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UPPSALA MODEL

Name:
Instructor:

Institution:
Fall 2014

Literature Review
Introduction
The principle application of Uppsala Model is based on empirical research; this implies
that the model of internationalization process is adopted in enhancing firm’s development from
domestic to international scope
...
In addition, the model
explores the incrementally increase in level of commitments to the foreign markets rather than

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domestic ones
...
Conversely, there are lots of critique on
effectiveness of the model, the paper will explore respective views of different authors regarding
the Uppsala Model
...
It was based on
gathered observations from studies based on internationalization issues (Yeung & Liu 2008)
...
This was meant to stabilize the Uppsala Model so that it could be
stable as far as resource immobility is concerned (Sablic & Duggal 2010)
...
The
model was still not able to derive explicit exploration of how resources would be acquired
...

Critical Perspective of the old Uppsala Model
Critics indicate that Uppsala Internationalization model has been extensively used
although it has indecisive conclusion that does not give clear results of the prevailing market

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conditions in foreign or international business arena (Daidj 2014)
...
Secondly, it is imperative to state that the
Uppsala Model, it turns down the problem of irreversible and deterministic nature of the
internationalization process which solely focus on the theoretical level (Dawson 2007)
...
It is however,
imperative to state that the Uppsala Model especially in the operational level resembles life cycle
model (H&M 2008)
...
It is
believed that the model can be a base for impressive dynamic internationalization theory if and
only if the vague or unclear underlying concepts of knowledge accumulation and commitment
are developed further
...

Organizational Learning
This was initiated back in 1980s to enrich the Uppsala model; although it is a good
strategy, it does not clearly illustrate realistic meaning of organizational learning (Ramamurti
2009)
...
Secondly, it does not bring out clear information about who should learn in an
organization; some researchers recognize that it is individuals to learn in organization, while
others perceive that as a systematic level, organization can also learn (H&M 2008)
...
And finally the organizational
learning is based on baseless and absence of valid measures (Lafing & Vutta-Abhai 2006)
...
According to research, firms also internationalized initially to be able to gain
advanced knowledge of the markets
...

Industrial Network Theory
This theory was introduced later as a third enriching field to enhance the improvement of
Uppsala Model and corresponding logistics
...
But its main weakness is that it does not deal with problems separately, instead it
generalize problems making it difficult to derivate amicable solution
...
The
exhibited third extra perspective is to enrich the Uppsala Model through addition of explicit
context perspective
...


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The Enriched Uppsala Model
This is a revitalized version of the internationalization process and derive effective
solutions to the other models since the inception of Uppsala Model (Hill & Charles 2010)
...
Analytically, it could be stated that
resource based view offered great improvement in the perspective of building blocks to the
Uppsala Model
...

Moreover, organizational learning literature prepares a learning response for the respective or
perceived triggers within the service firm (Sablic & Duggal 2010)
...
But, the
knowledge aspect has been explored; it now has three main components: Business knowledge
(knowledge of client), but institutional knowledge is the (knowledge about government), while
internationalization knowledge (knowledge about a firms capability and resources), which are
essential when engaging in internationalization process (Dawson 2007)
...
But in the
learning process, organizational learning acts as an interplay between market commitment and
market knowledge (Remigiusz & Rafalska 2013)
...


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However, the paper will incorporate results from provision of empirical studies about
strategies involved in development of international operations (Hill & Charles 2010)
...
Moreover,
it is believed that the term internationalization exclusively entails numerous incremental
decisions; it would be provident to state that more insight would be based on the common or
shared elements and corresponding decision situations developed (Daidj 2014)
...

Conversely, situational factors play a great deal when constituting decisions that are
relevant to the process and operation based on internationalization model in enabling or allowing
a country to commence exportation of its products and services to a different country (Lafing &
Vutta-Abhai 2006)
...

The Uppsala model greatly contributes to conceptualization in the firm’s internalization
field, thus, it is effective in increasing the understanding of relevant and necessary requirements
when developing international operations (Thomas & Graves 1020; Palgrave 2009)
...

In the paper, summative conclusion will observe commitment made by firms in exploring
market conditions on experience gained from markets with similar conditions (Palgrave 2009)
...
But the
imbalance would be corrected based on risk situations within the market
...

The Internationalization Model
Based on introductory literature, it is imperative to state that a basic mechanism is
effective in deriving an understanding of operation of internationalization operations (ICFAI
2008)
...
However, in the model, state aspects
are illustrated in consideration of level of commitment to foreign markets; knowledge about
foreign market commitment and market commitment operations (Andersson & Wang 2011)
...
The schematic
diagram of basic mechanism of internationalization’s theoretical level is illustrated in figure1
below:

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State

Change

Market
knowledge

Commitment
decisions

Market
commitment

Current
activities

Figure1
...
Source:
(Johanson & Vahlne, 2009, p
...

It is important to reiterate that Johanson and Vahlne, 1977, 1990, Uppsala Model has
been ranked among the most cited models within the international literature
...
Moreover, researchers agree with the fact that the model
indicate on the resource allocation trend; Uppsala Model affirms that when a firm decides to
choose a new foreign country, it will not invest in lots of resources, but as a firm gains higher
commitment mode it automatically increase resource commitment as a result of exponential
understanding and knowledge of the foreign market (ICFAI 2008)
...
In this regard, it is
skillful to differentiate of define the types of services; there are hard and soft services, which are
based on distinct boundaries in service industry
...
Much doubt is
cast on the model’s ability to describe the commonly selected service entry models in foreign
markets, as well as the ability to adopt the model in predicting the best entry mode that could
enhance a firm’s performance in service delivery market within foreign country (Kemppainen
2011)
...
Moreover, it does not also expedite the process of adopting effective decision-making
process on which goods or services engage in within foreign markets; thus jeopardizing
internationalization’s decision-making process (Lafing & Vutta-Abhai 2006; ICFAI 2008)
...
Since the Uppsala
Model was developed based on Swedish manufacturing environment, the author Khalid (2009)
argues that this should not have been the case, it is imperative that the model would have
considered market scenarios from distinct parts of the international foreign markets (Björkman &
Forsgren 2000)
...

This is based on two facts, whether to adopt foreign (Local) production of exporting products to
the foreign country
...
To some instances, it is imperative to exercise cross border mergers and acquisition so
that there would be mutual understanding and consideration of modulated rules in favor of both
the host country and the foreign country (ICFAI 2008)
...

However, in this regard, Hwang and Kim (1990) proposed adoption of three variables to
counter the failure of the Uppsala Model in influencing entry model decisions
...
e
...
In furtherance, the author categorically considered adoption of entry
models like licensing, wholly-owned subsidiaries and joint ventures
...

Nonetheless, according to Bazerman (2001), the classical assumption of perfect
information, rational decision-making, and symmetry in risk aversion should lead to predictable

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outcomes, which the Uppsala Model did not consider in real circumstances
...
Instead, the authors suggested that the differences between service and
manufacturing firms require content-specific approach to internationalization
...

Bazerman (2001) continues to reiterate that, when a sequential stages model was applied
to service context, which was similarly adopted from Uppsala Model and used by Roberts in
1991 cited in Robert (1999); the results failed to adequately address and support proposition of
sequential stages within internationalization of firms
...

According to Bjorkman & Forsgren (2000) it is explicit to state that Uppsala model is a
risk-avoidance or risk-aversion model
...
This happens whether there are higher
environmental uncertainties or not; which affirms the firm’s level of gained knowledge to either
be explicit of not
...
It is somewhat that Uppsala Model does not address the impacts of distinct

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characteristics of specific services (goods) within the internationalization path
...

Uppsala Model is challenged especially in service delivery within the internationalization
process
...
Moreover, there is need for enhanced investigation within sharp
contrast of performance implications
...
Finally, it is imperative to
state that some normative and descriptive research suggests for further testing of the Uppsala
Model to explore the challenges so that the foreign markets would be explored effectively by
firms
...
On the same
note, it is important for a firm to measure the internationalization variables, market knowledge,
and market commitment, and investigate the process of developing firm’s internationalization
...


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Moreover, the model is effective in deriving and understanding of price applications of
required/ necessary products and factors in distinct countries
...
In addition, the model creates distinctive understanding of internationalization variables,
it provides better execution of the processes involved in a firm’s internationalization
...
Finally, it is imperative to state that Uppsala Model of
internationalization process stresses on the importance of distinct factors that affect decision
making processes in foreign market operations but it does not clearly define strategies that could
effectively be adopted to enhance success therein
...
& Wang, J
...
The internationalization process of Chinese MNCs: A study of
the motive for Chinese firms to enter developed countries
...

Bazerman, M
...
Judgment in managerial decision making (5th ed
...

Björkman, I
...
(2000)
...
International
Studies of Management & Organization, 30(1), 6-25
...
, 2014
...
KarachiIndia: IGI Global
...
, 2007, “Scoping and conceptualizing retailer internationalization”, Journal of
Economic Geography, vol
...
4, pp
...

Fernández, Z
...
J
...
Impact of Ownership on the International
Involvement of SMEs
...

H&M, 2008, annual reports archive [online], available at Retrieved from:
ttp://www
...
com/us/investorrelations/financialreports/annualreports_investorannua
lreports
...

Hill, C
...
, & Kim, W
...
An eclectic theory of the choice of international entry
mode
...


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Hill, W
...
(2010)
...
International Business: Competing in the Global
Marketplace
...

ICFAI Center for Management Research, 2008, “H&M’s Supply Chain Management Practices”
[online], ICMR Case Collection, available at Retrieved from:
http://www
...
org/casestudies/catalogue/Operations/OPER066
...

Johanson, Jan & Vahlne, Jan-Erik (2009)
...
Journal of
International Business Studies, Vol
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1411-1431
...
W
...
Narrating the Entrepreneur
...

Kemppainen, K
...
Family Business Internationalization Opportunities And Obstacles From
An Entrepreneur’s Perspective: A Case Study Of The Creative Industry
...

Khalid, S
...
Exploring Firm Level Market Knowledge Competence and Its Implications for
the Speed and Success of Export Expansion: A Mixed Methodology Study from the
Software Industry
...

Kontinen, T
...
2010
...
Journal of Family Business Strategy 1(2), 97 –
107
...
L
...
, 2006
...
Nanjing- China: Internationella
Handel Shögskolan
...
R
...
time
...
ht ml,
on 27th March, 2015
...
& Frydrychowska, M
...
The International Expansion of a Multinational Company: A
Case Study of H&M
...

Madsen, T
...
; Servais, P
...
“The Internationalization of Born Globals: an Evolutionary
Process?”, International Business Review ( 1997), vol
...
561-583
...
The Uppsala internationalization process model revisited: From liability of
foreignness to liability of outsidership: Journal of International Business Studies (2009)
40, 1411–1431; doi:10
...
Retrieved from: http://www
...
com/jibs/journal/v40/n9/full/jibs200924a
...

Ramamurti, Ravi (2009)
...
/ Ramamurti, Ravi & Singh, Jitendra V
...

Cambridge: Cambridge University Press, pp
...

Remigiusz, L
...
, (2013)
...
A
...
55‐76
...
(1999)
...
The
Service Industries Journal, 19(4), 68-88
...
& Duggal, M
...
The internationalization of Swedish SMEs : The Road to India
...

Thomas, J
...
2008
...
Family
Business Review 21(2), 151-167
...
Globalizing China: The Rise of Mainland
Chinese Firms in the Global Economy
...
49,
No
...
57-86
...
The Basic Mechanism of Internationalization-State and Change Aspect
Source: (Johanson & Vahlne, 2009, p
...




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