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ng fewer than 100 people. This paper is based on data related to organisations of this size, accepting that the SME sector as a whole comprises a heterogeneous mixture of organisations, and firms of different sizes within it may face very different challenges. Following Coviello and McAuley (1999: 225), internationalisation is defined as ‘the process by which firms both increase their awareness of the direct and indirect influence of international transactions on their future, and establish and conduct transactions in other countries’. As such, international activity is taken to include: exporting; licensing/distributor arrangements; franchising; establishing a greenfield site abroad; having a manufacturing facility in another country; owning a sales or service centre abroad; undertaking a cross-border merger or acquisition; or the establishment of a cross-border joint venture or strategic alliance. SMES AND INTERNATIONALISATION
The process of initial internationalisation, for firms of all sizes, may be considered as an incrementally Internationalising SMEs
216 Journal of Small Business and Enterprise Development staged process (Johannson and Vahlne, 1990), the consequence of ‘strategic opportunism’ (Melin, 1992) or a more rational outcome of strategic market development (Buckley and Casson, 1999).
Management learning underpins the process, whether internationalisation is explained as an economically driven process of rational choices in terms of foreign investments, the outcome of strategic or opportunistic management behaviour, or the product of a network of inter-firm relationships enabling organisations to grow and develop (Coviello and McAuley, 1999).
From within the ‘staged perspective’, Dudley and Martens (1993) characterise the process of internationalisation as moving from: an introductory phase of exporting or initiating a licensing agreement; ‘colonisation’ through distributors, branch offices or subsidiary companies; ‘unification’, with the tightening of central control and the establishment of global objectives; ‘rationalisation’, where the business is restructured into manageable groups of business units; culminating in a position of ‘strategy maintenance’. Empirical investigations of the internationalisation process indicate, however, that these linear, staged explanations inadequately reflect the different experiences of firms in some sectors (Preece et al., 1998). Other studies focus on the organisational development features of international activity and suggest that organisations need to develop from a preinvolvement, or aspirational, stage of internationalisation to one where they are fully engaged through an ‘international mind-set’ in creating and maintaining effective relationships with stakeholders in cross-border operations (Edvardsson et al., 1993; Leblanc, 1994; Barkema et al., 1996; Anderson et al., 1998).
For smaller enterprises, of course, management learning is particularly important, as the scale and significance of the development from domestic to international operations is proportionately greater than for a large and functionally diverse organisation. The process of ‘going international’ begins well before the first international activity is undertaken, as managers begin to consider ‘whether’ ‘where’ and ‘how’ to operate overseas (Reid, 1981). If the transition from pre-internationalisation to committed international player is to be achieved, key issues are the ability to build an int