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International Family Enterprise

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"Enabling Internationalization Excellence for Family Enterprises"

IFE, 2017

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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.

Entrepreneurs Antti Ahlström, Gustaf Serlachius, and Wilhelm Schauman, the founders of Finnish well-known companies (currently called Ahlström, Metsä Group, UPM) were good at taking advantage of the existing networks derived from their earlier life phases. They were able to approach foreign agents, providers of technology and machinery, and customers by asking from people they already knew when building the international base of their business in between 1870s and 1920s. For Mr. Gustaf Serlachius the key contact for international business networks for his ground wood mill and paper production business was Georg Franz Stockmann, who imported liqueurs, chemicals, etc. for his pharmacies. Via him, Serlachius made contacts in Lübeck and Hamburg, followed by contacts in other markets. Contacts that were useful also for his new business area. Gustaf also approached e.g. his pharmacist friend in Sweden when searching for trustworthy machine manufacturers for his paper factory.

The family entrerprises of today have also reported they have found very good networks via existing networks. The quotes below are direct (translated) quotes from our interview data:

“Via the development project in Sweden, all the foreign markets were opened, since they always recommended us to a new direction.”

“Our Finnish major customer has introduced us to new customers.”

“I always ask our end customers from whom they would like to buy.”

“When introducing, they also tell what kind of a company we are as a collaborator.”

Hence, as a managerial recommendation, I warmly recommend that the entrepreneurs ask for recommendations for new network ties from their existing agents, dealers, customers, subcontractors, importers – anyone the entrepreneur knows well!