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Abstract(s)
This thesis is a study of foreign entry mode decisions of SMEs through the case of Portuguese
firms operating within the IT sector. With the growing interest in international business there
has been an extensive research focus towards international business issues where foreign
entry mode decisions is a core element. However, the literature is dominated of theories
developed prior to the existence and growth of the IT industry and in addition many of the
theories are focused towards MNEs rather than SMEs. As a consequence, the aim is therefore
to assess how these firms’ foreign entry strategies and underlying reasoning relate to the most
prominent existing literature within the field.
It is provided a comprehensive literature review that distinguishes between two different
perspectives: an economic rooted perspective versus a behavioral approach. In addition, a few
more modern and fragmented theories explaining firms’ internationalization process is
presented. Based on the literature review it is presented a set of different internal and external
factors that potentially affect firms when making decisions regarding foreign entry mode
strategies.
Furthermore, the research question is studied through a qualitative research design in the form
of a case study involving two Portuguese IT-firms, Novabase and Xpand IT. The majority of
the data is derived through interviews with top executives and managers within both firms.
Based on analysis of the empirical data it is found that even though the two firms are
following a fairly similar internationalization strategy the reasoning behind their decisions is
highly different. While the one firm emphasize on reasoning rooted in the economics
perspective it is found that the other firm relates more to the behavioral approach. Hence,
difficulties in achieving findings that could be generalized arose.