El Gerente de Post venta, en coordinación con los responsables de almacenes y los jefes de servicios, deben elaborar una estructura de

FTE Persons Engaged Size Groups3

0-5 6-9 10-49 50-99 100+ Total

Enterprises 289,320 17,821 23,010 2,329 1,860 334,340

Percentage 86.5 5.3 6.9 0.7 0.6 100.0

1

Source: NZ Department of Statistics (2000); 2Revenue > NZ$30,000; 3Full-time equivalent employees (FTE)

The next sections now focuses on the method of case selection, the research instruments employed, and the procedure followed in data management and analysis.

3.2.2 Case Selection

Patton (2002) states that nothing draws out the differences between qualitative and quantitative research better than their diametrically opposed sampling logics. He adds that bias and weakness in statistical sampling is the focus and strength of qualitative sampling. For instance in this research random sampling was displaced by purposeful (theoretical) sampling (Glaser and Strauss, 1967), whereby MCEs were selected which would most likely manifest the relationship and internationalisation theoretical constructs of interest (Patton, 1990). Inherent within this purposeful strategy were the consideration of additional sampling logics1 including; the selection of typical, critical, or confirming/disconfirming cases; the selection of cases fitting specific criteria; and the selection of cases being based on opportunistic or emergent circumstances. Ultimately,

1

A discussion of purposeful sampling strategies may be found in Patton, M.Q. (2002), Qualitative Research and Evaluation Methods, 3rd ed., Sage Publications, CA., pp.243-244.

although the final strategy encompassed aspects of all of these, theory-based sampling was the main logic determining inclusion or non-inclusion.

Adopting this approach not only allowed for confirmation of the dominant theory in practise, but also challenged long accepted conditions inherent within these. For example, it was shown that most MCEs when internationalising did so incrementally (Johanson and Vahlne, 1977). They also demonstrated active involvement in social and business networks to overcome various resource and competency barriers (e.g., Autio et al., 2000; Johanson and Mattsson, 1985; Larson, 1992; Sadler and Chetty, 2000). However the selected MCEs were also observed making commitments to the international market and achieving subsequent levels export performance, that were disproportionate to their internal resources and infrastructure (e.g., Wolff and Pett, 2000). This finding in itself was compelling justification for the selection strategy adopted, the application of which is now detailed in sections outlining which and how many cases were chosen.

3.2.2.1 Selection Criteria

Several options were considered prior to embarking on the process of case selection. The first was to only take firms from a single industry base in order to eliminate the potential contextual variation in the findings (e.g., Metcalf et al., 1992; Philp, 1998). The second was to select firms from a single geographical location in acknowledgment that regional economic factors might account for some differences in their strategy. The third was to discriminate on the basis of traditional manufacturing versus technology based firms which Coviello and Jones (2004) suggest is valuable for comparison purposes. A related option was to retain a selection of both “marketing entrepreneurs” and “technical entrepreneurs” (Andersson, 2000) reasoning that the former would adopt more resource intensive market entry strategies whereas the latter would place greater reliance on technology based international networks.

All three options were eventually rejected in favour of selecting exemplar manufacturing MCEs (traditional or technology based) operating in any industry from three main centres of commercial activity in New Zealand. The rationale behind this was two pronged. Firstly, it was posited that whilst internationalisation strategy may

have varied in aspects such as market selection and entry mode, all would be faced with resource constraints and be compelled to enter into facilitating business relationships. After all, the theoretical focus was on the relationship development approach between dyads and on this basis there was little justification for ruling out any industry/firm types or geographical locations.

This is consistent with the thinking of Reinartz, Krafft, and Hoyer (2004) who found that relationship management systems did not produce varying results between industries and were indeed relevant across industries (see also Coviello et al., 2002). Secondly, the chosen unit of analysis likely precluded the selection of well established firms with a track record of market and financial success. It was therefore considered important to maximise the chances of including MCEs, irrespective of demographic base or industry profile, that were likely to be going concerns in the long term. By implication, Coviello and Jones (2004) support such logic in that they did not find a single international entrepreneurship study which included firms less than six years old.

An aspect of INV research that was included in the selection logic was to only consider MCEs which possessed an international orientation from early in their existence. To this end, firms which had made their first international sale within two years of inception were deemed eligible (e.g., Autio et al., 2000; Moen and Servais, 2002).

3.2.2.2 Number of Cases

Even though statistical generalisation was not the aim of this study, “how many cases are enough?” has been an ardently debated question amongst qualitative researchers. Whilst Eisenhardt (1989) states as few as four cases are acceptable, Lincoln and Guba (1985) argue that sampling should continue to the point of redundancy. This research resided in between these two views by taking the more pragmatic approach of specifying a sample that would reasonably cover the phenomenon of interest, whilst accepting the realities of resource constraints (Patton, 1990). Ultimately though, data redundancy began occurring after five cases with the research concluding after the analysis of the seventh case. Any more than this would have yielded an amount of data too cumbersome to manage (Eisenhardt, 1989) or resulted in data asphyxiation

beforehand, a list of eligible MCEs was compiled from which participants could be drawn, the process of which is now discussed.

3.2.2.3 Building a List of Eligible Cases

There were two challenges to overcome in selecting the right mix and suitability of participant organisations. The first was to obtain a substantial enough prospect list to draw from. Initially considered were publicly available databases such as regional “Yellow Pages” and various other forms of business directories. These were rejected on two counts including the impracticality of randomly sifting through these listings in the hope of contacting qualifying organisations, and then having made contact, the difficulty in implementing the selection strategy. The purchase of a commercial database was rejected on similar grounds.

Ultimately a Delphi philosophy2 (Turoff, 1975) was employed whereby a panel of experts representing various Export Promotion Organisations3 (EPOs) were asked to provide the names of prospective participants. As initial expert advice from a national EPO recommended firms from four municipalities including Auckland, Palmerston North, Wellington and Christchurch, further confirmation was then sought from locally based EPOs. Consulting multiple organisations in this process not only resulted in more robust theoretical sampling, but enabled the assessment of the recommended prospects through different lenses (Lewis and Grimes, 1999). An additional and unexpected benefit arising from the approach was the unsolicited recommendation of some MCEs by more than one EPO.

Secondly, once in possession of a prospect list,4 it then had to be subjected to a set of predetermined filtering questions (see appendix two). Marshall and Rossman (1989) state that “the ideal [case] is where…there is a high probability that a rich mix of many of the processes, people, programmes, interactions, and/or structures that may be part of the research question may be present and…data quality and credibility of the study are reasonably assured by avoiding poor sampling decisions” (p.54). These

2

Miles and Huberman (1994) do refer to "reputational case selection" where the recommendation of an expert is sought, however there was more of a panel approach employed in this research which has more in common with "Delphi".

3

Names of the organisations have not been included for privacy reasons.

4

recommendations became an essential component of the case filtering rationale, with specific emphasis on obtaining a richness and variety of processes.

Filters required that the prospect be an active exporter, that activity had been ongoing for a minimum of twelve months, that time elapsing between business inception and receipt of an initial overseas sale be no more than two years, that the number of FTE staff be no greater than five5, and that business was commenced post 1984. This last condition was included in part due to the New Zealand economy undergoing dramatic deregulation at this time forever altering the manufacturing sector (Thirkell and Dau, 1998), and in part also to establish the impact of this newness (Aldrich and Auster, 1986) on future infrastructural growth strategy (e.g., Bell et al., 2000).

These requirements necessitated that all on the prospect list be contacted by telephone. In doing so, willingness to be involved in the research was ascertained, and then those in agreement, were qualified by means of the filtering questions. The results of this process were that five declined to participate and a further twenty failed to qualify. Of the twenty remaining eligible MCEs, a final group of twelve were deemed most suitable for participation.

3.2.2.4 Infrastructural Growth Strategy

The infrastructural growth strategy of the MCE is worthy of specific comment. In order to ensure that a critical feature of MCE internationalisation progress would involve the leveraging of external resources, it was necessary to ascertain the likelihood of the prospective organisation growing their internal resources. By this reasoning it was anticipated that remaining small compelled a highly socialised (Håkansson, 1982) relationship nurturing approach, not only through a transitional period of organisational expansion, but in its absence, as a permanent internationalisation strategy.

Conversely, stage models imply that increasing commitments to the foreign market is necessarily mirrored by adjustments to infrastructure. One would expect this to be more manifest in the diminutive MCE although some initial pilot interviewing revealed otherwise. Based on this thinking, efforts were made to ensure that MCEs were selected

which were not planning to significantly grow their internal resource base over the long term, in response to increasing international success.

3.2.2.5 Exclusions and Exceptions

Total adherence to the selection criteria was the ultimate goal but not at the expense including qualifying but potentially poor case participants and vis-à-vis. Firstly, “Mom and Pop” businesses were generally avoided on the basis of operating at subsistence levels (e.g., McAuley, 1999). These were not considered serious internationalising concerns albeit that some of their revenue may have been derived from exporting. This is not to say that home-based or husband and wife MCEs were excluded from the mix and in fact five of the final cases fell into this category. None of these operated at a subsistence level though and all were serious about the continuation and indeed growth of their international activities.

Secondly, one of the final cases did not originate from an EPO recommendation but from a local media article profile. The company was however subjected to and qualified through the same filtering procedure. Thirdly, small company innovation is often only associated with high technology enterprises (e.g., Oviatt and McDougall, 1994; Roberts and Senturia, 1996). Since innovation is one of the hallmarks of the INV it would have been reasonable to exclude traditional manufacturing firms in favour of only technology based ventures. Ultimately, a more broad perspective of innovation was adopted whereby both new marketing and technology approaches were considered eligible (e.g., Andersson, 2000).

3.2.3 Research Instrument

As the main form of data collection was from face-to-face discussions with case participants, an interview guide (Patton, 2002) was developed reflecting the topics of interest (see appendix three). Whilst designed to solicit MCE internationalisation strategy in the context of relationship development, questions were phrased in such a manner so as to encourage frank and open discussion between the researcher and the participant. For instance, “Please describe the journey that your business has taken from founding to today”, was the first question asked and often yielded an initial response in excess of half an hour. Apart from some broad demographic questions, included to

provide a context for individual case analysis, all other questions although providing some structure, were open-ended and intended to allow the participant significant latitude in responding (e.g., Larson, 1992).

In light of this, the interview guide was exploratory in nature and designed to obtain a holistic picture of MCEs temporal processes. This is supported by grounded theorists (e.g., Glaser and Strauss, 1967) who argue that preconceptions regarding the types of responses sought, might hamper the emergence of important themes. Similarly, Kvale (1996) warns of the structuring process increasing the chances of interviewer bias, resulting from co-authoring responses in an attempt to keep within question parameters. It was chosen instead to place greater reliance on the skills of the researcher as is aptly expressed by Miles and Huberman (1994).

In qualitative research, instrument validity and reliability ride largely on the skills of the researcher…[who] needs good investigative skills, including doggedness, the ability to draw people out, and the ability to ward off premature closure (p.38).

Caution was taken in adopting such an approach. Whilst the importance of providing a flexible vehicle to capture unique stories and contexts was acknowledged (Harris and Sutton, 1986), there was also a need to manage the overwhelming amount of field data requiring thematic identification and interpretation. This balance was not achieved in isolation. Two senior academic colleagues, known for their polar views on instrument design, were approached on separate occasions to provide feedback on the initial draft. Predictably, one advocated the inclusion of ratings and scale type questions, whereas the other suggested taking more of a participant led journey. Both made extremely valuable points that were taken into consideration in the final version. Ultimately, it was an instrument that enabled the recording of subtly structured MCE stories.

3.2.4 Operationalisation of Constructs

Both internationalisation and RM theory were drawn upon in the formulation of the analytical framework and research questions. With respect to the former, in more recent times greater emphasis has been given to the role of networks in foreign market

progression and to some extent this has been at the expense of understanding the relationships that make up these networks. A number of authors have acknowledged this deficiency inasmuch as they have suggested that the relational paradigm in small firm progression requires in-depth investigation to better appreciate network dynamics (Chetty and Eriksson, 2002; Coviello and Munro, 1995; Ellis, 2000; Healy and Perry, 2000; Styles and Ambler, 1994; Welch and Luostarinen, 1988). Therefore, it was primarily the relationship literature from both marketing and sociology that was turned to for the purpose of interpreting the study data6.

3.2.4.1 Developing a Typology

To achieve this necessitated that a typology be developed which enabled the observation and assessment of a number of theoretical constructs. Specific relationship constructs of interest came from Social Exchange (SE) theory and included commitment (Gundlach et al., 1995; Jap and Ganesan, 2000), trust (Doney and Cannon, 1997; Morgan and Hunt, 1994; Moorman et al., 1992), reciprocity (Axelrod, 1986; Gouldner, 1960; Leuthesser and Kohli, 1995; Perugini et al., 2003), and relational social norms (Berthon et al., 2003; Gundlach and Achrol, 1993; Kaufmann and Stern, 1988; Macneil, 1980).

Mechanisms of relationship governance (Heide, 1994) were also observed and in particular their employment as tools for managing opportunism (Brown et al., 2000). No specific measures of Transaction Cost Analysis (TCA) behaviour (Anderson and Weitz, 1992; Williamson, 1979) were developed as absence of SE was assumed to be indicative of the presence of TCA. However, TCA type interactions were recorded and detailed throughout each case, in that they were extremely valuable in assessing the MCE’s overall relationship approach.

Given that all of the above constructs have been discussed in some detail in chapter two, Table 3.2 offers a summary of these in terms of the nature of interactions looked for within each firm’s internationalisation relationships. Dimensions and conceptual definitions were drawn from the work of a few key authors in this area who are reflective of the larger body of work in the discipline. Measuring these involved the use

6

MCE international outcomes was the main observational construct of interest from the internationalisation literature, inasmuch as it was impacted by the relationship approach adopted overall. However, no attempt is made to operationalise it in this section, the approach instead being to reflect it through empirical observation of internationalisation outcomes within each case (see 4.2-4.8 and 4.94).

of a simple high, medium,and low scale, the judgements of which were based upon the preponderance of evidence from relationship interactions. The reason for using such an unsophisticated scale was driven by the need to make consistent albeit subjective interpretations of complex qualitative data, which would remain internally valid across all the cases.

Table 3.2