Internationalization of Family Businesses in Saudi Arabia.pdf

Section 1: Foundation of the Study

Internationalization of business operations can be a valuable strategy for

expansion and growth (Casillas, Moreno, & Acedo, 2010; Chen, 2011; Patel, Pieper, &

Hair, 2012). The definition of internationalization is the extension of the business across

transnational borders (Korsakienơ & Tvaronaviþienơ, 2012). With the emergence of new

markets, internationalization has become a vital strategy to survive (Chen, 2011; Patel et

al., 2012). Family businesses account for over 50% of employment in the private sector,

employ millions of people (IFERA, 2003; Segaro, 2012, Tucker, 2011), and are more

likely to internationalize than nonfamily businesses (Chen, 2011; Graves & Thomas,

2008). The focus of this study was to explore how Saudi family businesses can achieve

internationalization successfully. The foundation for this study includes the background

of the problem, problem statement, purpose statement, nature of the study, research

question, conceptual framework, definition of terms, assumptions, limitations,

delimitations, and significance of the study. Furthermore, Section 1 includes a

comprehensive literature review on internationalization, family businesses, and

internationalization of family businesses.

Background of the Problem

Family businesses represent the backbone of the global economy (Buang, Ganefri,

& Sidek, 2013; Casillas et al., 2010; Claver, Rienda, & Quer, 2007; Lin, 2011). The

effects of existing family businesses on employment rates establish the importance of

supporting family businesses to produce growth rather than mere survival of the company

(Moya, 2010). Internationalization is a valuable strategy for the growth and expansion of

family businesses (Graves & Thomas, 2008; Assaf, Josiassen, Ratchford, & Barro, 2012;

Chen, 2011; Chen, Zou, & Wang, 2009). If the leaders of a family business do not initiate

internationalization in the first and second generations, family business leaders will

unlikely internationalize in future generations (Okoroafo, 1999).

Internationalization of family firms is crucial to the gross domestic product (GDP)

of a nation (IFERA, 2003). Stamm and Lubinski (2011) stated that the decline of family

businesses could have an impact on the national economy. Family businesses adopt

distinctive corporate governance structures that may lead to higher productivity (Martin-

Reyna & Duran-Encalada, 2012). Casillas et al. (2010) found that there were two main

elements that stood out as determinants of internationalizing family organizations:

knowledge and family commitment. There are three key determinants of the family

firm’s internationalization pathways: the level of commitment toward

internationalization, the financial resources available, and the ability to commit and use

those financial resources to develop the required capabilities (Graves & Thomas, 2008).

Moreover, family business leaders may face two opposing forces in the

internationalization effort: The first force drives family business leaders to grow and

expand beyond traditional markets, whilst the second force encourages stability and the

development of low-risk projects within the traditional product market (Casillas et al.,

2010). The challenge for family business owners may include drawing a conceptual as

well as practical road map to facilitate the internationalization process from local to the

global market.

Saudi Arabia holds 25% of the oil reserves of the world and maintains one of the

fastest growing economies (Saudi Arabian General Investment Authority [SAGIA],

2013). The need to improve this growing economy is an ongoing concern. Saudi families

constitute the majority of the society, economy, and government (SAGIA, 2013). As a

result, family firms represent most of the private sector (SAGIA, 2013). Although there is

a need for these family businesses to maintain and promote performance in the local

market, Saudi family businesses have vital interests in expanding to the global market

(SAGIA, 2013). During the internationalization process, family firm leaders may have

challenges such as the nature of the conservative culture in Saudi society, as well as the

absence of unique industries that can be internationalized (Mellahi, Demirbag, & Riddle,

2011). Saudi family business leaders have an increasing need to understand how to

implement and achieve successful internationalization and overcome all associated

challenges (Kuivalainen, Saarenketo, & Puumalainen, 2012).

Problem Statement

The inability of business to compete in a foreign market may lead to a shorter

business lifespan (Assaf et al., 2012). Internationalization has become a key strategy for

business leaders to secure survival and increase profitability in a hypercompetitive global

marketplace (Casillas et al., 2010). Family firms represent 90% of businesses in the

United States and account for over 50% of employment in the private sector and employ

millions of people (IFERA, 2003; Molly, 2010; Tucker, 2011). Kontinen and Ojala

(2010b) mentioned that family businesses are more likely to internationalize than

nonfamily businesses. Internationalization usually occurs in the first and second

generations (Okoroafo & Koh, 2009). The general business problem is the lack of family

firms’ internationalization, which may impact the national economy (Casillas et al.,

2010). In Saudi Arabia, a primarily family-governed and oil-based economy, family

businesses depict the most common type of business firms that minimally contribute to

the Saudi national economy (SAGIA, 2013). Saudi family firms that have achieved

internationalization have overcome many challenges such as deriving from a non-

industrial business environment (Mellahi et al., 2011). The specific business problem is

the limited knowledge of how Saudi family business leaders implement

internationalization.

Purpose Statement

The purpose of this qualitative case study was to explore how successful Saudi

family business leaders have planned and implemented internationalization. The

population for the study was family business leaders in three Saudi Arabian

internationalized organizations. Saudi Arabia is one of the fastest growing countries with

one of the world’s 25 largest economies and is the largest economy in the Middle East

and North Africa (MENA) region (SAGIA, 2013). Three leaders from three successful

international Saudi family businesses participated in interviews. The purpose of the

interviews was to explore what strategies family business leaders used to successfully

expand from the local market to compete in the international marketplace. Exploring the

key factors of a transition plan from the local market to the international market may

provide a strategy for local family business leaders to follow for a successful

internationalization (Casillas et al., 2010; Claver, Rienda, & Quer, 2008; Kontinen &

Ojala, 2010b). The growth of Saudi family firms may positively contribute to the GDP of

Saudi Arabia and reduce unemployment. Furthermore, the growth of Saudi family

businesses may positively affect the local economy of Saudi Arabia.

Nature of the Study

According to Patton (2002), a qualitative research method is a means for

exploring and understanding individuals or groups ascribe to social or human problems.

In contrast, in quantitative research designs, the researcher tests objective theories by

examining the relationship amongst variables (Patton, 2002). The nature of the study

aligns with the qualitative research method more than quantitative because of the

exploratory nature of the topic. Therefore, I did not use either quantitative or mixed

method and instead used a qualitative research method for the study.

There are several qualitative research designs, such as narrative research,

phenomenology, grounded theory, ethnography, and case study (Marshall & Rossman,

2011). The case study approach is the optimal approach for this research topic because it

allows understanding of complex social phenomena and includes the concept of repeating

interviews with the same participant to gain in-depth data (Yin, 2009). The explanatory

case study approach by design allows the researcher to ask how and what questions in the

study (Yin, 2009).

Research Question

The central question for the research study was, How can Saudi family business

leaders implement internationalization? The answer to this question was the critical goal

of this research study. Families in business strive to secure their survival and increase

profitability by competing in the global marketplace (Casillas et al., 2010; Chen, 2011).

The interview questions were as follows:

1. What is your name and job title?

2. What are the mandatory characteristics of local family businesses that

would enable them to compete in a global market?

3. What are the strategic considerations needed for family businesses before

going global?

4. What were the motives for your business to go international?

5. What are the main challenges internally and externally to achieve

internationalization?

6. How did you select the country to commence internationalizing your

business?

7. How did your products change due to internationalization?

8. How do you describe your internationalization experience?

9. How did the owning family perceive internationalization?

10. What are the main strategies your family business took to achieve

internationalization?

11. How does internationalization affect the control of the family over the

business?

12. How does internationalization affect the overall performance of the family

business?

13. Would you like to add any other information?

Conceptual Framework

There are four main internationalization models: (a) The Uppsala model; (b) the

network model; (c) the resource-based view; and (d) the ownership, location, and

internationalization (OLI) framework (Javalgi & Todd, 2011; Kontinen & Ojala, 2010b).

For this study, I selected the internationalization process theory founded by Johanson and

Vahlne (1977) to form the conceptual framework. The internationalization theory, also

called Uppsala model and the stage model theory, includes internationalization as a

product of a series of sequential processes (Johanson & Vahlne, 1977). Business leaders

will incrementally move their businesses from one stage to another to achieve full

internationalization (Johanson & Vahlne, 1977). Business leaders may begin the

internationalization process by exportation via agents/distributors; sales via sales

subsidiaries; and finally, the establishment of overseas manufacturing plants (Johanson &

Vahlne, 1977).

By adopting the Uppsala model, business leaders can achieve internationalization

in small steps rather than large foreign investment (Johanson & Vahlne, 1977). Another

characteristic of the Uppsala model is that internationalization usually begins in countries

closest to the local market in the psychic distance. The concept of psychic distance in the

Uppsala model includes factors such as language and culture, which prevent the

information flow between the local and international market (Johanson & Vahlne, 2009).

Selecting the Uppsala model over other internationalization theories may aid in an

improved understanding of the internationalization of Saudi family businesses.

Johanson and Vahlne (1977) assumed that knowledge of the foreign market is a

significant factor in achieving successful internationalization. Market knowledge includes

information regarding markets and operations. Differences in factors such as language,

culture, and education can negatively affect internationalization (Johanson & Vahlne,

1977). The effect of market knowledge is apparent in the decision making process

(Johanson & Vahlne, 1977).

The Uppsala model originated in the mid-1970s (Johanson & Vahlne, 1977).

Researchers in the Department of Business Studies at Uppsala University in Sweden

referenced the internationalization process of Swedish-owned businesses. In the Uppsala

University study, the researchers observed that the internationalization of a business

expanded gradually from ad hoc exporting until the business reached a manufacturing

presence in a foreign country (Johanson & Vahlne, 1977). Researchers at Uppsala

University also noticed that businesses commenced internationalization in countries with

lower psychic distance (Johanson & Vahlne, 2009).

When applying the Uppsala model, businesses may internationalize gradually in

countries that tend to have similar language or culture (Johanson & Vahlne, 1977).

Kontinen and Ojala (2010b) stated that researchers applied the Uppsala model in at least

four studies and referenced it in several articles as a framework to analyze the different

internationalization activities. The consideration of the Uppsala model as a conceptual

framework was of value in understanding the internationalization activities of the

selected case studies.

Definition of Terms

This section of the study includes the terms used in the topic of

internationalization of family businesses. The terms defined in this section are terms that

scholars use in the literature and derived from scholarly sources.

Family business: A business in which a family holds a majority stake over the

business’s capital and retains significant control over the business (Abdellatif, Amann, &

Jaussaud, 2010).

Family business succession: The process of replacing the business founder or the

current leader (Cater & Justis, 2009).

Globalization: A worldwide trend of the world economies to be interlinked and

remove barriers to commerce (Cullen & Parboteeah, 2010).

Internationalization: A process through which enterprises are more concerned

with the international market and start to have direct contacts with it through different

types of transactions (Stremtan, Mihalache, & Pioras, 2009).

Multinational company (MNC): A company that has business functions outside its

domestic borders (Cullen & Parboteeah, 2010).

Psychic distance: A process where factors such as language and culture prevent

the information flow from and to the market (Johanson & Vahlne, 1977).

Assumptions, Limitations, and Delimitations

Assumptions

The first assumption was considering the internationalization process of the

family businesses as a standard process for all industries and locations. This assumption

is not always applicable because a researcher may focus on the management capabilities

of the business instead of the industries’ characteristics. Another assumption made was

that all families in Saudi Arabia follow the same culture and traditions. Saudi Arabia has

a wide variety of cultures and traditions, which may influence the way leaders run their

businesses. For this study, I did not consider the difference in cultures between Saudi

families.

Limitations

The potential weakness in the study was obtaining real data from Saudi family

business owners. In Saudi Arabia, family business owners tend to keep all their data

private, particularly financial information. Saudi business leaders tend to be resistant to

sharing their business information. Using multiple interviews, I strove to reduce the

resistance to sharing business information and enhance the validity of the data.

Delimitations

Family business leaders are the main source of information for the study. For

international family businesses, I did not consider collecting information from the

international subsidiaries of the family businesses. Instead, the home offices of the Saudi

family businesses in Saudi Arabia were the sources of information.

Significance of the Study

Reduction of Gaps

The topic of internationalization of family businesses in Saudi Arabia may

provide strategic intent to family business owners desiring expansion and

internationalization. Successful internationalization requires the managerial capabilities

necessary to configure and leverage a business’s resources in the international

marketplace (Graves & Thomas, 2008). The focus of the study was to identify the

necessary management strategies to achieve internationalization in Saudi family firms.

Implications for Social Change and Application to Business Practice

The social impact of internationalization of family businesses may be valuable to

the global society because of the impact on the economy. Families in businesses strive to

maintain their position in the market and achieve potential growth (Casillas et al., 2010;

Claver et al., 2008; Kontinen & Ojala, 2010b). The research topic of internationalization

of family businesses may positively affect family organizations by improving

performance and achieving potential growth (Kontinen & Ojala, 2010b). Family

businesses are the biggest employers in the private sector in Saudi Arabia; therefore, the

improvements of these family businesses may assist many families in finding secure jobs.

Finally, the global economy could be positively affected by the growth of family

businesses (Blodgett, Dumas, & Zanzi, 2011). Blodgett et al. (2011) argued that the

internationalization of family businesses may positively affect global business values by

bringing family values to the global marketplace.

A Review of the Professional and Academic Literature

In order to gain a deeper understanding of the previous literature on the topic of

internationalization of family businesses, it is necessary to analyze the key components of

the topic. The research question addresses how local family businesses implement

internationalization, and three key topics need to be understood. The first key topic is the

internationalization process of businesses in general. The second key topic is the family

businesses and the associative issues and concerns. The third key topic is the

internationalization of family businesses. Furthermore, the selection of Saudi Arabia as

the geographical location for the study narrows the search for family businesses

implementing an internationalization process. The search for available resources

confirmed little literature targeting this topic, suggesting that new insights might be

helpful.

Internationalization

The definition of internationalization is the extension of the business across

transnational borders (Johanson & Vahlne, 1977; Korsakienơ & Tvaronaviþienơ, 2012;

Oesterle, Richta, & Fisch, 2013). Internationalization is also the process that connects

enterprises with international markets through different types of transactions (Stremtan et

al., 2009). The degree of internationalization is a concept that demonstrates the monetary

amount of the firm’s business across borders (Oesterle et al., 2013).

The motive behind the internationalization is to increase sales by reaching

international customers (Kontinen & Ojala, 2010b). Moreover, additional reasons may

include the ability to increase monopolistic advantages, address deficient markets

internalization, leverage industrial economic effects, enhance organizational learning,

gain operational flexibility, as well as seek new markets (Oesterle et al., 2013).

Furthermore, the globalization of markets makes internationalization one of the key

strategies for business firms’ survival in a hypercompetitive marketplace (Assaf et al.,

2012; Chen et al., 2009; Koster & Vila, 2011).

Chen et al. (2009) considered internationalization and innovation (product

diversity) two strategies to measure the performance of business firms.

Internationalization and innovation may assist business firms to survive in the global

marketplace (Grøgaard, Gioia, & Benito, 2013; Kyläheiko, Jantunen, Puumalainen,

Saarenketo, & Tuppura, 2011). The relationship between the innovation and

internationalization strategies can be either complementary or substitutive; therefore, the

combination of internationalization and innovation can be the best strategy, particularly

when domestic markets have limited demand (Kylaheikoet et al., 2011). The inability of a

firm to innovate and internationalize can result in a shorter lifespan for a business (Patel

et al., 2012). The industry factors are essential to assess the ability of the firm to

internationalize (Grøgaard et al., 2013).

Preinternationalization is a key stage before commencing internationalization

(Gross & Huang, 2011). Preinternationalization includes internal and external challenges

as well as opportunities such as company abilities and government support. In order to

achieve successful internationalization, business leaders need to obtain

internationalization-required commitment and capabilities in the pre-internationalization

stage (Gross & Huang, 2011; Manolova et al., 2010; Schwens & Kabst, 2011). To

facilitate a positive outcome, business leaders should begin an internationalization

process following an Initial Public Offering (IPO; LiPuma, 2012).

A business leader seeking to internationalize can choose from several models to

implement the internationalization of the firm (Kontinen & Ojala, 2010b). The four main

internationalization models are the Uppsala model, the network model, the resource-

based view, and the OLI framework (Becker-Ritterspach & Bruche, 2012; Javalgi &

Todd, 2011; Kontinen & Ojala, 2010b; Korsakienơ & Tvaronaviþienơ, 2012). Scholars

derived the Uppsala model through the study of companies in Sweden. Johanson and

Vahlne (2009) described internationalization as a product of a series of sequential

processes based on a study on Swedish companies. In addition, Johanson and Vahlne

improved the Uppsala model through a consideration of the importance of networking in

an internationalization process.

The second model of internationalization is the network approach. Business

leaders achieve internationalization through growing relationships between key players

such as customers and suppliers (Javalgi & Todd, 2011; Kontinen & Ojala, 2010b;

Manolova, Manev, & Gyoshev, 2010). The third model is the resource-based view. In

this resource-based view model, internationalization expansion of a specific business is

dependent on the ability of the business to maintain valuable, rare, inimitable, and

nonsubstitutable resources (Graves & Thomas, 2006; Liang, Lu, & Wang, 2011). The

fourth model is the OLI framework. In the OLI framework, scholars explained

internationalization in terms of ownership, location, and internationalization advantages

respectively (Javalgi & Todd, 2011; Kontinen & Ojala, 2010b).

Scholars considered the previous models in a number of internationalization

studies in different specializations such as retail, services industries, hotels, textile firms,

technology firms, and universities (Assaf et al., 2012; Bennett & Kane, 2011; Castellacci,

2010; Gross & Huang, 2011; Karabulut, 2013; Koster & Vila, 2011; Schwens & Kabst,

2011). There are many determinants that can influence an internationalization process,

which makes setting one framework for all businesses impractical at best (Kuivalainen et

al., 2012).

Another essential question is on the proper timing of an internationalization for a

firm (Assaf et al., 2012; Casillas, Moreno, Acedo, Gallego, & Ramos, 2008; Cuervo-

Cazurra, 2011; Tang. 2011; Xie & Amine, 2009). Multiple qualitative and quantitative

researchers have attempted to answer this question (Gallego, & Ramos, 2008; Cuervo-

Cazurra, 2011; Tang. 2011; Xie & Amine, 2009). Xie and Amine (2009) argued that

business leaders achieve successful internationalization when they begin in a country that

has the same culture and ethnic factors as the origin country. In contrast, some business

leaders select countries that are dissimilar to their countries (Cuervo-Cazurra, 2011).

Knowledge is a key factor in the internationalization process (Brennan & Garvey,

2009; Casillas et al., 2008; Casillas et al., 2010; Kalinic & Forza, 2012). Knowledge

intensity is a key driver for internationalization of business firms and the effect of

knowledge will appear by the pace of the internationalization process (Brennan &

Garvey, 2009). Furthermore, the understanding of the knowledge influence can explain

why some business leaders follow a sequential process in achieving internationalization

as postulated by the Uppsala model, while other business leaders achieve

internationalization at birth of the business, a concept referred to as born global (Casillas

et al., 2008)

Another prototype for internationalization is an integrating dynamic model that

relates to the role of knowledge in the internationalization process (Casillas et al., 2008).

The model consists of four main parts: Possession of knowledge prior to

internationalization, the search for new knowledge, absorption of new knowledge, and

feedback process (Casillas et al., 2008). Developed through organizational learning in

multinational companies, the application of this model would include the influence of

knowledge on international behavior of business firms (Casillas et al., 2008).

In addition, the importance of accelerated internationalization is a crucial concept

in the field of business growth (Middleton, Liesch, & Steen, 2011). Middleton et al.

(2011) investigated how executive managers in internationalizing businesses manage

time as a way of ordering events and processes within a firm to achieve accelerated

internationalization. According to Kuivalainen et al. (2012), for business firms, being

born global will achieve more successful internationalization as compared to traditional

or born again global internationalization patterns. Kuivalainen et al. referred the reason

behind the success of born global businesses is the global mindset. Kalinic and Forza

(2012) supported the importance of the global mindset and found that business can

achieve a rapid internationalization if it has a specific strategic focus towards becoming a

global competitor. Kalinic and Forza argued that a business would be able to accelerate

the internationalization process by catching up with the increasing global competition.

Acquiring an opportunity-based view would assist a business firm in achieving

accelerated internationalization (Huei-Ting & Eisengerich, 2010; Chandra, Styles, &

Wilkinson, 2012).

Setting the correct strategy is a significant determinant of successful

internationalization (Cullen & Parboteeah, 2010). Considering internationalization as a

growth strategy, business leaders can achieve internationalization by different strategies

(Chen et al., 2009; Cullen & Parboteeah, 2010; Javalgi & Todd, 2011; Koster & Vila,

2011). Parmentola (2011) suggested understanding the internationalization strategy using

two variables: The level of a firm’s competitiveness in the domestic market and the level

of socioeconomic development of the destination country.

Internationalization through partnership strategy and acquisitions are two different

growth strategies pursued by business leaders to achieve internationalization (Chen et al.,

2009). One of the vital strategies to achieve successful internationalization for a business

leader is to be a market oriented (Koster & Vila, 2011). Market orientation relates to

innovation, and innovation relates to success (Koster & Vila, 2011). Another strategy for

successful internationalization is entrepreneurial orientation (Javalgi & Todd, 2011).

Innovation, risk taking, and being proactive are the three dimensions of entrepreneurial

orientation (Javalgi & Todd, 2011).

Relationship networks have a positive effect on the internationalization process

(Hewapathirana, 2009; Lindstrand et al., 2011; Manolova et al., 2010; Musteen, Francis,

& Datta, 2010; Tang, 2011). Moreover, business firms can internationalize faster if they

share a common language with their international ties (Musteen et al., 2010). In addition,

the use of social capital can assist business firms expedite their internationalization

process (Lindstrand et al., 2011). Furthermore, there is a positive effect of relationship

networks on the pace of internationalization; to be specific, the earlier the business leader

engages in inter-firm collaboration, the higher the degree of internationalization

(Manolova et al., 2010).

A business firm can focus on networking behaviors to support internationalization

rather than a narrow focus on only networking (Tang, 2011). The networking behavior

should be composed of four variables: Proactiveness, commitment, openness to network

diversity, and strategy (Tang, 2011). The availability of foreign business resources

positively relates to the achievement of rapid internationalization (Tang, 2011).

Another essential factor is the relationship between internationalization and

performance of business firms (Lin, Liu, & Cheng, 2011). An approaching

internationalization might have positive or negative effect on a business firm’s

performance (Assaf et al., 2012; Castellacci, 2010). Business leaders that internationalize

through mergers and acquisitions achieve a higher level of cost efficiency than business

leaders who have used their own resources (Assaf et al., 2012). Furthermore, business

firms from large economies gain less by internationalization than do businesses from

smaller economies; moreover, leaders of younger businesses have a better opportunity for

successful internationalization than older businesses (Assaf et al., 2012). The productivity

in the internationalization activities positively relates to the firm’s size (Arndt, Buch, &

Mattes, 2012).

Geographically diverse networks contribute to superior performance (Musteen et

al., 2012). Internationalization can positively affect business firms’ performance when

there are higher levels of organizational slack (the difference between total available

resources and the minimum required resources to produce a certain output) and

attainment discrepancy (aspirations exceeds expectations) (Lin et al., 2011). Furthermore,

the innovation and endowment capabilities are significant factors for successful

internationalization (Arndt et al., 2012; Castellacci, 2010; Cullen & Parboteeah, 2010;

Liang et al., 2011).

Arndt et al. (2012), Bennett and Kane (2011), Khavul, Benson and Datta (2010),

and Zhu, Sarkis, and Lai (2010) discussed the factors that affect internationalization such

as financial and managerial capability. Labor market constraints increase firms’ costs and

may hinder internationalization (Arndt et al., 2012). A firm’s financial situation is a

significant factor in the internationalization process (Bennett & Kane, 2011; Graves &

Thomas, 2008). In addition, there is a relation between internationalization and human

resource management practices (Khavul et al., 2010). Furthermore, Zhu et al. (2010)

found that there is a positive relation between internationalization and the adoption of

environmental supply chain management practices for Chinese manufacturers.

Family Businesses

The second key topic in this research is the family businesses. The family firm is

the business that has a key impact and contribution to economies of all countries around

the world (Bunkanwanicha, Fan, & Wiwattanakantang, 2013; IFERA, 2003; Molly,

2010; Okoroafo & Koh, 2009; Puig & Pérez, 2009; Sardeshmukh & Corbett, 2011;

Tucker, 2011), although there are many family business aspects that need deeper and

more extensive research (Litz, Pearson, & Litchfield, 2012; Segaro, 2012, Strike, 2012).

Yu, Lumpkin, Sorenson, and Brigham (2012) noted that scholars studied family business

roles, succession, and family dynamics in more depth than other noneconomic

performance and family-specific fields.

Thirty years ago, scholars showed little if any interest in researching family

businesses (Astrachan, 2010). The situation began to change with the inception of the

Family Business Review Journal. Beginning in 1988, the Family Business Review

Journal helped to review existing family business literature as well as define the gap in

the literature (James, Jennings, & Breitkreuz, 2012; Sharma, Chrisman, & Gersick,

2012).

Throughout the literature on family businesses there has been considerable debate

regarding the definition of family businesses (Carr & Bateman, 2009; O’Regan, Hughes,

Collins, & Tucker, 2010). The debate is replicating thorough the definition of

entrepreneurship (Wright & Kellermanns, 2011). The self-explanatory concept of family

business provides a simple definition of a business owned by a family or organization

resulting from a fusion of business and family (Rantanen & Jussila, 2011). Similarly,

ownership and control of a single or multiple family business firms can define a family

business (Abdellatif et al., 2010; Garcia-Castro & Casasola, 2011; Sharma et al., 2012;

Rantanen & Jussila, 2011; Short, Payne, Brigham, Lumpkin, & Broberg, 2009).

There is a need to agree on the categorization of family businesses (Wright &

Kellerman, 2011). The categorization of family businesses can be based on generation,

power, experience, and culture (Wright & Kellerman). In all categories, family

businesses usually consist of heterogeneous components, which are ownership,

governance, management, and succession (Garcia-Castro & Casasola, 2011).

Despite the need to distinguish between family and nonfamily businesses, many

researchers have adopted comparisons between family and nonfamily businesses in

several areas (Craig & Salvato, 2012). The value of family businesses versus nonfamily

businesses and other business behaviors are also points of interest and contention

amongst researchers in many studies (Granata & Chirico, 2010; Martin-Reyna & Duran-

Encalada, 2012; Short et al., 2009; Stewart & Hitt, 2012).

Assessing the values of firms in an acquisition may assist to delineate the

difference between family and nonfamily businesses. Although family businesses

maintain high performance, buyers undervalue family businesses in acquisitions when

compared to nonfamily businesses (Granata & Chirico, 2010). Buyers tend to regard

family businesses as unprofessional and inefficient businesses (Granata & Chirico, 2010).

Workplace performance is another issue. A family business can adopt different

corporate governance structure than a nonfamily business, which can lead to higher

performance (Martin-Reyna & Duran-Encalada, 2012). In a similar way, family

businesses may not be as professional as nonfamily businesses (Granata & Chirico, 2010;

Stewart & Hitt, 2012).

Short et al. (2009) provided a comparison between family and nonfamily

businesses in several characteristics including autonomy, proactiveness, and risk taking.

Autonomy refers to individuals bringing an opportunity and guiding this opportunity

from the idea to the completion stage. Proactiveness refers to anticipating market changes

and future needs. Risk taking refers to brave actions regarding uncertainties. Using a

quantitative study, Short et al. found that family businesses were more entrepreneurial

oriented than nonfamily firms in relation to autonomy, proactiveness, and risk taking.

Family business research has garnered attention regarding family firm behaviors

and their effect on overall performance (Astrachan, 2010; Garcia Ramos & Garcia Olalla,

2011; Memili, Eddleston, Kellermanns, Zellweger, & Barnett, 2010; Sharma et al., 2012).

Strategy, ownership, governance, and socio-psychological are the dimensions that

represent key trends in the family business research (Goel et al., 2012; Sharma et al.,

2012). Psychology could contribute significantly to a better understanding of the family

business (Pieper, 2010).

There are several factors affecting the performance of family businesses (García-

Ramos & García-Olalla, 2011; Goel, Mazzola, Phan, Pieper, & Zachary, 2012; König,

Kammerlander, & Enders, 2013; Sciascia & Mazzola, 2008). Influences like family

involvement and founder role are significant factors affecting family businesses’

performance (Bunkanwanicha et al., 2013; García-Ramos & García-Olalla, 2011; Goel et

al., 2012; König et al., 2013; Sciascia & Mazzola, 2008). Family involvement in the

business has a positive effect in general (Memili et al., 2010; König et al., 2013; Sciascia

& Mazzola, 2008; Zellweger, Eddleston, & Kellermanns, 2010).

In family businesses, there is a difference between the involvement of the owing

family in management and in ownership (Sciascia & Mazzola, 2008). There is no relation

between family involvement in ownership and performance, while family involvement in

management has a negative relation to performance (Sciascia & Mazzola). The reasons

behind the negative effect are the lack of professional competencies in general for family

members, the obstacles of increasing capital, family managers’ conflicts, and targeting

nonfinancial goals (Sciascia & Mazzola, 2008).

Family ownership positively influences the development of a family business

image (König et al., 2013; Memili et al., 2010). The influence of the family involvement

reduces the resistance to development initiatives (König et al., 2013). In regard to

discontinuous technologies, König et al. (2013) found that the family influence has a

positive effect on speed, aggressiveness, stamina, and flexibility. Bunkanwanicha et al.

(2013) claimed that the marriage of family members increases the value of the family

business, and is another positive effect of the family. The reason behind the positive

effect is that the marriage of the family members increases the control over the business

(Bunkanwanicha et al., 2013).

Other factors affecting family business performance include strategic direction,

and the makeup of the board of directors (García-Ramos & García-Olalla, 2011; Webb,

Ketchen Jr., & Ireland, 2010). Superior performance often results from successful

strategic entrepreneurship (Short et al., 2009; Webb et al., 2010). In addition, board

meetings have a positive effect on the business, and a weaker effect when the founder

leads the business (Garcia Ramos & Garcia Olalla, 2011).

The fusion between the family and the business, as well as the interaction between

the family and the business, are other key research areas (Basco & Pérez Rodríguez,

2011; Kwan, Lau, & Au, 2012; Rantanen & Jussila, 2011; Zellweger et al., 2010). The

family contribution to the business can be a key factor in achieving business success

(König et al., 2013; Kwan et al., 2012; Zellweger et al., 2010). The overlap between the

family and the business in many areas, such as values, are essential factors that influence

the family business (Bunkanwanicha et al., 2013; Rantanen & Jussila, 2011). Pursuing

these further, family businesses use a combination of family and business orientation that

could achieve results that are more successful (Basco & Perez Rodriguez, 2011).

O’Regan et al. (2010) noted that the balance between the family and the business

can be the key to success for family businesses. Although all generations of family

businesses have family and business balance issues, third-generation family businesses

may have complexity in balancing family requirements due to business maturity and

increased family problems (O’Regan et al., 2010). Moreover, there is a need for specific

financial policies to overcome the family issues such as the balance between the family

and business requirements (O’Regan et al.).

One of the special characteristics of family businesses is the transition from one

generation to the succeeding one and the effect on the business (Buang et al., 2013; Cater

& Justis, 2009; Molly, 2010; O’Regan et al., 2010). Sharma et al., (2012) noted that

between 1980s and 1990s succession was the dominant topic for family business

research. The interest in succession came from the need to sustain family businesses

(Lam, 2011). The importance of succession is apparent, especially, when statistics

illustrate that only one third of family businesses survive to the second generation (Lam,

2011; Molly, 2010; Sardeshmukh & Corbett, 2011). A succession issue may emanate

from a potential conflict between successors if the business has not prepared for the

transition from one generation to the next (Block, 2011; Cater & Justis, 2009; Osnes,

2011).

The transfer from one generation to another is a difficult step that may threaten

the entire business (Buang et al., 2013; Cater & Justis, 2009; Lam, 2011; Molly, 2010;

O’Regan et al., 2010; Sardeshmukh & Corbett, 2011; Stamm & Lubinski, 2011). In

contrast, Molly (2010) argued that there is no evidence that the succession negatively

affects family business’ profitability, while the succession may cause a decrease in

growth rate. Strategic thinking does vary among generations of family businesses

(O’Regan et al., 2010). Third generation family business owners tend to be strategic,

while second generation owners focus primarily on daily operations (O’Regan et al.,

2010).

Family Businesses Versus Multinational Companies (MNCs)

There is a difference between family businesses and multinational companies

(Abdellatif et al., 2010). The differentiation between family businesses and multinational

companies may assist in understanding the requirements of operating a multinational

company. Besides, the differentiation could assist in pinpointing the significant family

businesses’ characteristics for internationalization. Some of these characteristics depict

strong points, while others characterize weak points. Family business leaders may need to

utilize and improve all strength points to achieve successful internationalization. In

contrast, family business leaders may need to manage weak points carefully by either

avoiding or correcting.

One of the strength points in family businesses is loyalty to the firm (Cater, 2009).

Family members, including parents and children, have loyalty and commitment to their

business and act in the best interest of the business (Cater, 2009). In contrast,

multinational companies tend to build loyalty by offering their employees benefits

through the hiring of family members and friends (Cullen & Parboteeah, 2010).

Moreover, the loyalty in family businesses outperforms nonfamily business (Cater,

2009).

Another point of strength for a family business compared to a multinational

company is ethical values (Blodgett et al., 2011). Family businesses have unique ethical

values compared to nonfamily global businesses (Blodgett et al., 2011). Furthermore,

family businesses often have entrepreneurial dispositions, which may lead to successful

internationalization (Javalgi & Todd, 2011).

Family businesses have weaknesses that provide multinational companies the

advantage in internationalization. Family businesses have nonfinancial goals, which serve

the family more than the business (Cater, 2009; Sciascia & Mazzola, 2008). The

nonfinancial goals can have a negative impact on the overall performance of the firm

(Sciascia & Mazzola, 2008). Due to the nonfinancial goals of the family business, family

business managers may not have enough capability to cover the position requirements,

yet may still block others from filling the vacancy (Sciascia & Mazzola, 2008).

Multinational companies adopt professional selection processes to ensure that

they are recruiting capable and competent staff for all required positions at all levels

(Cullen & Parboteeah, 2010). Similarly, family businesses often lack professional

consultants in their leadership (Kontinen & Ojala, 2011; Strike, 2012); therefore, buyers

often tend to regard family businesses as unprofessional and inefficient organizations

(Granata & Chirico, 2010).

Single ownership of the family business facilitates easier decision making

processes and positively contributes to the agility of the business (Abdellatif et al., 2010).

In contrast, multinational companies require more flexibility in decision making

processes (Hua, 2012). Furthermore, succession in the family business can be a unique

threat for the firm (Block, 2011; Cater & Justis, 2009; Osnes, 2011). In multinational

companies, typically there are no specific impacts on the succession between leaders.

Internationalization of Family Businesses

Internationalization of family businesses became a significant topic to study

(Abdellatif et al., 2010; Casillas et al., 2010; Chen, 2011; Claver et al., 2007; Kontinen &

Ojala, 2010b). Gallo and Sveen (1991) studied the topic of internationalizing family

businesses and the needed facilitating factors (Casillas, Acedo, & Moreno, 2007). Eleven

more articles followed on the topic of internationalization of family businesses from 1991

to 2006 (Casillas et al., 2007), and 19 other articles followed targeting the same topic

until 2012.

The growing numbers of views expressed in research articles have indicated the

importance of this topic despite the difficulties that negatively affect the research such as

the debate regarding the definition of family businesses (Carr & Bateman, 2009).

Kontinen and Ojala (2010b) reviewed the literature on internationalization of family

businesses and suggested three main categorizations; family business dimension,

international business dimension, and international entrepreneurship dimension.

The importance of the topic of family businesses internationalization comes from

the dominance of family businesses and their effect on the national economy (IFERA,

2003; Molly, 2010; Okoroafo & Koh, 2009; Puig & Pérez, 2009; Sardeshmukh &

Corbett, 2011; Tucker, 2011), and the probability that family businesses are more likely

than nonfamily business to achieve successful internationalization (Chen, 2011).

As a result, internationalization became an essential strategy for family businesses

to secure their survival rather than an optional growth strategy (Casillas et al., 2010;

Chen, 2011; Patel et al., 2012). Moreover, if a family business does not commence

internationalization in the first and second generations, it is unlikely to do so in later

generations (Okoroafo, 1999). Therefore, internationalization became an essential and

urgent strategy for family businesses.

Abdellatif et al. (2010) stated that there is no significant difference between

family and nonfamily businesses. In contrast, Blodgett et al. (2011) indicated that there

are several differences between family and nonfamily businesses. International family

businesses emerge as more ethical, honest, and committed to quality and customer as

compared to nonfamily businesses (Blodgett et al., 2011). Furthermore, family businesses

are more internationally oriented than nonfamily businesses (Carr & Bateman, 2009).

One unique characteristic of family business is a preference for more

independence as compared to nonfamily businesses (Abdellatif et al., 2010). Family

business leaders establish fewer joint ventures than nonfamily businesses (Abdellatif et

al., 2010). Family business owners have socioemotional wealth concerns that may lead

them to attempt to control their affiliates as well as maintain higher ownership levels

(Kuo et al., 2012). Hence, family businesses tend to select wholly owned subsidiaries as

an internationalization choice (Kuo et al., 2012).

Family ownership has a significant influence on the internationalization process

of the businesses regarding the pace, scope, and rhythm of internationalization (Chen,

2011; Lin, 2011). Moreover, the role of the founder has a significant effect on

internationalization (Davis & Harveston, 2000). The higher educational level for the

family business founder has a positive impact on internationalization (Davis &

Harveston, 2000). In addition, Davis and Harveston (2000) indicated that the use of

technology has a positive impact on internationalization (Davis & Harveston, 2000).

There are barriers preventing family businesses from reaching successful

internationalization (Carr & Bateman, 2009; Casillas et al., 2010; Graves & Thomas,

2008; Kontinen & Ojala, 2010a; Kontinen & Ojala; 2011). There are two main

determinants of internationalizing family businesses; knowledge and family commitment

(Casillas et al., 2010). Furthermore, there are three key determinants of the

internationalization of family businesses: The level of commitment toward

internationalization, the financial resources available, and the ability to commit and use

those financial resources to develop the required capabilities (Graves & Thomas, 2008).

Psychic distance and trusted international ties are also determinants of the

decision to internationalize the family firm (Kontinen & Ojala, 2010a; Kontinen & Ojala,

2011). When the international market is psychically distant, family business leaders tend

to pursue a sequential process to achieve internationalization (Kontinen & Ojala, 2010a).

Moreover, family business leaders use different distance bridging factors to overcome the

psychic distance factor (Kontinen & Ojala, 2010a).

Geographical location is another key determinant of internationalizing family

businesses (Carr & Bateman, 2009). The risk aversion of family business owners

contributes to the decision to consider geographical location along with the lack of

trusted ties as an affecting determinant in family businesses, as opposed to nonfamily

business decisionmakers (Casillas et al., 2010; Carr & Bateman, 2009; Claver et al.,

2008; Graves & Thomas, 2008). The main factors that contribute to the

internationalization of the family firm include the following: The presence of significant

capacity for technological and management innovation; the social networks of owners

and managers; early and intense internationalization; and professional management of the

company, all of which contribute to the final decision (Moya, 2010).

Hobdari, Gregoric, and Sinani (2011) indicated that the high market share can

lead to increase in internationalization. Most likely the leading international family

businesses in the contemporary global marketplace are the result of a long learning

process (Puig & Perez, 2009). The long learning process will lead the family business to

innovate, which will positively impact internationalization (Tsao & Lien, 2013).

Several factors such as the age, size, and generation of the family business, affect

the internationalization process of the family firm (Claver et al., 2007). In contrast,

family businesses that do not have the same size as large multinational enterprises still

have the ability to achieve successful internationalization (Davis & Harveston, 2000).

Roida and Sunarfanto (2012) posited that business size is not a constraint to compete

globally.

The presence of family members in managerial positions of family businesses

provide a clear advantage when advancing the internationalization process by expediting

the decision making process (Claver et al., 2007; Tsao & Lien, 2013). However, the

positive influence of the presence of a family member in a managerial position is a

debatable issue (Claver et al., 2007). Tsao and Lien (2013) claimed that the involvement

of the owning family in the management positively moderates the internationalization

performance. The benefit of internationalization is not usually appreciated by first,

second, or the third generation leading family businesses (Okoroafo & Koh, 2009). To

avoid the escalation of commitment, non family managers are usually the individuals

who engage in internationalization activities (Claver, Rienda, & Quer, 2009; Woods,

Dalziel, & Barton, 2012). In contrast, family businesses under an owner’s control are

more internationalized (Hobdari et al, 2011). Contracts of family managers typically

include greater incentives in terms of short term performance measures as compared to

nonfamily managers (Block, 2011).

Considering the lack of proactiveness and professional advisors for family

business owners (Kontinen & Ojala, 2011; Strike, 2012), the gap in the literature is

apparent regarding answering how family businesses can ensure success in their long

term strategies (Astrachan, 2010; Dana & Smyrnios, 2010; Kontinen & Ojala, 2011;

Strike, 2012). The targeted gap in the literature to be covered is the absence of a strategy

to plan and implement internationalization of family businesses. The need arises for

family business owners on how to secure their businesses and achieve successful

internationalization (Assaf et al., 2012; Casillas et al., 2010).

The gap is apparent when the business firms need to achieve internationalization

in a nonindustrial country such as Saudi Arabia. Family business leaders in Saudi Arabia

have more challenges to achieve internationalization (Mellahi et al., 2011). Furthermore,

in family businesses where leadership incompetence is apparent, the situation becomes

more difficult when the family business is in a third country nation (Mellahi et al., 2011).

Transition and Summary

Family businesses have a significant influence on the economy (IFERA, 2003).

Internationalization may become a survival strategy for family businesses. Family

business owners have to prepare their businesses with the necessary information,

capabilities, and networks to achieve successful internationalization (Lin, 2011). The

different models of internationalization offer family firms more options to begin the

internationalization process (Kontinen & Ojala, 2010b). Family businesses in Saudi

Arabia have challenges in reaching successful internationalization due to the lack of

knowledge, industry, and capabilities (Mellahi et al., 2011). The study findings may be of

value to family businesses in Saudi Arabia in preparing for successful

internationalization. Section 2 addresses information regarding the role of the researcher,

participants, research method and design, data collection, reliability, and validity.

Section 2: The Project

Section 2 includes information on the methodology and research process in detail.

The research methodology and design was a qualitative case study approach. Considering

the available data, the case study approach was suitable for this research. Moreover,

Section 2 includes the purpose statement to ensure the full engagement with the

subsequent data. Furthermore, Section 2 includes the role of the researcher, participants,

research method and design, data collection, and reliability and validity.

Purpose Statement

The purpose of the qualitative case study was to explore how Saudi family

business leaders have successfully planned and implemented internationalization. The

selected population for the study was family business leaders in three Saudi Arabian

family internationalized organizations. Saudi Arabia is one of the fastest growing

countries, and the largest economy in the Middle East and North Africa (MENA) region,

(SAGIA, 2013). Three leaders of successful international Saudi family businesses were

interviewed. The focus of the interviews was on what strategies these family business

leaders used to implement internationalization. Key factors of the transition plan from the

local market to the international market were studied in order to draw a road map for

local family businesses intending to pursue successful internationalization. The results of

the study may be of value to family businesses to achieve potential growth by successful

internationalization, which may positively impact the local economy of Saudi Arabia.

The implementation of successful internationalization may also assist family business

leaders who are currently striving to maintain their position in the market and achieve

potential growth (Casillas et al., 2010; Claver et al., 2008; Kontinen & Ojala, 2010b).

Role of the Researcher

The role of the researcher commenced with a review of the literature to gain a

deeper understanding of the research topic. From the literature review, I collected data for

the study to address the research question and arranged meetings with leaders of Saudi

family businesses. The objective of the meetings was to present the research topic and

ask for their participation. I used an interview protocol with open-ended questions to

explore how these family businesses achieved their internationalization and overcame

challenges. Using semistructured, face-to-face interviews assisted me in exploring the

participants’ experiences. Thereafter, the analysis of the interviews enabled me to

interpret the findings of the study.

Participants

Saudi Arabian family business leaders were the focus for this case study, and the

participants were the leaders of the Saudi international family businesses. The strategies

to gain access to the participants were through personal and professional relationships.

Based on these relationships, I spoke with three Saudi family business leaders to obtain

access to potential participants for the study. I obtained their signatures on the participant

consent form (seen Appendix A) prior to holding the interviews. The relationships I have

with the business leaders from previous business engagements assisted in building a

working relationship with the participants. In addition, I protected the identity of the

participants and did not share the names of the organizations and participants. The

sampling method was purposeful by selecting participants based on the selected criteria

(Patton, 2002). The sample size comprised three business leaders. The use of three

leaders was sufficient to conduct multiple interviews and may lead to more persuasive

results (Yin, 2009). I saved all collected data on a secured hard drive and will keep the

data for 5 years after conducting the study. I will personally destroy all research data after

5 years.

Cater and Justis (2009) used purposeful sampling to select participants from

different industries to understand the development of successors in family businesses.

Kalinic and Forza (2012) used purposeful sampling to investigate the rapid

internationalization of small and medium enterprises. For this purpose, I used purposeful

sampling to explore how Saudi family businesses can implement internationalization.

Research Method and Design

The research methodology is a qualitative case study design. I selected this

research design based on the nature of the topic. The internationalization of family

businesses in Saudi Arabia is a new phenomenon that needs to be explored and

understood. Given the importance of building relationships with the family business

leaders, the qualitative methodology is the best fit for the research topic.

Method

The research plan included a qualitative methodology and a case study design.

According to Marshall and Rossman (2011), qualitative research is pragmatic,

interpretive, and grounded in the experience of the people. The nature of this research

required an understanding of the qualitative research to explore how Saudi family

business leaders achieved internationalization and overcame all challenges. Thus, a

qualitative research method is the best fit to explore and understand the results of this

research (Patton, 2002).

The three general research methodologies are qualitative, quantitative, and mixed

method. According to Denzin and Lincoln (2005), in quantitative research methodology,

researchers test hypotheses and find a relationship between variables, which was not the

intent of this study. For this topic, the phenomenon itself needed to be explored rather

than the study of any relation between variables. In addition, Denzin and Lincoln (2005)

mentioned that qualitative researchers are more concerned with details and descriptions

than quantitative researchers. Therefore, the quantitative methodology was not an

appropriate method for the research topic. Moreover, there was no need to use mixed

method.

Research Design

There are two approaches that were adequate for this doctoral study research:

phenomenological and case study. I explored the perspective and the experiences of the

participants, and I elected to use a qualitative case study design. According to Marshall

and Rossman (2011), a phenomenological approach addresses the perspective and lived

experiences of the participants. I did not select a phenomenological approach because the

participants were likely to be few and could not satisfy phenomenological approach

requirements. Ethnography was another possible design for the research topic. According

to Patton (2002), ethnography research requires intensive fieldwork including the direct

observation of participants. Also, an ethnographer should immerse in the studied culture

(Patton, 2002). The nature of the topic is not about studying the culture rather studying a

definitive strategy, and therefore, ethnography design was not an appropriate design.

A qualitative case study approach was the optimum research design for this

doctoral study research. The case study approach reflects the study of a bounded object in

an attempt to understand several decisions about the motives and implementations of

these decisions (Yin, 2009). Becker-Ritterspach and Bruche (2012) used a qualitative

case study approach to understand the internationalization process of businesses in

emerging markets. Similarly, Kalinic and Forza (2012) considered a qualitative case

study to be the best approach to investigate the rapid internationalization of small and

medium enterprises. Likewise, Cater and Justis (2009) selected a qualitative case study

approach to study the factors that shaped successor leadership in small family businesses.

Thus, I used a qualitative case study approach to explore how Saudi family businesses

can implement internationalization.

Population and Sampling

The research design was a multiple case study concerning Saudi Arabian

international family businesses. The sample included the leaders of the international

Saudi family businesses who have demonstrated significant participation in the

internationalization process from the beginning of the idea to the current operation. The

sampling method was purposeful by selecting participants based on the selection criteria

of being a leader in international family business in Saudi Arabia. Using purposeful

sampling assisted in focusing on information-rich participants for in-depth study to

answer the study questions (Patton, 2002).

The criterion for selecting a participant was having experience in the

internationalization process of the family business. Furthermore, being in a leading

position on the hierarchy of the family business was another vital criterion for selection.

Being a member of the family was not necessarily a condition for participation because

several family businesses hire nonfamily managers to lead their internationalization

process.

Ethical Research

I considered all ethical issues when collecting data from participants. I explained

all details of the research process to maintain high ethical standards, and to ensure that I

met the acceptable criteria and practices standards (Abbott & Grady, 2011). Each

participant signed the consent form before participating and answering the interview

questions. The consent form includes information informing the participant about the

research topic, risks, and benefits of being in the study, (see Appendix A). According to

Patton (2002), researchers must protect the privacy of the research subject.

Although all participants can understand English, I walked through the consent

form with each participant to ensure the understanding and to clarify any questions. I held

all interviews at my office to ensure privacy. The participants understood that

contributing in the study was voluntary and that they could withdraw from the study at

any time. If the participant elected to withdraw from the study, I would provide the

participants with the interview notes and the audio recording to destroy. Considering the

participants are leaders in Saudi family businesses, there were no incentives for

participating in the study. After the completion of my doctoral study, I will send the

participants a summary of the results. All collected data will remain in a password-

protected external hard drive for 5 years before disposal. The participants’ identities will

remain confidential. Each participant was given a unique number to maintain

confidentiality. I conducted the research under the IRB approval from Walden University

(approval # 08-12-13-0250005).

Data Collection

The data collection section includes three areas: instruments, data collection

technique, and data organization technique. The instrument includes the name and type of

the instrument used for this study. The data collection and organization techniques

included the collection of the data through interviews and how I organized the collected

data for analysis.

Instruments

According to Yin (2009), case study evidence can come from six sources:

documentation, archival records, interviews, direct observations, participant observations,

and physical artifacts. The data collection instruments included semistructured, face-to-

face interviews with international Saudi family business leaders and online archival data

about the family businesses. The use of semistructured interviews led to an understanding

of the strategies that family business leaders adopted to achieve internationalization. I

examined the reliability and validity through the consistency of the replies along with a

member checking technique and data triangulation.

Each participant read and signed the participant consent form before beginning

the interview process. The consent form is attached in Appendix A. The interview

questions are opened-ended and semistructured and include probing questions as needed

to acquire in depth responses from participants’ experiences (Yin, 2009). The interview

questions are listed in Appendix B. The interviews with each participant were audio

recorded to ensure accuracy. Member checking and follow-up interviews with

participants were the techniques used for further understanding of the participant

perspective. I used online web data regarding each family business to correlate with the

interview data and increase my understanding of the participants’ answers during the

interview process.

Data Collection Technique

The data collection techniques for the study were the interview notes and audio

recordings. According to Patton (2002), there are three forms of interviews: an informal

conversational interview, a general interview guide approach, and a standardized open-

ended interview. Yin (2009) suggested three types of interviews for a case study design:

in-depth interviews, focused interviews, and formal surveys. Cater and Justis (2009) used

in-depth interviews to understand the development of the successor in small family

businesses. Claver et al. (2007) also selected in-depth interviews to study the entry choice

in the internationalization process of family businesses. For this doctoral study, I used

semistructured face-to-face interviews, which provided a strategy to explore how Saudi

family businesses could implement internationalization.

Supporting the interview design, Gross and Huang (2011) used semistructured

interviews to understand the internationalization of Chinese hotels. Likewise, Kontinen

and Ojala (2010a) used semistructured interviews to explore how psychic distance affects

family businesses internationalization. In a similar study, O’Regan et al. (2010) claimed

that semistructured interviews gave better results in studying strategic thinking of family

businesses. Seeking strategic thinking of family business leaders, I used in-depth,

semistructured interviews to study how Saudi family businesses can implement

internationalization.

In-depth semistructured interviews are conducive for inquiring about facts and

opinions of participants. As a result, the semistructured interview strategy provides the

researcher an extended period of time to probe (Yin, 2009). There were three family

business leaders who participated in this study. Therefore, multiple (3-4) in-depth

semistructured interviews led to additional information from each participant.

The first step in conducting the interviews was creating a list of potential

participants from international Saudi family firms, then contacting the participants and

explaining the purpose of the study and the potential social impact. According to the

agreed upon time and location, I presented the list of questions along with the consent

form (see Appendix A) to each participant. The questions for the interview are listed in

Appendix B. In order to have accurate in-depth answers, informal conversations followed

the formal interview. Applying member checking, multiple interviews with participants

followed for additional information and to confirm the understanding of the participants’

answers. In addition to reading the online web information regarding each family

business to correlate with the interview data, my reading of the online data led to a better

understanding of the participants’ answers during the interview process.

Data Organization Techniques

I organized the data using Zotero™ along with an Excel™ spreadsheet. Zotero

aids in organizing the interview transcripts and notes, as well as literature references in

one location. Zotero also assisted in simple retrieval of any resource. The ability of

synchronizing all references on the Zotero server allowed me to access the references

from any computer using the same account. Moreover, Excel was helpful in categorizing

and monitoring the data and help in the coding of the data. I used the same techniques for

the references and for the collected data. I added the interview transcriptions to a Zotero

account, and then used Excel to categorize the data by theme. In order to ensure privacy

during data collection, all documents including interview notes, audio, and consent forms

will remain on a secure hard drive for 5 years with a secured backup on another hard

drive. All data are password protected.

Data Analysis Technique

After the data collection from the interviews and the online sites, I commenced

the data analysis using Excel, the Microsoft data analytical program. Each participant had

a unique numerical code to differentiate between participants and maintain their

confidentiality. After the definition of the themes, I compared and contrasted the answers

of the participants.

The interview questions were as follows:

1. What is your name and job title?

2. What are the mandatory characteristics of local family businesses that

would enable them to compete in a global market?

3. What are the strategic considerations needed for family businesses before

going global?

4. What were the motives for your business to go international?

5. What are the main challenges internally and externally to achieve

internationalization?

6. How did you select the country to commence internationalizing your

business?

7. How did your products change due to internationalization?

8. How do you describe your internationalization experience?

9. How did the owning family perceive internationalization?

10. What are the main strategies your family business took to achieve

internationalization?

11. How does internationalization affect the control of the family over the

business?

12. How does internationalization affect the overall performance of the family

business?

13. Would you like to add any other information?

After the collection of data, I used the coding process to break the data into

segments. According to Patton (2002), developing a coding scheme is the first step of the

analysis. I developed a coding structure to simplify the analysis of the data and then

assigned the codes for the general themes of the data.

Reliability and Validity

Reliability and validity section included a description of how I maintained

reliability and validity in the study. The use of multiple sources ensured the reliability of

the study. Furthermore, the use of member checking and data triangulation confirmed the

validity of the study.

Reliability

Reliability is the degree of how dependent the research findings were from any

accidental circumstances (Patton, 2002). Ensuring reliability in qualitative studies is

different than in quantitative studies (Patton, 2002). In quantitative studies, reliability is

measured, while in qualitative studies reliability addresses the consistency of the replies

and their relevance to the fact (Patton, 2002). For case studies, Yin (2009) recommended

the use multiple sources to increase validity and reliability of the data. Therefore, I used

the online published data of the family businesses as another research source.

Validity

Validity is the degree of accuracy in the interpretation of the findings (Patton,

2002). The experience of the same environment could simplify the correct understanding

of the participants’ answers. Denzin (2009) argued that data triangulation would increase

the validity by supporting the facts from multiple sources. Moreover, the participants

approved the interview transcription to ensure the accuracy. Patton (2002) warned

researchers about the assumption of understanding the meaning of the research

participants without checking back with the participants. Noble, Haytko, and Phillips

(2009) used informal member checking to confirm the interpretation of the interview

results from the participants. Davies (2010) confirmed the results by asking participants

to review results. In a similar study, Stol, Babar, Avgeriou, and Fitzgerald (2011)

provided their interviewees with the results to confirm the understanding. Hence, I shared

my transcription of interviews with the participants to ensure accuracy.

In addition, I used data triangulation. There are four types of triangulation: data

triangulation, investigator triangulation, theory triangulation, and methodological

triangulation (Denzin, 2009). For this study, I used data triangulation, which is the use of

multiple data sources to increase reliability and validity. The data sources were the

multiple interviews, follow-up questions, and online web data of the selected family

businesses. The triangulation of these sources contributed to the reliability and validity of

the research (Denzin, 2009). Salo, Tähtinen, and Ulkuniemi (2009) used data

triangulation when they studied businesses relationships to avoid misinterpretation of one

source data. Aarikka-Stenroos and Sandberg (2012) used data triangulation to increase

the trustworthiness of their research results. Therefore, I used data triangulation to

increase the trustworthiness of the research results.

Transition and Summary

Section 2 included vital areas about the study, by presenting the purpose

statement, the role the researcher, selected participants, and the research method and

design. Moreover, a description of the population and sampling along with the data

collection instrument, data collection technique, and data organization technique.

Furthermore, I discussed the data analysis technique and the validity and reliability of the

findings. Section 3 includes details on the data collection, analysis, and presentation of

the findings.

Section 3: Application to Professional Practice and Implications for Change

This section outlines a detailed description of the outcomes of this study. The

section includes an overview of the study, a presentation of findings, an application to

professional practice, an implication for social change, recommendations for action,

recommendations for further study, and reflections.

Overview of Study

The purpose of this qualitative case study was to explore how Saudi family

business leaders planned and implemented internationalization. Three leaders in various

international Saudi family businesses participated in interviews to share their

perspectives. I held multiple interviews with each participant to reach data saturation. The

main goal of the interviews was to explore how Saudi family business leaders implement

internationalization.

In order to answer the research question, I selected three leaders in three different

Saudi family businesses who have experience in planning and implementing

internationalization in their family businesses. Using semistructured face-to-face

interviews, I attained an understanding of how the participants implemented

internationalization successfully. In addition, I applied member checking and follow-up

interviews with probing questions for further understanding. I used online web data

regarding each family business to correlate with the interview data and increase my

understanding of the participants’ answers during the interview process.

My analysis of the interview data indicated that internationalization is an

opportunity for Saudi family businesses to increase their profits and sustain their

business. In addition, family business leaders can achieve internationalization in various

ways with diversified products and services. Family business leaders need to have

qualified resources furnished with the required knowledge and budget. The family

business leaders also need to select the appropriate market to sell their products or

services so their internationalization effort can be successful.

Presentation of the Findings

The main research question explored was how Saudi family business leaders

implemented internationalization. I used semistructured face-to-face interviews to reach

an in-depth understanding of the participants experience in internationalization of their

family businesses. The selected participants were leaders of Saudi family businesses.

Each participant led the internationalization efforts of their businesses. Each participant

implemented internationalization in different industries. Furthermore, each participant

worked in several countries in three continents; Europe, North America, and Africa. I

held multiple interviews with each participant to reach data saturation. In addition to

reading the online web information about each family business to correlate with the

interview data, my reading of the online data led to a better understanding of the

participants’ answers during the interview process. I replaced the names of the three

participants with codes P1, P2, and P3. In the next subsections, I presented an overview

for the answers of the participants, then I defined the key themes, and finally, I will

present the findings to answer the research question.

Answers Overview

The first interview demographic question acquired the participants’ names and job

titles. All the participants were Saudi with experience in the Saudi family business

environment. The job titles of all participants were CEOs or managing directors.

Selecting participants with high positions in their family businesses assisted in getting

clear and accurate answers for the interview questions. All participants mentioned that

they were directly managing the internationalization projects of their family businesses.

The second interview question relates to the needed characteristics for family

business to be able to compete in the global market. P1 gave a significant comprehensive

answer, stating that “first, the family business needs not to be a family business.” Then

the participant elaborated that usually family businesses in Saudi Arabia mean only one

individual thinks and makes decisions, and all other employees do whatever the one

individual decides. Although Tsao and Lien (2013) claimed that the family involvement

increases the internationalization performance, P1 warned that the family may not have

enough ability and competency to manage their business internationally. Abdellatif et al.

(2010) denoted a similar definition for family businesses where the ownership and

control are with one individual. P1 stated that this single control should not be the

practice of a family business that needs to compete internationally.

P1, P2, and P3 all agreed that family business leaders need to have proper

strategies and qualified resources to compete globally. Each indicated the need for a

sufficient budget to fund the internationalization effort, which confirms the financial

capability as one of the key determinants in internationalization (Graves & Thomas,

2008). P2 insisted that family businesses should be successful locally in order to compete

internationally, while P3 focused on having an international product or service. Segaro

(2012) claimed that family businesses internationalize after consolidating their position in

the local market, which supports P2’s opinion.

The third interview question was regarding the strategic considerations before

going global. Supporting Cullen and Parboteeah’s (2010) opinion, P2 indicated the need

of having a strategic plan before going global. P3 designated that family business leaders

need to identify their motive for internationalization. In contrast, P1 downplayed the risk

of going global and indicated that the current market with the current technology does not

make a difference in managing a business locally or internationally. P1 added that the

same vendors and same standards all over the world so it would not be so hard to run the

business internationally.

The fourth interview question related to the motive to go international. P3

summarized the answer by stating “profitability is the main motive.” All participants

agreed on the profitability being the main motive, supporting several theories (Brennan &

Garvey, 2009; Casillas et al., 2010; Chen, 2011). P2 added another motive related to the

saturation of the local market. He also added that having relationships in specific

international market may be a motive to start internationalization in that specific market,

supporting the theories of positive impact of relationship networks on internationalization

(Hewapathirana, 2009; Lindstrand et al., 2011; Manolova et al., 2010; Musteen, Francis,

& Datta, 2010; Tang, 2011). P2 mentioned evidence from practice, one of the

internationalization efforts started because one of the board members in his business

pointed out an opportunity to internationalize their product in another country based on

his relations there.

The fifth interview question related to the internal and external challenges to

achieve internationalization. All participants indicated that the understanding of the rules

and regulations of the targeted market is a key challenge to achieve successful

internationalization. In addition, all participants pointed that having the qualified

resources and sufficient budget are two key challenges. P2 mentioned that an important

internal challenge is having a well-structured family business. When the family business

is well-structured, this structure will support the internationalization with the required

resources and competences. P2 mentioned that having an international subsidiary requires

a well organization structure with a full range of employees with different required skills

and competencies. In contrast, in Saudi Arabia family business leaders tend to have a

minimal number of employees with limited skills, which will not be enough to go

international. P2 supported the argument of Arndt et al. (2012) that the labor market may

hinder the internationalization process.

P1 mentioned an important challenge for going international; leaders need to

make sure that they have enough stock to cover the international market demand. P1

insisted that having the production ability to satisfy the market need is a vital challenge to

succeed internationally. P1 supported that the industry factors have an impact over the

internationalization process (Grøgaard et al., 2013). Furthermore, P3 indicated the

importance of the political and economic stability as a key challenge for

internationalization. P3 stated that “if you are working in the tourism field you will not go

to Egypt these days due to the economic instability.” P1 concluded that the inability to

internationalize is the real challenge.

The sixth interview question was regarding selecting the country where to start

the internationalization effort. Carr and Bateman (2009) suggested geographical location

as one of the key determinant of internationalizing family businesses. All participants

agreed that family business leaders should start the internationalization in a country that

is familiar to them. P1 answered the question by saying that “First look for a place you

know.” P2 indicated that setting the strategic plan will assist to find a suitable place to

start the internationalization.

All participants agreed that it is crucial to start in a country that shares some of

same culture and regulations. Each participant mentioned the language as an important

factor to be considered. This opinion endorses what Musteen et al. (2010) suggested that

the internationalization will be faster when businesses have shared language with targeted

markets. P3 pointed another vital factor in selecting where to start internationalization; he

said that the targeted country should have a market that has a considerable demand for

your product. In addition, P2 indicated that there should be an opportunity in the targeted

market, and the family business should have the capability to take this opportunity.

The seventh question was about the changes on the products due to

internationalization of family businesses. Participants supported that unless family

business leaders build their products according to the global standard, they will not be

able to internationalize. Building a product based on the global standard was the main

answer for all participants. Also, P2 added that “customer preference changes from place

to another.” P2 added that the international customer expectations forces businesses to

customize their product. This customization will include the price of the product.

The eighth interview question was about the overall internationalization

experience. P3 indicated that internationalization was difficult the first time then it

became easier with the gained experience. All participants expressed their contentment

for going through the internationalization process. The participants mentioned that the

internationalization efforts were profitable to their family businesses. P1 warned that

starting an internationalization effort in any international market will open a global

demand to start in other international markets. P1 stated that “once you start your

business in London, for example, you will receive requests to cover Europe.” P3 agreed

on what P1 said. P3 motioned a similar experience of international expansion happened

to his business in North Africa.

The ninth interview question was regarding the perception of internationalization

by the owning family. P1 designated a crucial fact that most of the wealthy families in

Saudi Arabia have international investments, which makes the internationalization

initiative something familiar for them. P2 answered that his father who is the founder of

the business is the only one who has the final decision in the business. P2 mentioned that

his father is supporting the internationalization efforts; therefore, they are working on the

efforts. P2 supported the theory that the involvement of the owning family in the

management is positively impacting the internationalization performance (König et al.,

2013; Kwan et al., 2012; Tsao & Lien, 2013; Zellweger et al., 2010). P3 noted that the

owing family did not favor the internationalization effort in the beginning, but after the

success of the first trial, the owning family became supportive to internationalization

efforts.

Contradicting several theories (Buang et al., 2013; Cater & Justis, 2009; Lam,

2011; Molly, 2010; Okoroafo, 1999; O’Regan et al., 2010; Sardeshmukh & Corbett,

2011; Stamm & Lubinski, 2011), participants P1 and P2 mentioned that the second

generations in Saudi family businesses usually initiate the internationalization projects.

Participants P1 and P2 explained the reason, the second generations in Saudi family

businesses received their education in international universities in USA and Europe.

Studying abroad made the second generation familiar with the culture and more capable

of initiating internationalization than their parents.

The 10

interview question related to the main strategies the family business

leaders took to achieve internationalization. All participants indicated the importance of

having financial capability to fund the internationalization effort. P2 added “keep your

eyes open and monitor the changes in the market.” P2 asserted that being market oriented

will advocate the internationalization effort (Koster & Vila, 2011).

P1 simplified the internationalization process by simply contacting a lawyer in the

international market. P1 added that it is vital when establishing the business to consider

the global standards and to prepare your business to be international from its inception.

P3 pointed the importance of considering the internationalization as a process achieved

gradually, therefore, all needed strategies will gradually appear during the

internationalization effort. P3 supported the findings of Karabulut (2013) that the Turkish

firms have achieved the internationalization gradually.

The 11

interview question related to the effect of the internationalization on the

family control over the business. Participants agreed that the family will have less control

after internationalization as discussed by Kuo et al. (2012). The participants all also

signified the importance of having qualified resources to run the international subsidiaries

of the business. P3 indicated that the regulation of each country affects the level of

control. For example, some of the countries do not allow full ownership of foreign

investors while other countries do. Therefore, the regulations of the targeted country

affect the family control over the business.

The 12

interview question was regarding the effect of the internationalization on

the overall performance of the family business. All participants agreed that

internationalization of the family business will lead to higher performance and

profitability of the business, although participants noted that business leaders will achieve

high performance gradually. P1 commented that there is a relation between the learning

curve and the performance of the business. P1 agreed that the long learning process will

positively affect the internationalization of the family business (Puig & Perez, 2009). P2

pointed the importance of selecting the right metric to assess the performance of the firm.

P3 advised that the diversification of the investment due to the internationalization has a

positive effect on the overall performance.

The participants’ answers are in support of the Uppsala model, which is the

conceptual framework of this study. All participants agreed that family business leaders

will internationalize gradually (Johanson & Vahlne, 1977), although P1 noted that the

intent to internationalize should exist with the business establishment. P3, who had an

internationalization experience in several countries in North Africa, mentioned the

mentioned the gradual achievement of the internationalization in his experience. In

addition, the participants agreed that they started internationalization with countries

closest to the local market in the psychic distance. Furthermore, participants P1 and P2

mentioned that the current technology made the flow of information easy which make the

psychic distance easier to overcome. Korsakienơ and Tvaronaviþienơ (2012) mentioned

that family business leaders may initiate internationalization project as the opportunity

occurs even if the opportunity does not have close psychic distance. Participants

mentioned that the psychic distance is one of the criterions to evaluate the

internationalization opportunity as it occurs, which supports the compliance with the

conceptual framework.

Main Themes

After analyzing the answers of the participants along with the online data of the

participants’ family businesses, I found 15 themes that can be categorized into three main

themes. The first theme includes the essential characteristics for any family business to

compete internationally. The second main theme includes the essential characteristics of

the international market that is suitable for family businesses to internationalize. The

third main theme is about the essential characteristics of a successful internationalization

opportunity for a family business in Saudi Arabia.

The first main theme is the essential characteristics of the family business to

compete internationally. Under this theme, I found several characteristics mentioned by

the participants and supported by the literature. These characteristics include having the

proper strategy, financial capability, qualified resources, well structure and policies, and

products or services as per the global standard. Having proper strategy for a family

business is essential for any major decision like internationalization. Financial capability

is a requirement because the internationalization process will cost the family business and

take time before becoming profitable. Having qualified resources is one of the most

crucial requirements for internationalization, family business leaders need to hire and

acquire qualified resources. The business leaders also need to maintain proper training

and learning path for their resources to be able to internationalize. Having well-structure

and policies are essential for family businesses in particular because family business

owners usually override all the responsibilities and take single decisions. Having products

or services as per the global standard is a vital requirement for internationalization, which

means family business leaders need to apply global standards on their business across all

levels to produce a product or service that can be sold internationally.

The second main theme is about essential characteristics of the international

market that is suitable for Saudi family businesses to penetrate. The international market

needs to be stable, organized with clear regulations, and welcome the foreign

investments. The stability of the market, which occurs usually due to stability in the

economy and political conditions, is essential to be suitable for internationalization of

Saudi family businesses. Selecting a market with clear regulations may assist to simplify

the internationalization effort and to secure the investment. In addition, having clear

regulations is essential for the international market to have rules allowing and

encouraging the foreign investment.

The third main theme is about the essential characteristics of a successful

internationalization opportunity for a family business in Saudi Arabia. Under this theme,

there are several characteristics that make each internationalization opportunity beneficial

for specific family business in a specific period of time. These characteristics include

closer psychic distance, available relationships in the international market, satisfying a

motive in the family business, international market demand with the capability in the

family business to satisfy that demand, and proper timing for the family business to go

internationally. Closer psychic distance is a key factor to expedite the flow of

information. Available relationships assist family business in expediting the

internationalization efforts and decisions in each opportunity. Also, the

internationalization opportunity should include a satisfaction for a specific motive in the

family business in order to be a suitable opportunity. Usually, this motive is profit;

however, it can be any other motive that satisfies the business strategy. The demand in

the international market is essential for successful internationalization, and it will

significantly reduce the cost of marketing. The timing of the internationalization

opportunity is significant for the family business especially because each generation of

the family businesses may have a different opinion regarding the internationalization

opportunity.

Conclusion of the Findings

In the conclusion of the findings, it is necessary to note that the participants were

open for answering the interview questions. The participants addressed all the questions,

so there was no need for any archival data. In addition, I triangulated the online web data

of the participants’ businesses along with their answers. There was no extra content in the

online data beyond the answers of participants, although the use of the online data

supported and explained the answers of the participants. The use of the online data,

especially regarding the international subsidiaries, was like visiting the international

subsidiaries of the Saudi family businesses.

The first finding of this study is that internationalization is a profitable strategy

for Saudi family businesses. Also, Saudi family businesses can internationalize in both

products and services in various markets. Saudi family business leaders need to attain

several characteristics in their family business before going global. These characteristics

include having proper strategy, financial capability, qualified resources, well-structure

and policies, and products or services as per the global standard. The satisfaction of these

requirements to a certain level will qualify the family business to internationalize.

Family business leaders need to look for an international market that satisfies the

following characteristics: stable market, organized with clear regulations, and welcome

the foreign investments. After satisfying the internationalization requirements in the

family business and finding the suitable international market, family business leaders

need to scan the internationalization opportunities available in that market through the

following characteristics: closer psychic distance, available relationships in the

international market, satisfying a motive in the family business, international market

demand with the capability in the family business to satisfy that demand, and proper

timing for the family business to go internationally. Considering the previous

characteristics in the family business, international market, and in each

internationalization opportunity may assist Saudi family businesses achieve successful

internationalization.

Applications to Professional Practice

The findings of this study suggest opportunities for the family businesses in Saudi

Arabia. The implementation of the characteristics under the first theme may assist family

business leaders in sustaining their organization, in addition to internationalization

readiness. Having strategic planning for family businesses may assist to prevent

unplanned decisions. The need for qualified resources encouraging family business

leaders to invest on their human resources and raise the level of training provided.

Furthermore, the need for organizing or reorganizing the family businesses before going

global may assist the family business in arranging the roles and responsibilities.

The characteristics under the second and third themes may assist family business

leaders in achieving successful internationalization. While the first theme characteristics

may assist the family business for internationalization readiness, the mentioned

characteristics under the second and third themes may constitute a strategy for family

businesses to consider before commencing any internationalization effort. P2 asked for a

clear road to start the internationalization successfully. P2 noted that when started the

internationalization process there were no clear steps to take. I believe the findings of this

study may assist family business leaders to build a clear plan to achieve their

internationalization projects.

Implications for Social Change

The findings of the study suggest several options for consideration prior to the

internationalization of a family business. These options include characteristics mentioned

under the first theme including proper strategy, financial capability, qualified resources,

well-structured and policies, and products or services consistent with the global standard.

The implementation of these improvements may contribute to a positive social change by

sustaining the family business and increasing job opportunities, which may positively

affect the economy. In addition, the need for qualified resources may assist family

business leaders increasing knowledge of the employees. This concern means more

training and awareness for all employees, which may positively affect the society.

Moreover, the standardization of products and services as a requirement for

internationalization has a positive effect on the society. If business leaders consider the

global standard when presenting their products and services to their society, then this may

lead to high class products and quality services.

Recommendations for Action

Family business leaders may consider assessing their business per the first theme

characteristics. Leaders need to start looking at business strategy. If there is no strategy,

then they need to start building proper strategy. If family business leaders formulated the

strategy, they need to evaluate the strategy against a professional standard and against

their goals. These leaders also need to apply proper financial management to manage

their budgets and count for the internationalization effort. In the meantime, family

business leaders need to have a qualified human resource department to improve their

human resources and constitute qualified team. Family business leaders should establish a

clear organization structure based on the business strategy required for

internationalization. Finally, family business leaders should work on standardizing their

products and services based on the global standard. Completing these requirements for

any family business indicates the readiness for the internationalization effort.

In preparing the family business for internationalization, family business leaders

should start researching the international market that satisfies the characteristics under the

second theme. The market should be stable, organized with clear regulations, and

welcome the foreign investments. Once family business leaders identify the international

markets or market options, they need to start scanning the internationalization

opportunities and apply the characteristics under the third theme. Family business leaders

need to select internationalization opportunities using the following criteria: (a) that are

closer in psychic distance, (b) where the leaders have available relationships in the

international market, (c) to support family business growth strategies, (d) to address

international market demand with the capacity family business leaders have to satisfy that

demand, and (e) that the timing is right for the family business to expand internationally.

Selecting an internationalization opportunity based on these characteristics may assist

family business leaders to achieve successful internationalization.

The findings of this study should be of interest to family business leaders.

Applying the findings may help family business leaders sustain their business and

achieve successful internationalization. Furthermore, all stakeholders working with

family business may be interested in understanding these results. In addition, the study

findings may be of interest to the decision makers in the Ministry of Commerce and

Industry. The dissemination of these findings can be communicated through general

conferences and training courses. At the conclusion of this study I sent a summary of the

findings to the family business leaders.

Recommendations for Further Study

Further studies need to be conducted to cover other detailed issues that were not

addressed in this study. I recommend directing a study to compare the

internationalization of Saudi products versus services. This comparison could explore

detailed internationalization requirements for services and products and build specific

strategies for services and products. My findings in this study warrant further

investigation to compare the characteristics under each of the three main themes to

provide the family business leaders with a list of priorities. Considering the impact of the

qualified resources in the family business, I suggest further study on strategies to enhance

family business human resource department to improve their human resources (or human

capital).

Reflections

The research findings indicated the chance for Saudi family business to achieve

internationalization. Currently, many Saudi family businesses have strong financial

capabilities due to a strong economy; however, yet still did not satisfy their

internationalization need due to the absence of internationalization knowledge and

expertise. Furthermore, the Saudi government is trying to promote all Saudi family

business leaders to boost the local economy and reduce the unemployment rate (SAGIA,

2013). Family business leaders have the opportunity to ask for governmental support to

achieve internationalization in terms of long term loans and other facilities. Participants

mentioned in the interviews that the Saudi product is demanded internationally because

of the high quality and low cost. Family business leaders need to take advantage of this

demand and start building products to meet the international demand.

Summary and Study Conclusions

Internationalization is an essential strategy for Saudi family business leaders. The

findings of the study may assist family business leaders in achieving successful

internationalization. The first step in the internationalization process is to attain partially

or completely several essential characteristics in the family business. These

characteristics include having proper strategy, financial capability, qualified resources,

well-structure and policies, and products or services as per the global standard. Satisfying

these characteristics in the family business will assist qualify the family business to

succeed in the internationalization initiatives. In the meantime, family business leaders

should look for suitable market to start their internationalization. The targeted market

should be stable, organized with clear regulations, and welcome the foreign investments.

These characteristics comprise the main requirements that family business leaders need to

look for in any international market before initiating any internationalization effort.

Furthermore, if family business leaders are ready to internationalize and have found the

suitable international market or markets, then family business leaders should start looking

at different internationalization opportunities in the targeted market. In order to select an

internationalization opportunity, family business leaders need to select

internationalization opportunities using the following criteria: (a) that are closer in

psychic distance, (b) where the leaders have available relationships in the international

market, (c) to support family business growth strategies, (d) to address international

market demand with the capacity family business leaders have to satisfy that demand, and

(e) that the timing is right for the family business to expand internationally. Applying the

findings from this study, Saudi family business leaders may use the characteristics of

successful internationalization practices as a guide for successful internationalization.

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