Abstract

Research on small-to-medium enterprises (SMEs) and the ethical dimension of their internationalization initiatives has not been sufficiently undertaken, with research in international business and business ethics focusing primarily on multinational enterprises and their corresponding social responsibilities. This paper addresses this lacuna by discussing the ethical issues surrounding the process by which such firms utilize network-expanding strategies to legitimate themselves to foreign networks and partners. Through a longitudinal grounded theory approach, this paper illustrates how SME internationalization is a relationally-influenced and ethically-laden process that needs careful deliberation and reflection. Because their internationalization initiatives give rise to issues that do not diminish one’s responsibility for ethical behavior, SMEs need to create an ethical infrastructure that, while cognizant of their resource constraints, enables them to develop and sustain a strong sense of character and integrity to deal with the challenges surrounding SME internationalization.