Session 18 Case

8/10/2019 Session 18 Case

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International Entrepreneurial Cultur

Growth of International New Venture


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Introduction

An International New Venture (INV)is the firm that has achieved a substantial psales within 5 years after inception or a critical incident. A critical incident can befactor affecting internationalisation such as a change of management, rapid clienacquisition.

An International Entrepreneurial Culture (IEC)is that organisational culture ththe entrepreneurial activities of the firm abroad. The six dimensions of IEC are:International MotivationInnovativenessRisk AttitudeMarket OrientationLearning OrientationNetworking Orientation


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International

motivation

linked to theprocess ofcommencementand invigorationof enterprisemanagement andemployeebehaviourtowards foreign

ventures

International

Innovativeness

deals with theproclivity of thefirm to supportnew and creativeideas, productsor processes formarkets abroad.

International Risk

Attitude

extent to whichthe firm iscommitted toextensive andrisky acts abroad.

International

MarketOrientation

captures theproclivity of thefirm to seeksuperior valuefor its foreigncustomers.

Inte

leOri

refersinclinfirm tenergattainintelliforeigand meffect

6 Dimensions of IEC


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Growth Phases of INV

follow a path ofinternationalisationin many countriesof the world, eventhose that are

geographicallyoutside the homecontinent andpsychically differentthan their homecountry.

Born Global(BG)

These firms aretypically wellestablished in theirdomestic marketsand then suddenly

internationalisefollowing a criticalincident.

Born AgainGlobal (BAG)

fiawcn

oa

BI


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Firms Studied

Biohit (BGPath), 1988

manufactures liquidhandling products anddiagnostic test systemsfor use in research,health care andindustrial laboratories.

4thPhase

IonPhase (BGPath), 2001

produces advancedsemiconductivepolymers to solve staticelectricity problems ina number ofexistingcommercialplastic applications inthe telecom, chemicaland automotivesectors.

3rdPhase

Innohome (BIPath), 2005

produce securityproducts that enableprevention of fire,water leakage, andother damage relatedto cookers and otherhome appliancescommon in homes allover the world.

2ndPhase


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International Entrepreneurial Culture of the Firm and Its Infl

International Motivation

Biohit

- The founder had a global vision andhigh motivation to pursue globalopportunities- The culture was very open, particularlyin theinitial phases

- The bureaucracy, including ISOregulations, use of project milestonesand more formalised globalmanagement processes, increased alongwith the growth of firm size, decreasingsomewhat motivation

Ionphase

- Culture- not ver- The founder wabut a CEO with gmotivation to glohired in the secon

- However, the fivariety of internaunable to benefit- Development of1) high (phases


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International Motivation

Innohome

- The founders had an internationalvision and high motivation- The entrepreneurs were highlymotivated and determined

- The small number of personnel andlow level of bureaucracy led tofast decision making- Motivation was high,- Development of motivation: highthroughout phases (12)

Mapvision- The initial foundersfocus, but new managlobal vision- In the early phase tbut the new managem

motivation to becom- The firms size startthe teams size requirorganisation and ma- Development of mo1) high (phase 2)


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Innovation Propensity and Risk Attitu

Biohit

- Founded in 1988 by a highlyinnovativeentrepreneur who was able to developand commercialise innovativeelectronic and mechanical pipettes

- Led in the later phases to expansioninto diagnostic business and to theintroduction of a new consumerproduct- Development of innovativeness: high(phases 13) Moderate (phase 4)

Ionphase

Founded in 2001 by a hientrepreneur based on afrom his licentiate thesis- Innovativeness at the edictated by the founder

- During commercialisatmanagement put more rprocesses in place- Development of innovatechnology propensity in(phase 1) high (phase 2


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Innovation Propensity and Risk Attitu

Innohome

- Founded in 2005 by an innovativeserial entrepreneur who later becamethe managing director- Very innovative, entrepreneurial, andproactive founders, although often

too much; and, this could pose a riskfor the current business- Strong technology capabilities, manyawards for innovative products- Development of innovativeness: highthroughout the phases (12)

Mapvision

- Founded in 1987 as a spiState Research Centre of Fbenefit from highly techno- As a result of new ownertechnology capabilities an

combining CAD and photwere obtained- A certain type of rigidityimportant - Developmentbut without international 1) high (phase 2)


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International Risk Attitude

Biohit

- culture was very open with risk taking andcreativity encouraged. The firm hadfollowed a policy of not punishing thosewho took risks and failed- Lately, however, risk taking has

decreased with respect to foreignoperations and more hesitationappeared- Development of risk attitude: high(phase 13) ? moderate (phase 4)

Innophase

- Introductory phase characterinvestments into high risk techand development of many simproducts- Commercialisation and forei

expansion driven by aggressivexpansion strategy- Development of risk attitudethroughout phases (12) ? mo(phase 3)


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International Risk Attitude

Innohome

- Entrepreneurs ready to take risk asthey had a strong belief in businessopportunities- Expansion plans were narrowed from

a large scope to a more focusedcountry approach after initialdifficulties and worsening financesituations- Development of risk attitude: high(phase 1) ? moderate (phase 2)

Mapvision

- As a spin-off from the StaCentre of Finland, the propinternational risk was low iphase

- New entrepreneurs were rrisk and they believed in grpotential. However, they wready to build the business revenues generated from do

business


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International Market Orientation

Biohit

- Working closely with opinion leaderssuch as medical experts to understandforeign market requirements andpromote new products- OEM customer requirements and

customer feedback was taken seriously- Marketing capabilities and interfunctionalcoordination limited growth in the newdiagnostic business- Development of market orientation:high (phases 13) ? moderate (phase4)

Ionphase

- International marketthe introductory phasetechnology oriented fo- Following the appoinCEO, commercialisatio

entry enabled workingplastic processors andMNCs in different app- Development of mar(phase 1) ? high (phase


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International Proactiveness

Innohome

- The firm was ahead of competitors inintroducing revolutionary securityproducts and innovative promotionTechniques- The firm actively sought foreign enduserfeedback and used it to understand futureneeds- proactiveness: highthroughout the phases (12)

Mapvision

- The internationalmissing until the nmanagement chantowards being high- Their offering wareplace the formercompetitors- Development of p(phase 1) ? high (p


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International Learning OrientationBiohit

- The founders experience from earlierbusiness was useful for productdevelopment, commercialisation andentering foreign markets- Learning through research cooperationbetween scientific experts- Learning from OEM partnerships aboutmarket requirements- From explorative learning aboutinnovative products to exploitativelearning about large scale productionand distribution- Development of learning: highexplorative (phases 12) ? highexploitative (phases 34)

Ionphase

- The firm was inward direcinternational learning was - A new board and managemincluding its CEO, brought experience to the firm andenabled explorative learnin- Foreign expansion was enintroduction of more rigid pwhich increased exploitativthrough systematic collaboforeign customers- Development of learning:1) ? explorative learning (phlearning (phase 3)


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International Learning OrientationInnohome

- The founders serial entrepreneurialand large firm background was usefulfor product development,commercialisation and enteringforeign markets- Learning was of explorative nature inwhich challenges encountered inentering foreign markets anddeveloping knowledge

- Plans and budgeting were prepared toconvince investors, but the actualbusiness was run without too muchplanning- Development of learning: highexplorative throughout all phases(12)

Mapvision

- Founded in 1987 by researchthe State Research Centre of F- Following the new ownersinvolvement, the first opticalmeasurement products were daccepted and delivered for glameasurement purposes and glindustry suppliers- The new owners had sales an

marketing experience and werto explore the markets with thtechnology- Development of learning: dolearning (phase 1) Internationexplorative learning (phase 2)


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International Networking Orientation

Biohit- Using a network of contacts from theearlier firm to establish subsidiariesrapidly and find suitable distributors inforeign markets- OEM private label firms, e.g. 3M andJohnson & Johnson were leveraged toaccess markets rapidly

- Development of networking: highthroughout all phases (phases 14)

IonPhase- In the initial introductinetworking was limited founders orientation- Networking has becomsince the change in manthe actual commercialisa- Development of networ

1) ? high (phases 23)


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International Networking Orientation

Innohome- Good network of partners,subcontracting manufacturing, andcustomer service and logisticsoutsourced- Leveraging large partner channels andbrands

- Development of networking: highthroughout all phases (12)

Mapvision- A spin-off from the State RCentre of Finland. The networientation was initially dom- Following the change in minternational networking wmanufacturers and their pr

production lines became ce- Development of networkin1) high (phase 2)


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Development of Propositions

Proposition 1: The motivation of the INV towards theglobal marketplace leads to the BG or BAG path,while the motivation of the INV towards theinternational marketplace leads to the BI path.

Proposition 2: International motivation positivelyaffects advancement of the INV through the earliergrowth phases [13], while negatively affectsadvancement towards the last phase [4].

Proposition 3: (a) Inpropensity, (b) interinternational markeinternational proactadvancement of INVphases [13], while

advancement towar[4].


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Development of Propositions

Proposition 4: International explorative learning orientationpositively affects advancement through the earlier growth phasesof INVs [12], while international exploitative learningorientation positively affect advancement through their laterphases [34].

Proposition 5: An international networking orieaffects advancement through the earlier and latof INVs.


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Documents

Session 18 Case