JÖNKÖPING INTERNATIONAL BUSINESS SCHOOL JÖNKÖPING UNIVERSITY

Entrepreneuri al Exp ansion Swedish staffing companies entering the market in Oslo, Norway

Bachelor Thesis within Business Administration Author:

Eric Bergqvist

19861015

Jonatan Edler

19840321

Tomas Andersson

19841115

Tutor:

Bengt Johannisson

Jönköping

2010-03-17

Swedish staffing companies entering the market in Oslo, Norway

Andersson, Bergqvist, Edler.

Acknowledgements As the authors of this thesis, we would like to acknowledge some persons that have helped us throughout the process:



Our supervisor Bengt Johannisson for his support and advice.



The interviewees that made our empirical data possible.



Our fellow students that provided us with feedback and advice throughout the process.

Tomas Andersson

Eric Bergqvist

Jonatan Edler

_________________

_________________

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Jönköping International Business School 2010

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Bachelor Thesis in Business Administration Title:

Entrepreneurial Expansion - Swedish staffing companies entering the market in Oslo, Norway.

Authors:

Tomas Andersson, Eric Bergqvist, Jonatan Edler

Tutor:

Bengt Johannisson

Date:

2010-03-17

Abstract Purpose Our purpose is to develop a model, based on theoretical framework regarding expansion strategies and cultural differences and see if it can explain the establishment of Swedish staffing companies in Oslo, Norway. Theoretical Framework The theoretical framework presents theories within the field of cultural and social behavior, internationalization in general and two different approaches of international expansion. Each theory is explained and referred to entrepreneurial expansion.

Method This study has been based on three Swedish staffing companies and their expansion to Oslo, Norway. The research done has been both quantitative with surveys and qualitative with semi-structured interviews.

Findings According to the study, reasons to expand to Oslo for a Swedish staffing company are mainly due to the cultural similarities and the lucrative possibilities within the market. Expansion is preferable done with an incremental approach in line with the Uppsala model. Furthermore, no major barriers exist. The models of International New Venture and Born Globals are not applicable, while the theory of Hofstede is partially supported. Scott‟s theory is unworkable to consider due to lack of differences, while the interviewees support the theory of Rundh in terms of internationalization. It is the belief of the authors that their own model, supported by the empirical findings, also can be used by other companies, acting in other industries, in order to get a comprehensive overview of the factors that should be taken into account before going international. One should though keep in mind, that the cultural differences normally are bigger than in the case with Sweden and Norway.

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Kandidatuppsats inom företagsekonomi Titel:

Entrepreneurial Expansion - Swedish staffing companies entering the market in Oslo, Norway.

Författare:

Tomas Andersson, Eric Bergqvist, Jonatan Edler

Handledare:

Bengt Johannisson

Datum:

2010-03-17

Sammanfattning Syfte Vårt syfte är att utveckla en modell som bygger på teori gällande expansionsstrategier och kulturella skillnader för att se om det kan förklara etableringen av svenska bemanningsföretag i Oslo, Norge.

Teori Författarnas teoretiska ramverk presenteras genom teorier om kulturella och sociala skillnader, samt internationalisering i allmänhet som presenteras genom två olika strategier. Varje teori förklaras och återknyts till företagsexpansion.

Metod Den här studien är baserad på tre svenska bemanningsföretag och deras expansion till Oslo, Norge. Undersökningen som utförts har varit både kvalitativ, i form av semistrukturerade intervjuer, samt kvantitativ genom en undersökning.

Resultat Enligt studien är skälen till att svenska bemanningsföretag väljer att expandera till Norge främst de kulturella likheterna länderna emellan, samt de lukrativa möjligheter som finns inom den norska marknaden. Expansion till Norge görs vanligtvis med ett successivt tillvägagångssätt i linje med Uppsala-modellen. Inga större hinder med expansion har påvisats. Vidare visar studien att modellerna International New Venture och Born Globals inte är tillämpliga, medan teorin av Hofstede får visst stöd. De två intervjuade deltagarna stödjer dock Rundh‟s teorier angående internationalisering. Författarnas uppfattning är den egna modellen, utvecklad med hjälp av det empiriska materialet, även kan användas av företag i andra branscher för att få en överskådlig bild av de faktorer som kan komma att påverka valet gällande en eventuell utlandsexpansion. De måste dock vara medvetna om att de kulturella skillnaderna vanligtvis är större än då det gäller Sverige och Norge.

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Table of Contents 1 Introduction ............................................................................... 1 1.1 Background ............................................................................................1 1.2 Industry portrayal ....................................................................................2 1.3 Problem Discussion ................................................................................4 1.4 Purpose ..................................................................................................4 1.5 Perspective .............................................................................................4 1.6 Delimitations ...........................................................................................4 1.7 Definitions...............................................................................................5 Disposition...........................................................................................................6

2 Frame of reference .................................................................... 7 2.1 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.3 2.4 2.4.1 2.4.2 2.4.3 2.4.4 2.5

Introduction to the following theory .........................................................7 Social and cultural behavior ...................................................................7 Cultural Diversity ....................................................................................7 Hofstede’s cultural dimensions ...............................................................8 Social behavior ..................................................................................... 12 Entrepreneurship and culture ............................................................... 13 Ethnocentrism ...................................................................................... 13 Internationalization ............................................................................... 13 Internationalization in general ............................................................... 13 An incremental approach ...................................................................... 14 A direct approach ................................................................................. 16 Human Resources and Human Resources Management .................... 20 The Model ............................................................................................ 22

3 Method ..................................................................................... 25 3.1 3.2 3.2.2 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.4 3.4.1 3.5 3.6 3.6.1 3.6.2

Selection of companies ........................................................................ 25 Research approach .............................................................................. 25 Qualitative and quantitative data .......................................................... 26 Interview techniques ............................................................................. 26 Pros and cons of using semi-structured interviews............................... 29 Anonymities .......................................................................................... 30 Interview structure ................................................................................ 30 Facts about the interviews .................................................................... 31 Surveys ................................................................................................ 31 Pilot testing of Survey ........................................................................... 32 Data collecting ...................................................................................... 33 Data quality .......................................................................................... 33 Validity .................................................................................................. 33 Reliability. ............................................................................................. 35

4 Empirical study ....................................................................... 37 4.1 4.1.1 4.1.2 4.1.3 4.2

Introduction to interviews ...................................................................... 37 Presentation of Company 1 .................................................................. 38 Presentation of Company 2 .................................................................. 38 Presentation of Company 3 .................................................................. 38 Company 1 ........................................................................................... 39 v

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4.2.1 4.2.2 4.2.3 4.2.4 4.3 4.3.1 4.3.2 4.3.3 4.3.4 4.4 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.5

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Introduction to interview with Company 1 ............................................. 39 Before the expansion............................................................................ 39 After the expansion............................................................................... 40 Social and cultural differences .............................................................. 41 Company 2 ........................................................................................... 42 Introduction to interview With Company 2 ............................................ 42 Before the expansion............................................................................ 42 After the expansion............................................................................... 43 Social and cultural differences .............................................................. 44 Company 3 ........................................................................................... 45 Introduction to interview with Company 3 ............................................. 45 Before the expansion............................................................................ 45 After the expansion............................................................................... 46 Social and cultural differences .............................................................. 46 Interview with Human Recourse specialist Mrs. Malm Jonasson ......... 47 The survey ............................................................................................ 49

5 Analysis ................................................................................... 51 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.2 5.2.1 5.2.2 5.3

Social and cultural differences .............................................................. 51 Power distance ..................................................................................... 51 Individualism ......................................................................................... 51 Masculinity-femininity ........................................................................... 51 Uncertainty avoidance .......................................................................... 52 Scott’s institutional theory ..................................................................... 52 Internationalization ............................................................................... 52 Incremental approach ........................................................................... 54 Direct approach .................................................................................... 55 Human Recourses ................................................................................ 57

Conclusion ................................................................................... 58 6 Discussion ............................................................................... 61 6.1

Critique of study and method ................................................................ 61

7 References............................................................................... 62 8 Appendix 1 ............................................................................... 66 8.1 8.2 8.3 8.3.1 8.4

Frågeställning ....................................................................................... 66 Questions (translated into English) ....................................................... 68 Appendix 2 ........................................................................................... 70 Enkätundersökning ............................................................................... 70 Survey (translated) ............................................................................... 72

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Table of Figures Figure 1, Tables of Hofstedes cultural differences ........................................... 11 Figure 2. Model for International New Ventures ............................................... 18 Figure 3, The authors own created conceptual model ..................................... 24 Figure 4, Model of differences of conducting interviews. .................................. 28 Figure 5, Multiple evidence model.................................................................... 34 Figure 6, Yin’s model of how to conduct a case study ..................................... 36 Figure 7, The authors conclusion model .......................................................... 60

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1 Introduction This introduction chapter will start with a background to the problem statement and purpose. Furthermore the problem will be discussed where the authors will motivate their study. Finally, the delimitations of the study will be presented.

1.1 Background In a time of financial crises, where the competition between companies is tougher than ever, organizations have to find a competitive advantage on the market to be able to compete and enhance their profits. Broadening your market and specialize your service are two ways of achieving competitive advantage. In the 21st century, it is not uncommon with international businesses. One business that is starting to become international is the Swedish staffing business, as it has begun entering the Norwegian market with subsidiaries. The Swedish staffing companies have, such as other businesses, faced a time when internationalization is necessary in order to expand their businesses. More and more businesses are going international as a way to expand. It has been argued that a natural step is to expand to the most familiar markets first, in order to avoid uncertainty (Gooderham & Nordhaug, 2003). The advantages of going to your most familiar markets may be circumstances such as language and cultural similarities, but also financial and legal similarities could be beneficial (Gooderham & Nordhaug, 2003). Moreover, according to Hofstede´s research about cultural diversity Sweden and Norway are very similar culturally (Gooderham & Nordhaug, 2003). Furthermore, the Swedish market (as all markets) is limited in size. Ergo, when the original market is full, there will be a necessity for willing companies to expand their businesses abroad in a way that maintains their competitive advantage without lowering their prices. By enlarging their market size, companies can increase their profits and stay competitive on the international market (Doyle & Stern, 2006). When Swedish Companies are going international, an interesting aspect arises. How do Swedish companies handle an internationalizing process in terms of differences in social behavior, cultural diversity and human resources? These aspects are especially interesting within the staffing industry where workers tend to go abroad and work for a shorter period. Social Behavior, cultural diversity and human resource are all aspects that are of importance when internationalizing, where people enter a new environment, trying to adapt.

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According to Henrik Bäckström (Almega, 2009) the staffing industry has an important role during the current financial crisis, especially concerning the high demand of reconversion of personnel. Acting in a new environment often requires a social behavior that is different from the one previous used in the local environment. An interesting aspect when entering a foreign and new market regards how differences in a social behavior will affect the business. This is visual in terms of different norms, schedules, rules and routines between different countries (Scott, 2004). Those in international businesses tend to be surprised how people act in different cultures. Human instinct tends to make the mistaken assumption that people are all the same. Thus, to be able to make the right decisions in a foreign environment, the foreign culture must be taken into consideration (Hofstede, 2009). The way the human resources are managed can affect all of the company‟s different stakeholders, not only the employees, moreover the customers, the owners, the society and other organizations (such as alliance partners). This is especially important in expansions abroad. Social behavior and cultural diversity in a new country might be barriers that could be solved with human resource competence (Bohlander & Snell, 2009). This report will focus upon three major Swedish staffing companies that have made an expansion to Oslo, Norway. Their reflections regarding social behavior, cultural diversity, human resourcing and other strategic issues when internationalizing will be covered. The authors‟ thesis will therefore be interesting and beneficial for all small to medium sized Swedish enterprises that are in the process of going international.

1.2 Industry portrayal It is reasoned that the Swedish staffing industry was born in 1953, when the first Swedish staffing company was established (according to today‟s definition.) After being strongly regulated by the former laws, the Swedish staffing industry was deregulated in 1992. This was caused by new laws concerning employment, substituting the former regulations (Bemanningsföretagen, 2009). In Sweden, the staffing industry contains about 380 companies and engages in total 59 000 yearly workers. The Swedish market reached a total turnover of 20.2 billion SEK in 2008 (Bemanningsföretagen, 2009). The corresponding figures of the Norwegian market shows about 400 companies and 26 000 yearly workers. The Norwegian market is expected to reach a turnover of almost 14 billion NOK in 2008, recalculated into Swedish currency (exchange rate from December 2008) approximately 17 billion SEK (NHO Service, 2009). The turnover 2008 was the highest ever within the Swedish staffing industry. The global financial crisis started to affect the Swedish companies during the last quarter of 2008 Sida 2 av 73

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and is now demanding other services from the staffing companies. The customers are getting new demands; the economy is restructured, the work places are rearranged which leads to new areas for the staffing companies (Almega, 2009). The distribution of work today is today a billion industry where the work related governmental purchase processes are central, a process where private owned staffing companies can contribute with competencies and great experience. The staffing industry has historically been an important factor in the bigger city areas. The latest trends show that other regions of Sweden are the most frequent users of staffing companies, especially the regions of Northern Sweden and the middle of Sweden (Almega, 2009). An interesting question concerns why staffing companies exist and how they contribute to the society. According to a study made by Andersson & Wadensjö (2004) there are five different reasons why staffing companies exist. The first explanation says that the staffing companies are combining many part time jobs and binding them together into a full time job. Many companies need help a couple of hours per week or part time for a shorter period. In many cases, the employees want to work full time. Therefore, the staffing company will work as an intermediary between the two parts, to solve the issue. The second explanation states that it is expensive for a company to hire staff. There will be costs that will occur once, such as advertisement, selection, education etc. Instead, the staffing company will be responsible for the recruitment process and its costs, a cost that could be divided among several customers. Furthermore, the study states that a staffing company can be better to find the appropriate competence, especially compared to smaller companies. The staffing company is responsible for the screening and gives suggestions to the customer. A fourth explanation says that laws and policies make it expensive for the companies to dismiss people when different types of changes occur within the organization. The staffing companies can take the worker to another work place, instead of making the worker totally unemployed. The last and fifth explanation mainly concerns the market in USA due to their regulations. This explanation concerns the fact that companies using staffing companies can reduce their personnel costs due to a cheaper health insurance (Andersson & Wadensjö, 2004).

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1.3 Problem Discussion Rundh (2003) argues that even if the international market gives a company the opportunity to exploit its competitive advantages, the rate of change between markets has accelerated dramatically during the last decade. Furthermore, Rundh argues that the strategy of any organization will be shaped by the company‟s own capabilities and competencies, along with the competitive environment (Rundh, 2003). Consequently, companies expanding abroad have to adapt to their new environment and market, in the authors case Oslo, as well as make use of their already gained knowledge about the market. Therefore, the planning before entering a new market will be essential. The difficulty within the author‟s research that needs to be resolved is specified in the following questions, regarding the market expansions made by Swedish staffing companies into Oslo, Norway. 1. Why do Swedish staffing companies choose to enter this market? 2. What strategies have been used? 3. Have cultural differences and similarities caused any barriers and/or advantages? These questions were what eventually led up to our purpose. To be able to answer these questions and the purpose the authors will create a conceptual model, which will be used as a tool to understand the connection between chosen theories and the expansion process of the staffing companies.

1.4 Purpose Our purpose is to develop a model, based on theoretical framework regarding expansion strategies and cultural differences and see if it can explain the establishment of Swedish staffing companies in Oslo, Norway.

1.5 Perspective The author‟s perspective will be from a Swedish point of view, of how it is for a Swedish staffing company to establish a subsidiary in Oslo, Norway. To get an insight in possible advantages with this expansion as well as identifying what barriers that has to be overcome in order to succeed.

1.6 Delimitations For the reason that the interviewees were involved in the process of establishing the subsidiaries, and in addition to that, work for the Norwegian subsidiaries in question

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may make the interviewees biased towards a glorification of the internationalization. This is something the authors need to be aware of when doing their interviews. The study will focus on what advantages and barriers might arise when a business chooses to broaden its market by going international and to see if this generalization of advantages and barriers can be applied to Swedish staffing companies broadening their market to Oslo, Norway. The paper will be delimited to see if this applies to Company 1 Company 2 and Company 3. The authors have chosen these three companies and will draw a general conclusion on the results from these companies experiences. The authors will not focus on why choosing Oslo in front of other Nordic countries, such as Denmark, but rather discussing the advantages of choosing Oslo as a first movement when a Swedish staffing company wants to go international. Furthermore, the authors will not be investigating the Swedish companies in general but focus on the Norwegian subsidiaries and there adaption to the Swedish company.

1.7 Definitions Staffing company - Refers in this paper to companies that are leasing out personnel to other companies as their main operational business. Advantages - The reasons to choose one alternative over another; what makes alternative A preferable over alternative B. Barriers - Obstacles and problems that are in some way related to the expansion or the development of the business. Culture – The authors will use Hofstede‟s definition of „culture‟ throughout this paper. Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values (Hofstede, 2005). Establishment process - According to the authors, this is the process of planning and executing an expansion, and further operating of the business in order to gain customers and to keep them. Entrepreneurship - To organize, manage and assume the risks of a business or enterprise (Encyclopedia Britannica, 2009). Entrepreneurial expansion - Moving an already established business idea to another market (the authors own definition). Company culture – “The unique pattern of shared assumptions, values, and norms that shape the socialization activities, language, symbols and ceremonies of people in the organization” (Jackson et al., 2009, p. 56).

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Disposition Frame of reference: The first chapter will present theories within the field of cultural and social behavior, internationalization in general and two different approaches of international expansion.

Method This second section will explain what methods the authors have used to fulfill our purpose.

Empirical study In the third chapter, the authors will explain the process for a Swedish staffing company to establish a subsidiary in Oslo.

Analysis In the fourth segment, the authors will present their analysis of the empirical data.

Conclusion In the fifth and final section the authors will give suggesting answers to the purpose and accordingly to the three questions that were presented in the problem statement.

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2 Frame of reference This second chapter will present theories within the field of cultural and social behavior, human resources, internationalization in general and two different approaches of international expansion. Each theory will explain how it is adapted to international expansion. Finally, a summarizing model, created by the authors, will be presented.

2.1 Introduction to the following theory In order to fulfill the purpose, the authors decided to take advantage of different theoretical models to gain a deeper understanding within the subject of international expansion. The theoretical models will be presented and explained, as well as motivated by answers as to why they contribute to the thesis. Previous studies within the subject will also be presented. This theoretical part will be divided into three different sections. Thereafter, the part will be summarized in a conceptual model created by the authors. The first of the three sections concern the cultural diversity, human resources, entrepreneurship and the social behavior in a society when entering a new international market, which mainly involves theories by Gerard Hendrik Hofstede (more known by his nickname Geert Hofstede) and W. Richard Scott. The second section initially regards the internationalization process in general, as well as expansions that are done according to a well-known, Swedish model, called the Uppsala model. Characterizing for this model is to expand incrementally rather than by making huge expansions and establishments at a single occasion. The third and final theoretical section pushes, as opposed to the Uppsala model, for a more aggressive approach when entering a new international market. Thus, the result is an early and large expansion rather than a systematic approach. When analyzing the empirical data, the chosen theoretical models will work as helpful tools to understanding the collected data and thereby be utilized to meet the given purpose.

2.2 Social and cultural behavior 2.2.1 Cultural Diversity “If you talk to a man in a language he understands, that goes to his head. If you talk to a man in his own language, that goes to his heart.” Nelson Mandela The authors' interpretation on Mr. Mandela‟s quote is that it is easier to talk a man‟s own language, from a cultural view, if the new market is somewhat similar to your local

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market. Therefore, an expansion to your most familiar market could be a superior strategy for the reason that the cultural language is similar to your own market. 2.2.2 Hofstede’s cultural dimensions Gerard Hofstede is a Dutch professor in social psychology. Towards the end of the 1960‟s he started a research within IBM‟s offices all over the world on employee attitude surveys. The results of these surveys and further research throughout the 1970‟s were published in the 1980‟s in Hofstede‟s Culture‟s Consequences (Hofstede, 2009). “Gerard Hofstede gathered extensive data on the world's cultures and we have generated our impressions of that data into charts and graphs that help to better understand the many sublet implications contained in his raw data” - quote from Hofstede home page (Hofstede, 2009). It is hard not to mention Gerard Hofstede when talking about cultural differences in businesses. When looking at Hofstede‟s cultural differences research, Sweden and Norway are rather close in all four categories used by Hofstede: power distance, uncertainty avoidance, individualism-collectivism and masculinity-femininity (Gooderham & Nordhaug, 2003). Although Hofstede has taken a lot of criticism about his research (i.e. Hofstede´s research is entirely based on attitude-survey questionnaires - Gooderham & Nordhaug, 2003), the authors still feel that his research is worth mentioning considering that its comparative purpose is very efficient (Gooderham & Nordhaug, 2003). Considering Norway and Sweden‟s similarities according to Hofstede‟s research and backed up with Johansson and Vahlnes‟ famous Uppsala model, the movement to Norway may be considered as a natural move. The authors will further explore this movement and discuss Rundh‟s writings from 2003 about the necessity for movement to neighboring countries in order to avoid uncertainty. 2.2.2.1 Power distance

The power distance dimension is regarded to with what extent less powerful members of organizations and institutions accept and expect that power will be distributed unequally among its members (Hofstede, 2009). In a country with a large power distance, organizations are characterized by hierarchies and subordinates that are unwilling to challenge their superiors. Whereas in countries with small power distance the vice versa is the case (Gooderham & Nordhaug, 2003). For comparison purposes, the authors have also included Belgium presented in a graph to show why it might be easier and more successful for Swedish companies to penetrate the market in Oslo, Norway instead of another market. The use of Belgium is only selected because it is significantly different from Sweden and Norway. The comparison with Belgium will not be followed up later in the paper; its only purpose is to give the Sida 8 av 73

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reader a better understanding of the different dimensions used. Therefore, based on the assumption presented by Gooderham & Nordhaug, 2003 that expansions are preferably made to the most familiar market first the authors will explain why Norway is preferable to Belgium (Gooderham & Nordhaug, 2003). Ergo, as can be seen in the tables beneath, both Norway and Sweden have a power distance approximately below 30 where Belgium is in the 60‟s on a scale where 100 is maximum. Therefore, the management style used in Sweden would consequently be more easily applied in Norway than in Belgium. 2.2.2.2 Individualism

Individualism deals with the degree to which individuals in a society are integrated into groups. On the individualist side, we find societies in which the ties between individuals are loose; everyone is expected to look after him or herself (Hofstede, 2009). In organizations in an individualistic setting there will be a sharp distinction between work and personal life, furthermore individuals will prefer making their own decisions in an organization (Gooderham & Nordhaug, 2003). Once again, the results of Sweden and Norway are close to each other in Hofstede‟s study. 2.2.2.3 Masculinity-femininity

The dimension of masculinity vs. femininity deals with the distribution of roles between the genders (Hofstede, 2009). Scoring high in this dimension means that the society values competitiveness and materialism, whereas scoring low shows more harmonious relations with strong emphasis on social partnerships (Gooderham & Nordhaug, 2003). Gerard Hofstede‟s studies showed that women‟s values differ less among societies than men‟s values. Hofstede claims in his research, that it is mainly men‟s values that differ from one country to another. Hofstede says that men‟s values contain a dimension that is selfconfident and competitive, which is very different from women‟s values of being modest and caring. As the quote below confirms (Hofstede, 2009). “The self-confident pole has been called 'masculine' and the modest, caring pole 'feminine'. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values” (Hofstede, 2009).

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As can be seen in the tables below, both Sweden and Norway score low in this dimension and are therefore classified as feminine countries. It would doubtfully be harder for Swedish companies to open up their businesses in very masculine countries such as Belgium. 2.2.2.4 Uncertainty avoidance

Uncertainty avoidance deals with the question of whether a country is comfortable or uncomfortable in unstructured situations. Unstructured situations are unknown and different from what is considered usual in the specific country (Hofstede, 2009). High scores in the Uncertainty Index infer that the culture has a strong demand for rules within the organization (Gooderham & Nordhaug, 2003). As can be seen in the table below, this is the section where Norway and Sweden differ the most. According to Hofstede‟s study, Swedish organizations are in a greater need for rules than Norwegian organizations. From a Swedish point of view, the Norwegian market is still more preferable in contrast to the one of Belgium since Belgium has an even higher score than Norway. 2.2.2.5 Sweden versus Norway

In the tables below you can see how Sweden and Norway are very similar in all four categories, where PDI is Power Distance Index, IDV is Individualism Index, MAS is Masculinity-Femininity and UAI is Uncertainty Avoidance Index.

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(Hofstede, 2009). Figure 1, Tables of Hofstede’s cultural differences.

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2.2.3 Social behavior Acting in a new environment often requires a social behavior that is different from the one previously used in the local environment. An interesting aspect when entering a foreign and new market regards how differences in a social behavior will affect the business. In the following section, the concept of social behavior will be presented. This concept does have various definitions and the authors have decided to present the concept according to W.R. Scott‟s institutional theory. Scott‟s institutional theory (Scott, 2004) concerns how norms, schedules, and rules as well as routines can create a social behavior in a society –for instance, how these elements are built and adapted when entering a new market. These afore-mentioned elements can therefore become a guideline for a social behavior in a new environment. Scott claims that companies and their employees have a tendency of trying to adapt to their new environment. Furthermore, Scott states that a social behavior will only be legitimated as long as its environment accepts it (Scott & David, 2007). The term institutionalizing means that the social reality is a constructed process where the act of the individual is a repeated process that gives meaning for oneself and its environment (Scott & David, 2007). Norms, schedules, rules and routines are institutions that tend to be dissimilar in different countries. These elements will work as a guide for how to behave in a new culture. For instance, what is the norm when borrowing money in one country or, how is one expected to drive a car in another country? (North, 1999) Scott divides his elements into three different categories: 1. Regulative 2. Normative 3. Cognitive Regulative elements involve rules, laws and sanctions that can influence a social behavior, both informal and formal. The normative includes social appropriateness and moral aspects. The third part, the cognitive element, concerns what could be “taken for granted” in a social environment (Hossam, 2005). These three forces are, in a developed society, bounded together. All of them will affect an organization in a new environment. It is therefore important for an organization in a new environment to try to adapt to the social institutions as quickly as possible (Scott & David, 2007).

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2.2.4 Entrepreneurship and culture “Culture will defeat strategy every time” – Carl-Henric Svanberg, CEO Ericsson An entrepreneur is a concept for an innovative person, usually in the meaning of corporate founder. In a broader sense, the term entrepreneur is used to describe a person that is a leading light and works hard to reach success (Entreprenörsriket, 2009). The culture effect on entrepreneurship can be explained, somewhat simplified, by the fact that some countries/cultures have a greater tendency to encourage entrepreneurship than other countries (Thomas & Mueller, 1999). Thomas and Mueller (1999) subsequently claim that entrepreneurship is linked to emphasize levels of achievement, within the culture as well as the level of individualism that is in the culture. As can be seen in figure 1, both Sweden and Norway are on the upper half of the index when it comes to individualism (Hofstede, 2009), which in turn would indicate that both Sweden and Norway are entrepreneurially friendly societies. Thomas and Mueller claim that it is reasonable to believe that the culture in itself is what has formed these set of values and therefore culture is essential for entrepreneurship (Thomas & Mueller, 1999).

2.3 Ethnocentrism De Mooij (2009) states that there is a risk of ethnocentrism when comparing cultural differences. Furthermore, he says that because of the fact that our own culture works as an automatic pilot we are all prisoners of our own culture. Thus, when we view another culture we do it from our own culture. We use our cultural patterns to perceive and classify other cultures. De Mooij goes on by saying that “ethnocentrism refers to a tendency to feel that the home-country people are superior to people from other countries, that they are more intelligent, more capable, or more reliable than people from other countries” (De Mooij, 2009, p. 51). This is a reason to be aware of ethnocentrism when comparing the Swedish culture against the Norwegian.

2.4 Internationalization 2.4.1 Internationalization in general When companies want to expand their businesses and broaden their markets by going international, it appears that they tend to go to the closest markets/countries first in an attempt to adapt to the new markets as smoothly as possible, as the quote below confirms: “Internationalization is a slow process for most companies and it has often been a question of gaining experience of other countries step by step” (Rundh, 2003, p. 149). Sida 13 av 73

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According to Rundh (2003), companies that find that their home market has limited opportunities for their businesses therefore have to seek new markets. When this occurs it is necessary for companies to reduce their uncertainty by moving to neighboring markets. When moving to a new market there may be new laws and regulations that in turn will open up new competition (Doyle & Stern, 2006). This may be a reason for moving to closer countries where laws tend to be more similar. “Plans are nothing; Planning is everything” - Dwight D. Eisenhower Going international comes with a lot of planning in order to succeed. Doyle and Stern argue that Eisenhower‟s quote is especially true when it comes to managers entering new markets. They say that the real value of planning is not to forecast the events but rather to get a comprehensive view of the new market (Doyle & Stern, 2006). In addition, Doyle and Stern argue that competitiveness is about meeting the customer‟s needs better than your competitors in order to gain competitive advantage. Moreover, they argue that a company that does not possess competitive advantages will lose their market share or have to cut their prices (Doyle & Stern, 2006). This is an import aspect for managers to consider before entering a new market. Managers have to analyze the market that is the most suitable to expand to –where their competitive advantage is the largest. When an English CEO for an insurance company decided upon expanding abroad, he said the following: “The US was the first establishment. It was natural because of the language, the legal and financial systems are pretty similar, and we are both members of an international network and you find many immigrants from our country there.” (Gooderham & Nordhaug, 2003, p. 149). 2.4.2 An incremental approach In order to gain comprehensive overviews concerning the processes of establishing the subsidiaries, two well-known theories, or approaches, will be used. When approaching market-entering strategies from two different angles, the pros and cons of an expansion will be easier to distinguish. The two approaches could be explained as the two externalities when it comes to market entry strategies, one of them describing a slow step-by-step process, as the second one reflects a more aggressive approach. Published by the Swedish professors Jan Johanson and Jan-Erik Vahlne in 1977, the Uppsala model describes how Swedish companies usually do when establishing businesses abroad. According to the Uppsala model, Swedish companies preferably expand

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their businesses successively by making small steps, rather than making one huge expansion and establishment at one single point in time (Johanson & Vahlne, 1977). In order to explain the differences between different countries, the Uppsala model uses the concept of psychic distance. It is defined as: “The sum of factors preventing the flow of information from and to the market. Examples are differences in language, education, business practices, culture and industrial development” (Johanson & Vahlne, 1977, p. 44). The time required for the establishment of a subsidiary is said to be related to the psychic distance between the home and the host country (Johanson & Vahlne, 1977). The concept of psychic distance is further translated into an index, taking all of the above-mentioned factors into account. Lead by Johanson and Vahlne, a team of researchers tried the index by conducting empirical studies including about 1000 foreign sales subsidiaries of Swedish manufacturing firms. The results of the investigation turned out to correspond to the psychic distance index (Blomstermo & Deo Sharma, 2003). Another essential concept related to the Uppsala model is the concept of market commitment. Market commitment can be explained as a company's level of commitment to a specific market. It is further divided into two different factors: the degree of commitment and the amount of resources committed. The degree of commitment concerns whether a company is dependent to a specific market or not. This dependency, or independence, can be caused by immobile facilities like factories or important contracts to specific customers. The amount of resources committed is the value of the investments made, i.e. marketing expenditures and investments in organization and/or personnel. One specific observation from the empirical study lead by Johanson and Vahlne, was that Swedish companies usually expanded internationally by setting up their first subsidiary in Norway, or any of the other Nordic countries (Blomstermo & Deo Sharma, 2003). As the Uppsala model was published in 1977, it has been argued that the model might be outdated. Johanson and Vahlne (2003) are meeting the criticism in their article Business Relationship Learning and Commitment in the Internationalization Process: “We have a situation where old models of internationalization processes are still applied quite fruitfully at the same time as a number of studies have suggested that there is a need for new and network-based models of internationalization. We think it might be worthwhile to reconcile and even integrate the two approaches.” (Johanson & Vahlne, 2003, p. 84).

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The article, published in Journal of International Entrepreneurship in 2003, can be seen as a refreshing complement to the original ideas of Johanson and Vahlne‟s Uppsala model, started almost 30 years earlier. It has been mentioned that the Uppsala model has been questioned and criticized by different researchers while the model lacks aspects when it comes to the important role of networking within entrepreneurship (Johanson & Vahlne, 2003). Consequently, Johanson and Vahlne seem to rethink their former ideas. In their article, Johanson and Vahlne explain the importance of networking and the learning process that comes with it. This learning process is due to all kind of business relations, which are divided into two different perspectives. These are business experience and institutional experience, where business experience concerns the relation to customers, suppliers and partners and institutional experience refers to such factors as language, laws, regulations, and the authorities that are implementing laws and regulations (Johanson & Vahlne, 2003). The aim of using these theories is not to further investigate what Johanson and Vahlne already have discovered. Instead, the model will be used in order to see whether the Swedish staffing companies have chosen to make an expansion according to the successive process described in the Uppsala model or if they have made more drastic actions, trying to expand by using more aggressive strategies, as described below. 2.4.3 A direct approach In opposite to the Uppsala model, where companies internationalize incrementally in an attempt to reduce uncertainty gradually for each market, other models have argued for other approaches (Madsen & Servais, 1997). Researchers have claimed that the Uppsala model is too deterministic and includes too many limitations. Another fact is that many companies do not follow the incremental approach, when doing an expansion abroad. The result has actually been the opposite, that companies from an initial stage have had an international approach, a more direct approach (Madsen & Servais, 1997). A previous study made by McKinsey & Co. (1993) in Australia revealed that managers in a large number of companies had the whole world as their potential marketplace, already from the initial start. The American researchers Oviatt and McDougall (2007) define companies that already from the beginning have a worldwide perspective as International New Ventures. More specific: “We define an International New Venture as a business organization that from inception seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries.” (McDougall, P. P., Shane, S. & Oviatt, B.M., 1994, p. 369) For an International New Venture, although the company is started with only a small number of employees the goal and the strategy are aimed upon an early international Sida 16 av 73

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expansion. A previous study made about 24 International New Ventures gave the conclusion that none of listed companies had followed the traditional and the more conservative viewpoint. The researches state that the incremental approach of internationalization does not explain why these kind of companies act on an international market (McDougall et al., 1994). Research has also been done in the Nordic countries. A study conducted by Lindmark et al. (1994) followed 328 exporting companies within Sweden, Norway, Denmark and Finland. The report stated that the home market does not tend to be as important as older studies have shown, as well as the fact that many of the companies already from the beginning decided to expand abroad. A framework presented by Oviatt and McDougall (1994) explains four important aspects for an International New Venture to be able to exist. These four sections are combining entrepreneurship, international business and strategic management theory. The four elements are: 1. “Organizational formation through internationalization of some transactions” 2. “Strong reliance on alternative governance structures to access resources” 3. “Establishment of foreign location advantages” 4. “Control over unique resources” The first element, Internationalization of some Transactions, says that organizations are formed when a market is inefficient and there is a lack of economic transactions. The market is imperfect (Coase, 1937). Hymer (1960) states that the internationalization element is an important factor when considering a foreign direct investment. Alternative Governance Structures, the second element, states that new ventures tend to be too short of resources to own all their assets. Thus, new ventures often tend to own just a smaller percentage of their assets, in an attempt to survive. The management and the entrepreneur must consider other alternatives of controlling and owning their property and assets (Vesper, 1990).

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Figure 2. Model for International New Ventures. Necessary and Sufficient Elements, for Sustainable International New Ventures. The third element, Foreign Location Advantage, illustrates that a firm expanding to another country will meet disadvantages compared to the domestic firms. It could be trade barriers and difficulties in understanding language, laws and other business related issues (Dunning, 1988). To be able to overcome these advantages International New Ventures must rely on their knowledge. Due to modern communication, valuable information can rapidly be spread around the globe (Buckley & Casson, 1976). The fourth and final element is named Unique Resources and states that an International New Venture must possess unique resources to be able to sustain competitive in the market (Barney, 1991). For an International New Venture is at least a certain percentage of their business a public good. Patents, copyrights and trade secrets could be used initially, but are in some countries even ignored. Therefore, being able to reproduce is highly important. The concept of firms internationalizing at an early stage do have various definitions. Many authors have their own definition of these firms. Moen (2002) calls them for instance for Born Globals. He states that the two key factors that a Born Global company must fulfill are an engagement in exporting and that the expansion occurs shortly after start-up.

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Firms with a management clearly focused upon international expansion as well as a commitment to perform it will be classified as Born Globals (Moen, 2002). An interesting aspect concerns why the concept of international expansions has changed. From the previous incremental approach to the more direct approach. Madsen and Servais (1997) states that the reason beyond this change is implemented in three interrelated sections: 1. New market conditions. 2. Development within technology, for instance transportation, production and communication. 3. People (the entrepreneurs) have more capabilities today. New market conditions can be explained due to a higher need for specialization and therefore more markets with small niches. Companies are today constructing, producing and selling smaller and more specific details, which imply a broader market. The home market is thus too small. This is especially the case within the technology market where innovative products fast can be spread into the international market. The mutual customer needs and wants are today more similar around the world than before (Madsen & Servais, 1997). Rennie (1993) claims that the Born Global concept mainly concerns small and medium sized firms, because the customers of today have more specialized and custom made needs. This factor leads to a smaller market with a higher demand for niche products. Development within technology has changed the international expansion process drastically. Transportation for goods and people is today both cheaper and easier because of better travel facilities. Due to email, fax machines and other technical tools, the previous problems of communication in an international market have decreased significantly. Over the last couple of decades, people have gained more international experience than before. The great amount of people visiting other countries, learning languages and meeting new cultures reduces the step of going abroad and increases the likelihood of people willing to work in a foreign country (Madsen & Servais, 1997). Bell et al. (2003) state that the phenomena of Born Globals does not only concern newly founded businesses. The authors show evidence of firms that for a long time have focused only on their domestic market suddenly start to focus on an international market. These companies are called Born-again Globals. Critical procedures, including a change of financial or individual resources, tend to be a reason due to this internationalization. More specifically this could be a new owner/manager, take-over of another firm with an international viewpoint or just their own insight that internationalization is needed.

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2.4.4 Human Resources and Human Resources Management It has been problematic, to empirically prove the relationship between culture and the organization's performance and leaderships importance for the culture. Håkan Svennerstål (2007) argues that one cause for this is the lack of objective methods capable of evaluating the degree of performance with good reliability and validity. In other words, it means that the relationship is hard objectively to confirm. Håkan Svennerstål says it is enough with some degree of common sense to presume that the organization's culture will have an impact on how they are acting within the organization, which in turn leads to an impact on financial performance (Svennerstål, 2007). When investigating the staffing industry, one must take the area of human resources (HR) into consideration. Jackson et al. define human resources to be “all of the people who currently contribute to doing the work of the organization, as well as those people who potentially could contribute in the future, and those who have contributed in the resent passed” (Jackson, Schuler & Werner, 2009, p. 14). 2.4.4.1 Human Resource Management

According to Jackson et al. (2009), the success of a company is highly dependent to the way the company is able to manage their human resources appropriately. All of the company‟s relations need to be handled respectfully (Bohlander & Snell, 2009). Therefore, regardless of the size of the company or in which industry the company is acting, it is important to manage the human resources effectively (Jackson et al., 2009). Companies that are managing their human resources well can achieve competitive advantages by letting the organization‟s human resources become a source of added value (Jackson et al., 2009). As human resources include factors as knowledge and experiences, one can easily understand that this kind of human capital increases as long as the employees are continuing to work. As described by Jackson et al.: “Regardless of the specific work being done, the objective of effective human resource management is to maximize the value added by all employees. To achieve this objective, the organization must be staffed with the right employees doing the right things, at the right time and place, and under the right conditions” (Jackson et al., 2009, p. 12). Creating and keeping a strong company culture can work as a tool in order to keep the employees satisfied and productive (Jackson et al., 2009). This can be achieved by making use of policies, proper business practices and by managing the human resources properly. Policies and business practices may vary considerably depending on the company, the employees, or the industry in which the company is running their business. Jackson et al. (2009) describe some of the most common and most important fields within human resource management. To recruit and retain personnel, select suitable employees for the

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job and the organization and to train and develop the workforce are all factors connected to the employees and their performance. To provide benefits and services, promote workplace safety and health, and to offer unionization and collective bargaining are all factors that might increase the employees‟ satisfaction, something that keeps them working there for a longer time (Jackson et el., 2009). It is important to create a company culture that is hard for other companies to copy. If being easy to copy, the company culture will not contribute to obtained competitive advantages in the way that otherwise might would have been possible (Bohlander & Snell, 2009). 2.4.4.2 Measuring Human Resources

First, it should be discussed, that the staffing industry and its employees get affected by human resource management out of two different perspectives. The employees are employed by the staffing company at the same time as they are actually working at another company, which is the company hiring the services from the staffing company. Normally, the employees do not work at the same geographical location as their actual employer, and they often have a closer cooperation and relation to the company that is hiring personnel from the staffing company. Regarding the perspective of the hiring company, Fitz-enz (2002) describes what is said to be the best way to measure human resources regarding the staffing industry. He argues that hired or staffed personnel are to be seen as “human assets”. The best way to measure human resources is therefore to look at it as an acquisition of talent, in the same manner as when evaluating other acquisitions, as with the case when for instance acquiring capital equipment, supplies or energy (Fitz-enz, 2002). The aim of measuring is to gain knowledge in the added value by choosing the option of hiring personnel, in comparison with the added value if employing the workers oneself. It is further argued, that the human resources should be measured as to which degree the acquisition of talent has been effectively made. That is, managing the human resources has been effectively carried out, when it has not lead to any bigger obstacles or costs. The acquisition of talent is then meant to have been a success, regarding the perspective of human resources (Fitz-enz, 2002). When measuring human resources from the perspective concerning the staffing company itself, Fitz-enz (2002) does not make any differences between staffing companies and companies in other industries. This means, that the employees should not be looked upon as “human assets” in the objective way as previously described, rather as resources worth to invest in. This is, according to Fitz-enz (2002) preferably done by making use of a measurement system, highlighting the performance of the employees. The achievements are then followed up and further investigated, in order to get an understanding whether the differSida 21 av 73

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ences in performance possibly can be explained by successfully managed human resources or not. Fitz-enz (2002) presents a measurement system that is designed to ease the measurement of how the human resources are managed. 1. Communicate performance expectations – to clearly state what is expected from the employees, in terms of costs, time, quality, quantity, customer satisfaction and other measurable paragraphs. 2. See, feel and understand outcomes – not only the management, but also the employees must be able to understand how to meet the expectations, and why it is important to meet them. 3. Compare to standards and/or benchmarks – one must take standard measures or benchmarks into account in order to understand the relative position in comparison with the competitors, either other companies on the market place, or other departments at the own company. 4. Identify performance gaps – at this point, it is possible to recognize potential improvements that could develop the company and its market position, and to carry out these improvements. 5. Support resource allocation decisions – this is where the resources can be allocated within the company in order to develop the organization. 6. Recognize and reward performance – out from a human resource management perspective, it is important to show the employees appreciation for their performance, which easily might be shown by rewarding their achievements. Reward systems are preferably done by setting quantitative goals, which is easier to measure than qualitative goals. Further, Fitz-enz (2002) argues that this kind of measurements do not have to be extremely accurate. In research made concerning for instance pharmaceuticals or medicine, there is a need to be very accurate, since the research and the products otherwise could cause fatal outcomes. Regarding measurement of managed human resources, there will always be factors which not that easily can be taken into account. These factors might for example be of more individual or market-related character.

2.5 The Model The author‟s model is created in an attempt to summarize the chosen theories and connect them with the internationalization process of the staffing companies. The outcome

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of the model will result in a platform for the authors when creating the empirical framework. When creating the model, the first part corresponds to a staffing company without an international subsidiary, thus a domestic company. The last part corresponds to the same company after internationalization has been made. This should be seen as a chronological process. The second part; “Triggers for internationalization” will cover the actual reasons of making an expansion abroad. Thereafter, the internationalization process will take place. This process will be affected by two different factors: conditions and actions. Conditions involve specific affection according to which industry it belongs to, in this case obviously the staffing company industry. It also involves social behavior and cultural diversity. In this thesis, social behavior refers to the institutional theory presented by Scott and cultural diversity to the studies of Hofstede. The social behavior and cultural diversity will be affected by the human resources within the company, in connection with the specific staffing industry. Actions refers to the strategies chosen by the staffing companies while going international. This section will mainly include two different ways of approaching an international market. The first aspect refers to an incremental approach, supported by the Uppsala model. The second aspect refers to a more direct approach, which includes the concepts of Born Global and International New Venture. The outcome of this process will be the international company.

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Figure 3, The authors own created conceptual model.

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3 Method This chapter will explain what methods the authors have used to fulfill our purpose. Furthermore, we will explain our choice of collecting data in the form of interviews and surveys and how they are used, why they are feasible and what can be missed.

3.1 Selection of companies Hence, the author´s majors have been within International management and entrepreneurship, the area of International entrepreneurial expansion attracted the authors. In combination of wishes from the participating companies and the authors‟ thoughts of more open-minded interviews, backed up by Yin‟s theories of anonymity under 3.3.2, the decision was taken that all companies should be anonymous. The three companies are stated as Company 1, Company 2 and Company 3 throughout the report. Company 1, Company 2 and Company 3 were chosen since all of them are Swedish staffing companies with subsidiaries situated in Oslo, and due to the fact that all of them are major actors within the Swedish and Nordic staffing industry. All of them do also have ambitions to expand their businesses further. There are some slightly differences in terms of the size of the companies, but not of major concern. All of them are one of the biggest staffing company active within the industry and all of them possess a good reputation. The amount of Swedish staffing companies that have made an expansion to Oslo is limited and we decided to choose three well-established companies instead of choosing small actors. These would give us a better platform for conclusions and generalizations.

3.2 Research approach 3.2.1.1 Inductive approach

“Research approach involving the development of a theory as a result of the observation of empirical data” (Saunders, Lewis & Thornhill, 2007). For research, projects were one plan to explore data and develop theories from them, is called an inductive approach. The inductive approach may still use a defined purpose and research questions and objectives, but one will not start with any predetermined theories or conceptual frameworks. According to Saunders et al., an inductive approach would mean that the researchers would start sampling data, such as interviews and questionnaires to get a better understanding of the problem. Furthermore the researcher would try to make sense of the data collected by analyzing it, which in turn would lead up to a theory (Saunders et al., 2007).

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3.2.1.2 Deductive approach

“Research approach involving the testing of a theoretical proposition by the employment of a research strategy specifically designed for the purpose of its testing” (Saunders et al., 2007, p. 596). For research projects were you use literature to identify theories and ideas and the using data to test these theories is an example of deductive approach. According to Saunders et al., a deductive approach is usually what we think of when we say scientific research. The researcher will start with a hypothesis from a theory and then the researcher will try to test the hypothesis by collecting data and not the vice versa as in an inductive research (Saunders et al., 2007). The deductive approach involves some characteristics such as that one first chooses to explain relationships between two variables (Saunders et al., 2007). For example after seeing that Swedish staffing companies enters the Norwegian market and that the cultures are very similar. Consequently the researcher will develop a hypothesis, i.e. that the two variables might be related. Then to test this hypothesis the researcher does another characteristic, collecting quantitative data (Saunders et al., 2007). The authors have chosen to use a deductive approach by looking at already established models on how companies choose to go international, and then see if the chosen models can be applied on Company 1, Company 2 and Company 3. It all started with the observation that Swedish staffing companies are in fact opening up subsidiaries in Oslo, Norway. 3.2.2 Qualitative and quantitative data In the last decade qualitative data has increased as a tool in academic and professional areas, it is due to a view that to understand human behavior and feelings it is insufficient to rely on quantitative surveys and statistics. Furthermore, that it is a necessity to use qualitative data to understand answers and behaviors (Holliday, 2007). To fully comprehend all barriers as a Swedish company might face, such as culture differences, an interview will give the authors the chance to comprehend the answers from the interviewee. A survey will also be conducted to be able to gather more data regarding social behavior, cultural diversity and human resource.

3.3 Interview techniques As this paper will be highly dependent on the empirical findings from the interviews with the personnel on the staffing companies, it is crucial to make the right choices considering how to perform the interviews. Interviews can, and should, be made differently dependent on the situation, and how the gathered data is going to be used and analyzed. The formality of the interviews can vary Sida 26 av 73

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from being structured and formalized by using standardized questions, set up on forehand, or they can be made more as informal unstructured conversations (Saunders et. al. 2009). Different types of interview techniques are commonly divided into three different categories, dependent on the structure of them. These categories and the meanings of them are according to Saunders (2009) as follow below: 1. Structured interviews 2. Semi-structured interviews 3. Unstructured or in-depth interviews Structured interviews are among these three categories the most formal form of interviewing. They are highly structured and make use of questionnaires with predetermined and standardized questions, identical for each one of the interviewees. When conducting structured interviews it is important not only to read out the questions exactly as they are written, but also to use the same voice and the same emphasis on the words, in order to avoid any eventual form of bias. Structured interviews are in general used in order to provide the interviewers with quantitative data, and are therefore often referred to as “quantitative research interviews”. As with the case of structured interviews, semi-structured interviews are predetermined and standardized, but not to the same degree. Usually broader areas and themes are predetermined, rather than specific questions. Semi-structured interviews make it possible to follow threads as new perspectives or facts that arise during the interview. The questions can vary from interview to interview, which eases the possibilities to get a deeper understanding from every single case of interest. In opposite to the structured interviews, the semi-structured together with the unstructured or in-depth interviews are qualitative in nature, rather than quantitative. Finally, the unstructured interviews, also called in-depth interviews, are highly informal. The interviewee here gets the possibility to talk more freely in order to explain his experiences or perceptions. Consequently, the unstructured interviews puts the interviewee in a more central role, where he or she easier can affect the interview towards covering the areas that are the most interesting ones within the topic investigated.

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Interviews Non-standardised

Standardised

One-to-one

Interviewer administrated questionnaires Face-to-face interviews

Telephone interviews

One-to-many

Internet interviews

Internet group interviews

Group interviews

Focus groups

Focus groups

(Saunders et. al. 2009, p. 313) Figure 4, Model of differences of conducting interviews. These are examples off different forms off interviews. The authors have chosen to do non-standardized, one-to-one, telephone interviews, or more precise semi structured interviews, which the authors felt was most appropriated for the research questions. Furthermore the authors used standardized, interviewer-administrated questionnaires when trying to analyze what the main cultural differences were. The decision to chose these interview techniques where taken after reviewing the following questions taken from Saunders et al. 1. What is most appropriated considering the research questions? 2. When deciding between interview techniques what practical problems do you force? 3. Draft a list with interview themes and compare these with your research questions?

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3.3.1 Pros and cons of using semi-structured interviews A semi structured interview is an interview technique which the interviewer commences with a set of interview themes but is also prepared to vary the order in which questions is asked and ask new questions in the context of the research situation (Saunders et al., 2007, p. 611). By using semi-structured interviews, the interviewer can ask questions within a theme in relation to the research topic, and by doing so, giving the interviewee a chance to answer and develop his answers accordingly. The interviewer may add questions in order to obtain the answers he needs and to be understood correctly by the interviewee. The nature of the questions and the resulting conversion mean that data will have to be collected by for example note taking (Saunders et al., 2007, p. 312). “Interviewing is a very flexible tool to use when collecting data. A skilled and prepared interviewer can follow up on ideas and further investigate motives and feelings, which would be impossible in a questionnaire. How a response is given (tone, mimic and pauses) can give information that an answer in writing does not reveal. Answers in a questionnaire have to be taken for what they are, but in an interview you can come with follow up questions and the answers can be progressed and be in deepened.” (Own translation; Bell, 2004). According to Bell, a researcher has to be observant that both the interviewer as well as the interviewee might be biased. “It is a very subjective technique, and therefore the risk of bias is big” (Own translation; Bell, 2004). Interviews are, according to Patel and Davidson, based on the fact that the interviewees are willing to answer the questions. Because of the fact that the interviewee sometimes cannot be anonymous, his willingness to answer truthfully will sometimes be in danger (Patel & Davidson, 2003). For topics as the one chosen for this paper, the technique of making semi-structured interviews must be seen as the most preferable. The topic of the expansions made by the three staffing companies requires qualitative research rather than quantitative, when the gathered data is going to be analyzed, rather than compared to quantitative data about other expansions previously made. Giving the interviewees more free and central roles throughout the interviews is therefore to prefer when conducting the interviews about the expansions of the staffing companies.

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3.3.2 Anonymities Yin argues that the most desirable option is to keep both the case, the chosen companies as well as the individuals, the interviewees anonyms when conducting a report. Yin argues that disclosure produces helpful outcomes. One reason is that if the reader of the report is able to look at the report without any preconceptions from earlier knowledge when reading and interoperating the study. E.g. a preconception on the chosen companies or interviewees-from previous research or other sources. Yin in addition argues that there are disadvantages with anonymity for example it will eliminate some important background information about the case. However Yin claims that there are some occasions when anonymity is necessary, such as controversial topics (Yin, 2003) or when protecting the real participants so it want affect the participants when the final case report is made public. 3.3.3 Interview structure As earlier mentioned, the technique of semi-structured interviews will be used when conducting interviews with the personnel at Company 1, Company 2 and Company 3. This means that the interviewees will be put in a central role where they can talk relatively free, and that the interviewer gets the opportunity to go more into detail with further questions and discuss interesting topics more thoroughly. At the same time, the interviews will follow the same structure, which eases the analytical research that will lead up to conclusions concerning the expansions. In order to be better prepared for the interviews a scheme has been made. This will help the interviewers to cover all of the important areas. They were also sent out to the interviewees on beforehand, to give the interviewees the possibility to get prepared before the interviews actually should be done. The first questions are focusing on the factors that in forehand influenced the decisionmakers to make the move to establish the business in Oslo. The aim of using them is to get a better understanding of the situation before the expansion toke place. This includes market-related factors, considerations about the socio-cultural differences between the countries, and what strategies were planned and actually used when performing the expansion. The second area highlighted is the cultural aspects according to Hofstede‟s theories. These considerations will be based on the different categories within cultural differences, and will focus on the experiences of the three companies. At last, the barriers and advantages related to the expansion will be further discussed. This part is presumed to give a historical overview, reflecting over the experiences achieved since the expansion. The authors hope, this section will very informative and provide us with the answers needed to fulfill the purpose.

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3.3.4 Facts about the interviews The three conducted interviews were as earlier stated of a semi-structured character. All of the three chosen interviewees were at the time the highest manager for their respectively Norwegian subsidiary. The major and important roles, of the chosen interviewees have highly affected the authors‟ attitude to the empirical data. Since three such important persons were able to be a part of the empirical study, the authors decided that further interviews of personnel at the companies could be misleading. The first interview with Interviewee 1 at Company 1 was conducted on November 16, 2009. Interviewee 1 was at the time the highest manager at the subsidiary in Oslo. The interview was made over telephone and the time for the interview was 41 minutes. November 23, 2009, was the date for the second interview. Interviewee 2, working for Company 2, was also the highest manager at their subsidiary in Oslo. The interview lasted for 35 minutes and was made over telephone. One interviewer assisted by a secretary conducted both of the interviews. This made it possible for the interviewer to focus on the questioning, and for the secretary to focus on taking notes. The third interview was made with Interviewee 3 on February 18, 2010. Interviewee 3 had an important position at Company 3 during the whole process of the expansion. The interview was made face to face and the conversation was recorded with a tape recorder. The meeting lasted for one hour.

3.4 Surveys According to Arlene Fink surveys are defined as information collection methods used to describe, compare or explain individual and societal knowledge, feelings, values, preferences, and behavior (Fink, A., 2006, p. 1). Surveys can be conducted either by making use of questionnaires, or by making interviews. When conducting surveys by using questionnaires, the interviewee are often given a self-administered form, ready to be filled in and returned, either in printed form, by e-mail, or by answering and immediately register the answers online. When being made as interviews, surveys can be done in person, on telephone, or by teleconference (Fink, A., 2006). How to practically conduct the survey, should be decided dependent of what is being most suitable for every specific situation. Parameters as resources available must be taken into account, for example how much money can be spent on conducting the surveys, and how the time available might be limiting the research (Fink, A., 2006). Usually, when working with quantitative data and closed questions, it can be preferable to conduct surveys by phone or online, while face-to-face meetings are more timedemanding. On the other hand, when making qualitative research by making use of

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open-ended questions, surveys done by person can result in more reliable outcome for the researchers (Fink, A., 2006). Independent of how the survey is conducted, it is important for the researchers to act similar towards each and every respondent. When making interviews for instance, the questions should preferably be read with the exactly same voice, the same pronunciation, and with the same emphasis to the specific words. In order to achieve a high reliability and validity to the result, one must try to avoid any risks of biasing the respondents (Iarossi, 2006). According to Iarossi (2006) it is very important to be aware of the fact, that the words used and the specific language chosen can highly affect the outcome of the survey. Iarossi (2006) showed by experiments how different questions might affect the respondents and influence the result, depending on how they are formulated. As an example, while investigating different samples in 18 South-American countries, the results led to contradicting results, due to how the questions were put. As the respondents were divided into two groups (both equal in size), 63 percent of the respondents in the first group stated when asked, that they under no circumstances would support an authoritarian government. Further, the other half of the respondents, given a different formulated question, turned out to be of the opposite meaning. This time the majority (55 percent) turned out to be positive towards nondemocratic governments, if they during a short period of time could solve economic problems. One must be careful when compiling a survey, and pay attention to how each and every question is formulated. In order to minimize the risk of getting biased results, statements can be used instead of making use of direct questions (Iarossi, 2006). 3.4.1 Pilot testing of Survey Before conducting a questionnaire, a pilot study should be carried out in order to refine your data collection plans with respect to both the content of the data and the procedures to be followed. It is important to understand that the pilot study is not a pretest. The pilot test should be more like a “laboratory” for the investigator (Yin, 2003). Therefore, in order to acquire high validity, when conducting the survey, a pilot test was carried out. The pilot test was given out to 20 students that answered the questionnaire. The purpose of a pilot study is to find out. 

How long the questionnaire took to complete;



The clarity of instructions;

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Which, if any, questions were unclear or ambiguous;



Which, if any, questions the respondent felt uneasy about answering;

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Whether in their opinion there were any major topic omissions;

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Whether the layout was clear and attractive;

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Any other comments;

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(Saunders et al., 2007). After the pilot test was conducted the authors chose the valid questions and shortened the survey so it would be a proper length. This was made so the questionnaire would be easy to comprehend for the respondents and would be no problems to answer.

3.5 Data collecting In order for the authors to reach, their objectives they have decided to mainly focus on interviews. Interviewing is a powerful tool to gather valid and reliable data that fits with a predetermined research question or topic. Since it is based on two-waycommunication, it is useful in order to avoid misunderstandings and reveal the true attitude or position of the respondent (Sanders et al., 2007). We aim to use primary data rather than secondary to gain knowledge about the expansions made. The interviews will be semi-structured. Secondary data sources will be used as well, in order to comprehend statistics concerning the markets and the financial results (Sanders et al., 2007).

3.6 Data quality As written in the book Reliability and Validity assessment, reliability together with validity, is said to be one of two basic properties of empirical measurement (Edward G. Carmines, Richard A. Zeller, 1979). Reliability and validity is well explained and defined by Jerome Kirk and Marc L. Miller in their book Reliability and validity in qualitative research: “Reliability is the extent to which a measurement procedure yields the same answer however and whenever it is carried out; validity is the extent to which it gives the correct answer” (Kirk & Miller, 1986, p. 19). The following two chapters further describe the meanings of reliability and validity, and will explain in what ways the authors aim to achieve a result as reliable and valid as possible. 3.6.1 Validity Since this is an investigating report, the concept of validity becomes essential. Validity, in an investigating report, concerns whether the relationship between two variables is a strong relationship or a casual relationship. In our report it would be the relationship of the cultural similarities between Sweden and Norway, and Swedish compa-

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nies choosing the Norwegian market as a first movement when going international (Saunders et al., 2007). The authors have used one tactic presented by Robert K. Yin in a manner to keep validity; this tactic is called the multiple source of evidence, which implies using several sources that are independent from each other (Yin, 2003). The authors have to take into consideration if the method for data collection, that has been chosen, determines what it is intended to determine. Furthermore, the authors have to consider if the research findings really refer to the purpose for what it was initially chosen. Even if a relationship might exist, it is not necessarily just because the reason that it was intended to. An example, the relationship may have to do with what have happened in the past - other companies might previously have done the movement from Sweden to Norway successfully (Saunders et al., 2007). Furthermore, when the authors conducted their interviews they let the interviewees, as well as the companies, stay anonymous in order to avoid the testing of the research to be affected, and so the interviewees would feel a security that the results from the interview would not be harmful for the company (Saunders et al., 2007). Below is a model for how the authors have used multiple evidence to come up with a conclusion. The model is based of Robert K. Yin‟s model and then adapted to the authors specific case.

Figure 5, Multiple evidence model.

Archival records Phone Interviews

Literature

FACT Theories

Survey Face to face interviews

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3.6.2 Reliability. Reliability is the other factor the authors have to take into consideration. Reliability refers to what extent the techniques for collecting data will yield reliable findings as well as the how the conclusion from the raw data is done (Saunders et al., 2007). According to Saunders et al. (2007) the concept of reliability can be assessed by the following three questions. 1. Will the measures yield the same results on other occasion? 2. Will others reach similar observations? 3. Is there transparency in how sense was made from the raw data? (Saunders et al., 2007). The authors have to take into account that the interviewees work for the Norwegian subsidiaries, which can make them participant bias. They might have said what they thought was expected to say. Therefore, the authors have chosen to keep all three companies as well as interviewees anonymous. The authors also had the problem of observer bias, and therefore three different group members were in command to do the three separate interviews. The authors have also used Robert K. Yin´s tactic of maintaining a chain of evidence. “The principle is that the reader of the case study should be able to follow the derivation of any evidence, ranging from initial research questions to ultimate case study conclusion.”- Robert K. Yin Yin says that it is important that the observer can follow these steps in either direction from beginning to end and from end to the beginning. Yin presents this by using the model below (Yin, 2003).

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Figure 6, Yin’s model of how to conduct a case study.

Case study report

Case study database

Citations to specific sources in the case study database

Case study protocol

Case study questions (Yin, 2003)

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4 Empirical study The purpose of the empirical study is to explain the process for a Swedish staffing company to establish a subsidiary in Oslo. This part is divided into three sections: before expansion, after expansion as well as social and cultural differences. Interviews have been made with representatives from Company 1, Company 2, Company 3 and a Swedish human resource specialist. In addition to this, a survey has been conducted. The following material is based upon the interviews and the survey.

4.1 Introduction to interviews As earlier mentioned in the method section, the authors aimed to conduct semistructured interviews. By doing this, the authors got the opportunity to conduct interviews with a clear structure, leading to results that were applicable to the chosen theoretical framework, but also gave the possibility to compare the answers to each other. The questions were open-ended, which made it possible for the interviewees to reveal the amount of information they could about their own companies and the market entry strategies used, while establishing their subsidiaries in Oslo, Norway. Based on the assumption that interviewees might reveal more information while staying anonymous in this public paper, the authors have chosen to present the findings by using that approach. An opinion that also was shared by the interviewees. The interviewees, as well as the companies, will stay anonymous. Although, some information concerning both of the companies will be stated in order to give a more clarifying description of the strategies used, and the results achieved of the establishment of the subsidiaries. Interviews with representatives from Company 1, Company 2 and Company 3 will be conducted. An additional interview with a Swedish human resource expert will also be conducted. The interviews with the three staffing companies will be intangible divided into three different parts, based upon the chronological order from the start-up until the experiences gained so far. The three parts were though combined to each other and in some aspects even correlated. The first part concerns the discussing, the thoughts, opportunities, intentions and planned strategies before the time of the expansion. For instance, how the initial thought of an expansion was born. Furthermore, a change from focusing on the initial planning scenario continues into describing the process of the start-up. For instance, the barriers that were met and how the company was perceived by the new public, the customers and the co-workers. This part also includes actual advantages gained of the expansion made to Oslo.

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The third and final part regards the social and culture aspects, in combination with human resource competence, rising from this kind of expansion. This part mainly involves discussions about differences and similarities connected to this subject, both from a business perspective, but also from a wider, more general viewpoint. 4.1.1 Presentation of Company 1 Company 1 was established in the 1990‟s in Sweden and has during the last years experienced a rapid growth. They entered the market in Oslo during the 2000´s. Company 1 is one of the major Swedish staffing companies, but has the goal to be the best as well as largest within the staffing industry. The staff hired through Company 1 is diversified in a broad spectrum of different areas. 4.1.2 Presentation of Company 2 Company 2 is a Swedish staffing company, with an ambition to become the most successful staffing company within the Nordic countries. Company 2 see themselves as a Nordic specialist within staff leasing, recruiting, career and development. By promising guaranteed satisfied customers, the company claims that they are close to reach their goal of becoming the most successful staffing company in the Nordic countries. The company deals with three areas: 1. To lease personnel 2. To help with recruiting 3. To give support in an organization reform. Company 2 was founded in the 1960´s as one of the first staffing companies in Sweden. The company established their Norwegian subsidiary during the 1990´s. 4.1.3 Presentation of Company 3 Company 3 was established in Sweden during the end of the last decade and is today one of the major actors at the staffing market in the Nordic region. The company has today subsidiaries in four different countries and has domestic offices in nearly 10 cities. Their vision is to become the biggest actor within a specific niche.

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4.2 Company 1 4.2.1 Introduction to interview with Company 1 The first interview was conducted together with a Swedish employee representing one of the major Swedish companies within the staffing industry in Oslo, Norway. The interviewee, hereafter called Interviewee 1, has a high position within the company. He possesses good knowledge concerning the start-up and has a good overall insight of the company. From the point where he was employed, he has been highly involved in the process consequently following to the start-up. This phase has meant to establish the brand, to build a customer network, and to find the best employees and candidates, willing to be hired out in the name of the company. He was chosen because the authors thought that he was the person with best insight during the expansion. 4.2.2 Before the expansion The authors started to ask Interviewee 1 about how as well as why the initial discussion of this expansion was born. According to Interviewee 1, the staffing of personnel must be described as a quite new phenomenon at the Swedish market, as it was non-regulated in the 1960's. After years of development within the industry, the market had grown mature, and there was not much room left for easily conquered market shares. The Norwegian market, on the other hand, seemed to be more lucrative since it was bigger, and opened further doors for continuing going international by establishing new subsidiaries within the other Nordic countries. An important factor, according to Interviewee 1, leading to the choice of establishing a subsidiary in Oslo, Norway, was the minor differences in terms of language. This was said to be a great advantage when comparing the opportunity to exploit the Norwegian market, instead of for example the other Nordic countries such as the Danish or the Finnish markets. Interviewee 1 explained this to be of great weight, not only for the administrative personnel within the organization, but also for the Swedish workers aiming to move to Norway in order to find a jobs. Partially, as stated by Interviewee 1, the Norwegian market was from the beginning seen as an initial stage into an overall broader expansion, where the Norwegian market was the first step. Before the establishment of the subsidiary in Oslo, no plans had been decided whether a further internationalization should be carried out, according to Interviewee 1. Nonetheless, the expansion to Norway was seen as some kind of experiment. It should automatically clarify whether the concept of the Swedish staffing company also could be sold outside the boarders of Sweden. According to Interviewee 1, the establishment of the subsidiary cannot be seen as anything else than positive, so far. The expansion to Norway was said to be caused by quick decisions. During a period of rapid growth, the decision makers found the idea attractive, to go international by ex-

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panding to the Norwegian market. The process of planning took about a year, before the ground was laid to start up the subsidiary. 4.2.3 After the expansion According to Interviewee 1, many barriers were met by the time of establishing the new subsidiary. Being a new company, it was hard to gain market shares at the market in Oslo, which already experienced a hard competition from the actors on it. The high competition implied, according to Interviewee 1, two different factors that made the start-up phase tougher. The first one was explained to be the obvious existence of many different actors at the market, all of them fighting about the best contracts and the best employees. These actors were more or less niched into different sectors and areas of service, but anyhow they constituted what were perceived as a tough competition. The other factor, which could be associated to the broad range of existing staffing companies, was the low rate of unemployment. A higher unemployment rate had eased the situation for the newly started staffing company to find the best working employees to hire out to its customers. Interviewee 1 explained that his company had established the Norwegian subsidiary organically, instead of an acquisition of another staffing company. The later, a method used among other foreign competitions establishing in Oslo, Norway. This method could be used in an attempt to get a better competitiveness at an early stage. By not doing this acquisition, Interviewee 1 stated that the first period was a constant struggle. Other barriers and problems concerned the juridical aspects. When being asked whether the differences between Swedish and Norwegian jurisdiction and laws had led to any bigger complications, Interviewee 1 answered that the biggest problem might have been the belief that the juridical atmosphere would have been more similar between the two countries. When the authors asked Interviewee 1 about other relevant problems, one specific difference worth to be mentioned was within the jurisdictional field, namely the working environment law. It differs between Sweden and Norway, with regulations that affect many different aspects of the working environment. This highly influences the everyday working situation for the employers, as well as the employees. Another aspect, which differ the markets within the two countries, was by Interviewee 1 explained as a leftover of the former restrictive Swedish regulations towards the staffing companies. In Sweden, staffing companies are regulated different in comparison with regular companies in other industries. That is not the case in Norway. According to Interviewee 1, the Swedish staffing industry is also, in difference to the Norwegian market, highly influenced and affected by the Swedish industry organiza-

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tion, Almega. In order to be accepted as a staffing company in Sweden, one should fulfill their membership requirements and be a part of the organization. When discussing the major advantages by going international by making an expansion into the Norwegian market, Interviewee 1 is obviously positive to the big cultural similarities between the two countries. Already from the first start, being culturally similar has eased the process along the way. From the very beginning, it was the strategy to approach Oslo first, in order to establish a name, and to get brand awareness among the Norwegians. After being established in Oslo, the following process of expanding into other Norwegian cities and regions gets a lot easier. There might also be negative aspects of the cultural similarities between the countries. One of these was mentioned by Interviewee 1 concerning Swedish employees that had been employed by the same company at the Swedish market. This can lead to problems, as the employees bring their experiences and routines when starting to work for Norwegian subsidiary. Although there are no significant differences related to these routines, the differences that occur cannot be neglected. 4.2.4 Social and cultural differences When asked, Interviewee 1 had clear opinions about the difference of beliefs between the Norwegian and Swedish employees in terms of individualism. The Norwegians were said to be more individualistic, although in a manner that hardly could be described. At the same time as the Norwegians were said to be the more individualistic ones, he held Swedes for being more adventurous, for example, when it comes to traveling. According to Interviewee 1, this Norwegian individualism could also be seen in terms of the both nationalities' respect for authorities. As explained, this could be seen from a business perspective, most typically seen in hierarchical levels. When asked about potentially different views when it comes to equality between genders, Interviewee 1 could not distinguish any differences between the two nationalities. In case of attitude towards rules and structure at the working place, Interviewee 1 reflected that Swedish people tend to be more comfortable in disorder than the Norwegian ditto. On the other hand, he stated that Swedes in general take their work more seriously. As a final point, the authors and Interviewee 1 discussed if there were any other differences in regard of norms, rules and routines between the two neighboring countries. Interviewee 1 stated that the general business process in Norway was shorter. The Norwegian people seem to take a higher risk when doing business.

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4.3 Company 2 4.3.1 Introduction to interview With Company 2 The second interview was conducted with a Norwegian manager, responsible at the subsidiary in Oslo of one of the Swedish staffing companies. Interviewee 2 has great experience within the business of staffing companies, but has also worked within other similar businesses. Being the manager of the Norwegian subsidiary, she has had the opportunity to get an insight in issues related to the expansion. In difference to Interviewee 1 at Company 1, her nationality is Norwegian and not Swedish, which therefore makes her opinions about social and cultural differences more interesting. In similarity to Interviewee 1, she was chosen because the authors thought that she was the person with best insight during the expansion. 4.3.2 Before the expansion According to Interviewee 2, the major reason to establish a subsidiary in Oslo was the possibility to benefit from a great market potential, an expectation Company 2 had about the market in Oslo. As the company had ambitions to establish businesses in all of the Nordic countries, the Norwegian market was penetrated as a first step. In the late 1990's, Company 2 bought an existing company, already established in Oslo. According to Interviewee 2, the acquisition was meant to ease the entry of the Norwegian market, as Company 2 did not have to expand organically. While the Swedish division already had a well functioning business system, this was being thought of as applicable on the Norwegian company as well. Interviewee 2 continued by explaining that the market in Oslo was expanding, even though it already was of remarkable size. Company 2 perceived the market in Oslo to be strong, and the possibilities to generate a greater income were expected to be better in comparison to the Swedish market. The similarities between the two countries played an important role for the discussion whether to expand internationally, and if so, if the Norwegian market would be a suitable market to approach. According to Interviewee 2, the similarities could be seen both at an individual level and at an organizational. From an individual perspective, the similarities can for instance be seen in terms of the languages, which do not differ drastically. Other characterizing aspects for the Swedish and the Norwegian population are the cultural and mentality related similarities. These similarities were thought of as something that would make it possible to apply about the same concept in Oslo as the concept earlier used within the Swedish staffing industry. The establishment of the Norwegian subsidiary was the first international expansion of the company. Driven by the cultural similarities previously described, Oslo seemed to

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be an appropriate market to target while going international. Interviewee 2 described the advantages of nations and cultures being similar, and the way it eases the establishment of subsidiaries in foreign countries. As described, it easier makes you understand what can be expected from the new market, and what the market continuously might be expecting from you. Interviewee 2 further explains that the company always has had high ambitions, with expanding internationally as one of them. During the expansion, it was not thought of as a primary objective, but the establishment process was at the same time to be seen as an important learning process as well. By making the establishment of the subsidiary in Oslo as the first international expansion, the obstacles by meeting and adapting to a new culture could be minimized. According to Interviewee 2, the experience and wisdom achieved by the expansion to Oslo could later on be used in further expansions into other countries. Therefore, the market in Oslo, Norway was seen as a natural first step, on what further on could be a longer process of international expansion. According to Interviewee 2, the reason behind the thought of an expansion was the arrival of a new management team. Focus on planning for an international expansion was immediately implemented, a process, which took approximately a year. Thus, the new management felt that there existed a great capacity to increase the business. This expansion would preferably be done at an international level. The company was already acting within most of the different fields in the Swedish service sector. Thus, the most appropriate way to expand within Sweden would be to niche oneself into more specific markets by leasing out more skilled and qualified personnel. Therefore, an international expansion seemed to be the most natural step to make in order to continue growing at the same rate the company was accustomed to dealing with. 4.3.3 After the expansion During the establishment process by expanding into the staffing market in Oslo, the biggest barriers that were met were mainly due to the market related factors, according to Interviewee 2. As Company 2 acquired the Norwegian company, the market experienced a high competition. The situation was by Interviewee 2 described as an urban problem, when all of the biggest actors on a national level are concentrated into a smaller geographic region, in this case Oslo. Another problem mentioned during the interview, was the implementation of the former used Swedish business system on to the new company. It was crucial for the expansion of the company to implement the business system in the right manner. Despite not going into further details, Interviewee 2 made it obvious that changing a business system, including routines, norms, and standardized procedures, must be seen as a difficult process.

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According to Interviewee 2, the company has not met any bigger juridical problems, caused by the juridical differences between the two countries. This was said to be prevented by making the acquisition, instead of making an organic expansion. The acquisition resulted in a mixture of Swedish personnel who brought experience from the Swedish company, and Norwegian personnel, that knew the Norwegian juridical system. When asking Interviewee 2 about the major advantages with the expansion to Oslo two aspects were mentioned. Firstly, through the expansion, the company and its employees has learned a lot through the expansion process. Important experiences have been achieved from the stage of planning the expansion, to executing the establishment, and finally operating the business. Secondly, the company's financial risks have been minimized through diversification. Interviewee 2 continued by explaining why the staffing industry normally is relatively safe towards fluctuations in the business activity. That is, when a nation experiences economic growth, the staffing industry often benefits highly from it. This is explained by companies that during these times rather hire personnel than employ, if not being sure that the economic upswing will last for a longer period. Further, the situations during economic recessions also eases the businesses for staffing companies, as companies in other industries rather hire than employ, when the sales are low. 4.3.4 Social and cultural differences The authors asked Interviewee 2 about differences in individualism between people from Sweden and Norway. Interviewee 2 meant that Norwegian people in general were more individualistic than Swedes in terms of taking own decisions, not approved by a manager. She also added that this issue is highly dependent on every single employee and that the actual nationality of the specific employee should not be of any bigger importance. Especially in this case, when the differences between Swedish and Norwegian workers seem to be intangible, not at least compared to other European cultures and countries. In terms of attitude and respect towards authorities in a business, Swedish people seem to have a greater respect, according to Interviewee 2. She explained that a possible reason could be that Sweden has a more deeply rooted history of traditional strong leadership. When asking Interviewee 2 about differences regarding equality between genders between the two countries, she states that both countries do have a similar and dignified viewpoint upon this matter. A confirming factor for this statement is according to Interviewee 2 the organizational structures in terms of gender. In the Norwegian division, as well as the Swedish, the majority of the employees are women. This is also the case with the gender of the lower and middle management. However, the majority of the top management in both of the countries was said to be men.

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The attitude towards rules and structure at the working place is according to Interviewee 2 different between the Swedish and the Norwegian people. The Norwegians seem to have a much more laid-back attitude towards disorder and thus, rules and structure seems to be more important for Swedish people in general. Interviewee 2 further claims that the Swedish population seems to have too strong reliability in rules, structure and policies. The final aspect discussed with Interviewee 2 concerned other differences between the two countries in case of norms, rules and routines. Interviewee 2 said that no significant differences could be mentioned and that if some once in a while occurred, it was more of an individualistic character rather than of nationalistic character.

4.4 Company 3 4.4.1 Introduction to interview with Company 3 The third interview was made with a high representative from a major Swedish staffing company with a subsidiary in Oslo. The interviewee will hereafter be named Interviewee 3. Interviewee 3 has been involved in the whole process, from planning to execution and further on, the ongoing process. He has good insight in all of the core businesses at the company and has worked both from the Swedish head quarter and from the subsidiary in Oslo. 4.4.2 Before the expansion The first question the authors stated to interviewee 3 regarded the initial plans of expanding to Oslo. According to Interviewee 3 the market in Oslo seemed to be a potential success due to beneficial financial reasons and the fact that the staffing market in Oslo was not as developed as in Sweden. Company 3 had presented good financial results in Sweden and felt a hunger for a new market. Oslo felt suitable due to its similarities to Sweden in terms of culture. Thus, the similarities between Sweden and Norway did impact the choice of choosing Norway as a first step when internationalizing. Especially the possibility of speaking Swedish, instead of a foreign language. Norway and Oslo was the first expansion for Company 3, but thoughts of a further expansion have always been the case. Before executing expansions to other countries Company 3 decided to fulfill the internationalizing to Norway to full extend. This meant that it took several years before another international expansion was made. According to Interviewee 3, no particular specific action was the reason by internationalizing. As stated earlier, Company 3 felt a need and a hunger for a new and bigger market with similarities to the existing. Therefore Oslo, Norway was a natural choice. The planning process was short and concise and lasted for about three months.

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4.4.3 After the expansion According to Interviewee 3 not that many barriers had to be crossed when entering the market in Oslo, at least not barriers in terms of culture, human resource or social behavior. When entering a new market, regardless if it is in a new country or not, demands competence and power, according to Interviewee 3. Company 3 tried to implement the identical business structure and business system to the subsidiary in Oslo. Discussions about acquiring an existing Norwegian staffing company were held, but to be able to form the organization to full extend, this was not an option. According to Interviewee 3 the competition at the staffing market in Oslo was harder than initial projected. Company 3 tried to take advantage of their competence at their Swedish head quarter in order to increase their market position. No particular difficulties or problems have occurred regarding Norwegian laws or rules, according to Interviewee 3. Due to the fact that Company 3 decided to grow organically the company had the possibility to construct their own structure within the organization. According to Interviewee 3 this was a great move because it meant total control of the subsidiary. Further on, the biggest advantages of expansion to Oslo have been the big and unexploited market with its huge potential. The expansion to Oslo has been a success and this has led to further expansions to other countries. 4.4.4 Social and cultural differences According to Interviewee 3 no big differences have been visual in terms of attitude towards authorities between Swedes and Norwegians. This was more a matter of individual characteristics, regardless of nationality. In case of differences regarding individualism, Interviewee 3 stated that Norwegians seemed to be more individualistic than Swedes and that hierarchy has a greater impact in Norway than Sweden. According to Interviewee 3, no differences towards gender have been visual between Swedes and Norwegians. When it comes to attitudes regarding rules and structure at the working place Interviewee 3 said that Norwegians in general had a higher demand of rules and that Swedes were more comfortable in a disordered environment. In terms of differences regarding norms, rules and routines between the two countries Interviewee 3 could not state any.

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4.4.5 Interview with Human Recourse specialist Mrs. Malm Jonasson Mrs. Malm Jonasson has worked with Human Resources and HR related issues for over 20 years and has extensive experience with HR bonded questions within the Nordic countries. Mrs. Malm Jonasson argues that the corporate culture and leadership is the foundation for human recourses. It is the job for the Human recourse department to refine a workable corporate culture and to be a support for the managers and personnel. Furthermore, Mrs. Malm Jonasson has experience from companies‟ acquisitioning other companies, mergers. In these cases, where there is an already existent HR function, the company will properly try to keep as much as possible of an existing structure. If the merged company is going well and giving high profits it is very unusual that the merging company will make changes. Although Mrs. Malm Jonasson points out that it is unusual for a merging company to change a winning concept, she does not hesitate to point out the importance of the new company uniting as soon as possible. According Mrs. Malm Jonasson, the merging company should take any necessarily changes in small steps in order to avoid problems within the new organization. One way of achieving this is to do future projects together, for instance having two colleagues from Norway and two from Sweden working together on a project. If there is a possibility to just have one HR department over a company that exist in several countries Mrs. Malm Jonasson states that it is dependent on the size of the company in question, but for larger companies Mrs. Malm Jonasson states that the closeness to an HR department will become a necessity. Furthermore, she also says that it is a difference if the company is a merging company or if it is a company opening up a subsidiary in another country from scratch. Mrs. Malm Jonasson says that it would probably not work to have a centralized HR department with a large merging company, but thinks on the other hand that it would work just fine for a smaller company opening up a subsidiary. Mrs. Malm Jonasson says that the most important thing is that the personnel can have access to all information they need, and thanks to the computer technology we have today it is very easy. As long as the personnel knows where they can find all information, such as right to vacation, overtime compensation, maternity, leave, etc. then the internet will work just fine. According to Mrs. Malm Jonasson it is more important for the managers in the company with the HR department and where it is located than it is for the personnel. For the staff to work successfully, it is important that there is an HR department that meets their needs. Where the HR department is located is of less importance.

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There might be problems when sending personnel to other countries and Mrs. Malm Jonassons own experience is that there are many exceptions especially with Norway. A frequent problem is which company should pay for the employee‟s salary if the Swedish company sends out an employee to the Norwegian company for a project. The Swedish company or the Norwegian? In addition, should the employee pay taxes in both countries? These are questions the HR Department has to deal with frequently. If the company has HR departments in each country there is a problem with how information is sent between the countries. There are some things that the sending country cannot do which will in turn create problems according to Mrs. Malm Jonasson. Mrs. Malm Jonasson says that overall she believes that the access of communication today has made expansions for companies easier. Mrs. Malm Jonasson says that she does not think that the personnel of a company would care if the boss would be domestic or foreign, However, she states that there are pros and cons of using a domestic versus a foreign manager. Mrs. Malm Jonasson gives an example and says that if a Swedish company opens up a subsidiary in Norway they could choose either implementing a Swedish manager that knows the culture of the company and can therefore implement it successfully in the subsidiary. On the other hand, they can choose a Norwegian manager that has an existing network in Norway. Mrs. Malm Jonasson indicates that in her own experience the latter is preferable in the startup of a new subsidiary since this manager is familiar with the market. A real-life experience that Mrs. Malm Jonasson brings up is when a Swedish female manager was sent to a foreign country where she faced problems with the culture and its hierarchical order. The problem arose because the country lacked an HR department and so the female manager thereby forced to rely on her Swedish manager and HR department. Mrs. Malm Jonasson believes that cultural differences play a smaller role today than before; the differences have become more global. Young people today are more about progress and results and nationality is no longer the primary concern. The youth of today‟s generation believe that an international work environment is more enjoyable. Finally Mrs. Malm Jonasson says that the most important thing is that the personnel know where they can find information; this is the key according to Mrs. Malm Jonasson.

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4.5 The survey In this section the empirical results from the survey will be showed. The survey was sent out as an online questionnaire to 153 persons, all of them Swedes. All of the targeted persons had been working in Norway, and the majority of them still do. The respondents had six choices when answering the questionnaires where one represented “no significant difference”, five represented “a very large difference” and six represented “no difference at all”. The intention of the authors was to cover the same topics as in the case with the interviews. This in order to collect quantitative data as a complement to the qualitative data gathered throughout the interviews. The survey was also seen as a opportunity to gather empirical data concerning topics that otherwise might be hard to find theory about, for instance attitudes concerning cultural and behavioral differences between Norwegians and Swedes. The asked questions were the following. 1. Norwegians are more individualistic than Swedes. 2. Norwegians have a bigger demand for hierarchy and authority compared to Swedes. 3. Norwegians have a different viewpoint toward gender issues compared to Swedes. 4. Norwegians have a bigger demand of rules at structure at the working place compared to Swedes. 5. I have experienced differences when it comes to norms, rules and routines in general between Swedish and Norwegian business culture. 6. My opinion is that it has not been any problems to adapt to these differences. 7. I value change between workplaces higher, in contrast to develop in the same place for a greater period. 8. I prefer a lower salary with opportunities for performance-related bonuses, rather than a higher salary, which remains the same regardless of performance. 9. I experience culture as something desirable in the workplace (the corporate culture refers to norms, traditions, jargon, etc. that are typical for a particular workplace). 10. I get stimulated to work more effectively if surrounded by a good working environment and a good company culture. In the diagram below, the answers from the 70 respondents is presented. Despite the high proportion of non-responds, the authors have assumed the overall beliefs within the collected data to be equal to what would have been the general opinions of the nonresponds. Therefore, no efforts have been made in order to further analyze the nonresponds in terms of different answers, or the reasons why not to answer the survey.

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Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Question 8 Question 9 Question 10

Rank 1 0 3 2 3 4 2 19 5 3

Rank 2 5 9 5 2 11 3 13 20 4 2

Rank 3 10 5 3 7 7 22 21 23 12 5

Rank 4 10 7 1 20 7 34 10 15 12 7

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Rank 5 35 2 32 5 8 6 5 38 49

Rank 6 10 44 59 6 36 3 1 2 4 4

70 60 Rank 1

50

Rank 2 40

Rank 3

30

Rank 4

20

Rank 5 Rank 6

10 0 QuestionQuestionQuestionQuestion QuestionQuestionQuestionQuestion QuestionQuestion 1 2 3 4 5 6 7 8 9 10

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5 Analysis In this section, the authors will present their analysis of the empirical data. The section will be divided into five different parts, accordingly the order within the Frame of reference, social and cultural differences, internationalization (incremental approach, direct approach) and human recourses. Parallels to the model created by the authors will be drawn, however mainly to the theories summarized within the model.

5.1 Social and cultural differences 5.1.1 Power distance The dimension of Power distance is the extent to which the less powerful members of organizations and institutions accept and expect power to be distributed unequally (Hofstede, 2009). The study made by Hofstede regarding Power distance stated that both Sweden and Norway had the same score (31), which meant an equal approach to this issue. According to Interviewee 1 and Interviewee 3, this was also the case, that no differences could be distinguished. Interviewee 2 on the other hand, claimed that Swedes showed a higher need of being led. The majority of the respondents in the survey did not observe any difference at all in this aspect. Thus, the statements of Interviewee 1, Interviewee 3 and the survey, but not Interviewee 2, were within this subject evidence supporting the study of Hofstede. 5.1.2 Individualism Individualism deals with the degree to which individuals in a society are integrated into groups (Hofstede, 2009). According to Hofstede‟s study, Sweden and Norway has an almost equal approach to individualism. Interviewee 2 said that people in Norway generally were more individualistic than Swedes in terms of taking own decisions, not approved by a manager. Interviewee 1 and Interviewee 3 also stated that Norwegians tend to be a little more individualistic. The survey says that the majority of the respondents did think that Norwegians were more individualistic. The empirical data did therefore not support the study of Hofstede. 5.1.3 Masculinity-femininity According to Hofstede‟s dimension named Masculinity-femininity both Sweden and Norway have very low values, 8 and 5 points respectively, which implies that it is two similar countries in terms of gender equality. Interviewee 1 and Interviewee 2 state that there are no differences between the countries in terms of Masculinity-femininity. Interviewee 2 confirms the same hypothesis by giving example of the structural similarities between the countries. The result of the survey also confirms that there is no existence of differences according the genders.

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Therefore, all the interviews and the survey support Hofstede‟s study. 5.1.4 Uncertainty avoidance Uncertainty avoidance deals with the fact that individuals in a society are comfortable in unstructured situations (Hofstede, 2009). High scores in the Uncertainty Index means that the culture has a strong demand for rules within the organization (Gooderham & Nordhaug, 2003). According to Hofstede‟s study, Sweden has 29 points while Norway has 50 points. This implies that Norway has a stronger demand for rules in an organization. According to Interviewee 1: “Swedes tend to be more comfortable in disorder than Norwegian people”, which thus supports Hofstede‟s theory in this dimension. Interviewee 2, on the other hand, says that a big difference between the nationalities is the Swedish need for rules, structure and policies. Interviewee 3 agreed with Interviewee 1 and said that Norwegians had a higher demand for rules and laws and that Swedes were more comfortable in a disordered environment. The survey also confirmed this with a majority of the respondents stating that Norwegians had a higher demand for rules within an organization. 5.1.5 Scott’s institutional theory Scott‟s institutional theory (Scott, 2004) concerns how norms, schedules, rules and routines can create a social behavior in a society. According to Interviewee 2, there were almost no specific differences between Sweden and Norway within this subject. Interviewee 1 said that business processes in general tended to be shorter in Norway and that higher risks often were a fact when decisions were taken. This issue was, however, not of major character and could with some adaption easily be solved. Interviewee 3 did not see any differences at all within this aspect. The result of the survey confirms the statements from Company 2 and Company 3 that no differences in terms of norms, structures and rules between the countries could be seen.

5.2 Internationalization According to the theories of Rundh (2003) and Johansson and Vahlne (1977), it is preferable to expand to the countries that are culturally the most similar to your local market. This similarity can be caused by cultural and psychological factors, by trends and norms within the society, or by specific circumstances related to the business culture. During the interviews made, these factors were also declared as important advantages from all three interviewees. None of the cultural, or the language related differences brought any bigger barriers for the expansions made. As mentioned by Interviewee 1, the similarities in language generated a great advantage with expanding to Norway in comparison to other Nordic countries such as Denmark and Finland. Rundh's quote from 2003, saying: Sida 52 av 73

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“Internationalization is a slow process for most companies and it has often been a question of gaining experience of other countries step by step” (Rundh, 2003, p. 249). This correlates well to what was said during the three interviews. Interviewee 1 stated that the expansion to Oslo, even though not primarily, was reflected at as a first step on a potential broader expansion, aiming towards other countries than just Sweden and Norway. Interviewee 2 said that Company 2 had an ambition to establish businesses in all of the Nordic countries, and that the market in Oslo was penetrated as a first step. For Company 3 the similarities between Sweden and Norway did impact the choice of choosing Norway as a first step when internationalizing. Especially the possibility of speaking Swedish, instead of a foreign language. For all of the three companies this expansion brought the possibility to slowly be more internationalized, as explained by Rundh‟s quote. Further, Rundh´s ideas about expanding abroad after reaching a point, where an international expansion seems to be the most valuable possibility, seem to have been the case for both Company 1 and Company 2. According to Rundh (2003), an expansion is preferably made into a country similar to the country, from which the company is expanding. According to Interviewee 1, this seems to have been the case for Company 1 as well. In the first interview, it was stated that the Swedish market had grown mature for a couple of decades. Therefore, Company 1 at that point found the choice of going international by expanding to Oslo as the most valuable alternative to prefer. According to Interviewee 2, at the time for their expansion, they saw an expanding market and possibilities to generate great incomes within the staffing market of Oslo. Company 3 decided to choose Oslo, as their first internationalizing due to the similarities to Sweden, and further plans for expansions to other countries would be easier after the first one was accomplished. Thus, the actions of Company 1, Company 2 and of Company 3 could be linked to Rundh´s ideas and corresponds to the box “triggers for internationalizing” in the author‟s conceptual model. As written by Doyle and Stern (2006), entering a new international market might lead to problems regarding new laws and regulations when adapting to them. According to Interviewee 1, juridical differences brought more challenges than expected which might have been due to the more restricting laws in Sweden, to which Company 1 originally was used. Swedish staffing companies were also said to be regulated specifically, in comparison to companies within other Swedish industries. The industry organization, Almega, also affects the everyday situation for the Swedish staffing companies. Almega is Sweden's largest organization for service. The operation includes the employer's service for service and influence in matters concerning the conditions for operating and developing the service. The operation also covers trade issues for the Almega unions who are both employers and trade associations (Almega, 2009). Sida 53 av 73

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Summed up, the juridical differences, according to Interviewee 1, were bigger than expected, even though the juridical systems otherwise usually have considerable similarities. Interviewee 2 and Interviewee 3 did not mention any juridical differences. 5.2.1 Incremental approach Market entry strategies might be complicated to categorize into being either incremental or more direct by nature. The incremental way of expansion is in this paper explained according to the theories of Johanson and Vahlne (1977) and the direct approach is characterized by using the theories of McDougall and Oviatt (1994) and Moen (2002). The establishment processes have been complex for all of the companies investigated. Therefore, these processes can hardly be distinguished as incremental or direct by nature. There are though many specific parts within the processes of planning and executing the expansion, that more easily can be categorized, or related, to the different approaches. According to Johanson and Vahlne (1977), Swedish companies preferably expand their businesses successively by making small steps. According to all of the three interviewees, the expansions to Norway were in some way motivated by the minor differences in terms of language, as well as cultural and juridical similarities. This made it possible to expand incrementally, letting the company establish their business in Norway without meeting any large barriers. The concept of psychic distance, stated by Johanson and Vahlne, deals with differences caused by cultural factors between countries or regions. The three interviewees enlightened the great advantages with being similar to the culture you are about to expand into. This corresponds very well to the concept of psychic distance. Although, Interviewee 1 also mentioned problems with being similar in terms of Swedes coming to Norway, expecting the routines to be the same. These persons were said to be former employees employed within the Swedish division, heading for Norway and continuing to work for the company, but now as employees at the Norwegian subsidiary. Not only the ideas concerning psychic distance, but in addition the concept of market commitment (Johanson & Vahlne, 1977), should be considered while investigating the expansions of the both companies. The market commitment consists of the amount of resources committed and the degree of commitment. According to Interviewee 1 and Interviewee 3, their companies grew organically in opposite to Company 2, where an acquisition was made in order to establish on the market in Oslo. It can be argued, that the market commitment generally will not be as high when expanding organically, as when making an acquisition. An acquisition, generally spoken, demands a huge investment, which consequently affects the amount of resources committed - and brings it to a much higher level. Sida 54 av 73

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Within the conceptual model created by the authors the first box concerned the triggers for internationalizing. Thus, in the cases of Company 1 and Company 3 no specific actions were the trigger, it was more thoughts of a new attractive market that explained the internationalizing. According to Interviewee 2, Company 2 did an international expansion due to the arrival of a new management team. The other factor; the degree of commitment is usually related to immobile facilities or procedures that might be hard or expensive to apply to other divisions of the company. This means that the degree of commitment for a company operating within the staffing industry, without higher investments made in immobile facilities might be considered low. According to all three interviewees, the expansion to the market in Oslo was partially seen as a first step on what further on could be a broader international expansion. By exploiting this market, the companies could learn from their experiences in a useful way, in order to be better prepared for new international expansions. It should be considered as a great advantage for the future, not being too committed to the market in the way it is described by Johanson and Vahlne (1977). This is due to the more advantageous possibilities of making further expansions to other countries. 5.2.2 Direct approach Since the ambition of the expansion to Oslo for Company 1, Company 2 and Company 3 mainly was seen as an initial step in a broader future international expansion, connections to various related theoretical models could be done. As stated above in this analysis, this could mainly be done in connection with expansion models with an incremental approach, but connections to a more direct approach could also be done. Both the Incremental approach and the direct approach are represented in the conceptual model created by the authors. Oviatt and McDougall (2007) define an International New Venture as a company that already from the beginning has a worldwide perspective. Hence, all of the three companies had been active for a longer period before the expansion was made, none of them could be stated as an International New Venture in terms of the above named statement. Furthermore, the conclusion that none of the three companies are not an International New Venture could also be supported when considering the framework that explains four important aspects for an International New Venture to be able to exist (Oviatt & McDougall, 1994). The first element in this framework, Internationalization of some Transactions, says that organizations are formed when a market is inefficient and there is a lack of economic transactions. According to Interviewee 1: “The Norwegian market, on the other hand, seemed to be more lucrative since it was bigger.” Sida 55 av 73

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In addition, according to Interviewee 2: “The market in Oslo was to be seen as strong, and the possibilities to generate a greater income were realistic.” On the other hand, as Interviewee 3 said: “The market in Oslo seemed to be a potential success due to beneficial financial reasons and the fact that the staffing market in Oslo was not as developed as in Sweden.” Company 1 and Company 2, as well as Company 3, saw an imperfect market and consequently chose to make a move to go international. The first aspect, out of four, was thereby fulfilled, in order to become an International New Venture. The second aspect, Alternative Governance Structures, says that new ventures tend to be too short of resources to own all their assets. Since the staffing businesses mainly do not handle with physical resources this aspect was not considered. Foreign Location Advantage is the third aspect that illustrates that a firms expanding to another country will meet disadvantages compared to the domestic firms, disadvantages that the firm will overcome (Dunning, 1988). According to Interviewee 1, this has been a fact: “a lot of barriers were met by the time of establishing the new subsidiary”. As stated by Interviewee 1 problems did arise regarding the juridical aspect, and especially the fact that Company 1 had an assumption that no juridical dilemmas would occur. Other problems concerned the working environment law, for instance the amount of hours worked per week for the employee. These were all issues that Company 1 could overcome. The main problems for Company 2 concerned market related factors, such as competition and the dilemma of implementing the former used Swedish business system, which involved routines, norms and standardized procedures. Moreover, in similarity to Company 1, these were all issues that Company 2 could overcome. Thus, both these two companies fulfilled this third aspect. Company 3, on the other hand, did not meet any disadvantages of this character that they had to overcome and which confirms that Company 3 is not an International New Venture. The final element claims that a resource must be unique to be able to sustain competitive (Barney, 1991). Since Company 1 and Company 2 and the staffing industry in general do not possess unique resources, the possibility of fulfilling this aspect could be discussed further. The authors‟ interpretation is that none of the two companies possesses enough unique resources to fulfill this statement. Therefore, according to this framework none of the companies is International New Ventures. Interviewee 1, Interviewee 2 and Interviewee 3 state that their respectively companies seem to have international ambitious, but so far just within the Nordic countries. According to Moen (2002), firms with a management profile, clearly focused upon international expansion and a commitment to perform it, will therefore be classified as Born Sida 56 av 73

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Globals. The author‟s interpretation to this is that none of the companies are Born Globals. Moen (2002) also says that the two key factors that a Born Global company must fulfill are an engagement in exporting and that the expansion occurs shortly after startup, which furthermore supports the conclusion that none of the companies, is Born Global. This is done in consideration of that a longer period took place before the expansion was made. Bell et al. (2003) also state another aspect of Born Globals, that it does not only concern newly founded businesses. Therefore, the concept of Born-again Globals was implemented. Bell et al. (2003) show evidence of firms that for a long time have focused only on their domestic market, suddenly starting to focus on an international market. Since this has been the case for all of the three companies, the author´s interpretation is that they could be stated as a Born-again Global. According to Bell et al., a specific action tends to be the reason behind this internationalization. This could for instance involve a change of financial or individual resources, a take-over from another firm or a new manager with a new international perspective. In terms of the expansion of Company 1 and Company 3, this was not the case. No specific action was the reason behind the expansion. The underlying factor to the expansion for Company 2 was a specific action, namely a change of management. The concept of Born-again Global could therefore be linked to Company 2 as well.

5.3 Human Recourses It has been argued that the success of a company is largely due to the company‟s corporate culture and management of human recourses. Jackson et al. claims that the success of a company is highly dependent to the way the company is able to manage their human resources appropriately (Jackson et al., 2009). This view is also supported by Håkan Svennerstål who claims that if you just have some common sense you will understand that the corporate culture will affect the leadership and the employees, which will in turn affect the company‟s financial result. Mrs. Malm Jonasson says it is the HR departments job to create and manage a good corporate culture for the employees and managers. Furthermore, about 95 % of the participants of the survey thought that corporate culture is something desirable in the workplace. Furthermore, as pointed out by Bohlander and Snell, it is important to create a company culture that is hard for other companies to copy. If being easy to copy, the company culture will not contribute to obtained competitive advantages in the way that otherwise might would have been possible (Bohlander & Snell, 2009). Jackson et al. (2009) says that to train and develop the workforce are factors connected to the employees and their performance (Jackson et al., 2009). According to HR specialist Mrs. Malm Jonasson this view is correct and according to the survey all respondent felt that they would to some extent work more efficient if they were surrounded by a good corporate culture and work environment. Sida 57 av 73

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Conclusion The conclusion will give suggesting answers to the purpose and accordingly to the three questions that were presented in the Problem Statement. Why do Swedish staffing companies choose to enter this market? The reasons for choosing to expand into the market in Oslo, Norway, were clearly stated throughout the interviews. These were the many similarities between the countries, and the market related factors. According to Interviewee 1, the Norwegian market was expected to be more lucrative than the Swedish market, mostly due to fact that the Swedish one was more mature. Interviewee 2 supported this statement by highlighting the cultural similarities and the lucrative aspect of an expansion to Oslo. Further, the reasons for Company 3 to expand to the Norwegian market was said to be the lucrative possibilities, the cultural similarities, and the fact that the Norwegian market did not seem to be as developed as the Swedish one. This might be seen as further evidence, proving the validity of the theories of Rundh (2003), saying that companies commonly expand internationally when they find their foreign market to be mature. What strategies have been used? The strategies used can be categorized into being incremental, rather than being of a more direct approach. This is what could have been expected by generalizing according to the Uppsala model (1977). The opinion of the authors is that the direct way of making an expansion would not include Oslo, Norway as a first target market, if not aiming for further internationalization later on. While considering the similarities between the countries, and the limited opportunities within the Swedish and the Norwegian market, an International New Venture and a Born Global would aim higher, or at least more internationally. Therefore, all of the three companies used an incremental approach, as defined in the Uppsala model. Have cultural differences and similarities caused any barriers and/or advantages? According to the interviewees, no major differences could be seen regarding individualism and masculinity-femininity between the countries, which supports Hofstede‟s theory. Interviewee 2 and Interviewee 3 said that Norwegians in general had a higher need to be led, which contradicts Hofstede‟s theory regarding Power distance, whereas Interviewee 1 here stated that no differences occurred. Regarding uncertainty avoidance, Interviewee 1 and Interviewee 3 supports Hofstede‟s theory by stating that Norwegians need more rules, in opposite to opinion of Interviewee 2. Anyhow, these minor differences have not caused any essential barriers. Thus, the empirical data mainly, but not totally, supports Hofstede‟s theory. The advantages with the expansion might be concluded to be approximately, what was expected from the companies. The similarities between the countries in terms of language, mentality and culture were about as similar

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as presumed. The only exception concerned the juridical factors, according to Interviewee 1. Also the empirical results of the survey supported the chosen theories, primarily the theories of Hofstede. Even though the respondents of the survey did not have the same experience or knowledge as the interviewed managers, the studies ended up in similar results concerning cultural differences and similarities between the nationalities. Therefore, the models of International New Venture and Born Globals are not applicable while the theory of Hofstede is partially supported. Scott‟s theory is impossible to consider due to lack of differences. The theories of Rundh and Johanson and Vahlne regarding internationalization are both supported in this thesis. However, it is the belief of the authors, that the advantages and barriers shown within the scope of the empirical data, might not always be seen as evidence validating the theories. This because Sweden and Norway might be too similar culturally in order to make further predictions concerning expansions to other cultures. Supported by the empirical findings from the interviews and the survey, the authors find their model to give a descent overview of the different factors that have been causing the decisions of the three companies to expand into the market in Oslo, Norway. It can be used by other companies, acting in other industries, when investigating their opportunities to go international. One should though keep in mind that the cultural differences normally are bigger than in the case with the investigated countries, Norway and Sweden.

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Swedish staffing companies goes international to enhance competitive advantage; where you expand to the most familiar markets first.

Company 1, 2 and 3 are Swedish staffing companies, they have both expanded to the most familiar market first, Norway.

Norway is a familiar market to Sweden where culture and language similarities exist to a great extent.

Swedish Staffing companies will therefore expand to Norway as a first step when going international.

Figure 7, The authors conclusion model.

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6 Discussion This section will present additional findings learned during the process, mainly the authors’ own critique of their study.

6.1 Critique of study and method First, the Uppsala model was originally made to suit manufacturing companies. It is still applicable to companies within other sectors, but the companies that were investigated throughout the research ending up with the Uppsala model, were manufacturing companies. Concerning the interviews conducted, the authors decided to interview the persons with the best possible knowledge concerning the establishments of the subsidiaries. Eventually, this ended up with a limited amount of interviews, more specifically three interviews, all of them with high representatives on a national level. However, despite the limited number of interviews, the quality of the gathered data should be seen as high, because of the credibility of the interviewees. It should be said, that none of the interviewees on Company 1 or Company 2 worked at the same position during all of the establishment process. Both of them were though promoted to today‟s position right after the expansions of the both companies. Since then, both of the interviewees have been the highest manager on national level, responsible for the establishments of the subsidiaries. Moreover, the interviews could have been done more thoroughly. As interview 1 and interview 2 were conducted over telephone, they would preferably have been done by making use of a tape recorder instead of a secretary, which now was the case throughout these interviews. This in order to keep the exact answers, and the possibility to better understand the answers if listening to the way they actually were given.

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7 References Almega, homepage. Retrieved 22-01-2010, from http://www.almega.se/web/Nya_tjanster_for_bemanningsbranschen.aspx Almega, Verksamheten 2008. (2009). Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120. Bell, J. (2004). Introduktion till forsknings-metodik (4th ed.). Lund: Studentlitteratur AB. Bell, J., McNaughton, R., Young, S., & Crick, D. (2003). Towards an Integrative Model of Small Firm Internationalization. Journal of International Entrepreneurship, 1, 339-362. Bemanningsföretagen, homepage. Retrieved 02-12-2009, from http://www.bemanningsforetagen.se/web/Historia.aspx http://www.bemanningsforetagen.se/web/Fakta_om_branschen.aspx Blomstermo, A., & Deo Sharma, D. (Ed). (2003). Learning in the internationalization process of firms. Northampton: Edward Elgar Publishing, Inc. Bohlander, G. W., & Snell, S. (Ed). (2009). Managing human resources, Fifteenth edition. Mason: South-Western Cengage Learning. Britannica, homepage. Retrieved 2009-11-28, from http://www.britannica.com/ Buckley, P. J., & Casson, M. (1976). The future of multinational enterprise. New York: Holmes & Meier. Coase, R.H. (1937). The nature of the firm. Economica N. S, 4: 386-405. De Mooij, M. (Eds.). (2009). Global Marketing and Advertising - Understanding Cultural Paradoxes. Thousand Oaks: Sage Publications, Inc. Doyle, P., & Stern, P. (Eds). (2006). Marketing management and strategy. Harlow: Pearson Education Limited. Dunning, J. H. (1981). International production and the multinational enterprise. London: George Allen & Unwin.

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Entreprenörsriket, homepage. Retrieved 2009-11-16 http://www.entreprenorsriket.se/entreprenor.html Fink, A. (2006). How to conduct surveys – a step-by-step guide. Thousand Oaks: Sage Publications Ltd. Fitz-enz, J. (Eds). (2002). How to measure human resources management. United States of America: McGraw-Hill. Gooderham, P. N., & Nordhaug, O. (2003). International Management- CrossBoundary Challenges. Oxford: Blackwell Publishing Ltd. Holliday, A. (Ed). (2007). Doing and writing Qualitative research (2nd edition). London: SAGE Publications Ltd. Hofstede, G., homepage. Cultural Dimensions. Retrieved 2009-11-03 http://www.geert-hofstede.com/hofstede_sweden.shtml Hofstede, G., CV. Retrieved 2009-11-04 http://www.itim.org/cv_geert.html Hossam, Ali-Hassan. (2005, October 12). Theories Used in IS, Research Institutional Theory. Retrieved 2009-10-25 from http://www.istheory.yorku.ca/institutionaltheory.htm Hymer, S. H. (1960). The international operations of national firms: A study of direct foreign investment. Cambridge, MA: The MIT Press Iarossi, G. (2006). The Power of Survey Design: A User’s Guide for Managing Surveys, Interpreting Results, and Influencing Respondents. Washington DC: The World Bank. Jackson, S. E., Schuler, R. S., & Werner, S. (Ed). (2009). Managing human resources, 10 E. Mason: South-Western Cengage Learning. Johanson, J., & Vahlne, J-E. (1977). The Internationalization Process of the Firm – A Model of Knowledge development and increasing foreign market commitments. Journal of International Business, 8, 23-32. Lindmark, L., Christensen, P.R., Eskelinen, H., Forsström, B., Sörensen, O.J. & Vatn, E.(1994). Småföretagens internationalisering – en jämförande studie. Nord REFO, 7 Kwintessential, homepage. Retrieved 2009-11-14, from

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http://www.kwintessential.co.uk/resources/global-etiquette/norway-country-profile.html Madsen, T. K., & Servais, P. (1997). The Internationalization of Born Globals: a network view, International Business Review, 6(6), 561-583. McDougall, P. P., Shane, S. & Oviatt, B.M. (1994). Explaining the formation of international new ventures. Journal of Business Venturing, 9, 469-487. McKinsey & Co. (1993). (Ed). Emerging Exporters. Melbourne: Australian Manufacturing Council. Moen, O. (2002). The Born Globals – a new generation of small European exporters. International Marketing review, 19(2), 156-175. NHO Service, homepage. Retrieved 03-12-2009, from http://www.nhoservice.no/getfile.php/Filer/Dokumenter%20Bemanningbransjen /Bemanningsbransjens%20%E5rsstatistikk%202008%283%29.pdf North, Douglas. (1999). Institutions, Institutional Change and Economic Performance Cambridge University Press, Cambridge. Oviatt, B. M., & McDougall, P.P. (1994). Toward a theory of international new ventures. Journal of international business studies, first quarter 1994, 36. 4564. Oviatt, B. M., & McDougall, P.P. (2007). International Entrepreneurship. Cheltenham: Edward Elgar Publishing Limited. Patel, R., & Davidsson, B. (Eds.). (2003). Forskningsmetodikens grunder: att planera genomföra och rapportera en undersökning. Lund: Lund Studentlitteratur. Saunders, M., Lewis, P., Thornhill, A. (2007). Research Methods for Business Students. (4th ed.). Essex: Pearson Education Limited Schramm-Nielsen, J, Lawrence, P. Sivesvind, K H, (2004) Management in ScandinaviaCulture, Context and Change. (Finns inte refererat till i texten?!?!) Scott,

W. R. (2004). Institutional theory. Retrieved 2009-10-25 from http://www.si.umich.edu/ICOS/Institutional%20Theory%20Oxford04.pdf

Scott, W. R., & David, G. (2007). Organizations and Organizing - Rational, Natural, and Open System Perspectives. New Jersey: Pearson Education. Svännerstål, H. (2007). De nya organisations kulturerna Om öppenhetens överlägsenhet. Stockholm: Informationsförlaget. Sida 64 av 73

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Svensson R, C. Culture shock - A guide to customs and etiquette. (1996) (Finns inte refererat till i texten?!?!) Rennie, M.W. (1993). Born Global. The McKinsey quarterly, 4, 45-53. Rundh, B. (2003). Rethinking the international marketing strategy: new dimensions in a competitive market. Karlstad University. Market Intelligence & Planning, 21(4), 249-257. Bradford: MCB UP Ltd. Thomas, A., & Mueller, S. (1999). Institute of international Business- IIB A case for comparative entrepreneurship: Assessing the relevance of culture. Journal of International Business Studies, 31, 287-301. Vesper, K.H. (1990). New venture strategies. Englewood Cliffs, NJ: Prentice Hall. Yin, K, R. (2003). Case study research Design and methods. (3ed edition) London: SAGE Publications Ltd.

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8 Appendix 1 8.1 Frågeställning

Totalt 14 frågor uppdelade i tre olika kategorier:   

Inför expansion Efter expansion Sociala och kulturella skillnader

Inför expansion Vilka var de bakomliggande faktorerna för er expansion till Oslo? __________________________________________________________________ Hur pass mycket spelade de kulturella likheterna med Sverige in, vid valet av expansion till just Norge? ______________________________________________________________________ Fanns det en tanke med att använda expansionen i Norge som en ”språngbräda” för ytterligare utländsk expansion? ______________________________________________________________________ När skedde expansionen till Norge? Och hur länge hade då en expansion i Norge varit aktuell? ______________________________________________________________________ Var det någon speciell händelse som föranledde expansionen? ______________________________________________________________________

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Efter expansion Vad upplever du har varit de största barriärerna för er expansion till Oslo? ______________________________________________________________________ Har det uppstått besvär med norska lagar eller regler? ______________________________________________________________________ Vad upplever du har varit de största fördelarna med er expansion till Oslo? ______________________________________________________________________

Sociala och kulturella skillnader Har du upplevt skillnader i individualism mellan svenskar och norrmän? ______________________________________________________________________ Har du märkt av skillnader i inställning till hierarki och auktoritet mellan svenskar och norrmän? ______________________________________________________________________ Har du upplevt skillnader angående könsroller mellan svenskar och norrmän? ______________________________________________________________________ Har du upplevt skillnader i förhållningssätt till regler och struktur på arbetsplatsen mellan svenskar och norrmän? ______________________________________________________________________ Har du upplevt någon skillnad i övrigt gällande normer, regler och rutiner mellan svensk och norsk affärskultur? ______________________________________________________________________ I sådana fall, hur har det gått anpassa sig till detta? ______________________________________________________________________

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8.2 Questions (translated into English) In total, 14 questions divided into three different sections:   

Before the expansion After the expansion Social and cultural differences

Before the expansion What were the underlying factors for your expansion to Oslo? __________________________________________________________________ How important were the cultural similarities with Sweden, when deciding to expand to Norway? ______________________________________________________________________ Was there an underlying thought of using the expansion in Norway as a “springboard” for further international expansion? ______________________________________________________________________ When was the expansion to Norway accomplished? Moreover, for how long had the expansion been discussed? ______________________________________________________________________ Was there any special occurrence that caused the expansion? ______________________________________________________________________

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After the expansion In your opinion, what have been the biggest barriers for your expansion to Oslo? ______________________________________________________________________ Have there been any problems with Norwegian laws and rules? ______________________________________________________________________ In your opinion, what have been the greatest advantages of your expansion to Oslo? ______________________________________________________________________

Social and cultural differences Have you experienced differences in regard of individualism between Swedes and Norwegians? ______________________________________________________________________ Have you experienced differences in attitude towards hierarchy and authority between Swedes and Norwegians? ______________________________________________________________________ Have you experienced differences in attitude towards gender equality between Swedes and Norwegians? ______________________________________________________________________ Have you experienced differences in attitude towards rules and structure at the working place between Swedes and Norwegians? ______________________________________________________________________ Have you experienced differences in general regarding norms, rules and routines between Swedish and Norwegian business culture? ______________________________________________________________________ If that was the case, how difficult was the adaption? ______________________________________________________________________

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8.3 Appendix 2 8.3.1 Enkätundersökning

Sociala och kulturella skillnader Skillnader mellan norska och svenska arbetsgivare och arbetstagare

Kön: ______ Ålder: _______ Huvudsakliga arbetsuppgifter i Norge: ______________________________________ ______________________________________________________________________ På en skala 1 till 5 - där 1 är ”stämmer inte alls” och 5 ”stämmer verkligen” och 6 är ”ingen skillnad”:

Norrmän är mer individualistiska än svenskar. 1

2

3

4

5

6

______________________________________________________________________ Norrmän är mer beroende av hierarki och auktoritet jämfört med svenskar. 1

2

3

4

5

6

______________________________________________________________________ Norrmän har olika syn på kön och könsroller, i jämförelse med svenskar. 1

2

3

4

5

6

______________________________________________________________________ Norrmän är mer beroende av regler och struktur på arbetsplatsen i jämförelse med svenskar. 1

2

3

4

5

6

______________________________________________________________________ Jag har upplevt skillnader i övrigt gällande normer, regler och rutiner mellan svensk och norsk affärskultur. 1

2

3

4

5

6

______________________________________________________________________ Jag tycker att det gått problemfritt att anpassa mig till dessa skillnader. 1

2

3

4

5

6

______________________________________________________________________

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Jag värdesätter högre att byta mellan olika arbetsplatser, snarare än att utvecklas längre på ett och samma ställe. 1

2

3

4

5

6

______________________________________________________________________ Jag föredrar en lägre lön med möjligheter till prestationsrelaterade bonusar snarare än en högre lön, som förblir densamma oberoende av prestation. 1

2

3

4

5

6

______________________________________________________________________ Jag upplever företagskultur som något åtråvärt på en arbetsplats (med företagskultur menas normer, traditioner, jargonger och dylikt som är typiska för en viss arbetsplats). 1

2

3

4

5

6

______________________________________________________________________ Jag stimuleras till att arbeta effektivare omgiven i en god arbetsmiljö och god företagskultur. 1

2

3

4

5

6

______________________________________________________________________

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8.4 Survey (translated) Social and cultural differences Differences between Norwegian and Swedish employers and employees

Sex: ______ Age: _______ Main job assignments in Norway: ______________________________________ ______________________________________________________________________ On a scale from one to five were one is no significant difference, five represents a very large difference and six represents no difference at all:

I have experienced differences in individualism between Swedes and Norwegians. 1

2

3

4

5

6

______________________________________________________________________ I have experienced differences in attitude towards hierarchy and authority between Swedes and Norwegians. 1

2

3

4

5

6

______________________________________________________________________ I have experienced differences regarding the attitude towards the gender roles between Swedes and Norwegians. 1

2

3

4

5

6

______________________________________________________________________ I have experienced differences in attitude towards rules and structures within the workplace between Swedes and Norwegians. 1

2

3

4

5

6

______________________________________________________________________ I have experienced differences when it comes to norms, rules and routines in general between Swedish and Norwegian business culture. 1

2

3

4

5

6

______________________________________________________________________ My opinion is that it has not been any problems to adapt to these differences. 1

2

3

4

5

6

______________________________________________________________________

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I value change between workplaces higher, in contrast to develop in the same place for a greater period. 1

2

3

4

5

6

______________________________________________________________________ I prefer a lower salary with opportunities for performance-related bonuses, rather than a higher salary, which remains the same regardless of performance. 1

2

3

4

5

6

______________________________________________________________________ I experience culture as something desirable in the workplace (the corporate culture refers to norms, traditions, jargon, etc. that are typical for a particular workplace). 1

2

3

4

5

6

______________________________________________________________________ I get stimulated to work more effectively if surrounded by a good working environment and good company culture. 1

2

3

4

5

6

______________________________________________________________________

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