Discovering Knowledge and Cognitive Based Drivers

Journal of the Knowledge Economy (2022) 13:2490–2518
https://doi.org/10.1007/s13132-021-00801-1
Discovering Knowledge and Cognitive Based Drivers

for SMEs Internationalization
Jamshid Alinasab1 · Seid Mohammad Reza Mirahmadi2 · Hassan Ghorbani1 ·

Francesco Caputo3
Received: 1 March 2021 / Accepted: 30 May 2021 / Published online: 19 July 2021
© The Author(s) 2021
Abstract
Internationalisation begins with companies’ decision to enter global markets to
develop knowledge and experience as key competitive factors in the global economy,
which has been the subject of much empirical research. Decision-making, knowl-
edge management, and effective internationalisation have become key strategic tools
for all companies, especially for small- and medium-sized enterprises (SMEs). This
study wants to provide a framework for SMEs internationalisation based on the real
options theory, (ROT) as a knowledge driver method. For this purpose, the effective
factors for internationalisation were identified by reviewing the literature on the sub-
ject and the internal and external backgrounds of the subject. Then, main and sub-
factors were prioritised by the fuzzy analytic hierarchy process (AHP) method. The
statistical population consisted of senior managers, business managers of SMEs in
Isfahan, Iran, who were eligible to enter this study. Twenty-six experts participated
in this study by judgmental non-random sampling method. A fuzzy AHP question-
naire was prepared in the form of 19 sub-factors and 7 main factors. The components
of each factor in each group were also ranked by experts, and their weights were
obtained. Next, according to the ROT strategies which have 5 options, an alignment
matrix was used to align the factors affecting the decision with the strategies. After
answering the research question, the option that had a higher mode was considered
AS; then, this score was multiplied by the weight obtained in the previous step and
the TAS was obtained. Finally, strategies were classified as appropriate, need further
investigation, and inappropriate.
Keywords International market entry · Internationalisation · Real options theory ·

(ROT) · Decision-making · Small and medium sized enterprises (SMEs)
This article is part of the Topical Collection on Enhancing the Adaptability of Family Businesses to
the Knowledge-based Economy
* Francesco Caputo
[email protected]
Extended author information available on the last page of the article
13
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Journal of the Knowledge Economy (2022) 13:2490–2518 2491
Introduction
Subjectivity, complexity, and uncertainty are relevant challenges to face in decision-

making processes. A large segment of guidelines for the definition of efficient and
effective approaches in decision-making processes have been defined as a conse-
quence of the diffusion and understanding of specific social and economic dynam-
ics (Calabrese et al., 2018). Managerial, marketing, and organisational studies have
started to investigate the ways in which managers can support decision-makers and
organisations in gaining a better understanding of and managing the emerging com-
plexity (Caputo & Evangelista, 2019).
The term internationalisation in research fields has various definitions that can be
defined as a gradual process of promoting and strengthening the actions and activi-
ties of a company abroad (Johanson & Vahlne, 1977) or as an increasing external
movement in the direction of international actions by one or a group of companies
(Welch & Luostarinen, 1988). The term internationalisation in most contexts usu-
ally refers to the process of increasing participation and involvement in international
actions in which the company’s activities and performance in terms of explaining
the strategy, determining the structure and use of resources, or developing networks
of business relations in foreign markets are solely subject to adaptation to interna-
tional environments (quoted by Pham, 2019). Del Giudice et al. (2017) explained
that high informal institutional distance leads to a preference for non-equity-based
collaborative entry mode by SMEs. They also defined that positive time trends of
the host country, positive perception of size, and resource of the local partner, as
well as the local partners’ power, lead to a preference of equity-based collaborative
entry mode by SMEs. Research shows that companies seeking to internationalise
must have a strong organisational structure in line with their foreign activities and
actions. In addition, they need to gain an accurate and comprehensive understanding
of the many advantages and disadvantages that may exist in different ways of enter-
ing foreign markets (Laufs & Schwens, 2014).
Market characteristics, cultural understanding, and knowledge management
significantly affect management behaviour, while they do not significantly affect
the Internationalisation strategy. Furthermore, management behaviour signifi-
cantly affects Internationalisation strategy and can mediate relationships between
market characteristics, cultural understanding, and knowledge management with
Internationalisation strategy (Nurcholis, 2020). Knowledge has increasingly
established itself as an asset to be acquired and has valued for the achievement of
a competitive, lasting and defensible advantage by companies. Knowledge man-
agement in particular is considered as one of the disciplines supporting the for-
mulation and the implementation of successful strategies. The theme of knowl-
edge has been the subject of countless reflections ranging from philosophy to
economics (Canestrino & Magliocca, 2019).
In general, the ability to become international has become a necessity and
a must for many companies, which makes both the survival and growth of
the company in the field of globalisation (Raymond & St-Pierre, 2011) and a
knowledge-based economy possible. The multidisciplinary character and the
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2492 Journal of the Knowledge Economy (2022) 13:2490–2518
affirmation of multiple approaches to the analysis of the processes of creation

and management of knowledge have led to an effort of systematisation, which
from the analysis of interpretative paradigms of knowledge and knowledge
management reaches examination of the most recent conceptual elaborations on
Knowledge Ecosystems (Canestrino & Magliocca, 2019). Moreover, Canestrino
and Magliocca (2016) define internationalisation as transferring knowledge
through Cross-Border Communities of Practice (CCoP) which is used as a way
for managing knowledge in a global socio-economic environment. It is mainly
referring to the rising economies and explains that with reference to both the
opportunities and challenges that characterise the rising economies. CCoP arises
as the best suitable way to transfer knowledge at the international level, when
firms from developed countries encounter firms from emerging countries.
The process of internationalisation in SMEs is based on a learning process and
requires a set of capabilities (Schweizer, 2012). Its impact has also been proven as
one of the most important sources of corporate growth and performance improve-
ment in many documents in the field of international trade and business (quoted
by Joensuu-Salo et al., 2018). Dell’Anno et al. (2018) believe that the phenomena
of Internationalisation involve every type of organisation: private and public, for-
profit, and non-profit, and large and small; therefore, international start-ups by the
accumulated knowledge stemming from the relationship between knowledge and
internationalisation are able to identify the main factors influencing the choice of
the market on the part of the knowledge-based firms. Hence, knowledge-based
entrepreneurship as a virtuous combination of knowledge and entrepreneurship
enables start-ups and SMEs to boost capacities for such expansion of firms origi-
nating from innovation and that have operations suited to a widely ultra-national
context.
The important point is that SMEs must consider the nature of the industry in
question, the risk of producing and delivering non-tradable goods and services, the
nature of their support systems as a source of knowledge, and the potential impact
of rapid change in an internationally competitive environment. (Quoted from Gao
et al., 2019). To define SMEs in the form of family enterprises, institutions with per-
sonal and cooperative ownership, or formal and informal companies, several factors
have been considered. It includes the number of employees, amount of income such
as annual turnover, years of activity in the field of business, and number of branches
and locations (Khaidher et al., 2019). Factors and components affecting the success
of SMEs in different countries have been studied by researchers, and depending
on the conditions, several indicators have been mentioned by them. In this regard,
Chawla et al. (2010) in their studies have concluded that small businesses in China
are influenced by factors related to marketing, competitive forces, location, industry
trends and trends, location, availability capital, and experience of the owner. Inno-
vation and information technology (IT) are critical to effective knowledge manage-
ment (KM). So, that increasing the level of IT can enhance SME’s internationalisa-
tion. SMEs are able to heighten their innovation by implementing comprehensive
ERP and E-CRM which leading to higher export intensity as the primary method of
internationalisation (Lecerf & Omrani, 2020). Caputo et al. (2020) have recognised
internationalisation as one of the more recently debated topics in the management
13
field and explained the influence of international R&D teams on companies’

innovativeness.
By examining the studies conducted in this field, we can point two factors such
as the benefits of internationalisation and the conditions of the target market and
the destination country and the characteristics of the industry, country of origin,
convergence, and adherence factor, organisation conditions. In an effort to organise
SMEs internationalisation decision-making practices, Child and Hsieh (2014) pro-
posed four models that SMEs leaders should follow. These models range from high
to low levels of planning and rationality, which include reactivity, multiplicity, lim-
ited rationality, and reasoning of real choices. This approach is the highest form of
rational decision-making in Child and Hsieh (2014) model, which is defined as the
ability of managers to identify, maintain, and exploit real options in the business
environment in which they operate (Driouchi And Bennett, 2011). The real option
is a specific type of investment (in the international arena) in something of value
with uncertain achievement and feedback (for example, joint ventures and invest-
ments in R&D units elsewhere). This type of decision implies that companies need
to minimise their current investment when the level of uncertainty is high; however,
still consider an option to invest at other times and in situations where uncertainty is
expected to be lower (Brouthers et al., 2008, citing Ahi et al., 2017). Postponement
or staging, growth, scaling, shifting, and releasing strategic investment choices are
real options (quoted in Trigeorgis & Reuer, 2017). In the present study, the aim is
the priority and importance of effective factors and criteria in decision-making to
enter a new market and the degree of alignment with each of the decision options
based on ROT. Accordingly, research questions include the following:
• What are the priorities and importance of influencing factors and criteria in
deciding to enter a new market?
• Which of the main decision factors for entering the international market corre-
sponds to which of the decision options based on the ROT?
Theoretical Literature of Research
Factors Influencing the Decision to Enter International Markets
SMEs are different from other large companies due to their smaller size, limited
resources, and capabilities, as well as organisation systems and structures. Accord-
ing to Papadakis and Barwise (2002), it is expected that smaller companies will have
less formal and rational decision-making processes. The perceived gaps in respect
of using traditional decision support systems point to the growing need for a shift to
more advanced and sophisticated technological solutions (Kaur et al., 2019). Some
other aspects that make small companies different from big companies are that such
companies use a higher degree of insight (insight and intuition) in their decisions
(Khatri and Ng, 2000), there is less focus on the comprehensive information collec-
tion (Gilmore et al., 2001), and senior management/leaders have a stronger influence
on the decision-making process (Elbanna & Child, 2007).
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Casali and Perano (2020) have defined synthesise and critique the voluminous,
multidisciplinary literature on factors influencing ethical decision making (EDM),
and shown that there are up to 42 potentially influencing factors on EDM in the
literature. The most important factors that may influence the decision-making of
SMEs are (i) information scarcity (Gabrielsson & Gabrielsson, 2013); (ii) resource
availability (Evers & O’Gorman, 2011); (iii) characteristics related to decision-
making leadership, and their interpretation of the environment (Child & Hsieh,
2014); (iv) knowledge and the previous experience of the entrepreneur and social
and business networks (Evers & O’Gorman, 2011); and (v) the structure of
hybrid governance in SMEs in which the business model is normally aligned with
the partners. This suggests that the decision-making process (Nummela et al.,
2014), like goal setting (Gabrielsson & Gabrielsson, 2013), is shared with
partners.
Moreover, some small companies, such as larger organisation, have well-designed
routine procedures, and decisions may be made based on existing management
knowledge (quoted in Ahi et al., 2017). According to the theory of top management,
organisations are a reflection of their senior management teams, and decisions at
the company level such as internationalisation depend to a large extent on the back-
ground and experience of the team, their experience, and values (Hiebl, 2014). Man-
agers must have the knowledge to enable them to process and analyse information
effectively and efficiently in a complex and uncertain process such as internation-
alisation (Ramón-Llorens et al., 2017). In a way, it can be said that decisions are
influenced by managers’ cognitive-mental schemes that are based on their academic
and functional backgrounds, experiences, views, values, and demographic charac-
teristics (Hiebl, 2014). In a general framework, situations are interpreted differently,
and actions are taken, and accordingly, the company’s achievements are the result of
the composition of senior management teams (quoted by Alayo et al., 2019).
In an international strategy, the entry mode chosen by the companies has pro-
found important strategic consequences in terms of the way in which it conditions,
the level of control of the operations, and immobilisation of company resources in
the markets. As a result, firms adopt this decision as rationally as possible becomes
vital, looking for the highest success level in the market within which they choose to
operate (De Soto-Camacho & Álvarez-Torrescusa, 2018). When companies decide
to internationalise their operations, they must choose the appropriate entry mode in
foreign countries. This decision greatly affects the organisational and operational
aspects related to their international development. Companies often have to deal
with alienation (Wu & Salomon, 2016) due to a lack of information about the local
business environment, including administrative and political systems, as well as
social and cultural factors.
International SMEs are responsive to the prevalent social problems if the local
government supports their business development. And the greater local govern-
ment support, along with network competencies, provides resource accessibility to
international social enterprises (Scuotto et al., 2020). To understand this phenom-
enon, previous studies have introduced the concept of distance to obtain differences
between host and guest countries. This concept is mainly used to objectively assess
the degree of dissimilarity between countries or to examine the decision-maker’s
13
perception of incompatibility from a mental perspective (Ambos & Håkanson,

2014). In addition, the greater the psychological distance between the host and host
countries, the greater the level of uncertainty for companies wishing to expand inter-
national operations. Hence, distance is considered a major challenge and obstacle
for international activities and leads to increased complexity.
Cultural Distance This concept depicts the differences between the cultural values
of the two countries and is the most widely used dimension of distance (Beugelsdijk
et al., 2018). Individualism versus collectivism, distance from power, avoidance of
uncertainty, masculinity versus women-centeredness, long-term approaches ver-
sus short-term orientation, and cohesion versus constraint are among the factors for
determining distance. Schwartz (1994) developed new cultural dimensions and sum-
marised them in three bipolar dimensions: confinement versus independence, egali-
tarianism versus hierarchy, and harmony versus domination.
The Distance of Administrative or Executive Approaches Administrative distance,

which is also called political distance, can be defined in the form of various charac-
teristics; existence of colonial ties, economic, monetary, or political unions, politi-
cal hostility, government policies, and institutional weaknesses. This concept mainly
refers to the historical, institutional, and political components, and unlike the cul-
tural distance, this dimension of the distance studied by experimental research is
relatively small and therefore difficult to evaluate. The presence of colonial back-
grounds leads to a better understanding of the target market and possibly reduces
uncertainty. Conversely, political hostility or political risk, in general, may make it
more difficult to access the market, thus increasing the degree of uncertainty in the
country in question. Dow and Karunaratna (2006) state that differences and contra-
dictions in political systems between two countries increase the costs and risks asso-
ciated with entering a foreign market and may therefore influence the market selec-
tion process. Differences in institutional environments can also increase the degree
of uncertainty of foreign companies. The findings of Pattnaik et al. (2014) show that
the quality of institutions has a negative effect on lateral performance.
Geographical Distance The most obvious dimension is distance and often refers to the
number of kilometres or miles that separates the country of origin from the host coun-
try. This dimension is also reflected in the form of travel time and costs such as coor-
dination costs because differences in time zone can make coordination more difficult.
These differences lead to uncertainty about the ability to communicate quickly in order
to solve an immediate problem. Efficient knowledge transfer may also be affected
(Ambos & Ambos, 2009). Boeh and Beamish (2012) also state that physical separa-
tion influences strategically important decisions. Ragozzino (2009) highlights the role
of geographical distance in decisions to enter foreign markets. He argues that prox-
imity probably reduces information asymmetry and explains that companies located
near their target markets may have access to information through business partners or
stakeholders, thus reducing uncertainty about the host country’s environment.
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Economic Distance Indicates the difference in economic wealth between the two
countries or the difference in the quality and cost of natural, financial, and human
resources. This type of difference at the economic level may be reflected in purchas-
ing power, labour costs, macroeconomic stability, or the degree of openness of econ-
omies (Berry et al., 2010). Companies prefer countries with similar economic char-
acteristics. In general, companies have started to expand and expand their activities
to countries that are economically similar to other countries that are further econom-
ically distant in the next period (quoted by Moalla and Mayrhofer 2020) (Table 1).
Real Option Theory
Decisions in an organisation involve evaluating the options available to conclude the

choice of action type (Elbanna & Child, 2007). Decisions need to be made in an orderly
manner; however, some decisions may be important to the organisation because of the
impact on the company’s strategic performance (Zheng et al., 2006). Such decisions
are called strategic decisions. Therefore, strategic decisions are important for the
organisation because their success can determine the overall success of the organisa-
tion (Sharma et al., 2014). Making decisions in its strategic form in the organisation
is associated with the complexity of the process and uncertainty in various forms.
However, these decisions play a much more critical role in the survival and perfor-
mance of the organisation and involve senior leaders in the organisation (Sinclair &
Ashkanasy, 2005) and therefore can be the basis for decision-making throughout the
organisation. The application of real options in the field of strategic management
begins with the identification of existing options (shadow) that are derived from the
company’s previous strategic decisions and then will be accompanied by the identifi-
cation of real options that can be achieved (through research and development, con-
tracts, etc.). This step and evaluation of real options (valuation) are basically based
on the competencies and capabilities of individuals. Based on the organisational and
behavioural characteristics of a company, it has started to manage the portfolio of
real options, which in turn will lead to more intuitive decisions (based on insight and
insight) about using an option (Trigeorgis & Reuer, 2017).
Dimensions of Real Options
For asset and project management, the types of real options according to the dimen-
sions of flexibility and strategic use are growth options (opening new opportunities),
learning options (learning about the market, customers, etc.), and guarantee options
(goals related to risk management).
Regarding the real growth options, a given investment can be the basis for start-
ing a chain of interconnected projects and thus pave the way for future growth pros-
pects, new, strengthening core capabilities (implementation of new projects, new
processes, market penetration) (Kester, 1984). Guaranteed options allow you to react
to unfavourable demands and price changes in the form of cancellation as well as
practical compatibility. In contrast to growth options, guaranteed options make it
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Table 1 Components extracted from the theoretical literature of the research
Theory Component Factors References
Economic theory based on transaction Geographical features Distance from the destination country Zachary et al. (2015), Ambos and Ambos
costs (2009), Ragozzino (2009), Ghemawat
(2001), Berry et al. (2010)
Institutional theory Political situation Political stability and diplomatic rela- Holmvall and Arne (2010), Långbacka
tions (2019), Pattnaik et al. (2014), Ghemawat
(2001), Dow and Karunaratna (2006),
Berry et al. (2010)
Real option theory The economic situation Economic stability (exchange rate, infla- Ghemawat (2001), Berry et al. (2010),
tion, export rate) Cavusgil (1985)
Institutional theory and bargaining Legal and regulatory requirements Government intervention and regulatory Markman et al. (2019), Zachary et al.
power and economic theory based on constraints and legal constraints and (2015), Ambos and Ambos (2009),
transaction cost property protection, law enforcement Ragozzino (2009), Ghemawat (2001),
and oversight (corruption) Berry et al. (2010)
Trading cost-based economic theory, Cognitive or cultural conditions Cultural distance or proximity (avoid- Engwall (1984), Ambos and Håkanson
Internationalisation model, real ance of uncertainty, power distance, (2014), Beugelsdijk et al. (2018), Ghe-
options theory, communication cost individualism, masculinity) mawat (2001), Dow and Karunaratna
theory (2006) Berry et al. (2010)
Experts, real choice theories, transac- Market status Growth potential, market size, and Markman et al. (2019), Pinho (2007)
tion cost-based economic theory, demand, labour costs, market uncer-
ownership framework, location and tainty/demand volatility, asset turnover
internationalisation, bargaining power rate
theory
Porter’s theory of competitive forces, Barriers to entry Reputation, distribution, advertising and Demirbag et al. (2007), Falk (2014),
the theory of real choice, the theory technology costs, access to resources, Rundh (2007), Markman et al. (2019),
of Internationalisation, the theory of performance scale, competition Zaki et al. (2015), Altun (2017)
bargaining power
Experts, the real options theory Exit barriers Exit costs Ghemawat (2001) Berry et al. (2010),
Cavusgil, 1985
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Table 1 (continued)
2498
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Experts, economic theory based on Industry characteristics The multiplicity of technology in Kogut and Singh (1988), Demirbag et al.
transaction costs research and development and the (2007)
multiplicity of marketing in the form
of advertising
Experts, economics theory based on Department/activities Fit to business, the degree of diversity Yu and Ito (1988), Hitt et al. (1997),
transaction costs, the real options of products and services, production, McGuinness (1981), Caves and Mehra
theory services (1986), Sampson and Snape (1985)
Experts, economic theory based on Specific or specialised industry Special knowledge and technology Maekelburger et al. (2012), Markman
transaction costs (research and development), et al. (2019), Zaki et al. (2015), Dies-
advertising and marketing Vial and Fernández-Olmos (2013)
Experts, transaction cost-based Investment conditions Investment size and operating scale. Demirbag et al. (2007), Shieh and Wu
economic theory, bargaining power Duration of investment and project (2012)
theory, irreversible cost, real options implementation
theory
Experts, transaction cost-based Motivators and benefits of Authority in external operations and Harzing (2002), Chen (2008)
economic theory, knowledge-based Internationalisation actions, international strategy and
perspective, organisational capability global cooperation, speed of entry,
perspective specific incentives such as market
search, natural resources, strategic
assets, knowledge, customer tracking,
asset discovery and exploitation)
Experts, ownership framework, location, Spatial advantage Place Czinkota et al. (2007), Pinho (2007)
and Internationalisation
Experts, Uppsala framework, exchange Experience At the destination country level and at Agarwal and Ramaswami (1992), Denison
cost theory, organisational capability the international and multinational et al. (1996), Pinho (2007), Sousa et al.
perspective level (2008)

Table 1 (continued)
Experts, organisational capability Organisational capabilities and Distinctive product and services, ability Zou and Stan (1998), Knight and
perspective, transaction cost-based competencies to attract and transfer, innovation Daekwan (2009), Morgan et al. (2012),
economic theory, bargaining power and ability to connect with the Diez-Vial and Fernández-Olmos
theory, resource-based perspective, market, need for complementary (2013), Kuivalainen et al. (2012),
ability, special technical knowledge, Majocchi et al. (2005), Manolova et al.
Technology (research and (2010), Nowinski and Rialp (2013),
development), marketing multiplicity Felzensztein et al. (2015), Kim and
(advertising), investor size, capital Hemmert (2016), Freeman (2012)
profitability transition, and financial
budgets, need for additional resources,
networks
Experts, representation theory, institu- Ownership structure State ownership, institutional Chan and Makino (2007), Maekelburger
tional theory stakeholders, internal ownership et al. (2012)
Experts, representation theory, top man- Management characteristics and com- Service compensation, training and Altun (2017), Sousa et al. (2008), Borg-
agement theory petencies coaching status, level of education, ersen (2005), Oviatt and McDougall
functional background, specialization (1995)
Experts, institutional theory Conformity and obedience Behaviours of other investors in similar Chan and Makino (2007), Maekelburger
industries in the country of origin and et al. (2012)
destination, previous management, and
organisational stagnation
2499
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possible to protect the company against the risks associated with losses so that the
company is able to avoid declining cash flow levels (Copeland & Howe, 2021).
A real option in the form of learning makes the investment decision to postpone it
or to reduce management risk and make irreversible decisions based on incomplete
information and thus tolerate the adverse consequences of abandonment. In a way,
it can be said that the more uncertainty and uncertainty about the decision, the more
senior executives of the company prefer to delay the implementation of a project and
keep the option to implement it in the future (to Quoted from Csapi, 2019) (Table 2).
Research Method
The research method in the present study has been, in terms of purpose, both
developmental and applied research because the purpose of it is the development
and improvement of methods, tools, goods, or structures and therefore is included
in the category of developmental-applied research. The environment in which the
research is conducted shows the background of the research, which may take three
general modes: library research, field research, and experimental research. The data
and information contained in this study were obtained from two different sources:
(1) first-hand data obtained from interviews and observations and (2) second-hand
data obtained from related articles, documents, and documents. The technique
employed to collect data is the semi-structured interview (Fife, 2005), which ena-
bles participants to discuss the business realm with a researcher (Behar, 2014) and
to highlight personal thoughts (Collins & Cooper, 2014), even when emotions and/
or external inputs may cause some misunderstandings (Hawamdeh & Raigangar,
2014). Therefore, the present research will be considered as library-field research.
Sarmad believes that research is divided into two categories based on how data is
collected: descriptive research and experimental research. The present study is clas-
sified, based on nature and method, in the survey group. Also, based on the type of
data and the industry under study, it can be considered as a case study.
Table 2 Strategic investment selections as real options (Trigeorgis & Reuer, 2017)
A: Real basic options
Option type Investment selection/description
Defer or stage Delay or stage market entry when facing demand uncertainty
Growth Enter new or foreign market (with option to buy partner)
Alter scale (expand/contract) Expand or contract plant or scale of outsourcing contract
Switch Switch suppliers or production across foreign subsidiaries
Abandon/exit Exit market (or sell technology for salvage) if conditions deteriorate
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Statistical Population
The statistical population of the present study consists of senior managers and
business managers of SMEs in Isfahan, Iran, who are eligible to enter this study.
Conditions for entering the research are export experience, being in the process
of entering the international market, or present in the international market. The
samples of SMEs operated in different sectors and shared similarities and differ-
ences in their business operations.
Statistical Sample, Sampling Method, and Design
The number of the members who express the main characteristics of the com-
munity are called “statistical samples.” In this study, a purposive or judgmental
non-random method was used for sampling. Thus, as per the given guidelines,
we interviewed 26 executives who are working in SMEs in Isfahan. These execu-
tives occupy key positions in the organisation with decision-making powers in
the firm. Our sample size of 26 executives also falls within the acceptable sample
range for qualitative studies (15 being the minimum acceptable sample) (Guest
et al., 2006).
The executives who participated are holding key positions and are eligible to
provide firm insights into the potential factors of internationalisation. Criteria for
selecting experts were theoretical mastery, practical experience, willingness, and
ability to participate in research and accessibility. Like any other type of sam-
pling, the sample size depends on factors such as accessibility, required time, and
data collection costs (Table 3).
Methods and Tools of Data Collection
The main methods of data collection in this research are library studies and field
research. Collection of information has been employed in the field of theoretical
foundations and research literature by library resources, articles, books, publica-
tions, and the internet. For field research, a questionnaire was used to collect data
in the practical part, and in the quantitative part, in order to prioritise and weigh
Table 3 Research and community stages and sample of experts

Steps Population Number
Fuzzy AHP Questionnaire Industry experts in small and medium sized 26 people
enterprises in Isfahan with internationalisation
experience
Alignment matrix Industry experts in small and medium sized 26 people
enterprises in Isfahan with internationalisation
experience
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Table 4 Factors Factors Sub-factors
Country level (host) Geographic characteristics

determinants Political situation
Economic (macro) situation
Regulatory and nominative (legal) conditions
Cognitive (cultural) conditions
market level determi- Attractiveness
nants Entry/exist barriers
Industry specificity Industry assets specificity
Investment condition
Motivation interna- Motivation internationalisation
tionalisation
Firm-level determi- Experience
nants Capabilities
Resources
Ownership structure
CEO characteristics
Conformity and Conformity and obedience
obedience
Home country deter- Cultural conditions
minants Economic conditions
Regulatory conditions
each factor and sub-factors with the help of the fuzzy analysis hierarchical pro-
cess (AHP) technique, a questionnaire was designed as a pairwise comparison
matrix. In this questionnaire, first, the main factors and then the sub-factors of
each factor were compared separately in pairs (Table 4). According to Table 5, all
extracted indicators were given.
Table 5 Fuzzy and non-fuzzy weights of the main factor

Factors �∏
n ̃
�1∕n
W̃ Fuzzy weight Non-fuzzy weight Normal weight
P
j=1 ij Geometric mean
A (0.986, 1.297, 1.654) (0.102, 0.171, 0.277) 0.180 0.170

B (1,165, 1.472, 1.882) (0.121, 0.194, 0.316) 0.206 0.195
C (0.807, 1.035, 1.332) (0.084, 0.136, 0.223) 0.145 0.137
D (1.333, 1.712, 2.151) (0.138, 0.225, 0.361) 0.237 0.224
E (0.386, 0.483, 0.615) (0.04, 0.064, 0.103) 0.068 0.064
F (0.513, 0.634, 0.79) (0.053, 0.083, 0.133) 0.088 0.083
G (0.774 0.964, 1.222) (0.08, 0.127, 0.205) 0.135 0.127
∑ �∏n ̃ �1∕n (5.962, 7.598, 9.646)
P
j=1 ij
13
The benefits of internationalization 0.224

Target market conditions 0.195
destination country 0.17
Industry characteristics 0.137
Country of origin 0.127
Uniformity and obedience 0.083
Organizational 0.064
0 0.05 0.1 0.15 0.2 0.25
Fig. 1 Weights of the main factor
Alignment Matrix
In the third step, a matrix was formed for each factor to determine the decision
options based on the ROT. The matrix rows are the main and sub-factors identified
in the qualitative stage along with the weights calculated in the fuzzy AHP stage.
The matrix columns determine the decision options. As mentioned before, in this
study, based on the ROT, we have 5 decision options (strategies) that showed in the
matrix to align the factors affecting the decision with the ROT.
Information Analysis Results
Results of Fuzzy AHP Method
In the previous step, research factors were identified and confirmed. In this phase,
firstly, pairwise comparisons of factors are formed and provided to 26 respondents.
After answering the pairwise comparisons, the incompatibility rates of the tables
were calculated, all of which were < 0.1. This proves that the stability and reliability
of pairwise comparisons are acceptable; then, the answers were merged using the
geometric mean method and merged in the form of pairwise comparisons. We calcu-
lated the priorities via the geometric means method of Buckley.
Table 6 Fuzzy and non-fuzzy weights of the sub-factor of the destination country
Factors �∏
n ̃
�1∕n ̃ Fuzzy weight
W Non-fuzzy weight Normal weight
Pij
j=1 Geometric mean
A1 (1.201, 1.467, 1.766) (0.187, 0.276, 0.402) 0.285 0.276

A2 (0.52, 0.629, 0.761) (0.081, 0.118, 0.173) 0.123 0.119
A3 (1.101, 1.322, 1.585) (0.172, 0.249, 0.361) 0.258 0.249
A4 (0.557, 0.674, 0.812) (0.087, 0.127, 0.185) 0.131 0.127
A5 (1.015, 1.217, 1.486) (0.158, 0.229, 0.338) 0.239 0.230
∑ �∏n ̃ �1∕n (4.394, 5.309, 6.411)
P
j=1 ij
13
Geographical conditions 0.276

Economic conditions 0.249
Cultural conditions and distance 0.23
Regulatory and legal conditions 0.127
Political conditions 0.119
0 0.05 0.1 0.15 0.2 0.25 0.3
Fig. 2 Weights of sub-factor of the destination country
According to Fig. 1, the benefits of Internationalisation with a weight of 0.224

achieved first place. The target market condition with 0.195 was ranked second and
the destination country with 0.17 was third. Industry characteristics, country of ori-
gin, uniformity, and obedience, and organisational factors were in the next positions,
respectively. Therefore, in a similar way for other pairwise comparisons (sub-factor),
these calculations are performed as follows (Table 6).
Regarding Fig. 2, among the sub-factors of the destination country, the geograph-
ical conditions with 0.276 have gained the first rank. Economic conditions with a
weight of 0.249 ranked second and cultural conditions and distance with a weight
of 0.23 ranked third. Regulatory and legal conditions, and political conditions were
fourth and fifth in the ranking (Table 7).
In terms of Fig. 3, the attractiveness of the target market with a weight of 0.617
ranked first and the barriers to entry and exit of the market with 0.383 ranked second
(Table 8).
According to the Fig. 4, investment condition with 0.504 ranked first, and then
was the industry assets specificity with a weight of 0.496 (Table 9).
Regarding Fig. 5, the experience with a weight of 0.268 achieved the first
place. The resources with 0.263 was ranked second and the capabilities, CEO
characteristics, and ownership structure with the weight of 0.175, 0.168, and
0.126 are in the next, respectively (Table 10).
According to Fig. 6, among the sub-factors of the country of origin, the cul-
tural conditions of the country of origin with a weight of 0.341 have gained the
first place. Economic conditions with 0.340 ranked second, and legal regulatory
conditions was 0.318.
Table 7 Fuzzy and non-fuzzy weights of the target market factor

Factors �∏
n ̃
�1∕n
Pij
j=1 Geometric mean
B1 (1.156, 1.269, 1.39) (0.513, 0.617, 0.741) 0.622 0.617

B2 (0.719, 0.788, 0.865) (0.319, 0.383, 0.461) 0.387 0.383
∑ �∏n ̃ �1∕n (1.876, 2.057, 2.255)
P
j=1 ij
13
Entry/ Exist barriers 0.383

Market Attractiveness 0.617
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
Fig. 3 Weights of the target market sub-criteria
Summary of Factor and Sub‑factor Weights
Table 11 summarises the weight and rank of the factors and sub-factors.
According to the results of Table 11, motivation internationalisation was the first.
Then, market-level determinants, country-level (host) determinants, and industry speci-
ficity were 2nd, 3rd, and 4th, respectively. Home country determinants located fifth and
after that was conformity and obedience, while firm-level determinants ranked 7th.
Based on the third step and in order to answer the research question, the experts
were asked to rate the decision options between −2 and +2, and the answer that has a
higher fashion was considered as a score and this score in the weight obtained in the
previous stage is multiplied before and the final result is obtained. Finally, we consider
the positive options as the appropriate option, the zero–one is considered as the option
needed for further investigation, and the negative score is the inappropriate option.
With reference to Table 12, after calculating the weight of each factor and deter-
mining the mode of scores given (AS) to each option for each factor using the opin-
ion of experts (between −2 and +2), the final score of each criterion was obtained by
multiplying these two numbers (AS * Total weight of each factor = TAS). The inap-
propriate option is negative and in red, green is the appropriate option, and yellow
is the option that cannot be commented on now and needs further investigation. The
results are described below.
Discussion and Conclusion
What are the Priorities and Importance of Influencing Factors and Criteria
in Deciding to Enter a New Market?
It was used to determine the ranking of factors in terms of experts and the fuzzy
AHP technique in this field. Advantages of internationalisation and target market
Table 8 Fuzzy and non-fuzzy weights of industry specificity factor

Factors �∏
n ̃
P
j=1 ij
Geometric mean
C1 (0.872, 0.991, 1.134) (0.382, 0.495, 0.646) 0.505 0.496

C2 (0.882, 1.01, 1.147) (0.387, 0.505, 0.654) 0.512 0.504
∑ �∏n ̃ �1∕n (1.754, 2,2.28)
P
j=1 ij
13
Investment condition 0.504

Industry assets specificity 0.496
0.492 0.494 0.496 0.498 0.500 0.502 0.504 0.506
Fig. 4 Weights of industry characteristic sub-criteria
conditions and the destination country and industry characteristics are ranked first
to fourth, respectively. Country of origin, conformity, and compliance factor, organi-
sational conditions are ranked fifth to seventh, respectively. The sub-factors of each
category were also ranked in the same category. The sub-factors of target market
level determinants are the attractiveness of the target market in the first place and the
barriers to entry and exit to the market in the second place. In the destination coun-
try, geographical conditions rank first, economic conditions rank second, cultural
conditions and distance rank third, regulatory and legal conditions rank fourth, and
political conditions rank fifth. The sub-factors of industry characteristics, investment
conditions ranked first, and industry-specific characteristics ranked second. The sub-
factors of the home-country determinants, the cultural condition was first, the eco-
nomic condition was ranked second, and the legal regulatory condition was in third
place. Regarding the sub-factors of firm-level determinants, the experience was first,
the financial condition of the company located second, organisational capabilities
ranked third, and CEO characteristics ownership structure were in next levels.
Since no similar study has been conducted to rank these factors, comparison with
previous research is not possible. In explaining the present findings, it can be said
that internationalisation has benefits and incentives. At first glance, companies are
looking to enter the international market to gain these benefits. But to rape these
benefits, the target market conditions must be properly examined to see if the prod-
uct or service in question is needed in this country. Is there growth potential? What
are the barriers to entry and exit from the market? Then the geographical, economic,
cultural, political, and legal suitability of the destination country for entry must be
examined because if the destination country is fluctuating economically or there
Table 9 Fuzzy and non-fuzzy weights of organisational sub-factor

Factors �∏
n ̃
�1∕n
Pij
j=1 Geometric mean
E1 (1.171, 1.395, 1.651) (0.19, 0.268, 0.375) 0.275 0.268

E2 (0.77, 0.911, 1.081) (0.125, 0.175, 0.246) 0.180 0.175
E3 (1.164, 1.371, 1.617) (0.189, 0.263, 0.367) 0.271 0.263
E4 (0.554, 0.655, 0.775) (0.09, 0.126, 0.176) 0.129 0.126
E5 (0.742, 0.877, 1.037) (0.12, 0.168, 0.236) 0.173 0.168
∑ �∏n ̃ �1∕n (4.4, 5.208, 6.161)
P
j=1 ij
13
Experience 0.268
Resources 0.263
Capabilities 0.175
CEO characteristics 0.168
Ownership structure 0.126
0.000 0.050 0.100 0.150 0.200 0.250 0.300
Fig. 5 Weights of organizational sub-criteria
are political restrictions with the country of origin, the companies will definitely
face problems in continuing their work. Also, some industries have special features
that require high costs, special technology, and high capital requirements. The more
these features are, the more research needs to be conducted to enter the international
market. In the next step, the conditions of the home country such as economic con-
ditions and regulatory conditions could be important factors in deciding to enter the
international market. In particular, cultural conditions such as risk-taking and eco-
nomic conditions such as inflation and exchange rate instability should be consid-
ered. Following the example of other similar organisations and the performance and
decisions of previous managers in the organisation are also effective factors in the
decision to enter the international market. Finally, the study of organisational condi-
tions from management capabilities to financial conditions, experience, and organi-
sational structure are effective factors.
Since the obtained rankings show the importance of each main factors in com-
parison with each other and the sub-factors were compared to each other in each
group, SMEs can plan according to the set priority to formulate their strategies and
operational plans.
Which of the Main Decision Factors for Entering the International Market
Corresponds to Which of the Decision Options based on the ROT?
In answer to this question, based on the ROT, there are 5 options to decide to
enter the international market. The matrix was formed based on the identified fac-
tors in the first question of the research, and the appropriation of the options was
Table 10 Fuzzy and non-fuzzy weights of the country-of-origin sub-factor

Factors �∏
n ̃
P
j=1 ij
Geometric mean
G1 (0.896, 1.024,1.173) (0.261, 0.341, 0.447) 0.347 0.341

G2 (0.831, 0.956, 1.094) (0.242, 0.318, 0.416) 0.324 0.318
G3 (0.9, 1.022, 1.162) (0.263, 0.341, 0.442) 0.346 0.340
∑ �∏n ̃ �1∕2 (2.627, 3.002, 3.429)
P
j=1 ij
13
Cultural conditions 0.341

Economic conditions 0.340
Regulatory conditions 0.318
0.305 0.310 0.315 0.320 0.325 0.330 0.335 0.340 0.345
Fig. 6 Weights of sub-criteria of the country of origin
determined with a range of −2 to 2 and was divided into three categories of appro-
priate, inappropriate, and optional. Since no similar study has been conducted in this
field, it is not possible to compare it with previous studies. Based on the alignment
matrix, the following results were obtained:
Regarding the geographical conditions of the destination country, it refers to the
short geographical distance from the country of origin and the appropriate location
in the destination country in the questionnaire. The shorter the distance and the more
convenient the location, the more depressing the status of the factor. It is clear that
in the case of geographical conditions of the destination country, there is an option
to alter the scale and grow the appropriate options. Depending on the desirability of
this index for the target country can be used, the abandon/exit option can be used in
case of further investigation and in case of undesirableness of this factor for the tar-
get country with further investigation.
With regard to the political conditions on both sides of the spectrum, there may
be stability or instability, inappropriate or appropriate diplomatic relations. The
more favourable the political stability and diplomatic relations with the destination
country, the better the option to enter that country. In this case, defer or stage of the
political conditions for unfavourable conditions and growth for desirable political
conditions are two suitable options for companies. The option of altering the scale
can also be used if further consideration and depending on the desirability of the
political situation of the target country.
In the case of economic conditions on both sides of the range, there may be stabil-
ity or instability. The more pleasant the economic stability of the destination coun-
try, the better the option to enter that country. In this case, regarding the economic
stability of the country, the goal is to change the scale and growth of two suitable
options for companies. The option of altering the scale can be used if further study
and depending on the desirability of the economic conditions of the target country.
In terms of indicators of regulatory and legal conditions, both sides of the spec-
trum may exist, supporting or obstructing. The more desirable the regulatory and
legal conditions of the destination country and support the entry of international
companies, the better the option to enter that country. In this case, regulatory and
legal conditions, deferral for unfavourable and obstructive conditions, and growth
for favourable and supportive regulatory and legal conditions of the country are the
target of two suitable options for companies. The option of altering the scale can
also be used if further investigation and depending on the desirability of the regula-
tory and legal conditions of the target country.
13
Table 11 Final weight of sub-factor
Factors Standard weight Factors rank Sub-factors Sub-standard Sub-factor
weight rank
Country level (host) determinants 0.170 3 Geographic characteristics 0.276 1

Political situation 0.119 5
Economic (macro) situation 0.249 2
Regulatory and nominative (legal) 0.127 4
conditions
Cognitive (cultural) conditions 0.230 3
Market level determinants 0.195 2 Attractiveness 0.617 1
Entry/exist barriers 0.383 2
Industry specificity 0.137 4 Industry assets specificity 0.496 2
Investment condition 0.504 1

Motivation Internationalisation 0.224 1 Motivation internationalisation 1 -
Firm-level determinants 0.064 7 Experience 0.268 1
Capabilities 0.175 3
Resources 0.263 2
Ownership structure 0.126 5
CEO characteristics 0.168 4
Conformity and obedience 0.083 6 Conformity and obedience 1 -
Home country determinants 0.127 5 Cultural conditions 0.341 1
Economic conditions 0.318 3
Regulatory conditions 0.340 2
2509
13
Alter scale
Sub-Factor's Weight
Defer or Abandon/e
Switch (expand/con Grow
Factor's Weight
Total Weights
stage xit
Sub-Factors
tract)
Factors
TAS
TAS
TAS
TAS
TAS
AS
AS
AS
AS
AS
Geographic characteristics 0.276 0.047 -2 -0.09 0 0 -1 -0.05 1 0.05 2 0.09
Political situation 0.119 0.02 2 0.04 -1 -0.02 -2 -0.04 0 0 1 0.02
Country level (host) Economic (macro) situation 0.249 0.042 -1 -0.04 -2 -0.09 0 0 1 0.04 2 0.09
0.17
determinants Regulatory and Nominative 0.127 0.022 2 0.04 -1 -0.02 -2 -0.04 0 0 1 0.02
(Legal) conditions
Cognitive (cultural) conditions 0.23 0.039 -1 -0.04 -2 -0.08 2 0.08 1 0.04 0 0
market level Attractiveness 0.617 0.12 -2 -0.24 -1 -0.12 0 0 1 0.12 2 0.24
0.20
determinants Entry/ Exist barriers 0.383 0.075 1 0.08 0 0 -2 -0.15 2 0.15 -1 -0.08
Industry assets specificity 0.496 0.068 -2 -0.14 1 0.07 2 0.14 0 0 -1 -0.07
Industry specificity 0.14
Investment condition 0.504 0.069 -2 -0.14 -1 -0.07 0 0 2 0.14 1 0.07
Motivation 1 0.224 -1 -0.22 -2 -0.45 2 0.45 1 0.22 0 0
0.22 Motivation Internationalisation
Internationalisation
Experience 0.268 0.017 -1 -0.02 -2 -0.03 2 0.03 1 0.02 0 0
Capabilities 0.175 0.011 -2 -0.02 -1 -0.01 0 0 2 0.02 1 0.01
Firm-level
0.06 Resources 0.263 0.017 -2 -0.03 2 0.03 0 0 1 0.02 -1 -0.02
determinants
Ownership structure 0.126 0.008 2 0.02 1 0.01 0 0 0 0 1 0.01
CEO characteristics 0.168 0.011 0 0 -1 -0.01 2 0.02 1 0.01 0 0
Conformity and 1 0.083 2 0.17 1 0.08 0 0 -2 -0.17 -1 -0.08
0.08 Conformity and obedience
obedience
Cultural conditions 0.341 0.043 2 0.09 0 0 1 0.04 -1 -0.04 -2 -0.09
Home country
0.13 Economic conditions 0.318 0.04 1 0.04 2 0.08 0 0 -2 -0.08 -1 -0.04
determinants
Regulatory conditions 0.34 0.043 1 0.04 2 0.09 0 0 -2 -0.09 -1 -0.04
Table 12 Decision options matrix
In the case of cultural distance, there may be two sides. When the cultural dis-
tance is large and people are risk-averse, the two options of change and scale change
are two suitable options for companies.
It is predictable that the organisation will enter the international market in search
of a market and a potential consumer. When the conditions and attractiveness of the
target market are high, scale change and growth are two suitable options for compa-
nies. The option of change can be used if further consideration and depending on the
desirability of the target market attractiveness.
In the case of barriers to entry and exit, alter the scale and defer are the two best
options for companies. In case of further investigation and depending on the severity
of barriers to entry and exit to the target market, a release option is a suitable option.
In the case of the industry-specific characteristics, since specific properties can
be a major barrier to entering the international market, the options of abandonment
and change are suitable for companies. In case of further study and depending on the
costs of technology, research, and development, etc., the option of scaling can also
be a suitable option, but it needs to be examined more carefully.
In terms of the investment condition, the lower the required investment and the
sooner the return, the change of scale and growth are two suitable options for com-
panies depending on the desirability of this factor. The option of change can be used
if further investigation and depending on the desirability of investment conditions.
Turning to internationalisation motivations, the option of change and alter the
scale are two suitable options for companies depending on the desirability of this
factor. But it is not because of these benefits alone that a final decision can be made,
and the growth option can be explored further depending on the desirability of the
benefits of internationalisation.
13
Regarding the experience, a scaling option is a suitable option for companies

depending on the desirability of this factor. When the experience of being present in
the growth option can also be used with further consideration and depending on other
conditions.
Regarding organisational capabilities and competencies, the higher the capabilities
and competencies of organisations, they can change the scale and growth of two suit-
able options for companies depending on the desirability of this factor if other condi-
tions are appropriate. The option of change can be used by further examination and
depending on other conditions and the degree of desirability of organisational capabili-
ties and competencies.
According to the financial condition of the release company, it is a suitable option
for companies for undesirable conditions and for suitable conditions to change the scale
depending on the desirability of this factor. The option of change can also be used by
further examination and depending on other conditions and the degree of desirability of
the financial condition.
Regarding the ownership structure, depending on the type of ownership and their
conditions, the options of growth, postponement, and release can be used, and the
option of change and scale change needs further consideration and other conditions.
Implications
Implications for Theory
Real options theory has a lot of potential for developing the rationality of the present
business environment. The study highlighted the major factors in respect of the
decision-making in the context of SMEs internationalisation. It presents an opportunity
for academicians working in the domain of internationalisation research to consider the
impact of the strategic factors, in general, with an understanding of the potential impact
of ROT as a strong method of decision making. Since ROT is in the initial phase of
adoption, the present study contributes in terms of bringing forth perceived challenges
and issues in the process of international market entry. The study contributes to the
organisation and innovation literature in terms of stating the potential benefits of
embedding ROT as a part of a larger decision-making system in the firm. Hence, it
advances an understanding of how ROT can drive a change in the decision-making
process of an organisation. Thus, it holds implications for scholars engaged in the study
of SMEs internationalisation. From the perspective of decision-making studies, it gives
an indication of how the use of ROT can expand the information available and needed
in a company’s decision-making. Additionally, it furthers an understanding of effective
factors on decision-making from the lens of real options theory.
Implications for Practice
Our study demonstrates the decision-making process of SMEs entering international

markets. Decisions about international entry mode strategies and identification of
13
effective factors are difficult, falling initially under the purview of international mar-
keting managers. The main problem relates to the ability to collect all the informa-
tion needed to produce the most profitable decision. The managerial implications
discussed here relate to the importance of a long-term approach when internation-
alisation. How companies learn to find, analyse, and use present information is
largely related to prior and experiential knowledge. In the case of SMEs interna-
tionalisation, this often means identification of effective factors for decision-making,
given that international experience accumulates from learning by doing and that the
required knowledge may not exist within the company.
Thus, managers need to learn from partners or recruit wisely to acquire the neces-
sary knowledge. Moreover, ROT offers SMEs manager alternatives, which, as much
as possible, lower risk, so, this gives some support to the use of ROT for achieving
above-average performance. Managers could use options in the foreign market by
entering through a low investment mode or using other entry modes. They could
enter a market through exporting and wait for the right time to expand the invest-
ment. Meanwhile, they would have the option of abandoning the investment project
without incurring high costs. This could result in superior performance. At the same
time, it would help managers to exploit opportunities in different markets without
having to collect all the information, a particularly important benefit when resources
are tight.
Limitations and Future Offers
Beyond a shadow of a doubt, researchers face limitations and problems in conduct-

ing their research that may affect the results of the research. Recognizing these
limitations makes it possible to better interpret the results of research and also to
improve the quality of future research. This research has various limitations. First,
given its qualitative nature, we can only make analytical generalisations. There-
fore, we would encourage future researchers with larger samples and other coun-
tries to find more precise factors. Second, interviews with more interviewees (e.g.,
with marketing managers, executive managers, and SMEs CEOs) could identify any
information bias among CEOs, other members of management, and SMEs owners,
better validating our study. Third, the SMEs analysed are of different sizes and oper-
ating in different sectors. There could be a size and context bias in entry mode selec-
tion, and we would recommend future studies take this into account. For instance, a
follow-up quantitative study could control the effect of SMEs size on the relation-
ship between rationality in the decision approach and performance. This study also
has witnessed limitations which are discussed below.
Lack of Proper Cooperation of Experts in Answering the Questionnaires
There may be intrusive variables that affect the identification of factors that are the
researcher’s inability to control unwanted variables.
13
Since the results of the research are the result of a survey of (SMEs) in Isfahan,
caution should be exercised in generalizing the results to other organisations.
The results of the research are limited to the research period so that generalizing
the results is specially related to that period.
Based on the title of the research and its findings, the following research sugges-
tions are provided for future researchers:
Since the results are limited to the opinions of (SMEs) in Isfahan, the results can
be different in other cities. Therefore, it is suggested that this research be repeated in
other cities and in large companies, and its results are compared with the results of
the present study.
Given that decision options may have been selected based on real options theory,
future research could include other possible options in the selection matrix.
Funding Open access funding provided by Università degli Studi di Napoli Federico II within the CRUI-
CARE Agreement.
Declarations
Ethics approval All procedures performed in studies involving human participants were in accordance
with the ethical standards of the institutional and/or national research committee and with the 1964 Hel-
sinki declaration and its later amendments or comparable ethical standards.
Consent to Participate Informed consent was obtained from all individual participants included in the
study.
Consent for Publication The authors give their consent for the publication of identifiable details, to be
published in the Journal of the Knowledge Economy.
Conflict of Interest The authors declare no competing interests.
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License,
which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long
as you give appropriate credit to the original author(s) and the source, provide a link to the Creative
Commons licence, and indicate if changes were made. The images or other third party material in this
article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line
to the material. If material is not included in the article’s Creative Commons licence and your intended
use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permis-
sion directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/
licenses/by/4.0/.
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Publisher’s Note Springer Nature remains neutral with regard to jurisdictional claims in published
maps and institutional affiliations.
Authors and Affiliations
Jamshid Alinasab1 · Seid Mohammad Reza Mirahmadi2 · Hassan Ghorbani1 ·

Francesco Caputo3
Jamshid Alinasab
[email protected]
1
Management Department, Mobarakeh Branch, Islamic Azad University, Isfahan, Iran
2
Management Department, Dolatabad Branch, Islamic Azad University, Isfahan, Iran
3
Department of Economics, Management, and Institutions (DEMI), University of Naples
“Federico II”, Naples, Italy
13
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Journal of the Knowledge Economy (2022) 13:2490–2518

Discovering Knowledge and Cognitive Based Drivers

Jamshid Alinasab1 · Seid Mohammad Reza Mirahmadi2 · Hassan Ghorbani1 ·

Keywords International market entry · Internationalisation · Real options theory ·

Subjectivity, complexity, and uncertainty are relevant challenges to face in decision-

affirmation of multiple approaches to the analysis of the processes of creation

field and explained the influence of international R&D teams on companies’

Theoretical Literature of Research

Factors Influencing the Decision to Enter International Markets

perception of incompatibility from a mental perspective (Ambos & Håkanson,

The Distance of Administrative or Executive Approaches Administrative distance,

Real Option Theory

Decisions in an organisation involve evaluating the options available to conclude the

Dimensions of Real Options

Theory Component Factors References

Content courtesy of Springer Nature, terms of use apply. Rights reserved.

Statistical Sample, Sampling Method, and Design

Methods and Tools of Data Collection

Table 3 Research and community stages and sample of experts

Table 4 Factors Factors Sub-factors

Country level (host) Geographic characteristics

Table 5 Fuzzy and non-fuzzy weights of the main factor

A (0.986, 1.297, 1.654) (0.102, 0.171, 0.277) 0.180 0.170

The benefits of internationalization 0.224

Fig. 1 Weights of the main factor

Information Analysis Results

Results of Fuzzy AHP Method

A1 (1.201, 1.467, 1.766) (0.187, 0.276, 0.402) 0.285 0.276

Geographical conditions 0.276

Fig. 2 Weights of sub-factor of the destination country

According to Fig. 1, the benefits of Internationalisation with a weight of 0.224

Table 7 Fuzzy and non-fuzzy weights of the target market factor

B1 (1.156, 1.269, 1.39) (0.513, 0.617, 0.741) 0.622 0.617

Entry/ Exist barriers 0.383

Fig. 3 Weights of the target market sub-criteria

Summary of Factor and Sub‑factor Weights

Discussion and Conclusion

Table 8 Fuzzy and non-fuzzy weights of industry specificity factor

C1 (0.872, 0.991, 1.134) (0.382, 0.495, 0.646) 0.505 0.496

Investment condition 0.504

Fig. 4 Weights of industry characteristic sub-criteria

Table 9 Fuzzy and non-fuzzy weights of organisational sub-factor

E1 (1.171, 1.395, 1.651) (0.19, 0.268, 0.375) 0.275 0.268

Fig. 5 Weights of organizational sub-criteria

Table 10 Fuzzy and non-fuzzy weights of the country-of-origin sub-factor

G1 (0.896, 1.024,1.173) (0.261, 0.341, 0.447) 0.347 0.341

Cultural conditions 0.341

Fig. 6 Weights of sub-criteria of the country of origin

Country level (host) determinants 0.170 3 Geographic characteristics 0.276 1

Investment condition 0.504 1

Table 12 Decision options matrix

Regarding the experience, a scaling option is a suitable option for companies

Implications for Theory

Implications for Practice

Our study demonstrates the decision-making process of SMEs entering international

Limitations and Future Offers

Beyond a shadow of a doubt, researchers face limitations and problems in conduct-

Lack of Proper Cooperation of Experts in Answering the Questionnaires

Conflict of Interest The authors declare no competing interests.