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rly: entry routes/methods, transport or logistical difficulties, awareness of tariffs/trading barriers and language problems (see Table 4).
Journal of Small Business and Enterprise Development 221 The issue of prior knowledge of target markets was investigated to some extent through a question relating to knowledge of different regions of the world prior to entry. Knowledge of Western Europe was perceived to be average or good in around 70 per cent of firms, whereas between 40 and 46 per cent of respondents entering Eastern Europe, Asia and the Middle East believed their level of prior knowledge to be poor. Only 6.8 per cent believed their knowledge of Eastern Europe to be good or very good prior to entry, with this figure rising to 16.3 and 17.8 per cent for those entering the Middle East and Asia (see Table 5).
The survey also provided respondents with an opportunity to reflect on some of the outcomes of their international activities. Data from the questionnaire, shown in Table 6, indicate that the main changes recorded relate to product specification, marketing issues and financial controls. There is less evidence of changes in management style, organisation structure or approach to HRM issues. When asked about other, less tangible, benefits of involvement with international markets, most firms cited enhanced market awareness and company reputation rather than organisational or management learning (see Table 7).
The survey data suggest, therefore, that having made the decision to undertake international activity, immediate challenges of securing payment and the management of foreign intermediaries are important, and prior knowledge of the target region is recalled as a less significant issue for those embarking on international activity. Management learning is not perceived as a concern at the beginning of the process or as an outcome. The survey data provide some useful indications of challenges for managers but do not indicate the process by which these issues are addressed. Data from the case study organisations, however, are useful for further investigation of these challenges.
Internationalising SMEs 222 Journal of Small Business and Enterprise Development LEARNING TO INTERNATIONALISE: THE PROCESS Experiential learning Much of the literature on internationalisation, particularly that based on the ‘staged approach’, suggests that firms are likely to enter markets with low ‘psychic distance’ in their initial forays abroad (see, for example, Barkema et al., 1996). The questionnaire data do not support the view that culture or location, both of which might be components of ‘psychic distance’, are significant features of internationalisation decisions. For the case study organisations, experience of the entry method used to access previous markets was also more important than issues of culture or geography. In Company A, for example, international activities have been undertaken and developed in an ad hoc way with such success that, in spite of a lack of any coherent strategy or plan, business abroad now accounts for 60 per cent of the company turnover. Products reach North America, Western Europe, Middle East, Asia and Australasia. The overseas business is undertaken almost entirely through a network of distribution agents, although there is one subsidiary company in New Zealand that began as a distributor and was acquired to save it from insolvency. The current MD of Company B initiated trade overseas through chance