The Review of International Organizations

Heuristics in international SMEs: A systematic literature review

--Manuscript Draft--

Manuscript Number: ROIO-D-24-00009

Full Title: Heuristics in international SMEs: A systematic literature review

Article Type: Review Article

Keywords: Heuristics; International SME; Rules of thumb; Cognitive shortcuts; Systematic

literature review

Corresponding Author: Mouad Lahjiri

Hassan II Ain Chock University Faculty of Economic and Social Legal Sciences:
Universite Hassan II Casablanca Faculte des Sciences Juridiques Economiques et
Sociales
El fida derb seltan CASABLANCA, MOROCCO

Corresponding Author Secondary

Information:

Corresponding Author's Institution: Hassan II Ain Chock University Faculty of Economic and Social Legal Sciences:
Universite Hassan II Casablanca Faculte des Sciences Juridiques Economiques et
Sociales

Corresponding Author's Secondary

Institution:

First Author: Mouad Lahjiri

First Author Secondary Information:

Order of Authors: Mouad Lahjiri

Zakia Benhida

Order of Authors Secondary Information:

Funding Information:

Abstract: Purpose: This systematic literature review aims to investigate the use of heuristics in
the internationalization process of Small and Medium-sized Enterprises (SMEs). By
asking this open ended question : "How do Small and Medium-sized Enterprises use
heuristics during the internationalization process?". The study seeks to understand
how SMEs employ heuristics, the areas in which heuristics are applied, and how
decision-makers handle uncertainty in the context of internationalization.
Design/Methodology/Approach: The review analyzes eleven relevant works, drawn
from scientific databases (scopus, Web of science) and the snowball sampling on the
application of heuristics in SME internationalization. A systematic review is employed
to select and analyze the literature. Thematic and descriptive analyses are conducted
to identify trends, difficulties, and outcomes related to the use of heuristics in SME
internationalization.
Findings: The findings highlight the scarcity of interdisciplinary research and the
ongoing development of the global SME literature. However, a significant portion of the
examined research supports the idea that heuristics and heuristically-based judgments
can be distinguished from one another. Moreover, it is suggested that heuristics play a
valuable role in mitigating the uncertainty associated with internationalization
processes.
Research Limitations/Implications: The review is limited to the analysis of eleven
selected works, which may not cover the entire spectrum of research on heuristics in
international SMEs. The scarcity of research on different types of heuristics and
heuristically-based decision-making in the context of international SMEs is identified as
a research gap. This is especially true for heuristics specific to international business
literature, researchers need to compare them to heuristics identified in the psychology
field in order to gain a better understanding of them and especially avoid inventing new
terminologies of previously identified heuristics which can lead to a sparse literature if
ignored.

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 Originality/Value: To the best of the authors' knowledge, no reviews have yet
addressed heuristics in the context of international SMEs. This systematic review aims
to be the first to shed light on the trends, difficulties, and results connected to the
application of heuristics in SMEs' internationalization journey. The findings not only
emphasize the importance of heuristics in decision-making under uncertainty and
provide insights into their usage in international entrepreneurship, foreign market entry,
post-entry international expansion, and foreign market selection. But also highlight the
need for further research on different types of heuristics and their impact on decision-
making in the context of international SMEs, thus paving the way for future
investigations in this field

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Title Page w/ ALL Author Contact Info.

Heuristics in international SMEs: A systematic literature review

Author 1 : Lahjiri Mouad,
Author 2 : Benhida Zakia,

LAHJIRI Mouad, (0009-0009-1237-7124*)

University of Hassan II,
Mouad.lahjiri-etu@etu.univh2c.ma,
BENHIDA Zakia,
University of Hassan II,
Zakia.benhida@univh2c.ma,
Title Page w/ ALL Author Contact Info.

Heuristics in international SMEs: A systematic literature review

1
2
3
4 Keywords Abstract
5
6
7 Heuristics Purpose: This systematic literature review aims to investigate the
8
9
use of heuristics in the internationalization process of Small and
International SME
10 Medium-sized Enterprises (SMEs). By asking this open ended
11
12 Rules of thumb question : "How do Small and Medium-sized Enterprises use
13
14 Cognitive shortcuts heuristics during the internationalization process?". The study
15
16 seeks to understand how SMEs employ heuristics, the areas in
17 Systematic literature review
18 which heuristics are applied, and how decision-makers handle
19
20
uncertainty in the context of internationalization.
21
22 Design/Methodology/Approach: The review analyzes eleven
23
24 relevant works, drawn from scientific databases (scopus, Web of
25
26 science) and the snowball sampling on the application of heuristics
27
28
in SME internationalization. A systematic review is employed to
29 select and analyze the literature. Thematic and descriptive
30
31 analyses are conducted to identify trends, difficulties, and
32
33 outcomes related to the use of heuristics in SME
34
35 internationalization.
36
37 Findings: The findings highlight the scarcity of interdisciplinary
38
39 research and the ongoing development of the global SME
40
41 literature. However, a significant portion of the examined research
42
43 supports the idea that heuristics and heuristically-based judgments
44
45 can be distinguished from one another. Moreover, it is suggested
46
47
that heuristics play a valuable role in mitigating the uncertainty
48 associated with internationalization processes.
49
50
51 Research Limitations/Implications: The review is limited to the
52
53 analysis of eleven selected works, which may not cover the entire
54
55
spectrum of research on heuristics in international SMEs. The
56 scarcity of research on different types of heuristics and
57
58 heuristically-based decision-making in the context of international
59
60
61
62
63
64
65
 SMEs is identified as a research gap. This is especially true for
1
2 heuristics specific to international business literature, researchers
3
4 need to compare them to heuristics identified in the psychology
5 field in order to gain a better understanding of them and especially
6
7 avoid inventing new terminologies of previously identified
8
9 heuristics which can lead to a sparse literature if ignored.
10
11
12 Originality/Value: To the best of the authors' knowledge, no
13
reviews have yet addressed heuristics in the context of
14
15 international SMEs. This systematic review aims to be the first to
16
17 shed light on the trends, difficulties, and results connected to the
18
19 application of heuristics in SMEs' internationalization journey.
20
21 The findings not only emphasize the importance of heuristics in
22
23 decision-making under uncertainty and provide insights into their
24 usage in international entrepreneurship, foreign market entry,
25
26 post-entry international expansion, and foreign market selection.
27
28 But also highlight the need for further research on different types
29
30 of heuristics and their impact on decision-making in the context of
31
32 international SMEs, thus paving the way for future investigations
33
34
in this field
35
36
37
38 1. Introduction
39
40
41 When an SME decides to internationalize, it embarks on an uncertain journey that involves
42
43 expanding its operations beyond domestic borders. "Uncertainty" goes beyond "risky
44
45 situations" where the best course of action may be determined based on known probabilities of
46
47
outcomes (Guercini & Milanesi, 2020). Foreign exchange, political risk, lack of experience
48 operating in a foreign environment, labor restrictions, cultural differences, and infrastructure
49
50 challenges are some causes of uncertainty (ibid). Other causes include continuous shifts in
51
52 market conditions, and technology (Scranton, 2009). Decisions related to firms'
53
54 internationalization, including market entry strategies and foreign direct investments (FDIs) are
55
56 also marked by risk and uncertainty (Jardet et al., 2023), as well as by bound information and
57
58
complex internal procedures (Sharfman & Shaft, 2011). As a result, when following this route,
59 businesses frequently use heuristics to help them make judgments when faced with uncertainty.
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 Making it the gateway between management literature and cognitive psychology. The analysis
1
2 of heuristics has attracted interest in clinical psychology and is linked to the concepts of
3
4 "cognitive bias" (Tversky & Kahneman, 1974) and "bounded rationality" (Simon, 1955). Since
5 the 1970s, when Kahneman and Tversky's books were published, the literature regarding these
6
7 swift decision-making models arising when time, information, and resources are limited has
8
9 undergone major change. Especially in the 1990s, Gigerenzer and colleagues' research has had
10
11 a major effect on the literature concerning strategic management and return entrepreneurship.
12
13 With Gigerenzer and colleagues, influencing in return entrepreneurship and the business
14
15
literature as a whole. Such advancements resulted in a debate which compares heuristics that
16 can have positive or negative effects on decisions to cognitive traps, which are cognitive errors
17
18 that often harm choices (Kahneman, 2011).
19
20
21 Based on these premises, the study of heuristics in the entrepreneurial literature has garnered a
22
23 lot of attention, however, a serious dearth of research on the different kinds of heuristics and
24
25
heuristically-based decision-making remains. To the best of the authors' knowledge, no reviews
26 have yet addressed heuristics in the context of international SMEs. This systematic review aims
27
28 to be the first to shed light on the trends, difficulties, and results connected to the application of
29
30 heuristics in SMEs' internationalization route. This begs the open-ended question, "How do
31
32 Small and Medium-sized Enterprises use heuristics during the internationalization process?"
33
34
35 The format of the paper is as follows. The next part covers the initial stages and progression of
36 heuristic research in an effort to define the term precisely and provide support for its benefits
37
38 "The fast and frugal heuristics paradigm" and drawbacks "the heuristics and bias paradigm".
39
40 The methodology is the focus of the third section, which also describes the journal selection
41
42 criteria and the primary procedures used in the content analysis of the generated articles. The
43
44 findings of the literature review are presented in the fourth and fifth parts through a thematic
45
46
and descriptive analysis of those same articles. The discussion of the literature review's
47 findings, recommendations for more research, the study's limitations, and closing thoughts
48
49 round up the paper.
50
51
52 2. Theoretical background
53
54
55 Bounded rationality, a theory which originated from the work of the Carnegie School and was
56 primarily developed by March and Simon (1958) and Cyert and March (1963), forms the
57
58 foundation of most understandings of organizational decision-making. Bounded rationality's
59
60 fundamental tenet is that decision-makers are limited by their cognitive capacities and seek
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 satisficing answers rather than those that are objectively best (Simon, 1979). Business owners
1
2 must rely their decisions on abbreviated mental models of their business environment since the
3
4 organizational field is too intricate for them to fully grasp (Cristofaro & Giannetti, 2021).
5 Expanding on the idea of bounded rationality, current research indicates that managers may not
6
7 carefully consider all the information at their disposal while making decisions. Rather, they
8
9 depend on heuristics that, by disregarding part of the available data, can lessen the cognitive
10
11 load during decision-making (Gigerenzer et al., 2022). Heuristics are basic frameworks that let
12
13 people quickly identify a workable solution while disregarding some pieces of
14
15
information (Kahneman, 2011). they are also simple to use, comprehend, and evaluate
16 (Gigerenzer & Gaissmaier, 2011). Some researchers believe that heuristics can lead to cognitive
17
18 biases which in turn can ultimately lead to errors (Lahjiri & Benhida, 2023; Tversky &
19
20 Kahneman, 1974) or cognitive traps (Cristofaro & Giannetti, 2021). As a result, human
21
22 judgment intentionally departs from rationality. On the other hand, the latest "fast and frugal"
23
24 stream contends that heuristics can produce reliable outputs in ambiguous and intricate
25
26
environments that are beyond the capacity of the human mind to fully grasp (Gigerenzer et al.,
27 2022).
28
29
30 2.1. The heuristics and bias paradigm
31
32 This paradigm links heuristics to biases in decision-making and is related to the idea of bounded
33
34 rationality. With the study program of Kahneman and Tversky (1974), the relationship between
35
36 heuristics and bias was first identified. Daniel Kahneman was later awarded the Nobel Prize in
37
38 Economics in 2002 for his contributions to prospect theory, an approach that clarifies how
39
40 individuals assess possible advantages and liabilities in the face of uncertainty (Kahneman &
41
Tversky, 1979). Intensive study has been conducted over the past four decades to understand
42
43 not only the psychological principles behind thinking, judging, and decision-making but also,
44
45 more recently, the neurological structures involved in these functions.
46
47
48 Decision-making rules tend to be violated in real life, deviating from logical methods, since
49
50 omniscience is beyond the human capacity. Researchers have examined how recurrent
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52
behavioral deviations from rational models might be caused by constraints on data accessibility
53 and processing (e.g., issues with focus, retention, understanding, and communication)
54
55 (Kahneman, 2011). Heuristics originate from this bounded rationality. However, as the name
56
57 "bounded" suggests, these simplifying heuristic mechanisms can lead to predictable errors in
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 judgment since not all information is taken into account in this mental process (Flyvbjerg,
1
2 2021).
3
4
2.2. The fast-and-frugal paradigm
5
6
7 The fast-and-frugal perspective, on the other hand, favors heuristics. Considering them an
8
9
"ecological rationality, "which is defined as the "ability to exploit the structure of the
10 information in natural environments” (Goldstein & Gigerenzer, 2002, p. 76). Ecological
11
12 rationality describes personal and environmental circumstances that support inferences based
13
14 on heuristics. In some cases, heuristics may even be strategically reasonable (Gigerenzer et al.,
15
16 2022). This perspective is very different from the heuristics approach created by Kahneman et
17
18 al. (1986), which acknowledges the usefulness of heuristics in utilizing available environmental
19
20
data. According to Gigerenzer and Brighton (2009), heuristics are effective mental processes
21 that ignore data. Here, scholars investigate the rationale and timing of applying basic guidelines
22
23 to capitalize on environmental features. Heuristics include knowing what cues to look for in the
24
25 context of a given decision, when to stop looking for signals, and how to use the signals to make
26
27 a decision (Czerlinski et al., 1999).
28
29
30
Strategic management and entrepreneurship literature has been open to the impact of this debate
31 (Cristofaro & Giannetti, 2021). In contrast to the considerable discourse on heuristics in
32
33 psychology and cognitive science. This openness can go from research in entrepreneurship, and
34
35 strategic management to organizational theory (Bingham & Eisenhardt, 2011; Saab & Botelho,
36
37 2020). Additionally, by publishing in business journals, clinical psychology and cognition
38
39 scholars can apply their findings (Flyvbjerg, 2021; Gigerenzer et al., 2022).
40
41 It remains unclear if the literature on international business (IB), which recognizes that
42
43 organizations' worldwide expansions are significantly marked by uncertainty, has a comparable
44
45 openness or permeability. Nonetheless, it seems that in this particular context, heuristics and
46
47 types of judgment based on elementary principles have received very little attention especially
48
49 when it comes to SMEs. Understanding the nature of international decision-making and how
50
51
individuals make decisions is still crucial and demands further research.
52
53 3. Methodology
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55
56 Researchers may review and analyze earlier studies to locate critical dependent, independent,
57
58 and control variables and to clarify the broad principles underlying a phenomenon if it has been
59
60 well investigated (Cristofaro & Giannetti, 2021). Similarly, several academics have determined
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 that the best study strategy for compiling and synthesizing academic literature is a Systematic
1
2 Literature Review (SLR) (Cefis et al., 2022; Cristofaro & Giannetti, 2021). Unlike classic
3
4 narrative reviews, SLR helps use rigorous and repeatable assessment procedures and connect
5 future studies to the issues and concerns raised by previous studies (Tranfield, Denyer, and
6
7 Smart, 2003). In he following we discuss steps of the implemented SLR:
8
9
10 1) Scopus and Web of Science are the databases used to gather the scientific studies;
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12 2) To improve quality control, only peer-reviewed journal publications published in
13
14 English have been taken into consideration (see Tranfield et al., 2003);
15 3) The inclusion of one of the following six terms in the chosen abstracts attests to the
16
17 importance of the contributions to the topic: “heuristic*” OR “cognitive shortcut*” OR
18
19 “shortcut*” OR “rule of thumb*” OR “mental rule*” OR “cognitive rule*” (used
20
21 interchangeably by Kahneman (2011)). Resulting in 146,742 Scopus + 188,955 Web of
22
23 Science papers;
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25
4) The International SME theme's substantive relevance has been guaranteed by stipulating
26 that the chosen abstracts must include a minimum of one of the five terms listed below,
27
28 as recommended by Martineau et Pastoriza (2016): ("SME" OR "SMEs" OR "small
29
30 firms" OR "small enterprises" OR "small and medium enterprises" OR "small and
31
32 medium firms") AND ("internationalization" OR "internationalisation"). Databases
33
34 were combined and duplicates were removed, at this point, 56 results were preserved;
35
36
5) The resulting articles were scanned by reading all the abstracts by all the authors to
37 ensure their coherence between their ‘research question’ and ‘investigated variables’
38
39 were within the aim of this review. 10 results were generated;
40
41 6) The remaining papers were fully read to ensure their alignment with the research
42
43 objective. 7 results remained;
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45 7) Lastly, using the snowballing method, 4 papers were added. The final sample consists
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47
of empirical 11 papers.
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49 The 11 articles that came after were analyzed using a report with two stages that includes a
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51 descriptive and thematic analysis. The descriptive analysis provides a thorough grasp of the
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53 topic being examined, including the amount of research done on heuristics in the field of
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55 international SMEs throughout time, the journals that have done so, and the citations associated
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with it. A theme analysis is then carried out, which includes synthesizing individual studies and
58 presenting the results. The next sections provide more in-depth analysis.
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 4. Descriptive analysis
1
2
3 The investigation turned up 11 papers in all that discussed heuristics and were published in
4
prestigious IB journals between 1995 and 2021 (see the Appendix). Figure 1 illustrates how
5
6 studies on heuristics began to appear in prestigious publications mostly in 2015, with notable
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8 upticks in 2017 and 2021. We can talk about at least two likely causes for this tendency, even
9
10 if we are unable to completely explain it. First, as the above examples demonstrate, research on
11
12 international business has been heavily influenced by the discussion of heuristics in cognitive
13
14 science and psychology since the 2000s. This could have sparked heuristic research onward the
15 field of international SMEs. A second explanation might be found in the turbulence and
16
17 uncertainty that have characterized the global scene in recent years. This could have encouraged
18
19 managers and entrepreneurs to depend more heavily on heuristics when making international
20
21 decisions, thereby influencing the discourse among academics on the subject. The increasing
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23 focus of prestigious publications on heuristics presents a chance for academics.
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25 Table 1 displays the total amount of chosen papers within the time frame as well as the nine
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27 journals where they are published. The leading outlet for heuristics research is represented by
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29 International Business Review journal which hosts 33.33% of the selected papers in our SLR.
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31 The amount of citations obtained by the selected articles enables for the identification of some
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33 of the most 'influential' papers. Assuming that this study has certain limitations owing to the
34
35 sample size, which is too little for a scientometric analysis. The total number of citations is
36 4060. (Bell, 1995) remains The most cited article with 1935 citations. Followed by (Galkina &
37
38 Chetty, 2015) with 324 citations. Despite these data limitations, the matter under consideration
39
40 appears to be of academic relevance.
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 1
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23 Figure 1 Documents by year
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25
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27 Table 1
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29 Number of articles in each journal
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31 Journals N. papers
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33 International Business Review 3
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35 Journal of Small Business Management 1
36
37 European Journal of Marketing 1
38
39 Journal of Operations Management 1
40
41 Journal of Global Fashion Marketing 1
42
43 International Journal of Management and Enterprise 1
44
Development
45
46
47 Journal of Small Business Management 1
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49 Journal of International Business Studies 1
50
51 Management International Review 1
52
53 Total 11
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59
5. Thematic analysis
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 This analysis is based on the selected articles' key topic categories (see Table 2). The authors
1
2 highlighted four categories as study areas from the five that were highlighted by Guercini &
3
4 Milanesi (2020) in the IB domain: (i) foreign market entry; (ii) post-entry international
5 expansion; (iii) international entrepreneurship; (iv) foreign market selection.
6
7
8 Table 2
9
10 Thematic analysis overiew
11
12 Topic/area Authors/year N. articles
13
14 International (Barron et al., 2016; Galkina & Chetty, 2015; Khorrami et al., 5
15 entrepreneurship 2017; Niittymies, 2020; Perks & Hughes, 2008)
16
17 Foreign market entry (Oehme & Bort, 2015; Masiello & Izzo, 2019; Guercini & 4
18 Runfola, 2021; Gray et al., 2017)
19
20 Foreign market selection (Bell, 1995) 1
21
22 Post-entry international (Pellegrino & McNaughton, 2017) 1
23
expansion
24
25
26
27
28 5.1. International entrepreneurship
29
30 The category with the highest number of articles concerns "International entrepreneurship" with
31
32 5 articles: (Barron et al., 2016; Galkina & Chetty, 2015; Khorrami et al., 2017; Niittymies,
33
34 2020; Perks & Hughes, 2008). Barron et al., (2016) research focuses on SMEs' entrepreneurial
35
36 operations amid political crises, particularly the 2012 Euro crisis, by investigating their
37
38 information exploration and exploitation. The data implies that during crisis, SMEs,
39
40 particularly those reliant on the Eurozone for export sales, regularly acquire political
41 knowledge. According to the study, entrepreneurs and managers who have developed formal
42
43 processes for leveraging political information are more inclined to pursue new export
44
45 opportunities. The focus on "shortcut" scanning operations and the investigation of new export
46
47 potential outside of the Eurozone corresponds to the entrepreneurial features of international
48
49 business. Furthermore, the study defies norms by revealing that, in reaction to deteriorating
50
51
operational conditions, small enterprises might lower past commitments to export markets—a
52 point that is not generally stressed in the literature. This next research by Khorrami et al., (2017)
53
54 focuses on the entrepreneur's use of heuristics as a tool for overcoming ill-structured and
55
56 unpredictable challenges connected to SMEs' internationalization. The study relied on
57
58 grounded theory, and interviews with Iranian internationalized SMEs done over six months.
59
60 Their findings contribute to "the fast and frugal" literature since they question the norm by
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 showing that logic may not be as successful in situations impacted by uncertainty (ex., political
1
2 concerns). Instead, heuristics emerge as a helpful and relevant instrument that may assist
3
4 businesses in speeding up the internationalization process, particularly in developing nations
5 where access to trustworthy information is restricted. A taxonomic analysis also revealed that
6
7 the majority of heuristics principles are located in a hybrid group, showcasing the
8
9 multidisciplinary nature of heuristics. This departure from singular dimensions, such as strategy
10
11 or environment, adds depth to the understanding of the application of heuristics in SME
12
13 internationalization.
14
15 "Why do entrepreneurial managers in mid-sized firms take the decision to internationalize and
16
17 enter foreign markets?" is the topic that Perks & Hughes (2008) attempt to address. looking at
18
19 the reasons behind their choice to become global. The research indicates that, in contrast to
20
21 expectations, entrepreneurial managers in mid-sized companies might behave without taking
22
23 into account the initial resources, demonstrating a high degree of confidence in their capacity
24
25
to obtain resources from other sources, possibly through network relationships (both domestic
26 and foreign clients), The choice to go global is not just motivated by intuition, even if
27
28 entrepreneurial managers are frequently motivated by their innate entrepreneurial instincts.
29
30 Rather, it combines a strategic evaluation of the commercial case for internationalization with
31
32 entrepreneurial qualities. Therefore, using basic heuristics might be a logical "strategy" that
33
34 aligns with this advantage- and opportunity-seeking mentality.
35
36 The non-predictive logic of foreign market entry is one of the issues that the internationalization
37
38 process literature had previously ignored. This study by Galkina & Chetty (2015) examines
39
40 SME internationalization as an entrepreneurial process by fusing the effectuation theory from
41
42 entrepreneurship with the Uppsala model from international business. While the Uppsala model
43
44 clarifies the internationalization process at the business stage, effectuation theory aids in
45
46
understanding the process at the individual level, specifically the entrepreneurial decision-
47 making. The findings suggest that rather than having predefined internationalization objectives,
48
49 internationalization chances emerge via effectual reasoning based on how entrepreneurs create
50
51 networks and with whom. The latest research in this category is the investigation by Niittymies
52
53 (2020)who follows the evolution of heuristic decision-making processes in two Finnish SMEs
54
55 and finds that, while heuristics have a positive effect on internationalization planning,
56
57
entrepreneurial managers are unable to capitalize on this at the start of their very first
58 internationalization stages. Upon reaching a certain level of context-specific experience,
59
60 experience does not become a heuristic. This suggests that management teams need to surpass
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 a certain experience threshold in order to fully benefit from heuristic decision-making in an
1
2 unfamiliar environment. This is the study's most striking finding. Yes, the beneficial effects do
3
4 not materialize until a sufficient amount of context-specific experience has been acquired and
5 until the stimulus of an unforeseen occurrence initiates the translation of that experience into
6
7 actionable heuristics.
8
9
10 5.2. Foreign market entry
11
12
13 This second category concerns foreign market entry, with 4 articles dealing with several topics
14
in this area: choice of entry modes (Oehme & Bort, 2015), social network in the foreign market
15
16 entry process (Masiello & Izzo, 2019), export (Guercini & Runfola, 2021) offshoring and
17
18 reshoring (Gray et al., 2017). The extant literature on the choice of entry modes is challenged
19
20 by Oehme & Bort (2015) challenges the literature that currently exists on the choice of foreign
21
22 market entrance. This literature relies on the premise that to executives, the decision to enter a
23
24 foreign market is a single stage, logical, analytical decision. According to the authors, SMEs
25 often try to imitate the internationalization strategies of their network peers. Their results then
26
27 support this theory, showing that initially imitating others might act as an apparently practical
28
29 and low-risk shortcut to an internationalization process driven by experience. However, this
30
31 procedure is exact and depends on formal network state and connections. Their research
32
33 acknowledges the interaction of many learning sources and shows that SMEs' initial
34
35 internationalization mode decisions might lead to long-term diverging behavior.
36
37 In their investigation of the impact of interpersonal social networks on the exploration and
38
39 exploitation of opportunities overseas, Masiello and Izzo (2019) find that rather than actively
40
41 searching for market entry opportunities through planification, small firms frequently find these
42
43 opportunities through the flow of information and heuristics conveyed through direct and
44
45 indirect social ties, making internationalization a "social embedded" activity.
46
47 Guercini & Runfola (2021) investigate the heuristics that SMEs employ in business-to-business
48
49 marketplaces when making exporting decisions. Eight rules of thumb are listed, two of which
50
51 are "Discount as a rule," which the interviewee believes minimizes the uncertainty surrounding
52
53 non-payment, and "Product-market related rules," which can be summed up as "the product we
54
55 sell guides the foreign market we select"(2021, p. 6). The three categories that the authors
56 designate for all of the discovered heuristics are "Selecting export markets," "Defining the
57
58 product offering," and "Setting export prices". They encourage practitioners to become more
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60
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 knowledgeable about heuristics, and intuitive judgments since they could be more useful than
1
2 intricate algorithms that rely on a large amount of data.
3
4
(Gray et al., 2017) study provided insight into the decisions four US SMEs made regarding
5
6 reshoring and offshoring. The initial offshoring decision-relevant to our study-were made
7
8 without comparable data nor formal planning. Instead, the executives took on the challenge by
9
10 using the overly simplified lowest per-unit landed cost (LPLC) heuristic. which "is a
11
12 manifestation of the “take the best” heuristic (Gigerenzer and Brighton, 2009), which entails
13
14 comparing options on the basis of cues in the order of validity, then choosing the best option in
15 the first cue to discriminate" (Gray et al., 2017, p. 8).
16
17
18 5.3. Foreign market selection
19
20
21 Within this category, only one article proposes heuristics specific to foreign market selection.
22
23 Where (Bell, 1995) backs up the idea of "psychic distance" as a crucial consideration in the
24
25
export market selection process for Scandinavian companies, overall trends show that in the
26 early phases of export development, the majority of SMEs targeted "close" markets. Finnish
27
28 companies, for instance, focused on Sweden, Norway, and the former USSR—nations that are
29
30 close both geographically and culturally, and with whom Finland, has extremely strong
31
32 historical links. Similar to this, Norwegian businesses chose Sweden, the UK, or Finland, while
33
34 Irish businesses preferred the UK. It is argued that even if the heuristics are not the focus of this
35
study, an effective heuristic—which they refer to as "client followership"—suggests that
36
37 enterprises choose new export markets as a result of their domestic clients' international
38
39 strategies. The "stage" approach, which views internationalization as a predictable, linear
40
41 operation that happens in little, incremental phases, is refuted by their overall findings. Proof
42
43 of customer loyalty and hints that certain companies chose particular export markets due to
44
45 relationships with overseas vendors do provide a tenable explanation for how and why software
46 companies with these kinds of networks became global.
47
48
49 5.4. Post-entry international expansion
50
51
52 In this final category, Pellegrino & McNaughton (2017) present the results of a retrospective
53
54 longitudinal study of the learning processes and the sources of information of four New
55
56
Zealand-based SMEs, four of which internationalized rapidly, and four of which did so
57 gradually. The results show variances in the content and source of learning and that both slowly
58
59 and quickly internationalizing firms employ distinct learning mechanisms at different phases
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 of their internationalization. It is true that during the pre-internationalization period, congenital
1
2 learning predominates. Still, the authors assert that this phase is brief and that, once the firms
3
4 begin selling in foreign markets, experiential learning quickly takes the lead as the most popular
5 learning mechanism. According to one perspective, early choices concerning the firm's
6
7 internationalization strategy are greatly influenced by the knowledge that the founders and other
8
9 employees bring to the table. particularly the drive to swiftly and aggressively penetrate foreign
10
11 markets, but once internationalization gets underway, experience learning gains greater clout
12
13 and speeds up the process. It seems that one of the elements impacting learning processes was
14
15
shared by all the groups. is the availability of resources. The entire focus of learning was
16 impacted by resource limitations. Due to this lack, SMEs usually focused on learning about a
17
18 single aspect of their internationalization plan at a time, replacing the knowledge of their
19
20 distributors for experiential knowledge captured by heuristics. In general, the relative
21
22 significance of internal learning sources increased and the dependence on external sources
23
24 decreased as businesses expanded and allocated more resources. The focus of learning changed
25
26
from product knowledge to foreign market knowledge and general internationalization
27 expertise in both types of organizations during the early and later phases of internationalization.
28
29
30 Table 3
31
32 A typology of heuristics emerging from the SLR
33
34 Groups and approaches Heuristic types Authors
35
36 Group 1 – Research confronted with Fast-and- Positive heuristic (Niittymies, 2020)
37
38 heuristics-and biases or fast-and-frugal- frugal- contexts
39 heuristics approaches heuristics
40
41 Problem solving (Khorrami et al., 2017)
42
heuristic taxonomy
43
44 (organisational,
45
46 environmental and
47 strategic
48
49
Heuristics- Availability heuristic (Masiello & Izzo,
50
51 and biases 2019)
52
53 LPLC heuristic (Gray et al., 2017)
54
55
56 Group 2 – Research based on other psychological Effectuation (Galkina & Chetty,
57 approaches 2015)
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59
60
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62
63
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 Group 3 - Research oriented to heuristics specific to Imitation, network (Oehme & Bort, 2015)
1 international business position, and
2
3 international experience
4
5 experiential learning (Pellegrino &
6
7 McNaughton, 2017)
8
9 shortcuts during (Barron et al., 2016)
10
11 political crisis
12
13 domestic and foreign (Bell, 1995; Perks &
14
15 client followership Hughes, 2008)
16
17 Heuristics categorized (Guercini & Runfola,
18
in "Selecting export 2021)
19
20 markets," "Defining the
21
product offering," and
22
23 "Setting export prices".
24
25
26
27
28 6. Discussion and final remarks :
29
30
31 It is challenging to identify a single recurrent or dominating form due to the wide diversity of
32
33 research topics and methodologies. Table 3 illustrates at least three types of heuristic-related
34
35 works that the authors' reading and analysis of the international SME literature revealed. The
36
37 first group regroups articles that fit the "heuristics and bias paradigm" and the "fast and frugal
38 heuristics paradigm." In the first category we find two articles based on the set of heuristics
39
40 proposed by Kahneman and Tversky (1972) such as availability(Gray et al., 2017; Masiello &
41
42 Izzo, 2019). Two others fit the a "fast and frugal heuristics paradigm" whereby rules of thumb
43
44 are recognized as useful heuristics in the internationalization processes (Khorrami et al., 2017;
45
46 Niittymies, 2020). However, we couldn't find any research that contrasts the two methods.
47
48
Additionally, there is a nuance in the findings since the research we studied do not differentiate
49 between risk and uncertainty. This established the framework for further research in the field
50
51 of international business. This research could build on the discussion surrounding heuristics in
52
53 the clinical psychology literature to determine whether certain heuristics that businesses can
54
55 use to expand internationally are sources of biases or models for quick decisions that can be
56
57 made efficiently without requiring a lot of data.
58
59
60
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62
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 Other psychologically based research is included in the second set of studies. Unlike the
1
2 previous set of articles, the new heuristics can be connected to psychologically based methods,
3
4 such the effectuation theory, which has a distinct theoretical foundation. Future studies in this
5 field might be helpful in determining how useful these heuristics are for making decisions on
6
7 an international level.
8
9
10 Research focused on heuristics particular to international business is included in the third set of
11
12 studies. Several heuristics in this area are directly drawn from the IB domain. To name a few,
13
14 heuristically based choices on market entrance are dependent on the firm's overall prior
15 international experience, the entrepreneur, or management. Experiential learning comes from
16
17 prior international experience, which suggests that information is accumulated and stored to
18
19 inform judgments about entering foreign markets. Other heuristics relate to familiarity with the
20
21 nation or the clients giving the SME a "psychic distance". Add to that the imitative behavior
22
23 that arises when businesses see the actions of others and the results they get, absorb the
24
25
knowledge, and utilize it as the foundation for their action. Nevertheless, the majority of these
26 papers employ the word without giving the underlying idea any special weight, creating a clear
27
28 contrast with the findings that surfaced in a transdisciplinary setting, or establishing the ability
29
30 to understand the findings for the target field. These cover every topic that needs more
31
32 investigation. Future study should focus on gaining a greater understanding of the many types
33
34 of heuristics that are frequently cited, such as prior experience, imitation behaviors, and
35
36
organizational capacities, as well as how they are used and what results they produce. This is
37 especially true for the heuristics specific to international business, researchers need to compare
38
39 them to heuristics identified in the psychology filed in order to gain a better understanding of
40
41 them and especially avoid inventing new terminologies of previously identified heuristics
42
43 which can lead to a sparse literature if ignored.
44
45
46
As a result, the findings of this literature study attest to the fact that the IB literature extends the
47 idea of heuristics in a wide range of manners, with a tendency to create several approaches
48
49 rather than just a few recurrent or dominating forms. Nonetheless, there are limitations to our
50
51 literature review. In terms of technique, the literature review does not encompass the entire
52
53 spectrum of academic databases within the subject of international business because it is based
54
55 on Scopus and WOS. Additionally, only empirical papers were assessed leaving out book
56
57
chapters, editorials, books, notes, conference reviews. This might lead to an interpretation bias.
58 A further limitation is to the chosen keywords and strings, which could have prevented the
59
60 finding of pertinent research. Lastly, the manual literature review procedure used in the
61
62
63
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 methodology, together with the manual screening and analysis, may have introduced
1
2 unintentional bias.
3
4
Appendix A. Authors, title, year, source title
5
6
7 N Authors Title Year Journal
8
9
1 Barron & Hultén & The Role of Political Intelligence in Firms’ 2016 Journal of Small Business
10
11 Vanyushyn Export Decisions During the Euro Crisis Management
12
13 2 Galkina & Chetty Effectuation and Networking of 2015 Management International
14
15 Internationalizing SMEs Review
16
17 3 Khorrami & Zarei.B Heuristics of the internationalisation of SMEs: 2017 International Journal of
18
19 & Zarei. M A grounded theory method Management and Enterprise
20 Development
21
22
23 4 Niittymies Heuristic decision-making in firm 2020 International Business
24 internationalization: The influence of context- Review
25
26 specific experience
27
28 5 Perks & Hughes Entrepreneurial decision-making in 2008 International Business
29
30 internationalization: propositions from mid-size Review
31 firms
32
33
34 6 Oehme & Bort SME internationalization modes in the German 2015 Journal of International
35 biotechnology industry: The influence of Business Studies
36
37 imitation, network position, and international
38 experience
39
40
41 7 Masiello & Izzo Interpersonal Social Networks and 2019 Journal of Small Business
42 Internationalization of Traditional SMEs Management
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44
45 8 Guercini & Runfola Heuristics in decision-making by exporting 2021 Journal of Global Fashion
46 textiles SMEs Marketing
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48
9 Gray & Esenduran & Why in the world did they reshore? Examining 2017 Journal of Operations
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50 Rungtusanatham & small to medium-sized manufacturer decisions Management
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52 Skowronski
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54 10 Bell The internationalization of small computer 1995 European Journal of
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software firms: A further challenge to “stage” Marketing
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57 theories
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59
60
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 11 Pellegrino & Beyond learning by experience: The use of 2017 International Business
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