The article ”The internationalisation process of the firm - A model of knowledge development and increasing foreign market commitments” written by Johanson and Vahlne, 1977, presents a model witch mainly focuses on the expansion of different individual firms and their process of internalisation on the foreign markets. As well as the importance of knowledge when it comes to the foreign markets and operations when one is involved with an international firm. The authors of the article and creators of the model, Jan Johanson and Jan-Erik Vahlne describes how they have incorporated parts of results from a previous empirical study, ”A Behavioural Theory of the Firm” by Cyert and march, 1963, to complete their own research and model. They explain that their model focuses on the common traits of the internationalization process, for instance, one firms choice to export to different countries.
2. Empirical Background
Johanson and Vahlne´s studies, which were completed in international business at the university of Uppsala, revealed that most firms based in Sweden evolve small steps in their international operations, instead of rushing and taking bigger steps in their foreign production investments. These small steps include taking help from an agent with …show more content…
The Pharmacia example showed how they had their private organisations in nine different countries. Three os these were operating in manufacturing actions. When the firm started taking orders from foreign markets they agreed to work with an agent. That led to established sales subsidiaries in seven of the original countries where they had their own organisations. In two of those proposed to manufacturing activities (Johanson & Vahlne,1977). By this the results showed how a subsidiary can be beneficial with expanding