Innovation And Internationalization In Small And Medium Enterprises (SMEs) In India

Research Objectives

The study at hand examines overall influence of innovation on strategic results related to internationalisation activities among different small as well as medium sized enterprises in the India. In particular, SMEs are the base of economic developments in particularly the India and are identified to be significant contributors to process of recovery from recessionary period. Essentially, the study helps in understanding the way growth as well as performance of SME retailers are driven by the way business enterprises manage innovation as well as internationalisation. In the beginning, combining both innovation and internationalization can be reflected to generate the highest rate of growth potential for performance among small as well as medium sized enterprises. Therefore, managing innovation as well as internationalization might perhaps present theoretical and managerial threats since the two subsists in an intertwined manner in SME retailers and might also have common antecedents. 

Research Objectives: The three primary objectives formulated for the study include the following:-

– To evaluate important identified factors or variables (namely technological capabilities, technology investment, strategic alliances as well as decision structure) that determines relationship (ascertains causal associations) between internationalisation and innovation strategy of firms

— To critically evaluate the way innovation actions exerts impact on international performance as well as worldwide expansion

– To evaluate different barrier that inhibit international expansion of SME retailers in the India

– To analyse the ways in which the identified barriers can be mitigated

The internationalisation of large transnational retailers is properly documented and numerous researches have been conducted for understanding their motives as well as strategies for expansion. However, no research in this particular area has identified internationalisation of small- to medium-sized enterprises (SMEs) functioning in the retail sector and the way innovation affects their internationalisation activities. Various theoretical insights derived from the literature reflects gaps in existing research, that are related to the barriers, facilitators and different processes of retail SME internationalisation (Chiva et al. 2014) 

Businesses enhance the degree and extent of internationalization by means of gaining more information regarding the market and as the total amount of information enhances, so do the possibilities for identifying diverse opportunities for innovative ideas, whether they stem from different unmet requirements, rules and regulations or else imitation. This hereby generates possibilities to augment performance in international context. Prior studies have repeatedly instituted a positive association between innovation and performance. Furthermore, association between innovation and performance has been observed in internationalization context, since innovation in worldwide markets exert impact on performance (Suarez-Perales et al. 2017). Therefore, whilst innovation has received only limited research attention in the context of internationalization of small as well as medium sized enterprises, there are two different reasons behind a positive association between innovation and performance of worldwide operation of SMEs (Hagen et al. 2014). This is the first mover advantage and gap of performance.  Again, first mover advantage are essentially generated by means of innovation and this in turn have an influence on overall performance, while gap in performance is generated by an alteration in the environment to which a corporation is able to adapt to by means of innovating. Again, sustainable competitive advantage can be reached by means of continuous innovation. Halilem et al. (2014) suggest that product as well as process innovation might possibly inspire firms to internationalise, while different knowledge intensive firms have the tendency to concentrate on generating products that can necessarily be commercialised globally. In addition to this, entering numerous foreign markets can be considered to be a way to overcome investments in mainly research as well as development. Further, higher performance of export can be attained by small corporations by means of an innovative differentiation stratagem. This in turn can help in overcoming regional disadvantages for innovating firms that are expanding worldwide (Kunttu and Torkkeli 2015). The association between innovation and financial performance can be affected by the external business environment, as a competitive environment mixed with incremental innovation augments financial performance in a dynamic business environment. Again financial performance is said to enhance by means of radical innovation.  

Literature Review

The current study intends to analytically evaluate the way continuous innovation can be considered to be an important key to acquirement of competitive advantage and way successful new global ventures to internationalize can be started. Therefore, the study at hand intends to analyse the manner in which innovation in small as well as medium sized enterprises in the India are positively associated to level of global performance. Also, the study intends to delve deep into the matter to evaluate the extent to which innovation in globally operating small as well as medium sized enterprises in the India positively contribute to rate of growth. Essentially, new research studies also suggest that Indian SMEs are quite optimistic regarding the global economy and their role in the same.  Results of the research also present the fact that roughly 41% of SMEs in the India indicate that agility, strong and enduring customer relationship and innovation are the most important strategies that they use for accelerating rate of growth during the year 2018 (Prashantham and Dhanaraj 2015).  Prior studies have indicated towards the fact that respondents prioritise agility as the most important capability for development over the upcoming three years. SMEs in the India have extremely ambitious growth targets that are 23% of SMEs in the India as compared to the figure of global average of around 19% (Ren et al. 2015). Further, past research reflects that smaller enterprises in the India are primed for attaining success by concentrating on special advantages, remaining close to customers, and enhancing efficacy by means of continuous innovation.

Structure of the Literature Review

The learner intends to present an analytical overview of the important literature that is published on the subject matter under consideration. Conducting an analytical and systematic review of the literature helps in presenting an insight into subsisting knowledge as well as themes related to the topic at hand.  Firstly, the learner intends to explain in detail the definition of SMEs, different proactive as well as reactive reasons for internationalisation, main internalisation theories (including process of internationalisation, stage model of internationalisation), internationalisation of Indian SMEs (strengths and weaknesses), barriers of Indian SMEs in internalising activities. Moving further, the literature review section of the study intends to throw light on the way innovation can help in internationalisation of SMEs with empirical evidences and prior case studies. The key themes that emerge from different cases shall be presented to provide theoretical insights. It can be hereby mentioned that the study at hand shall concentrate on case evidences of internationalisation of SMEs and innovation of Indian retailers.  

Definition of SMEs

The variance between large sized firms and SMEs can be recognized in terms of physical size and at the same time presence. As suggested by Prange and Pinho (2017), classification and categorisation of SME size can take account of total number of employees, total number of outlets of retailers, yearly turnover, and a blend of employee and turnover dimensions. Empirical evidences across different industries has observed turnover of sales as the key indicator of differentiating between small and large sized firms (Wadhwa et al. 2017). The current study at hand has followed guidelines specified by the Micro, Small & Medium Enterprises Development Act of the year 2006.

Internationalisation entails high risk and SMEs possess more inadequate resources to cope up with the consequences of foreign expansion (Zucchella and Siano 2014). Thus, the complications impeding worldwide development for SMEs can be indicated as strategic, functional, informational as well as process-based limitations (Halilem et al. 2014). Accordingly, weak financing and the ensuing requirement for speedy return on investment (ROI), SMEs normally have a narrow range of strategies for entry in foreign markets and even a narrower functional ground from where international activities can be carried out (Sui and Baum 2014). Again, intensified by restricted market knowledge and deficiency of interaction with important parties, over and over again owners of small corporations have no tendency, expertise or responsiveness to develop and grow and to pursue prospective actions for overseas expansion. Nevertheless, the subsistence of export stimuli can permit SMEs to triumph over this kind of barriers to worldwide expansion (Hagen et al.  2014). As suggested by Zhang et al.  (2016), international stimuli cab be considered as the motivating factors that can over-ride these kinds of obstacles identified. Different important themes that have emerged as significant stimuli, drivers as well as facilitators of overseas expansion include innovative international strategy, experience of entrepreneurs, networks of firms plus external support.

This literature assessment starts by studying in detail about the Resources Based View (abbreviated as RBV), as both strategies are included in this corpus. Essentially, in one hand, firm internationalization has necessarily been saturated by the RBV indicating that firms attaining success have the need to acquire, build up important and not alternative resources (Fernández-Mesa and Alegre 2015). Fundamentally, these resources have the need to be configured in a way that is not imitable (Boermans and Roelfsema 2016). As such, business concerns aiming to attain success in worldwide markets must get or design significant resources and put them together to build up an internationalization scheme. Again, on the other hand, existing literature on different innovation actions is said to be closely associated to RBV (Caiazza 2016). Therefore, firms intending to innovate need to acquire and at the same time develop significant intangible resources, in addition to knowledge as well as technology. Therefore, for businesses to attain success there is need to develop products as well as services presented to altering market conditions (Zucchella and Hagen 2015). To put it briefly, RBV is a theoretical body that illustrates development of innovations and internationalization, by way of significant resources as well as capabilities designed to formulate a firm stratagem. Bello et al.  (2016) suggest that at the time when a business concern enters novel worldwide markets it acquires new knowledge to expand or else redevelop products and/or services. In essence, this procedure directly influences innovation system of firms. Then again, development of different products and/or services exerts influence directly on different opportunities to enter in new foreign markets with a specific competitive gain and lead through resources development. However, the lack of proper evidence on causal association between internationalization and innovation is a matter under consideration.

Four different variables identified that directly exerts impact on innovation and internationalisations of the firm include Technological development, Technology Investment, Alliances as well as Decision Structure.

One ordinary approach to internationalization of firms and innovation is by means of technological potential and capabilities. In essence, technological capabilities are observed  as technological knowledge that is derived from varied sources (Prashantham and Dhanaraj 2015). As such, this knowledge is utilized to develop novel product and/or services to enter novel markets. Particularly, this knowledge also helps in path-dependent technology and development of potential in firm innovation.

Internationalization can be considered to be a specific way to expose the enterprise to knowledge as well as advanced technologies of different foreign markets, in that way delivering opportunities for development of new skills as well as capabilities, and showing the way to path-dependent technology along with innovation (Radulovich et al.  2018). However, it is also said that technological potential exert influence directly on the innovation system of the firm by means of internationalization.

Semrau et al.  (2016) assert that innovation assists in the process of translating tangible as well as intangible resources into different innovative product and/or services. Essentially, this subsequently directs the way towards sustainable competitive advantage. There are studies that propose the fact that technological capabilities helps in attainment of internationalization and expansion of firms and put forward the fact that technological capabilities directly influence internationalization by means of innovation.

Subrahmanya (2018) presents the fact that firm investment is an important variable. Subrahmanya (2018) suggests that investment permits businesses to acquire and at the same time develop novel technology or else technological resources. Again, this also permits the corporation to develop novel products and/or services. Essentially, technology investment also becomes an aspect for internationalization, provided that firms are competent of developing novel product and/or services and entering into new and foreign markets (Abubakar et al.  2018). Particularly, technology investment also is a factor that is an important for innovation. Business concerns can attain or develop advanced technology that reflect both tangible as well as intangible resources, and add to path-dependent technology as well as innovation. However, this reflects a double impact of technology investment, influencing directly on internationalization along with innovation.

Resource Dependence Theory (RDT) has necessarily roots in resource based view and is attaining added awareness. In essence, this theme illustrates the relation between business concerns, institutions and business concerns and other firms (Gupta et al.  2018). Also, it also illustrates instituting alliances all the way through necessity of resources as well as capabilities. This indicates towards the fact that business concerns are acquiring, imitating otherwise gaining access to different strategic resources that are essential for the corporation. However, they do not alter the value proposition of the business concern owing to erosion of different resource value, or due to the fact that both firms are in varied phases of development (Narasimhan and Sridhar 2015). The business concern, all the way through the institution of alliances, can gain access to new resources that are significant for internationalization.

Innovation, Internationalization and Decision Structure of Business Concerns

As indicated by Semrau et al. (2016), strategic decisions are said to have long-term consequences for attainment of success or else survival of firms. A primary issue in strategic administration is the decision making of different managers. Also, there are quite a lot of vital factors of the decision structure influencing decision making. An important factor is essentially the family ownership, as family ownership lessens agency conflict between different owners as well as managers (Bello et al.  2016). Particularly, decision making by mainly the family permits firms to design and develop easier decisions of firm internationalization or else to get more engaged in the process of innovation.

The learner of the study intends to adopt a mixed model research methodology for conducting the present research. The mixed method research methodology refers to the use of both quantitative as well as qualitative research methods for conducting research (Ledford and Gast 2018).  The selection of this specific method is said to be justified in this case as this can help in using combined potential of both quantitative as well as qualitative methods of research. 

Justification for selection of mixed research method

The combined potential of both quantitative and qualitative research can be particularly observed while using this mechanism of study. Also, while applying mixed research methods of study, the learner of the study has the advantage of suing numerals for addition of precision to various words, images along with narratives (Flick 2015). Again, another benefit of using the mixed research method is that learner can develop and investigate the grounded theme.

The learner intends to utilize the post positivism research philosophy for the purpose of the current study. This specific philosophy of research can help in the process of accepting theories, background and knowledge. Also, this specific research philosophy can help in identifying probable effects of different biases (Lewis 2015). Positivists also stress on both quantitative mechanisms but consider both quantitative as well as qualitative mechanisms as valid research approaches. Therefore, this philosophy can be said to be in line with the study at hand and thereby justified.

The learner intends to use both quantitative as well as qualitative data for the current study. Quantitative data includes close-ended information particularly the ones used to enumerate attributes (namely, rating scales), behaviours (for eg, checklist of observations) as well as tools of performance (Mackey and Gass 2015). In essence, analysis of this type of data includes statistical analysis of diverse scores acquired on different instruments (for instance, questionnaires) otherwise checklists to react to research questions or to investigate hypothesis. For the purpose of the current study, the learner intends to collect quantitative data by means of research surveys where questionnaires containing pertinent questions shall be distributed to respondents of the study through e mail with a request for reply.

Again, Qualitative data refers to different information that is open ended in nature. The learner generally acquires the same by way of an interview or focus groups or observations (Mackey and Gass 2015). By combining both quantitative as well as qualitative methods of study, the learner can acquire understanding together with confirmation, while counterbalancing weaknesses that are inherent to using a single approach of research (Flick 2015). In this case, the learner intends to acquire qualitative data by interviewing business entrepreneurs operating in the retail industry in the Indian small and medium sized enterprises. Also, the learner has the intention to acquire secondary qualitative data from prior research works as empirical evidences and case studies.

Sample Selection: The learner has selected five SMEs operating in the Indian retail market and intends to interview 5 business entrepreneurs. Also, the learner intends to circulate questionnaires among 100 employees of five different Indian SMEs.

The learner intends to select the target respondent of business entrepreneurs of five different retail SME firms in India using non-probabilistic sampling method as per purpose. To put it briefly, the learner intends to use purposive sampling for selecting the members for the interview as the sample selected are as per purpose of the study (Ledford and Gast 2018). However, for the purpose of circulating questionnaires to 100 different employees of the five firms, the learner intends to use the probabilistic sampling (simple random sampling) where each respondent of the study necessarily has known probability of getting selected in the specific sample.

 The learner intends to acquire quantitative primary data from surveys by means of circulation of questionnaires containing close ended questions. The responses provided by the survey respondents will be rated using the five point likert scale for acquiring information (that can be quantified) on the study (Flick 2015). Again, the learner has the aim to collect qualitative primary data from interviews (containing open ended questions) of business entrepreneurs operating in retail sector as SMEs in India. On the other hand, secondary qualitative data is acquired from prior research works, books, journals, official websites, government reports, academic literature, online library resources and many others.

The learner intends to analyse the secondary qualitative information (non-numerical data) obtained by means of content analysis, thematic analysis and case study analysis. Again, the learner intends to carry out quantitative analysis of the data using statistical techniques (both descriptive and inferential statistics) (Flick 2015). The learner intends to apply the statistical mechanisms of central tendency, measures of dispersion and correlation and regression analysis using the MS Excel Software.

-The learner intends to ensure that participants of the survey as well as interview are well informed as regards research subject under deliberation and presented requisite approval willingly on their own accord

– The learner of the study ay hand ensures that no harm is necessarily inflicted upon different partakers of the survey and/or interview. In addition to this, the learner also makes certain safeguarding of confidentiality together with anonymity of respondents. Basically, learner also intends to ensure maintenance of both privacy as well as anonymity of different respondents (Mackey and Gass 2015).

– Besides this, the learner also has the aim to confirm that permission is asked for from different research participants and the same is granted (Mackey and Gass 2015). Therefore, this indicates that no respondent necessarily is compelled to engage in the research forcefully and get opportunity to withdraw themselves at any point of time.

– Also, learner intends to confirm that the amassed information adhere to the guidelines as well as directives stipulated under the Data Protection Act. Also, the information gathered is to be protected from any kind of fraudulent use, access or leakage.

The chief limitation of the practice is allied to concerns of access to the respondents. A larger sector of participants would have been accepted for all all-encompassing understanding of the conforming values of ethical, communal and collective, monetary and legitimate ranges with authorizations to study the national and international landscapes of the SMEs. The time is similarly a related factor. 

Main Objectives	1st week	2nd week	3rd + 4th week	5th week	6th + 7th week	8th week	9th +10th week	11th+12th week
Topic Collection	v
Literature Appraisal		v
Research Structure			v
Secondary data range			v
Primary data assortment				v
Data analysis and outcomes					v
Interpretation						v
Commendation							v
Final proposal								v

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