1) firms were developed in systematic stages

1)     Uppsala Framework  The Uppsala model was formed to discern howinternational operations of firms were developed in systematic stages and atthe same time demarcating decision-making processes to expand internationally (Johanson and Vahlne, 2006). The Uppsalamodel is built upon the concept of market knowledge as it encompassesstep-to-step learning and knowledge appropriation process in conjunction with foreignmarket and its operation (Johanson and Vahlne, 2006).

Frynas andMellahi (2015) endorse this view indicating that firm should garner goodknowledge accumulation and learning as it offers better comprehension ofprospects and risks of continual market involvement. Market commitment isanother essential aspect of the model in which company expanding abroad isrequired to carefully allocate appropriate resources or assets to the foreignmarket and usually EMNEs are required to have higher commitment (Frynas and Mellahi, 2015). As bothmarket knowledge and commitment are analogous and connected, one decision willbecome input for subsequent decision (Forsgren, 2002). Thus, themore the firm gather knowledge about the foreign market, the lower theexistence of perceived risk and there will be high commitment and investment inthat market (Forsgren, 2002). As a result,the Uppsala explains how firms internationalize progressively and cautiously asit is built based on incremental decisions.  The model also illustrates the significance ofpsychic distance that is described as factors that prevent or derange firms fromlearning or understanding the foreign environment (Johanson and Vahlne, 2009).

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Factors canbe differences in business practices, language or culture. It is also assumedthat firms should expand into markets that are closer to their home country. Therefore,psychic distance influences firm’s market selection (Johanson and Vahlne, 2009).  Despite the incremental stages and concepts thatthe model entails, it is still being criticized for being too rigid in light oftheir approach during internationalization as the model omits low level ofinvestment and less risky approaches such as franchising (Ramamurti, 2012). Furthermore, the model explainsthe incremental internationalization of firms, which is contrary to theaggressive acceleration expansion method that EMNEs usually undertake (Ramamurti, 2012). However, theUppsala model is able to highlight risks that EMNEs may face which is imperativeto decision-making process (Forsgren, 2002).

Frynas andMellahi (2015) further indicate that despite the model being too generic innature, it is still able to encapsulate issues related to location or strategicchanges, which cover essential contextual aspects of companies expandinginternationally. 


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