Fletcher - A Holistic Approach To Internationalisation

International Business Review 10 (2001) 25–49
www.elsevier.com/locate/ibusrev
A holistic approach to internationalisation

*
Richard Fletcher
School of Marketing, University of Technology, PO Box 123, Broadway, Sydney, NSW 2007, Australia
Received 7 January 1999; received in revised form 13 October 1999; accepted 26 June 2000
Abstract
Previous research into internationalisation has viewed it as being an export-led phenomenon.

Although this is a phenomenon that extends to other activities such as licensing and manufac-
ture overseas, it is usually considered from an ‘outward’ perspective. In this paper it is argued
that internationalisation is no longer just an outward-driven activity and that firms also become
internationalised by undertaking import-led activities and activities in which ‘inward’ and ‘out-
ward’ activities are ‘linked’, as happens with strategic alliances, cooperative manufacture
and countertrade.
The paper demonstrates that a majority of firms engage in ‘inward’ and ‘linked’ international
activities as well as ‘outward’ activities. It also illustrates that the factors that predict outward
internationalisation also predict ‘inward’ and, to a lesser extent, ‘linked’ internationalisation.
The paper questions the traditional view that internationalisation should be progressive and
incremental and explores the issue of de-internationalisation and its role in the long-term inter-
nationalisation of the firm.
The implications of the above conceptual approach to internationalisation are discussed
briefly and illustrated in the case of government programs of export assistance, born global
firms, firms operating on a global basis and firms undertaking international business in the
electronic environment.  2001 Elsevier Science Ltd. All rights reserved.
Keywords: Internationalisation; De-internationalisation; Export; Import; Strategic alliances and

countertrade
* Tel.: +61-2-95143537; fax: +61-2-95143535.

E-mail address: richard.fletcher@uts.edu.au (R. Fletcher).
0969-5931/01/$ - see front matter  2001 Elsevier Science Ltd. All rights reserved.
PII: S 0 9 6 9 - 5 9 3 1 ( 0 0 ) 0 0 0 3 9 - 1
26 R. Fletcher / International Business Review 10 (2001) 25–49
1. Introduction
Over the past thirty years, one of the most frequently researched topics in inter-
national marketing has been that of internationalisation of the firm. For the most
part, this research has been devoted to factors causing internationalisation or to the
process by which firms become increasingly involved in international activities. One
conclusion which emerges from this research is that internationalisation is a complex
and multidimensional process (Barrett, 1986). There are many definitions of inter-
nationalisation and more recent ones such as those of Welch and Luostarinen (1988),
Rao and Naidu (1992), Easton and Li (1993) and Johanson and Vahlne (1993)
describe internationalisation as a process by which firms increase their involvement
in international business activities. There have been two streams of research into
internationalisation. The first research stream relates to factors causing internationa-
lisation, and the second has focused on the process of firms’ internationalisation.
2. Factors causing internationalisation
Research in this area has been extensive and has been summarised by Cavusgil
and Naor (1987), Aaby and Slater (1989) and Zhou and Stan (1998). These factors
can be categorised according to whether they are management characteristics, organ-
isation characteristics, external impediments or external incentives to engage in busi-
ness overseas.
Important management characteristics are demographic such as age (Pinney, 1970;
Barrett, 1986) and education (Simpson & Kujawa, 1974; Fletcher, 1996); and those
involving aspects of international exposure such as country of birth (Simmonds &
Smith, 1968; Barrett, 1986, Da Rocha, Christensen & Da Cunha, 1990; Eriksson,
Jahanson, Majkgard & Sharma, 1999), time spent living overseas (Langston & Teas,
1976; Barrett, 1986; Fletcher, 1996), and frequency of business trips overseas
(Simmonds & Smith, 1968; Barrett, 1986); those which reflect a knowledge of inter-
national business such as familiarity with culture and international business practises
(Shoham & Albaum, 1995; Fletcher, 1996) and international transactions experience
(Fletcher, 1996). Other important characteristics include a structured approach to
management—such as planning orientation (Cavusgil, 1984; Diamantopoulos &
Inglis, 1988) or having a strategic or proactive approach (Cavusgil & Godiwalla,
1982; Dominguez & Sequeira, 1991).
The most important organisational characteristics are willingness to develop pro-
ducts for overseas markets (Rosson & Ford, 1982; Bilkey, 1985; Chetty & Hamilton,
1993), technological advantage (Chang & Grubb, 1992; Evangelista, 1994), willing-
ness to fund international activities (McKinsey/AMC, 1993; Evangelista, 1994), size
as measured by employment (Miesenbock, 1989; Akoorie & Enderwick, 1992;
Chetty & Hamilton, 1993), willingness to research overseas markets (Cavusgil, 1984;
Bello & Barksdale, 1986), having a focus on research and development (Chang &
Grubb, 1992; McKinsey/AMC, 1993), and finally the nature of the product
(Akoorie & Enderwick, 1992).
R. Fletcher / International Business Review 10 (2001) 25–49 27
The most important external impediments are marketing activities by competitors

in overseas markets and perception of higher risk in overseas markets including lack
of continuity in overseas orders, tariff and non-tariff barriers (Bilkey, 1978),
exchange-rate movements (Bradley, 1981; Cavusgil, 1982), knowledge of the market
and how it operates (Reid, 1983; Johnston & Czinkota, 1985), issues related to agents
and control including attitudes of foreign governments (Bello & Williamson, 1985;
Yaprak, 1985), cost issues, lack of export training and government assistance
(Bilkey, 1985).
The most important external incentives are availability of export incentives from
government (Kaynak & Kothari, 1984), overseas demand factors such as competi-
tiveness (Reid, 1984) and inquiries via industry bodies or government representatives
overseas or information in publications. Others include fall in domestic demand or
excess capacity (Johnston & Czinkota, 1985; Sullivan & Bauerschmidt, 1987;
Kumcu, Harcar & Kumcu, 1995; Ogunmokun & Ng, 1998), and reduction in costs
of production (Reid, 1983; Axinn, 1988).
These studies of factors causing internationalisation categorise the degree of inter-
nationalisation according to the nature of involvement in exporting (Bilkey & Tesar,
1977), or progression from one stage of outward-driven international behaviour such
as exporting to another such as foreign direct investment (Johanson & Wiedersheim-
Paul, 1975), or in terms of exporting as opposed to non-exporting (Barrett, 1986). In
all cases, the focus is on internationalisation as an outward-driven (exported) activity.
3. The process of firms’ internationalisation
This process includes the ‘stages’ approach which views internationalisation as

involving changes in the firm as it increases its commitment to foreign markets.
Firms start with the entry mode that requires the least commitment of resources and
gradually increase their commitment of resources (Bilkey & Tesar, 1977; Cavusgil,
1980; Reid, 1981). These studies tend to be cross-sectional in nature and do not
address the dynamic nature of internationalisation.
The ‘learning’ approach, on the contrary, attempts to explain rather than describe
patterns of internationalisation behaviour. With this approach, the process is treated
as an evolutionary, sequential build-up of foreign commitments over time due to
interaction between knowledge of foreign markets, on the one hand, and increasing
commitment of resources to their development, on the other (Johanson & Wiedersh-
eim-Paul, 1975, Johanson & Vahlne, 1977, 1993; Luostarinen, 1978).
The ‘contingency’ approach, by contrast, is based on the premise that firms’ inter-
national evolution is contingent upon a wide range of market-specific and firm-spe-
cific characteristics. External situations or opportunities may cause firms to leapfrog
stages or to enter markets that are psychically distant from the home country (Reid,
1984; Turnbull, 1987; O’Farrell & Wood, 1994).
Finally, the ‘network’ approach attributes internationalisation to the development
of networks of relationships over time as international buyers and sellers build up
knowledge about each other. At a point in time, the firm has a position in an overseas
network that characterises its relations with other firms. The network approach con-
centrates on the market and the relationship of the firm to that market as opposed
to internal development of a firm’s knowledge and resources (Hakansson, 1982;
Johanson & Mattsson, 1984, 1988; Easton, 1992). In addition, there has been some
examination of buyer–seller relationships based on the network approach as reflected
in the work of the Industrial Marketing and Purchasing (IMP) group (Leonidou &
Kaleka, 1998).
There has been some challenging of the above approaches on the grounds that
they do not reflect how firms actually behave, especially in hi-tech and service indus-
tries (see Bell, 1995). Such challenge has not gone beyond questioning the relevance
of these approaches to outward forms of internationalisation. This raises the issue
as to how relevant are the more traditional approaches to internationalisation of firms
in the new millennium.
There are two main reasons for the change in the environment for international
business. In the first place, national borders are becoming increasingly irrelevant.
This is evidenced by the expansion of regional trade groupings, developments in the
international trade environment such as the World Trade Order and the difficulties
faced by governments in enforcing national sovereignty. This aspect is illustrated by
the rise in incidence of transfer pricing, promotion activity via the Internet and the
expanded focus of global policies towards issues such as the environment and human
rights. In the second place, strategic alliances are being formed by firms across
national boundaries. These are driven by the information revolution, rising fixed
costs, the need for increasing R&D expenditures, rapid dispersion of technology,
shorter product life-cycles, converging consumer tastes, and increasing value placed
on brand equity—all of which stimulate firms to enter into cooperative arrangements
with organisations in other countries.
These issues in turn are requiring firms to adopt a more dynamic as opposed to
an incremental approach and switch between forms of international involvement as
changing market circumstances require. The opposite of stepwise progression and
forward momentum is de-internationalisation. In international as in domestic mar-
kets, firms often downsize, shed unprofitable operations and return to their core com-
petencies and increase their outsourcing—all in the interests of enhancing their ability
to compete in the longer term. Niall Fitzgerald, the co-chairman of Unilever, argues
that for the multinational, this process is
like having a nice garden which gets weeds. You have to clean it up so the
light and air get to the blooms which are likely to grow best (Wall Street Journal,
3 September, 1996).
Although the above refers to voluntary de-internationalisation, it can also be involun-

tary as when expropriation occurs in a foreign country. De-internationalisation can
take the form of reducing operations in a market, completely withdrawing from a
market or switching to modes of operation that entail a lesser commitment of
resources.
4. A holistic approach
In response to these developments in the international environment, more complex

forms of international behaviour have evolved. These forms of behaviour have been
influenced by the increasing need to serve customers in the global environment, to
bring products to market more quickly, to introduce products into several countries
simultaneously, to lower costs by firms in each country focusing on their core com-
petencies and to reduce promotion costs by marketing globally under one brand.
Underlying the above is a realisation by firms that in order to be internationally
competitive, they also need to be internationally cooperative.
Whilst the early approaches to internationalisation such as the ‘stages’, ‘learning’
and ‘contingency’ approaches were developed on the basis of empirical surveys of
past export practices in the US and Europe in the 1970s and 1980s, the above changes
in the international business environment mean that such approaches may no longer
be relevant. These changes in the environment call for a new approach that embraces
a more holistic view of internationalisation. This new approach needs to recognise
the following factors.
앫 Firms can also become internationalised by inward-driven activities such as

indirect importing, direct importing, becoming the licensee for a foreign firm,
being the joint venture partner with an overseas firm in its domestic market, or
by manufacturing overseas to supply the home market. It is only recently that
empirical research has been undertaken in this area and this has been from a
purchasing rather than from an internationalisation perspective. As an example, in
the Australian context, James N. Kirby (Australia) now manufacture refrigeration
compressors in Thailand via a joint venture to supply the Australian market,
whereas 15 years ago they exported compressors from Australia to Thailand.
앫 Outward internationalisation can lead to inward internationalisation and vice
versa, as when the franchisee or licensee in one country becomes the franchisor
or licensor in another. International franchising often spreads in this way, as for
example when the McDonald’s franchisee in Australia becomes the McDonald’s
franchisor in Papua New Guinea.
앫 Internationalisation often requires more complex forms of international behaviour
in which there is a linking of both inward and outward international activities as
happens with strategic alliances,1 countertrade and cooperative manufacture. An
example of this that receives frequent comment in the press is offset programs in
the aerospace and defence sectors. An example involving Australia was the sale of
submarines by Kokums of Sweden to the Royal Australian Navy—an arrangement
involving components supply by Australian firms, technology transfer to Australia
and cooperative manufacturing activities in Australia.
1
Joint ventures are considered as strategic alliances in cases where the foreign investment involves
the linking of inward and outward activities. Where this is not the case, joint ventures are regarded as
an outward form of internationalisation.
앫 Internationalisation should be viewed as a global activity rather than as an activity

with respect to a firm’s involvement in a specific overseas country. This means
that internationalisation should not only focus on expansion of international
involvement in a particular country but also on contraction. This is because a firm
might involuntarily or deliberately reduce its involvement in one country so as
to devote resources to more beneficial activities in other countries. This relates
to the concept of de-internationalisation as proposed by Welch and Benito (1996).
Several researchers in the area of internationalisation have written conceptual papers

which point to a more holistic view which embraces inward and linked forms as
well as outward forms. However, these papers commented on the extent of these
additional forms of internationalisation rather than on the motivations for inward and
linked internationalisation. For example, in Finland Luostarinen (1984) found that
of manufacturers engaged in outward activities, 79% were also involved in inward
activities and 17% in linked activities. In a later study in Finland referred to by
Korhonen, Luostarinen and Welch (1994), it was found that only 44% of small and
medium-sized firms began international operations from the outward side.
Fig. 1 is a conceptual framework of a holistic approach to internationalisation. It
shows that factors previously found to apply to outward-driven internationalisation
also impact on inward and linked forms of internationalisation. It also shows that
outward forms can lead to inward forms and vice versa. In addition, it illustrates
that linked forms of internationalisation can be driven by outward forms (e.g, a desire
to export) or by inward forms (i.e. a desire to tie up a long-term supply from overseas
of a difficult-to-obtain product). Within each of the above forms as appropriate, vari-
ous types of international activity are shown (e.g. exporting, licensing, production
overseas, strategic alliances, etc.).
Fig. 1. A holistic approach to internationalisation.

The above discussion leads to three areas for research. The first relates to whether
firms that engage in outward internationalisation also engage in other forms such as
inward or linked internationalisation.
Proposition 1 The international behaviour of firms indicates that a majority of firms

undertake different forms of internationalisation (i.e. outward, inward and linked)
at the same time.
The second area for research relates to whether factors that predict outward inter-
nationalisation also predict inward and linked internationalisation and as well as
overall internationalisation.
Proposition 2 Those factors which predict internationalisation with an outward focus

also predict inward internationalisation, linked internationalisation and inter-
nationalisation overall.
The third area for research relates to the extent to which factors predicting inter-
nationalisation also apply when de-internationalisation takes place. As logic would
indicate that the factors applying to internationalisation are unlikely to apply when
the reverse occurs, the proposition is posed as follows:
Proposition 3 The factors which predict internationalisation do not apply when de-
internationalisation takes place.
5. Methodology
In order to test the above propositions, responses to questions in a broad-based

survey on internationalisation developed by Fletcher and Albaum were analysed. The
responses to questions on management characteristics, firms’ characteristics, impedi-
ments and incentives were analysed in terms of the form and nature of the inter-
national involvement of respondents. In order to measure change over time, respon-
dents were asked to indicate the form and nature of firms’ international involvement
in both 1983 and 1993. It is acknowledged that asking respondents to recall the
situation both at the time of completing the survey and at an earlier time may result
in unwitting self-justification by exaggerating present performance compared to the
past. The alternative of comparing separate studies of the same broad group nine
years apart was considered. However, this was discarded because of the small num-
ber of firms that responded to both surveys due to mergers, acquisitions and bank-
ruptcies.2
2
The surveys were those undertaken by Barrett in 1983 and Fletcher in 1992 and reported in Barrett
(1986) and Fletcher (1996) respectively. Both were of Australian manufacturing firms based on a Dun
and Bradstreet listing. There were approximately 500 firms in each survey of which only 22 were common
to both surveys.
Originally developed in 1992, the questionnaire was revised following pilot testing
in 1993 by mailing to 28 international business executives who had attended the
World Countertrade Conference at Eindhoven in the Netherlands. In 1994, the
updated survey was mailed to the population of exporting firms in the state of New
South Wales listed in the Australian Directory of Exports. These were exporters of
Australian goods and services. As there is no equivalent listing of importers and as
directories of manufacturers exclude service providers, the Directory of Exports was
the best available data base. The limitation of relying on a directory of exporters to
provide a sample of importers is acknowledged. However, given the thesis of this
paper that most firms engage in forms of international behaviour in addition to
exporting and that a majority of exporting firms are likely to engage in inward or
linked international activities, the approach would appear to be reasonable. The ques-
tionnaire was mailed to 2845 firms and, taking into account firms with wrong
addresses or those that had ceased operations, resulted in an effective list of 2637
exporting firms. Completed questionnaires numbered 541 which is a response rate
of 20.5%. Sixty-two per cent of respondents were small firms (1–49 employees),
29% were medium-sized firms (50–499 employees) and 9% were large firms (500+
employees). This response pattern corresponds with previous surveys of manufactur-
ing firms in Australia (Barrett, 1986; Fletcher, 1996). Although the mailing was to
a census of direct exporting firms, not all the firms that responded were undertaking
direct export at the time of the survey. All these firms, however, engaged in some
form of international activity. Because of the preliminary nature of the study, testing
for non-response bias was not undertaken.
As the data were gathered 5 years ago, their continuing relevance was checked
by including questions relating to the findings in interviews conducted with 17 execu-
tives and officials involved in international activities in Sydney in November–
December, 1999. The questions related to forms of international activities under-
taken, percentage of business accounted for by forms of international involvement,
factors causing international involvement and whether de-internationalisation had
taken place over the last decade. Responses were analysed using ‘Nu*dist’. Nothing
was revealed by this subsequent qualitative research that negated the findings.
In order to test the first proposition that a majority of firms undertake different
forms of internationalisation at the same time, percentages of respondents participat-
ing in various forms of internationalisation were compared. This was to establish
the extent to which both exporting and non-exporting firms participated in other
forms of internationalisation.
In order to test the second proposition that the factors found to predict outward
internationalisation also predict inward and linked internationalisation and inter-
nationalisation overall, a measure of dependency on internationalisation was arrived
at. A firm was deemed to be dependent on internationalisation overall, or on a specific
form of internationalisation, if the percentage of its international business activity
accounted for by internationalisation, or the form of internationalisation, was equal
to or greater than 20%. Chi square was used to determine levels of significance.
In order to measure the third proposition—the factors that predict internationalis-
ation do not apply when de-internationalisation occurs—respondents were split into
those that had increased their dependency on international activity, on the one hand,
and those that had decreased their dependency on international activities, on the
other, between 1983 and 1993. ANOVAs were calculated, grouping companies based
on management characteristics, firms’ characteristics, perceptions of impediments
and perceptions of incentives. The resulting group means were used to determine if
there was a difference in the overall level of international business activity over the
10-year period.
6. Results
Table 1 shows the number and percentage of the 503 firms in the survey that
undertook a specific international business activity. First, all respondents were ana-
lysed. They were analysed according to the form of international activity undertaken
(outward, inward or linked) and within each form (e.g. indirect export, production
overseas, licensing overseas). Second, firms that undertook direct export were ana-
lysed according to the same criteria to see whether there was a difference between
respondents that did and respondents that did not engage in direct export. Whereas
Table 1
Involvement in differing types and forms of international businessa
Activity All responses Direct exporters Sole involvement
N % N % N %
Outward
Indirect export 108 21.5 97 26.7 5 5.3
Direct export 363 72.2 363 100.0 108 33.6
Sales branch 113 22.5 101 27.8 4 6.3
overseas
Production overseas 46 9.1 42 11.6 3 7.3
Licensing overseas 68 13.4 64 17.6 1 2.6
Total 698 667 121
Inward
Indirect import 73 4.5 68 18.7 – –
Direct import 208 41.1 194 53.4 12 8.6
Purchasing office 23 4.6 21 5.8 – –
abroad
Licensing in 48 9.5 44 12.1 1 3.8
Australia
Total 352 327 13
Linked
Countertrade 13 2.6 13 2.6 – –
Strategic alliances 47 9.3 41 11.3 3 11.1
Total 60 54 3
a
Examples of types of international business involvement are indirect export, direct export, sales
branch overseas, production overseas, etc. Forms of international business involvement are ‘outward’,
‘inward’, ‘linked’. Totals of percentages exceed 100% as firms engage in more than one type or form.
most respondents engaged in several forms of international activities, 27% (137) of

firms engaged in one form of international activity only. These are shown according
to the activity undertaken. This enables a comparison to be made between firms
undertaking individual international activities and firms undertaking multiple inter-
national activities.
The 503 firms surveyed engaged in 1120 types of international business activity.
Seventy-three per cent of firms undertook more that one type of international busi-
ness activity. Anecdotal comment would suggest that those firms that engage in direct
export are most likely to only undertake the single activity of direct export because
it is an activity at an early stage of the internationalisation process. This was not
the case. The 363 firms that engaged in direct export undertook 1048 types of inter-
national business activity (685 types of activity other than direct export). With direct
exporters, 28% had sales branches overseas, 19% also exported indirectly through
export intermediaries, 18% licensed manufacture of their products in overseas coun-
tries and 12% engaged in direct manufacture overseas. The responses of these firms
indicate that exporting is not a precondition for other forms of internationalisation.
In fact, only 27% (137) of firms in the survey engaged in only one type of inter-
national business. The figure ranged from a low of zero in the case of indirect import,
purchasing office overseas and countertrade to 33.3% in the case of direct exporting.
Table 1 also reveals that respondents did not confine their international business
activities to one form—be it outward, inward or linked. This can be inferred from
the fact that of activity forms undertaken by respondents drawn from the Australian
Directory of Exporters, although of 63% of activity types were outward driven, 32%
were inward driven and 6% were linked. This is further supported by the analysis of
international business transaction types by direct exporters. The 363 direct exporters
undertook a total of 327 inward and 54 linked types of international business trans-
action. Furthermore, 53% undertook direct importing and over 14% engaged in some
form of linked activity.
The above indicates that internationalisation is multifaceted, does not just relate
to outward activities and supports the views of researchers in Finland mentioned
earlier. Proposition 1 is therefore supported.
The second stage of analysis related to Proposition 2—whether factors that pre-
dicted outward internationalisation also predicted inward and linked internationalis-
ation as well as internationalisation overall. As mentioned, these factors were derived
from previous research on drivers of outward internationalisation. Questions relating
to these drivers were included in the survey instrument. The factors were grouped
according to whether they were management characteristics, firms’ characteristics,
incentives or impediments. Table 2 contains detail of which factors were significant
predictors of inward, linked and overall internationalisation and provides details of
the Chi square figures and significance levels. All factors that according to the litera-
ture predict outward internationalisation were found in this research to also predict
outward internationalisation with the exception of size as measured by employment.
As far as management characteristics are concerned, all those which predict out-
ward internationalisation were found to predict internationalisation overall. With the
exception of the factor ‘build up long-term relationships’, the same factors also pre-
Table 2
Crosstab results to determine factors linked to dependence on international business
Factor Outward Inward Linked Total
Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)
High Low High Low High Low High Low
MANAGEMENT
CHARACTERISTICS
IB plan
Yes 60.0 46.6 6.58 61.3 43.0 7.39 84.6 56.7 5.15 59.1 45.4 7.65
No 40.0 53.4 (0.01) 38.7 57.0 (0.01) 15.4 43.3 (0.02) 40.9 54.6 (0.01)
Trips overseas
Infrequent (1–4 years) 26.4 44.5 10.12 27.0 45.5 6.13 15.0 45.8 4.78 25.7 44.2 11.81
Frequent (5+ years) 73.6 55.5 (0.00) 73.0 54.5 (0.01) 85.0 54.2 (0.03) 74.3 55.8 (0.00)
IB decision driver
Domestic market 9.3 16.1 13.08 10.8 21.3 7.69 9.0 16.7 13.33
Foreign market 40.4 28.1 (0.00) 38.6 23.8 (0.05) Unable to test 40.1 27.6 (0.00)
Both 50.3 55.7 50.6 54.9 50.8 55.7
Senior executive spends
⬎10% time on IB
Disagree 8.7 20.8 11.42 11.8 26.5 11.52 10.0 22.1 11.90
R. Fletcher / International Business Review 10 (2001) 25–49
Ambivalent 5.8 7.3 (0.00) 3.2 8.8 (0.00) Unable to test 5.8 7.4 (0.00)
Agree 85.5 71.9 85.0 64.7 84.2 70.5
International transactions
experience
(continued on next page)
35
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Table 2 (continued)
Disagree 8.1 29.7 37.58 7.5 31.6 32.40 7.9 31.3 47.73
Agree 81.5 52.1 87.1 50.7 81.1 49.3
Knowledge of foreign
cultures
Disagree 11.6 28.8 32.97 11.8 31.1 27.95 11.5 26.7 9.22 11.1 31.5 41.07
Ambivalent 23.1 35.1 (0.00) 20.4 36.3 (0.00) 11.5 36.7 (0.01) 23.2 32.9 (0.00)
Agree 65.3 36.1 67.7 32.6 76.9 36.7 65.8 35.6
Build long-term relationships
Disagree 4.0 7.3 5.92 6.5 11.0 4.45 4.8 9.2 9.86
Agree 92.5 84.4 90.2 80.1 92.1 81.6
IB experience
Low (1–4 years) 13.9 31.9 16.43 8.6 29.5 14.79 12.0 28.6 2.28 13.7 31.3 17.52
Medium (5–9 years) 30.6 24.5 (0.00) 28.0 24.2 (0.00) 36.0 32.1 (0.32) 31.1 25.1 (0.00)
High (10+ years) 55.5 43.6 63.4 46.2 52.0 39.3 55.3 43.6
No. of countries involved
Small (1–4) 17.4 41.1 36.99 13.3 41.5 32.02 16.9 43.3 46.84
Medium (5–9) 30.8 35.7 (0.00) 26.7 33.8 (0.00) Unable to test 31.2 34.6 (0.00)
Large (10+) 51.7 23.2 60.0 24.6 51.9 22.1
Employment in Australia
(size)
Low (1–49 employees) 62.8 55.0 2.55 50.0 52.6 0.60 42.3 63.3 9.57 63.5 54.6 3.43
Table 2 (continued)
Medium (50–499 employees) 29.1 33.5 (0.28) 40.2 35.6 (0.74) 46.2 10.0 (0.00) 28.6 34.3 (0.18)
High (500+ employees) 8.1 11.5 9.8 11.9 11.5 26.7 7.9 11.1
Adequate funds for IB
Disagree 8.1 19.9 25.96 9.7 20.7 19.91 10.0 21.3 26.35
Agree 79.2 53.9 80.6 51.9 76.8 52.3
Adequate IB market research
Disagree 22.0 33.9 18.64 29.0 45.6 6.465 19.2 30.0 0.974 23.7 44.7 21.132
Ambivalent 26.0 24.0 (0.00) 28.0 22.8 (0.07) 26.9 20.0 (0.61) 26.3 23.0 (0.00)
Agree 52.0 42.2 43.0 31.6 53.8 50.0 50.0 32.3
Growth in major OS market
Growing 64.1 48.6 9.93 62.5 46.7 5.47 65.0 48.5 11.61
Static 31.7 41.4 (0.01) 33.0 44.3 (0.06) Unable to test 30.6 41.9 (0.00)
Declining 4.2 9.9 4.5 9.0 4.4 9.6
INCENTIVES
Fall in domestic demand
Important 38.0 57.5 12.96 40.0 56.0 5.36 34.6 62.1 4.13 38.5 57.2 13.21
Unimportant 62.0 42.5 (0.00) 60.0 44.0 (0.02) 65.4 37.9 (0.04) 61.5 42.8 (0.00)
Increasing domestic
competition
Important 31.7 47.2 8.57 38.2 46.5 1.45 30.8 44.8 1.15 31.6 50.2 13.42
Unimportant 68.3 52.8 (0.00) 61.8 53.5 (0.23) 69.2 55.2 (0.28) 68.4 49.8 (0.00)
37
38
Table 2 (continued)
IMPEDIMENTS
Strong marketing by OS
competitors
Important 50.9 63.4 5.71 54.3 63.5 1.85 53.8 62.1 0.39 50.5 61.6 4.81
Unimportant 49.1 36.6 (0.02) 45.7 36.5 (0.17) 46.2 37.9 (0.54) 49.5 38.4 (0.03)
Lack of continuity of OS
orders
Important 56.5 66.7 3.86 48.9 69.5 9.56 68.0 62.1 0.21 57.3 67.5 4.32
Unimportant 43.5 33.3 (0.05) 51.1 30.5 (0.00) 32.0 37.9 (0.65) 42.7 32.5 (0.04)
Identifying OS decision
makers
Important 55.6 68.6 6.41 54.3 69.5 5.31 53.8 75.9 2.94 56.5 68.8 6.35
Unimportant 44.4 31.4 (0.01) 45.7 30.5 (0.02) 46.2 24.1 (0.09) 43.5 31.2 (0.01)
Lack of control over agents
Important 45.8 60.1 7.27 44.6 60.2 5.23 44.0 72.4 4.49 45.9 59.0 6.68
Unimportant 54.2 39.9 (0.01) 55.4 39.8 (0.02) 56.0 27.6 (0.03) 54.1 41.0 (0.01)
Control of international
operations
Important 48.5 62.0 6.54 47.8 63.3 5.21 53.8 79.3 4.04 50.0 62.3 5.91
Unimportant 51.5 38.0 (0.01) 52.2 36.7 (0.02) 46.2 20.7 (0.04) 50.0 37.7 (0.02)
Lack of government
assistance
Table 2 (continued)
Important 44.0 61.0 10.16 38.5 63.0 12.80 34.6 62.1 4.13 43.2 60.8 11.97
Unimportant 56.0 39.0 (0.00) 61.5 37.0 (0.00) 65.4 37.9 (0.04) 56.8 39.2 (0.00)
Lack of OS market
information
Important 46.1 59.9 6.74 46.7 62.2 5.17 50.0 62.1 0.81 46.2 59.8 7.20
Unimportant 53.9 40.1 (0.01) 53.3 37.8 (0.02) 50.0 37.9 (0.37) 53.8 40.2 (0.01)
Lack of export training
Important 26.8 40.1 7.02 26.1 43.3 6.86 50.0 41.4 0.41 28.1 40.2 6.28
Unimportant 73.2 59.9 (0.01) 73.9 56.7 (0.01) 50.0 58.6 (0.52) 71.9 59.8 (0.01)
Foreign government attitudes
Important 37.7 54.0 9.41 37.0 54.7 6.75 42.3 62.1 2.15 38.0 52.9 8.65
Unimportant 62.3 46.0 (0.00) 63.0 45.3 (0.01) 57.7 37.9 (0.14) 62.0 47.1 (0.00)
Technical help to OS firm
Important 37.6 52.2 7.50 36.3 58.3 10.27 40.0 51.7 0.74 37.9 52.2 7.92
Unimportant 62.4 47.85 (0.01) 63.7 41.7 (0.00) 60.0 48.3 (0.39) 62.1 47.8 (0.00)
Higher risk in OS markets
Important 40.5 60.1 13.68 44.6 57.0 3.33 34.6 55.2 2.34 40.0 61.0 17.12
Unimportant 59.5 39.9 (0.00) 55.4 43.0 (0.07) 65.4 44.8 (0.13) 60.0 39.0 (0.00)
INCENTIVES: 1=very important; 5=not at all important.

IMPEDIMENTS: 1=very important problem; 5=not at all important a problem.
IB=international business; OS=overseas.
39
dicted inward internationalisation. Although only three management characteristics

predicted linked internationalisation (frequency of overseas trips, preparation of an
international business plan and knowledge of foreign cultures), this may not mean
that the other management characteristics do not predict linked internationalisation.
This is because the four other factors could not be tested due to the small number
of respondents.
With firms’ characteristics, those factors that predicted outward internationalis-
ation also predicted inward internationalisation as well as internationalisation overall.
Again, as with linked forms of internationalisation, there were a number of character-
istics that could not be tested because of the small number of respondents engaging
in strategic alliances or countertrade. However, two factors that predict outward,
inward and overall internationalisation did not predict linked internationalisation—
‘international business experience’ and ‘international market research’. On the other
hand, the only factor that was found not to be positively related to other forms of
internationalisation or internationalisation overall—size (as measured by Australian
employment)—was found to be a predictor of linked internationalisation.
Concerning incentives to internationalise, both factors that predict outward inter-
nationalisation also predicted overall internationalisation, although the second of
these factors (increasing domestic competition) did not apply to either inward or
linked internationalisation.
Finally, regarding impediments to internationalisation, those that related to out-
ward internationalisation also related to internationalisation overall and, with the
exception of ‘strong marketing by overseas competitors’, to inward internationalis-
ation. With linked forms of internationalisation, the four impediments that were sig-
nificant drivers mostly related to information and control, although there were seven
factors which were not significant. This provides a mixed picture as far as linked
internationalisation is concerned. From the foregoing, it would seem that it will be
necessary to undertake a study involving a larger number of respondents engaging
in linked internationalisation, before any meaningful conclusions can be drawn as
far as factors underlying this form of internationalisation is concerned.
Overall, the results indicate that Proposition 2 is supported as far as inward inter-
nationalisation and overall internationalisation are concerned.
The third proposition relates to whether the factors that predict internationalisation
do not apply when de-internationalisation takes place. This was measured by compar-
ing the percentage of turnover due to international business in 1983 compared to
1993 (i.e. dependency on international involvement). Where the percentage had
increased, it was presumed internationalisation had taken place. Where the percent-
age had decreased, it was assumed that de-internationalisation had taken place. The
factors that applied to firms in this latter group were treated as having contributed
to firms’ de-internationalisation (see Table 3).
This measure can only provide an indication as there is a bias in the sample
towards internationalisation as it was taken from a directory of current exporters. In
addition, some of those whose internationalisation had decreased may have been
reluctant to respond to the survey as it was entitled ‘Internationalisation of Compa-
Table 3
ANOVA results for factors which predict internationalisation and de-internationalisation
Factor Internationalisation De-internationalisation
% of Group mean F (sig.) % of Group mean F (sig.)

respondents respondents
MANAGEMENT CHARACTERISTICS
Trips overseas
Infrequent (1–4 31.6 15.13 7.22 52.4 ⫺12.82 0.05
year)
Frequent (5+ year) 68.4 24.38 (0.01) 47.6 ⫺11.60 (0.83)
Senior executive
spends more than
10% time on IB
Disagree 14.9 11.31 3.86 25.0 ⫺15.57 0.84
Ambivalent 4.9 24.00 (0.02) 10.7 ⫺3.33 (0.44)
Agree 80.4 22.24 64.3 ⫺14.28
International
transactions
experience
Disagree 16.6 8.49 11.36 17.9 ⫺17.40 0.546
Ambivalent 14.9 14.54 (0.00) 14.3 ⫺7.25 (0.58)
Agree 68.5 24.99 67.9 ⫺13.68
Knowledge of
foreign cultures
Disagree 19.2 13.38 6.64 21.4 ⫺16.67 0.199
Ambivalent 30.3 17.31 (0.00) 14.3 ⫺13.75 (0.82)
Agree 50.4 25.6 764.3 ⫺12.28
FIRM CHARACTERISTICS
International
business experience
Low (1–4 years) 19.6 16.17 5.195 – Unable to test
Medium (5–9 26.8 28.05 (0.00) –
years)
High (10+ years) 53.6 18.69 100.0
Number of
countries involved
Small (1–4) 27.5 15.00 4.065 25.0 ⫺22.00 1.758
Medium (5–9) 34.1 20.44 (0.02) 35.7 ⫺10.40 (0.19)
Large (10+) 38.4 25.28 39.3 ⫺10.73
Developing new
products for
overseas
Disagree 8.9 17.62 0.981 21.4 ⫺11.00 2.277
Ambivalent 6.0 20.43 (0.42) 10.7 ⫺33.33 (0.09)
Agree 85.1 20.98 67.9 ⫺11.16
Adequate funds for
IB
Table 3 (continued)

Disagree 13.7 14.50 5.29 21.4 ⫺4.00 1.87

Ambivalent 21.8 14.59 (0.01) 21.4 ⫺13.67 (0.18)
Agree 64.5 24.17 57.1 ⫺16.88
Adequate IB
market research
Disagree 32.6 15.95 2.982 53.6 ⫺11.80 0.385
Ambivalent 23.8 21.07 (0.05) 25.0 ⫺13.00 (0.68)
Agree 43.8 23.99 21.4 ⫺18.00
Growth in major
overseas market
Growing 56.5 23.13 3.08 61.5 ⫺15.19 1.28
Static 37.8 17.93 (0.05) 15.4 ⫺2.50 (0.30)
Declining 5.7 9.92 23.1 ⫺15.50
INCENTIVES
Exclusive
production process
Important 49.5 21.95 0.89 45.8 ⫺9.36 2.92
Unimportant 50.5 19.13 (0.35) 54.1 ⫺19.46 (0.10)
Inquiries for
industry
representatives
Important 42.5 17.04 3.96 48.1 ⫺12.15 0.22
Unimportant 57.5 23.02 (0.05) 51.9 ⫺14.86 (0.64)
Industry trade
associations
Important 27.4 15.52 3.819 38.5 ⫺9.50 1.48
Unimportant 72.6 21.86 (0.05) 61.5 ⫺16.69 (0.24)
Fall in domestic
demand
Important 52.9 17.50 4.042 48.1 ⫺13.46 0.001
Unimportant 47.1 23.23 (0.05) 51.9 ⫺13.64 (0.98)
Increasing domestic
competition
Important 44.2 13.44 18.84 37.0 ⫺6.90 3.627
Unimportant 55.8 25.53 (0.00) 63.0 ⫺17.47 (0.07)
Domestic suppliers
more competitive
Important 33.8 16.07 3.95 37.0 ⫺12.40 0.096
Unimportant 66.2 22.10 (0.05) 63.0 ⫺14.24 (0.76)
Technology of
suppliers increased
Important 24.9 15.87 2.77 34.6 ⫺13.00 0.07
Unimportant 75.1 21.50 (0.10) 65.4 ⫺14.59 (0.80)
Acquire overseas
market knowledge
Table 3 (continued)

Important 69.7 21.18 0.69 66.7 ⫺10.22 3.03

Unimportant 30.3 18.48 (0.40) 33.3 ⫺20.22 (0.09)
Versatile production
Important 68.2 21.16 0.45 57.7 ⫺9.53 3.43
Unimportant 31.8 19.06 (0.50) 42.3 ⫺19.91 (0.08)
IMPEDIMENTS
Strong marketing by overseas competitors
Important 53.1 17.10 6.998 63.0 ⫺12.88 0.169
Unimportant 46.9 24.80 (0.01) 37.0 ⫺15.30 (0.68)
Lack of continuity of overseas orders
Important 59.9 18.47 3.20 78.6 ⫺13.32 0.006
Unimportant 40.1 23.85 (0.08) 21.4 ⫺13.83 (0.94)
Identifying overseas decision-makers
Important 61.0 19.79 0.69 64.3 ⫺8.17 8.70
Unimportant 39.0 22.30 (0.41) 35.7 ⫺22.90 (0.01)
Availability of working capital
Important 61.4 22.96 3.34 53.6 ⫺15.60 1.03
Unimportant 38.6 16.92 (0.01) 46.4 ⫺10.93 (0.41)
Compete on price overseas
Important 62.1 18.29 4.17 71.4 ⫺13.15 0.51
Unimportant 37.9 24.43 (0.00) 28.6 ⫺14.13 (0.73)
Strong competition overseas
Important 77.0 18.79 4.15 75.0 ⫺14.62 0.57
Unimportant 23.0 25.81 (0.04) 25.0 ⫺9.86 (0.46)
Lack of export
training
Important 36.6 17.20 2.896 37.0 ⫺18.10 1.43
Unimportant 63.4 22.33 (0.09) 63.0 ⫺11.24 (0.24)
Foreign government attitudes
Important 49.3 17.50 4.096 42.9 ⫺13.75 0.10
Unimportant 50.7 23.39 (0.04) 57.1 ⫺13.19 (0.92)
Typical help to overseas firms
Important 49.1 17.10 5.23 42.3 ⫺9.00 2.45
Unimportant 50.9 23.77 (0.02) 57.7 ⫺17.87 (0.13)
Higher risk in overseas markets
Important 53.3 17.18 5.89 35.7 ⫺14.50 0.08
Unimportant 46.7 24.19 (0.02) 64.3 ⫺12.83 (0.78)
nies’. This may explain why only 28 cases of de-internationalisation were found
compared to 209 cases of internationalisation.
Contrary to the suggestion of Welch and Benito (1996), none of the factors that
predicted internationalisation operated in reverse in the case of de-internationalis-
ation. Those factors which were found to be unique to increased internationalisation
centre around management characteristics such as commitment and experience of
employees with regard to involvement in international activities. Organisational

characteristics focus on a willingness to make adjustments to accommodate the needs
of foreign markets and a willingness to commit adequate resources. The external
impediments relate to overseas competition and difficulty in identifying decision
makers overseas (both only significant at the 0.09 level). External incentives were
related to both product advantages and to inquiries from and assistance by industry
bodies. In general, these factors indicate that a proactive approach characterises firms
which experienced an increase in internationalisation as measured by dependency
on international business for turnover.
By contrast, those factors unique to de-internationalisation did not include any
management characteristics and those relating to firms’ characteristics were confined
to developing new products for overseas markets. External impediments relate to
lack of continuity in overseas orders and poor performance of overseas agents. These
factors point to a more reactive approach on the part of firms that have experienced
de-internationalisation rather than a conscious attempt to reduce immediate inter-
national involvement in order to strengthen the firm’s future domestic or inter-
national position.
Finally, there were a number of factors that related to international involvement
in general but which did not differentiate between internationalisation and de-inter-
nationalisation. These include the management characteristic of frequency of over-
seas trips and the firms’ characteristics of degree to which decision making in the
firm was driven by foreign market considerations, length of firms’ involvement in
international business, adequacy of international market research and extent of
growth in major overseas markets. The only external incentive in this category was
whether the firm’s R&D expenditure level was above the industry average (and hence
international involvement was necessary in order to amortise it).
Of the 28 factors in Table 3, 17 only related to increases in internationalisation,
six only related to increases in de-internationalisation and a further five related to
both internationalisation and de-internationalisation. Because of this, Proposition 3
is supported.
7. Implications
The above research indicates that firms’ international decision-making is both mul-
tidimensional and multifocal. It is multidimensional in that it is not only outward
driven but can also be inward driven. Outward-driven activities can be influenced
by inward-driven activities and vice versa. It is multifocal in that firms do not focus
on one form of involvement overseas but tailor their form of involvement to both
the circumstances of the firm and the circumstances of the market.
The research indicates that the management and firm characteristics that previous
research attributed to outward-driven internationalisation also applied to inward-
driven internationalisation and internationalisation overall. This would suggest that
the firm and management characteristics attributed previously to a tendency to engage
in export and other outward forms of internationalisation in fact reflect a tendency
towards international involvement regardless of the form it takes. Similarly, the

incentives and impediments attributed in previous research to outward-driven inter-
nationalisation apply, for the most part, to inward-driven internationalisation and
internationalisation overall.
Finally, the research provided some evidence that the management characteristics,
firms’ characteristics, impediments and incentives of firms that expanded their inter-
national involvement did not apply in reverse to firms that decreased their inter-
national involvement. To the extent that these variables differed between firms that
increased as opposed to decreased their internationalisation, a preliminary conclusion
would be that the former were more proactive and the latter more reactive in
approach.
The above suggests that internationalisation should be viewed in a holistic way
rather than in terms of the form it takes. This is because it was found that with firms
engaged in export, their international involvement in a majority of cases was not
confined to export or even outward-driven activities. Rather it involved t a range of
inward and linked forms of international behaviour that interacted with each other
to influence the extent of the firm’s internationalisation.
A holistic approach to internationalisation is better able to mirror the more sophis-
ticated forms of international involvement that characterise many firms’ international
activities at the threshold of the of the new millennium. There are an increasing
number of firms that operate on a global basis. Driven by shorter product life-cycles
and increased costs of bringing new products to market, these firms, in their search
for inputs to improve their global competitiveness, are likely to sell to and source
from the same overseas firm or subsidiary. In so doing, they are endeavouring to
serve the global market by maximising the capabilities and advantages that individual
countries have to offer. This may necessitate the formation of strategic alliances, the
entering into cooperative manufacturing arrangements, acting as both licensee and
licensor, or operating as both franchisee and franchisor. In some cases, in order to
secure a competitive position in difficult markets, global firms may have to become
actively involved in countertrade.
The holistic approach is also a more appropriate description for the involvement
of small and medium-sized firms that are ‘born global’. These are firms that, from
the outset, plan to market their products and services internationally. Within 2 years
of establishment, these firms usually achieve 25% of turnover from overseas activi-
ties. They do not follow a sequential process of internationalisation and often their
expansion overseas reflects the nature of their operation in the domestic market (i.e.
if their skill in the home market lies in franchising, this will be their mode of entry
into overseas markets).
The holistic approach is also more appropriate for both small and medium
exporters (SMEs) as well as transnational companies undertaking international busi-
ness in the new electronic environment. In the world of electronic commerce, out-
ward-driven internationalisation may well prove an inadequate explanation of inter-
national behaviour in an environment characterised by interactivity, disintermediation
and the replacement of marketplace by marketspace transactions. Whereas in the
marketplace, internationalisation tends to be incremental, unidimensional and dis-
tinct, in marketspace, internationalisation tends to be rapid, multidimensional and

indistinct (Zhao & Du, 2000).
Finally, from the perspective of government, the holistic approach to internationa-
lisation has significant implications. This can be illustrated in the case of government
assistance programs. Governments in many countries, via programs of export assist-
ance (e.g. Export Now, Australia 1978) and export incentives (e.g. Australian Export
Market Development Grants Scheme), endeavour to encourage firms to become more
involved in international activities. Government assistance measures in general have
not moved beyond outward forms and governments tend to only assist firms to sell
to and manufacture in overseas markets with a view to supplying those and adjacent
markets. In general, this approach lags behind the reality of international behaviour
in that it does not recognise that inward-driven internationalisation today can lead
to outward-driven internationalisation tomorrow and vice versa, and that international
business increasingly involves activities in which inward and outward forms are
linked. As far as government assistance is concerned, a majority of respondents
engaged in outward, inward and linked forms of internationalisation did not consider
lack of assistance an important impediment to undertaking international business.
This appears to indicate that assistance measures offered by the Australian govern-
ment are not rated highly. It also raises the possibility that the assistance offered
may be of the wrong kind—that assistance measures tailored to direct exporters are
of little relevance to many exporting firms because most of them simultaneously
engage in other forms of international activity.
8. Limitations and directions for future research
One of the limitations of this research is the source of the population used for
this study. In the absence of an up-to-date directory of Australian importers, a Direc-
tory of Exporters was used. This can be supported on the basis of overseas research
that most exporters also engage in inward and linked forms of internationalisation.
Although this was borne out by the study, we do not know whether most importers
also engage in export and a further study using a list of current importers would
assist in confirming this. If this proves impossible, the study could be replicated in
another country where up-to-date directories exist of both importers and exporters.
The results of that study could then be compared with the present findings to see
whether they differ significantly.
The model in Fig. 1 shows that outward activities might lead to inward activities
and/or linked activities and vice versa. This was not explored in the survey. Because
of the complex nature of internationalisation, this aspect might be explored by selec-
ted case studies of firms that engage in multiple forms of international activity. In
addition, the number of firms undertaking linked international activities was too small
in most instances to determine which factors were significant drivers of linked inter-
nationalisation. This suggests that a replication of the study on a larger basis might
be undertaken, specific to firms undertaking linked international activities.
Another aspect is that the study was conducted from the perspective of firms
domiciled in New South Wales, irrespective of whether they were wholly or partly
foreign owned and/or subsidiaries of trans-national companies. An area that could
be further explored is whether degree of foreign ownership impacts on firms domi-
ciled in Australia adopting a holistic approach to internationalisation.
Finally, on the issue of de-internationalisation, the number of firms was too small
to reach other than indicative conclusions. A more comprehensive list of firms which
reduced their international involvement needs to be obtained and a specific survey
administered inquiring as to the factors causing their de-internationalisation.
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Dr Richard Fletcher is a Senior Lecturer in charge of international marketing studies at the University of
Technology, Sydney (UTS). He is also Director of Post-Graduate Programs in Marketing and Course Director
of the Master of Business (International Marketing) Degree. Prior to joining UTS in 1989, Dr Fletcher was a
Senior Trade Commissioner for the Australian Government over a 25-year period and represented Australia’s
commercial interests in New Delhi, Bombay, San Francisco, Jakarta, Teheran, Libya, Los Angeles and Bang-
kok.

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International Business Review 10 (2001) 25–49

A holistic approach to internationalisation

Previous research into internationalisation has viewed it as being an export-led phenomenon.

Keywords: Internationalisation; De-internationalisation; Export; Import; Strategic alliances and

* Tel.: +61-2-95143537; fax: +61-2-95143535.

2. Factors causing internationalisation

The most important external impediments are marketing activities by competitors

3. The process of firms’ internationalisation

This process includes the ‘stages’ approach which views internationalisation as

Although the above refers to voluntary de-internationalisation, it can also be involun-

In response to these developments in the international environment, more complex

앫 Firms can also become internationalised by inward-driven activities such as

앫 Internationalisation should be viewed as a global activity rather than as an activity

Several researchers in the area of internationalisation have written conceptual papers

Fig. 1. A holistic approach to internationalisation.

Proposition 1 The international behaviour of firms indicates that a majority of firms

Proposition 2 Those factors which predict internationalisation with an outward focus

In order to test the above propositions, responses to questions in a broad-based

Activity All responses Direct exporters Sole involvement

most respondents engaged in several forms of international activities, 27% (137) of

Factor Outward Inward Linked Total

Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)

High Low High Low High Low High Low

Factor Outward Inward Linked Total

Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)

High Low High Low High Low High Low

Factor Outward Inward Linked Total

Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)

High Low High Low High Low High Low

Factor Outward Inward Linked Total

Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)

High Low High Low High Low High Low

Factor Outward Inward Linked Total

Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.) Dependence χ2 (sig.)

High Low High Low High Low High Low

INCENTIVES: 1=very important; 5=not at all important.

dicted inward internationalisation. Although only three management characteristics

Factor Internationalisation De-internationalisation

% of Group mean F (sig.) % of Group mean F (sig.)

Factor Internationalisation De-internationalisation

% of Group mean F (sig.) % of Group mean F (sig.)

Disagree 13.7 14.50 5.29 21.4 ⫺4.00 1.87

Factor Internationalisation De-internationalisation

% of Group mean F (sig.) % of Group mean F (sig.)

Important 69.7 21.18 0.69 66.7 ⫺10.22 3.03

employees with regard to involvement in international activities. Organisational

towards international involvement regardless of the form it takes. Similarly, the

tinct, in marketspace, internationalisation tends to be rapid, multidimensional and

8. Limitations and directions for future research

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