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Entry in a psychically distant market:: Finnish small and medium-sized software firms in Japan

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  • Ojala, Arto

Abstract

Summary This paper investigates the market entry and entry mode choice of eight small and medium-sized Finnish software firms in the Japanese market. The findings in this study reveal that, despite of the psychic distance between Finland and Japan, most of the firms entered Japan at a very early stage of their internationalization process by using direct entry modes. This was mainly due to the market size, sophisticated industry structure, and requirements for intensive cooperation with the customers during the sales process. The firms were able to overcome psychic distance by hiring local employees and western managers who already had working experience in the Japanese market. This finding indicates that psychic distance is based on a manager's personal experiences and feelings about how distant a country is rather than on cultural differences between the countries.

Suggested Citation

  • Ojala, Arto, 2008. "Entry in a psychically distant market:: Finnish small and medium-sized software firms in Japan," European Management Journal, Elsevier, vol. 26(2), pages 135-144, April.
    • Handle: RePEc:eee:eurman:v:26:y:2008:i:2:p:135-144
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    Citations

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    Cited by:

    1. Natalya D. Likhareva & Elena B. Gafforova & Igor A. Novikov, 2022. "International market selection by small enterprises: Cognitive biases and heuristics in decision-making," Upravlenets, Ural State University of Economics, vol. 13(1), pages 84-99, March.
    2. Musso, Fabio & Francioni, Barbara, 2012. "How Do Smaller Firms Select Foreign Markets?," MPRA Paper 49117, University Library of Munich, Germany, revised 02 Nov 2012.
    3. Talukder, Sazzad & Barner-Rasmussen, Wilhelm, 2024. "Exploring the language choice dilemma of international small firms: A social exchange perspective on English-only versus multilingualism," International Business Review, Elsevier, vol. 33(3).
    4. Roger Schweizer, 2013. "SMEs and networks: Overcoming the liability of outsidership," Journal of International Entrepreneurship, Springer, vol. 11(1), pages 80-103, March.
    5. Pushyarag N. Puthusserry & John Child & Suzana B. Rodrigues, 2014. "Psychic Distance, its Business Impact and Modes of Coping: A Study of British and Indian Partner SMEs," Management International Review, Springer, vol. 54(1), pages 1-29, February.
    6. Ojala, Arto, 2015. "Geographic, cultural, and psychic distance to foreign markets in the context of small and new ventures," International Business Review, Elsevier, vol. 24(5), pages 825-835.
    7. Ojala, Arto, 2009. "Internationalization of knowledge-intensive SMEs: The role of network relationships in the entry to a psychically distant market," International Business Review, Elsevier, vol. 18(1), pages 50-59, February.
    8. Richardson, Christopher, 2014. "Firm internationalisation within the Muslim world," Journal of World Business, Elsevier, vol. 49(3), pages 386-395.
    9. Kontinen, Tanja & Ojala, Arto, 2010. "The internationalization of family businesses: A review of extant research," Journal of Family Business Strategy, Elsevier, vol. 1(2), pages 97-107, June.

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