.9 Method of Analysis
A method of analysis exists to help organise the interview texts, to condense the
meanings into forms that fits the main purpose of the thesis and also to work out
implicit meanings of what was said (Kvale & Brinkmann, 2008). It is important to always
have the purpose for the thesis in mind when the analysis of the collected data takes
place; it is the purpose with the thesis that keeps the researchers on the right track. To
have the main purpose in mind makes it easier to become more effective and to bring
forward relevant and right information (Krueger & Casey, 2000).
Before the analysis can start the researchers need to condense and interpret what was
said during the interview and after that structure all the material that the interview has
brought forward (Kvale & Brinkmann, 2008). In this thesis the interviews were
recorded, this so the interviewers wouldn’t miss any important information. All the
interviews were then transcribed. After the information was transcribed the analysis of
the information began, this with the purpose and problem of this thesis in mind. The
researchers need to make the material fit the analysis, this for example by eliminating
material that is not needed, take away repetitions and distinguishing between essential
or non-‐essential material. What is essential or non-‐essential depends on the purpose
and problem for the thesis (Kvale and Brinkmann, 2008).
In this thesis the information not concerning the field of topic were taken away so all the
focus ended up with the important information concerning the topic of this thesis. In the
analysis chapter the information that best suited the purpose and problem of this thesis
is brought forward and further analysed.
3.10 Operationalization
The operationalization was conducted to collect primary data of the characteristics of
internationalisation of family businesses. The primary data was collected by interviews
27
with family businesses in Sweden that has internationalised in one way or another. The
interviews were semi-‐structured which makes the understanding more deep. A semi-‐
structured interview gives the interview the purpose of obtaining descriptions of the life
world of the interviewee, this so the interviewer can interpret the meaning of the
described experiences (Kvale & Brinkmann, 2009, p.3) The order of the questions are
not of relevance and since it is a semi-‐structured interview the interviewees are able to
talk freely and may answer questions that are planned to be asked later in the interview.
This make that a semi-‐structured interview comes close to an everyday conversation
between two or more people, but it involves a specific approach and techniques of
questioning by the interviewer (Kvale & Brinkmann, 2009, p.24) The interview
questions were before the interview translated into Swedish because of the fact that the
companies are active in Sweden and manage by swedes.
3.10.1 Interview description
3.10.1.1 Internationalisation
Internationalisation refers to an increase of involvement in international operations in
other words the expansion of the business across boarders (Akpinar, 2009). It has
during the last couple of years become on of the most strategies for companies to
achieve sustainable growth (Ruochen et al., 2012).
Questions are asked to find out how the companies have been internationalising outside
of Sweden. Overall all question have to do with internationalisation but specifically
question 6-‐7, 9-‐14 and 24.
3.10.1.2 Slow pace, patients and persistence
Several researches have indicated that family businesses are having a very long-‐term
orientation when it comes to internationalisation (Astrachan, 2010; Sciascia et al., 2012;
Arregle et al., 2007; Calabro et al., 2013). Questions are asked to support this argument
and can be found in questions 13 and 15-‐17.
Family businesses tend to be patients and persistence when entering a new market.
They carefully explore the new market and family managers are more willing to devote
more time and effort to make business successful (Bloch et al., 2012). Questions that
may include answers dealing with patients and persistence are to be found by questions
28
number 13 and 15
3.10.1.3 Similarities, risk awareness and control
Johansson and Vahlne (1990) suggested in the Uppsala Model that it is easier to for a
company to expand to a nearby country, which often have similarities to the country of
origin. Questions that may include answers dealing with similarities is to be found by
questions number 11 and 12.
It has been stated that family businesses are more concerned with keeping the family
control of the business and avoiding risk. Questions will be asked to examine if the
stated information above is credible. Questions that possible include answers dealing
with this area may be question number 15-‐19.
3.10.1.4 Economic and non-‐economic goals
Family business are more concerned about the non-‐economic goals which can be the
interest in employees and their well being and the possibility to make relationships that
will benefit the business in the longer run for the family. Often family businesses want to
achieve their economic goals by improving the non-‐economic ones. (Holt, 2012; Miller &
Breton-‐Miller, 2005). Questions that possible include answers concerning this area can
be question 7 and 8.
3.10.1.5 Importance of family
Family members of a family owned company tend to feel more commitment and
responsibility towards the business and its employees. They often have a more open
communication and closer relationship between management and employees (Sciascia
et al., 2012; Arregle et al., 2007). To answer that question, questions number 20 and 21
will be asked.
3.10.1.6 Strategic Alliances
It is not unusual that family businesses have strategic alliances to make up for the lack of
resources (Holt, 2012). Questions include strategic alliances is to be found at questions
number 22 and 23.
3.11 Credibility
3.11.1 Reliability
As many authors points out, the reliability is to reduce mistakes and errors and make
29
sure that the research is yield with consistent findings. One can say that if the same
research is being conducted in the future using the same method as previous one, will
there be matching findings and conclusions? Saunders et al., (2012) is pointing out three
different questions to test the reliability.
Will the measures yield the same results on other occasions?
Will similar observations be reached by other observers?
Is there transparency in how sense was made from the raw data?
There are four threats that are pointed out by Saunders et al., (2012). The first one is the
subject or participant error. Means that different results can occur if the research is
done at different times of the day. One way to reduce this error is to conduct the
research on a more neutral time of the day. The other is subject or participant bias
which is saying that the interviewed person don’t describe what they know, except what
they believed that others wanted them to say. This error can be reduced by offer the
respondent the choice of anonymity. The third is the observer error. Different observers
can direct the same question in different ways and this can be resolved by having very
structured interview questions or use the same observer at all interviews. Finally the
fourth is the observer bias; here the observers may interpret the answers differently.
This can be resolved by using the same or trained observers.
For this thesis, during the interviews only one person will act as the interviewer, this in
order to keep the interview at the same level and also in the same tone. If not, it can have
an affect on how the respondent answers the questions. There has been found that
different interviewers, using the same interview guide can get different answers and
statements from the interviewee. This has to do with the different levels of sensitivity
that the interviewee feels towards the interviewer (Kvale & Brinkmann, 2009) To
overcome the problem with contradictory only one person will conduct the interview as
mentioned, and to overcome sensible questions there will be a chance for the
respondent to be anonymous. To make sure that the data is correctly analysed, both
observers will analyse it.
3.11.2 Validity
There is different threats to validity that have been put forward by different authors.
The most common is when the researcher wrongly concludes that there is an actual
30
relationship between two variables, when there is actually a third factor influencing the
outcome. Validity defines whether the research truly measures what it was intended to,
or how trustworthy the research results are.
Researchers generally determine validity by asking a series of questions, and will often
look for the answers in the research of others.
Some qualitative researchers means that the term validity is not appropriate in a
qualitative research, but at the same time, they argue that there is a need for some kind
of qualifying measure for their research (Golafshani, 2003). For example, Creswell and
Miller, (2000) suggest that the validity is affected by the researcher’s perception of
validity in the study and his/her choice of paradigm assumption.
To collect as valid answers from the interviews as possible, for this thesis the questions
were strategically planned, prepared and carried out. Since there are two researchers
for this thesis, there is a higher level of validity since there could be a discussion about
the interpretation for each interview between the researchers (Golafshani, 2003).
3.12 Ethics
Ethical problems when conducting and interview occur particularly because of the
difficulties of researching private lives and placing that information in the public arena
(Birch et al., 2002). When collecting data, ethics in business research refers to a code of
conduct. The ethical code of conduct applies to all the involved parties of the research,
the researchers are responsible for making the respondents feel comfortable and not
pressured and the respondents should not misguide the researchers with falsely
answers. The researcher should conduct the data collection in good faith, pay attention
to what the results indicate and pursue organisational rather then self-‐interests
(Sekaran & Bougie, 2011).
When the interview questions were created it was of much importance that the
respondents were to feel comfortable and could talk freely without feeling pressured to
answer in a certain way. The respondents that were asked knew that they could choose
not ta participate and that their identity were kept anonymous. To get the most honest
answers no information about the company as a whole, its budget, strategies, business
partners and suppliers and customers will be reviled in this thesis to avoid putting the
company in an unethical situation.
31
Interviewing is a prime area in which means are as important as the end. If unethical
means are used, then the end cannot be trusted to provide valid information (Sekaran &
Bougie, 2011).
32
4. Result
In this forth chapter the result from the interviews are presented. It begins with a small
introduction of every company and their international activities. It continues with five
subheadings that characterize the internationalisation process. The chapter ends with a
summary of all the results and a clarifying matrix.
4.1 Introduction
For this thesis three different family businesses have been selected for interviews. To
gain as much understanding and different aspects from the interview there have been
various amount of respondents from each company. In two of the companies there has
been interviews with a non-‐family member, which will give the thesis a broader view of
the company. The family businesses that have been interviewed are active in different
industries and all of them have activities abroad.
Company A Status Sex Family/non-‐
family
member
Years in
company
Person 1 CEO/part
owner
Male Family 20 years
Person 2 Controller/part
owner
Female Family 7 years
Person 3 Production
worker
Female Non-‐family 30 years
Company B
Person 1 Chairman and
main owner
Male Family 20 years
Person 2 CFO Female Family 13 years
Person 3 Foreman Male Non-‐family 17 years
Company C
Person 1 Chairman/Sales
manager
Male Family 28 years
Person 2 CEO Male Family 20 years
Figure 4. Matrix over the interviewees (own construction).
33
4.2 Interview with company A
Company A is a production company, located in the southern parts of Sweden. The
company produces and surface finishing both simple and more complex pieces of sheet
metal in large series to their customers, primarily the automotive industry.
The company is a family company in the third generation and is currently managed by
three siblings. Company A currently employs approximately 200 people and had a
turnover of 390 million Swedish Crowns in 2012.
Company A have no own production outside of Sweden but they are having both import
and export activities from Germany, United Kingdom, USA and Asia.
The CEO of the company is handling the international activities of the company but he
cannot recall the first international activity that the company had. This is due to the fact
that he is the third generation of the family to run and control this company.
The controller and co-‐owner of the company says that she is well aware of all the
international activities that the company are part of, but she has not part of the decision
making process.
The representative from the production believes that the employees working in the
company are all aware of the international activities that the company is taking on.
They are getting weekly updates and they are having an open discussion about it.
All the respondents from Company A believe that the international activities will
increased in the next coming ten years, primarily regarding the export sector.
4.2.1 Strategic alliances
The company is producing parts to two large Swedish companies in the automotive
industry. The CEO explains that the company produces and then sends the parts to its
partners, and that the partners later send the parts abroad to the final customers.
The CEO further explains that the strategic alliances are with two large companies who
have outsourced some activities to Company A.
“Without our partners Company A would not have had this large amount of export, our
partners have such a broad export area which we also benefit from” (CEO of Company A,
13-‐04-‐15). The controller of Company A believes that the company have become more
known in the market and gained a good reputation in their industry thanks to the
cooperation with their strategic partners. The production worker of Company A is
34
aware that the company is part of these strategic alliances but has no specific insight in
the partnerships. “It´s an open dialogue of what is going on in the company. Concerning
the activities abroad, I have no part in that except for production purpose” (Production
worker in Company A, 13-‐04-‐17).
4.2.2 Similarities, risk awareness and control
The CEO explains that it is not the similarities or distance to another country that makes
the decision of where an activity abroad is taking place, it is the price and quality that is
the most important aspect. “Sweden has been ousted by China when it comes to price
and quality in our sector.” (CEO of Company A, 13-‐04-‐15).
The controller is explaining that most of Company A´s international activities are based
upon where their strategic alliances have their factories, and that is nothing Company A
can have a say about.
Company A do not take any major risks, they wishes to build long relationships and do
investments that are beneficial in the long run says the controller.
Company A has always been very cautious, most of the investments that are being made
are being done with our own resources, it is rare that the company lease equipment; we
have our own states the CEO. The controller is adding that Company A rarely take any
external help from banks and in that way adding risk to the company, “We have a strong
company that my father has been building up over a long period of time and the
company have always made good money” (Controller of Company A, 13-‐04-‐17).
“We do not take any major risks, I would never jeopardize the company for an
investment” (CEO of Company A, 13-‐04-‐15).
The production worker do not believe that the company is taking any risks when it
comes to investments, “They are too economic for that” (Production worker in Company
A, 13-‐04-‐17).
35
4.2.3 Economic and non-‐economic goals
In this company the economic and non-‐economic goals are an interaction with each
other and the CEO believes that to be able to gain profitability for the company it is
important that the employees are healthy and comfortable in the company, only then
can quality products and customers satisfaction be achieved.
“An interaction between the two is essential to be able to achieve good financial results”
(CEO of Company A, 13-‐04-‐15). The controller is more oriented towards achieving the
economic goals, but mention that there have been major improvements regarding the
wellbeing of the employees during the last couple of years.
The production worker says that in her sector of the company they are more concerned
with and focused on the economic goals. She adds that in the last couple of years the
company have been focusing more and more on the non-‐economic goals as well, but it is
the economic goals that seems to be more important.
4.2.4 Importance of family
Company A is owned by three siblings in the third generation of family members. The
CEO and the Controller believes that it is both important and beneficial to run a family
business. Personal connection and dedication to the company is two of the things that
make it easier to work closely together to achieve the common goals say the CEO. “It is
very important to have a personal commitment to the company and you become more
dedicated and motivated towards the company because of the fact that you have a
personal interest” (CEO of Company A, 13-‐04-‐15). The Controller is saying that
Company A has benefitted from being a family business because they are relatively small
and can be very flexible when it comes to decision-‐making. Since the management have
an open dialogue with their employees, the employees feels closer and more secure
since they always know what is going on within the company says the production
worker. “To work in a family business gives you more benefits and everyone have a
closer relationship to the management” (Production worker in Company A, 13-‐04-‐17).
4.2.5 Slow pace, patience and persistence
The CEO explains that the time horizon regarding new activities abroad is dependent on
the complexity of the product, and that it often varies. He further explains that the
company is looking at different suppliers, discussing prototypes and price, and then they
36
test the prototypes in the factory and make their own quality checks. The time can vary,
but it usually takes about six months for this process.
4.3 Interview with company B
Company B is a trading company without their own production, which trade packaging
solutions and other materials for the construction industry.
The company is a family company in the second generation and is located in the
southern parts of Sweden. Company B’s chairman took over the company from his father
in 1992, but left the post for an “external” CEO in 2009, that is a non-‐family member.
Currently company B employs around 50 people and had a turnover of 470 million
Swedish Crowns 2012.
Company B are exporting to Norway and Finland and have imports from Germany, the
Middle East and Asia. They are also trading with some local Swedish businesses.
The chairman and main owner of the company explain that Company B is a trading
company without any own production. All three respondents from Company B believe
that international activities, both import and export has increased during the last couple
of years. It is believed that Company B will get more and more dependent of good
contacts in both Europe and the Middle East says the CFO. The chairman states that
“growth includes finding new products to offer its customers and this contains finding
both domestic and international partners that can help us” (Chairman of Company B, 13-‐
04-‐19).
4.3.1 Strategic alliance
The Chairman of the company is explaining that since Company B is a trading company,
they are dependent on their suppliers and approximately half of their suppliers come
from abroad. The business is totally dependent on this activities, price is one of the main
reasons for going abroad, “ it’s important to find innovative suppliers with new ideas,
which are the things we are benefitting from” (Chairman of Company B, 13-‐04-‐19).
The Foreman of the company says that he is aware of the strategic alliances that the
company are part of and that 80% of the products that Company B is selling to Europe is
purchased from Asia.
37
4.3.2 Similarities, risk awareness and control
All three respondents from Company B agree that the company rarely takes any risks.
One example is that they don’t pay until the products have arrived and they always
make sample delivery before the real delivery is being made says the Chairman.
The CFO express the importance for Company B to build a long-‐term relationship with
the suppliers, and to examine the suppliers before any relationship can take place, to see
whether their economy is reliable.
The globalisation has made the business market smaller and thanks to the new IT that is
available and that almost everyone speaks English today, the communication is much
easier. This means that there is not such a big difference between making business with
China or Germany, as it once was states the Chairman of Company B.
4.3.3 Economic and non-‐economic goals
The economic goals are very important, it’s important with profitable a operation, but
one could not gain that if not working properly with the fundamental values of the
company says the Chairman. The Chairman also express that the company work towards
good long-‐term relationships. “To educate executives to have a good leadership, and to
work a lot towards satisfaction of the employees and that they are working in a safe
environment in which they can develop and grow in are important tools in a company
today” (Chairman of Company B, 13-‐04-‐19). All three respondents of Company B are in
agreement that the economic and non-‐economic goals go hand in hand, but the CFO
expresses that the economic ones are slightly more important. “A company need to
make profit to be able to develop and grow” (CFO of Company B, 13-‐04-‐22).
4.3.4 Importance of family
All three respondents from Company B feels the importance of a family business, they
feel like there is a good atmosphere, good solidarity, open communication and that their
business are appreciated by others. “It feels good to be a family business and it is
appreciated by others, a family business stands for a number of values which are
important” (Chairman of Company B, 13-‐04-‐19).
38
4.3.5 Slow pace, patience and persistence
The time it takes with the establishment of new international activities can vary a lot
between different products says the Chairman. The CFO is saying that our company is
actively looking for new relationships and it is important that they have the same values
as us when doing business. The Chairman further explain that some of the company’s
products need to be approved by the government and in that case the procedure can
take almost one year, while if the product is of a simpler character, it can go as fast as a
week. “One of the many benefits of being a family business is that we are able to make
fast decisions when we need to” (Chairman of Company B, 13-‐04-‐19).
4.4 Interview with Company C
Company C is a company who produces concrete elements to the construction industry
as well as they have a licencing agreement for chimneys, which is sold in Russia and
USA. Company C is a family company in the second generation and is managed by two
siblings. The company is located on the Swedish west coast and employs around 70
people today. 2012 the company had a turnover of 150 million Swedish Crowns.
Company C is as mentioned dealing with import from Iceland and export to Norway and
Russia. They also have a licensing agreement with a company from the USA.
Both the Chairman and the CEO of Company C believes that the internationalisation of
this company have increased a lot in the upcoming 10 years and that they have a bigger
share of the global market then they have today.
“There will be more indistinct boarders which will make the business process easier”
(CEO of Company C, 13-‐04-‐25).
4.4.1 Strategic Alliance
The licensing part of our company is the strategic alliance and this partnership has
benefitted our company in that sense that we are now global says the Chairman. Thanks
to this we do now operate in different parts of the world he adds.
4.4.2 Similarities, risk awareness and control
The Chairman is explaining that the export to Norway is easy since the countries are
quite similar in different business aspects. He continues saying that they are more
39
liberal when it comes to payments but besides that there is no problem. Both the CEO
and Chairman of Company C are saying that it’s important to have built a relationship
and to have the right feeling with the partners abroad. “Its important to have a dialogue
with the buyer/seller, since trust and reliance is very important for this company” (CEO
of Company C, 13-‐04-‐25). We do not take any unnecessary risks in this company says
the CEO, “We rather back off then doing business if it doesn’t feel one hundred per cent
right” (Chairman of Company C, 13-‐04-‐24).
4.4.3 Economic and non-‐economic goals
Both the CEO and the Chairman believes that there is a connection between the
economic and the non-‐economic goals. If the employees are happy, the company is going
to do better says the CEO.
“It’s more important to have the organisation in order and a good structure rather then
only making profit, but it is also nice if the company is doing well, that’s good for
everybody” (Chairman of Company C, 13-‐04-‐24). We have a big social commitment for
our employees, and we want them to enjoy the workplace and feel good says the CEO.
4.4.4 Importance of family
Both the CEO and the Chairman of Company C express the importance of being a family
business. There is a certain feeling of being a family business and it comes with certain
values and responsibilities say the CEO. “We are both in the second generation of family
members in this company” (CEO of Company C, 13-‐04-‐25). The Chairman says that he
really would want the succession to move forward to the next generation as well.
4.4.5 Slow pace, patience and persistence
The CEO explains that the time horizon for new products varies a lot depending on how
complex the product is. Sometimes the products have to be approved by the
government; in this case it can take up to six months adds the CEO. The Chairman says
that if operating with smaller businesses it often goes a lot quicker. The market in
Sweden is saturated so we feel that we have to move across borders to be able to expand
and keep the employees, “but one have to wait for the right time and place” (Chairman of
Company C, 13-‐04-‐24).
40
4.5 Summary of results
All respondents from Company A, B and C were aware of the fact that the company they
work in is having international partners and activities abroad in some matter.
Even if they do not have a part in the international activities they get updates and
information about the companies activities abroad. All three companies have both
import and export operations with countries both inside and outside of Europe. The
respondents from all the companies are seeing an increase in internationalisation in the
next ten years and this due to globalisation and more indistinct national borders.
4.5.1 Strategic alliance
All companies have important strategic alliances with international businesses and they
all benefit from the relation. They benefit in that matter that they are now global,
connecting with more numerous companies and making profit. Some of the respondents
are aware of the strategic alliances but have no part in that process.
4.5.2 Similarities, risk awareness and control
The respondents are all consistence with the fact that price and quality is more
important then similarities between the countries doing business. The differences
between countries have become smaller and there is sometimes no difference, between
doing business with a European country and an Asian country.
They are also consistent when it comes to risk; no one is taking unnecessary risk, or in
some cases no risk at all. If they do, they are always aware of the consequence, rather
safe then sorry. They say that if the relationship doesn’t feel right, they rather back off
and wait for another opportunity.
4.5.3 Economic and non-‐economic goals
Almost all of the respondents said that it was of high importance to value the economic
and non-‐economic goals equally. They said it was an interaction between a positive and
healthy staff, satisfied customers and profitability. One respondent thought that the
economic goals were of more importance, but that the company had a better
relationship with the employees than many other non-‐family businesses.
All of the companies hade large social involvement in their employees and saw their
wellbeing as an investment for the company.
41
4.5.4 Importance of family
All of the respondents thought it was important that the company they worked for were
a family-‐business. The management said that they had benefitted from the open
dialogue with the employees and that they could be more flexible and faster in the
decision making process since they had a smaller management team.
All respondents said that they felt a good atmosphere in their workplace and that they
knew what was going on within the company. All respondents from the management
were in the second or third generation of family members in the company and one of
them felt that it would be nice if the company continued in the succession.
4.5.5 Slow pace, patience and persistence
The respondents that were in a management position said that the process of
internationalisation took various amounts of time, depending of the complexity of the
product in question. They said that it often took from six months up to a year if the
product were to be approved by the government, but sometimes as fast as a week if the
product were of a simpler character.
4.5.6 Clarifying Matrix
Figure 5 – Clarifying matrix over the answers from the interviewees (own construction).
This matrix summarises the information that the respondents gave during the
interviews concerning the main characteristics of family businesses and their
internationalisation process. In the first column the letters A-‐C stands for which
42
company the respondents are from and the numbers is there to be able to separate the
respondents from each other. The second column identify if the respondent is a family
member of the family business or not. The third identify if the respondent are aware of
the fact that the family business have any strategic alliances or not. The fourth identify
how aware the company is about risk and which level of control they have. The fifth
column identifies what the respondent feel the company value higher, economic or non-‐
economic goals. The sixth column identify whether the respondent think that the
presence of family members is of value. The seventh column identifies if the respondent
think that a new international activity have a long time horizon or not. The last column
identifies how many similarities the respondent think that domestic market has to the
international market.
43
5. Analysis
In this fifth chapter the analysis of the result will be presented. All the results from the
interviews and the summary of results will be analysed and a new adjusted model will be
presented at the end.
Melin and Nordqvist (2007) argue that because of the increasing attention to family
businesses, businesses within this sector show a lot of similarities. Many of the
characteristics do have the same importance for the different companies that are taking
part of this thesis. This also means that the different family businesses face similar
challenges. This can for example be ownership, the generational succession issue and in
this case the internationalisation (Melin & Nordqvist, 2007).
5.1 Company A
After having conducted interviews with Company A, a lot of different characteristics
were brought forward. Some of the characteristics were consistent with prior findings of
this thesis, whereas some new findings diverged to earlier models and academic
journals. Company A have benefitted from having strategic alliances with larger
international companies, and they wouldn’t have had such a large network without it. By
examine new external partners before entering a new relationship Company A is able to
reduce the risks; these results are supported by Holt (2012) and The Economist (2011).
The CEO was not sure about where the first activity outside of Sweden was, but one of
the early ones were in China. This was due to the fact of a much more beneficial import
price and quality of the products. “Sweden has been ousted by China when it comes to
price and quality in our sector.” (CEO of Company A, 13-‐04-‐15). This activity conflict
with the findings of the Uppsala Model that the first activity is in a market close by.
Nowadays Company A still chooses to import from where prices and quality are more
beneficial, rather from a similar market. Regarding their export, they have little to say in
the matter, since that decision lies with their strategic partners. Company A does very
rarely take any major risks, which is a common characteristic within a family business.
“We do not take any major risks, I would never jeopardize the company for an
investment” (CEO of Company A, 13-‐04-‐15). This is consistent with prior data that has
been brought forward in this thesis, from among others Kontinen and Ojala (2012)
44
Another main characteristic that have been enlightened in this thesis is that family
businesses tend to value the non-‐economic goals higher than the economic ones. After
conducting this interviews it was clear that the non-‐economic goals were very
important, but they high-‐lightened the importance of the interaction of the both.
“An interaction between the two are essential to be able to achieve good financial
results” (CEO of Company A, 13-‐04-‐15). According to Sciascia et al., (2012) and Arregle
et al., (2007) there is something special with a family business. This highly agrees with
what all of the respondents said during the interview. The respondents felt more
connected and had a deeper understanding of the company.
Many previous researches are saying that the internationalisation process for family
business has a longer time horizon (Astrachan, 2010; Sciascia et al., 2012; Arregle et al.,
2007; Calabro et al., 2013). This could be the case for company A but it always
depending on the complexity of the product. When exploring different options and
markets before making a final decision, it can in some cases take a longer time. This has
however very little to do with the fact that Company A is a family business; it is rather
the risk avoidance that matter in this case.
5.2 Company B
When conducting the interviews and findings from Company B there were some
characteristics that were consisting with the prior data and some that were not. As
previous mentioned researchers have stated, family businesses often start strategic
alliances due to lack of resources of their own. This is not the case concerning Company
B, since Company B is a trading company whose business idea is to buy products from
one supplier and selling them forward.
As earlier stated, family business rather have business relations in nearby countries is
not exactly the case for Company B. Company B have international activities both in
close by countries and in countries further away, but the reasons for it is not similarities,
rather the price and the opportunity to gain a long term relationship with trading
partners. Company B is very risk awareness and if they do need to take some risks they
45
are fully aware of the consequences, which follows the patterns for family businesses in
general (Calabro et al., 2013 & Arregel et al., 2007).
The fact that family business would value non-‐economic goals higher then the economic
is not completely the case for Company B. One respondent points out the importance of
profitability and economic goals, while the other two respondents in Company B felt that
an interaction between the two would be more beneficial. “A company need to make
profit to be able to develop and grow” (CFO of Company B, 13-‐04-‐22).
The chairman explained that the employees are a resource that the company need to
invest in, Company B are for example educating the executives so they are able to take
on a leading role. This is a characteristic that Miller and Breton-‐Miller (2005) have
mentioned.
Both the family members and the non-‐family member of the company express the
benefits with being a family business. They mention the more open communication that
exist as well as the closer relationship with the employees. They agree on the fact that
being a family business is more then just being a business. Other researchers mention
the fact that family business does have more open channel of communication and a
closer relationship between the employees and the management (Arregle et al., 2007).
The management in the company are saying that one of the benefits of being a family
business is that they can take fast decisions if needed but it all depends on what kind of
product it is concerning. The internationalisation process for the company may take
some time, and that go hand in hand with the risk awareness of the company. Risk
awareness and a longer time horizon are well known characteristics of family
businesses (Astrachan, 2010; Sciascia et al., 2012; Arregle et al., 2007; Calabro et al.,
2013; Gomez-‐Mejia et al., 2010; Lin, 2012).
5.3 Company C
For Company C there were some aspects agreeing with previous findings as well as
disagreeing. The strategic alliance of Company C has benefitted them by giving the
company a much bigger exporting area. They have a bigger network of both suppliers
and customers. These activities is nothing that the company could have done by
themselves in Sweden, so the strategic alliances that they have was a necessary business
and one way they chose to gain and possess the resources that they missed (Holt, 2012).
46
In contraries to the other companies, Company C have begun their internationalisation
process, with exporting to Norway, according to the Uppsala Model. Even Company C is
very risk adverse and would rather start a long-‐term relationship based on trust rather
then a one-‐time business deal. “We rather back off then doing business if it doesn’t feel
one hundred per cent right” (Chairman of Company C, 13-‐04-‐24).
In company C the fact previous stated by Miller and Breton-‐Miller (2005) that family
businesses values non-‐economic goals higher then economic ones, is accurate. The
chairman expresses his concern of the importance of the social engagements in the
employees. He states, “if the employees are happy, then the company is doing better”
(Chairman of company C, 13-‐04-‐24). Even though making profit is an important aspect
of a business, he really points out that the well being of the employees is more valuable
for him and his company.
Company C value the fact that it is a family business and explains that one get a deeper
understanding of the business and care for it on a personal level, which according to
Sciascia et al., (2012) is a common characteristic for a family business. Regarding the
time-‐horizon, it depends on what kind of product it concerns. As for many family
businesses, Company C impose the importance of wait for the right time and place to
make a good business deal, which is a common known pattern for family businesses.
5.4 Summary of analysis
5.4.1 Strategic alliances
For all the companies the strategic alliances have helped them to grow and gain a larger
market share in their area of business. They all express the importance that the alliances
have to their companies. Company B are totally dependent on the strategic alliance
while the other two are heavily dependent on them. It’s not really the lack of resources
that have made the companies enter strategic alliances; it’s more about the possibilities
and benefits.
5.4.2 Similarities, risk awareness and control
For all of the companies, the most important factor of operating abroad is the price and
quality aspect rather then similarities between the countries. They all express that
todays business market are very integrated and there is as easy making business in Asia
47
as in Europe. This is due to the fact of technology development and less language
barriers. Risk avoidance is common for all the three companies. They are rather safe
then sorry and are working proactively to reduce any unnecessary risk. They all want to
build long-‐term relationships so the need for deeper research is necessary. This is also a
way of obtaining control.
5.4.3 Economic and non-‐economic goals
Most of the respondent are in agreement of the fact that the economic and non-‐
economic goals are interconnected. All the companies are however in agreement that
the economic goals are important for a company’s survival. They all stress the fact that
they feel the importance of the well being of the employees. All three companies have
great social engagement with the employees and feel the need of investing in them and
their development. They all care a lot for their business and want to see it profitable, and
for the business to do this it is important with developed, healthy and happy staff.
5.4.4 Importance of family
They all feel that they are benefitting from being a family business. Both the family
members and the non-‐family members agree that it is a more open communication
between the employees and the management. There is also a more likable atmosphere
in the working place within a family business. To be a family business means the option
to make fast decisions and be more flexible, which they explained has benefitted them in
different business relations. They all want the succession to continue and value the fact
that the business is a family business.
5.4.5 Slow pace, patience and persistence
All the three companies argue that depending on what kind of product is concerned, the
time horizon is different. But they all stress the fact that explore and investigate the
market or potential partners before entering a new business is important and that
increase the time horizon. This may have to do with the risk avoidance that all the three
companies possess, to avoid risk there is need for more research and that makes the
decision making process longer then for other businesses.
5.4.6 Adjusted Model
From the analysis one can see that some of the characteristics were more prominent
than others. The characteristics have in the new adjusted model been graded with plus
48
and minuses depending on how noticeable they were among the interviewed family
businesses. Importance of family, strategic alliance, non-‐economic goals and risk
awareness and control are the characteristics that have gotten three pluses, and which
are the characteristics that were most central during the interviews. The respondents
were all agreeing on the fact that the businesses were very risk advert and would not
jeopardize the company with unnecessary risk. Both family members and non-‐family
members emphasised the importance of family presence in the company and that non-‐
economic goal were of high value, but at the same time interacting with the economic
goals. All the companies have strategic alliances and whose are of high importance for
the company’s survival. The least prominent characteristics were the similarities. The
company’s international activities were based on price and quality rather than
similarities in markets. The characteristic of slow pace, patience and persistence were
not a common characteristic in the family businesses, the time horizon were dependent
on the complexity of the products and activities rather than if the company was a family
business or not.
Figure 6 – Adjusted model (own construction).
49
This adjusted model has some diversity from the previous model. The score below the
characteristics is the same as in the previous model, this in order to easier be able to
compare the two with each other. But there has been discovered that some of the
characteristics did not belong with each other, so it was decided to separate them. This
was done so that the analysis of this thesis could be properly done. The economic and
the non-‐economic goals were separated, this because of the fact that all the respondent
companies valued them separately but also expressed the importance of cooperation
between the two. That is why they were separated in the adjusted model but still got a
connection between them with the arrow. Other characteristics that were being
separated were the similarities, risk awareness and control. In the conducted interviews
it was showed that similarities and risk didn’t belong together due to the fact that todays
companies don’t take similarities into that much consideration as was previously
believed. Making business with countries far away is not longer believed to be more
risky then to make business with your neighbours.
50
6. Conclusion
This is the final chapter of this thesis and it includes a conclusion of the findings, practical
implications, critical reflections, ethical considerations and some ideas for future research.
6.1 Conclusion of findings
From prior theories and internationalisation models a new model has been developed.
The model was developed from characteristics that previously had been found within
other models, theories and academic journals, of different family businesses (Sciascia et
al., 2012; Arregle et al., 2007; Bloch et al., 2012; Chrisman et al., 2005; Johansson &
Vahlne, 1990; Kontinen & Ojala, 2012; Calabro et al., 2013; Gomez-‐Mejia et al., 2010;
Astrachan, 2010; Lin, 2012). Three different Swedish family businesses from different
industries were examined to test the strength and rightness of the model.
After analysing the data collected from the interviews it was indicated that some of the
characteristics were consistent with the findings in the previous research and some
were not. As one can see in the matrix below, importance of family and the economic
goals are consistent from the findings in the initial model. From the previous research
the characteristic strategic alliance didn’t seem of such high importance as it then
revealed to be. The characteristic slow pace, appeared as very common among family
businesses, but after the analysis it was found that the time horizon was dependent on
the complexity of the product and not on the fact that it was a family business. From the
analysis it was found that family businesses don’t internationalise due to similarities
between markets, it is rather dependent on other features such as quality and price. The
characteristics risk awareness and control and non-‐economic goals were both found to
be more prominent than earlier believed. The characteristics were further divide in the
adjusted model since the companies valued them independently.
51
Importance
of family
Strategic
Alliance
Similarities Risk
awareness
and
control
Slow pace,
patience
and
persistence
Economic
goals
Non-‐
economic
goals
Analysing
Model
+++ + ++ ++ +++ ++ ++
Adjusted
Model
+++ +++ -‐ +++ + ++ +++
Figure 7. Comparison between analysing model and adjusted model (own construction).
The research question for this thesis states; what characterises the internationalisation
process of family business? After the interviews that were being conducted it was clear
that characteristics for these family businesses lies in the value of being a family
business. Both family members of the company and the non-‐family members value the
fact that it is a family business. The family businesses want all the employees feel like
being a big family. Hand in hand with this come the non-‐economic goals. This
characteristic stood out, all three family businesses cared highly for the non-‐economic
goals, it was important for them to satisfy the employees and care for the company
rather then to make huge profits. The companies didn’t to take any risk, a characteristic
that also belongs to wanting to keep the family.
6.2 Practical implications
There are a lot of previous research in the area of family businesses and how they tend
to internationalise, but there are gaps in the area of what the main characteristics that
makes them successful are. This thesis will be help to fill that gap.
This thesis tries to fill the gap in the research field of what characteristics family
businesses that internationalise tend to have. Other areas of usage for this thesis could
be for non-‐family businesses to be able to compare and contrast their own
characteristics, values and beliefs with the one’s from the family businesses. It can be a
good starting point to learn about differences between family and non-‐family
businesses. One could also use this thesis as a tool to make further acknowledgements in
the area on how family businesses tend to internationalise. It can be used to learn about
family business, how they act and behave in certain situations, especially
52
internationalisation.
Since the findings from this thesis cannot be generalised it can be used as a guiding tool
for further research in the area of family business and internationalisation processes.
6.3 Critical reflections
The aim for this thesis was to examine the different characteristics for the
internationalisation process of family businesses. There were three family businesses
examined, which of course make the generalisation a bit harder, the three family
businesses do not represent all the family businesses available in the Swedish, nor the
global market.
The results from the interviews may give indications to limited generalisations, but one
cannot generalize the findings from three companies on all the family businesses there
are. Another aspect is the fact that there only were Swedish companies that were being
analysed, so perhaps the characteristics that were found is more valid and correct for
Swedish family businesses rather than others.
All the respondents from the interviews had only respectable things to tell from working
for a family business, they mentioned value and belonging. A critical reflection to that is
that most of the respondents have not been working for another company than a family
business so it is hard not to take that in consideration. Another reflection is that the
respondents speak about the business as family, and to then talk bad about the company
is to talk bad about the family, which also need to be considered.
6.4 Ethical implications
When the potential interviewees first were contacted, they were generally informed
about the authors of this thesis, about the meaning behind the interviews and the work
with the thesis. They were then kindly asked if they could spare some time to participate
and help in the research. This was a way to make the potential interviewees feel that
they could decline whenever they wanted.
Before the interviews started the interviewer clearly explained for the respondents
what the information given in the interview were going to be used for. It was also
explained that no information that could “hurt” the company were going to be revealed.
53
With this in mind the respondents were able to give this thesis the most usable and
important information.
6.5 Future research
Concerning family businesses and their internationalisation, it seem to be a topic of
importance, which need to be studied in more detailed. One interesting area could be to
investigate the internationalisation patterns for small and medium enterprises, or
continue with the family businesses and compare and contrast if their characteristics, or
internationalisation pattern differs from the Swedish family businesses. It would also be
of interest to compare and contrast family and non-‐family businesses regarding their
internationalisation.
54
References Akpinar, M. (2009) Internationalization vs. Diversification: A Study on the Drivers of Growth Strategies. Journal of Global Business Issues, 3 (2), pp.1-‐7
Andersson, S and Wictor, I. (2003) Innovative Internationalisation in New firms: Born Globals – the Swedish case. Journal of International Entrepreneurship, 1 (3), pp.249-‐276.
Arnett, D and Madhavaram, S (2012) Multinational enterprise competition: grounding the eclectic paradigm of foreign production in resource-‐advantage theory. Journal of Business & Industrial Marketing, 27 (7), pp. 572-‐581.
Arregle, J.L., Hitt, M.A., Sirmon, D.G., & Very, P. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44, 73–95.
Arregle, J,L., Naldi, L., Nordqvist, M., Hitt, M. (2012) Internationalization of Family –Controlled Firms: A Study of the Effects of External Involvement in Governance. Entrepreneurship: Theory and Practice, 36 (6) pp. 1115-‐1143
Astrachan, J., Mazzola, P., Pieper, T., Sciascia, S. (2013) Family involvement in the board of directors: Effects on sales Internationalization. Journal of Small Business Management, 51(1), pp. 83-‐99.
Bell, J., McNaughton, R., Young, S., Crick, D. (2003) Towards an integrative model of small firm internationalisation. Journal of International Entrepreneurship, 1 (4), pp. 339-‐362 Birch, M., Miller, T., Mauthner, M., & Jessop, J. (2002). Ethics in qualitative research (pp.1-‐13). London: Sage. Bloch, A., Kachaner, N., Stalk, G. (2012) What can you learn from family business. Harvard Business Review, 90 (11), pp. 102-‐106. Calabro, A., Torchia, M., Pukall, T., Mussolino, D. (2013). The influence of ownership structure and board strategic involvement on international sales: The moderating effect of family involvement. International Business review, 22 (3) pp. 509-‐523. Campos, N and Kinoshita, Y (2008) Foreign Direct Investment and Structural Reforms: Panel Evidence from Eastern Europe and Latin America. [online] Available from: http://www.imf.org/external/np/seminars/eng/2008/strureform/pdf/foreign.pdf [Accessed: 10 February 2013].
Chrisman, J.J., Chua, J.H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29, pp.555–575..
Chua, J., Chrisman, J., and Pramodita, S. (1999) Defining the family business by behaviour. Entrepreneurship: Theory & Practice. 23 (4), pp. 19-‐39
Collin, S.Y., Ahlberg, J. (2012). Blood in the board room : Family relationships influencing the functions of the boar. The Journal of Family Business Strategy. 4. 207-‐219.
55
Collins, J. and Hussey, R. (2009) Business research, a practical guide for undergraduate & postgraduate students. 3th ed. England, Hampshire: Palgrave Macmillan.
Creswell, J. W. & Miller, D. L. (2000). Determining validity in qualitative inquiry. Theory into Practice, 39 (3), pp. 124-‐131 Denicolai, S., Palamara, G., Zucchella, A (2007) The drivers of the early internationalization of the firm. Journal of World Business, 42 (3), pp. 268-‐280
Dunning, J.H. (2001) The eclectic (OLI) paradigm of international production: past, present, and future. International Journal of Economics of Business, 8 (2), pp. 173-‐90.
Elango, B (1998) An empirical examination of the influence of industry and firm drivers on the rate of internationalization by firms. Journal of international Management, 4 (3), pp. 201-‐221.
Farrington, E. and Merwe, S.P (2012) An assessment of selected family business values in small and medium-‐ sized family businesses. South African Journal of Business Management, 43 (4), pp.17-‐31 George, G., Wiklund, J., & Zahra, S.A. (2005). Ownership and the internationalization of small firms. Journal of Management, 31(2), 210–233.
Golafshani, N (2003) Understanding Reliability and Validity in Qualitative Research. The Qualitative Report, 8 (4), pp. 597-607
Gomez-‐Mejia, L.R., Makri, M., & Larraza-‐Kintana, M. (2010). Diversification decisions in family controlled firms. Journal of Management Studies, 47(2), 223–252.
Gomez-‐Mejia, L.R., Haynes, K.T., Nunez-‐Nickel, M., Jacobson, K.J.L., & Moyano-‐Fuentes, J.M. (2007). Socioemotional wealth and family business risks in family controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52 (1), pp. 106–137.
Gong, K. (2011) Cultural Difference Effects on Business: Holding up Sino-‐U.S. Business Negotiation as a Model. Cross-‐Cultural Communication. 2011, Vol. 7 Issue 2, p101-‐104.
Graves, C and Thomas, J.(2004) Internationalisation of the family businesses: A longitudinal perspective. International Journal of Globalisation and Small Business, 1 (1) pp. 7-‐27.
Hitt, M.A., Bierman, L., Uhlenbruck, K., & Shimizu, K. (2006). The importance of resources in the internationalization of professional service firms: The good, the bad, and the ugly. Academy of Management Journal, 49(6), 1137–1157.
Hofstede, G. (1984) Culture’s consequences – International differences in work related values. Abridged edition. Newbury Park: Sage publications, Inc.
Holt, D (2012) Strategic decisions within family firms: Understanding the controlling family´s receptivity to internationalization. Entrepreneurship: Theory & Practice, 36 (6),
56
pp.1145-‐1151.
Hsu, W., Chen, H., Cheng, C. (2013). Internationalization and firm performance of SMEs: The moderating effects of CEO attributes. Journal of World Business, 48 (1), pp. 1-‐12
IKEA (2013) Tidsaxel. [online]. Available from: http://www.ikea.com/ms/sv_SE/about_ikea/the_ikea_way/history/index.html [Accessed 16th February 2013]. Jacobsen, D-‐I. (2002) Vad, hur och varför? – Om metodval i företagsekonomi och andra samhällsvetenskapliga ämnen. Trans. G. Sandin. Studentlitteratur AB. Lund. Johanson, J and Vahlne, J (1990) The Mechanisms of Internationalization. International Marketing Review, 7 (4), pp. 11-‐24. Johanson, J and Vahlne, J (2009) The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40 (9), pp. 1411-‐1431. Johnson, B. and Christensen, L. (2011) Educational Research: Quantitative, Qualitative and Mixed Approaches. 4th ed. United States: SAGE. Kontinen, T., Ojala, A (2012) Internationalization pathways among family owned SMEs. International Marketing Review, 29 (5), pp. 496-‐518.
Krueger, R and Casey, M.A (2000) Focus Groups: A Practical Guide for Applied Research. 3th ed. Thousand Oaks, CA: Sage publications, Inc.
Kvale, S and Brinkmann, S (2008) Interviews – Learning the craft of qualitative research interviewing. 2nd ed. United States of America: Sage publications, Inc. Kvale, S. and Brinkmann, S. (2009) Den kvalitativa forskningsintervjun. 2nd ed. Sweden: Studentlitteratur, Lund.
Lin, W-‐T. (2012) Family ownership and internationalization processes: Internationalization pace, internationalization scope, and internationalization rhythm. European Management Journal. 30 (1), pp. 47-‐56
Melin, L and Nordqvist, M (2007) The reflexive dynamics of institutionalization: The case of the family business. Strategic Organization, 5 (3), pp. 321-‐333 Menedez-‐Requejo, S. (2005) Growth and internationalisation of family businesses. International Journal of Globalisation and Small Business, 1 pp. 122-‐133
Michelin (2013) History of the Michelin Company. [online] Available from: http://www.michelin.com/corporate/group/history?l=en [Accessed 16th February 2013] Miller, D., Le Breton-‐Miller, I. (2005) Managing for the long run: Lessons In Competitive Advantage From Great Family Businesses. Boston, Harvard Business school press.
57
Miller, D., Steier, L., Le Breton-‐Miller, I. (2003) Lost in time: Intergenerational succession, change, and failure in family business. Journal of Business venturing, 18 (4), pp. 513-‐531
Moosa, I. (2002) Foreign direct investment: theory, evidence, and practice. New York: Palgrave.
Myint, H. (1977) Adam Smith’s Theory of International Trade in the Perspective of Economic Development. Economica, 44 (175), pp. 231-‐248 Nordqvist, M., Hall, A., Melin, L (2009) Qualitative research on family businesses: The relevance and usefulness of the interpretive approach. Management and Organization, 15 (3), pp. 294-‐308
Okoroafo, S.C and Perryy, M. (2010) Generational perspectives of the export behaviour of family businesses. International Journal of Economics and Finance, 2 pp.15-‐24. Oxford Dictionary (2013) Characteristics definition [online] Available from: http://oxforddictionaries.com/definition/english/characteristic [Accessed: 13 May 2013].
Oxford Dictionary (2013) Entrepreneur definition [online] Available from: http://oxforddictionaries.com/definition/english/entrepreneur?q=entrepreneurship#entrepreneur__11 [Accessed 3th August 2013].
Ruochen, Z., Saixing, Z., Xuemei, X., Chiming, T., Tianwei, W (2012) What motivates firms from emerging economies to go internationalization? Technological & Economic Development of Economy, 18 (2), pp. 280-‐298.
Saunders, M., Lewis, P., Thornhill, A. (2012) Research methods for business students. 6th ed. England, Harlow: Pearson Education Limited.
Schumacher, R. (2012) Adam Smith's theory of absolute advantage and the use of doxography in the history of economics. Erasmus Journal for Philosophy and Economics. 5 (2), pp. 54-‐80 Sciascia, S., Mazzola, P., Astrachan, J.H., & Pieper, T.M. (2012). The role of family ownership in international entrepreneurship: Exploring nonlinear effects. Small Business Economics, 38(1), 15–31. Segaro, E (2012). Internationalization of family SMEs: the impact of ownership, governance and top management team. Journal of Management and Governance, 16 (1) pp. 147-‐169.
Sekaran, U. and Bougie, R. (2011) Research Methods for Business, a skill building approach. 5th ed. England, John Wiley & Sons Ltd. Shane, S and Venkataraman, S (2000) The Promise of Entrepreneuship as a Field of Research. The Academy of Management Rewiew. Vol 25, 217-‐226. Silva, S., Pacheco, E., Meneses, R., Brito, C. (2012) The importance of Second-‐Hand
58
knowledge in the revised Uppsala Model: Can European textiles producers export to China? Journal of Global Marketing, 25 (3) pp. 141-‐160. The Economist (2011) Italian businesses -‐ Keeping it in the family. [online] Available from: http://www.economist.com/node/18333085 [Accessed:16th February 2013 ].
The European Commission (2012) Small and medium-‐sized enterprises, Family Business. [online] Available from: http://ec.europa.eu/enterprise/policies/sme/promoting-‐entrepreneurship/family-‐business/index_en.htm [Accessed: 28 January 2013]. Whitelock, J. (2002) Theories of internationalisation and their impact on market entry. International Marketing Review, 19 (4), pp. 342-‐347.
Whipps, H. (2008) How ancient trade changed the world. LiveScience. 17th February 2008 [online]. Available from: http://www.livescience.com/4823-‐ancient-‐trade-‐changed-‐world.html [Accessed 9th February 2013]
Wictor, I. (2012) Born Globals: Rapid International Growth in New Ventures. JIBS Dissertation Series No. 080
Wilson, R. T., Baack, D.W. (2012) Attracting Foreign Direct Investment: Applying Dunning’s Location Advantages Framework to FDI Advertising. Journal of International Marketing, 20 (2), pp. 96-‐115
59
Appendix 1 – Interview guide -‐ English
1. Could you please tell us a bit about yourself? 2. Could you please describe your own role that you have in this company? 3. Could you describe how you got this position that you are currently occupying? 4. Have you worked with something similar before this position? 5. How many other family members of yours are presently working at this company and what are there roles? 6. Can you please tell us about the company and its history? 7. What are the goals and aims for this company? 8. In this company, how do you value economic vs. non-‐economic goals? 9. Can you please describe in what kind of way this company have been operation outside of Sweden? 10. What was your first operation abroad? 11. How come you choose that country? 12. Are there any resemblances between Sweden and the country of choice? 13. From idea to operation, how long did the process take before you could start the activities abroad? 14. What is the main reason for operating/having activities abroad for this company? 15. Was it much research that has to be done before the operation took place? 16. What kind of research? 17. How did you conduct the research? 18. What are your views about risk? (Give example of risks if necessary) 19. How do you handle risk? 20. Is it important for you to keep this company a family business? 21. Why/why not? 22. Have this company got any important business partners abroad? 23. How have that partnership benefitted this company? 24. To round up this interview, where do you see this company in 10 years in terms of internationalisation?
60
Appendix 2 – Interview guide – Swedish 1. Skulle du kunna berätta lite om dig själv? 2. Skulle du kunna beskriva din roll i företaget och hur/varför du fick denna roll? 3. Har du arbetat med något liknande tidigare? I Så fall vad? 4. Hur många andra familjemedlemmar jobbar för tillfället i företaget? I så fall, vad är deras roll? 5. Skulle du kunna berätta lite om ert företag och dess historia? 6. Vad har ni för målsättning inom företaget? 7. Hur värderar ni ekonomiska vs. Icke-‐ekonomiska mål i ert företag? 8. Skulle du kunna berätta om på vilka olika sätt ert företag har aktiviteter utanför Sverige? 9. Vad var ert företags första aktivitet utanför Sverige? 10. Varför valde ni just det landet? 11. Finns det några likheter mellan Sverige och det/de länder som ni har aktiviteter i? 12. Från idé till verklighet, hur lång tid tog processen innan ni kunde sätta igång med era utlandsaktiviteter? 13. Vad är det huvudsakliga syftet med era utlandsaktiviteter? 14. Gjorde ni mycket research innan ni kunde genomföra era aktiviteter utomlands? 15. Vilken sorts research gjorde ni? 16. Hur gick ni till väga? 17. Hur risktagande anser du att ert företag är? 18. Hur hanterar ni risker i ert företag? 19. Är det viktigt för dig att detta företag är ett familjeföretag? 20. Varför/Varför inte? 21. Har ert företag några viktiga affärspartners utomlands? 22 Hur har detta partnerskap påverkat er? 23. För att avsluta denna intervju, var ser du detta företag om 10 år, beträffande internationalisering?
61
Appendix 3 – Interview guide – description of questions
1. Could you please tell us a bit about yourself? 2. Could you please describe your own role that you have in this company? 3. Could you describe how you got this position that you are currently occupying? 4. Have you worked with something similar before this? 5. How many other family members of yours are presently working at this company? 6. Can you please tell us about this company and it’s history? 7. What are the goals and aims for this company? 8. In this company, how do you value economic vs. non-‐economic goals? Question 1-‐8 aims to get an introduction and understanding of the company and to make the interviewee feel more comfortable in the given situation. 9. Can you please describe in what kind of way this company have been operating outside of Sweden? This question aims to find out in which way the company have been internationalised. 10. What was your first operation abroad? 11.How come you choose that country? 12. Are there any resemblances between Sweden and the country of choice? Questions 10-‐12 aims to find out if there are any similarities with the chosen country and the country of origin. Here one can also see how risk awareness the company is, by seeing which country they chose to internationalise to first. 13. From idea to operation, how long did the process take before you could start the activities abroad? This question tends to reveal how patients and persistent the company are. 14. What is the main reason for operating/having activities abroad for this company? The intention with this question is to find out more about their internationalisation process overall and the reasons behind it. 15. Was it much research that has to be done before the operation took place? 16. What kind of research? 17. How did you conduct the research? Questions 15-‐17 are asked to see how and if they did any research before internationalising. This is important fact for the areas of risk, patients and time horizon. 18. What are your views about risk? 19. How do you handle risk? Those questions aims to find out how risk awareness the company are.
62
20. Is it important for you to keep this company a family business? 21. Why/why not? To get an idea of how the company feel about control and risk questions number 20 and 21 will be asked. 22. Have this company got any important business partners abroad? 23. How have that partnership benefitted this company? To see if the company in matter have got any strategic alliances and if so, how the partnership has affected the company and internationalisation questions 22 and 23 will be asked. 24. To round up this interview, where do you see this company in 10 years in terms of internationalisation? To end the interview smoothly this final question will be asked. It will also give an idea of future goals.
63
HALMSTAD UNIVERSITY � PO Box 823 � SE-‐301 18 Halmstad, Sweden � www.hh.se
![BachelorThesis: SimulationofReplicationandShardingwith ... · 2 1. Introduction windowinthetestedsystemsincreaseswithanincreasingworkload. However,[WFGR15]dis-coveredthatthemeasuredstalenesswindowisactuallyquiteimprecise](https://img.pdfslide.us/doc/110x75/5f836c52f9607d06984df092/bachelorthesis-simulationofreplicationandshardingwith-2-1-introduction-windowinthetestedsystemsincreaseswithanincreasingworkload.jpg)
