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Internationalization : entrepreneurial view - Coggle Diagram
Internationalization : entrepreneurial view
created by : Oviattand McDougall (2005a, p. 540)
The discovery, enactment, evaluation, and exploitation of opportunities –across national borders –to create future goods and services”.
Entrepreneurship ; “Identifying, developing and exploiting opportunities.
Small and medium companies
Why SME´s dont internationalize ?
Lack of knowledge
Lack of business opportunities
Lack of financing
Lack of networks and connections
-Cultural differences
Three prerequisites for internationalization:
Knowledge
Opportunities
Entrepreneurial capability
Entrepreneurial capabilities
•Identify market needs
•Exploit existing resources
•Proactively develop opportunities
•Adaptability
High risk
•Uncertainty
How do you mitigate?
•Trust in relationship
s•Decisions guided by affordable losses
Why internationalize ?
-Size of home market
•Emergence of new markets
•Technological developments
•Emergence of networks and alliances
Internationalization success depends on leaders and organizational capabilities
International experience
Vision
Commitment
Innovativeness
Strong market orientation
Adaptability to changing market condition
Experimentation and adaptation
Strategic intrernationalization(Autio, 2017)
•Proactive capability development
•Business model experimentation
•Asymmetry exploitation
•Niche strategy
Knowledge :
( link to tallman )
Knowledge-based companies are those who "have a high level of scientific knowledge embedded in both products and processes" (Bell et al., 2003)
A dynamic capabilities-based entrepreneurial theory of the multinational enterprise
Dynamic capabilities:
the ability of an organization and its management to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments
VRIN-resources =
Valuable, Rare, Inimitable, Non-substitutable•
Signature processes and business models = embody a company’s history, experience, culture, and creativity
1 more item...
Oviatt, B., M, and McDougall, P., P. (2005). Entrepreneurship and Modeling the Speed of Internationalization
how the speed of entrepreneurial internationalization
is influenced by various forces.
The discovery, enactment, evaluation, and exploitation of opportunities –across national borders –to create future goods and services”.
Why certain some entrepreneurial behavior is faster to internationalize than others ?
1 : Entrepreneurial opportunity
Mediating :
Entrepreneurial
Actors perception : How the actor views and interprets the opportunity
Moderating : Network relationships:
Tie strength
Network size
Network density
Internationalization speed :
-Initial entry
-Country scope
-Commitment
Moderating :Knowledge
Foreign market
Intensity
2 :
Motivating
force of competition
3.Enabling
Technology
Cavusgil, S., Knight, G. 2004-20165
Born globals
2004 article
: Framework to charactarize the early and rapid internationalization of born globals
Born globals exhibit a high degree of international entrepreneurial orientation supported by entrepreneurial founders or managers.
Small in scale limited in tangible resources
Have distinctive intangible resources and capabilities
Focus on exporting SME´s
**Early Internationalization occurs despite resource and experience scarcity ( under asset parsimony)
How ?
Innovation ->knowledge -> unique organizational capabilities-> rapid internationalization
the availability of non-traditional organizational assets driven by founders and managers such :
Proactive orientation,
Dynamic capabilities
Skillful strategy
Leveraging unique capabilities and strengths :
-high degree of entrepreneurial orientation
-persistence
-innovation
-differentiated offerings.
Strategies :
Differentiation strategy
Focus strategy : focus on one group of consumers or one product
Innovation culture :
Builds knowledge and capacities
2015 article
Early and rapid internationalization benefit enormously from network relationships
and other forms of social capital
- Born global firms found in industries characterized by rapid growth, high knowledge intensity, and global interconnectedness
value-added offerings innovative, cutting edge, differentiated, and unique
The leadership of born global firms is often driven by change agents who champion internationalization
Entrepreneurial founders seek global customers
Nations with small domestic markets tends to nurture a higher incidence of born globals
Innovation drives internationalization through capabilities development
THE FUTURE OF EARLY AND RAPID
INTERNATIONALIZATION
Opportunities:
Competitive pressure driving efficiency, innovation and change
Tech dev
collaborative ventures
network relationships
emerging markets and new markets niches
lower entry barriers to markets
Challenges:
Need to constantly develop new capabilities to optimize global operations
Finding competent partners
-Liability of foreignness and newness
Born global success depends on :
Entrepreneurial orientation
retain technological edge offering
dynamic engagement of network
managing transition to complexes organization without loosing entrepreneurial advtg
balance opportunity and risk
Stay agile
A dynamic capabilities-based entrepreneurial
theory of the multinational enterprise
Entrepreneurial management and transformational leadership are
incorporated into a capabilities theory of the MNE
Dynamic capabilities coupled with good strategy are necessary to sustain
superior enterprise performance entrepreneurial
approach that emphasizes the importance
of (signature) business processes both inside the
firm and also in linking the firm to external partners
It also recognizes the importance of critical resources
and good strategy
It is not animated primarily by
transaction cost or contractual on the resource-based approach
why old throes suck :
Capabilities and Learning Unexplored
Cross-Border Market Creation and Co-Creation
Ignored
Entrepreneurship Suppressed, Leadership
Ignored Management Muted equilibruim Assumed,
-“Control” Follows Ownership of (Foreign)
Subsidiaries; Inter-Firm Relationships Enigmatic
Competitive Advantage Neglected
Facts
The (dynamic) capabilities framework is an entrepreneurial
approach that emphasizes the importance of signature business processes both internally and linking the firm to external partners
It also recognizes the importance of critical resources
and good strategy.
Understanding sustainable competitive advantage
(and not just the boundaries of the firm)
Managerial and organizational capabilities are determinants of competitive advantage
Components of dynamic capabilities
Dynamic capabilities signature VRIN resources:
Embody a company’s history, experience, culture,
and creativity
Not so easily replicated
Positions ( VRIN Resources ):
The management and coordination of Tangible and intangible assets ( knowledge) VRIN criteria
Paths ( strategy) Good strategy :
1- Sensing ( identifying and assessment of opportunities ) Diagnosis
2- Seizing ( mobilization of resources to seize opportunity ) Guiding policy
3- transforming ( continuous change to continuously adapt) coherent action
Signature Processes
:
Management´s ability to design, develop implement and modify routines to adapt to the environment
Where certain capabilities and markets are absent, they need to be created.
Entrepreneurs and managers in parents and subsidiaries build signature processes, deploy distinct
resources, and design good business models and
strategies in pursuit of profits
the question robust theory of the MNE is not
simply where to locate in order to minimize production
and transaction costs, but where to locate to build or deploy signature processes and obtain market
access
Organizations are not driven only by reducing contractual risks but also by developing and building dynamic capabilities
Replicability and Imitability: Ordinary vs Dynamic Capabilities
Ordinary capabilities:
Easily replicable Non VRIC
No innovation simply allow an existing
product or service to be made, sold, and serviced
They will not necessarily permit the MNE to grow except in environments with low competition, no
technological disruptions, and very limited globalization. or to emerging economies.
not basis for competitive advantage