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"Enabling Internationalization Excellence for Family Enterprises"

IFE, 2017


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Research on the Internationalization of Family Enterprises – Toward the Holy Grail?

The research on the internationalization of family enterprises took off in 1991 when Miguel Angel Gallo and Jannicke Sveen published the first scientific article on the topic. This study dealt with the facilitating and restraining factors for family enterprises to go international. For nearly 30 years from that publication, various studies have attempted to increase our understanding on the specific factors related to the internationalization of family enterprises. Although this field of research has witnessed explosive growth (e.g. Pukall and Calabro, 2014), there is still lot to do in gaining findings that have large consensus behind them. We are still in a situation wherein opposing findings often fight with each other, for instance:

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Values as assets

Service designer Petri Aaltonen notes that the core of service business is not how valuable the customer is to the company, but what is the value the company brings to the customer. Hence, focus in service design should first and foremost be on the value experience, combining different levels of feeling and meaning. This lead me thinking more of the meaning of word value(s) in business.

Lately, I have been following one of my friends in LinkedIn, noting how he has become a professional in encouraging others. One update and post after another, be it work or free-time related, he is giving positive feedback and appreciation to his co-workers, colleagues, customers and friends. I could say, my friend’s activity and communication is led by the value of encouragement. The leading thought does not seem to be how much his actions bring value to the company he represents, but how much his actions are bringing meaning and value to his network and people he personally encounters – online or offline. He has internalized a value and attitude – or a personal brand – which reaches people on levels of both feeling and reason.

If service and service leadership is about value experience, I would say it is exactly the personal level appreciation and valuing that should be in a bigger role when building up the firm-level value for customers. It would not be primarily about competing for the value the customers brings to the company (cashflow), but the meaningfulness and feeling of working with that particular company that brings value (experience) to the customer. Like Aaltonen notes, service designing in companies must be based on knowing and seeing the customer and their needs; one must go close to the human: “Leaders’ attitude should be that I am here to learn, not leading.”

Because service business is growing its percentage in overall business activities, it is meaningful to take notion of how value experience and services are lead in family businesses. Not least, because values serve as the anchor for family firms, grounding much of its organizational culture, leadership, activities and objectives. Therefore, family firms as the kind of value leaders have the great position to be encouraging and showing their customers and other stakeholders how they reflect on values as assets in their operations e.g. in designing and producing services.


By chance or by chased chance?

I read a book about Finnish entrepreneurship stories (Yrittäjän Taivas+Helvetti Vol. 3, The Heaven and Hell of an Entrepreneur Vol. 3 in English), which includes a story about Risto Käkelä and his family firm Avant Tecno, a manufacturer of loaders, located in Ylöjärvi, Finland. Risto tells how in 1992 Jorgen, a Danish man having a small firm in their barn with his wife importing agricultural machinery to Denmark, happened to walk at the exhibition stand just when Avant Tecno started the machine of their loader on the last day of the first foreign trade fair of the firm in Germany. Jorgen tried the loader and eventually his firm started to import the machines of Avant Tecno to Denmark. Since the start of the relationship, Avant Tecno has sold machines to Denmark with 70 million euros, and in 2017 Risto gave Jorgen a gift for “the first 25 years” at the open house at Jorgen’s firm in Denmark.

“It was a lucky event for both of us. If we had started the machine ten seconds later, Jorgen would have walked by so far away that he wouldn’t have turned back”.

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The president of France Emmanuel Macron is currently visiting Finland. Yesterday, he started his speech with a few phrases of Finnish. In Denmark, he started with a few words of Danish. His pronunciation of Finnish was not perfect, but actually, pronunciation was not the point at all. The Finnish faces around him, and of the ones seeing this on TV, were all smiles.

According to my research findings, in addition to spending free time together one of the most important ways of getting closer to the customer or partner is to know some historical facts and a few words of the language of the target country.

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“In communication, 10 % is words”

For my research, I interview founders of internationalizing small firms. As a norm, they struggle with the scarcity of time, money or other resources, but at the same time, they all seem to dream big and possess a rather solid belief in who they are and what they are doing. You may or may not relate, but at least it seems to be the case for the majority of small business owners, entrepreneurs, and managers in charge of operationalizing strategy that I meet and interview. And, what becomes vital for many of the start-up founders, investors too seem to somehow become spokesmen of those “dream big” ventures, sharing something of that initial belief.

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The Value of Networks of Networks for Internationalization

Asking from existing trustworthy network ties about new potential networks seems to have been an efficient way to expand internationally through history. However, according to our research project, current family entrepreneurs could use this approach more efficiently. Firstly, it does not cost anything. Secondly, time is saved, since the element of trust is more present there – being that the introduction to the new contact is done via someone who already trusts both parties.

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Internship for PhD Students: Why Not?

Last September 2017 I started my journey towards PhD degree, and as a crucial part of it, the data collection of our research project started in the beginning of 2018. Having visited and interviewed a bunch of interesting family SMEs in Finland, I feel confident that we are digging a fruitful and important turf of internationalization phenomena, and that there is a lot to learn from these stories of successful family enterprises. For now, I won’t go that deeper into the insights relevant to our research project (because there are still many interviews to be made during the spring and, thus, more insights to be taken into consideration), but rather I would like to reflect these enterprise visits to the researcher’s work and career development in general. Being at the early stage of my PhD degree path and having done few courses related to the research field and methodology, I think that, just like the case often is with lower level degrees, there should be compulsory internship or practical training period for each PhD to really get to know, what the real world is really like regarding one’s own research field.

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Social interaction is an essential part of the international trust game

Sorry, this post is available only in Finnish! It has been tailored for Finnish entrepreneurs in special.

Olen tutkijanurani (2008-2018) aikana perehtynyt syvästi 23 suomalaisen pienen ja keskisuuren perheyrityksen kansainvälistymiseen. Tässä kirjoituksessa esittelen tutkimukseni kautta tekemiäni yleisiä havaintoja erityisesti näiden 23 pk-perheyrityksen kansainväliseen verkostoitumiseen ja kulttuuriosaamiseen liittyen. Lopussa vielä valotan miten 1870-1930-lukujen perheyrittäjät (Serlachius, Schauman, Waldén, Ahlström) verkostoituivat ja hallitsivat vieraat kulttuurit.

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Of coming and going

As I’m writing this, I’m sitting in a bus. The bus is taking me to Austria, where I’ll spend a couple of days visiting my friends before heading towards the expected white Christmas in Finland. My trip has started from Milan, where I attended an European International Business Academy Conference of current research related to my own research field. Now, having a good 5-hour ride for myself, I start reflecting on the past six months of research and my next steps in this process. So, in addition to a simple bus ride with a nice view over the Alps, I find myself being on a mental journey of some sort inspired by the things I see around me.

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We thought this must be the best way – but we should always remember it is just one way and there is also a mid-way

My newest publication* deals with how SMEs are able to build international network ties wisely to an institutionally different foreign market. We investigated eight Finnish SMEs who had exports via agents / distributors, sales subsidiaries, or a production subsidiary in the French market. We interviewed both Finnish managers and their French collaborators. We used the concept of institutional logics to find out about the cultural and material practices typical of Finnish and French business culture / SMEs.

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