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Barriers to the Internationalisation of Polish SMEs: A Social Capital Theory Perspective

International Journal of Applied Management (ISSN: 1742-2590) Volume 1 Issue 2

David Pollard, Dundee Business School, University of Abertay Dundee

Maria Jemicz, Department of Strategy and Innovation, University of Central Lancashire

Introduction

Poland ’s accession to the European Union in May 2004 will bring both opportunities and challenges for domestic small and medium sized businesses (SMEs), most of which have come into existence since the beginning of the economic transformation process in the late 1980s. The important role of SMEs in transformation economies has been extensively discussed in the literature but rather less attention has been devoted to the importance of internationalising businesses for economic growth, competitive sustainability and the consolidation of the transformation process.

Smaller businesses must contend with specific challenges when contemplating entering foreign markets. In addition to resource and support requirements, there is usually a lack of relevant information and firms are faced with challenges related to the development of internal knowledge and expertise. Various theoretical approaches have been utilised to explain the internationalisation processes undertaken by SMEs, stage models and latterly network models proving popular bases for empirical research. No existing body of theory has found universal agreement and, while there is a need to move to a higher degree of integration in the literature, alternative approaches which enhance current theoretical models may be useful in explaining the SME internationalisation process more fully

This conceptual paper takes an alternative approach to internationalisation, utilising social capital theory (SCT). It highlights, inter alia, the importance of network relationships and social connections, both formal and informal, which impact on owner-managers’ strategies for entering and operating in foreign markets. SCT provides insights not only for practice but also for policy-setting for SME development in Poland and possibly also in other transformation economies of east and central Europe.

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