Management and Organization Review 15:2, June 2019, 307–340

doi: 10.1017/mor.2019.25

Institutional Bridging for SME High-Distance

Internationalisation to China: A Contextualised
Explanation

Carole Couper
Sheffield University Management School, UK

ABSTRACT This article offers a contextualised explanation of the process of institutional

bridging by Delta, a British SME, in order to internationalise to China across high
institutional distance. The study uncovers three novel mechanisms of ‘Cross-institutional
Dissonance Mitigation’, ‘Multi-level Strategic Embedding’, and ‘Cross-institutional
Consonance Retuning’ to explain how and why a failing SME with limited resources and
networks was able to bridge the institutional distance and internationalise to the
challenging Chinese market. This article contributes to the literature on SME
internationalisation across high institutional distance by opening the ‘black box’ of SME
institutional bridging, hence demonstrating the benefits of contextualised explanations to
extend research into internationalisation phenomena that span multiple institutional
boundaries.

KEYWORDS contextualised explanation, institutional bridging, institutional distance, SME

internationalisation, UK/China

INTRODUCTION
Over the last two decades, ‘West-Meets-East’ business interactions that involve
SMEs as opposed to larger firms have been increasing (Li & Ma, 2015; Lin, Lu,
Li, & Liu, 2015). The high institutional distance that characterises those interac-
tions (Child, Rodrigues, & Frynas, 2009) presents SMEs with complex challenges,
especially when distance equates with a lack of appropriate knowledge and net-
works (Fletcher & Harris, 2012; Ojala, 2009). While some SMEs may benefit
from being managed by transnational entrepreneurs (Lin et al., 2015), this is
hardly the case for the majority of internationalising SMEs. So how do these
smaller firms manage to overcome the challenges of internationalisation across
high institutional distance?
The literature suggests that in order to internationalise across institutional dis-
tance, SMEs must ‘span the institutional distance between national contexts’, an
entrepreneurial capability described as ‘institutional bridging’ (Karra, Phillips, &
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 308 C. Couper
Tracey, 2008: 447). Through institutional bridging, SMEs may acquire the right
social and cultural knowledge, develop the appropriate networks for international-
isation and increase their stocks of human capital in order to operate in the host
market. Bridging is rooted in the social networks’ literature (Burt, 1995) and
implies a process where access to a suitable network bridging connection is
achieved. When the distance between home and host markets is high however,
SMEs may not have access to the right networks in order to internationalise
(Ellis, 2011; Ojala, 2009), making the institutional bridging process more challen-
ging. Internationalisation across high institutional distance leaves SMEs with a
conundrum: how do they successfully bridge high institutional distance without
appropriate knowledge and networks?
Solving this puzzle has important implications. Despite the impact of the insti-
tutional distance on internationalisation (Estrin, Baghdasaryan, & Meyer, 2009;
Meyer, Estrin, Bhaumik, & Peng, 2009), research exploring how institutional dif-
ferences may be reconciled is scarce (Child & Marinova, 2014). SMEs have also
been shown to be more sensitive to the effects of differences in institutional
context (Schwens, Eiche, & Kabst, 2011), while research interested in SME inter-
nationalisation across high institutional distance remains limited (Baum, Schwens,
& Kabst, 2015). From a theoretical perspective, explaining how and why SMEs
may bridge high institutional distance would improve extant knowledge of high
distance SME internationalisation. Furthermore, identifying mechanisms that
may explain the process of high distance institutional bridging would illustrate
how and why the institutional distance may be managed and support an increasing
number of smaller firms (Li & Ma, 2015; Lin et al., 2015) in their attempts to inter-
nationalise to distant markets.
This article investigates and explicates SME institutional bridging for high
distance internationalisation by offering a contextualised explanation (Welch,
Piekkari, Plakoyiannaki, & Paavilainen-Mäntymäki, 2011) of the highly successful
internationalisation to China, and through institutional bridging, of Delta, a British
SME. Sensitivity to context is particularly critical in internationalisation studies
that span multiple institutional settings (Child, 2009; Welch et al., 2011), although
accounting for context when theorising remains a challenge. Contextualised expla-
nations (Welch et al., 2011) offer an alternative approach to theorizing that recon-
ciles context and explanation through the case-based study of phenomena within
their rich context. Contextualised explanations are underpinned by a critical
realist ontology (Bhaskar, 2014). The critical realist’s stratified view of the world
is particularly appropriate for the study of complex phenomena that are best
explained holistically through the discovery of deep-seated and unobservable
causal mechanisms (Pajunen, 2008; Welch et al., 2011). By studying an insightful
case of institutional bridging within its context, this article offers a holistic explan-
ation of the mechanisms (how and why) that caused Delta to span the institutional
distance to China. More specifically, Delta’s institutional bridging process was
explained through three causal mechanisms, labelled ‘Cross-institutional
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 Institutional Bridging in SME Internationalisation 309
Dissonance Mitigation’, ‘Multi-level Strategic Embedding’, and ‘Cross-institu-
tional Consonance Retuning’. These mechanisms enabled Delta to internationalise
across high institutional distance in spite of significant resource and network
constraints.
Through the contextualised explanation of Delta’s institutional bridging
process, this article offers two core contributions. First, the study extends the
current theory of ‘institutional bridging’ as a capability for entrepreneurial inter-
nationalisation (Karra et al., 2008) by offering an explanation of the process of insti-
tutional bridging by the internationalising SME across high institutional distance.
By doing so, this article also extends theory of SME internationalisation across high
institutional distance (Coeurderoy & Murray, 2008; Ellis, 2011; Kiss & Danis,
2008; Ojala, 2009; Schwens et al., 2011) by providing an explanation of some
of the mechanisms that may enable resource-constrained internationalising
SMEs to overcome the challenges of high institutional distance. Current theory
of SME internationalisation across institutional distance highlights the impact of
high institutional distance (e.g., Coeurderoy & Murray, 2008). This article goes
further and offers a theoretical explanation of the mechanisms that may mitigate
the challenges of high institutional distance and support the internationalisation
of SMEs in that context. Second, this article presents a methodological contribu-
tion by applying the contextualised explanation perspective (Welch et al., 2011)
to an empirical case of internationalisation across high institutional distance. In
so doing, this article demonstrates the benefits of contextualised explanations for
theorising in a way that is sensitive to differences in institutional context (Child,
2009; Welch et al., 2011), hence reconciling explanation and context. Finally,
this article offers some novel methodological insights into the conduct of qualitative
research in the emerging market of China.

THEORETICAL BACKGROUND
The Impact of High Institutional Distance on SME Internationalisation
This article aims to explain the process of institutional bridging in the context of
SME internationalisation across high institutional distance. When the institutional
distance present between markets is high, firms and individuals will be embedded
into significantly dissimilar institutional frameworks. Institutions are ‘comprised of
regulative, normative and cultural-cognitive elements that, together with asso-
ciated activities and resources, provide stability and meaning to social life’
(Scott, 2008: 51). Regulative institutions are coercive rules which are legally sanc-
tioned; they are complemented with normative and cultural-cognitive institutions
which are based on socially binding expectations (norms) and taken-for-granted
shared understanding (or cognitive frames of reference). As a result, the latter infor-
mal components of institutions are ‘morally governed’ and ‘culturally supported’
(Scott, 2008: 52).
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 310 C. Couper
Extant internationalisation research (Abdi & Aulakh, 2012; Brunning,
Sonpar, & Wang, 2012; Orr & Scott, 2008) highlights that the absence of
common rules, shared normative expectations and mutual understanding can
have a negative impact on firms’ internationalisation. Orr and Scott (2008)’s
case studies of large scale global projects for instance introduced the term ‘institu-
tional exceptions’ to describe how variations in rules, norms and cultural beliefs
impeded the success of cross-border collaborative projects. Brunning et al.
(2012) also highlighted that differences in values, attitudes, norms, and beliefs
could negatively impact the performance of Western expatriates in China by cre-
ating ‘dissonance’. Abdi and Aulakh (2012) found that differences in the informal
institutional arrangement between large firms created difficulties in the governance
of their relationships.
Due to resource-limitations, internationalising SMEs are more sensitive to dif-
ferences in institutional context than larger firms (Schwens et al., 2011). When the
institutional distance (Kostova, 1999) that separates an SME’s home market from
the prospective host market is high, SMEs often lack knowledge of focal markets
(Fletcher & Harris, 2012), making internationalisation more challenging. In spite
of the importance of the institutional distance in the international business litera-
ture (Estrin et al., 2009; Meyer et al., 2009), studies investigating this dimension in
the context of small firms’ internationalisation are limited (Baum et al., 2015). Rare
examples include research showing that regulatory distance will impact location
decision for high-tech SMEs (Coeurderoy & Murray, 2008), while Kiss and
Danis (2008) highlight how a country’s institutional context may moderate the
effect of weak and strong ties on the speed of internationalisation. This begs the
question as to how SMEs may be able to overcome the challenges of institutional
distance in order to internationalise.

Institutional Bridging for SME Internationalisation across High

Institutional Distance
The consensus within the small firm’s internationalisation literature is that SMEs
may overcome their resource limitations by drawing on their networks (Baum
et al., 2015; Coviello, 2006). Networks have been portrayed as critical, with
small firms’ internationalisation commonly pictured as driven by existing inter-
national networks (Cabrol, Favre-Bronte, & Fayolle, 2009; Coviello & Munro,
1997; Evers & O’Gorman, 2011). Networks can also provide SMEs with knowl-
edge of foreign market opportunities (Ellis, 2000) and learning from networks is
deemed essential for smaller firms’ international growth post-entry
(Prashantham & Dhanaraj, 2010). On that basis, Karra et al. (2008: 447)
suggest that in order to internationalise across institutional distance, SMEs must
‘span the institutional distance between national contexts’, an entrepreneurial cap-
ability described as ‘institutional bridging’. Through institutional bridging, SMEs
may acquire the right social and cultural knowledge, develop the appropriate
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 Institutional Bridging in SME Internationalisation 311
networks for internationalisation and increase their stocks of human capital in
order to operate in the host market.
Bridging takes its roots in social network theory (Burt, 1995, 2011) and
involves creating a bridge (new connection) between two network points ‘where
there is no effective indirect connection between third parties’ (Burt, 2011: 24).
In other words, it involves building a link between two individuals that are not
otherwise connected through any other indirect connection. Although Burt’s
theory is particularly useful in settings characterised by rapid and dynamic
changes in complex knowledge (Yu, Brett, & Oviatt, 2011), such as dynamic emer-
ging markets’ environments, institutional bridging as an enabling capability for
smaller firm internationalisation is a weak proposition in the presence of high insti-
tutional distance.
First, bridging implies a process where identification and access to a suitable
network bridging connection is pursued: when the distance between home and host
markets is high, networks themselves may be constrained by institutional distance
(Ellis, 2011). In that context, SMEs may not possess the right networks to support
internationalisation (Ojala, 2009; Fletcher & Harris, 2012) and bridge the institu-
tional distance. SMEs must instead proactively identify new connections in order to
create a bridge to the focal market and internationalise (Hara & Kanai, 1994;
Loane & Bell, 2006; Tang, 2011). How firms and individuals may bridge new net-
works, especially when the impact of the high distance is likely to hinder that
process, is unclear. The bridging process is not discussed by Burt in his work
‘partly because the processes that people use in bridging are so varied and sensitive
to context’ (Burt, 2011: 87).
Herein lies a conundrum for the theory of SME internationalisation across
high institutional distance. For the SME to internationalise across high institutional
distance, ‘institutional bridging’ (Karra et al., 2008) is a must-have entrepreneurial
capability. In the study’s focal context of SME internationalisation across high
institutional distance (Kostova, 1999) however, institutional bridging is particularly
challenging due to a lack of appropriate knowledge and networks (Fletcher &
Harris, 2012; Ojala, 2009). How therefore can institutional bridging for SME
internationalisation across high institutional distance be explained?

Theoretical Gap and Contributions

The earlier discussion highlights some knowledge gaps and leads to important
research questions. The literature that integrates SME internationalisation with
network bridging (Burt, 1995, 2011) and institutional distance (Kostova, 1999)
remains primarily focused on the impact of institutional distance. As a result, the
explanation of the process and mechanisms that enable institutional bridging for
SME internationalisation across high institutional distance remains limited
(Jennings, Greenwood, Lounsbury, & Sudaby, 2013). The larger firm internation-
alisation literature does shed some light as to the types of mechanisms that may
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 312 C. Couper
underpin ‘institutional bridging’, although deeper explanations are lacking. Abdi
and Aulakh (2012) suggest for instance that arrangements developed between
firms have the capacity to overcome the difficulties created by differences in the
informal institutional arrangement. The use of a large survey however does not
reveal the mechanisms behind the effectiveness of those ‘informal arrangements’.
More interestingly, Brunning et al. (2012: 445) propose that the ‘dissonance’
created by differences in informal institutions between Western expatriates and
their Chinese colleagues can be better tuned through ‘socializing activities’,
although how and why this may be so remains unexplained.
The ability of internationalisation theory to explain how and why SMEs are
able to internationalise across high institutional distance matters. Globalisation and
the increasing dominance of emerging markets have led a growing number of
SMEs to internationalise further away from home (OECD, 2017). Besides, inter-
nationalisation that takes place between distant Western and Eastern markets –
including between the West and China – (Lin et al., 2015) is increasing; and
with SMEs representing over 99% of firms in both the UK and China (Li &
Ma, 2015), UK-China interactions increasingly involve SMEs, as opposed to
their larger multinational counterparts. From theoretical, policy and managerial
perspectives, explaining how and why SMEs may internationalise across high insti-
tutional distance through ‘institutional bridging’ (Karra et al., 2008) is both topical
and timely. On that basis, this article aims to contribute to extant theory of small
firm internationalisation and explain the process of institutional bridging in the
context of SME internationalisation across high institutional distance.

METHODS
Research Design
The study develops a ‘contextualised explanation’ (Welch et al., 2011) of the
process of institutional bridging for SME internationalisation across high institu-
tional distance and is informed by a critical realist ontology (Bhaskar, 2014).
The critical realist’s stratified view of reality allows context ‘to be an active
player in the nature of the world’ (Peters, Pressey, Vanharanta, & Johnston,
2013: 339), hence promoting theorising through contextualised causal explana-
tions (Easton, 2010; Welch et al., 2011). Social reality is conceptualised across
three strata – or dimensions – labelled as the domains of the empirical – or
factual – (human experience of occurring events), the actual (occurring events)
and the real (the mechanisms that may generate events if operationalised under
certain conditions) (Bhaskar, 2014; Peters et al., 2013).
As an epistemological approach, the contextualised explanation offers an
effective response to current theoretical and methodological debates around the
importance of the context in internationalisation theory (Welch et al., 2011);
and this is particularly true for theories of internationalisation that involve
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 Institutional Bridging in SME Internationalisation 313
China, where debates on the role played by the ‘unique’ Chinese context in theor-
ies of management is on-going (Child, 2009; Child & Marinova, 2014; Meyer,
2015). Theorising through contextualised explanation is characterized by ‘a very
particular view of causality as a complex and dynamic set of interactions that
are treated holistically’ (Welch et al., 2011: 754). In other words, as per the critical
realist view, causality does not simply refer to the relationship between two vari-
ables (cause and effect) but raises the question of ‘what caused an event to
happen’ (Mason, Easton, & Lenney, 2013; Sayer, 1992).
Case study research is a particularly suitable design to ‘explain in context’,
since this form of theorising requires in-depth qualitative analysis of ‘individual
agents within their causal contexts’ (Welch et al., 2011: 748). Cases allow the con-
struction of ‘causal chains of events’ (Welch et al., 2011) through process tracing
(George & Bennett, 2005), where the researcher works backwards from a specific
outcome (Delta’s successful institutional bridging to China) to retrace the multiple
steps leading to that outcome. The explanation revolves around explaining how
each step led to the next through the identification of underlying causal
mechanisms.
In order to study institutional bridging in the context of SME international-
isation across high institutional distance, I also worked from a single case study.
Single case studies are particularly appropriate for contextualised explanations:
working on the basis of a single case allowed me to immerse myself into the com-
plexity of the case and analyse the experience of participants, events and contextual
structure over time (Easton, 2010). The case was also selected as an insightful case
of institutional bridging in the context of SME internationalisation across high
institutional distance (Matthyssens, Vandenbempt, & Bockhaven, 2013).

Case Selection and Overview

The focal firm is Delta, a British SME manufacturing engineered industrial pro-
ducts, established in the 19th century. The need for an explanation often originates
in a surprising observation, or from an outcome that does not meet expectations,
suggesting that current explanations may not be suitable and that unknown causal
mechanisms may be at play (Welch et al., 2011). In this study, extant knowledge
implies that bridging high institutional distance in the context of SME internation-
alisation is challenging, especially for firms lacking appropriate knowledge and net-
works (Fletcher & Harris, 2005). My serendipitous encounter with DeltaUK in
2011, in the context of a broader research project on network development
between the UK and China, presented such a perplexing picture. Delta was on
the brink of bankruptcy, back in 2006, when it was forced to move some of its
manufacturing operations to China. Besides, the small firm initially lacked any
knowledge of the Chinese market or appropriate network relationships to
support its internationalisation. Nonetheless, by 2011, when I first met Delta
UK’s Managing Director (from here on DeltaUK MD), the British SME owned
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 314 C. Couper
an extremely successful Chinese manufacturing subsidiary, DeltaChina. By the
time of the last interviews in 2014, the company was thriving and drew 50% of
its profits from its Chinese operations: a very dissimilar firm from the near-bank-
ruptcy one of 2006, pre-China entry.
An observation drawn from my practice of UK-China internationalisation is
that initial appearance of success in internationalisation to China by UK SMEs can
be misleading, with sudden catastrophic internationalisation network and relation-
ship collapse after three or four years of seemingly successful operation in the
market. For that reason, Delta, with its extremely successful record after more
than four years in the market at the time of the first interview, was deemed a par-
ticularly insightful study case. How and why had struggling, network-limited and
knowledge-lacking Delta managed to internationalise to China so successfully?
During the initial interview of Delta’s MD, I discovered that Delta UK had inter-
nationalised on the strength of a key bridging connection between the MD and its
key Chinese Representative, i.e., through institutional bridging. Besides, the UK
and China are separated by high distance (Child et al., 2009), hence the case’s
context was ideal to develop a contextualised explanation of the institutional bridg-
ing process across high institutional distance.

The Researcher’s Prior Knowledge of the Context

The ‘contextualised explanation’ of a phenomenon through case study (Welch
et al., 2011) involves digging beyond the empirically ‘observable’ (Bhaskar,
2014) in order to unearth explanatory mechanisms that encompass both human
agency – or ‘intentionality’ – and actors’ positions within the social structure
(Welch et al., 2011: 748). Delving below the surface in the context of Delta’s inter-
nationalisation to China presents academic researchers with some significant and
unique challenges as the research context spans multiple and highly dissimilar insti-
tutional frameworks. As a result, the ability of the researcher to dig below the
observable, in order to offer a meaningful explanation, requires in-depth familiar-
ity with the context and topic. In other words, the researcher must possess an in-
depth understanding of the UK and Chinese institutional frameworks, as well as
the SME internationalisation context. As a result, meaning and explanation of
the phenomenon are derived inter-subjectively (Sayer, 1992) through the co-
created interpretation of meaning, which is aligned with a critical realist
philosophy.
Co-created causal explanations must have ‘practical adequacy’ to be valid
however, i.e., knowledge must generate expectations about the phenomenon
that are realised and vary according to context (Sayer, 1992). For adequate knowl-
edge to be developed through a ‘contextualised explanation’, the researcher must
possess in-depth knowledge of the research context within which the phenomenon
to be explained is set. For the avoidance of doubt, I happen to possess such an in-
depth knowledge having studied in China and the Chinese language since 1981,
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 Institutional Bridging in SME Internationalisation 315
and have been engaged in the practice of international business between the UK
and China since the early 1990s. I was able, as a result, to draw from my own
experience of UK/China internationalisation, and my knowledge of the dual insti-
tutional contexts, in order to delve below the surface of the informants’ explicit
‘intentionality’, and expose the deep mechanisms at play underneath the observ-
able phenomenon. I was nonetheless careful not to let my prior (personal) experi-
ence bias the explanation through a reflective process where I cycled iteratively
between the literature, the explanation and the data. I further endeavoured to
search for alternative explanations of the phenomenon (Sayer, 1992), through
the involvement of three UK-China internationalisation experts and three aca-
demics with experience of the UK-China institutional and internationalisation
contexts; their roles were to act as ‘devil’s advocates’ and question the emerging
explanation. Finally, I was careful to provide a transparent and detailed explication
of the data collection and analysis process, which are now discussed in greater
detail.

The Data Collection Process in View of Critical Realism

The study’s critical realist ontology implies that the explanation of the phenom-
enon that is ‘institutional bridging in the context of SME high distance internation-
alisation’ will involve regressing from reasons and events, down to inferred rules
and finally to structures (Sayer, 1992). In practical terms, this means moving
from the empirical data down to reasons and rules in order to infer structures at
the level of the real (Bhaskar, 2014; Sayer, 1992). Structures, from a critical
realist perspective, are ‘sets of internally related objects or practices’ (Sayer,
1992: 92). The structure of a phenomenon can be discovered by asking questions
such as ‘what does the existence of this event presuppose’? ‘Can this happen on its
own? If not, what else must be present’?
The ‘reasons’ behind events or actions can be apprehended empirically
through the interview process, albeit via participants’ own interpretations of
events which may be ‘idealized’ and divergent (Piekkari, Plakoyiannaki, &
Welch, 2010). Participants may not necessarily be aware of the full range of
reasons guiding their own behaviour either (Sayer, 1992): informal institutional
rules that guide human behaviour for instance have often been internalised,
hence becoming invisible to participants. In order to mitigate this limitation and
to collect a ‘multivoiced’ (Piekkari et al., 2010: 111) interpretation of events, I
endeavoured to collect data across a wide range of participants, within and out
with Delta, each with diverse perspectives of the events of interest. Data was
also collected through a variety of methods, including interviews, observation
and documentary material (Piekkari et al., 2010; Welch et al., 2011).
As the research setting spanned home and host markets, access was negotiated
with key actors on both sides of the organisational bridging dyad (Piekkari et al.,
2010): the intent was to combine – as opposed to compare – dual institutional
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 316 C. Couper
perspectives (e.g., Carney, Dieleman, & Taussig, 2015). Interviews of UK-China
internationalisation and institutions experts were also conducted to gather in-
depth knowledge of the context within which actors were positioned.

The Interview Process

Over the next three years (2012–2014), I travelled multiple times between the UK
and China and conducted 21 interviews of relevant Delta’s employees, alongside
external contacts with knowledge of Delta (Table 1) and experts in UK-China
internationalisation process and setting.
During the interviews, participants were first asked to relate the process fol-
lowed by Delta in order to internationalise to China. This line of questioning
led to the gathering of a temporal sequence of events (Sayer, 1992) as experienced
by the participants. I then proceeded to ask participants to explain why certain
events had taken place the way they did: this approach led informants to enter
into a reasoned explanation of events (Sayer, 1992). I proceeded to dig deeper
into the reasoned explanation by asking participants to explain their behaviour
and reasoning further. By digging beneath the surface, I was able to gain insight
into institutional rules and norms that had shaped events without participants
being aware of their influence (Sayer, 1992).
In addition, the two core informants, DeltaUK Managing Director (from
here on DeltaUK MD) and DeltaChina General Manager (from here on
DeltaChina GM) were interviewed on repeated occasions. I was therefore able
to explore any evolution in their perspectives, as well as probe deeper into their
explanation of Delta’s internationalisation. For instance, in his first interview,
DeltaUK MD mentioned searching for a Chinese National in the UK as a poten-
tial representative of DeltaChina. This was surprising as, from my prior knowledge
of UK-China internationalisation, I was aware that most firms would tend to
search for a China representative within the Chinese market, where the search
population is much larger. During the second interview of DeltaUK MD, I
delved deeper by asking why he had decided to identify a Chinese National in
the UK as opposed to China. The ensuing discussion unearthed DeltaUK’s
concern that the future representative should have dual understanding of both
the British and Chinese environments. I was then able to dig further and
explore why DeltaUK was keen on duality, which unearthed a previous negative
experience with the high distance market of India. As a result, DeltaUK had
been sensitized to (a) the challenges of high institutional distance and (b) the
importance of dual ‘UK-high distance market familiarity’ to overcome those chal-
lenges. This was one in a myriad of examples of the way the data was collected and
the explanation was developed; hence data collection and analysis, although pre-
sented linearly in the article, were conducted in an iterative manner, with early
analysis leading to further data collection in order to dig deeper into emerging
findings.
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Table 1. Data collection schedule

Interview participant Date Notes

1 DeltaUK MD May 2012 1st interview, UK Head office, notes

2 August 2012 2nd interview, UK Head Office, digital recording

Institutional Bridging in SME Internationalisation

3 January 2014 3rd interview, UK Head Office, digital recording
3 DeltaUK FD January 2014 1st interview, UK Head Office, digital recording
4 DeltaChina GM March 2012 1st interview, visit of Chinese factory, followed by lunch, notes
5 October 2012 2ndt interview, China office/factory, digital recording
© 2019 The International Association for Chinese Management Research

6 November 2013 3rd interview, China office/factory, digital recording

7 DeltaChina GM + DGM June 2013 Informal interview, Scotland, field notes
8 DeltaChina DGM November 2013 2nd interview, China office/factory, digital recording
9 DeltaChina TD November 2013 1st interview, China office/factory, digital recording
10 DeltaChina FM November 2013 1st interview, China office/factory, digital recording
11 DeltaChina SM November 2013 1st interview, China office/factory, digital recording
12 DeltaChina PM November 2013 1st interview, China office/factory, digital recording
13 DeltaChina PurchM November 2013 1st interview, China office/factory, digital recording
14 UK-China trade expert, Chinese March 2012 1st interview, China office, notes
15 UK-China trade expert, Chinese October 2012 2nd interview, digital recording
16 UK-China trade expert with knowledge of Delta case, British August 2011 1st interview, UK office, digital recording
17 UK-China trade expert with knowledge of Delta case, British March 2013 2nd interview, UK office, notes
18 Chinese government official with knowledge of Delta case, Chinese October 2012 China government offices, digital recording
19 UK-China legal expert January 2014 1st interview, phone, notes
20 UK-China legal expert January 2014 2nd interview, UK office, digital recording
21 UK-China practice expert, British October 2012 1st interview, China offices, digital recording

DeltaUK MD: Delta UK Managing Director DeltaUK FD: Delta UK Finance Director
DeltaChina GM: Delta China General Manager DeltaChina DGM: Delta China Deputy GM
DeltaChina TD: Delta China Technical Director (British) DeltaChina FM: Delta China Finance Manager
DeltaChina SM: Delta China Sales Manager DeltaChina PM: Delta China Production Manager
DeltaChina PurchM: Delta China Purchasing Manager

317
Source: The Author
 318 C. Couper
Observation. Interviews as the sole source of data have limitations (Piekkari et al., 2010)
as respondents are rarely aware of the effects of the real (Bhaskar, 2014) reasons that
may influence both their behaviour and the observed events (Sayer, 1992). Instances
of observation supported the interview data by offering insights into the running of
DeltaChina and the behaviour of DeltaChina GM when interacting with either
British or local Chinese staff and visitors. Observational data was recorded through
field notes (Corbin & Strauss, 2008: 123) that included both observational and ana-
lytical remarks about the context and the behaviour of the participants.
Two occurrences of observation took place at the same time as the interviews
of DeltaChina GM in March 2012 and October 2012 in China. I was able to
observe (a) a meeting between DeltaChina GM and two British members of a
UK delegation and (b) Delta interact with employees and factory staff while she
was visiting Delta’s Chinese factory and offices. The observation of the interaction
between DeltaChina GM and members of the delegation offered evidence of
changes in his behaviour when switching between British and Chinese audiences.
It suggested that invisible rules (Sayer, 1992) operated below the surface, leading
DeltaChina GM to modify his behaviour. On a later visit to Delta’s Chinese sub-
sidiary, I was further able to observe DeltaChina GM’s adapting his communica-
tion style when engaging with his local Chinese staff and when interacting with his
British Technical Director (from here on DeltaChina TD).
During the observation periods, I was also able to chat informally with local
DeltaChina staff, which helped establish rapport with Chinese participants that
were later interviewed. This is an important part of the research process in a
China context where building trust with research participants is essential
(Stening & Zhang, 2007).

Documentary material and expert interviews. Documentary material and expert interviews
were mainly used for further contextualisation of the emerging explanation of
Delta’s internationalisation to China. Documentary resources offered a more
‘operational’ perspective of Delta than self-reported and potentially ‘idealised’
interview data (Piekkari et al., 2010). The material included company brochures
and general company information, both in English and Chinese, as well as inter-
net-based press releases covering the period 2011 to 2018.
In addition, I interviewed five UK-China trade and practice experts, two
being Chinese Nationals (a UK-China Trade expert and a Government Trade
Official) and three being Caucasians (one SME UK-China internationalisation
practitioner, one Government trade expert and one legal UK-China expert).
Three of the experts had direct knowledge of Delta’s internationalisation to
China and were able to clarify some of the context surrounding Delta’s inter-
nationalisation process. Among those was a UK local government China trade
expert with personal knowledge and experience of the Delta case from the initial
decision to enter the Chinese market in 2006 to more recent events. He was
able to clarify some of the context and build on DeltaUK MD and DeltaChina
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 Institutional Bridging in SME Internationalisation 319
GM’s accounts of the early stages of Delta’s internationalisation to China. The
legal expert offered in-depth knowledge of the UK and Chinese formal institu-
tional environments – and of their differences. Experts were also asked for feedback
about the explanation as it emerged, with their feedback leading to some minor
refinements in relation to contextual factors.

Data Analysis
Analysing data in light of a critical realism ontology and contextualised explanation approach.
Explaining in context (Welch et al., 2011) requires contextualising phenomena
and their constituting events to identify the conditions that are necessary for
those events to occur (Sayer, 1992). Such conditions are then conceptualised as
generative – or causal – mechanisms, apprehended through a process of retroduction
as ‘a mode of inference in which events are explained by postulating (and identi-
fying) mechanisms which are capable of producing them (Sayer, 1992: 107). For
instance, in this case, I asked what kind of attributes and powers (Bhaskar, 2014)
DeltaChina GM must possess for institutional bridging to take place: ‘What is it
about DeltaChina GM that makes him do x and y? And how did these attributes
and causal powers operate, how did they interrelate?’ This task meant discrimin-
ating between external or contingent relationships – those relationships that do not
create significant effects on the phenomenon of institutional bridging – and
internal or necessary relationships – those relationships that are critical to the phe-
nomenon (Bhaskar, 2014; Sayer, 1992).

Data Analysis Process

Research data was first transcribed in English and Chinese before being entered
into an access database for early categorisation around broad themes drawn
both from the early analysis of the data and the literature. These themes included
‘regulative institutions’, ‘normative tension’, or ‘bridging process’. A native
Chinese academic verified the transcriptions from Mandarin Chinese, as well as
the interpretation of the data collected from the Chinese informants (Stening &
Zhang, 2007). Although quotes from the data are reported in English in this
paper – for concision and the benefit of non-Chinese readers – data was analysed
in the native language (Chinese and/or English) throughout, in order to retain
richness and nuances in the language. I was able to avoid the risks linked to the
translation of data into English such as issues of cognitive, linguistic, and pragmatic
equivalence (Chidlow, Plakoyiannaki, & Welch, 2014) or cultural interference
(Holden & Michailova, 2014). In addition, categorisation and reduction of the
raw data (Miles & Huberman, 1994; Tracey & Phillips, 2016) was undertaken in
order to abstract higher order themes and aggregate theoretical concepts from
the concrete case data (Sayer, 1992). This analytical process allowed the identifi-
cation of three critical and necessary theoretical components of the causal
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 320 C. Couper
mechanisms conceptualised as ‘institutional hybridity’, ‘cross-institutional disson-
ance’ and ‘cross-institutional consonance’.
The data analysis then proceeded with the development of a timeline of Delta’s
institutional bridging process to China. From the timeline, three key events labelled
‘institutional bridge creation’(E1), ‘institutional bridge reinforcement’(E2) and ‘insti-
tutional bridge maintenance’ (E3) were identified through ‘temporal bracketing’
(Langley, Smallman, Tsoukas, & Van de Ven, 2013) (Table 2).
From that timeline of critical events, the researcher proceeded to trace the
process (George & Bennett, 2005) of Delta’s institutional bridging to China by ana-
lysing how and why one step of the process had led to the next (Figure 1).
Questions such as ‘why did DeltaUK GM select one candidate over the other’?
led to identification of ‘familiarity with UK culture’ as a critical reason for the selection
of the future representative of the firm for instance. This technique clearly highlighted
the role that contextual factors had played in Delta’s institutional bridging process to
China, hence bringing the context back into the processual analysis. Furthermore,
clarity about events to be explained is essential to a ‘contextualised explanation’ on
the basis of critical realism (Sayer, 1992). Through retracing the process, critical
events for each stage of the institutional bridging process were identified.
Finally, and consistent with the ‘contextualised explanation’ perspective
(Welch et al., 2011), the explanation was developed through the discovery of the
necessary component parts of the mechanisms and their relationships (Pajunen,
2008) for each event (E1, E2, E3). Discovery of the mechanisms meant asking ques-
tions such as: ‘What does Delta’s recruitment process of DeltaChina GM assume?
What does DeltaUK MD’s difficulty in making sense of the information in China
presuppose’? (Sayer, 1992). In addition, alternative events that did not happen
(recruitment of a Chinese National in China rather than the UK) offered valuable
insights (Easton, 2010). ‘If DeltaChina GM had not spent time at Delta’s UK Head
Office, what would have changed’? Answers to these questions highlighted the
presence of unobserved rules and practices linked to the Chinese institutional
context. Identifying the necessary relationships between research entities (e.g.,
DeltaUK MD and DeltaChina GM), their attributes (e.g., prior experience of
high institutional distance or institutional hybridity), and structure (e.g., lack of
network access and high institutional distance) led to identification of causal
mechanisms that explained in context the event of interest (e.g., the recruitment
of DeltaChina GM). An important task was to root out any contingent relationship
from the mechanistic explanation by exploring whether the removal of a particular
attribute or condition would, or would not, change the resulting event (Sayer,
1992). For instance, may a lack of prior experience of India have led DeltaUK
GM to emphasize different criteria for the recruitment process?
The emerging explanation was further discussed with three external aca-
demics, one Chinese and two non-Chinese, who were all unfamiliar with the
case and played the role of ‘devils’ advocate. Results from the analysis of the
data are discussed next.
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Table 2. Delta’s timeline

KEY EVENTS TIME EVENTS

Institutional Bridging in SME Internationalisation

Institutional bridge Early 2006 DeltaUK, on the verge of closing, has no choice but to start manufacturing in China and avoid losing their largest
creation customer.
E1 Jan 2006 DeltaUK MD arranges to visit China on a fact-finding mission, with logistical support from trade organisation on the
ground. He cannot make sense of the information he is given and decides to search for a Chinese National in order to
carry out a market evaluation and potentially represent DeltaUK in China.
© 2019 The International Association for Chinese Management Research

Mid 2006 After two rounds of candidates are rejected, a candidate, DeltaChina GM, is offered a 6 months Chinese market
evaluation project, based out of Scotland’s Head Office. The intention is to both test DeltaChina GM and ‘socialise’
him further to UK culture and Delta organisational practices.
Institutional bridge Late 2006 DeltaUK conducts a strategic and proactive loyalty-building exercise on DeltaChina GM while the latter is based at
reinforcement the company’s Head Office in the UK.
E2 Jan-Mar 2007 DeltaChina GM receives training at DeltaUK as he has little knowledge of the company’s sector of activity and
products. DeltaUK MD acts as his mentor while he is being trained at the Head Office in the UK. DeltaChina GM
travels to and from China to conduct the market evaluation.
Whilst conducting the market evaluation in China, DeltaChina GM requests the help of a close friend and classmate,
DeltaChina DGM. DeltaChina GM and DeltaChina DGM share a long-term, close, trust-based relationship.
DeltaChina DGM cannot speak English.
Apr 2007 DeltaChina GM is formally offered the position of General Manager of Delta China by DeltaUK.
May 2007 DeltaChina GM formally recruits DeltaChina DGM as No. 2 of the Chinese structure. Delta China is registered in
municipality Z., within an Industrial Park Zone.
Sept 2007 DeltaChina GM is flying back and forth between the UK and China. Manufacturing equipment is shipped to China,
alongside two Scottish technicians, one of them DeltaChina TD, to help with equipment commissioning. At the
request of Alter, DeltaChina TD eventually remains in China permanently.
Late 2007-Early The core administrative team and a small manufacturing team are recruited. Staff numbers quickly go from 3 to 17.
2008 Production starts.

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© 2019 The International Association for Chinese Management Research

322
Table 2. Continued

KEY EVENTS TIME EVENTS

Institutional bridge Spring 2008 DeltaChina GM moves to China full time. From then on, he only visits the UK once a year.
maintenance 2009 DeltaUK MD makes frequent visits to China to support DeltaChina GM in building relationships with Chinese raw
E3 material suppliers and China-based customers.

C. Couper
The signing of an exclusive agreement with a Chinese supplier of a key raw material eventually allows Delta to
control the European market for the related product.
2009–2012 By 2012, China represents 50% of the overall profit of the company and manufacturing in China is perceived as the
decision that saved Delta UK. Delta exports increase by 200% over three years.
2012 Decision is made to expand manufacturing in China and add a second manufacturing plant. A new local Production
Manager, DeltaChina PM, who only speaks Chinese, is recruited.
Late 2013 An agreement for Delta China to lease land and build its own manufacturing facility is reached with municipality Z’s
local government. DeltaChina GM has lobbied from the start for Delta to build their own plant in China, as opposed
to renting a production facility, as was the case until now.
2014 DeltaChina now directly oversees the Japanese market. The number of staff in China reaches 130.

Source: The Author

 Institutional Bridging in SME Internationalisation 323

Figure 1. Process-tracing diagram of Delta’s institutional bridging process for internationalisation to

China (drawing from George & Bennett, 2005 & Welch et al., 2011)
Source: The Author

RESULTS
In line with critical realist assumptions, the findings from the analysis of the data
are structured around the three strata of the empirical experiences of the research
participants, actual events, and the identification of real causal mechanisms. The
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 324 C. Couper
experiences of the participants in relation to the three critical events (E1, E2
and E3) are discussed first. Key events (E) are then articulated around the temporal
brackets highlighted through the timeline (Table 2). Critical steps in Delta’s insti-
tutional bridging process were abstracted from the timeline as the basis for
retracing Delta’s journey from its last step in 2014, i.e., ‘institutional bridging con-
nection maintained over time’, back to its first step, i.e., Delta decides to set-up
manufacturing in China’ (Figure 1). Tracing the process backwards, from one
step back to the previous one, drew both from the participants’ experience of
the process and from the implied structures inferred from the institutional,
network, internationalisation and SME contexts. This form of analysis helped iden-
tify the contingent and necessary conditions that explained the steps followed by
DeltaUK and resulted in a descriptive explanation of Delta’s institutional bridging
process to China (Figure 1). This explanation had to be further conceptualised to
generate a more abstract and theoretical explanation. The multiple steps were
reduced down to three key events to be explained: institutional bridge creation
(E1), institutional bridge reinforcement (E2) and institutional bridge maintenance (E3).
The first Event (E1) revolves around the creation of an institutional bridge in
order to internationalise to China. The second Event (E2) is concerned with
DeltaUK reinforcing their institutional bridge to protect themselves from risks of
opportunistic behaviour by DeltaChina. The final Event (E3) is focused on main-
taining the bridge between DeltaUK and DeltaChina. In turn, the rationale and
explanation for each causal mechanism (CM1, CM2, and CM3) follows the discus-
sion of Experiences and Events.

Experiences: Reasons for Delta’s Institutional Bridging Process to

China
The discussion of Delta’s experience of the process of institutional bridging to
China unearthed participants’ perceptions of the reasons why each step in the
process had led to the next.
Experience 1: The reasons for DeltaUK’s institutional bridging creation process. Why had
DeltaUK created their China bridge by recruiting a Chinese National and UK
Graduate in the UK? Digging deeper into the reasons behind that decision high-
lighted a combination of factors. First, DeltaUK lacked knowledge and networks in
order to internationalise to China. Even with the support on the ground of both the
large, China-experienced, customer and of a British Government’s trade organisa-
tion, making sense of the Chinese environment had proved too difficult for
DeltaUK MD. This difficulty to make sense of the Chinese context was developed
into the concept of ‘cross-institutional dissonance’, defined as ‘the disharmony
between dissimilar institutions’.
Second, DeltaUK had prior negative experience of doing business with India
– another country where environment and practices significantly differed from the
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 Institutional Bridging in SME Internationalisation 325
UK. As a result, DeltaUK felt they needed the help of a Chinese National to enter
the Chinese market:
‘The reason for that is that, particularly in China and India, actually, the culture is so totally
different; I think that if you sent over a European person, they would still have to have a local the
next layer down’. [DeltaUK MD]
Finally, Delta’s challenging experience in India had also taught DeltaUK that
Delta’s future representative must have familiarity with Delta’s British culture
and organisational practices. The firm accordingly restricted the search to
Chinese Nationals that were future UK MBA graduates in order to ensure famil-
iarity with the British environment. The Chinese candidate’s dual familiarity with
the UK and Chinese environments was conceptualised as ‘institutional hybridity’,
defined as ‘cross-institutional identity from adaptation to multiple institutional con-
texts’. Individuals whose attributes include institutional hybridity are labelled
‘Institutional Hybrids’.

Experience 2: The reasons for Delta’s institutional bridge reinforcement process. DeltaUK had
to consider the risk of opportunistic behaviour by any future China representative.
The SME was extremely vulnerable as it neither had understanding of the Chinese
environment nor knowledge of the local language. When asked about DeltaUK’s
knowledge of Chinese accounting systems, DeltaUK Finance Director (from here
on DeltaUK FD) replied:
‘Not a lot. The very first time I went over there, I asked to see a bank statement and I was given a
piece of paper without a single figure on it, entirely filled with Chinese characters. I had no idea
what I was looking at’.
As a result, formal monitoring of the future DeltaChina was going to be a chal-
lenge. DeltaUK MD did not believe either that the company could protect itself
by relying on a legal contract.
DeltaUK’s strategy revolved instead around (a) building loyalty between the
new recruit and the SME and (b) further socialising DeltaChina GM to UK culture
and practices:
‘Otherwise they would just go native and you’re actually not, you know, they’re running a
company without you in their mind’.
The SME went to remarkable lengths to strategically build loyalty between
DeltaChina GM and DeltaUK:
‘We paid for his mum and dad to come over, we looked after them, again we went up to [Beauty
Spot], took them all around; […] and that sort of thing buys you, crudely, buys you loyalty’.
[DeltaUK MD]
‘They want to let me think I belong to Delta because at the time, they really spent a lot of effort to
do that’. [DeltaChina GM]
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 326 C. Couper
Another strategy for protecting DeltaUK against the risk of opportunism was the
development of a close personal relationship between DeltaUK MD and
DeltaChina GM with the involvement of family members within the relationship.
Unbeknown to DeltaUK, the data strongly showed that a key factor in the close
relationship that developed between DeltaChina GM and DeltaUK MD was
the mentoring role played by the latter. Delta’s new employee lacked knowledge
of Delta’s products and industry since he was recruited for his dual familiarity
with the UK and Chinese environments rather than his industry experience.
What could have been perceived as a disadvantage had the effect of further
strengthening DeltaUK MD’s bond to DeltaChina GM:
‘We, Chinese people, all feel that teachers play a very important role in our lives; […] So
because of that time, that period when he looked after me and trained me, I feel he is a great
person. This was a crucial period’.
As a result, Delta was able to reinforce the bridging connection between DeltaUK
and DeltaChina.

Experience 3: The reasons for Delta’s institutional bridging maintenance process. Once
DeltaChina GM had moved to China, the perception within Delta was that main-
taining the bridging connection relied on the critical – and sensitive – personal rela-
tionship between DeltaUK MD and DeltaChina GM. This was acknowledged by
multiple respondents:
‘So I don’t want to be annoying DeltaChina GM or asking DeltaChina GM anything I
shouldn’t be asking him, so, generally, I speak to DeltaUK MD first’. [DeltaUK FD, 2014]
‘Sometimes I also receive bad comments from the Head Office; but when DeltaUK GM told me,
I think okay, right, that’s fine, I’ll change that. If it was someone else, I would feel unhappy: ‘get
out of my door’! [DeltaChina GM, 2012]
The close relationship was also under threat from continued cross-institutional dis-
sonance between the UK and China, with examples such as ‘double-invoicing’ and
concerns of systemic corruption:
‘What is common out there is you buy a piece of equipment and it costs 80,000 and they say:
call it 100,000 and you pay me 100,000 and I give you 10,000. Now that happens all the
time’. [DeltaUK MD]
The key reason offered for the relationship remaining close was DeltaChina GM’s
institutional hybridity, i.e., his ability to act and communicate ‘the British way’ and
reconcile UK and Chinese culture and practices:
‘DeltaChina GM stayed in Scotland for a long time, he is quite familiar with the Head office’s
management practices, so on the whole, management practices involved in our work are more or
less the same’. [DeltaChina Purchasing Manager]

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 Institutional Bridging in SME Internationalisation 327
‘When I’m across there, he [DeltaC1] is very good with his English and will often help out
when I’m speaking to DeltaC4’. [DeltaUK Finance Director]
‘Their culture’s not to say what they think; you’ve got to try and guess. And with DeltaChina
GM, because he was in [Britain] for a year, we always say that we would do it the British
way’. [DeltaUK MD]
DeltaChina GM also mentored DeltaUK GM, improving his knowledge of
Chinese culture significantly, hence further reducing the risk for misunderstandings
and conflict over time:
‘Cultural. And the same with little things about, you know, he will say to me: right, we should
go and toast Joe Blogs round. Taking food and put it on somebody else’s plate, all these little
things’. [DeltaUK MD]
Although other factors were highlighted within the analysis of the data, such as
DeltaUK MD’s tolerant attitude, risk-taking tendency and emphasis on the rela-
tional – as opposed to contractual – governance of business relationships in
China, it was DeltaChina GM’s institutional hybridity and ability to operate
across institutional boundaries that enabled the Delta’s bridging connection to
be maintained and the institutional distance to be bridged effectively. In effect,
DeltaChina GM’s institutional hybridity promoted ‘cross-institutional conson-
ance’, which is defined as ‘harmony between dissimilar institutions’ and mirrors
the concept of ‘cross-institutional dissonance’.
The analysis of the experience of the participants unearthed some motivating
factors and necessary conditions for Delta’s institutional bridging process. In add-
ition, it highlighted multiple steps in the process which were organised around
three critical events: Institutional bridge creation (E1), institutional bridge
reinforcement (E2) and institutional bridge maintenance (E3).

Events: Delta’s Institutional Bridging Process for Internationalisation

to China
Event 1: Institutional bridge creation. Delta was close to bankruptcy, back in early 2006,
when the decision to start manufacturing in China was instigated at the demand of
the company’s largest customer. The firm’s desperate situation and the promise
from the large customer of a guaranteed supply agreement finally led Delta to
make what had felt like a daunting move: ‘we had indecision rather than there was some-
body saying we should not go to China. It was just an enormous thought’. [DeltaUK MD]
The task of setting-up manufacturing to China fell on Delta’s Managing
Director, DeltaUK MD, a key shareholder of Delta. In January 2006, DeltaUK
MD went on a fact-finding mission and his first encounter with China, opened
his eyes to the challenges ahead:
‘We saw six different cities, very hard, were told different wage rates and it was very hard actu-
ally for us to form our own opinion on what we had been told’.
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 328 C. Couper
On his return to China, DeltaUK approached a British government organisation
specialised in the recruitment of UK-based international students, with
DeltaChina GM selected for his superior familiarity with the British language
and culture over a competing candidate:
‘The most significant difference was that DeltaChina GM came over and was single, and was
in a flat in [British city] and he was exposed to [British] culture’. [DeltaUK MD]
In the Autumn of 2006, DeltaChina GM was offered a 6-month China evaluation
project placement based at Delta UK’s Head Office, as confirmed later by a UK-
China local government trade expert with close knowledge of DeltaUK.

Event 2: Institutional bridge reinforcement. At the end of the evaluation project, in April
2007, DeltaChina GM was formally offered the role of General Manager of the
future manufacturing subsidiary. For the next 12 months, as the Chinese subsidiary
was being set-up, DeltaChina GM spent his time travelling between the UK and
China, with full responsibility for the set-up of DeltaChina. In order to get
support in China, DeltaChina GM approached a former University classmate
and trusted colleague to be his future DeltaChina Deputy General Manager
(from here on DeltaChina DGM):
‘We knew each other before as classmates and then [DeltaChina GM] told me DeltaUK would
like to set-up a factory in China and he invited me to come and do this together with him’.
[DeltaChina DGM]
During that period, while receiving training at DeltaUK’s Head Office and being
mentored by DeltaUK MD, DeltaChina GM was also able to build connections
with multiple DeltaUK colleagues including DeltaUK’s Chairman, Finance
Director and Purchasing Manager. These connections helped further reinforce
the institutional bridging connection.
In May 2007, DeltaChina was registered in municipality Z, within an industrial
park zone and manufacturing equipment was shipped to China, alongside two
DeltaUK technicians, to help with equipment commissioning. At the request of
DeltaChina GM, one of the technicians, DeltaChina Technical Director (from here
on DeltaChina TD), was offered a full-time position in China to oversee production:
‘But after six or seven months, DeltaChina GM decided that he wanted to keep me here; so he
offered me a contract’. [DeltaChina TD]
By early 2008, DeltaUK’s institutional bridging connection to China had been
reinforced and had led to the establishment of a Chinese manufacturing facility
and the recruitment of 17 new China-based staff.

Event 3: Institutional bridge maintenance. In the Spring of 2008, with the new Chinese
factory ready to start production, DeltaChina GM moved to China full time.
Although he now only visits the UK once a year, he continued working closely

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 Institutional Bridging in SME Internationalisation 329
with DeltaUK MD, who communicated with him on a daily basis and made fre-
quent visits to China. DeltaUK MD was the main link to DeltaChina GM, himself
the critical connection to the Chinese market. With DeltaUK MD’s support,
DeltaChina GM’s key role was to develop relationships with external stakeholders
such as Chinese customers and, more importantly, suppliers. DeltaChina DGM,
who spoke limited English, was responsible for overseeing the running of
DeltaChina and did not have much interaction with DeltaUK.
In 2009, DeltaChina was able to sign an exclusive agreement with a Chinese
supplier of a critical raw material. This was confirmed by the British China trade
expert working for Delta UK’s local government who helped with the negotiation
of the agreement. This exclusive agreement allowed Delta to take control of the
European market for a related product. Delta’s supply chain was subsequently reor-
ganised to integrate DeltaUK and DeltaChina around the critical bridging connec-
tion between DeltaUK MD and DeltaChina GM. By 2012, Delta’s exports had
increased by 200%, with 50% of the company’s profits derived from the Chinese
subsidiary. DeltaUK had become a remarkable success story in its local area as evi-
denced by multiple press releases over that period. In late 2013, DeltaChina received
approval from the Chinese local government to lease additional land within the
industrial park and expand manufacturing facilities. By 2014, DeltaChina staff
reached 130 and the subsidiary directly oversaw the Japanese market. The SME
was able to maintain its critical institutional bridging connection over time and
Delta had become a remarkably successful international firm. What key mechanisms
had enabled Delta’s institutional bridging process? On the basis of the motivating
factors, necessary conditions and events that explain Delta’s institutional bridging
process, three causal mechanisms are identified and discussed next.

Causal Mechanisms to Explain Delta’s Institutional Bridging Process

Causal Mechanism 1: Cross-institutional dissonance mitigation. What had led DeltaUK to
create an institutional bridge (E1) and recruit DeltaChina GM with its particular
attributes? First, the fact that Delta must internationalise to China was a motivat-
ing factor for the creation of the institutional bridge. Without this motivation,
DeltaUK could have simply decided to forget about China and internationalise
somewhere else instead. DeltaUK’s institutional bridging process also pre-sup-
posed the existence of a necessary conditions that had shaped the behaviour of
DeltaUK when the firm had taken the decision to internationalise to China.
These necessary conditions included DeltaUK’s prior experience of high institu-
tional distance (India) and experience of cross-institutional dissonance (China),
compounded by the firm’s lack of China knowledge and network. The interaction
between DeltaUK’s motivation to internationalise to China and the conditions at
the time of Delta’s institutional bridge creation led to Delta’s recruitment of an
Institutional Hybrid through a causal mechanism (CM1) labelled ‘Cross-
institutional Dissonance Mitigation’. Without prior (negative) experience of
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 330 C. Couper
internationalisation across high institutional distance (India), DeltaUK may not
have insisted on the future Chinese GM having familiarity with UK institutions
as well as Chinese ones. Without the experience of the cross-institutional disson-
ance in China, DeltaUK MD may not have selected a Chinese National as
future GM, choosing instead an existing member of DeltaUK staff with experience
of Delta’s organisational culture and products. The fact DeltaUK did not choose
any of the above alternatives can be best explained by a mechanism of Cross-insti-
tutional Dissonance Mitigation (CM1) realised through a process of institutional
bridging creation that entailed the recruitment of an Institutional Hybrid.
Following the creation of an institutional bridge to China (E1), a second
mechanism is identified to explain Delta’s institutional bridging process to China.

Causal Mechanism 2: Multi-level strategic embedding. The motivation to protect DeltaUK

against the risk of opportunistic – and more generally inappropriate – behaviour
by their future Chinese GM can partly explain the next event in Delta’s institu-
tional bridging process for internationalisation to China. Necessary conditions
present at the time further explain how and why Delta had taken steps to reinforce
their bridging connection. Those conditions were identified by reflecting on alter-
native steps the SME could have taken. For instance, why had DeltaUK not relied
on formal and legal means – such as employment contracts or monitoring systems
as per UK practices – to protect the firm against unwanted behaviour in China?
Why had they not appointed a British expatriate to represent the firm in China?
Giving full responsibility for the set-up of Delta China to the future Chinese
GM, while exhibiting concerns around risks of opportunistic or inappropriate
behaviour, presupposed an institutional bridging process constrained by certain
necessary conditions.
The necessary conditions for DeltaUK’s institutional bridging reinforcement
process included cross-institutional dissonance and network and resource con-
straints. The cross-institutional dissonance was the result of the challenge of legal
contract enforcement in China (as was confirmed by expert interviewees) and
the enduring lack of China knowledge and language within DeltaUK. In addition,
resource-limitations did not allow DeltaUK to build an expensive network of
experienced multi-lingual China staff and consultants to mitigate knowledge lim-
itations (as may be the case for larger multinationals). Incurring extra cost was a
recurring concern of DeltaUK when it came to the process of institutional bridging
to China. The only option available to DeltaUK to protect itself against inappro-
priate behaviour was to strategically embed DeltaChina GM at three interacting
levels: relational (personal bonding with DeltaUK MD), organisational (socialisa-
tion to organisational culture and development of network connections with
Delta UK colleagues) and institutional (through socialisation to British culture
and practices). The mechanism that enabled institutional bridging reinforcement
is conceptualised as ‘Multi-level Strategic Embedding’. The combination of this
second mechanism (CM2) with the first mechanism (CM1) had powerful effects:
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 Institutional Bridging in SME Internationalisation 331
DeltaChina GM became highly effective across both the UK and Chinese institu-
tional and organisational frameworks. As a result, DeltaUK felt confident enough
about their Chinese GM’s loyalty and ability to operate between the UK and
China to trust him with the full responsibility for the set-up and running of
DeltaChina. Hence ‘Multi-level Strategic Embedding’/CM2 caused the reinforce-
ment of the institutional bridge (E2) (Figure 2). This in turn led DeltaChina GM to
move to China full time to run the newly established subsidiary, DeltaChina. For
internationalisation to China to continue however, DeltaUK’s institutional bridge
had to be maintained over time. This final key event (E3) is discussed next.

Causal Mechanism 3: Cross-institutional consonance retuning. For Delta’s internationalisa-

tion to China to endure over time, the institutional bridge between DeltaUK and
DeltaChina had to be maintained. This was motivated by Delta’s reliance on
DeltaChina GM due to the continued lack of knowledge of Chinese institutions
and language as a necessary condition of the institutional bridging process. This
condition constrained DeltaUK’s ability to operate independently. This theory
also highlights that bridging connections are difficult to maintain with most bridg-
ing links decaying within a year (Burt, 1995). DeltaUK’s institutional bridging con-
nection was remarkably enduring more than 8 years after it was created in 2006.
The question of what caused Delta’s institutional bridging connection to be main-
tained over time presupposed another necessary condition that prevented the
bridging connection from decaying or collapsing. This second condition was high-
lighted as DeltaChina GM’s institutional hybridity. DeltaChina GM’s hybridity
meant that he was able to (a) resolve any tension that resulted from the institutional
distance between the UK and China and (b) help DeltaUK make sense of the
Chinese environment. To draw from a musical analogy, DeltaChina GM was
able to ‘retune’ cross-institutional dissonance into cross-institutional consonance.
Examples of DeltaChina GM’s ‘retuning’ actions included (a) effectively teaching
DeltaUK actors about Chinese norms and values, (b) adequately translating insti-
tutional practices between the UK and China and (c) expertly communicating
across the cultural-cognitive distance. This behaviour is conceptualised as a third
mechanism of ‘Cross-institutional Dissonance Retuning’ (CM3) which caused
the institutional bridging connection to be maintained over time.
Importantly, only when considered in combination can the three mechanisms
CM1, CM2 and CM3 – Cross-Institutional Dissonance Mitigation, Multi-level Strategic
Embedding, and Cross-Institutional Consonance Retuning – explain the process of institu-
tional bridging in the context of SME internationalisation across high institutional
distance, with the relationships between motivating factors, necessary conditions,
events and mechanisms linking the empirical, actual and real strata. To illustrate
that last point, a contextualised explanation (Welch et al., 2011) of the process
of institutional bridging in the context of SME internationalisation across high
institutional distance is presented as Figure 2.

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 332 C. Couper
Figure 2. Contextualised Explanation of ‘institutional bridging for SME high-distance internationalisation (drawing from Jacobides, 2005; Pajunen, 2008; Welch

Source: The Author

et al., 2011)
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 Institutional Bridging in SME Internationalisation 333
DISCUSSION
Delta’s successful institutional bridging to China did not match expectations set by
the SME internationalisation literature, highlighting a puzzling gap: what had
caused an SME with resource and network constraints to bridge the high institu-
tional distance and internationalise so successfully? Karra et al. (2008) had concep-
tualised ‘institutional bridging’ as an entrepreneurial capability for entrepreneurial
internationalisation: this article builds on their conceptualisation by offering a con-
textualised explanation (Welch et al., 2011) of the process of institutional bridging in
the context of SME internationalisation across high institutional distance, thereby
answering calls for studies that investigate the way institutional distance can be
managed through theoretical explanations that are sensitive to context (Child &
Marinova, 2014). This explanation further answers calls to explore the mechanisms
by which internationalisation through networking across institutional contexts can
occur (Kiss & Danis, 2008). More broadly, the article extends theory on the impact
of high institutional distance on SME internationalisation across institutional dis-
tance (Coeurderoy & Murray, 2008; Ellis, 2011; Kiss & Danis, 2008; Ojala,
2009) by explaining why SMEs that are more sensitive to challenges arising
from the institutional context (Schwens et al., 2011) may nonetheless bridge the
institutional distance and internationalise.
As part of the contextualised explanation of SME internationalisation
through institutional bridging, this article develops the concept of ‘institutional
hybridity’ which draws from the literature on ‘cultural hybridity’ (Shimoni &
Bergmann, 2006) and the notion of hybrid cultures (Jia, Rutherford, &
Lamming, 2015). In line with cultural hybridity, institutional hybridity emphasizes
integration of multiple influences and creation of ‘new spaces’ (Shimoni &
Bergmann, 2006) of institutional influence. Unlike cultural hybridity however,
institutional hybridity is concerned with all three institutional dimensions, not
just culture-related factors. In the context of SME internationalisation, solely focus-
ing on cultural factors to the detriment of cognitive or more formal regulative
aspects, may remove some keys pieces of the puzzle. As this article explains, for
the three key mechanisms to operate effectively and support SME internationalisa-
tion across high institutional distance, hybridity must operate across cultural-cog-
nitive, normative and regulative institutional dimensions. Future research could
explore ‘institutional hybridity’ further to improve understanding of its nature
and of the role ‘institutional hybrids’ may play in supporting SME
internationalisation.
The two mechanisms of ‘Cross-institutional Dissonance Mitigation’ and
‘Cross-institutional Consonance Retuning’ build on studies of ‘cognitive’
(Rodrigues & Child, 2008) and ‘acculturative’ (Lillevik, 2015) dissonance
(Brunning et al., 2012). Component parts of the mechanisms extend the concept
of ‘dissonance’ to regulative, normative and cultural-cognitive dimensions’.
Although DeltaUK MD was given information about the Chinese institutional

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 334 C. Couper
environment in English, he still could not make sense of it due to a lack of under-
standing of the normative and regulative institutional context. Cross-institutional
dissonance was the result of the significant dissimilarity between the Chinese and
British institutional frameworks across cultural-cognitive, normative and regulative
dimensions (Scott, 2008). These mechanisms further extend the literature on ‘dis-
sonance’ in an internationalisation context. In a multinational expatriate environ-
ment, Brunning et al. (2012) had identified the formation of friendships with
colleagues as remedies for ‘dissonance’. If dissonance is of a cross-institutional
nature, it implies that remedies for dissonance must operate across cultural-cogni-
tive, normative and regulative institutional dimensions: the formation of ‘friend-
ships’ may reduce the effect of ‘dissonance’, but is unlikely to be fully effective.
Instead, as explained in the study, a mechanism of ‘cross-institutional consonance
retuning’ that operates across all institutional dimensions may be necessary to miti-
gate dissonance. Besides, SME internationalisation across institutional distance
requires alternative explanations to those offered for larger multinationals: with
SME boundary-spanners likely to be positioned across distant institutional environ-
ments, close relationships that require frequent and long-term interactions are more
difficult to establish than in an expatriate environment. Furthermore, SME decision-
makers cannot await the eventual formation of friendships with potential partners in
order to internationalise, nor may it be wise to do so. Mechanisms such as presented
in this article offer a more suitable explanation for managing high institutional dis-
tance in the context of SME internationalisation.
The study’s methodological contributions answer calls for greater contextual-
isation of theorizing and demonstrates the benefits of applying qualitative research
methods on the basis of critical realist assumptions. Although the contextualised
explanation approach (Welch et al., 2011) offers an open-system, multi-level
approach for theorising about complex phenomena (e.g., Matthyssens et al.,
2013), it is by no means straightforward to apply empirically (Ryan, Tähtinen,
Vanharanta, & Mainela, 2012) and is still rarely used in internationalisation
studies (Geary & Aguzzoli, 2016; Welch et al., 2011). By contributing through a
rare empirical application of the ‘contextualised explanation’ (Welch et al.,
2011) in the area of International Business, the article demonstrates the benefits
of contextualised explanations when theorizing in a China- and internationalisa-
tion-related context (Child, 2009).
Separately, I endeavoured to collect and analyse bilingual Chinese-English data
to retain congruence with the phenomenon under study and highlighted some of the
dangers of attempting sense making from translated qualitative data, such as loss of
nuances. Bilingual data analysis however requires skilled researchers that are compe-
tent across institutional boundaries. Discourse is embedded within institutional fra-
meworks and interpretation requires deep understanding of the context of
relevance. This methodological issue is rarely discussed in the internationalisation lit-
erature and represents an important area of future debate and development.

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 Institutional Bridging in SME Internationalisation 335
Limitations and Boundary Conditions
I endeavoured to develop the best contextualised explanation of Delta’s institu-
tional bridging process to China by offering a detailed and transparent discussion
of the research process (Welch et al., 2011). The proposed mechanisms (CM1,
CM2 & CM3) should also be evaluated in terms of their ‘practical adequacy’,
i.e., its ability to ‘generate expectations about the world and about the results of
our actions which are actually realized’ (Sayer, 1992: 69). The aim is to explain
the process of institutional bridging to a particular context by unearthing deep gen-
erative mechanisms: future studies could evaluate the applicability of the proposed
mechanisms to more or less similar settings.
The choice of the UK to China internationalisation context to explain insti-
tutional bridging across high institutional distance for instance may be subject to
idiosyncrasies related to UK and China-specific institutions, as well as to their par-
ticular interactions. China has unique normative and cultural-cognitive institutions
such as the importance of ‘teachers’ as discussed in the article, in addition to
strongly-binding norms of reciprocity. Reversing the direction of internationalisa-
tion, from China to the UK, again, may impact the applicability of the mechan-
isms. Replicating this explanation and evaluating the three mechanisms in
different high distance contexts may clarify whether China or UK-specific context-
ual factors played a part in this explanation. The entry mode chosen by DeltaUK
(manufacturing) may also have had implications in relation to the level of vulner-
ability of the firm in China due to higher investment and risk: it would be interest-
ing to evaluate the explanation in SME internationalisation contexts where lower
investment foreign entry modes were selected.

CONCLUSION
This article aims to contribute to the literature on SME internationalisation
across high institutional distance by explaining how and why Delta, a British
SME was able to internationalise to China. Three novel mechanisms of ‘Cross-
institutional Dissonance Mitigation’, ‘Multi-level Strategic Embedding’, and
‘Cross-institutional Consonance Retuning’ are proposed to explain Delta’s inter-
nationalisation to China across high institutional distance and through institutional
bridging.
By opening the ‘black box’ of SME internationalisation across high institu-
tional distance, this explanation shows the benefits of pursuing the deeper context-
ualisation of research into phenomena that span multiple institutional boundaries.
I hope that this article will encourage a greater number of researchers to adopt
‘contextualised explanations’ as a methodology in future internationalisation
research and concurs with Welch et al. (2011: 755) that the ‘contextualised explan-
ation’ approach ‘holds promise in that it offers a high degree of contextualisation without sac-
rificing the goal of causal explanation’.
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 336 C. Couper
In addition, the research process resulted in a number of insights with regard
to conducting qualitative research in an emerging market such as China. A general
observation is that interviews conducted in China followed a different pattern to
those conducted in the UK. In China for instance, formal interviews were often
followed by more informal interactions that involved the sharing of food. In that
more informal context, Chinese participants became more relaxed and often
offered deeper insights into aspects discussed during the more formal interviews.
The collection of qualitative data in China as a Mandarin-speaking
Caucasian also meant deciding which language to select when interviewing
Chinese participants with fluency in English. Initially, I felt uncomfortable impos-
ing a particular language to participants and, as DeltaChina GM had good fluency
in English, he chose to use English in his first interview. Early transcription and
analysis of the interview data raised issues around the accuracy of language, and
the interpretation of nuances. This was particularly critical due to the interest in
normative and cultural-cognitive institutions. As a result, I insisted Mandarin
Chinese was used during the follow-up interview: through contrasting
DeltaChina GM’s choice of equivalent English and Chinese terms across both
interviews, I was able to notice improved depth and richness of language, as
well as inaccurate use of language in the earlier interview conducted in English.
For instance, although DeltaChina GM talked about ‘loyalty’ in his English inter-
view, he later used the term ‘归属感’ (guishugan) in his Chinese interview, which
has the different connotation of ‘sense of belonging’ in English. Loss of nuances
matters deeply in qualitative research, especially when conducted across institu-
tional and linguistic boundaries (Holden & Michailova, 2014): researchers
should be wary of interviewing non-English native participants solely in English,
even if their fluency in that language is high. A final insight surrounds the advantage
of being a Mandarin-speaking Caucasian researcher exploring cultural-cognitive
and normative institutions in China. Most Chinese informants assume that
Caucasians have little knowledge of Chinese culture. As a result of my categorisa-
tion as a Westerner or ‘laowai’, Chinese respondents entered into very elaborate
explanations of their values, expectations and beliefs for my benefit, generating
valuable depth in the explanation of the rationale behind their actions. Being per-
ceived as a ‘naive’ Caucasian researcher (Stening & Zhang, 2007) can have its
advantages, as long as the researcher still has sufficient knowledge of the native lan-
guage and research context.
This study also has important implications for policy and practice if EU
SMEs are going to ‘seize opportunities’ in high distance markets. From a
policy perspective, we must acknowledge the important role of organisations
such as the one depicted in the research case that act as intermediaries
between international (especially MBA) students and internationalising organisa-
tions within the home market. Highly competent international MBA students
offer an invaluable opportunity to bridge EU markets with the students’ home
nation, especially in cases where internationalisation spanning high distance is
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 Institutional Bridging in SME Internationalisation 337
concerned. Support from home-based trade organisations is often focused on the
development of networks with individuals and organisations located in the host
market. Whilst this is undoubtedly helpful in some respects, when it comes to
early stages SME internationalisation, home-based international students may
represent a more appropriate solution.
From a practice perspective, SMEs should be aware of the strategic importance
of building links with local Universities in their area in order to identify potential
recruits or partners with connections to, and knowledge of, international markets.
In addition, SME practitioners should be aware of the importance of embedding
future partners and employees at individual, organisational and institutional levels
through socialisation within the home organisation. In contexts where legal enforce-
ment is a challenge, extensive and repeated interaction between host-based represen-
tatives or employees and their home-based colleagues, culture and organisational
practices is likely to be the most effective approach to mitigate risks of opportunistic
or inappropriate behaviour. Besides, in contexts where cross-border activities are
conducted through a single critical bridge to the distant host market, the embedding
of foreign representatives across home and host markets appears to be an attractive
strategy to ensure long lasting internationalisation.

NOTES
The author would like to acknowledge the financial support of the University of Glasgow’s Adam
Smith Research Foundation and the Universities’ China Committee in London, UK towards the
completion of this research.

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Carole Couper ([email protected]) (PhD, University of Glasgow, UK)

is lecturer in Executive and Professional Education at Sheffield University
Management School, UK, where she teaches in the area of international busi-
ness and entrepreneurship. Her research interests include internationalisation
between institutionally-distant markets (with a focus on UK-China internation-
alisation), the role and nature of social networks and trust in that context, as well
as the practices surrounding qualitative research when studying phenomena
that span multiple institutional frameworks.

Manuscript received: October 5, 2017

Final version accepted: March 25, 2019 (number of revisions – 4)
Accepted by: Guest Editor Emmanuella Plakoyiannaki

© 2019 The International Association for Chinese Management Research

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