6.1 What do we mean by the Term Internationalisation?

The term internationalisation envelops all activities that a company undertakes with regards to its relations with foreign markets. Political and economic changes in the global terrain certainly influenced the term to a point where it now involves more activities than merely exporting goods to other countries. Thus, internationalisation can take many forms, such as investing in a foreign country (foreign direct investment), forming partnerships with foreign companies, subcontracting foreign experts, taking part in international networks, and many more.

From a historical point of view, internationalization of business started simultaneously along with mankind´s ability to travel across the seas and overcome borders and the term itself can be interpreted and defined through many perspectives and viewpoints.1

The number of small firms that operate on an international level has been growing at a slow but steady pace and, as a result, their contribution to the global economy is also getting recognised, a fact which also altered their position as potential trade partners.2 Researchers have pointed out that the time between the establishment of a company and its first international activity has become shorter; a factor which urges SMEs to carry out their operations in a timely and organised manner, in order to keep up with the developments and advances of the economy.3

Nonetheless, an SME which decides to engage in international operations (both inward and outward) must follow a certain pattern involving a series of activities, which will be integrated into the firm´s strategy. This set of actions will form the internationalisation development strategy of the firm and it should be based on its available resources, due to the fact that a lack of resources can seriously affect the feasibility of the international operations that an SME wishes to undertake.4

1 Internationalization Process of SMEs: Strategies and Methods, Mohibul Islam Masum Alejandra Fernandez, June 2008, p. 11.
2 OECD, Green Paper, 2003.
3 Change in SME Internationalisation ? A Network Perspective, Niina Nummela, 2002, p. 3.
4 Edelman, L., Brush, C., Manolova, T., The impact of human and organizational resources on small firm strategy, 2001.