Internationalization: An Information-processing Perspective

The original proposition of this dissertation was: information-processing grows in quantity and variety as the complexity and uncertainty of business increases during internationalization. This dissertation examines the dynamic internationalization process. The proposition assumes that the ways and means of accessing information is dependent upon the process of internationalization. Because internationalization is dynamic, turbulent and incremental, increased information-processing may be required.

This dissertation examines the need for and impact of increased information-processing capacity as the firm internationalizes. How decision-makers use information is, therefore, not the focus of this research. Thus, organizations are viewed as systems that need to balance their capacity to process information with the requirements originating from the internationalization strategy and the international business environment. Variations in organizational forms may also result from growing information-processing requirements faced during internationalization.

In this dissertation internationalization is operationalized by examining the different stages in that process. Information-processing capacity is investigated by observing the use of information and communications technologies (ICTs). The ICTs observed were; email, internet, intranet, extranet, EDI and enterprise resource planning systems. Quantitative and qualitative methods were used in the empirical stage. A large scale regression analysis was made of ICT use and very early stages of internationalization (imports & exports). Furthermore, interviews were made with more than 70 Finnish companies to understand how ICT usage grows during more advanced stages of internationalization.

The results of this research confirmed a strong relationship between incremental internationalization and growing ICT usage. However, business function (marketing, finance etc.) variations were observed. The size of the firm was not found to account for growing ICT usage.

A significant challenge to mainstream internationalization theory was uncovered during this research. ICTs were found to speed up the process of internationalization. Furthermore, it is clear that managers should consider the need for more information-processing capacity as the firm internationalizes. Firms also need to account for functional variations in information-processing. Moreover, the organization of information-intensive processes needs to be reconsidered, prior to and during internationalization.