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levels of control (Doole and Lowe, 2008). Thus the process of
internationalisation has been characterised as a gradual movement from

exporting to foreign direct investment (Knight and Cavusgil, 1996).

6.3 The Decision to go international

The development of an international strategy is typically an evolutionary

process. Often a company expands in its domestic market, and then
gradually moves to the overseas market. If international operations

prosper, the company expands its presence in foreign markets and seeks
to enter new markets. When this process has developed, the company
can grow an international presence and move towards operating and

planning its strategy on a global scale. Young et al. (1989, p. 9) suggest
that there are five important issues that a company should consider when

taking the decision to go international:

• Its product(s) and/or service(s): A company must determine the
nature of the product or services to be offered, the range and extent

of diversification, and the marketing modes to be employed in
approaching the target market(s). Issues emerge about where and to

what extent products, services and marketing methods require
adaptation.

• Which overseas markets to approach, and the number of
markets to be tackled simultaneously: There is evidence of
companies, especially in the early stages of internationalisation,
directing their efforts at countries that are closest in terms of ‘psychic

distance’, reflecting their cultural similarities.

• Functions: A company’s functional management issues appear at
the international business level in relation to communication between

headquarters and overseas and the control of overseas activities. The
human resource management function is thus of major importance.