At uninorte en verano – Business School 2015 Dr Mahmoud Khalik from the University of St Andrews gave a talk on "the internationalisation of firms from developed countries and emerging markets: A historical perspective".
The talk outlined a number of important theories in the field of international business, and began by explaining the emergence of international business (IB) as a field. Dr Khalik explained that IB is a mix of economics, marketing, and strategy combined. The combination of three business strands, globalisation, and the internationalisation of small, medium, and large firms emphasises the importance of IB as a research field. This aspect of the talk explained that research on internationalisation emerged based on the increased number of multinational enterprises that emerged after the Second World War. The talk highlighted the shift from focusing on trade between countries and a more micro perspective that pays attention to firms engaging with countries and their expansion across borders. Dr Khalik emphasised that IB scholars focused on the firm level and later the entrepreneur, and moved away from macro level trade theories such as absolute advantage and comparative advantage between nations.
During his talk, Dr Khalik grouped a large number of theories according to what they predominately address and contribute towards. The talk demonstrated with examples how there are two extreme paths and one hybrid approach that firms may follow when they internationalise. Dr Khalik explained the gradual steps outlined by the Uppsala model and the born global perspective which emphasises rapid internationalisation. The hybrid approach know as born-again globals was outlined as companies that begin gradually as emphasised by the Uppsala model but then experience rapid internationalisation due to critical incidents.
After outlining the models that explain a comprehensive view of firm internationalisation, it was explained that these models and perspectives were developed based on developed country firms. Dr Khalik explained how not all theories fit well with emerging market firms, and a leading IB scholar Peter Buckley emphasised that new questions were needed to move the IB domain forward. A number of scholars began investigating emerging market firms and their internationalisation behaviour. Dunning's OLI model, the bedrock of IB which explains firm internationalisation through FDI based on developed country firms is challenged by Mathew's LLL perspective. The talk highlighted that firms from emerging markets internationalise in order to strengthen assets and acquire new ones, rather than exploiting existing assets. Particular attention was given to the institutional environment and that firms from emerging markets entered the global arena much later. Dr Khalik emphasised that the main issue with Dunning's OLI model is that it assumes that firms already have ownership advantages to exploit in foreign markets. Emerging market firms may not possess ownership advantages and instead may seek assets that are most imitable and most transferable to strengthen their companies. The likelihood of emerging market firms succeeding in the global arena and catching up with western firms is based on their capabilities to link with established companies from developed countries, learn, acquire knowledge, and implement a global mind-set in the organisation's culture.
After outlining a number of views found in the literature on emerging market firms, such as Mathew's LLL model, OEM-ODM-OBM, and the Springboard perspective. It is clear that there are differences between firms that originate from developed countries and emerging markets. Although the network perspective and international entrepreneurship may be important perspectives for all firms regardless of their origin, how networks are used and how entrepreneurs behave could differ significantly due to the institutional environment.
Dr Khalik provided insights from his own research with a particular focus on the food service sector, and it was emphasised that more research is needed on the service sector, as research predominantly has focused on manufacturing firms. In addition to this, more research is needed on smaller firms from emerging markets. Dr Khalik concluded the talk by identifying a number of Colombian food service firms which he labelled as inspiring champions. Overall, the talk was a comprehensive overview of internationalisation theories since the 1960's to the current state. The talk highlighted the need to understand that there are differences between developed country firms and those originating from emerging markets.
Silvia Rozas, Business School lecturer commented "This was an exciting talk given by Dr Khalik. He really provided a complete overview of internationalisation and a lot of theories were covered, but grouped nicely together. The examples were interesting and explaining how emerging market firms behave was relevant to the audience and Colombia".
Another attendant commented "A great talk with passion. Dr Khalik really allowed those who do not know much about IB to really understand the key issues in the field. Summarising each theory and what it aims to explain in the internationalisation process was concise. The clear differences between companies from developed countries and emerging markets was intriguing and important not only for academics, but also business owners who are thinking of internationalising their companies and what they need to be aware of".
Universidad del Norte - Business School.