Effectuation and causation are drivers toward internationalization success of SMEs : case: cross-sector Finnish SMEs

Abstract

Entrepreneurial decision-making logics and internationalization success of firms have been relatively broadly studied as separate concepts. However, there is a gap in the literature in concerns with these concepts’ interplay. Therefore, this thesis attempts to contribute to the research area, and offers insights into relationship between entrepreneurial decision-making logics and internationalization success of firms. In addition, the thesis increases understanding on the ways managers adapt their decision-making logics according to the decision context and the idiosyncratic nature of each foreign expansion. Moreover, this thesis is limited to study SMEs in the cross-sector, which again is lacking research until now.

The empirical part of the research is based on a quantitative research method. The data were collected via a structured online survey instrument from a cross-industrial sample of SMEs in Finland during 2014. The results of the thesis indicate that the entrepreneurial decision-making logics do not drive for internationalization success of SMEs. The findings were that causation positively but not-significantly predicts SMEs international performance in contrast to effectuation, which negatively but significantly predicts SMEs international performance. Overall, entrepreneurial decision-making logics do not seem to have a large positive role as influencers and predictors of SME internationalization process and internationalization outcomes, however, the positive effect could be moderated by some other mechanism, such as entrepreneur’s global mindset, and managerial experience.