GRIN - A Critical Evaluation of the Stages Model of Internationalization according to Johanson and Vahlne (2024)

FAQs

What are the five stages of internationalization? ›

Refers to an internationalization process that happens gradually, stage-by-stage, depending mainly on the gradual acquisition of knowledge of international markets.

The main criticism of the Uppsala model is that it assumes decision makers are rational, but it does not consider bounded rationality and the influence of escalation of commitment on internationalization decisions.

Step 1: No regular export activities (sporadic export). Step 2: Export via independent representative (export mode). Step 3: Establishment of a foreign sales subsidiary. Step 4: Foreign production/manufacturing.

There are four main models of internationalisation: Uppsala model, Transaction Costs Approach, Network theory, and Dunning Eclectic Approach.

Internationalization process canvas (Figure 1, above) shows the game setup. There are four stages (1): domestic stage, international entry, international diversification and global rationalization. Each stage requires development of certain capabilities to move to another level.

Stage Theory is based on the idea that organizations pass through a series of steps or stages as they change. After stages are recognized, strategies to promote change can be matched to various points in the process of change. According to Stage theory, adoption of an innovation usually follows several stages.

The first major steps in a firm's internationalisation process are generally held to be trade related, and while import activity is considered to play a role, it is export activity that is most often recognised as being the first real step in the internationalisation process.

The Uppsala model explains how companies intensify their investments and activities in foreign markets. The authors, Johanson and Vahlne, describe it as a step-by-step learning process and gaining knowledge through experience. This is correlated to the amount of investments into foreign markets.

What are the key concepts of the Uppsala model? ›

The Uppsala model is based on four core concepts: market commitment, market knowledge, current activities and commitment decisions. These four concepts are then divided into state aspects and change aspects.

The importance of combining the experientially acquired skills of the entrepreneur, or the entrepreneurial manager, with the resources available via the network is crucial for success (Schweizer et al., 2010). Hence, the Uppsala model is applicable for both large MBEs and SMEs (Chandra et al., 2020).

The stage model of internationalization refers to the step-by-step process that small and medium-sized enterprises (SMEs) go through when expanding their operations internationally. It provides a framework for understanding the various stages and challenges involved in becoming a global company.

NETWORK APPROACH OF INTERNATIONALIZATION

Besides, the network model is concerned with relationships among partners in the network, while in original Uppsala model focus is on psychic distance and countries that a firm should enter (Johanson & Vahlne, 2003).

The Uppsala model of internationalisation and beyond. the studies of Johanson & Wiedersheim-Paul (1975) and Johansson & Vahlne (1977). theory that suggests that the internationalisation of business occurs in sequential steps. foundations needed, in order for companies to handle international activities.

According to the algorithm that drives this word similarity engine, the top 5 related words for "internationalization" are: internationalisation, globalization, democratization, westernization, and harmonization. There are 242 other words that are related to or similar to internationalization listed above.