Top management networks and external environment : an examination of internationalisation among SMEs fom the Australian food and beverage sector.

Several reasons underlie the increased efforts towards internationalisation by small and medium-sized enterprises (SMEs) including the emergence of global and niche industries, technological developments and the increased importance of global networks and alliances (Etemad, 2004). Positioned within the field of international entrepreneurship, this study addresses the following broad research problem: what is the role of top management, networks and external environment on the internationalisation of SMEs operating in the Australian food and beverage sector? A multi-theoretical approach is used to examine this research problem. This study draws on internationalisation theory (Johanson & Vahlne, 1977, 2009), the resource-based view (Barney, 1991), the knowledge-based view (Grant, 1996), network theory (Granovetter, 1973; Johansson & Mattson, 1988) and entrepreneurship theory (Shane & Venkataraman, 2000). While previous research highlights the role of top management, networks and external-environment on the internationalisation of SMEs, opportunities for further research exist. In addition, there are concerns that the field of international entrepreneurship remains dominated by research on international new ventures (IN V s) (Keupp & Gassman, 2009). In addressing these concerns, the broad research problem is examined across three categories of SMEs: INVs (defined as SMEs that have commenced internationalisation less than three years from inception), late international SMEs (defined as SMEs that commenced internationalisation after three years from inception), and domestic SMEs (defined as SMEs that are over three years of age and have not yet internationalised). The three research questions addressed in the present study are as follows: 1. What is the role of top management on the internationalisation of SMEs? 2. What is the role of networks on the internationalisation of SMEs? 3. What is the role of the external environment on the internationalisation of SMEs? To examine the role of top management, networks and external environment on internationalisation, the present study employed a multiple case-study approach comprising fifteen SMEs from the Australian food and beverage (F&B) sector. This sector plays an important role in the development of Australia's economy (Department of Agriculture Fisheries and Forestry, 2008), however it is undergoing rapid changes associated with the increasing globalisation of food production and retail markets and significant rationalisation and integration of the supply chain (Department of Agriculture Fisheries and Forestry, 2007a). In light of these changes, it is crucial that Australian F&B SMEs are able to compete effectively at home and in foreign markets. Despite this, only a small number of studies have examined internationalisation within the Australian context (Fischer, 2004). In addressing Research Question 1, the present study identifies four managerial mindset characteristics that explain internationalisation. These are: cosmopolitanism, cognitive complexity, risk tolerance and commitment to internationalisation. With regard to Research Question 2, the findings contribute towards an understanding of how smaller firms differ in their development and utilisation of networks for internationalisation. The study also highlights the importance of strong international business relationships, and explicates the opportunity costs and network rigidity resulting from existing networks, which may affect internationalisation. In addressing Research Question 3, four salient external environment forces are identitied to explain why some Australian F&B SMEs internationalise and others stay focussed primarily on the domestic market. These are domestic push forces relating to threats from a consolidated retail sector, domestic pull forces relating to sustainability in a small domestic market, international pull forces relating to the perceived superiority ofproduct in international markets, and international push forces relating to competitive pressures abroad. In applying a multi-theoretical approach to examine intemationalisation across three groups of SMEs, the findings of the present study extend existing theoretical and empirical literature within the field of international entrepreneurship. In addition, the study contributes to practice. From a managerial perspective, the findings may provide managers with a framework upon which to evaluate their firm's internationalisation against the internationalisation of others in the industry. They may also be able to gauge the effect of their firms' managerial mindsets and networks on intemationalisation given the nature of the external environment. Government policy-makers may be able to use these findings to develop new or existing initiatives to assist SME managers operating within the Australian F&B sector internationalise. The present study also provides empirical contributions and suggestions to further existing research.