Dimensions of the Internationalization The internalization of the firm is a complex process that involves several management dimensions like these:  diversity of international operations (geographical diversification – how many countries?);  type of markets (political and social system; quality of the institutions – weak or strong);  scope of products/services and degree of organisational commitment with resources.

We have 6 dimensions: 1)Operation Method: From the strategic point view, the firms tend to adopt a gradualistic model of internationalization - known as The Uppsala Model. According the Uppsala Model, the firms go into international activities through an incremental process. The Model has four stages: 1) no regular export activities; 2) export via agent; 3) subsidiary (sales abroad); 4) foreign direct investment (FDI – production abroad). The lack of knowledge about the markets and resource are obstacles to internationalization. So, the process in foreign markets should be incremental - step by step. The procedure learning-by-doing minimizes the business risk, because the firm just jump to next step when it has specific knowledge for that.

2) Target Markets (where are the firms? In which countries?): The cultural differences among countries impose more risk to the international business. Therefore, the cultural differences determine the choice of the mode of entry and the geographical diversification. In the early stage of the internationalization, the firms tend to choose markets with geographical and cultural proximity. The cultural differences are revealed by: kind of institutions, language, legal system, level of education and level of economic development, consumer behaviour, religion...and others. Cultural Differences = {host country – origin country} Risk of the Business = f (Cultural Differences) > 0

3) Sales (what? – which products do the firms sell?): In general, the firms expand their sales when they go into abroad. This expansion may occurs at two levels: 1) within the same line products/services; or 2) developing new products/services (innovation). Organisational Capacity: 4) Human Resources: The success of internationalization in any firm depends heavily on the type of people (HR). The international experience of the firm demands continuous development of specific capabilities (management, negotiation, transport, logistic, foreign languages, international law, tax duties...)

5) Organisational Structure: The increasingly deeper process of internationalization of the firm imposes more complexity in the organisational structure: new procedures, departments, production,... 6) Finance: The increasingly deeper process of internationalization of the firm imposes more complexity and sophistication in the corporate finance: new currencies, new interest rate, risk and volatility of the exchange rate, new banking documents,... The success of the internationalization depends on the coherence among these six dimensions.