Networking and internationalization of SMEs in emerging economies

Networking has been established as an important source of small- to medium-sized enterprises (SMEs) business expansion in many developed economies. Often, it provides the necessary intelligence leading to internationalization. The question this study addresses is “What are the roles and sources of networking of SMEs internationalization in emerging economies?” This study responds to this query through a dyadic study involving expert-opinion survey of SME development professionals and case studies of SMEs internationalization. The convergent views identified three interconnected sources of networking for SMEs internationalization, which are government institutions, business associates, and personal relations. The results affirmed that accomplishment of internationalization requires cohesion among the myriads of networking sources and operating agencies. A systems approach towards supporting the creation and management of networking linkages for internationalization combines systems thinking perspective with institutional view. It emphasizes integration of coordination, facilitation, and monitoring functions. Thus, suggesting institutional support and systems thinking are important constructs in the theory of international entrepreneurship. Policy makers and entrepreneurs of SMEs gain actionable points to ensure effectiveness of institutional support mechanism and to enhance their business internationalization, respectively.     

Untangling African indigenous management: Multiple influences on the success of SMEs in Kenya

This article examines the nature of indigenous management in relation to the success of SMEs in sub-Saharan Africa, taking Kenya and six SMEs under the management of Kenyan Africans, Kenyan Asians and Kenyan British as examples. It proposes that management systems, styles and practices, when appropriate to the local cultural contexts, will give rise to successful organizations. By formulating tentative hypotheses about this relation after reviewing the literature, the data from these case studies are interrogated first by using a ‘template’ derived from theories of management control to investigate the inter-continental cultural influences on local management, and then inductively to modify and develop the original hypotheses in view of possible intra-country influences. Paternalism, emerges as a common theme in the way cultural influences are combined, suggesting different types of paternalism for in-group and out-group organizational members. This is a possible success factor for local SMEs. Implications for future research in these areas and management practice are discussed.     

Strategic agility of SMEs in emerging economies: Antecedents,consequences and boundary conditions

This study investigates the effects of firm-level capabilities, and their relationships with strategic agility and the international performance of small and medium-sized enterprises (SMEs). Using time-lagged data from 233 internationalizing SMEs from Ghana, we test the direct relationships between SMEs’ capabilities and strategic agility. Additionally, we examine the indirect relationships between technological and networking capabilities and superior performance in international markets through the mediating mechanism of strategic agility. We also investigate the moderating effects of environmental dynamism and internationalization knowledge on the relationship between strategic agility and international performance. Our findings provide a nuanced view of the relationship between the firm-level capabilities, strategic agility and SMEs’ international performance.     

Top management teams and corporate success in an emerging industry

This longitudinal study investigates changes in top management teams of a cohort of firms established in an emerging, high growth industry-the minicomputer industry. Given the turbulent conditions that organizations in this industry must contend with, top management teams do not remain stagnant. Most firms in the industry require a new set of executives to bring forth the organizational changes necessary to cope with major shifts in the environment.Little consensus exists in the literature on the impact of new executives on organizational performance. Studies have found that executive succession may be either positively, negatively, or unrelated to subsequent organizational effectiveness. The authors argue that a weakness of the existing research stream is a failure by scholars to adequately consider either the characteristics and skills of newly appointed executives or the patterns of change in management characteristics over time. The authors propose that organizational performance implications of executive succession events can be clarified by examining who the newly recruited executives are.When executive replacements are made, new successors often have characteristics which widely deviate from those of their predecessors. Such deviations in top management characterisics are shown to be pronounced where top management changes are made in response to crisis. In crises, successors are apparently recruited in an attempt to compensate for the shortcomings of their predecessors. However, while both high and low performing organizations make executive replacements as they evolve, the types of top management revisions they make differ. This study provides evidence that the types of senior management team changes made and the characterisics of newly recruited top management are related to organizational performance. High performing firms recruit new top management with new skills that are appropriate to the evolving environment. Lower performing firms somehow replace executives in response to crises, but seem to make the wrong executive recruitment decisions, apparently because the successors in the lower performing organizations do not match the changing competitive conditions in the industry. Low performing firms appear to recruit executives that entirely lack the types of top executive expertise are necessary for new environmental conditions.Although the majority of minicomputer firms required sizable changes in their executive teams over time, a small but significant subgroup of exceptional firms were identified that defy conventional wisdom. These extraordinary organizations were led by visionary CEOs—capable of maintaining management team stability as they successfully repositioned their firms' strategies to cope with continual environmental change. Among the conventional theories that these exceptional managers defy are: 1. Firms in high growth industries can be highly successful even if they retain their CEO/ Founders well beyond the embryonic stage. 2. Firms in high growth industries can retain a significant proportion of management ownership and still grow exponentially without financial crises. 3. Firms in high growth industries can maintain a high level of insider recruitment and still not become inbred.There appear to be two entirely distinct patterns of CEO/executive team success:Pattern 1 involves firms with no CEO change. This visionary CEO tends to be a founder who appears to be able to systematically recruit a limited number of external recruits in the top management team, selecting recruits who fit a changing environment yet also making maximum use of the existing team's longstanding experience and relationships. To maintain the necessary external perspective and avoid an inbred mindset, these firms a) tend not to allow the CEO to also be chairman, b) encourage a modest level of external ownership.Pattern 2 involves firms in which there is extensive turnover in both CEO and senior management teams, once again bringing in the kind of skills needed to match the changing environment. The CEO tends also to be chairman, and the external perspective is provided by having many external recruits plus low level of management ownership.     

Corporate recidivism in emerging economies

Prior research on corporate misconduct pays extensive attention to single misconduct behaviors. However, little research has addressed recidivism – the repeated behaviors of corporate misconduct. Based on institutional theory and using the context of emerging economies where recidivism plays a considerable role, we propose the path dependency of corporate recidivism and suggest that three influential factors exist: internal preconditioning, inter‐organizational imitation, and the prevailing external evaluation. Our event history analysis of 1,036 listed companies in China over the period 2001–2008 statistically confirms our hypotheses. We conclude the paper by outlining the implications for both theory and practice.     

Cooperative ventures in emerging economies

Foreign market entry strategy involves choices about which markets to enter and how to do it. Most of the literature on foreign direct investment reflects an interest in ownership structure decisions and the risks foreign investing firm may face. As recognized in many studies, one set of risks arises from public expropriation hazards, a function of the ability of the host country's institutional environment to credibly commit to a given policy or regulatory regime. Empirical research has shown this hazard to have an impact on ownership levels. This study is a theoretical model that describes how multinational firms face moral hazard risk from their local partners and political risk from the host country when they decide to go abroad in a joint-venture alliance. I found that the greater the level of hazard expropriation, the lower the participation of the multinational firm in the final cash flow, except for when the multinational firm has the negotiation power and there is a high level of local investment protectionism. In that case, the multinational firm increases its participation in the final cash flow.     

Key success factors of multinational firms in China

This article presents the latest empirical findings on factors critical to the success of multinational companies (MNCs) investing in the People's Republic of China. The study, based on recent face-to-face interviews with managers from MNCs in China, shows that critical success factors for these MNCs include: CEO's long-term commitment to the Chinese market, thorough predeparture training and feasibility studies, patience and persistence, effective use of Chinese intermediaries, bringing a brand name image, establishing wholly owned structures whenever possible, finding qualified local partners in joint ventures, winning trust from Chinese officials and managers, and developing good human resource management. The study has laid a solid foundation for a quantitative survey of these issues in the future. ©1998 John Wiley & Sons, Inc.     

Internationally leading SMEs vs. internationalized SMEs: Evidence of success factors from South Korea

Previous studies on the internationalization of small and medium-sized enterprises (SMEs) have typically compared the performance of internationalized SMEs (I-SMEs) with that of non-internationalized SMEs. However, not all I-SMEs can successfully lead the international market either unless they should consistently strive to attain and maintain competitive advantages. Thus, this study aims at identifying success factors which influence efforts of I-SMEs to lead international markets as internationally leading SMEs (IL-SMEs). To examine the success factors of the IL-SMEs, in this paper, IL-SMEs are specifically defined as I-SMEs which occupy dominant positions in the international market, i.e., ranking among the top three worldwide. The results based on a sample of 88 South Korean SMEs including 18 IL-SMEs and 70 I-SMEs indicate that 18 factors (out of 47 factors) show significant differences between IL-SEMs and I-SMEs in terms of customer relations/service, technological innovation, and corporate strategies. Also, by factor analysis and logistic regression analysis, three factors influencing the success of IL-SMEs are identified in the perspectives of technological innovation (R&D) and international marketing (customer satisfaction and demand quality/scope). Surprisingly, internationalization strategies and external markets have no relationship with performance of IL-SMEs. These results provide important implications to policy-makers interested in the sustainably international competitiveness of SMEs.     

MNE translation of corporate talent management strategies to subsidiaries in emerging economies

The rise of emerging economies in recent years has motivated calls for research into how multinational enterprises translate their corporate strategies to subsidiaries in these countries. This study addresses this issue and presents a heuristic framework derived from the resource-based view and neo-institutional theory. We propose that the translation of corporate talent management strategies to emerging economies is affected by metropolitan and provincial institutional and cultural differences. We develop propositions pertaining to corporate-local level decision-making, community relations, skills shortages, and diversity, to inform future research and practice.     

Key success factors for Russian-foreign joint ventures

This article identifies key success factors (KSFs) for Russian-foreign joint ventures. Based on case studies of two successful and two unsuccessful Russian-foreign joint ventures, four KSFs are identified. The presence of the four KSFs is then assessed in a sample of 30 Russian-foreign joint ventures. To assess the generalizability of the KSFs, discriminant analysis is then applied to the 30 joint ventures to differentiate between successful and unsuccessful joint ventures. The results show that the KSFs can explain 83.3 percent of the variance in the performance of joint ventures in the sample.     

Housing wealth effect in emerging economies

In this paper I estimate the impact of changes in real and financial wealth on private consumption for a panel of 17 emerging economies from Asia and Central and Eastern Europe. Households' consumption, income and the two measures of real and financial wealth – proxied by house and stock market prices – are found to be difference-stationary and co-integrated; by means of recent econometric techniques for heterogeneous panels, i.e. the pooled mean group estimator, inference is drawn about the long- and short-run relationships between the variables of interest. The main result of the analysis shows that both real and financial wealth positively affect households' consumption in the long-run, with the elasticity of housing wealth being larger than that of stock market wealth. Moreover, there is also a significant short-run adjustment from income, stock prices and house prices on consumption, i.e. consumption adjusts to its long-run relationship with lags. When the model is run for the two groups of countries separately, the long-run impact of an increase (decrease) in house prices is generally higher in Central and Eastern European economies with respect to Asian ones, which make them more vulnerable to further adverse housing market developments.     

The impact of global factors on stock market movements in emerging market economies

Global factors are becoming increasingly important as a cause of international capital fl ows. It is nearly impossible for some countries to protect themselves from outside infl uences on their fi nancial markets. This paper investigates the extent to which various global factors such as stock market volatility, international liquidity and global interest rate levels impact on the effective fi nancial market exchange rates of selected emerging market economies. These results are compared with effects on the fi nancial market exchange rates of the United States, the United Kingdom and Germany.     

International business-government relations: The risk management strategies of MNEs in emerging economies

In emerging economies where the institutional environment is weak, the level of risk faced by MNEs remains high. Extant literature recognizes the forms of risks faced by MNEs, but only a few studies have attempted to explain how firms identify and mitigate these risks. This study addressed the commercial risk management strategies of MNEs operating in Vietnam. We found that the government remained the key stakeholder and maintaining active relations with them aided MNEs’ operational success. The risk mitigation strategies employed by MNEs included managing alertness, portraying good behavior, navigating through the state of comfort, and active mediation.     

Engagement in entrepreneurship in emerging economies: Interactive effects of individual-level factors and institutional conditions

This paper examines individuals’ engagement in entrepreneurship in emerging economies. We conceive of such engagement as encompassing opportunity discovery, evaluation, and exploitation. We investigate the influence of individuals’ household income and level of education on their engagement in entrepreneurship, as well as the interaction effects between these individual-level factors and country-level regulatory, cognitive, and normative institutions. We test our hypotheses on a multi-source dataset from 22 emerging economies using a multilevel analysis technique. Our results indicate that the direct effect of individuals’ household income on their engagement in entrepreneurship is persistent, regardless of institutional conditions; but the influence of education level varies contingent upon various institutional conditions.     

Key success factors for strategy implementation in Latin America

Increasing competition among Latin American firms fosters more proactive processes aimed at reviewing business strategy. The research objective is to measure the impact of key variables on successful implementation of business strategy. Relying on the knowledge and experience of Latin American entrepreneurs and managers, the questions addressed include: How important is the role of the CEO and management actors? Do firms prioritize actions prior to implementing strategy? Are control and follow-up tools valued? How is a successful strategy implementation ensured? Research findings are expected to provide useful knowledge for management decision processes relating to successful implementation of business strategy.     

Corporate governance and MNE strategies in emerging economies

We explore factors of convergence and divergence in corporate governance of emerging and developed market economies, focussing on the role of firm internationalisation. In particular, foreign investments by emerging economy firms led to upgrade of their governance capabilities. These firms also became advocates for home-country policy reforms that mandated the development of similar capabilities for local firms. We present a broad overview of the literature and propose an approach that considers the evolution of corporate governance, both at the national level and the firm level, with MNEs from both emerging market economies and developed economies as active actors in this process.     

Key success factors for mobile app platform activation

This study explores the key activation factors of the mobile application development platform through a comparative analysis of Apple App Store and Samsung Apps platforms based on the information and communications technologies intensive service innovations (IISIⁿ) model from the developer’s perspective. We conducted intensive interviews of 14 mobile app developers who had development experiences with both Apple App Store and Samsung Apps. The study results indicate that the most important app development platform activation factors from the developer’s perspective are: (1) core components of the platform and technical support; (2) policy assistance for developer work activities; and (3) assurance of adequate financial returns to developers. This study is based on grounded theory and uses the IISIⁿ model to determine the success factor of mobile app platform activation. The results of this study make contributions to both theoretical and practical aspects regarding strategies and operations of mobile app development platforms.