Managing resource dependencies to overcome internationalisation constraints: A perspective of low-power firms

Ahmad, Salman (2019) Managing resource dependencies to overcome internationalisation constraints: A perspective of low-power firms. PhD thesis, University of Glasgow.

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Extant literature about SMEs internationalisation suggests that resource-constrained SMEs can use their networks to fill their resource gap for internationalisation. However, existing theories fail to address how SMEs protect themselves against opportunistic behaviour of their network partners. The present study aims to address this gap by combining resource dependency management theory with bargaining theory to analyse how SMEs that depend on networks to overcome their internationalisation constraints manage network externalities and opportunistic behaviours of their partners. The combination of these theories helps towards better understanding of underlying bargaining power dynamics when firms use dependency management strategies. It investigates SMEs’ dependency management strategies as low-power firms that they use against their high-power counterparts. The study addresses this gap by analysing the evidence from the context of the IT sector of Pakistan.
The study employed qualitative methodology with multiple case studies that include in-depth analysis of 75 dyadic relationships between 22 low-power firms and their four high-power counterparts. The findings reveal that low-power firms deal with their high-power counterparts by using unconventional strategies. Instead of decreasing their dependence or increasing the counterpart’s dependence, they collect power from outside the exchange relationship to reduce the power imbalance and influence their high-power counterparts to adopt interest-based bargaining. This enables low-power firms to renegotiate exchange terms to ensure sustainable access to resources, and ultimately, they become more dependent on the same counterpart, but with more power to resist any opportunistic behaviour.
This study contributes to the literature on SMEs’ internationalisation by highlighting how SMEs build defence mechanism against dark sides of networks, which they use to access resources for internationalisation. It also contributes to RDT by suggesting that firms do not always intend to decrease their dependence on others, rather they seek power without needing to reduce dependence because it enables them to counter any opportunistic behaviour of their counterparts. It also adds value to the bargaining theory by articulating the mechanism for low-power firms to shift their high-power counterparts from the positional bargaining to the desired interest-based bargaining.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Keywords: SMEs internationalisation, resource dependency management theory, bargaining theory, power dynamics, low-power firms.
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Colleges/Schools: College of Social Sciences > Adam Smith Business School > Management
Supervisor's Name: Dimitratos, Professor Pavlos and Zyglidopoulos, Professor Stelios
Date of Award: 2019
Depositing User: Mr Salman Ahmad
Unique ID: glathesis:2019-74316
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 02 Aug 2019 09:50
Last Modified: 03 Aug 2022 09:14
Thesis DOI: 10.5525/gla.thesis.74316

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