What happens to international new ventures beyond start-up: An exploratory study

Since its inception, research in international entrepreneurship has focused mainly on how and why international new ventures internationalize early on. To date, there has been hardly any research regarding the issue of continuing corporate growth in such ventures beyond their start-up phase or initial internationalization. Theoretically, we ground our study within the dynamic capabilities view of the firm and through an inductive theory building research explore how and whether international new ventures made-it beyond the start-up phase, aiming to generate early theoretical constructs to guide international entrepreneurship research in this substantive area. Grounded in data, we develop the following constructs related to made-it points: strategic experimentation, tensions in organizational gestalt, and legitimacy lies. To get to a made-it point, entrepreneurs experiment with their venture at several levels: organizational, business model, and operational. These experimentation efforts are fueled by tensions that exist in the organizational gestalt, such as ownership structure, business proposition to the market, and product development process. To legitimate themselves and their venture in the stakeholders’ eyes, entrepreneurs may tell legitimacy lies. We maintain that international new ventures do not reach a made-it point if they only manage to develop substantive capabilities to produce desired outputs at various levels within the venture but fail to create dynamic capabilities to change and reconfigure existing substantive capabilities.     

The nature and origins of social venture mission: An exploratory study of political ideology and moral foundations

Although organizational mission is central to social venturing, little is known about the nature and origins of social ventures' missions. In particular, the field lacks a framework for understanding the moral content of nascent ventures' “prosocial” missions that rely on quite different—and potentially conflicting—moral values. We engage in an exploratory study, drawing on moral foundations theory and upper echelons theory to develop framing questions related to the moral discourse in social venture missions and the role of founders' political ideology in relation to this moral discourse. We construct a novel dataset using computer-aided text analysis on the mission statements of over 50,000 nascent nonprofit ventures in the United States, supplemented by voter registration data from 17 states and Washington, D.C. Our findings reveal rich nuance in the moral discourse found in organizations' mission statements. Furthermore, founding teams' political ideologies are strongly associated with the moral discourse in their social ventures' stated missions—and in ways that differ intriguingly from findings in moral psychology at the individual level. We draw on these new insights to develop a roadmap for future research on organizational mission in relation to social venturing, moral markets, mission drift, and political ideology.     

Dual-edged tools of trade: How international joint ventures help and hinder capability building of Chinese firms

Forming international joint ventures (IJVs) with multinational corporations (MNCs) from advanced economies has been widely adopted by firms in emerging economies as an organizational approach to building up their innovative capabilities. In this paper, we emphasize that such an approach has both advantages (knowledge transfer from MNCs) and disadvantages (overdependence upon MNCs and reduction of innovation incentives) in the capability building of indigenous firms. Utilizing a longitudinal dataset consisting of 474 industries in China during 1998–2002, we find supporting evidence for the co-existence of the positive and negative impacts of IJVs. Specifically, we find that IJV presence has an inverted U-shape impact on innovative capabilities of indigenous firms; such an impact is stronger in industries with low (versus high) technology gap. We discuss the implications of our findings for research, managerial practice, and government policy.     

Organizing for Society: A Typology of Social Entrepreneuring Models

In this article, we use content and cluster analysis on a global sample of 200 social entrepreneurial organizations to develop a typology of social entrepreneuring models. This typology is based on four possible forms of capital that can be leveraged: social, economic, human, and political. Furthermore, our findings reveal that these four social entrepreneuring models are associated with distinct logics of justification that may explain different ways of organizing across organizations. This study contributes to understanding social entrepreneurship as a field of practice and it describes avenues for theorizing about the different organizational approaches adopted by social entrepreneurs.     

Accelerating strategic fit or venture emergence: Different paths adopted by corporate accelerators

Corporate accelerators (CAs) are a fast-emerging form of corporate engagement with startups. Equating them with independent startup accelerators and/or corporate venturing limits our understanding of how and why corporations run CA programs and to what end. In this inductive grounded theory study, we explore how corporations design and run CAs and to what effect. This study of four CAs reveals that corporations manage accelerators via one of two distinct processes: namely, accelerating strategic fit or accelerating venture emergence. Our inductive models of these corporate acceleration processes provide new insights into how CAs operate within corporations. Strategic posture and investment time horizon influence corporations' choice of acceleration path and their identification of potential ventures for acceleration. Our study deconstructs what comprises the core corporate acceleration processes and explains how the two pathways result in distinct outcomes—nurturing innovations or nurturing ecosystems. We believe these findings can open up rich research opportunities for understanding how corporations engage with entrepreneurial ventures to enhance their entrepreneurialness.     

Social Media Firm Specific Advantages as Enablers of Network Embeddedness of International Entrepreneurial Ventures

Combining internalisation theory and internationalisation networking literature we study how international entrepreneurial ventures use social media to internationalise. Our qualitative study reveals the governance mechanisms and learning that are part of a dynamic process. We explain how firms leverage their own social-media capabilities and bundle them with the capabilities of foreign partners, which they leverage to create new social-media capabilities to grow internationally. Firms leverage social-media capabilities to become embedded within emerging and strategic networks, a position that is central for firms to mitigate threats of opportunism and bounded reliability and to overcome liabilities connected to smallness, newness, and foreignness.     

Multilateral R&D alliances by new ventures

We examine the antecedents and outcomes of new ventures' formation of multilateral R&D alliances. Our results show an inverted U-shaped relationship between market uncertainty and a new venture's likelihood of forming multilateral R&D alliances. Top management team's social capital and ventures' technological capabilities are critical for new ventures to identify and capture alliance opportunities. Moreover, our analysis reveals value creation effects of multilateral R&D alliances for new ventures despite the challenges and difficulties associated. We further show that the value creation effect is a function of the type of exchange relationship (i.e., net- vs. chain-based) in the multilateral R&D alliance and that governance structure moderates this relationship.     

How do new ventures grow? Firm capabilities, growth strategies and performance

While new venture growth performance has been studied extensively, little work has been done to examine the complex strategic choices through which growth is pursued and attained. Building on the resource-based view and social capital perspective, this study develops a conceptual framework that links combinations of ventures' (1) technological, (2) financial, and (3) networking capabilities to different growth strategies in terms of organic growth, partnership, and acquisition. We further assess the mechanisms through which a new venture's growth choices affect firm performance. Using data from 238 new high-tech ventures in China, we find that new ventures with different resource combinations follow different growth strategies. While partnership growth leads to greater product diversity, and acquisition is more effective in realizing firm internationalization, both lead to a better chance of survival of new ventures. In addition, the study explicates the role of technological capability in moderating the relationship between growth strategies and new venture performance.     

On the different “worlds” of intra-organizational knowledge management: Understanding idiosyncratic variation in MNC cross-site knowledge-sharing practices

This qualitative field study investigated cross-site knowledge sharing in a small sample of multinational corporations in three different MNC business contexts (global, multidomestic, transnational). The results disclose heterogeneous “worlds” of MNC knowledge sharing, ultimately raising the question as to whether the whole concept of MNC knowledge sharing covers a sufficiently unitary phenomenon to be meaningful. We derive a non-exhaustive typology of MNC knowledge-sharing practices: self-organizing knowledge sharing, technocratic knowledge sharing, and best practice knowledge sharing. Despite its limitations, this typology helps to elucidate a number of issues, including the latent conflict between two disparate theories of MNC knowledge sharing, namely “sender–receiver” and “social learning” theories (Noorderhaven & Harzing, 2009). More generally, we develop the term “knowledge contextualization” to highlight the way that firm-specific organizational features pre-define which knowledge is considered to be of special relevance for intra-organizational sharing.     

Navigating compromise: How founder authenticity affects venture identification amidst organizational hybridity

Founders of hybrid ventures encounter organizational tensions that can compel compromise in both their organizations' and their own personal values. Such compromises may, in turn, undermine founders' identification with their ventures. In a multi-case study analysis we examine why social entrepreneurs differ in their responses to organizational tensions, both at the firm- and individual-level, and how such differences relate to their venture identification. Specifically, our findings reveal that strategic decisions made in the context of values-based complexity are often accompanied by concerns regarding founder authenticity—that is, judgments about the alignment between founders' actions and the commitments or responsibilities associated with their identities as entrepreneurs. Yet, because founders differ in the basis from which they seek to maintain such alignment, these differences shape both hybridity management and subsequent venture identification. By unpacking such differences, our findings contribute new theory, bridging recent scholarship on founder authenticity with longstanding research on organizational identification and hybrid organizing.     

Corporate governance or governance by corporates? Testing governmentality in the context of China's national oil and petrochemical business groups

Like other industrial sectors with significant – ‘pillar’ – importance in China's overall economy and development, oil and petrochemicals are governed by state-owned business groups. In this context, ‘corporate governance’ of these groups is of fundamental interest. This study probes corporate governance of 31 national oil and petrochemical business groups by examining their structure, development and business activities in the period from 2007 to 2011. The post-1998 restructuring of China's qiyejituan business groups, their related party transactions and related party corporate finance all yield insight into how property rights are decisive in how corporate governance based on governmentality – or the interrelation of corporate, state and social relations – is structured. This study sheds light on how China's big business policy and governance of the state-business interface progresses in a socialist market economy. It has clear implications international trade and investment as well as multinational corporations doing business with China.     

Technological capabilities and the decision to outsource/outsource offshore R&D services

We analyze firm and environmental factors influencing the decision to outsource and outsource offshore R&D services. To do so, we have adopted a co-evolutionary approach adapted to firm internationalization, according to which these decisions are conditioned by the institutional environment (the IPR system), managerial intentionality (firms’ international strategy) and organizational path dependence and learning (firms’ technological and governance capabilities). Specifically, we argue that: (1) firms with more technological capabilities will tend to both outsource and outsource offshore R&D services, (2) the positive effect of technological capabilities would be leveraged when the institutional context of the firms’ country of origin has allowed them to transform their technological expertise into governance capabilities, and (3) that those firms with a higher local responsiveness attitude will be more likely to outsource offshore R&D services. We have found support for our hypotheses using survey data from a sample of 182 technology intensive firms from the European Union and the US.     

Technology commercialization, incubator and venture capital, and new venture performance

This study examines the effects of technology commercialization, incubator and venture capital supports on new venture performance from the resource-based view. This study uses regression analysis to test the hypotheses in a sample of 122 new ventures. The findings highlight the role of technology commercialization as a mediator between organizational resources, innovative capabilities, and new venture performance. Also, the empirical evidence indicates that incubator and venture capital supports moderate the effects of technology commercialization on the performance of new ventures. Finally, this study discusses managerial implications and highlights future research directions.     

Technology ventures' engagement of external actors in the search for viable market applications: On the relevance of Technology Broadcasting and Systematic Validation

In order to succeed, technology ventures need to find a profitable market application for their technology. Although external market actors may provide important information for the identification and validation of potential technology-market combinations, it remains largely unclear how technology ventures can involve them in this process. Building on insights from organizational search literature, this study follows five university spin-offs trying to commercialize early-stage technologies. We find that ventures are cognitively constrained in proactively identifying and approaching external market actors. Interestingly, the better performing ventures in our sample engage in a previously undocumented market search process we label Technology Broadcasting. They communicate their technological competencies to a broad range of market actors and react to these actors' assessment and spontaneous expressions of interest, thereby overcoming their own cognitive constraints. Resource constraints require filtering these expressions of interest through Systematic Validation with additional market players. These results complement the existing insights on market search by entrepreneurial ventures and advance the literature on organizational search.     

Dynamic capabilities and venture performance: The effects of venture capitalists

After going through the initial public offering (IPO), new ventures face increased competition, greater public examination, and increased government scrutiny. Resource base weaknesses and external forces pose severe threats to the survival and success of new ventures. Building from resource-based theory, we first examine and delineate dynamic capabilities from entrepreneurial capabilities in entrepreneurship. We then develop theory to explain how venture capitalists (VCs) endue their ventures with greater dynamic capabilities in order to address these weaknesses and threats. We test our hypotheses on a match-pair sample of VC-backed and non-VC-backed new ventures and find that VC-backed ventures demonstrate greater dynamic capabilities as they relate to product and management development but do not display any greater dynamic capabilities as they relate to legal and government regulation threats. Further analysis also revealed that VC experience and VC reputation were positively related to 1-year stock price returns.     

Managing Institutional Complexity: A Longitudinal Study of Legitimacy Strategies at a Sportswear Brand Company

Multinational corporations are operating in complex business environments. They are confronted with contradictory institutional demands that often represent mutually incompatible expectations of various audiences. Managing these demands poses new organizational challenges for the corporation. Conducting an empirical case study at the sportswear manufacturer Puma, we explore how multinational corporations respond to institutional complexity and what legitimacy strategies they employ to maintain their license to operate. We draw on the literature on institutional theory, contingency theory, and organizational paradoxes. The results of our qualitative longitudinal study show that managing corporate legitimacy is a dynamic process in which corporations adapt organizational capacities, structures, and procedures.     

Entrepreneurship and dynamic capabilities: how firm age and size affect the ‘capability enhancement–SME performance’ relationship

The entrepreneurship and dynamic capabilities literature adds to our understanding of how strategic change can drive firm performance. We draw on a recent survey of US SMEs to determine whether entrepreneurial ventures have dynamic capabilities, and, if so, whether differences in the characteristics of those ventures lead to differences in how dynamic capabilities benefit firm performance. We find that most entrepreneurial ventures report having such capabilities and that their differences in age and size lead to differences in how dynamic capabilities affect firm performance. We consider how these results redefine the overlap of the dynamic capabilities view literature with the entrepreneurship literature, because the redeployment of resources to create and adapt to opportunities that defines what are dynamic capabilities lies at the core of what is entrepreneurial activity.     

Enriching strategic variety in new ventures through external knowledge

To build profitable market positions, new ventures have to address multiple challenges on several fronts. These ventures can compete by being simple (focused) or applying varied ways to compete. The likelihood of these ventures remaining competitive depends on their ability to build novelty into their products and operations, an activity that requires infusing knowledge into their operations. Most ventures, however, have limited knowledge bases and the reach (scope) of their external connections is limited, a factor that prompts them to tap into different external sources in their local areas. This article reports an empirical study of 140 new ventures located in seven regional clusters in Spain. The results show that new ventures can enrich the variety of their strategic repertoire by accessing diverse sources of external knowledge and being exposed to external novel knowledge, while absorptive capacity moderates this relationship. The degree of social development of these clusters also has a positive impact on the strategic variety of new ventures, exhibiting an inverted U-shape curve.     

A typology of social entrepreneurs: Motives, search processes and ethical challenges

Social entrepreneurship has been the subject of considerable interest in the literature. This stems from its importance in addressing social problems and enriching communities and societies. In this article, we define social entrepreneurship; discuss its contributions to creating social wealth; offer a typology of entrepreneurs' search processes that lead to the discovery of opportunities for creating social ventures; and articulate the major ethical concerns social entrepreneurs might encounter. We conclude by outlining implications for entrepreneurs and advancing an agenda for future research, especially the ethics of social entrepreneurship.     

Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation

This article explores the hybrid phenomenon of social business, that is, both a form of organization and a practice that deliberately harnesses market dynamics to address deeply rooted social issues through the design and implementation of a core product or service. This new form of hybrid venture melds the social purpose traditionally associated with non-profit organizations with the economic purpose and market-based methods traditionally associated with for-profit firms. This exploratory research inductively explores the process by which social businesses are designed. The result suggests that clear intentionality around social purpose drives the design of these ventures and their associated missions and business models such that they can creatively synthesize competing paradigms (economic and social purpose) within one venture. The tight coupling of mission, method, and operationalization allows for the multi-stakeholder promise of the business model to be fulfilled.