Internationalization as an entrepreneurial process

When firms cross-borders it is, by definition, internationalization. We believe that often internationalization should be seen as either a by-product of a firm’s efforts to improve its position within its network or networks, or as the result of an entrepreneurial action. We consider three theoretical approaches as a starting point and breathe life into them with a rich case study. We suggest adjustments to Johanson and Vahlne’s business network internationalization process model, an update of the Uppsala internationalization process model, to emphasize the entrepreneurial aspects of the process.     

International springboard as an entrepreneurial act

International springboard is an entrepreneurial act that requires international entrepreneurial orientation (IEO). An important aspect of international springboard is the establishment of a deeply localized flagship foreign subsidiary to help pursue diverse international strategic goals. We model parent-level IEO as a mediator in the relationships between diversity of international strategic goals and flagship subsidiary localization strategies (customer responsiveness, market scope, and local cooperativeness). The results from a sample of 208 Chinese MNEs demonstrate that the three dimensions of IEO (innovativeness, proactiveness, and risk taking) play an important but differentiated mediation role. The study illustrates the connection between parent-level entrepreneurial behavior and subsidiary-level strategic actions through which MNEs capture cross-national entrepreneurial opportunities.     

Contingency as an entrepreneurial resource: How private obsession fulfills public need

Borrowing from Rorty (1989:37), this article portrays the entrepreneurial process as a mechanism through which “private obsession” fulfills “public need.” It begins with an argument that a deeper understanding of contingency can enhance management scholarship in general and entrepreneurship in particular. It continues with an examination of contingency and entrepreneurial opportunity and then uses six narratives to show how both personal and historical contingencies become resources in the entrepreneurial process. A depiction of possible alternative responses (counterfactuals) for each narrative illustrates how entrepreneurs tend to take a resourceful, rather than an adaptive or a heroic stance toward contingency. A discussion of American Pragmatism provides theoretical support for contingency's role in the entrepreneurial process. The paper concludes with a literature review and a look at how this view of entrepreneurial contingency illuminates the temporal context in management scholarship, among other implications for both research and practice.     

The paradox of new venture legitimation within an entrepreneurial ecosystem

The current rise in research on entrepreneurial ecosystems notes that many questions are still unanswered. We, therefore, theorize about a unique paradox for entrepreneurs trying to establish legitimacy for their new ventures within and beyond an entrepreneurial ecosystem; that is, when pursuing opportunities with high levels of technological or market newness, entrepreneurs confront a significant challenge in legitimizing their venture within an entrepreneurial ecosystem, while those entrepreneurs pursuing ventures using existing technologies or pursuing existing markets have a much easier path to garnering legitimacy within that ecosystem. However, the diffusion of that legitimacy beyond the ecosystem will be wider and more far-reaching for those pursuing the newer elements compared to those using existing technologies or pursuing existing markets, thus, creating a paradox of venture legitimation. Prior research outlines approaches for new venture legitimacy but it is unclear when these approaches should be applied within and beyond an entrepreneurial ecosystem. To address this paradox, we integrate ideas from the entrepreneurship and innovation literature with insights from the legitimacy literature to describe how different types of venture newness employ different legitimation strategies which results in different levels of legitimacy diffusion beyond an ecosystem. We conclude with a discussion of our concepts and offer suggestions for future research efforts.     

Perceived psychological distance,construal processes,and abstractness of entrepreneurial action

In this paper we develop the concept of abstractness as an underlying theoretical structure of entrepreneurial action, specifically to connect individual perception of psychological distance to entrepreneurial action. We draw on construal level theory to model distance and abstractness, using construal as the mechanism where, in new venture creation, entrepreneurs are expected over time to engage in more abstract action when they perceive greater psychological distance. Based on longitudinal data from 350 entrepreneurs, results from cross-lagged panel analysis indicate that psychological distance shapes the actions of entrepreneurs over time through social distance and hypotheticality. These findings advance entrepreneurial action research, practice, and pedagogy by showing that the apparently implicit relationship between entrepreneurial perception and entrepreneurial action may actually be quite explicit, when abstractness of action is seen as a construal-mechanism-based function of psychological distance.     

The role of entrepreneurial cooperation

Entrepreneurial cooperation between industrial and developing countries has gained in significance during the past decade, both in practice and in academic discussion. To what factors can this trend be attributed? What forms of cooperation are available? Where do the opportunities and risks lie?     

The informational basis of entrepreneurial discovery

Scholars have identified four different roles played by entrepreneurs in the discovery of new venture opportunities. What each of these roles has in common is that the discovery process consists of the acquisition of specific, risk-reducing information. Uncertain returns from such investments deter some would-be entrepreneurs from making discoveries. This approach suggests that the vision to make entrepreneurial discoveries depends on making cost-effective informational investments, not on special talents possessed by only a few aspirants.     

Governance and strategy of entrepreneurial networks: an introduction

This special issue focuses on empirical and theoretical papers that help us to better understand the strategy and governance of entrepreneurial networks, such as franchise chains, alliances, and cooperative networks. The following central themes are covered: (I) Which formal governance mechanisms do entrepreneurial networks use in order to reduce transaction cost/agency cost and to increase strategic value? (II) What is the role of relational governance mechanisms (such as information exchange and social ties) for the performance outcomes in franchise chains and cooperatives? (III) Which alliance strategies do entrepreneurial firms pursue to realize a competitive advantage, and what is the impact of resources and capabilities on performance outcomes of entrepreneurial firms. To address these issues, insights from organizational economics (transaction cost theory, agency theory, signaling theory), strategic management perspectives (resource-based, knowledge-based and organizational capabilities theory), entrepreneurship theory and the relational governance view are used.     

The future of research on entrepreneurial intentions

Entrepreneurial intention is a rapidly evolving field of research, with a growing number of studies using entrepreneurial intention as a powerful theoretical framework. Some authors, however, are now calling for scholars to rethink the future of research on entrepreneurial intentions. This paper addresses this issue and, on the basis of a number of knowledge gaps in the literature, proposes future directions for research.     

The lineages of the entrepreneurial ecosystem approach

In its most abstract sense, an ecosystem is a biotic community, encompassing its physical environment, and all the interactions possible in the complex of living and nonliving components. Economics has always been about systems that explain differential output and outcomes. However, economics has generally ignored the role of entrepreneurship in economic systems, just as entrepreneurship studies have largely overlooked the role of systems in explaining the prevalence and performance of entrepreneurship. The entrepreneurial ecosystem approach has the promise to correct these shortcomings. Its two dominant lineages are the regional development literature and the strategy literature. Both lineages share common roots in ecological systems thinking, providing fresh insights into the interdependence of actors in a particular community to create new value. But studies of both regional development and strategic management have largely ignored the role of entrepreneurs in new value creation. In this paper, we will outline contributions to the entrepreneurial ecosystem approach and conclude with a promising new line of research to our understanding of the emergence, growth, and context of start-ups that have achieved great impact by developing new platforms.     

The role of networks in the entrepreneurial process

The extent to which the entrepreneur interacts with the networks in his local environment during the process of starting a new firm was studied. This study was based on the premise that, during this process, he is seeking not only the resources of equipment, space, and money, but also advice, information, and reassurance. Consequently the help and guidance received from both the formal networks (banks, accountants, lawyers, SBA) and the informal networks (family, friends, business contacts) will influence the nature of the firm substantially.The study was conducted in St. Joseph County, Indiana, a county that has experienced the same economic problems as many other towns in the midwest smoke-stack belt during the 1970s. In 1982, in response to this general decline in the business climate, a fund was raised to create and manage a new industrial strategy. Before this, there was no collective strategy for nurturing either the small firm or the new firm. Therefore, in order to determine the extent to which an interventionist strategy was appropriate, a research project was designed that posed three basic questions: what does the environment look like; does it need changing; and, if so, in what ways? This article reports part of that study—a survey of firms that had started in the county in the previous five years (1977–1982). It was concerned with two issues: the characteristics of the St.Joseph County entrepreneur and the usage of the formal and informal networks.The results of the survey show that the aggregate characteristics of the St. Joseph County entrepreneur are similar to those found in other studies. The new firms were founded by local people from small firms who started their small firms in similar industries that were local in nature. Moreover, the majority (90%) not only started small, but also grew very little subsequently—firms that have been classified elsewhere as life-style ventures. It is to be expected that such people would have a strong local network, both formal and informal, particularly in a county with a population of only 220,000. However, the results of the second part of the study showed that the main sources of help in assembling the resources of raw materials, supplies, equipment, space, employees, and orders were the informal contacts of family, friends, and colleagues. The only institution that was mentioned with any regularity was the bank, which was approached towards the end of the process when many of the resources were assembled and the elements of the business set in the entrepreneur's mind. This was not because the formal sources were unwilling to offer guidance, but rather that the entrepreneur and his social network appeared to be unaware of what was available. Moreover, in using only business contacts, family, and friends, the entrepreneur was likely to re-create the elements of previous employment, even when he was starting business in an entirely new market. Further, there was no significant difference between growth and no-growth firms. It would appear that in this county, the formal network was uniformally inefficient.This research shows that a major aim of the new strategy should be to increase the awareness of the community to the formal sources and types of help that are available. However, whilst most of the institutions are prepared to solve specific problems, they are not in the business of diagnosis or counseling. The network needs a hub or an enterprise office.The data on the start-up process and the role of networks in relation to new firms are very sparse and often anecdotal. This study was conducted in one environment, a small midwest county with a jaded entrepreneurial tradition. Further studies are necessary. Research questions include the extent to which networking is crucial in the start-up process, the length of time it took for the sophisticated networks of Boston's Route 128 and California's Silicon Valley to develop, and the effect of different geographic, cultural, and economic conditions. Only in this way is it possible to determine the extent to which regional, regeneration strategies for new firm creation should be county specific rather than state or country wide.     

Negative emotions of an entrepreneurial career: Self-employment and regulatory coping behaviors

Although we know a great deal about the relationship between self-employment and the experience of positive emotions such as passion, excitement, happiness, satisfaction, and flow, there is some research that suggests that the self-employed may be more susceptible than employees to negative emotions such as stress, fear of failure, loneliness, mental strain, and grief. We draw on the literature on role requirements to develop a model of career pursuit based on individuals' willingness and abilities to regulate these emotions. Using a nation-wide survey of more than 2700 US citizens we show that over and above the effects of positive emotions, the self-employed experienced fewer negative emotions than those who are employed, contingent on their regulatory coping behaviors. We discuss implications of these results for the literature on entrepreneurial emotions.     

The role of entrepreneurial risk in financial portfolio allocation

Small Business Economics - Entrepreneurs or small business owners are confronted by a number of risks in their business activities. Previous literature suggests that entrepreneurs balance...     

International entrepreneurial marketing strategies of MNCs: Bricolage as practiced by marketing managers

The extant research lacks information on entrepreneurial marketing in large international firms. This study explores the international entrepreneurial marketing strategies of multinational corporations (MNCs), and its results reveal that MNC marketing managers use bricolage to develop international entrepreneurial marketing. A novel finding of the study is that the international entrepreneurial marketing strategies of MNCs include co-innovation, accelerating customer value, and international expansion based on regional market leadership. Marketing managers use both parallel and selective bricolage in their international entrepreneurial marketing. Environmental uncertainty and entrepreneurship culture are important drivers of the implementation of bricolage to develop international entrepreneurial marketing. The research findings can inform MNC management of the options available to utilize corporate venturing to facilitate bricolage and in turn to realize international entrepreneurial marketing strategies.     

Experience as a catalyst of export destinations: The ambidextrous connection between international experience and past entrepreneurial experience

This paper examines how different forms of accumulated exploitable knowledge—i.e., export experience with the current firm and past entrepreneurial experience—stimulate export destinations, defined as the number of foreign markets where businesses sell their products/services. The proposed hypotheses are tested on a unique sample of Costa Rican entrepreneurial businesses for 2017. Results from the sequential deductive triangulation analysis (QUAN → qual) reveal that the ambidextrous connection between export experience with the current firm and past entrepreneurial experience is an essential prerequisite for explaining export destination figures. Also, the positive effect of export experience with the current business on export destinations is more prevalent among firms created by serial entrepreneurs. These findings corroborate our argument line on the importance of generative-based learning processes. Furthermore, the results of the qualitative analysis suggest that task-specific international experience and experience gained through past business venturing are relevant micro-foundations of international business expansion in the context of the export destinations of entrepreneurial firms.     

Entrepreneurial exit as a critical component of the entrepreneurial process: Theoretical development

By demonstrating the importance of entrepreneurial exit to the entrepreneur, the firm, the industry, and the economy I contend that our understanding of the entrepreneurial process is incomplete without the inclusion of entrepreneurial exit. I define entrepreneurial exit and demonstrate how this conceptualization provides concepts that are unique from those addressed by researchers in other domains; thus outlining a space for it within the literature. In each phase of the entrepreneurial process I explore the development of an exit strategy, reasons for exit and options for exit.     

Entrepreneurial inception: The role of imprinting in entrepreneurial action

Recent research highlights that founders' early decisions and the environmental conditions at founding each imprint upon a new venture in ways that affect growth and survival. However, we know much less about how the entrepreneur is imprinted and how the outcome of this imprinting process influences the entrepreneur and the venture. Through semi-structured interviews and content analysis, our study examines entrepreneurs' formative experiences during sensitive periods of transition, which we refer to as sources of imprint. We illustrate how these sources of imprint impact entrepreneurial decision making and explain how they guide entrepreneurs' decisions as they progress through their entrepreneurial careers. In doing so, we improve our understanding of how entrepreneurs navigate the entrepreneurial process.