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Abstract

The aim of this article is to analyze learning for the internationalization of craft companies. The study is mixed and is based on a questionnaire, field visits and retrieval of documentary evidence about these companies. The main result is that, self-financing, the application of resources in obtaining raw materials, as well as the adaptation of machinery and equipment to traditional modes of production, have facilitated the internationalization of companies. It is concluded that the learning system promotes self-financing, constant adaptation to change and greater use of the international markets.
INDEPENDENT JOURNAL OF MANAGEMENT & PRODUCTION (IJM&P)
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APPRENTICESHIP SYSTEM FOR THE
INTERNATIONALIZATION: JALISCO HANDICRAFT
PRODUCTION COMPANIES
Tania Elena González Alvarado
University of Guadalajara, Mexico
E-mail: taniaelena2021@gmail.com
Sara González Fernández
Universidad Complutense de Madrid, Spain
E-mail: sarago@ccee.ucm.es
Submission: 6/5/2019
Revision: 9/18/2019
Accept: 10/22/2019
ABSTRACT
The aim of this article is to analyze learning for the internationalization of
craft companies. The study is mixed and is based on a questionnaire, field
visits and retrieval of documentary evidence about these companies. The
main result is that, self-financing, the application of resources in obtaining
raw materials, as well as the adaptation of machinery and equipment to
traditional modes of production, have facilitated the internationalization of
companies. It is concluded that the learning system promotes self-financing,
constant adaptation to change and greater use of the international markets.
Keywords: Financing; production modes; values; custom.
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1. INTRODUCTION
The companies that manufacture crafts are hardly internationalized. The main limitation
lies in the artisanal process. There is the possibility that, when reaching new markets, the
demand for the product increases, with the consequence of companies being forced to increase
production, and thereby acquire a faster industrial process at a lower cost (GAROFOLI, 1995).
In other words, it is possible that internationalization negatively impacts the artisanal process.
For this reason, it is considered relevant to study artisanal companies that have achieved
a greater presence in foreign markets. Among the questions that arise when analyzing them,
there are the following ones: What elements favor the internationalization of Jalisco handicraft
production companies? What factors have facilitated the internationalization of Jalisco
handicraft production companies? What role does learning play in all this process?
2. TURNING OBSTACLES INTO OPPORTUNITIES FOR
INTERNATIONALIZATION
The internationalization implies the ability to transform obstacles into opportunities.
Strategists who have the ability to transform scenarios and turn threats into opportunities (LAX;
SEBENIUS, 2006) make their companies sustain their advantages. These kinds of competitive
advantages are hardly imitable (FERNÁNDEZ; SUÁREZ, 1996; TRUJILLO; VÉLEZ, 2010;
FERNÁNDEZ; REVILLA, 2010; MUIÑA; BARAHONA; LÓPEZ, 2008; F-JARDON;
MARTOS, 2011).
Many of these advantages are the result of one's own experiences, learning from acts of
opportunism and through unfavorable environments. The Apprenticeship system, based on
collective action motivations, is important for the opportunity creation (SOSKICE, 1994;
SNELL, 1996; HARHOFF; KANE, 1997; SHARPE; GIBSON, 2005; CRAWFORD-LEE,
2016; PULLEN; CLIFTON, 2016; RENDALL; WEISS, 2016; GESSLER; 2019; LALIOTI,
2019; SMITH, 2019; WOESSMANN, 2019).
Learning is envisaged therefore, as a key element to understand the internationalization
of companies in conditions in which they would be considered as rather unlikely to
internationalize (D’ANGELO; PRESUTTI, 2019; LOVE; MÁÑEZ, 2019). The producer of
handicrafts with traditional production methods is no exception. Among the factors that affect
the internationalization of the companies producing handicrafts are the following:
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There are only few sources of financing. The financial system responds with higher
priority to speculative rather than productive purposes. The high-speed industries are
those that get the most financial support, while the traditional, rather slow ones, get very
little of it. Finally, the producer of crafts depends almost exclusively on his/her own
family of origin and its ways of operating.
The traditional organization may, at one time, lack the capacity to adapt quickly to
changes in the capitalist system.
There is little or no knowledge about Marketing and Business Management in the
handicraft companies, which results in not taking the advantage of the international
market, and in missing the opportunities for the company.
These factors do not only correspond to the circumstances faced by Jalisco handicraft
production companies but also coincide with those of other regions such as Nicaragua, Peru,
India, and Malaysia (FABEIL et al. 2016; JAMIR; SRIDHARAN, 2017; NOVOA; USEDA;
MERLO, 2015; RODRÍGUEZ, 2014). In fact, access to credit has been identified as generally
difficult at the global level.
The type of available financing and its conditions significantly affect the sustainability
of the business (SUBÍA-VELOZ et al., 2018). It is expected, that companies having access to
bank credit intensify their exports. However, they do not always access this possibility, or, it
turns out that this financing does not necessarily have a positive effect on their activity (ST
PIERRE; SAKKA; BAHRI, 2018).
The granting of credit to the smaller company depends on at least three conditions: the
reliability of the company, the warranty or available pledge and the existence of financial
information (MUÑOZ; CÁCERES; AGUILAR, 2014).
The lack of fulfillment of one or more requirements, indicates weakness in the ability
to support its funding structure and general creditworthiness. The latter does not only limit the
growth of the company, but also gives way to new problems in times of crisis, when other
financial resources are scarce and when the ability to demonstrate their repayment capacity is
crucial (BORIN; DONATO; SINAPI, 2018).
The smaller the companies, the greater the exclusion of traditional banking financing.
Therefore, the sources of financing typical to these companies are based on own funding
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sources and non-banking credits (GIMÉNEZ, et al., 2018). It is important to indicate that these
last two sources of financing can positively or negatively affect the company.
A lot depends on the entrepreneurs' learning capacity; learning that leads to adaptation
to the context and, sometimes, to the transformation of obstacles into opportunities. In the case
of companies in the artisan sector that have managed to internationalize, internationalization is
identified as an expression of learning, adaptation, and transformation based on the family
tradition (Graph 1). Otherwise, these companies would not be able to have a presence in foreign
markets.
Graph 1: Learning for internationalization based on the obstacles faced by handicraft
producers.
Source: own elaboration.
Artisanal companies, based on the ancestral inheritance and accumulated family
knowledge, are organizations that learn constantly. There is evidence of strategic vision and
capacity for organizational learning in craft companies in Tunisia (AMMAR, 2017). Strategic
vision and capacity for organizational learning do not usually explain the internationalization
of smaller companies in other economic sectors, but they are strong explanatory factors in the
artisan sector.
Important is both the way in which knowledge is transmitted and the understanding of
the family in what respects the trade influence. The appropriation of family discourse by
younger generations grants a new meaning to their ways of seeing craft work. There is a
collective memory that guides the discourse, but finally, each craftsman lives his/her own
experience. The motivation of parents and family plays there an important role. It is in the
family that a sense of work is formed (FREITAG, 2012).
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The innovation processes in low-income countries differ from the models derived from
the study of these processes in the richest countries. A study carried out by Fransen and
Helmsing (2017) on Indonesian artisanal export companies, found that the incremental
innovation of handicraft exporters requires specific absorption capacities, such as linguistic
abilities.
This study identified a group of strategists with a high level of own innovation
capabilities, a high level of absorption capacity, and a positive effect on supplier innovation.
The results show that the dissemination of knowledge is fostered within an emerging system
of local innovation (FRANSEN; HELMSING, 2017). All this is true for the artisan sector.
Graph 2: Diversification of artisanal products for export
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America UDG-CA-484”.
The craftsperson is usually a creative agent. Through production, s/he captures its own
perception of reality, its own imagination and its own values. The crafts express the link
between the different historical stages. It is possible that this last characteristic explains the
high diversity in crafts created in Jalisco (Graph 2).
This diversification is reflected even among the companies that have been
internationalized. Each region, each village has its own characteristic handicraft. The variety
and quality of its production are being recognized as one of the State’s most valuable
representations. Artisan work for export purposes requires innovation without expropriating
cultural capital.
00,05 0,1 0,15 0,2
SADDLERY
POTTERY
STONE WORKING
TEXTILE
CERAMICS
INDIGENOUS ART
WOOD
METALWORK
GASTRONOMY
GLASS
VEGETABLE FIBER
PAINTING
NATURAL RESIN
PAPER & PAPERBOARD
ANIMAL FIBER
PARAFFIN WAX
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3. METHODOLOGY
The present study is based on the Realism approach (HAUSMAN, 2000). The observed
reality is considered more complex than the theory, by means of Popper's falsifiability of
science advances (POPPER, 2014).
When the intent is to achieve as much information about a phenomenon as possible
(HUSSERL, 2012; HEIDEGGER, 1996), a representative case or a random sample may not be
the appropriate strategy. The typical case or the average case usually does not provide the best
or the most valuable information (FLYVBJERG, 2006).
Atypical or extreme cases reveal more information because they activate more actors
and basic mechanisms of the studied situation. In addition, from an understanding-oriented
perspective, it is often more important to clarify the root causes of a particular problem and its
consequences, rather than to describe the problem symptoms and the frequency with which
they occur.
The characteristics of the case study extend to other cases due to the strength of the
explanatory reasoning (YACUZZI, 2005). Random samples will rarely produce this knowledge
type; it is more appropriate to select some cases because of their validity (FLYVBJERG, 2006:
45).
In case of working with multiple cases, the replication logic is observed, not the
sampling. This logic increases the size of a sample to guarantee a certain degree of certainty.
The replication logic is analogous to that of the multiple experiments and leads to the selection
of the cases in order to anticipate similar results in all of them or contradictory results, based
on predictable reasons (YACUZZI, 2005).
This is the reason why field visits and on-site observation, the semi-structured interview
and questionnaires with open questions are used within the project. These tools offer the
possibility of recovering details that enrich the phenomenon explanation. The results
triangulation, as well as the discussion among experts, is of vital importance for the analysis,
too.
The atypical case is an artisan who has achieved international presence without
abandoning the traditional process of production that grants the handmade stamp to his/her
products. To the extent that they reach the prestige and demand of other regions, they keep
clear the renunciation to economies of scale and the company growth.
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These artisans have managed to make their production unit competitive internationally
despite not very advantageous sector, sustaining international competitive advantages for
several decades. Learning based on family structure and values have made it possible and has
even allowed them to maintain their financial autonomy.
From a database made up of 10,240 Jalisco handicraft production companies (IAJ,
2017), enterprises that have linked with economic agents from other regions and, therefore,
maintain internationalization activities, were identified. Only 2.75 percent of Jalisco handicraft
production companies have been internationalized. This percentage is represented by 282
companies. In comparison with the more than ten thousand Jalisco handicraft companies and,
according to the sector in which they operate, they are considered an atypical case.
This companies’ group should be exhaustively studied because it allows contribution to
the internationalization theory. Particularly, in sectors in which the capitalist system and global
value chains seem to go against international competitiveness, given the nature of their
production.
4. RESULTS AND DISCUSSION
Family values have contributed to the survival of artisanal production, regardless of the
family's economic situation. The tradition rooted in the core of the family and the vocation of
its members lead to a situation where the production has not been industrialized, replaced or
eliminated. In this way, the family tradition allows the existence of handicrafts.
The oral transmission of family memories to the new generations and the internalized
discourse on family tradition generate a positive vision of the trade (FREITAG, 2015). Cuevas
(2007) considers that poverty has also contributed to its existence, however this opinion differs
from this document conclusions.
As in the case of other economic activities, there are different reasons why people are
involved in craft production: vocation, circumstances, search for an economic income, among
others. The market, art, tradition, quality, and identity are factors that attract the demand for
handicrafts (GUEVARA, 2008).
In Tlaquepaque, Mexico there are craft designers who can are distinguishable due to
their originality and high quality. These two badges lead to the international recognition of
their crafts. There are also craftsmen who are dedicated to the imitation of handmade pieces
produced with low quality and low prices.
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The latter generates strictly commercial relationships with international buyers, mainly
Americans. Foreign buyers follow business conduct rules very strict and orderly. Commercial
asymmetries encourage distrust in quality as well as lack of knowledge about the supplier
(CARCAMO 2011).
Tlaquepaque produces original art that is marketed at high prices. This locality is
defined by its infrastructure and architecture (streets, roads, houses, buildings, churches of
colonial and classic style), in addition to restaurants and hotels that all together make the
attraction of national and foreign tourists more intense. (CARCAMO, 2011)
The National Microentrepreneur Financing Program in México promotes supporting
tools integrated by microcredits, accompanied by training and incubation of productive
activities. This program helps to start and consolidate various business deals, including
Mexican crafts. This seeks to improve the living conditions and well-being of the communities
of artisan microentrepreneurs (SE, 2016). However, there are few artisans who come to make
use of this type of financing. Most of them prefer self-financing or resort to informal sources
derived from their own contact networks.
An important challenge for the artisan is to separate him/herself from the informal
economy because the latter facilitates the sustainability of the business. Most of those who have
gone from informality to formality, have been attracted by the opportunity to internationalize.
Unfortunately, those who do not opt for such a transition usually depend on intermediaries that
undermine the benefits obtained by sales abroad.
The location of points of sale in tourist areas leads to crafts being acquired by foreigners
and, through migratory flows derived from tourism, taken to other regions. There are also cases
in which the foreign entrepreneur comes to the door of the workshop for the acquisition of
handicrafts. These last two situations encourage the existence of a large number of artisans in
the informal economy.
The Jalisco local learning system reflects the Pre-hispanic (in sense of pre-institutional)
heritage. This occurs when knowledge is transmitted from parents to children rather than by
institutions outside family. Oral transmission is essential for learning. This heritage is
combined with the colonial heritage.
The learning system is strengthened through workshops and self-learning. Higher
education courses taken at national and/or foreign universities are the exception, but they also
enrich the local learning system. This mixture of different learning sources does not dilute the
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family inheritance. This heritage is essential for the artisan conviction to continue with what
he/she considers his/her roots. Roots that are proudly exhibited at international events,
specialized magazines and in galleries near the workshop.
The learning system encourages novel artisan training. Almost always the apprentices
are formed within the same workshop. Thus, the artisan is the teacher who, in teaching the new
generations, conserves collective knowledge. Production secrets, lived experiences and
sensitivity to creating unique figures become a resource for the handicraft production
companies; but it is also a heritage that is hardly shared with people outside of family.
The concept of family extends beyond the consanguineous ties to include the workshop
members that over the years have been key personnel to achieve the artisan (also
internationalization) goals. Graph 3 shows the learning system in the 282 exporting companies.
Family inheritance is the most frequent form. Second is the workshop and, third, self-learning.
Internationalization is difficult without considering family ties.
Graph 3: Apprenticeship system in craft exporting companies.
Source: Own elaboration based on the results from the project "Generation of value and international
cooperation in the smallest companies in Latin America" UDG-CA-484.
The family of artisans uses the following strategies to achieve their permanence and
stability in the artisan trade: artisan organizations, craft contests, and virtual spaces (FREITAG,
2012).
The work tools usually vary a lot. It is not a representative sector for the development
and application of advanced technology. It is a sector that lends itself to the creation of its own
tools; or in some cases, to the adaptation of tools and industrial machinery (Graph, 4).
0
0,2
0,4
0,6
Family heritage
Workshop
Training course for
work
Self-learning
others
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Graph 4: Tools used by the handicraft production companies.
Source: Own elaboration based on the results from the project "Generation of value and international
cooperation in the smallest companies in Latin America" UDG-CA-484.
The level of economic informality in the sector is no surprise. This economic activity
precedes capitalism (Graph, 5). However, only companies in the formal economy are linked to
economic agents abroad. This requires the fiscal formalization of the craft manufacturing
companies. Thus, these companies issue invoices when foreign client makes a purchase (direct
internationalization).
Graph 5: Economic formality level in the handicraft production companies.
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
Meanwhile, they can also issue purchase notes for sales abroad through another local
company (indirect internationalization). However, companies that have reached a high level of
internationalization issue invoices for each transaction (28.46% of the companies studied,
Graph 5).
INDUSTRIAL OWN MANUFACTURING
00,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8
Issues invoice
not issue invoice
not specify invoice issuance
Issue purchase note
not issue a purchase note
not specify purchase note issuance
Issue invoice and / or purchase note
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It is possible that the degree of internationalization has an indirect relationship with the
degree of economic informality of the company. If the internationalization level is low, then
the informal level is high. If the internationalization level is high, then the informal level is
low.
The company maintains a size small enough to preserve the closeness between the
teacher and the apprentice. A larger size transforms the teacher into a manager or administrator,
and the apprentice into an employee. The growth of the company beyond these limits has a
negative impact on both the product quality and the work environment.
In principle, it is committed to quality craftsmanship that finds an international market
willing to pay a relatively expensive price. The trend towards greater growth in terms of
outreach and higher sales is moving away from the interest of internationally successful
artisans.
The constant growth in production leads to the end of the activity as an artisan. For this
reason, it is possible that an increase in sales is due to the fact that the product tends to increase
its value, and it is not necessarily caused by an increase in the quantity of the units produced.
(Graph 6)
Graph 6: Monthly sales of handicraft production companies.
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
The craftsman who operates permanently in an international environment opts for the
demand for his product leading to an increase in price rather than an increase in the units
produced.
This gives greater sustainability to crafts. Only 4 percent is getting monthly sales greater
than 50,000.00 Mexican pesos. It is considered that this group represents artisans with the
highest international prestige. They maintain a website with a detailed catalog of the pieces
52%
34%
10%
4%
Until $5,000 mxn from $5001 to $20 000 mxn
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they produce, the art expressed makes them unique, the quality in the production process
precedes the quantity.
52 percent of artisans earn a monthly income of up to 5,000.00 per month. This group
corresponds to the craftsmen who carry out a few international activities. They focus more on
the local market, in which they opt for the flows of international tourism, making agents from
other regions come to demand their crafts. They locate their workshops at points near historic
sites and craft markets, sites with greater affluence of people interested in knowing and
obtaining a regional product.
The Mexican magical towns, the local government investment, and the tourism influx
contribute to the sales of artisans. There is no entrepreneur in the study group whose location
is on the periphery of the cities where it is located. On the contrary, its galleries and workshops
are located in the most central area of the towns in which they are located.
Graph 7: Obstacles to accessing financing.
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
The financing offered by credit institutions is practically unnecessary (Graph 7). From
a financial perspective, it is important to point out that high interest rates are not a cause of
credit being inaccessible; rather, it shows that credit is not tailored to that productive sector.
Requiring a higher interest rate than the entrepreneur can bear through applying the business
activity resources, makes the credit unnecessary. Probably the causes would also include the
thorough requirements covering the bank risk perspective.
Any connoisseur of credit knows that even when the information for a loan is fulfilled,
it can be rejected because it is not consistent with the risk assumed by the creditor. The same
0
0,1
0,2
0,3
0,4
0,5
High interests
Checking income
termendorsement
guarantee
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also happens with the terms of financing. The result, these companies turn to other external
sources of financing (Graph 8). Few have required financing from credit institutions (Graph 9).
Graph 8: External sources of financing.
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
Graph 9: Self-financing.
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
The financing is achieved thanks to relatives and acquaintances. The members of the
family form a supportive network that financially help the activity. Family finances are often
combined with self-financing. Financial resources are applied to acquisition of the raw material
for production rather than for purchasing machinery and equipment. Only a small percentage
is interested in remodeling the workshop (Graph 10).
Functional obsolescence (Cervera, 2013) seems not to be present in this type of
company. The number of materials, molds, tools, drying pieces or pieces in process occupy a
large part of the space devoted to the production of handicrafts. (Freitag, 2012)
32%
36%
32%
BANK CREDIT PUBLIC SUPPORT POPULAR BOXES
0
0,1
0,2
0,3
0,4
0,5
REQUESTED
FINANCING
OBTAINED
FINANCING
SELF-FINANCING
NOT REQUIRED
EXTERNAL
FINANCING
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Graph 10: Application of financial resources
Source: Own elaboration based on the results of the project "Generation of value and international cooperation
in the smallest companies in Latin America" UDG-CA-484.
5. CONCLUSION
The family inheritance allows the existence of companies that produce handicrafts.
Collective memory and learning open the way to internationalization without abandoning the
artisan craftsmanship. Learning is combined with training of artisan strategists who cover the
roles of the creative and entrepreneurial agents to transform obstacles into opportunities. In this
way, the learning system of these companies encourages self-financing, constant adaptation to
change and greater use of the international market.
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0
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Applies the financing
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raw material
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equipment
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... The United States, the European Union and China were introducing increasingly protectionist measures long before COVID19. The large economic blocs had already started a tariff war in strategic sectors, a situation that involved countries from the Middle East, Latin America, Africa and Asia (Castillejo & Silvente, 2020;González, 2020). ...
... Learning facilitates the adaptation of economic agents to changes in the environment, no matter how unfavorable they may be (González & González, 2020). This works best when it comes to cultures in which the learning system has fostered creativity, knowledge as "a commons", and family cohesion. ...
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