The role of foreign-born employees in inward–outward internationalization of SMEs: an organizational capacity perspective

This chapter draws on the work of Reijo Luostarinen and his co-authors to reintroduce the concepts of inward-outward internationalization and organizational capacity within the context of small and medium-sized enterprises. Luostarinen’s approach to firm internationalization was holistic, taking into account both inward and outward operations as well as their interconnectedness. He also drew attention to the internal changes that take place in a firm as it internationalizes. A crucial element of a firm’s organizational capacity is its personnel, their skills, and knowledge related to internationalization. By exploring the potential contributions of foreign-born employees this study proposes a contemporary perspective on inward-outward connections in firm internationalization and on the development of organizational capacity. Foreign-born employees are conceptualized as a form of inward internationalization because their ‘imported’ resources have the potential to enhance a firm’s organizational capacity for internationalizing in an outward direction.