Unformatted text preview: As businesses are no
longer limited by national boundaries and therefore organizations are performing
activities outside their home countries. Barkema, Shenkar, Vermeulen and Bell (1997)
argues that through accumulate experience in foreign markets, firms gain local market
knowledge and develop routines and process for dealing with the foreign context.
The concept of globalization and internationalization is referred to as the trend toward
greater interdependence among national institutions and economies. It is a trend that is
characterized by “denationalization” in which national boundaries are becoming less
relevant. It also refers to the cooperation between national actors (Wild, Wild and Han,
2003). In addition, Friedman (1999) states that globalization is not a phenomenon or just
some passing trend, indeed it is an overarching international system, shaping the domestic
politics and foreign relations of virtually every country.
According to Root (1994) the new global economy has created business environments
that require firms to look past the traditional thinking of the domestic market, and to start
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