Internationalization of Family Firms : The effect of family-specific resourceson internationalization decisions

University essay from Högskolan i Jönköping/Internationella Handelshögskolan; Högskolan i Jönköping/Internationella Handelshögskolan

Abstract: Background: Sweden is known for encouraging entrepreneurship where 99.9% of the business organizations are SMEs. Including Sweden, several other countries in the world provide significant importance to family firms, as their contribution is noteworthy to the global economy. Due to numerous reasons such as globalization and growth aspects, FSMEs are forced to gain competitive advantage through international diversification. Internationalization of FSMEs can be influenced by unique characteristics of family firms.Purpose: Internationalization is a process where the decision of internationalization can be affected by several factors including resources. Among unique characteristics of family firms, FSMEs also possess family-specific resources that may influence these decisions. Hence the purpose of this study is to gain an in-depth understanding on which and how family-specific resources influence internationalization decisions.Method: With the use of a single case study method, we gained valuable insight of a Swedish candy manufacturing family firm which engaged in internationalization successfully. The data was collected through in-depth interviews, observations, company website, published press interviews, press articles and other databases.Conclusion: Internationalization can be a daunting decision for family firms where availability of resources play a major role. The key family-specific resources that influenced the decision of internationalization of the family firm studied in this thesis were bridging social capital, human capital and governance capital. The remaining capitals may have contributed to the internationalization process. Other than the family-specific resources, factors such as generational change and ability to gain substantial financial support in further influenced their internationalization decisions. These findings likewise confirm the existence of heterogeneity of family firms which makes them unique.

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