A Study on Motivation and Internationalisation Process of Indian SMEs

Abstract

The reason of this study is to understand the motives and the internationalisation process of the Indian small and medium-sized enterprises. Recently, the Indian SMEs have seen a huge spur in the global environment. Currently, there are around 42.50 million registered and unregistered SME’s and about 40% of them export on the international platform. In this research, the author tried to understand the internationalisation methods employed by the companies and the motivation behind their internationalisation. This is an important subject to study as many Indian SMEs are facing challenges in their internationalisation process and the Indian formal institutions were lacking the knowledge of helping them in overcoming those challenges. Therefore, understanding the internationalisation process may help SME managers to take appropriate steps concerning the internationalisation process. Also, understanding the motives to internationalise may help the Indian formal institutions to devise policies for increasing the internationalisation of the Indian SMEs. It will also serve as a key maker of theories of internationalisation of firms and add to the existing academic literature.

The data for the analysis was collected using semi-structured interviews. Four successful SME directors participated and helped in answering questions related to the internationalisation process and their motivation to internationalisation. The four SMEs were from different industries each having a different operating activity.

The results showed that all the companies despite of their different industries or different operating activities, shared a similar internationalisation process and similar motivations to internationalise. It was revealed that all the four companies internationalised due to high consumer demand, increasing competition within the industry and growing home country government incentives to internationalise. These factors highly motivated Indian SMEs to internationalise at an early stage. Their process of internationalisation was a combination of the network theory and the born global firms. All the firms internationalised as soon as they were founded and used their formal/informal networks to enter the foreign market through indirect exporting. There is a vast scope of further research on this topic as it is an unexplored area. Researchers can study the evolving internationalisation processes and their relation to motivation.