Page 43 - AEI Insights 2020 - Vol. 6, Issue 1

Munusamy and Hashim, 2020

Girdzijauskaitė et al. (2019) mentioned that the Uppsala model of internationalisation
comprises four components to enter foreign markets. These are exporting, licensing production,
joint ventures and sole ventures. The term (1) exporting refers to international students studying
abroad or pursuing their higher education in different country; (2) licensing production means
twinning or franchising programmes such as 1+2 or 2+2 study period (local + abroad); (3) joint
ventures and (4) sole ventures refer to establishment of branch campuses either through
partnerships or wholly-owned branch campuses (Healey, 2008). It is clear that Uppsala model
emphasises the economic perspective. The impact on other rationales for internationalisation
such as the socio-cultural, politic and academic is lacking. Girdzijauskaitė et al. (2019) urged
that the Uppsala model originally established to explain the internationalisation process in
firms, industries and business. Edwards and Edwards (2001) concluded that
internationalisation of services sector such as higher education providers may follow different
trails to fulfil the rationale for internationalisation to themselves, governments, students and
societies. James (2009) also agreed that this model is less appropriate to knowledge-intensive
and business service industries including the higher education sector. As such, there is a need
for identifying a more appropriate internationalisation theory, which can accommodate the
approaches, strategies and rationale for internationalisation. Through recent empirical research,
Johanson & Vahle proposed that the re-examined Uppsala theory as a network model of
internationalisation is more applicable and can meet the rationale for internationalisation
(Johanson & Vahlne, 2009).

The network theory of internationalisation
In 1988, Johanson & Mattsson established a network theory of internationalisation by exploring
the Uppsala model of Johanson & Vahlne (1977,1990). The network model of
internationalisation provides a platform for external or outsiders influences on the
internationalisation process of firms or business (Johanson and Mattsson 1988). The
connection between two or more businesses is defined as a network and the relationships
between the businesses or firms is known as shared players (Blankenburg Holm, Eriksson, &
Johanson, 1996). Networking in internationalisation is vital for entering foreign markets and
also to strengthen the position of firms or organisation in the market (Johanson and Vahlne
2009). Networking also emphasises the importance of organisation relationships and
advantages gained (Girdzijauskaitė et al., 2019). It also allows for continuous learning in the
networks (Ruzzier et al., 2006). Networking in internationalisation also provides a valuable
platform to gain the information of the existing market through exchanges and communication
with existing network members and non-members from outside of the networks. This is an
additional feature of the extended version of the Uppsala theory. In the existing model, market
knowledge is acquired from experiences in the networks (Johanson and Vahlne 2009). It is
confirmed that networking is an avenue for knowledge and market information (Chetty and
Campbell-Hunt 2003; Masum and Road 2012; Rastorgueva 2014; Welch and Welch 1996)
which allows for international expansion, penetration and strong relationship among partners
(Johanson & Mattsson, 1988) as well as international integration (Coviello & Munro, 1997).

In terms of international cooperation, the network is also known as a form of multilateral
governance structure. Mori (1999) expressed that in networking, the multilateral governance
allows the connected parties to perform and interact freely within the structure and flexibly
outside the structure. He also claimed that inter-governmental organisation such as the Asia-
Pacific Economic Cooperation (APEC) has integrated the network theory for
internationalisation process among the members including in higher education cooperation.
The relationship between members in the inter-governmental organisations such as APEC, the

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