Internationalization of Finnish construction companies: An interview-based study in the Swedish construction industry

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School of Business | Master's thesis
International Business
Kansainvälinen liiketoiminta
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The purpose of this thesis is to discover what aspects affect the internationalization success of Finnish construction companies and how that success could be improved. According to the exist- ing business network literature, internationalization can be seen as a company's entry to a new international business network rather than a new country. Therefore the internationalization pro- cess can be described through the process of network development. In network development the elements of trust and commitment are identified as essential, but business network literature does not exhaustively describe how trust and commitment can be developed. According to branding researchers, business-to-business brands have the potential to improve trust and commitment between companies. Thus, branding theory is introduced to fill the research gap identified in the network literature. By combining important theoretical models from the two research fields a the- oretical framework for this thesis is created. The resulting framework portrays the internationali- zation process from a network perspective and introduces supporting brand-building elements to go with each step of the process. Semi-structured interviews conducted with Swedish construction industry experts largely con- firmed the findings of the existing literature. The majority of purchasing and partnering decisions within the Swedish construction industry are made based on past experiences and references. If the prospecting Finnish company is not part of a Swedish company's business network it will be almost impossible for it to internationalize into the Swedish construction industry. One modifica- tion was made to the theoretical framework based on the interviews. The brand-building element "reputation" was replaced by "references". References were seen as the most important source of good reputation in the Swedish construction industry. As a theoretical contribution to the business network literature the thesis sheds some light on the creation of trust and commitment between companies in new international business networks. Trust seems to be increased by focusing on the company's reputation, a part of its brand equity. The most efficient way of establishing good reputation in relation to a new network is found to be the creation of trustworthy and transparent references. From a managerial point of view the thesis provides valuable information about the Swedish construction industry as a target for internationalization. The most common business network type in the industry is the flexible network. Entering flexible networks can be relatively easy be- cause they need a lot of companies with different capabilities to tackle different projects. Another managerial implication is that the initial contact with potential new partners should be done face- to-face to increase the sense of trust and commitment in the relationship.
internationalisation, construction industry, business networks, B2B branding, kansainvälistyminen, rakennusteollisuus, yritysverkostot, B2B-brändäys
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