Where clouds do not prevent the sun from shining : A qualitative study of Swedish B2B SMEs´ risk perception when doing business in Indonesia

Abstract: In this thesis the authors have analyzed what risks Swedish business-to-business (B2B) small- and medium sized enterprises (SMEs) perceive when internationalizing to Indonesia, as well as what factors impacting their perception of risk. By distinguishing the risks and the impacting factors, the aim of the research has been to increase the awareness of these risks and provide an understanding of the means necessary for decreasing them. The authors have implemented a qualitative study method with an abductive research approach to gain a deeper insight to the subject. Qualitative interviews have been conducted with three relevant case firms and one council in order to gain a wider perspective. To fulfill the purpose of the study and to gain deeper understanding, the study has been based on two questions: (1) What are the risks Swedish B2B SMEs perceive when internationalizing to Indonesia? And (2) What factors impact the Swedish B2B SMEs' perception of risk in Indonesia? The literature review includes theories and findings of previous research related to international business and how it can be impacted depending of several factors such as risk, distance, commitment, knowledge and relations. The findings of the study show that the most prominent risks perceived are the financial risks of default and insecure payments, corruption and vulnerability to the network. The risk perception is determined by an interrelation between the factors of commitment, knowledge and relations. Furthermore, by examine these underlying factors’ impact on risk perception, the study contributes to a wider understanding necessary for a successful practical business implementation in a foreign country.