Failures In International Partnerships: The Role Of Sew In Family Firms

This study aims to answer the following research question: Why international partnerships (IP) of family Small and Medium Enterprises (fSMEs) fail? In doing so, it builds on the network theory and the Socio-Emotional Wealth (SEW) theory and investigates: 1) the factors that trigger IP failures in the context of fSMEs internationalisation and 2) the role of SEW in IP failures of fSMEs. To address the research question, this study employs a multiple case study design of six fSMEs operating in the Food and Beverages sector. The case study evidence indicates that bureaucracy issues and institutional restrictions (external factors), as well as unfulfilled expectations related to financial agreements and brand placement (internal factors), led to failures in IP of fSMEs. The case study evidence also indicates that the family owners' identification with the firm drove decision-making in IP strategic decisions. The contribution of the case study is twofold. It informs the international networking literature by presenting a framework of potential environmental (external) and individual (internal) factors which trigger IP failures in the context of fSMEs internationalisation. Furthermore it brings into light potential SEW dimensions (the family owners' identification with the firm) that drive the decision-making underlying family owners' IP strategic decisions.