The role of network relationships in firms’ internationalization failures under VUCA conditions

What the paper says

Purpose This paper aims to contribute to the internationalization literature by examining the role of network relationships in companies’ internationalization failures under VUCA conditions (a period characterized by volatility, uncertainty, complexity and ambiguity). Design/methodology/approach It is based on three Estonian cases, drawing from in-depth, semi-structured interviews and supplementary materials. The data set is longitudinal, featuring repeated interviews with entrepreneurs over a multi-year period. Findings Network-related issues often underlie failures, as inadequate networking significantly increases the risk of failure. Common mistakes include making poor partner choices, conducting insufficient background checks, being passive in networking and overreliance on existing partners. Depending too much on one partner can cause problems, while expanding networks opens opportunities but demands ongoing reassessment to avoid new constraints. Practical implications The results support internationalization efforts by highlighting the impact of networking from a different perspective. By emphasizing the drawbacks of networking, this paper can help firms manage risks posed by VUCA. Amid recent crises, understanding the positives and negatives of networking is important to informed, risk-aware decision-making. Originality/value This study contributed to the literature by showcasing how networks not only enable internationalization but also constrain it, potentially leading to internationalization failures. It identified inhibiting mechanisms: ineffective networking heightened risks, created knowledge gaps, hindered decision-making and obstructed partner identification. The theoretical contribution benefits both entrepreneurs and scholars.