Institutional knowledge: Acquisition, assimilation and exploitation in internationalisation

Purpose – Rarely have studies on the acquisition of knowledge in internationalisation focused on institutional knowledge. The aim of this paper is, therefore, to investigate the acquisition of this knowledge, and its assimilation and exploitation processes in internationalisation.

Design/methodology/approach – The paper utilises ten longitudinal revelatory case studies built from multiple semi-structured interviews conducted with three different firm types of SMEs in the pharmaceutical industry and secondary documents to which the researchers obtained proprietary access.

Findings –The study enhances our conceptual understanding of the institutional learning process in internationalisation by, for the first time, developing a framework to characterise this process. The study explores and identifies multiple types of institutional knowledge required, the sequencing of their acquisition, sources, and learning methods utilised. It also discusses transferability of this learning across foreign markets and firms’ absorptive capacity for that knowledge. Regulatory-specific product knowledge, found to be the most important type required, appeared to affect significantly both market selection and mode of entry, and when acquired insufficiently, prevented internationalisation.

Research limitations/ implications – While the sample size is relatively small, and sectorspecific, the findings were consistent across all the SME firms and firm types. They may also be generalisable to other sectors, firm sizes such as MNEs and types, particularly those which are knowledge-based or highly regulated, given that similar institutional knowledge and processes of acquisition are necessary for firms of all sizes in internationalisation.

Practical implications – International marketing managers will gain valuable insights, based on a framework proven to propel firms to successful internationalisation, upon how to plan, organise, manage and match their institutional knowledge-seeking and learning activities with their firms’ internal capabilities, staffing and other resources in an effective and timely manner.

Originality/value – This study contributes to our conceptual understanding of the institutional knowledge learning process in the internationalisation.