PhD defence: The internationalisation process of firms producing consumer-oriented foods

PhD defence

Andrea Bruno Landi

Title of thesis

The internationalisation process of firms producing consumer -oriented foods: identity, embeddedness, information, and resources

Abstract

The study can be summarised as the investigation of the nexus between information, knowledge and internationalisation-related decisions, in case embeddedness (a profound relation with the local culture) is a signature feature of firms. This relation is analysed through a multi-country study, in a three-year independent project that investigates the irrational components of managerial decisions. The study investigates how information converts into knowledge, a topic that is seldom discussed in research. Information is selected, transformed, and eventually transmitted to the managers. Then, the decision-maker filters all information and knowledge. The process continues until the final decision is taken. Information is central in all parts of the project: as the medium connecting all stakeholders, and as the way they express their identity. Managerial decisions are investigated through the flow of information; identifying who select and transmit information, and how such information becomes new knowledge. The study focuses only on the irrational component of managerial decisions; it does not discuss costs, profits or logistics. Rather, it investigates feelings, familiarity, idiosyn-crasies, even biases, which shape the firm’s persona. This investigation is one of the two, in-terrelated parts compose the study, each based on a different methodology.

The study begins with a quantitative analysis, investigating the observable effects of information on international trade. Familiarity with the export market is found to be relevant for both market selection and trade development, only for few products (namely consumer-oriented food products, and the food sector), but not for other sectors. The result gives a first empirical evidence of the relevance of information (as an external resource) on trade. Further data confirm the relevance of familiarity alongside other more rational drivers (i.e. connectivity). Hence, the quantitative analysis establishes that the consumer oriented food subsector is a plausible choice for investigating information, knowledge and embeddedness, justify-ing the choice of that specific subsector for the second part of the project. The empirical out-come gives a valuable contribution to the literature on trade, discussing the factual relation between irrational drivers and firm’s choices.

Then, the qualitative study examines the initial phases of firms’ internationalisation process, from the decision to initiate international operations (or simply to export their product), the evaluation and selection of a new market, to the mode of entry, when different modes are feasible. The unit of analysis is the firm, and it speaks through the words of its top managers, owners, founders. Manager and firm’s identities are aligned, and managers, founders, owners speak for the entire firm, allowing the investigation of firms with different characteristics.

The qualitative approach allows to answer the ‘how’ questions about the genesis and trans-mission of knowledge, and it is appropriate to investigating the complexity of the irrational component of decisions. The qualitative approach is also accessory for mapping the stakeholders involved, highlighting the relevance of all the brokers (i.e. the influence of all the intermediators involved in the flow of information and knowledge).

The study’s main finding is the connection between the firms’ embeddedness (the irrational component of a firm’s identity), and how information flows, is selected and transformed. The relation extends to the embeddedness of all actors (including brokers and supporting ser-vices), in shaping the process. The qualitative part contributes to the literature defining the relation between external and internal resources. Further, it analyses how such resources connect with personal characteristics of managers and firm’s identity.

The relevance of both embeddedness and identity was the initial hypothesis, and the project unfolds identifying which products (or sector) best exemplify the bond between culture, identity, and managerial choices. The quantitative part indicates food as the best candidate, but the irrational component of business decisions is not equally relevant for all food products. A considerable effort and a relevant part of the project were necessary to validate the choice of food as subject of the analysis, and to identify which kinds of products show such relation. The quantitative tool helped to establish the relation between consumer-oriented and niche food products and familiarity (an indicator of a flow of information), and its influence on both market selection and trade. Besides, the study criticises the validity of some other indicators, commonly (and perhaps mistakenly) used as proxies of familiarity.

Finally, the project examines the state-of-the-art of the international business research on food, concluding that there is little cohesion between research groups. The results indicate a need for a shared vocabulary, beginning with the definition of food, as the researchers on international business and international entrepreneurship seem to lack a way to define the sector.

The qualitative investigation confirms that the choice of the consumer-oriented and niche food subsectors is a sound option. Additionally, food products show a signature relationship with their territory and community of origin, among other peculiarities. Although not unique to food, this relation influences the identity of firms, including most stakeholders involved in food production and its internationalisation process, creating a strong embeddedness that fits well within the scope of the project.

Organiser:

Department of Food and Resource Economics (IFRO), University of Copenhagen

Supervisor:

Professor, MSO Jørgen Dejgård Jensen, Department of Food and Resource Economics (IFRO), University of Copenhagen

Assessment Committee:

Chair:

Professor Teis Hansen, Department of Food and Resource Economics, University of Copenhagen

Professor David Crick, University Ottawa

Professor Svetla Marinova, Aalborg University

Master of Ceremony

Professor Peter Sandøe, Department of Food and Resource Economics, University of Copenhagen

The defence is open to all.