90
Int. J. Globalisation and Small Business, Vol. 3, No. 1, 2009
International entrepreneurship: research priorities for the future Leo Paul Dana* GSCM-Montpellier Business School Montpellier, France E-mail:
[email protected] *Corresponding author
Richard W. Wright University of California Los Angeles Los Angeles, CA 90095, USA and Klagenfurt University Klagenfurt, Austria E-mail:
[email protected] Abstract: An interactive Delphi process was employed to synthesise the opinions of a panel of experts on the research priorities for the emerging field of International Entrepreneurship (IE). The content analysis of the results identifies broad directions for future research in the field. Moreover, the compilation of the recommendations received from the panelists provides a wealth of ideas and guidelines for specific research projects. Keywords: entrepreneurship; international business; International Entrepreneurship; IE; Small and Medium Enterprise; SME; Delphi; future research; research priorities. Reference to this paper should be made as follows: Dana, L.P. and Wright, R.W. (2009) ‘International entrepreneurship: research priorities for the future’, Int. J. Globalisation and Small Business, Vol. 3, No. 1, pp.90–134. Biographical notes: Leo Paul Dana is a Professor at GSCM-Montpellier Business School, Montpellier, France, on leave from the University of Canterbury in New Zealand, where he has been tenured since 1999. He also holds the honourary title of Adjunct Professor at the University of Regina, Canada. He was the Founding Editor of the Journal of International Entrepreneurship, launched by Kluwer Academic. He has published extensively in the British Food Journal, Cornell Quarterly, Entrepreneurship: Theory & Practice, the Journal of Small Business Management, the Journal of World Business and Small Business Economics. He is also the Author of several books on entrepreneurship and the Editor of five collections of research papers that are published by Edward Elgar. His current interests focus on self-employment in indigenous communities and the internationalisation of small firms.
Copyright © 2009 Inderscience Enterprises Ltd.
International entrepreneurship: research priorities for the future
91
Richard W. Wright is the Co-founder of the annual McGill Conferences on International Entrepreneurship. Currently a visiting scholar at both the UCLA Anderson School of Management and the Department of Innovation Management and Entrepreneurship of University of Klagenfurt (Austria), he was the Founding Director of International Business Studies in the Faculty of Management of McGill University. He has also held the Jackson Distinguished Professorship at the Graduate School of Management, Willamette University, and the E. Claiborne Robins Distinguished University Chair in the Robins School of Business, the University of Richmond. His publications include 11 books and research monographs, 25 book chapters and 40 articles in refereed journals. His current research interests focus on the new opportunities and challenges that face small firms in the globalising economy, on which he has edited several books and special journal issues. He is also the President of an international management consulting and training firm specialising in the Asia Pacific region.
1
Introduction: background and rationale
The global business environment is changing dramatically. Traditionally competition in international markets was the realm of large companies, while smaller businesses remained local or regional in scope. However, the removal of government-imposed barriers that segregated and protected domestic markets, and recent technological advances in manufacturing, transportation and telecommunications, allow even the smallest firms access to customers, suppliers and collaborators around the world. Entrepreneurial enterprises – both large and small, domestically and internationally – are increasingly fuelling economic growth and innovation. These trends are transforming management strategies, public policies, and the daily lives of people around the world. They present both opportunities and formidable new challenges to firms competing in the global arena. One consequence of the breakdown of the lines of demarcation, which formerly segregated the disparate fields of entrepreneurship and international business, is the emergence of a new academic discipline – International Entrepreneurship (IE). The emergence of IE as an identifiable academic field positioned at the intersection of the international business and entrepreneurship disciplines dates back approximately a decade, with two significant events. One was the publication in Journal of International Business Studies of Oviatt and McDougall’s seminal 1994 article, ‘Toward a theory of international new ventures’ (Oviatt and McDougall, 1994). The other was the convening in 1998 of the first McGill Conference on IE, which brought together leading academics to begin bridging academic research in what had traditionally been distinct and disparate fields. Since then, the integration of international business research and entrepreneurship research has gained significant momentum: ten McGill Conferences on IE have been held; a host of articles, edited books and special journal issues have appeared; two specialised journals (Journal of International Entrepreneurship and International Journal of Globalisation and Small Business) have been launched.
92
2
L.P. Dana and R.W. Wright
Objectives and methodology
In recognition of the growing importance of IE, the Anderson Graduate School of Management at UCLA launched an integrated, four-year programme to further develop and disseminate academic and applied knowledge of the phenomenon and its consequences. As a key part of this process, the authors of this paper were commissioned to conduct an assessment of the evolution and current state of research at this milestone in the evolution of IE; and specifically to ask: What are the critical questions on which we should be focusing our research in the years ahead? In entrepreneurship, in international business and in IE, the dominant paradigm is positivist, with hypothetico-deductive methodology, imitating that of the pure sciences. It involves pre-selected constructs in an attempt to obtain meaningful quantitative data which is easily analysed by means of sophisticated statistical software. Variables have been defined. Survey results are analysed relative to an average. Such a design is a cost-effective, efficient means of obtaining quantitative data from a large sample size for the purpose of statistical analysis. Although quantitative research is easy to get published, it has its shortcomings (Miles, 1979). Pasquero (1988) suggested that quantitativists often let themselves be carried away by strict but limited methods. Given our research question, any hypotheses could run the risk of being value-laden (Kuhn, 1962; Morgan, 1983; Tinker et al., 1982; Von Bertalanffy, 1968), in which case the outcome could be biased. Therefore, we did not wish to launch our project with any hypotheses because, in hypothetico-deductive research, findings which are not directly linked to the predetermined hypotheses are usually lost. In contrast, a holistic-inductive design would allow us to be open to whatever would emerge from the data (Patton, 1982). Our solution was to use a Delphi Process, a procedure designed to synthesise diverse perspectives toward a consensus on research priorities; followed by a plenary session at the tenth anniversary McGill Conference on International Entrepreneurship (held at UCLA in September 2007), to assess the results of the Delphi process and to further refine and operationalise the emerging set of priority research proposals. In identifying how constituents view the future, content analysis of the literature may be a good means to examine trends (Naisbitt, 1990). An alternative is to conduct in-depth interviews (Fontana and Frey, 2003). A shortcoming of these methods, however, is the lack of interaction among respondents. In contrast, the Delphi technique allows for interaction. Examples of its use include Czinkota and Ronkainen (1997; 2005) and De Loe (1995). We selected for our methodology the Delphi technique, in order to obtain and synthesise the opinions of experts. The Delphi Process was developed by the Rand Corporation during the cold war to forecast the impact of technology on warfare. It is a systematic interactive forecasting method based on independent inputs of selected experts. We first formed a panel of recognised experts, from the fields of entrepreneurship, international business and IE. (See Appendix 1 for a list of the panel members and their affiliations.) Following the suggestion of Delbeq et al. (1975) that more than 30 participants is redundant, we assembled a panel of 23 experts representing the Americas, Asia, Europe and Australia-Oceania. Representativeness is not an issue in a Delphi
International entrepreneurship: research priorities for the future
93
study, as the result depends on the group dynamics of experts rather than on statistical power. For construct validity, the experts were not told who else was participating. Correspondence was done electronically via e-mail. We initiated the process by asking each of the experts to respond, individually, to the instructions, “Please identify (and elaborate upon) up to five questions or five challenges in IE that you feel are most in need of research.” At this stage we did not let participants know who else was participating, in order to minimise socially-desirable responding (Adair, 1984; Arnold and Feldman, 1981; Arnold et al., 1985; Crowne and Marlowe, 1960; Golembiewski and Munzenrider, 1975; Lopez, 1982; Rahim, 1983; Rosenkrantz et al., 1983; Stone et al., 1979; Thomas and Kilmann, 1975; Zerbe and Paulhus, 1987). Twenty-one responses were received. The results of Round 1 are presented in Appendix 2. Content analysis (Bristor et al., 1995; Taylor and Stern, 1997) was used to group the responses into categories. Content analysis has been described as the “systematic, objective, quantitative analysis of message characteristics” (Neuendorf, 2002). Kassarjian (1977) explained objectivity, systematisation and quantification in content analysis. Ahuvia (2001) argued that content analysis should be used as a method for counting interpretations of content and seeks to explain why replicability may be a better term for ‘objectivity’. Increasingly, researchers are using this research technique. The objective of Round 2 was to gain more focus. Each of the panelists was sent the full set of responses from Round 1, without identification of the authors. Panelists were then instructed as follows: “We would ask each of you to reconsider your own ideas about research priorities, which you submitted earlier, in the light of any further thoughts or insights you have gained from the submissions of the other panelists. Now assume you could design the single research project you think is most important at this time for the field of international entrepreneurship. We would like you to prepare and send us a single, one-page research proposal summary, including: (i) A brief statement of the nature and objectives of the research; (ii) Why is it significant? (iii) What methodologies will be employed? (iv) What obstacles may be encountered? (v) Any further comments.”
Fifteen responses to Round 2 were received. They are reported in Appendix 3.
3
Findings
Suggestions from 11 participants involved researching partners, alliances, networks and cooperation. Eight scholars emphasised the importance of empirical investigation to identify patterns and causality, and four specified the need for longitudinal research. Seven responses were related to the nature of the entrepreneur’s macroenvironment, including government policy, cultural values and links between diasporas and their countries of origin. Seven respondents proposed research into the uniqueness of IE, such as to legitimate the field and its constructs. Five experts identified sociological issues. Three participants suggested a focus on microenterprises. Two research questions were related to survival and failure issues. One scholar identified the role of customers as important; and one research question involved finance.
94
L.P. Dana and R.W. Wright
Noting the broad range of foci identified in Round 1, eight participants in Round 2 noted the need to identify theoretical issues that define the distinctiveness of IE. What constitutes IE and what explains it? A large sample size would be required in a longitudinal study. A theme discussed by nine experts is that environmental factors might be explanatory variables for IE. This includes microenvironmental factors such as partnerships and networks, as well as macroenvironmental factors such as the role of the state intervention. Eight respondents noted the need for multi-country comparative studies in order to obtain multicultural perspectives Round 2 was followed up by a baseline workshop that was held at the 10th McGill Conference on International Entrepreneurship, held at UCLA, to further refine and operationalise the emerging set of priority research proposals. Discussion was tape-recorded and transcribed.
4
Conclusions
Cuervo-Cazurra et al. (2007) built on resource-based theory and identified three main sets of challenges for internationalising firms: loss of advantages provided by resources transferred abroad; creation of a disadvantage by resources transferred abroad; and the lack of complementary resources required to operate abroad. In the case of large firms, we fully agree. In IE, however, we see a different paradigm as many small companies internationalise without transferring resources abroad. Based on content analysis of our Delphi findings, we foresee a shift from the stand-alone entrepreneur to increased networking and cooperation, resulting in an internationalisation that involves a multi-polar distribution of control. Suggestions from 11 participants involved researching partners, alliances, networks and cooperation; no other focus received more interest. Where to from here? The field will need empirical investigation to identify patterns and causality, including longitudinal studies with large sample sizes leading to theory development. We believe that this will identify the uniqueness of IE, such as to legitimate the field and its constructs. The inputs from Rounds 1 and 2 of the Delphi process are presented in their entirety in the following appendices. We believe that this compilation provides a wealth of creative ideas and suggestions for individual researchers, as well as a basis for larger, integrated research programmes. It is our hope that this Delphi exercise, and the data which it has generated, will serve as a stimulus and catalyst for future research in this dynamic new academic field of IE.
Acknowledgement The authors wish to express their gratitude to UCLA’s Center for International Business Education and Research (CIBER) and the Harold and Pauline Price Center for Entrepreneurial Studies for their sponsorship of the 10th McGill Conference on International Entrepreneurship and for their support of this research project.
International entrepreneurship: research priorities for the future
95
References Adair, J. (1984) ‘The Hawthorne effect: a reconsideration of the methodological artifact’, Journal of Applied Psychology, Vol. 69, pp.334–345. Ahuvia, A. (2001) ‘Traditional, interpretive and reception based content analysis: improving the ability of content analysis to address issues of pragmatic and theoretical concern’, Social Indicators Research, Vol. 54, No. 2, pp.139–172. Arnold, H. and Feldman, D. (1981) ‘Social desirability response bias in self-report choice situations’, Academy of Management Journal, Vol. 24, pp.377–385. Arnold, H., Feldman, D. and Purbhoo, M. (1985) ‘The role of social desirability response bias in turnover research’, Academy of Management Journal, Vol. 28, pp.955–966. Bristor, J., Lee, R. and Hunt, M. (1995) ‘Race and ideology: African-American images in television advertising’, Journal of Public Policy and Marketing, Vol. 14, No. 1, pp.48–62. Crowne, D. and Marlowe, D. (1960) ‘A new scale of social desirability independent of psychopathology’, Journal of Consulting Psychology, Vol. 24, pp.349–354. Cuervo-Cazurra, A., Maloney, M. and Manrakhan, S. (2007) ‘Causes of the difficulties in internationalization’, Journal of International Business Studies, Vol. 38, No. 5, pp.709–725. Czinkota, M. and Ronkainen, I. (1997) ‘International business and trade in the next decade: report from a Delphi study’, Journal of International Business Studies, Vol. 28, No. 4, pp.827–844. Czinkota, M. and Ronkainen, I. (2005) ‘A forecast of globalization, international business and trade: report from a Delphi study’, Journal of World Business, Vol. 40, pp.111–123. De Loe, R. (1995) ‘Exploring complex policy questions using the policy Delphi: a multi-round, interactive survey method’, Applied Geography, Vol. 15, No. 1, pp.53–68. Delbeq, A., van de Ven, A. and Gustafson, D. (1975) Group Techniques for Program Planning, Glenview, IL: Scott Forseman. Fontana, A. and Frey, J. (2003) ‘The interview: from structured questions to negotiated text’, in N. Denzin and Y. Lincoln (Eds.) Collecting and Interpreting Qualitative Materials, 2nd ed., Thousand Oaks, CA: Sage, pp.61–106. Golembiewski, R. and Munzenrider, R. (1975) ‘Social desirability as an intervening R. variable in interpreting OD effects’, Journal of Applied Behavioral Science, Vol. 11, pp.317–332. Kassarjian, H. (1977) ‘Content analysis in consumer research’, Journal of Consumer Research, Vol. 4, pp.8–18. Kuhn, T. (1962) The Structure of Scientific Revolutions, Chicago: University of Chicago Press. Lopez, E. (1982) ‘A test of the self-consistency theory of the job performance – job satisfaction relationship’, Academy of Management Journal, Vol. 25, pp.335–348. Miles, M. (1979) ‘Quantitative data as an attractive nuisance: the problem of analysis’, Administrative Science Quarterly, Vol. 24, pp.590–602. Morgan, G. (1983) Beyond Method, Strategies for Social Research, Newbury Park, CA: Sage. Naisbitt, J. (1990) Megatrends, New York: Morrow. Neuendorf, K. (2002) The Content Analysis Guidebook, Thousand Oaks, CA: Sage. Oviatt, B. and McDougall, P. (1994) ‘Toward a theory of international new ventures’, Journal of International Business Studies, Vol. 25, No. 1, pp.45–64. Pasquero, J. (1988) ‘Comparative research: the case for middle-range methodologies’, Research in Corporate Social Performance and Policy, Vol. 10, pp.181–209. Patton, M. (1982) ‘Qualitative methods and approaches: what are they’, in E. Kuhns and S. Martorana (Eds.) Qualitative Methods for Institutional Research, San Francisco: Jossey-Bass, pp.3–16. Rahim, M. (1983) ‘A measure of styles of handling interpersonal conflict’, Academy of Management Journal, Vol. 26, pp.368–376.
96
L.P. Dana and R.W. Wright
Rosenkrantz, S., Luthans, H. and Hennessey, H. (1983) ‘Role conflict and ambiguity scales: an evaluation of psychometric properties and the role of social desirability response bias’, Educational and Psychological Management, Vol. 43, pp.957–970. Stone, E., Ganster, D., Woodman, R. and Fusilier, M. (1979) ‘Relationships between growth need strength and selected individual difference measures employed in job design research’, Journal of Vocational Behavior, Vol. 14, pp.329–340. Taylor, C. and Stern, B. (1997) ‘“Asian-Americans” television advertising and the “model minority” stereotype’, Journal of Advertising, Vol. 26, No. 2, pp.47–60. Thomas, K. and Kilmann, R. (1975) ‘The social desirability variable in organizational research: an alternative explanation for reported findings’, Academy of Management Journal, Vol. 18, pp.741–752. Tinker, A., Merino, B. and Neimark, M. (1982) ‘The normative origins of positive theories’, Accounting Organization and Society, Vol. 7, pp.167–200. Von Bertalanffy, L. (1968) General System Theory, George Brasiller. Zerbe, W. and Paulhus, D. (1987) ‘Socially desirable responding in organizational behavior: a recognition’, Academy of Management Review, Vol. 12, No. 2, pp.250–264.
International entrepreneurship: research priorities for the future
Appendix 1 List of participants Project coordinators Leo Paul Dana University of Canterbury (New Zealand) GSCM Montpelier (France) Richard W. Wright Anderson Graduate School of Management, UCLA (USA) University of Klagenfurt (Austria) Panelists Nancy J. Adler S. Bronfman Chair in Management Desautels Faculty of Management McGill University (Canada) Robert Anderson Faculty of Business Administration University of Regina (Canada) Erkko Autio QinetiQ-EPSRC Chair in Technology Transfer and Entrepreneurship Tanaka Business School Imperial College (UK) Paul Beamish Canada Research Chair in International Business Richard Ivey School of Business The University of Western Ontario (Canada) James Bell Professor of International Business Entrepreneurship School of International Business University of Ulster (UK) Nicole Coviello Professor of Marketing and International Entrepreneurship Auckland Business School The University of Auckland (New Zealand) Hamid Etemad Professor of International Business Desautels Faculty of Management McGill University (Canada)
97
98
L.P. Dana and R.W. Wright
William B. Gartner Spiro Professor of Entrepreneurial Leadership Spiro Institute for Entrepreneurial Leadership Clemson University (USA) Brendan Gray DCC Chair in Entrepreneurship School of Business University of Otago (New Zealand) Marian Jones Professor of Internationalisation and Entrepreneurship Centre for Internationalisation and Enterprise Research University of Glasgow (UK) Jerome A. Katz Mary Louise Murray Endowed Professor of Management John Cook School of Business St. Louis University (USA) Gary A. Knight Director, Program in Multinational Business Operations College of Business Florida State University (USA) Patricia P. McDougall The William L. Haeberle Professor of Entrepreneurship Kelley School of Business Indiana University (USA) Rod McNaughton Eyton Chair in Entrepreneurship Department of Management Sciences University of Waterloo (Canada) Babak Mehmanpazir Directeur, IECS – Ecole de Management de Strasbourg Université Robert Schuman (France) John Milton-Smith Professor Emeritus School of Management Curtin University of Technology (Australia) Michael H. Morris Witting Chair in Entrepreneurship School of Management Syracuse University (USA)
International entrepreneurship: research priorities for the future Niina Nummela Department of Marketing and International Business Turku School of Economics (Finland) Jean-Jacques Obrecht Professor Emeritus Robert Schuman University, Strasbourg (France) Ben Oviatt Director, Herman J. Russell, Sr. International Center for Entrepreneurship J. Mack Robinson School of Business Georgia State University (USA) Alan Rugman L. Leslie Waters Chair in International Business Kelly School of Business Indiana University (USA) Robert Spich Director, Center for International Business Education and Research Anderson Graduate School of Management University of California at Los Angeles (USA) Shaker A. Zahra Robert E. Buuck Chair in Entrepreneurship Carlson School of Management University of Minnesota (USA)
99
100
L.P. Dana and R.W. Wright
Appendix 2 Delphi Round 1 responses Twenty-one distinguished panelists from the fields of international business, entrepreneurship, and IE responded (anonymously) to the instructions, “Please identify (and elaborate upon) up to five questions or five challenges in International Entrepreneurship that you feel are most in need of research.” Their responses are presented below. Panelist 1 Mohammed Yunas just won the Nobel Peace Prize for his work on microenterprise. To what extent are microenterprises (all of which are entrepreneurial) going global? Is technology allowing the smallest enterprises in the most impoverished areas of the world to have access to clients, suppliers and ideas from around the world? Bobby Sager is leading a microenterprise initiative in Rwanda designed not only to support business ventures of the poorest people in this war ravaged country, but also to help to re-weave the post-war society back together in a way that will support peace. His initiative requires that a Tutsi entrepreneur who lost her husband or son in the war join with a Hutu woman, whose husband is currently jailed for perpetrating the carnage. These Hutu-Tutsi joint microventures are carefully selected and then coached for success. The researchable questions include: •
How successful is this process in Rwanda? Both for the businesses themselves and for the well-being of society?
•
Are there similar examples of microenterprise being used in other parts of the world as a peace-building process that includes support for the economy and for society?
•
Could some of the microenterprise approaches be scaled up for use by mid-sized and large multinationals?
There is a growing movement for business to act as an agent of world benefit, which is often labelled as global corporate citizenship. UN Secretary General Kofi Annan challenged the business world to become co-creators of society’s success: “Let us choose to unite the power of markets with the strengths of universal ideals…let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of future generations.”
To what extent are entrepreneurial businesses incorporating global corporate citizenship practices into their core business strategies (as opposed to treating sustainability issues as an aspect of charity or philanthropy)? What are the best examples of entrepreneurial businesses acting as agents of world benefit as a part of their core business strategy? Often labelled as bottom-of-the-pyramid strategies (Prahalad, Hart), we are increasingly hearing about leapfrog technology allowing entrepreneurs in economically developing countries to outperform similar enterprises in the rest of the world. Prahalad has offered many examples from India in which the local entrepreneurs now produce world class products for less that 1/100th of the price abroad (see, for example,
International entrepreneurship: research priorities for the future
101
Jaipur Foot). How extensive are these leapfrog technology gains? What are the examples (case studies) of entrepreneurial enterprises in economically developing and transitional economies that are out-performing the larger established firms in developed economies? To what extent do we see women taking leadership positions in international entrepreneurial activity? Panelist 2 For me the key questions are: •
Born globals – What are the key factors that result in successful new ventures that are created to pursue international opportunities from the outset?
•
Global oriented Small and Medium Enterprises (SMEs) in contrast to SMEs who simple export and/or operating in one or two non-home markets. Are they more successful? If so why? What differentiates them from domestic and less global SMEs?
And by far the most important for me: •
The relationship between the local, entrepreneurial-based development activities and the global economy. The attached paper [not included] will give you a sense of my area of interest. It the place of the local in the global economy and the opportunities present in that economy for localities to pursue their particular agendas (whether indigenous or not). And that the way to do this is through the recognition and pursuit of an opportunity in the global economy – surely a variant of IE.
Panelist 3 Question 1: Do we need internationalisation entrepreneurship? As an introduction, I think that the field of IE remains challenged to convince that it is necessary. To show this, IE needs to demonstrate that it provides for a distinctive domain of academic inquiry, one which genuinely adds distinctive value to the domains of I(nternationalisation) and E(ntrepreneurship). In short, IE needs to demonstrate the following: IE > I + E IE ≠ I + E. IE must be able to show that it is not simply I in the context of E, or E in the context of I. This leads me to my second question. Question 2: What is distinctive about IE? At the risk of sounding sceptical, I am not convinced that this has been shown either. I do have some ideas of where this could come from, hence my third question. Question 3: What are the links between IE and Competitive Advantage (CA)? Specifically, how does early I contribute to subsequent CA?
102
L.P. Dana and R.W. Wright
In our AMJ article (Autio et al., 2000), we had several findings that actually flew into the face of received theories. I mention two here: 1
a negative correlation between age at internationalisation and subsequent international growth (younger internationalisers grew faster internationally)
2
a negative correlation between age at internationalisation and subsequent domestic growth (younger internationalisers grew faster domestically).
As regards the first one. Received theories on internationalisation assume that CA exists before I. That is, you internationalise in order to leverage an existing competitive advantage. This is an essential (albeit implicit) feature of the Uppsala model. A consequence is that, if anything, we should see a positive correlation between age at first I and CA, because, presumably, CA is built over time. Yet we saw a negative correlation (remember that our focus was on electronics firms). This, to me, suggests that I actually gives rise to CA, at least in some types of companies. But how does this actually happen, remains unclear. A further exploration of this issue could help provide some answers to Questions 1 and 2. As regards the second finding. Why should early internationalisation positively impact domestic growth? This is quite puzzling, if you think about it. If anything, a negative correlation should be expected between I (regardless of when it happens) and domestic growth, at least if we accept that managerial attention is a limited resource. Consequently, if managers add to the number of markets they need to deal with, this presumably leads to smaller share of attention given to domestic markets. This should lead to slower domestic growth. Also, internationalisation adds to the complexity of the organisation, and again we should see managers diverting their attention from domestic markets to handle increased organisational complexity. Yet, we see the opposite, especially when firms internationalise while young, when even greater negative effects on domestic growth should be expected. The question is: why? This leads to my final question. Question 4: What is the relationship between early internationalisation and organisational (dynamic) capabilities? In our AMR article (Sapienza et al., 2006) we argue that early internationalisation impacts the development of organisational (dynamic) capabilities. If this is true, we may actually start having some basis for defining IE as a domain of academic inquiry in its own right. An early I, through its impact on DC, could help boost entrepreneurial advantages. The model presented in the AMR is a very crude one, though, and further explorations in this domain appear necessary. Panelist 4 •
Data availability A major challenge to the furtherance of IE research is the lack of data, particularly large samples, and that of a longitudinal nature.
International entrepreneurship: research priorities for the future •
103
Entrepreneurship Better understanding of the entrepreneurship phenomenon in Multinational Corporations (MNCs), both at the parent and subsidiary levels.
•
Venture capital Understanding of venture capital and how it affects the pace and pattern of IE. I believe that venture capital is usually a regional phenomenon and the funding that goes with this may create contradictions in the firm. On one hand, venture capital funding may provide the capital needed to grow in international markets, but on the other, the social ties from outside investors may moderate the focus and pace of a firm’s growth.
Panelist 5 Here are a few questions and challenges/areas: •
Entrepreneurial teams in IE Much of the previous research has focused on the lone entrepreneur. However there is strong evidence of the importance of entrepreneurial teams in IE, particularly in knowledge based sectors. Therefore we need to focus more research efforts here.
•
IE in emerging/transitional economies Growing evidence of importance of entrepreneurs in international activities in emerging and transitional economies (e.g., recent and new EU, Asia, PRC, etc.) In fact a much more international focus would benefit the area rather than narrow US/advanced economy perspectives.
•
Gender and IE The area of gender in IE merits much further enquiry than it has received to date.
•
There are other issues relating to ethical and social perspectives that merit detailed international and cross-national enquiry.
Panelist 6 Here is my list of research issues/challenges, in no particular order. As a preface, please note that I am using the term ‘INV’ in the broadest sense. Thus, it encompasses BGs. 1
I see a particular need for research on INV processes, specifically how development processes evolve from start-up through to growth and survival, with related issues being network dynamics, resource dynamics, and the co-evolution of networks and resources. Such process-based research requires temporal analysis, which ideally, involves tracking INVs over time (like the work that Bergmann Liechtenstein and others do in the context of entrepreneurial ventures).
104 2
L.P. Dana and R.W. Wright With regards to time-sensitive studies, I personally like to support research that begins with INV conception and not just from time of initial foreign market entry. To me, the former captures the essence of ‘new venture’ issues while the latter is often more SME-focused. In a related vein, we seem to have two general types of INV studies that have emerged: •
those focusing on truly new firms (i.e., young firms)
•
those that are well-established now, but INV by definition.
Many researchers seem to consider these two categories as the same, but I wonder if they are and if in fact, there is a research opportunity to incorporate both groups in comparative research. 3
With regards to context, Coviello and Jones (2004) noted in JBV that much of the IE literature tends to focus on technology-based firms (often software). I would like to see two things evolve from this: •
some effort to consolidate what we know about this type of firm
•
another effort to pattern match against other types of firms such as those that are lower tech, or comparing hard services (software) to goods and/or soft services.
4
An emerging hot topic in IE research seems to be related to social capital. This and many other ideas that we readily incorporate into IE research (e.g., networks) are already studied in other disciplines. Consequently, I would like to see better integration of the sociology, strategy and marketing literatures into IE. As one example, we tend to focus on network structure in order to gauge social capital. However, we do not tend to analyse the (trickier) relational or cognitive dimensions of the network; dimensions also widely discussed in the relationship marketing literature. This means we do not account for the nature of behavioural interactions including levels of trust and obligation, nor do we address shared codes or language across network ties. Doing so would enrich our understanding of social capital and networks in INVs.
5
While I’m a fan of start-up INV analysis, I think IE scholars could advance the field by comparing patterns from the types of firm they have studied (be it start-up INVs or more established firms) with different types of international firms. One example is by applying Johanson and Mattsson’s (1988) categorisation of ‘early starters, lonely internationals, late starters and internationals among others’. Another approach, as suggested by Zahra (2005), could compare different types of INVs using Oviatt and McDougall’s (1994) typology: import/export start-ups, multinational traders, geographically-focused start-ups and global start-ups. Other particularly relevant firms for comparison include domestic new ventures. I think this is especially important since although Shrader et al. (2003), McDougall (1989) and Chetty and Wilson (2003) identify differences between DNVs and INVs, I’m not yet convinced as regards how these firms implement key organisational processes (network development, resource generation, etc.). That is, I’m not convinced that the INV is in fact a completely distinct phenomenon.
International entrepreneurship: research priorities for the future
105
Panelist 7 I would like to see more empirical and theoretical research applied to different kinds of reasons that entrepreneurs offer for engaging in entrepreneurial activity. I am sceptical of the ‘opportunity – necessity’ dichotomy (as seen in the GEM research) as a way to categorise a larger and more complicated set of reasons that individuals offer for starting businesses. I would speculate that opportunity and necessity are orthogonal characteristics, rather than a dichotomy. Also, I would speculate that the ‘opportunity – necessity’ dichotomy is a construct in more advanced economies, and that entrepreneurs in emerging economies (such as China and India) have different reasons for why they engage in entrepreneurial activity. So, this issue needs more ethnographic research in various countries. I would like to see more ethnographic and qualitative research applied to the study of how individuals engage in entrepreneurial activity. The creation and development of a business is a process occurring over time. Paying attention to the time dimensions of the process is important. Paying attention to what activities occur in the process is important, as well as the reasons that individuals provide (at the time of their actions) for why they are engaging in those actions. I think such constructs as BRICOLAGE (Baker and Nelson, 2005) and EFFECTUATION (Sarasvathy, 2001) require a rather fine-tuned exploration of how and why entrepreneurs engage in entrepreneurial activity. I would like to see a more coherent description of the different measures used to describe business entry used in studies in various countries. For example, if there are 6 000 000 business start-ups in the USA in a given year, about 600 000 of these are corporations, with the rest as sole proprietorships and partnerships. How are the different business start-up entries categorised in various countries? How are different business start-up entries likely to show up in various registries of business databases in various countries? It would seem that comparisons of start-up efforts across various countries is often comparing apples to oranges. There seems to be much overlap between those studying innovation and those studying entrepreneurship. It would be helpful to seem more integration between these two fields of study. Panelist 8 Five challenges/questions: 1
Defining the field The first and most pressing one for me is how the field of IE should be defined. Having now edited and reviewed a significant number of would-be IE papers I have found that while the potential breadth and depth of the field is large and flexible, there is a widespread view that almost anything can be called IE and stands a chance of getting published. Research needs to be done to try at least to establish parameters that are commonly recognised. Literature reviews by Rialp, Rialp and Knight, Zahra and George and Coviello and Jones have at least made a start at identifying what the state of IE knowledge is and how the field might be defined. Oviatt and McDougall have explicated several definitions, and Cavusgil and Knight and others have defined rather explicitly ‘born global’ firms, one of the central points of focus in IE. There seems to be little adherence to these premises, definitions, constructs and measures
106
L.P. Dana and R.W. Wright and key authors are loosely cited to help position a piece of work in the field when really it has no business being there. Examples, without naming names – a recent paper in JIM which stated quite firmly that there is virtually no research on small firm internationalisation yet cited O&M in order to justify its focus – the paper contains other significant errors and omissions. A paper in IBR a year or so ago, examined retrospectively the internationalisation of rather large, rather old Israeli firms and used rather spurious evidence to refute the international new venture theory.
2
Distinguishing the field IE researchers must be able to distinguish their work more exactly from other disciplines such as strategic management for example. It is not enough to indicate that IE is the interface between IB and E, that is where the focus of what we do is in real life, i.e., entrepreneurs/firms that are/go international, etc. However, IE is far from having any theories of its own and much more needs to be done to research antecedent themes, influences, and to integrate theoretical contributions (Coviello and Jones, 2004; Jones and Coviello, 2005). As someone said to me in an interview, if IB is a fuzzy field with no theories of its own and E is likewise, what on earth can be gained in clarity by merging the two? There are a number of issues that need to be researched here:
3
•
whether in fact this is a distinct field of study
•
what is its focus
•
what are its theories
•
what are its contributions to understanding over and above other existing theories, e.g., Schumpeterian innovation theories
•
how is it distinguished from other schools of thought
•
how does it reconcile differences between levels of analysis, e.g., the firm, the individual, the team, the industry and so on.
Defining constructs and measures This relates to both one and two above. Researchers need to be much more explicit in defining what they mean and what measures they are using. I have seen a number of empirical papers that position themselves as ‘born global’ studies when they are actually nothing more than studies of exporting. This allows the authors to ignore an enormously well established literature on SME exporters, and publish a relatively flimsily researched study under the title of ‘born global’. More research needs to be done to establish, clarify and distinguish constructs and measures from others. More vigilance is required by editors and reviewers to help develop the field and establish minimum standards and expectations.
4
Seeking causality IE research needs to move beyond the descriptive level. Much of what has been published so far describes a phenomenon – usually of rapid or early internationalisation. Some research extends into the question of how this happens (means), or the motivations or triggers that make individuals/firms internationalise
International entrepreneurship: research priorities for the future
107
quickly and far afield. Little is known about the facilitators from the external environment and exactly how these influence the phenomenon. Acs and Audretsch have advanced a theory of new venture foundation from the perspective of knowledge spillovers – to date this has not effectively been extended to explain INVs. Researchers confidently (including me) suggest that advances in IT, regional integration, etc., have enabled rapid internationalisation – to date to my knowledge, few macroeconomic studies have been done to establish this as fact. Another issue in relation to causality is that beyond Trish McDougall’s thesis, there has been little work that has explained differences between domestic and international new ventures, more importantly, there are no theories that explain why some small firms expand internationally from early stages and others do not. IB is replete with theories that explain why firms in general go international rather than remain local – few of these are pertinent to very small young firms. If IE is to be taken seriously as a field – we need to have theories that provide, insights at least, into causal factors. 5
Embracing new topics It was recently said to me that IE needs to grow up and move beyond the early and rapid internationalisation phenomenon, or whatever one wants to call it because that has been ‘done to death’ and ‘is not interesting’. I disagree with the latter two comments because I feel that we are a long way from fully understanding these issues and there is a dearth of good, robust conceptual and empirical work on that aspect of IE. However, I do agree that new topics should be sought. Recent attention has been paid to opportunity recognition, discovery and so on, other aspects of cognition and mindset, innovation, absorptive capacity, creativity, etc. I would like to see a focus on the role of emotion in relation to international entrepreneurial behaviour, more cross cultural comparisons, studies on ventures established by asylum seekers and other migrant groups, the role of women in internet based internationalisation, and research on things that would be useful to the IE community as a whole, e.g., a study of sampling frames, or the establishment of data-sets and sampling frames that could be accessible to researchers within their field.
Panelist 9 •
Are there stages of development in outsourcing companies?
•
Where do national differences apply in entrepreneurial makeup?
•
Are the patterns of IE/trading the same in different language clusters (e.g., Anglophone countries, Francophone countries, etc.)?
•
How do exporting firms get past family/friend contacts to pursue business with strangers overseas?
•
How often (and is there any pattern to) how firms exaggerate or misrepresent themselves in IE deals?
108
L.P. Dana and R.W. Wright
Panelist 10 The phenomenon of IE and international new ventures (or born global firms) has only recently begun to generate research interest and findings. There is a need for substantial future research. The following are several leading issues: •
What is the nature of born global firms? What are the major characteristics of born globals? What accounts for the early international success of born globals, particularly in light of the resource constraints they typically face? For a variety of reasons, the number and influence of born globals in international business is likely to increase. First, thanks largely to globalisation-induced infrastructures and facilitating technologies, born globals are already doing business in dozens of countries. These globalising trends are not a burden; they appear to be a boon to many such firms. Second, the inherent flexibility and international orientation of smaller, early-internationalising firms appears to confer key advantages for adapting to foreign market conditions and evolving buyer tastes. Finally, as smaller firms, born globals tend to operate in niche markets that often are ignored by larger firms. With the broader development of nations and increasing shift to market-based economies, new international marketing opportunities are emerging for businesses, large and small.
•
What specific conditions within the firm give rise to IE and early internationalisation? What is the role, for example, of managerial vision and drive, product/process discoveries, and other such factors? Youth and lack of experience, as well as paucity of financial, human, and tangible resources, are no longer major impediments to the large-scale internationalisation and global success of the firm. Countless companies that possess particular characteristics and capabilities are undertaking IE endeavours. Managers at such firms might be seen to begin with a global vision, and devise a collection of capabilities at the strategy- and organisational-culture-levels of the firm that give rise to early adoption of internationalisation and success in a broad range of foreign markets. For example, early on, they might acquire a substantial, fundamental base of international knowledge and capabilities that traditional MNCs typically have taken longer to acquire. In this sense, for instance, IE might be seen to pose an important new challenge to traditional views on the internationalisation of the firm.
•
Is IE a legitimate, stand-alone field likely to lead to new models and theories for international business? This author believes the answer is ‘yes’. However, this remains an open question for many. This is true partly because scholars might argue that the extant literature in the fields of international business and entrepreneurship might suffice to explain all phenomena that are taking place in IE. On the other hand, recent phenomena in the macroenvironment of international business might lead one to conclude that earlier theories of international business need updating. During the past couple of decades, the volume of global business activity has increased dramatically and is associated with the emergence of mechanisms and infrastructures that are facilitating the internationalisation of countless smaller, entrepreneurial firms. The trend has been
International entrepreneurship: research priorities for the future
109
hastened by the development of technologies that allow companies to internationalise and conduct global business much more efficiently than ever before. Electronic interconnectedness in particular is driving the emergence of a borderless global economy. Information technology and the internet are liberating forces, permanently altering the landscape of international trade. Thus, for example, absent the burden of administrative heritage, younger, smaller firms are playing a much greater role in international trade than ever before. What are the implications of this trend for international business and entrepreneurship that have not been examined in extant literature? •
Is IE a relevant field for firms that specialise in services? If so, how do international services firms they differ from traditional MNC service firms and from early internationalising manufacturers? International services, like IE, is a field in its infancy. Much of the literature in international services has been largely exploratory, descriptive, and focused on particular industries or international locations. The gaps in extant literature are considerable. While having established an enduring place in the practitioner realm of world commerce, work has only just begun in transforming international services into a viable field in academic research. Features such as the tangibility of the offering, its perishability, and inseparability from the point of production, appear to sharply distinguish services from products. In international business, it is primarily these characteristics that stimulate use of local production and joint ventures as the primary channels by which services are marketed overseas. Where production and consumption cannot be spatially separated, it is necessary to locate production abroad in order to sell to foreign consumers. A key challenge in making and selling services abroad is that of overcoming hurdles associated with the unique characteristics of each country and the fact that services are particularly prone to culture and other country-specific influences. Services are fundamentally people-centred and are therefore highly culture-sensitive. In service encounters, people as ‘culture bearers’ interact directly in simultaneous production and consumption. Such encounters and the communications process that they rely upon are infused with the cultural idiosyncrasies that each party embodies. These considerations help make services different from products in international business. It might well be the case that research on international services embedded within an IE perspective would lead to new insights for both the fields of IE and international services.
•
Are born globals more internationally oriented than companies that expand abroad in the traditional way? If so, does this orientation make them more responsive than traditional MNCs to foreign buyer needs and wants? The traditional view of the large multinational corporation as the dominant international form might well be evolving. Born globals are emerging in substantial numbers worldwide and likely reflect an emergent paradigm, with the potential to become a leading species in the ecosystem of international trade. The born global phenomenon is heartening because it implies the emergence of an international exchange system in which any firm, regardless of age, experience, and tangible resources, can be an active international business participant. While large global
110
L.P. Dana and R.W. Wright corporations and the negative aspects of globalisation often dominate reports in the popular press regarding the emergent world order, the increasing role of born globals implies a more optimistic view. In relative terms, born globals might be seen to herald a more diverse international business system in which any firm can succeed internationally. Born globals might be seen to represent a more ‘democratic’ movement in global business, as today companies of all sizes and all resource bases are internationalising and succeeding in cross-national business.
•
What is the role of network relationships in early internationalisation and IE? How do networks advance early internationalisation goals and international performance? What types of network contacts are most beneficial? The first international sales of many businesses these days may come through a foreign joint venture or a network relationship with companies abroad. For industrial firms, involvement in international networks provides a low risk conduit for foreign sales. Successful international commerce today is increasingly facilitated through partnerships with foreign businesses – distributors, trading companies, subcontractors, as well as more traditional buyers and sellers. Inexperienced managers can improve their chances for succeeding in international business if they take the time to build mutually-beneficial, long-term alliances with foreign partners. The literature on networks might hold important implications when integrated with the emergent literature in IE.
Panelist 11 •
How do networks moderate the speed of internationalisation? More specifically, how do (1) the strength of network ties, (2) the size of the network and (3) the overall density of the network moderate the speed of internationalisation? Networks offer one of the most fruitful areas of research in IE. Networks help entrepreneurs identify international opportunities, establish credibility, and often lead to strategic alliances and other cooperative strategies. The three most important aspects of networks in relation to IE are strength of network ties, size of the network and overall density of the network.
•
How does strategy interact with industry structure in the internationalisation of new ventures (or entrepreneurial firms)? Entrepreneurship scholars have found the interaction between industry and strategy to have a very influential impact on new venture performance. The interaction has also been deemed influential in the fields of international business and strategic management.
•
Do knowledge spillovers relating to international expertise impact the (1) level of internationalisation, (2) speed of internationalisation, and (3) choice of countries entered of new ventures that are operating within recognised geographical clusters within their industry? Until recently, research on industry clusters has been done primarily by economists and economic geographers with the primary unit of analysis being the geographical region. Much of this research focused on policy issues such as the creation of new
International entrepreneurship: research priorities for the future
111
jobs. Individual firms, and most specifically new ventures, have not been the primary focus of cluster research. There is a rich body of cluster literature that can be applied to IE research. •
What structural forms best enable a MNC to harness the entrepreneurial capabilities of its subsidiaries to increase its competitiveness? The corporate entrepreneurship work of Julian Birkinshaw examining the relationships of MNC companies and their subsidiaries has opened an interesting avenue of research of IE scholars. The question I have identified is only one of many questions in MNC-subsidiary relationships that are worthy of study.
•
The final issue that I wish to highlight is the methodological need for more studies on service firms. The internationalisation of new ventures has focused most typically on product firms, and most specifically on technology based firms. It is not at all clear that the results would be generalisable to service firms. The lack of service firm samples is, in general, an issue for more established entrepreneurial firms as well; however, samples have not been as dominated by technology based firms as the new venture studies have been.
Panelist 12 The extant literature is largely descriptive. We have an understanding of the variety of patterns and processes of early and rapid internationalisation, and the conditions under which it is most likely to occur. I think research should now turn to the question of if this phenomenon is sufficiently unique to warrant a distinct body of theory, public policy, etc., if INVs increase returns for investors and society, and if so, how do we encourage more firms to assume this form, and overcome difficulties this type of organisation experiences (especially those that may be addressed by public policy). I think the most important question is whether international new ventures constitute a distinct organisational form. The answer to this question is fundamental to defining IE as a unique discipline. If the answer is ‘no’, then the phenomenon of early and rapidly internationalising firms can be viewed adequately from either the theoretical lenses of entrepreneurship (where market choice is international in scope), or international business (where the organisation suffers the liability of newness as well as ‘foreign-ness’). Alan Rugman outlined the arguments against INVs as a unique organisational form (from the IB perspective) during his invited presentation at the McGill Conference this past September. The next issue is if early and rapid internationalisation has a significant (positive) influence on firm performance, and any moderating/mediating conditions. In particular, if the long run returns to investors adequately compensate for increased risk. This can also be viewed from a societal perspective – whether INVs improve commercialisation and financial performance resulting in increased public welfare. If INVs are good for their investors and society, then the issue becomes how and when to encourage ventures to take this form, identification of unique operational requirements (e.g., financing, HR, etc.) and if there are any market failures hindering INVs that should be addressed by public policy.
112
L.P. Dana and R.W. Wright
Panelist 13 •
Education, learning issues and skills
•
International intrapreneurship
•
Managerial relevance.
Panelist 14 Here is a list of some of the topics which are currently exercising my mind: •
What are the key drivers of business model innovation in SMEs?
•
What are the critical success factors in partnerships between business entrepreneurs and universities?
•
Is there an optimum branding strategy for entrepreneurial enterprises in the early growth phase?
•
How is organisational learning managed and processed in highly innovative SMEs?
•
Do major customers facilitate or inhibit corporate adaptation and renewal?
•
What are the most effective management strategies in building partnerships and alliances between entrepreneurial and more traditional enterprises?
•
Under what circumstances does significant investment in service excellence and customer loyalty pay off?
•
How effective is the traditional SCM paradigm in fast-growth international enterprises?
•
How do entrepreneurs make their decisions about international investment and location strategy?
•
What are the most effective strategies for attracting and retaining talent in new entrepreneurial enterprises?
Panelist 15 •
The role of values in IE Certain values are associated with entrepreneurial behaviour (individualism, achievement, independence, competition, change, innovation, etc.). Where these values conflict with dominant societal values, what are the implications for entrepreneurship? Does entrepreneurship manifest itself in other (e.g., non-commercial) ways?
•
The issue of growth While many studies have examined venture creation in various country contexts, and comparative studies have been done on venture creation, too little attention has been devoted to the creation of managed growth and high growth (as opposed to lifestyle or survival) ventures. What are the country factors that explain higher proportions over time of either managed growth or high growth firms among the population of firms.
International entrepreneurship: research priorities for the future •
113
The quality of life implications of entrepreneurship Looking at different domains of quality of life in different international contexts, what are the implications of lower versus higher levels of entrepreneurial activity, as well as the implications of different types of entrepreneurship (e.g., low versus high tech, product versus service-based, etc.) for the various quality of life domains? What role do various country factors play in mediating or moderating this potential relationship?
•
The entrepreneurial experience How do individuals experience the act of venture creation in different country contexts? Are there commonalities among the experiences themselves? Is the same venture type and venture success experienced differently based on the international context? What are the implications for how entrepreneurship is experienced?
Panelist 16 I have now carefully considered the challenges/key questions for future IE research, please find my comments below. All of them are rooted in the thought that a new stream of research which seeks permanent presence in the academic field needs to be both rigorous and relevant. Being rigorous leads my thoughts to the following issues: 1
2
I do not want to argue that current IE research would be methodologically weak, but as Nicole Coviello and Marian Jones have quite aptly pointed out, methodological challenges do exist. In my opinion, they are rooted to some issues which need to be commonly solved by the research community before the research can progress. •
During the past two decades we have been able to theoretically define the phenomenon in question and the definition(s) of Oviatt and McDougall have been widely accepted by researchers worldwide. However, when it comes to the operational definition – i.e., how do we operationalise the theoretical concepts – a lot of controversy still exists. If we cannot solve this problem, we can be easily accused of comparing apples and oranges and even drawing conclusions based on this comparison. A common operationalisation of the key concepts is still lacking.
•
If we would be able to create and accept a common operationalisation of the key concepts, this would open us the door to true cross-country comparison – a way which would be greatly appreciated by researchers and also be of interest to the major journals.
•
From the viewpoint of rigour, the third point which we need to address is the introduction of mixed methods and longitudinal research in our research designs. However, this is a step which can be taken only when the two first ones have been solved.
A research stream survives in time only if it is both academically interesting and managerially relevant. In my opinion, the academic interest has been clearly demonstrated, now it is the time to focus on the managerial relevance. This leads again to the following thoughts:
114
L.P. Dana and R.W. Wright •
Existing research offers us enough grounds to understand why IE as a phenomenon emerges and I think we do also know how these companies differ from others. However, so far we have been able to offer only limited evidence for the companies (or researchers) which strategies/operational activities they should take in order to solve the challenges we have pointed out. In other words, we should redirect our interest from the birth of these companies to the time after.
•
The thought above makes also one think whether we have focused too much on success stories (which is quite understandable as they are easier to access), whereas it would have been as interesting to know about the other side of the coin, i.e., failure cases. I do believe that especially with qualitative research approach we might learn a lot from the companies who did seem promising but did not make it in the end.
Panelist 17 •
The metaphor of entrepreneurship as a rhizome applies to IE as well: “a fertile middle space, a little chaotic and unfocused arena, a heterotopic space of varied thinking, a space that can connect to many forms of theoretical thinking and where many thinkers can connect to, a true interdiscipline.” (Steyaert, 2005)
As regards IE, it is admitted at least that the field of research includes two distinct foci: the entrepreneurial phenomenon as it is appearing in various Countries and Cultures (IECC) and the firm’s activities that cross National Borders, in so far as they are comparable with the entrepreneurial process (IENB). Now it is quite clear that IECC is more rhizomatous than IENB. Interest in new kinds of entrepreneurship with their cultural specificities is increasing: ethnic entrepreneurship, community entrepreneurship, etc. Interdisciplinarity is widening: sociology, anthropology, etc. Consequently newcomers who may be attracted by the variety of the field, may lose their way. The point at issue is to build a framework for a better understanding and for a better academic respectability of IECC. The first step should turn on elaborating a general survey of available contributions. •
There is no noticeable flow back of ethnocentrism in mainstream entrepreneurship-thinking. Including risk taking or profit maximisation into the definition of entrepreneurship is a good example of such a bad habit: in a many cultural contexts, the crossbred vision of business entrepreneurs makes them more like non-profit organisations. This remark applies to IECC and IENB as well and should lead to another way of thinking about both. As an increasing number of researchers accept the idea that entrepreneurship is culture-based, the question arises what type of entrepreneur is adequate in such and such a country in respect of the overall values of society. This leads up to view entrepreneurship as a set of personal, organisational and societal capabilities entrepreneurs have to show up in such and such an environment. This alternative way of thinking would be suitable in particular to IECC and IENB. In literature on IE, there is some nascent interest in this approach. Hopefully there will be more in the near future.
International entrepreneurship: research priorities for the future
115
•
The field of IE has been widened to a considerable degree, due to the move from international new ventures (cf. Oviatt and McDougall, 1994 for instance) to the international activities of established firms (cf. Zahra and George, 2002 for instance) as the critical unit of analysis for understanding IENB. Whereas in the former configuration the entrepreneur and his/her team have a sensible position, the entrepreneurial ingredient is limited in the latter outline to discovering and exploiting new opportunities outside a firm’s domestic markets. The international business part being prevalent, the distinctiveness of international ‘entrepreneurship’ is much less visible. One may suggest that the entrepreneur’s mark, as an individual or a team, should rather be searched for within the range of the entrepreneurial capabilities (see above). This set includes the ability concerning new opportunities but goes far beyond. In a global environment where heterogeneity is the dominant feature, entrepreneurs need global sensitivity supported by finesse of performance. Hereby is meant the entrepreneur’s personal sense of what is fitting in complex situations including simultaneously economic and non-economic issues. These situations may emerge from differences in culture and institutions. Understanding the meaning of culture, being able to recognise its many manifestations and adapting his/her business approach to cultural diversity is not a small task when taking into account the extraordinary variety of ways of perceiving things which are rooted in culture and traditions. Sensitivity to a cross-cultural perspective and handling difficult and/or delicate situations in a resourceful way are, of course, only one aspect of the entrepreneurial capabilities which are involved in IENB. There is also a renewed interest in the role and the importance of intuition to the entrepreneur and, more generally, in non-rational aspects of decision-making. Researchers have to show a great deal of ‘esprit de finesse’ when investigating the entrepreneurial capabilities that are significant in IE.
•
In less developed countries, entrepreneurship in small business is often seen as a powerful remedy against poverty. The challenge entrepreneurs are facing is enhanced by globalisation so that the development of indigenous SMEs activities on their home markets has to be supported by governmental bodies which have to be themselves backed by international organisations. As regards their activities on foreign markets, they are most of the time taken over by intermediary organisations. Now the efficiency of the institutional network is often very low as a consequence of officials’ corruption. The benefits of the distribution network are embezzled mostly through organisational malfeasance. It is most urgent that scholars should give more attention to these policy aspects of IE, be it IECC or IENB.
•
Interorganisational learning together with networking among SMEs are considered by a great number of researchers as an alternative governance structure for better firms’ performance. They are subject to regional embeddedness and therefore culture-specific.
116
L.P. Dana and R.W. Wright In less developed countries, despite their collectivistic social substructure, poverty often generates an ‘every for himself’ mindset among individuals who endeavour to take their chance in business. Neither interorganisational learning nor local networking is likely to evolve as a ‘system’ that could fuel effectively indigenous entrepreneurship. Alternative forms of learning and networking systems as well as alternative forms of entrepreneurship are to be explored in view of a better adequacy with social substructure and with a view to find the best leverage for entrepreneurship, be it IECC or IENB, in the context of poverty.
Panelist 18 Below are my responses, in no particular order: •
The first is a challenge. For a number of years many papers, special issues of journals, and books have been published on IE. But not enough of them build on one another and not enough of them are empirical. For the project you are leading to be a true success, you must generate more empirical work and that work must be built on what already exists. Thus, the challenge is to figure out a way to make that happen.
•
Johanson and Vahlne (2003) focus on networks and propose that the establishment of foreign customer and supplier relationships determine much about the nature of international entry and expansion. Those networks need to be studied systematically in a variety of ways over many studies to understand their influences. Also, Johanson and Vahlne’s ideas seem to relegate foreign entry mode to an extraneous variable that is largely determined by a firm’s international networks. That is certainly different than the way foreign entry mode is treated in the IB literature. Perhaps empirical (meaning qualitative, quantitative, large sample, or small one) investigations focused on the details of how new ventures use networks to go international can shed some light on a variety of issues and especially on whether foreign entry mode is an important or extraneous variable.
•
How many born globals/global start-ups/international new ventures are there? In what countries and industries do they originate? Can their distribution and their pattern of emergence over time be explained?
•
In what ways can we move what academics know about IE into practical use?
Panelist 19 As far as I am concerned there is one major topic that needs to be researched in the area of IE. My apologies for not sending you up to five questions or challenges: I only have this one. Despite a large and influential literature on the concept of ‘born globals’, there is no substantive empirical evidence that they exist. Certainly there has been no empirical publication in any major journal. Thus, it is essential to test the existence of born global firms. To do this will require studies looking into the foreign dimension of the operations of small businesses. This will require what is called the F/T variable. This variable is readily available in the annual reports of all companies issuing stocks. The current studies
International entrepreneurship: research priorities for the future
117
use a scope measure, simply counting the number of countries in which sales are made. The scope measure is totally invalid and misleading. It also tends to focus on exports rather than the sales of foreign subsidiaries where the latter is the focus of mainstream research in IB. A second aspect of this issue is to test the extent to which born globals are actually born regional. I have now seen several papers which suggest that small firms expand within their home region and that home region sales account for the majority of their international sales. This needs to be extended to larger data sets and for firms outside of the USA. There are three things important in research on entrepreneurship: empirical, empirical, empirical. Panelist 20 1
Ends versus means of IE Culture impacts on the development entrepreneurship. It is clear that many national development policies are interested in supporting entrepreneurship as a source of growth and development in their economies. Although there is universal agreement (and maybe not!) about E as a good End, (the general process and activity of starting and growing a new business enterprise), there will most likely not be agreement on the Means. For example, how do incubator programmes differ and are some more successful than others? Market driven versus National programme driven strategies? A comparison on a number of important dimensions of comparison (e.g., Technology assistance, financing, marketing assistance, comparative advantage, etc.) with performance/survival as the dependent variable might yield insights into what works well and why. There have probably been comparison and Key Success Factor studies of this sort already. A more sophisticated update will be interesting and important for policy guidance.
2
Microfinance entrepreneurship With the latest Nobel Peace Prize going to the founder of the microfinance/ microcredit movement, Mic Fin has both legitimacy of a track record and trend status as many new people are trying to ‘get into the field’. Starting the Mic Fin organisation itself in the field is a well-known process and many supporting NGO organisations exist to support them and help them run better. So as a field, the Mic Fin is doing relatively fine. What is not being looked at though is the Mic Fin clients as entrepreneurs. Most of the early Mic Fin money is going to start microenterprises at the most basic level of activity (e.g., taking local resources and skills and producing low tech labour intensive products). Some of these Mic Fin enterprises have good growth success and become sustainable enterprises. But what happens to those who do not? Why do some fail? What happens to the failing microenterprise over time? Does strong/weak E training make a difference? This is an issue that has been identified in Mic Fin circles and institutions. The entrepreneurship field might provide some insights here.
118 3
L.P. Dana and R.W. Wright Large scale org spinoffs Many large companies spin off new company efforts based on new technologies and patents. I am sure someone has looked at this before but there might be a question of interest here re KSF analysis.
4
Diaspora support of homeland entrepreneurship There is a tendency for successful diaspora citizens (e.g., Indians in San Diego) to feel that at some time the want to ‘give back’ to their homeland. This often takes the form of starting new businesses in the home country with family et al. This often involves the transfer of important technology. So there are three areas of interest here:
•
Which diaspora ethnic groups are doing what and where? (A simple assessment research).
•
What is the nature of the ‘giving back’ to the homeland? (Assessment of types of economic activities started).
•
What determines which technology is the most appropriate to transfer? How is the fit/appropriateness issue dealt with? Barriers to technology transfer, etc.?
•
Are these diaspora enterprises able to stand alone over time? Or not?
Panelist 21 Here are my five issues: 1
What is unique about IE as an area of scholarly inquiry? IE boundaries are becoming increasingly fuzzy.
2
What is the relative survival of born global new ventures to other ventures that follow gradual internationalisation?
3
How do international new ventures learn? Do they do this differently from others?
4
How do international new ventures develop capabilities? Are they different in this regard from others?
5
How enduring are the liabilities of newness, foreignness and smallness among born global new ventures?
International entrepreneurship: research priorities for the future
119
Appendix 3 Delphi Round 2 responses The objective of Round 2 was to gain more focus. Each of the panelists was sent the full set of responses from Round 1, without identification of the authors. Panelists were then instructed as follows: “We would ask each of you to reconsider your own ideas about research priorities, which you submitted earlier, in the light of any further thoughts or insights you have gained from the submissions of the other panelists. Now assume you could design the single research project you think is most important at this time for the field of international entrepreneurship. We would like you to prepare and send us a single, one-page research proposal summary, including: •
A brief statement of the nature and objectives of the research.
•
Why it is it significant?
•
What methodologies will be employed?
•
What obstacles may be encountered?
•
Any further comments.”
Fifteen responses to Round 2 were received. Each is presented below, with identification of its author: Robert Anderson I read with interest all of the Round 1 submissions. Much food for thought. For me, the most interesting research questions centres on the role of entrepreneurship in bringing together the ‘local’ and the global in the new flexible economy. In fact it is the reason that IE is an important (and increasingly so) field of study. The following excerpt from one of my papers captures my views: Regulation theory is one of the new approaches to development that emphasizes contingency and human agency. According to Hirst and Zeitlin (1992), it executes a slalom between the orthodoxies of neo-classical equilibrium theory and classical Marxism to produce a rigorous but nondeterministic account of the phases of capitalist development that leaves considerable scope for historical variation and national diversity. Concurring with Mark Elam’s contention that, in the new global economy, local economic forces and external economic forces are in constant interaction, Amin and Malmberg (1984) argue that the crisis in the global economy has resulted in “new opportunities for the location of economic activities” and that “the geography of post-Fordist production is said to be at once local and global”. Similarly, Scott (1988) states that new industrial spaces result from a “very specific articulation of local social conditions with wider coordinates of capitalist development in general”. In addition, Dicken (1992) emphasizes that successful participation in the global economic system “is created and sustained through a highly localized process”.
It seems to me that the ‘highly localised process’ is entrepreneurship by people in places focused on opportunities in the global economy is the key to what is described above, and surely this in IE. This suggests that in entrepreneurship a global orientation is not an
120
L.P. Dana and R.W. Wright
alternative among many, but the key to success in the unfolding new flexible global economy. This is especially so if one moves beyond markets to include sources of inputs including knowledge as all being part of global environment in which new firms emerging and existing one prosper or falter. I think the key would be to define identifiers of a global orientation (not just with respect to markets) and then search for them among start-ups now and at a point in the past still in the Fordist Era. In addition it would be interesting to follow the Fordist Era companies forward through time looking for evidence of increasing recognition of global opportunities and necessities, and the impact of this on organisation survival and growth. Erkko Autio Title: Effects of internationalisation on new venture survival and growth Objective: Determine whether internationalisation has differential short-, medium- and long-term effects on new venture survival and growth. Justification: If it does have a positive medium- and long-term effect on new venture growth, this can be construed as supporting evidence for the learning advantage of newness. Controlling for survival enables us to focus more closely on this effect and eliminate survival bias. Methods: Longitudinal archival research (internationalisation, survival, growth), combined with industry, time and country controls. Obstacles: Such datasets do not exist in my knowledge. Paul Beamish Nature and objectives: The purpose of this research is to begin the tedious but essential task of building a multi-country, large sample, longitudinal data set. The objective is to be able to track the growth and geographic spread of entrepreneurial enterprises. Significance: A major impediment to the establishment of the legitimacy of the IE area is a lack of data. The proposed data set would serve as the empirical basis for at least 100 eventual refereed journal articles. Evidence that this is possible can be seen in the impact of (A) the Harvard Multinational Enterprise Project data set developed and maintained by the late Ray Vernon for many years, and (B) the Japanese FDI Project at Ivey established by Paul Beamish and Andrew Delios in the mid-1990s. Based on longitudinal data from Toyo Keizai, the latter has already resulted in 64 published articles, with many more in review or in process. Methodology: Annual survey. Obstacles: Agreeing on the set of questions to go into the annual survey. Determining conditions of use of the data. Cost of administering and tracking a large number of entrepreneurs in each country. Researcher commitment to the topic area (many scholars change research focus after five years or so). Further comments: There is no short-cut possible.
International entrepreneurship: research priorities for the future
121
James Bell To recap on the first Delphi phase, I suggested that areas for further enquiry might include: •
entrepreneurial teams in IE
•
IE in emerging/transitional economies
•
gender and IE
•
there are other issues relating to ethical and social perspectives that merit detailed international and cross-national enquiry.
The ideas put forward by other panelists also indicate many other issues that merit systematic investigation. Rather than focus on any one particular area, I believe that it is important to set the parameters for such enquiries as follows: •
They should involve a collaborative approach involving researchers in different countries in order to develop cross-national perspectives on the particular issue.
•
Collaborating researchers should agree in advance the aims, scope and processes for these studies. This would include agreement classification/definitional issues, the most appropriate methodologies to employ, analytical tools, etc.). A valuable outcome from the panel session at McGill UCLA would be to reach some common agreement/understanding on base parameters that might apply to different avenues of enquiry.
•
The potential for longitudinal research should be explicit the design of these studies as should the willingness to embrace methodological pluralism, in order to provide deeper and richer insights over time. Extending the geographical scope of enquiries is also important to obtain truly multi-cultural perspectives.
For example, a multi-country study on international female entrepreneurs, could be undertaken in locations represented by researchers within the existing McGill network (e.g., Canada, Denmark, Finland, Ireland, New Zealand, Sweden, UK, USA, etc.) We could then recruit new researchers into the McGill network to extend the study into other locations (e.g., Asia, new EU, BRIC economies, etc.). The objective of this research would be to gain a deeper understanding of challenges facing female IEs and to compare/contrast their experiences and behaviour in the different research locales. The enquiry would involve mixed methods including the use of online sources to identify a sample and build profiles of female IEs and their firms. Information gaps would be addressed via a tightly focused e-mail instrument. Thereafter an appropriate subsample would be identified for further investigation via in-depth interviews. It is envisage that 80–100 profiles of female IEs might be developed in each research location and of these 20–25 of the selected for in-depth study. Data analysis would involve quantitative and qualitative techniques. No particular problems are envisaged with this approach as myself and colleagues have used it in a number of enquiries to date with very satisfactory outcomes.
122
L.P. Dana and R.W. Wright
Nicole Coviello Nature and objectives of research This primary purpose of this research is to address the question: are INVs different from DNVs? In doing so, we focus on an empirical comparison of born global firms (the most commonly studied form of INV) and domestic new ventures. We examine these organisational forms through their stages of development and compare network interactions and structure, resource outcomes, learning outcomes and the extent to which causation or effectuation best captures venture development processes. We also depart from the technology or ‘hard service’ firm-focus of many IE studies to identify patterns across goods, soft services and hard services. This study is a replication and extension of Coviello (2006) and Coviello and Cox (2006). Significance of research A simple content analysis of the Round 1 Delphi Results indicates that eight of 21 panelists question whether IE is a distinctive domain for academic inquiry. A number of others highlight the need to better understand the role of networks, the nature of learning and if IE is different in a service firm context. This study has the potential to address all these issues. Methodology Since this project is a replication and extension of previous work (noted above), the methodology involves their protocol for multi-site case research. Data is analysed through content analysis, event analysis and application of UCINET 6. To allow for comparison, cases are either ‘born globals’ or ‘domestic new ventures’. They also represent one of three categories: goods, soft services or hard services. Existing cases include three software firms (hard services, BGs), three wineries (goods, BGs) and three engineering consultancies (soft services, DNVs). Each case includes a chronology of organisational development that captures conception, commercialisation and growth. To progress this project, we will: •
return to the existing case sites to update data and assess whether or not the firms have shifted beyond growth to stability/profitability
•
identify and conduct case research on nine new ‘matching’ firms (e.g., the three software BGs will be matched with three software DNVs, etc.).
Using the complete set of 18 cases, we will then extend analysis of the original nine cases through to their current state of development and replicate the analysis (focused on network and resource dynamics) to the nine new cases. Finally, all 18 cases will be reanalysed to explore the nature of organisational learning by stage and the extent to which causation or effectuation (Sarasvathy, 2001) characterises venture development. Ideally, this type of research would be replicated in other countries to allow for a cross-cultural comparison. Countries that come to mind that are likely to have similar industries but cultural values different from New Zealand. Examples include Spain and Germany.
International entrepreneurship: research priorities for the future
123
Anticipated obstacles This is more of a research programme than research project! It is time-consuming and intense, and as such, not great for tenure-track scholars. I also expect that some IE scholars may dismiss this type of research because of its degree of difficulty to implement and its non-causal nature (no surveys, no moderating variables, no measures of interaction, etc.). In my opinion however, the research proposed here is complementary to such approaches and necessary to provide a rich and deep empirical base for future study. It’s also a great training opportunity for grad students and provides a chance for them to understand programmatic research. Comments This project has the potential to be academically rewarding since we might better understand if/how the INV (in this case the BG) is truly different from the DNV when it comes to the networks, resource outcomes, learning, etc. Further, the project turns the focus away from internationalisation issues per se to understanding the nature of the venture, potentially in a cross-cultural manner. We also have the opportunity to compare soft services (and goods) with the hard service or technology firms commonly studied in IE research. Overall, I believe the project has the potential to address a number of the issues identified in Round 1 of the Dephi study. William Gartner Topic: Exploring the opportunity/necessity dichotomy Nature and objectives of the research: There is a growing body of research that starts with the idea that entrepreneurs pursue business creation for either of two broad reasons: opportunity – entrepreneurs “elect to start a business as one of several possible career options” (Reynolds et al., 2002, p.15), or necessity – entrepreneurs “feel compelled to start their own businesses because all other options for work are either absent or unsatisfactory” (Reynolds et al., 2002, p.15). This dichotomy could be expressed as the difference between ‘want to’ start a business versus ‘have to’ start a business. I think the reasons entrepreneurs offer for starting businesses are more complicated than this dichotomy, and, therefore, using opportunity/necessity provides a biased view as to the motivations that drive entrepreneurial activity in various countries and cultures. Why is this significant? I believe the opportunity/necessity dichotomy leads to one-dimensional thinking about a construct that is multi-dimensional in nature. I believe that our thinking about entrepreneurship should better reflect the phenomenon, itself, particularly if a goal of our research is to develop teaching and policy to increase or enhance entrepreneurial activity. What methodologies will be employed? I would use data from the PSED1 and PSED2 that asks open-ended questions to explore the reasons entrepreneurs offer for getting into business. This open-ended data can be analysed using various protocols (e.g., Shaver et al., 2001) to explore whether other constructs might be useful for categorising the kinds of motivations that orient individuals towards entrepreneurial action. Then, I would
124
L.P. Dana and R.W. Wright
look to expand this study by asking GEM participants to ask similar open-ended questions on reasons for starting businesses, and then use similar protocols to ascertain whether similar or different motivations surface. What obstacles may be encountered? Most researchers have little additional time to take on new research projects. I think the data from GEM survey respondents would be easy to collect. The problem would be more in encouraging researchers to analyse this data. Brendan Gray Nature and objectives of research Two major questions appear to have emerged from the first Delphi round: first, what is the nature of IE; and second, is it a moral or ethical pursuit? The proposed research will consist of two distinct stages: first, to examine the phenomenon of IE in multiple cultural or national settings to establish whether definitions by respected authors (e.g., McDougall and Oviatt, 2005) hold, and/or whether an adapted, generalisable and widely-accepted definition can emerge from this research; and second, to examine the value (and values) that are co-created and damaged or destroyed by international entrepreneurs and their cross-cultural/national partners. Significance of the research In any relatively new academic field it is imperative that a strong theoretical basis be developed to guide future inquiry. It appears that IE researchers are still grappling with the nature of the rather slippery phenomenon they are trying to describe, diagnose and help develop. The underlying premise – that rapid internationalisation by relatively small (at least to begin with), entrepreneurial and innovative enterprises – needs to be questioned in the light of the economic, cultural, social, physiological and environmental benefits and costs associated with the exploitation of opportunities across borders (if one accepts the McDougall and Oviatt (2005) definition of IE activities). Addressing fundamental questions associated with the nature and moral worth of the phenomenon will help clarify links between theory, practice and policy. Methodology A mixed method study, based on the critical realist paradigm (Bhaskar, 1989), would be a useful approach. This would combine meta-analyses of existing studies with qualitative and quantitative empirical studies to assess the validity of a generalisable view of the nature of IE and to assess its impacts on the social, physical and moral health of individuals, networks, societies and ecosystems. Obstacles Researchers with more interpretivist or constructivist views may object to the underlying ontology and epistemology of critical realism. However, the proposed study could accommodate more theoretical pluralism and accept that different ‘schools’ of IE theory may emerge. Inquiry, explanation, application and debate are signs of a healthy discipline. However, the IE discipline has to be seen as distinctive, relevant and valuable by the business and social science research communities if it is to flourish.
International entrepreneurship: research priorities for the future
125
Marian Jones Delphi proposal: cross-national survey on internationalisation activity to determine international entrepreneurial behaviour Having read the responses to the first stage of the Delphi exercise my conclusion is that the key issue is to better define IE as a field through the construction of generally agreed theories, constructs and measures. Recurring issues emerging relate to the nature, causes and impact of the INV assuming that that term encompasses a range of variations, and extending to examination of its process of development over a period of years, and this needs to be done through empirical study. It is crucial that we reach agreement on exactly what we mean by internationalisation in the first instance before we can make assumptions about what is rapid, slow, diverse, whether it is entrepreneurial and so on. Empirical research particularly that on INVs is fragmented and incomparable across studies because of difference in the ways in which such firms are identified, e.g., a recent study in JIBS identified INVs as firms that had reached their IPO, other recent studies in the same journal on born-globals used 75% of exports (i.e., sales) within three years as the selection criteria. The first screens out most young firms and the earliest stages of internationalisation, the second assumes an outward process indicated by sales thus screening out or masking the diversity of value chain activities that might possible extend across borders and add value. I suggest that the construction of cross-national survey data on internationalisation activity of new ventures extending to firms to, e.g., 30 years old is imperative and would provide the basis on which to develop appropriate definitions and categories of INV based on their nature, temporal and spatial patterns of internationalisation. The survey should be repeated at feasible intervals, e.g., every 3rd year, following a panel approach in order to capture changes over time. A standard structured questionnaire (adapted for reasons of cultural diversity and equivalence) will enable the construction of a cross-national data-base. Definitions of IE have been provided by Oviatt and McDougall (1994) and others. Delineation of the internationalisation process (what is transferred internationally, where, through what mode and when) is indicated in Jones and Coviello (2005), and various antecedent and impact variables identified and employed by Sapienza, Autio, Zahra and others. We already have the key constructs for empirical delineation of IE as a field but we need to combine them in a competent large-scale study to provide empirical data from which classifications and patterns of activity may be identified. Nature A cross-national, panel study of internationalisation activity of new ventures through to firms of 30 years old. Objectives To determine; forms of internationalisation, subcategories of INV, pattern of activity at start-up and over a development period, actual differences (if any) in performance based on measures of commencement speed, and development speed, provide data for national studies and cross-national comparisons, provide a data-base of evidence for further, depth research.
126
L.P. Dana and R.W. Wright
Methodology Structured questionnaire administered to firms from 0 to 30 years old. The firms should not be selected because they already have international sales or appear in an export directory to avoid ‘export’ bias. Questions should address the nature, form, extent and timing of international activity, following constructs as mentioned above. Obstacles Source of funding, central administration and coordination, national differences in how firms are registered, the availability of common databases for sampling, differences in industry populations. Benefits A solid empirical basis on which to build the field, evidence and visibility in the eyes of policy-makers, the opportunity to develop commonly understood terminology, constructs and measures. Further integration of established theory and measures between the entrepreneurship, internationalisation and strategic management literatures. A better understanding of what we mean by loose concepts such as ‘born-global’! Jerome Katz 1
2
A brief statement of the nature and objectives of the research. •
Nature: study of the forms of International New Ventures (INV) in a manner nested within a larger definitional model of new ventures.
•
Objectives clarify the different types of INV
b
show how these types differ (and correspond) to non-I new ventures
c
with this foundation laid, identify the areas where INV can add to our knowledge of NV in general.
Why it is it significant? •
3
a
Finding those aspects of INVs which are important and dissimilar to other organisation situations (unique to INVs) is critical to justifying INV research ad relating it to the larger bodies of entrepreneurship and strategy/OB research. INVs are not distinctive enough that a whole new set of theories are needed to account for them. We need to identify those places where INVs are distinctive and where understanding them can aid in expanding our coverage of NVs generally, or where INVs are the best population for studying important aspects of organisation.
What methodologies will be employed? •
Methodology is open. It can be done using surveys or enthnography. A key factor would be to sample INVs more broadly than has been done to date. So in addition to high-tech firms, eBay global sellers, conventional retailers and
International entrepreneurship: research priorities for the future
127
wholesalers, raw materials companies, service firms and small low-tech manufacturers should be considered. There are some fun opportunities with communities entering the Fair Trade movement consortia, since they are new INVs, based on entrepreneurial teams and partnerships, and selling low-tech goods via high-tech methods. This is one example. There are many others. 4
5
What obstacles may be encountered? •
There is less uniqueness than we expected.
•
The use of a narrow sample (see methodology) could lead to redundant findings and limited generalisability.
Any further comments.
Patricia McDougall I have been paralysed trying to come up with a homerun idea for a research proposal. I have read and re-read the excellent information provided by the 21 panelists. Because my work has been primarily on international new ventures I have been trying to extend my thinking to a different research proposal. However, after reading the many comments from the panelists relating to international new ventures I concluded that within the field of IE, the area that has been most researched are studies on international new ventures (born globals, etc.). After much thought I have determined the following. Given the growing number of empirical studies that have been published on international new ventures, the field is at or approaching the point that it would be appropriate to conduct a meta analysis1 that combines the results of these studies to address a set of related research hypotheses. I am unaware of any published meta analysis on international new ventures. Bringing these studies together through a meta analysis would begin to address the comments of several of the panelists regarding the fragmentation of the research and lack of studies building on other studies. A meta analysis would bring together the disparate research on international new ventures and provide a foundation for scholars to move what has been the core of IE research forward. Rod McNaughton Topic: International new ventures – a new organisational form? IE emerged as a new field of study over the past decade and a half. Ostensibly this area of study lies in the intersection between the disciplines of entrepreneurship and International Business (IB). However, the core theories of neither discipline provide a strong explanation of the phenomenon of ‘international new ventures’, ‘born global firms’ or ‘rapid internationalisers’. Entrepreneurship posits that new firm formation is a locally embedded process, while IB theory does not posit a role for smaller and inexperienced firms in international markets. Since McDougall et al. (1994) reviewed the core theories of international business and found them lacking as an explanation of INVs, no unifying theory has gained prominence. Indeed, the majority of the extant literature is descriptive, characterising the various patterns of internationalisation and antecedents of this behaviour. Much is known about the motives and variants of INVs, but a fundamental question remains: are INVs a
128
L.P. Dana and R.W. Wright
unique organisational form, or simply a variant of new ventures in which the marketing strategy involves rapid expansion into a number of national markets? Stated a different way: Is the experience of INVs sufficiently distinct to warrant specific attention by researchers, policy programmes and regulators? To answer these questions, I propose research focused on determining if INVs are a distinct organisational form. Rommanelli (1991) defines organisational form as “…those characteristics of an organization that identify it as a distinct entity and, at the same time, classify it as a member of a group of similar organizations”. The empirical literature on organisational form focuses on decision rights, and tracks measures such as organisation members, channels for information and control, dynamic rules, and agency. The extant literature does not characterise INVs in this way. A significant exception is Madsen and Knudsen (2003) who identify a number of international organisation forms, and argue that “…scarce resources and pressure to enter many markets quickly force some new firms to choose the market/polyarchy solution” (i.e., INVs). The issue of distinctiveness of organisational form also arises in other specialised areas of research about (supposedly) new types of organisations, for example, project-based firms (Whitley, 2006) and professional services firms (Teece, 2003). While focus on decision rights dominate attempts to delineate organisational forms, there are alternative approaches. Polos et al. (2002) suggest a particularly intriguing approach based on the idea that form is a type of socially coded identity. Thus, form is defined in terms of social cognition: “…you know social codes exist when one observes that departures from the codes after periods of conformity cause a devaluation of the entity by relevant insiders and/or outsiders”. This raises the question of who are the relevant observers for INVs, for example, Entrepreneurship or International Business scholars, private equity investors, or export development agencies? This approach also lends itself to use of research methods that are not currently common in the study of INVs. For example: •
identification of organisational form by measuring social equivalence in networks
•
mapping the boundaries of a ‘form’ from the view of different audiences
•
identification of ‘codes’ from semiotic or language analysis
•
analysis of the dynamics of the population of a form (or forms).
Research concerning the distinctiveness of INVs as an organisational form is important for choosing between theories to explain the INV phenomenon, the social legitimacy of IE as a field of study, and the development of policy to support the growth of these new ventures and their contribution to local economies. This approach also expands the repertoire of theories that provide insight on the phenomenon of INVs, and suggests new variables and processes that should be studied. The notion of ‘form’ may lead to different ways to define and measure INVs, and promote comparative research with other forms of organisation. If the suggested research concludes that INVs are not distinct, the question can be pursued at the next level of the current categorisation of business organisations – are international (multinational) firms a distinct organisational form? The conclusion that INVs are not distinct would also suggest that existing theories can be adapted to adequately account for the phenomenon of INVs, and that the focus should be on explaining why some organisations choose a marketing strategy that involves rapid
International entrepreneurship: research priorities for the future
129
expansion into a number of geographic markets. This strategy might, for example, be adequately modelled as an investment in real options to hedge against market volatility. Finally, concluding that INVs are not distinct would mean that public agencies, regulation and policies are less likely to require major changes to address market gaps experienced by rapidly internationalising new ventures. Babak Mehmanpazir A brief statement of the nature and objectives of the research In the knowledge-based economy we are experiencing, the common ‘belief’ suggests that there is a strong positive relationship between economic growth and innovative capacities of organisations. If it is true, and if we agree on the fact that the entrepreneurs play a role in this ‘scenario’, then we may admit that what sustains the whole process of wealth creation (or value creation?) is a matter of access to ‘entrepreneurial capacities’ which are supposed to exist somewhere; for instance we can suppose that there is a sort of entrepreneurs’ market where we can purchase these capacities at a given price. We can also think about these capacities as assets that have to be built up inside companies through well designed process (recruiting talented people, knowledge management tools, project management, experience curve, etc.). According to this, entrepreneurship capacities are ‘intentionally’ internalised and give birth to the so-called ‘intrapreneurial capacities’. This implies that top managers are able to design organisational structures enabling companies to create these very unique assets. Herein, the research objectives can be manifold as far as we are able to answer the following questions: •
How top managers can promote and implement such a process inside companies?
•
Isn’t there a kind of antagonist force which will prevent them acting like that? What are theoretical issues at stake?
•
What are organisational structures and processes sustaining the intrapreneurship? What do they look like?
•
Is there a market for these assets? If no, so which kind of institutional arrangement can provide it?
•
The role of entrepreneurship education as the ‘resource provider’?
Why it is it significant? To enlarge our perception and understanding of entrepreneurship as a ‘capacity’ enabling organisations to implement a growth/innovation based strategy. What methodologies will be employed? Identification of theoretical issues, trends and their critical assessment. Elaboration of a theoretical framework for the intrapreneurship. Exploring practical implications: case studies for testing basic hypothesis. Developing clinical case studies based on research-action.
130
L.P. Dana and R.W. Wright
What obstacles may be encountered? Implementation of research-action cases: companies which agree on a long run partnership for the study. Jean-Jacques Obrecht It seems that for some panelists the international dimension of IE lies in the various cultural, social and institutional environments that entrepreneurs may possibly be facing Jo. Therefore I would suggest that IE research should focus on the variety of environments in which entrepreneurs’ activities are embedded and on the variety of entrepreneurial capabilities that are requested in diverse environments at the personal, organisational and societal levels. These capabilities may concern a person, a team or a community. They are to be considered as resources, open to change, which may take form in business oriented firms as well as social enterprises. They may evolve as unique resources underpinning a competitive position. Last but not least, this capability approach leads to the ultimate issue dealing with sustainable entrepreneurship: what kinds of capabilities are needed in various environments as regards their contribution to sustainable development? This means of course that we have to drop the idea that there is only one model of entrepreneurship. Instead we have to elaborate a plurality of ‘models’ considering the contextualisation of entrepreneurship and thereafter, but only thereafter, paving the way for a theory of IE, if ever. This agenda requires integration of other disciplines into IE research: sociology, ethnography, anthropology, ethics, history and geography. The sociological approach of networks, for instance, should be given deep attention. Literature dealing with topics such as embeddedness, social capital, social regulation, localised learning versus global learning, etc., would give valuable new insights. As regards methodology, empirical research should be extended to get detailed and comprehensive information on significant entrepreneurial environments and on the relevant capabilities entrepreneurs show up in different contexts. Qualitative research is especially appropriate in this respect. Participatory observation and the use of extensive sources should be the hallmarks of this research orientation. At the very beginning of this research, one could look for ‘the best examples of entrepreneurial businesses acting as agents of world benefit as a part of their core business strategy’ (Panelist 1) while ‘embracing new topics’ (Panelist 8) and making the most of ‘the role of values in IE’ (Panelist 15). A preliminary discussion about the understanding of ‘world benefit’ would be thrilling of course, given the supposed cultural diversity of our panel. Ben Oviatt Proposal for research study on international new ventures Objectives of the research: The study I propose would describe the characteristics and dynamics of networks of international new ventures. The ventures studied would be initiated in a variety of theoretically distinct countries. Ultimately, we would have a better empirically based understanding of international new ventures and could develop improved theory.
International entrepreneurship: research priorities for the future
131
Significance: The importance of networks as a vehicle for starting and growing international new ventures seems to be widely accepted, but not enough empirical work has been done. If a small number of researchers located in a several countries would agree to work together using a common theoretical framework and a common empirical methodology, advances in knowledge are more likely. Methods: A series of very structured case studies that use a common methodology and are analysed in a common way. Obstacles: Getting a group of academics to agree on theory and methods is difficult. But choose carefully and keep the group relatively small (e.g., ten people located in various places around the world). Alan Rugman Are born global firms really born regional? There is a literature in the area of IE which argues that small firms can be ‘born global’. Essentially this means that small firms can obtain a significant and growing percentage of foreign-to-total sales within a few years of their launch. For example, some studies have shown that within either three or six years of their formation many small firms in the information technology sector have achieved a ratio of (F) to (T) sales in excess of 30%. This is an interesting finding since the traditional theory of the growth of international business suggests that firms first develop in their home-country market, and then go abroad at a slow and incremental pace. They suffer from a liability of foreignness in host-country markets, and they need to offset such a liability against any firm-specific advantages that they possess, see Rugman (1981). Thus, the extent to which small firms can benefit from globalisation and jumpstart their growth through international sales is of interest within the fields of entrepreneurship and international business. Yet, two basic research issues remain unresolved. First, the data showing a rapid increase in the F/T ratio seems to be largely confined to US firms in the information technology sector. Is it applicable to small firms from other regions of the triad, in Asia and Europe? Is it applicable to other sectors, especially service sectors which are traditionally regarded as more location bound? Second, when the F/T variable is deconstructed, it is notable that the growth in foreign sales occurs mainly within the home region of the broad triad regions of North America, Europe, and Asia. To what extent is internationalisation truly global (defined as sales across all three regions of the triad)? Or is internationalisation actually a regional phenomenon? If it is then small firms will be born regional rather than born global. This research project will conduct empirical work across both of these dimensions. First, firms will be studied across different industries and from different regions of the triad. Second, the data on F/T sales, and where available, F/T assets, and F/T employees will be analysed from a regional, as well as a country perspective. The underlying intellectual driver for this research project is the finding that the world’s largest 500 firms average 72% of their sales in their home region. Only nine firms have at least 20% of their sales in each region of the triad. In contrast, 320 of the 380 large firms reporting data on the geographic segment of their sales average 80% of their sales in their home region. These data were first presented in Rugman (2005). More recent work shows that the world’s 500 largest firms remain extremely home region oriented over time.
132
L.P. Dana and R.W. Wright
The logic of this empirical work is that small firms would also tend to be regionally based. Small firms often grow up within clusters and business networks led by large MNEs. As these clusters and networks are regionally based, so too should be the supply chains and activities of small firms. In general, given the lack of empirical evidence supporting globalisation (in the sense of commonality and homogenisation) it would be surprising to find a robust set of born global firms. However, as yet, there are no published studies finding born regional firms. Thus, it is necessary to investigate the relative nature and importance of born globals and born regionals.
References Amin, A. and Malmberg, A. (1984) ‘Competing structural and institutional influence of the geography of production’, in A. Amin (Ed.) Post-Fordism: A Reader, Oxford: Blackwell Publishers, p.222. Autio, E., Sapienza, H. and Almeida, J. (2000) ‘Effects of age at entry, knowledge intensity and imitability on international growth’, Academy of Management Journal, Vol. 43, No. 5, pp.909–924. Baker, T. and Nelson, R. (2005) ‘Creating something from nothing: resource construction through entrepreneurial bricolage’, Administrative Science Quarterly, Vol. 50, No. 3, pp.329–366. Bhaskar, R.A. (1989) Reclaiming Reality: A Critical Introduction to Contemporary Philosophy, London: Verso. Chetty, S. and Wilson, H. (2003) ‘Collaborating with competitors to acquire resources’, International Business Review, Vol. 12, pp.61–68. Coviello, N. (2006) ‘Network dynamics in the international new venture’, Journal of International Business Studies, Vol. 37, No. 5, pp.713–731. Coviello, N. and Cox, M. (2006) ‘The resource dynamics of international new venture networks’, Journal of International Entrepreneurship, Vol. 4, Nos. 2–3, pp.113–132. Coviello, N. and Jones, M. (2004) ‘Methodological issues in international entrepreneurship research’, Journal of Business Venturing, Vol. 19, No. 4, pp.485–508. Dicken, P. (1992) ‘International production in a volatile regulatory environment’, Geoforum, Vol. 23, No. 3, p.307. Glass, G. (1976) ‘Primary, secondary, and meta-analysis of research’, Educational Researcher, Vol. 3, pp.3–8. Hirst, P. and Zeitlin, J. (1992) ‘Flexible specialization versus post-Fordism’, in M. Storper and A. Scott (Eds.) Pathways to Industrialization and Regional Development, London: Routledge, p.84. Johanson, J. and Mattsson, L. (1988) ‘Internationalization in industrial systems – a network approach’, in N. Hood and J. Vahlne (Eds.) Strategies in Global Competition, London: Croom Helm, pp.287–314. Johanson, J. and Vahlne, J. (2003) ‘Business relationship learning and commitment in the internationalization process’, Journal of International Entrepreneurship, Vol. 1, pp.83–101. Jones, M. and Coviello, N. (2005) ‘Internationalization: conceptualizing an entrepreneurial process of behaviour in time’, Journal of International Business Studies, Vol. 36, No. 3, pp.284–303. Madsen, T. and Knudsen, T. (2003) ‘International new ventures: a new organizational form?’, Paper Presented at the Sixth McGill Conference on International Entrepreneurship: Crossing Boundaries and Researching New Frontiers, University of Ulster, Magee Campus, Northern Ireland, 19–22 September.
International entrepreneurship: research priorities for the future
133
McDougall, P. (1989) ‘International vs. domestic entrepreneurship: a comparison of new venture strategic behavior and industry structure’, Journal of Business Venturing, Vol. 4, No. 6, pp.387–400. McDougall, P. and Oviatt, B. (2005) ‘Defining international entrepreneurship and modeling the speed of internationalization’, Entrepreneurship Theory and Practice, Vol. 29, No. 5, pp.537–554. McDougall, P., Shane, S. and Oviatt, B. (1994) ‘Explaining the formation of international new ventures – the limits of theories from international business research’, Journal of Business Venturing, Vol. 9, No. 6, pp.469–487. Oviatt, B. and McDougall, P. (1994) ‘Toward a theory of international new ventures’, Journal of International Business Studies, Vol. 25, No. 1, pp.45–64. Polos, L., Hannan, M. and Carroll, G. (2002) ‘Foundations of a theory of social forms’, Industrial and Corporate Change, Vol. 11, No. 1, pp.85–115. Reynolds, P., Bygrave, W., Autio, E., Cox, L. and Hay, M. (2002) Global Entrepreneurship Monitor: 2002 Executive Report, Kauffman Foundation, Kansas City, Missouri. Rommanelli, E. (1991) ‘The evolution of new organizational forms’, Annual Review of Sociology, Vol. 17, pp.79–103. Rugman, A.M. (1981) Inside the Multinationals, New York: Columbia University Press (reissued by Palgrave Macmillan in 2006). Rugman, A.M. (2005) The Regional Multinationals, Cambridge, UK: Cambridge University Press. Sapienza, H., Autio, E., George, G. and Zahra, S. (2006) ‘A capabilities perspective on the effects of early internationalization on firm survival and growth’, Academy of Management Review, Vol. 31, No. 4, pp.914–933. Sarasvathy, S. (2001) ‘Causation and effectuation: toward a theoretical shift from economic inevitability to entrepreneurial contingency’, Academy of Management Review, Vol. 26, No. 2, pp.243–288. Scott, A.J. (1988) New Industrial Spaces: Flexible Production Organization and Regional Development in North America and Western Europe, London: Pion Ltd., p.108. Shaver, K., Gartner, W., Crosby, E., Bakalarova, K. and Gatewood, E.J. (2001) ‘Attributions about entrepreneurship: a framework and process for analyzing reasons for starting a business’, Entrepreneurship Theory and Practice, Vol. 26, No. 2, pp.5–32. Shrader, R., McDougall, P. and Oviatt, B. (2003) ‘Early internationalization of U.S. based new ventures: a comparison of international and domestic new ventures’, Journal of International Entrepreneurship, Vol. 1, pp.59–82. Steyaert, C. (2005) ‘Entrepreneurship: in between what? On the “frontier” as a discourse of entrepreneurship research’, International Journal of Entrepreneurship and Small Business, Vol. 2, No. 1, pp.2–16. Teece, D. (2003) ‘Expert talent and the design of (professional services) firms’, Industrial and Corporate Change, Vol. 12, No. 4, pp.895–916. Whitley, R. (2006) ‘Project based firms: new organizational form or variations on a theme?’, Industrial and Corporate Change, Vol. 15, No. 1, pp.77–99. Zahra, S. (2005) ‘A theory on international new ventures: a decade of research’, Journal of International Business Studies, Vol. 36, pp.20–28. Zahra, S. and George, G. (2002) ‘Absorptive capacity: a review, reconceptualization, and extension’, Academy of Management Review, Vol. 27, No. 2, pp.185–203.
134
L.P. Dana and R.W. Wright
Note 1
A note regarding ‘meta-analysis’: An excellent overview of the technique is provided on the following website http://edres.org/meta/. In 1976, Glass proposed a method to integrate and summarise the findings from a body of research, which he called meta-analysis. Meta-analysis is the statistical analysis of a collection of individual studies. “Meta-analysis refers to the analysis of analyses. I use it to refer to the statistical analysis of a large collection of results from individual studies for the purpose of integrating the findings. It connotes a rigorous alternative to the casual, narrative discussions of research studies which typify our attempts to make sense of the rapidly expanding research literature.” (Glass, 1976, p.3)