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Born Globals: Rapid International Growth in New Ventures
Halmstad University, School of Business and Engineering (SET), Centre for Innovation, Entrepreneurship and Learning Research (CIEL), Centre for Technology, Innovation and Marketing Management (CTIM2).
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The traditional theories developed by Johanson and Vahlne (1977, 1990) and other researchers ofinternationalisation have long been questioned because of the fast-changing environment and deregulations. In particular, for Born Global firms, namely a company that has achieved a foreign sales volume of at least 25% within three years of its inception and that seeks to derive significant competitive advantage from the use of resources and the sales of outputs in multiple countries (Andersson and Wictor, 2003, p. 254), itis a question of surviving by establishing in many markets in a short period of time.This thesis summarises five papers. Paper 1 showed that the CEO´s perception and the fast changing environment push small firms to internationalise and that younger CEOs have an important role in expanding the firm. This is often because of their experiences accumulated inthe organisation over time or because the entrepreneur has been exposed to the international arena and information technologies, which can explain why some small firms continue to expandtheir international activities.The conceptual framework in paper 2 comprises four factors that influence Born Global firms:entrepreneurs, networks, industry and globalisation. To succeed in establishing a global firm it isimportant to have certain resources, such as an entrepreneur with international experience and strong networks. A Born Global entrepreneur is distinguished by his interest and motivation todo business abroad and his vision for the future.Paper 3 focuses on the importance of Born Globals’ foreign market channel strategies. The decision to establish a new market is of great importance for the long-term survival of the company. In this comparative case study, four companies that display different foreign entrymodes are compared. We found that these companies had very different market channel strategies even though they internationalised rapidly.Paper 4 is a study of four companies that indicates that their CEOs are active and involved in making strategic decisions in all parts of a Born Global firm’s value chain activities. Decisions on localisation and outsourcing are influenced by the entrepreneur’s definition of his firm’s core competencies. However, factors outside the firm are also an influence: potential suppliers,outsourcing of manufacturing and potential partners in distribution, especially relating to the riseof new emerging markets (e.g. China). The importance of coordinating value chain activities also influences the localisation of different activities. Entrepreneurs aim to arrange value-creating networks to secure their core manufacturing processes and close relations with local suppliers when they outsource products. In such a case, the entrepreneur can be seen as an orchestrator ina virtual organisation. The ‘global factory’ concept can be adjusted to fit locally for a Born Global company and its environment. Paper 5 focuses on a Born Global company’s way to grow and is a longitudinal study of acompany over 17 years (1990–2007) and its development in the different stages in the growth/life-cycle curve. From inception, the vision is already strong to go global. During thea bove period, the founder, external CEO I and CEO II were interviewed to assess whatcharacterises the different stages of growth over time compared with the growth/life-cycle model of Smallbone and Wyer (2006). The company is still growing and very entrepreneurial. The leadership has changed from a deciding style to a more coaching way of leading. Themanagement and organisation have changed to be more professionalised and team-oriented over8time. Entrepreneurial teams have also become more and more important for transferring knowledge to individuals in the organisation.The traditional models of Johanson and Vahlne (1977, 1990) point out that learning at an organisational level is a main factor in international development over time. However, a way to speed up the development of Born Global firms is entrepreneurial background with long experience and different knowledge serving his vision for the company. Nevertheless, theknowledge transfer from the entrepreneur and his team to the organisation is important. Knight and Cavusgil (2004, p. 137) find that “Born Globals pose an important new challenge to traditional views on the internationalization of the firm”.Johanson and Vahlne (2003) study what happens in companies because of rapid changes in the environment. They suggest that the Uppsala model is still valid, but that the early stage of a firm’sinternationalisation is important to study. Organisational learning is carried out at an individual and an entrepreneurial level. Johanson and Vahlne (1977) focus on the importance of the people working in a market and their learning. In their latest published article by Schweizer et al. (2010,pp. 368–369), they argue that “it is the liability of outsidership rather than the liability offoreignness that gives rise to internationalization difficulties. Outsidership implies that the firm isnot a member of relevant networks. Internationalization can be seen then as taking steps tobecome an insider in relevant networks in focal foreign markets … In their last study it emphasizes the entrepreneurial facets of a firm’s internationalization process”. The above defined background of the entrepreneur, his entrepreneurial way of working and his experience from former jobs also means that he already has the networks necessary for international expansion.The entrepreneur and his team in a Born Global company must from the beginning have the capability and knowledge of the environment and market in a country to establish in the new market as well as the understanding of how to manage the company and organisation. If they do not have this knowledge, they must have a network from which to extract this information. The entrepreneur has to be strongly involved in building and sustaining relationships with both customers and suppliers. In the organisation, he also has to build a powerful culture with decentralisation and empowered employees. The leadership in these companies is charismatic,employees are empowered in their jobs and the teams are entrepreneurial. Employees are therefore also allowed to make their own decisions within certain limits. Networks are important to overcome “perceived barriers on cultural and regulatory issues, those associated with locating partners, plus other matters deemed important to specific management teams” (Crick, 2009, p. 466). Coviello and Cox (2006) find that a company’s network is aresource when it is working with acquisitions and important recruitments. For companies growing over many years such as the Rubber Company studied herein, networks change and the chairman’s networks can be of great importance when core individuals should be recruited as an important part of the company’s strategies.

Place, publisher, year, edition, pages
Jönköping: Jönköping International Business School , 2012. , 246 p.
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 080
Keyword [en]
Born Global, internationalisation, entrepreneur, network, vision, value chain, growth, management, leadership, entrepreneurial teams
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hh:diva-19344ISBN: 978-91-86345-32-7 OAI: oai:DiVA.org:hh-19344DiVA: diva2:547116
Opponent
Supervisors
Available from: 2012-08-27 Created: 2012-08-27 Last updated: 2012-08-28Bibliographically approved
List of papers
1. International activities in small firms: Examining factors influencing the internationalization and export growth of small firms
Open this publication in new window or tab >>International activities in small firms: Examining factors influencing the internationalization and export growth of small firms
2004 (English)In: Canadian Journal of the Administrative Sciences, ISSN 0825-0383, E-ISSN 1936-4490, Vol. 21, no 1, 22-34 p.Article in journal (Refereed) Published
Abstract [en]

In this paper we explore internationalization and export growth over time in a sample of 135 small manufacturing firms. By using concepts and arguments from literature on international business and small firms, the paper identifies six situational, or contingency, factors that are expected to influence the international activities of small firms. Our results show that a dynamic and fast-changing environment may push small firms to go abroad, while it seems to be the experiences built up in the organization and a younger generation of CEOs that can explain why some small firms continue to expand their international activities. The findings suggest that the factors influencing small firms to go abroad and become international differ from the factors that influence them to continue and grow once they are on the international marketplace. The paper ends with a discussion of the findings, together with suggestions for further research.

Place, publisher, year, edition, pages
Chichester: John Wiley & Sons, 2004
Keyword
Studies, Exports, Manufacturing, Small business, Statistical analysis
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-327 (URN)10.1111/j.1936-4490.2004.tb00320.x (DOI)000221662600002 ()2-s2.0-2642512515 (Scopus ID)2082/629 (Local ID)2082/629 (Archive number)2082/629 (OAI)
Available from: 2006-12-15 Created: 2006-12-15 Last updated: 2014-12-17Bibliographically approved
2. Innovative Internationalisation in New firms: Born Globals–the Swedish Case
Open this publication in new window or tab >>Innovative Internationalisation in New firms: Born Globals–the Swedish Case
2003 (English)In: Journal of International Entrepreneurship, ISSN 1570-7385, E-ISSN 1573-7349, Vol. 1, no 3, 249-275 p.Article in journal (Refereed) Published
Abstract [en]

During the past few years, the phenomenon of Born Globals has been highlighted in many studies. Such firms adopt a global approach right from their inception or very shortly thereafter. This behaviour challenges the traditional internationalisation models of slow and gradual development with respect to geographical markets and market entry modes. In this paper a conceptual framework is developed from earlier research and includes the factors: globalisation, entrepreneurs, networks, and industry. A survey showed that Born Globals were still very uncommon in Sweden. However, four Born Global firms were identified and analysed with the framework. It was concluded that the ongoing globalisation has made it easier to conduct Born Global strategies. However, active entrepreneurs, who recognised the global opportunities, were crucial for the implementation of these strategies, in which personal networks were used as tools.

Place, publisher, year, edition, pages
Berlin: Springer Berlin/Heidelberg, 2003
Keyword
Born Globals, Sweden, Internationalisation, Entrepreneurs, Network
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-329 (URN)10.1023/A:1024110806241 (DOI)2082/631 (Local ID)2082/631 (Archive number)2082/631 (OAI)
Available from: 2006-12-19 Created: 2006-12-19 Last updated: 2013-11-19Bibliographically approved
3. Born Globals' foreign market channel strategies
Open this publication in new window or tab >>Born Globals' foreign market channel strategies
2006 (English)In: International Journal of Globalisation and Small Business, ISSN 1479-3067, Vol. 1, no 4, 356-373 p.Article in journal (Refereed) Published
Abstract [en]

Foreign entry mode choices are decisions of paramount importance for the long-term survival and growth of companies that are in a process of rapid international expansion. In this paper we seek to understand the foreign market channel strategies of Born Globals. We examine whether these companies develop a similar strategy regarding foreign entry mode choices and whether their market channel strategies differ from contemporary theories treating this problem. A comparative case study conducted on four companies meeting the criteria of Born Globals suggests that they do not show a common foreign entry mode. Instead, the companies seem to have very different market channel strategies even if they all have internationalised very rapidly. These findings are discussed against the current range of theoretical models that seek to explain the companies' foreign entry mode choice. We conclude the paper with some implications and suggestions for future research.

Place, publisher, year, edition, pages
Olney: InderScience Publishers, 2006
Keyword
Business Administration, Entrepreneurship, Innovation and SMEs
National Category
Economics and Business
Identifiers
urn:nbn:se:hh:diva-1364 (URN)10.1504/IJGSB.2006.012185 (DOI)2-s2.0-33847682890 (Scopus ID)2082/1743 (Local ID)2082/1743 (Archive number)2082/1743 (OAI)
Available from: 2008-04-25 Created: 2008-04-25 Last updated: 2014-08-25Bibliographically approved
4. The Management of Value Chain Activities in Born Global Companies
Open this publication in new window or tab >>The Management of Value Chain Activities in Born Global Companies
2011 (English)Other (Other academic)
Abstract [en]

Purpose

The purpose of this study is to investigate how Born Global companies’ value chain activities are managed and organised.

Methodology

This study explores how Born Global firms’ activities are managed and organised through qualitative research using secondary data and interviews with the entrepreneurs and CEOs offour Swedish Born Global firms.

Findings

This study indicates that CEOs are active in making strategic decisions in all parts of a Born Global firm’s value chain activities. Decisions on localisation and outsourcing are influenced by the entrepreneur’s definition of his firm’s core competencies. However, factors outside the firmare also an influence: potential suppliers, outsourcing of manufacturing and potential partners indistribution, especially relating to the rise of new emerging markets (e.g. China). The importanceof coordinating value chain activities also influences the localisation of different activities. The use of value-creating networks is important for Born Global companies. These networks,especially local ones, can also be seen in connection with the ‘global factory’ concept but adjusted to the Born Global Company and its international environment.

Research limitations/implications

This study provides a deeper understanding of how entrepreneurs in Born Global firms are involved in decisions regarding all parts of the value chain. A limitation is that it has focused onthe value activities within these firms. Future studies should also investigate how the relationship with other actors in the value chain (e.g. suppliers and distributors) influences the development of Born Global firms.

Practical implications

It is important to focus on strategic decisions in all parts of the value chain in global settings. The management team needs to create an organisation that can deal with operative matters and work without the direct supervision of top-level management.

Originality/value

This paper takes a holistic view of all parts of Born Global firms’ value chain activities and the role of the entrepreneur and management in the value chain, which few previous studies have investigated.

Place, publisher, year, pages
Halmstad: Halmstad University, 2011
Keyword
Internationalisation, Value Chain Global, Born Global, Entrepreneurial, Outsourcing
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-19345 (URN)
Note

Unpublished article.

Available from: 2012-08-27 Created: 2012-08-27 Last updated: 2012-08-27Bibliographically approved
5. A Born Global Company’s Way to Growth
Open this publication in new window or tab >>A Born Global Company’s Way to Growth
2011 (English)Other (Other academic)
Abstract [en]

In this paper, a Born Global company is studied, with the aim of investigating how it has developed from 1990 to 2007. Which growth stages can we identify over time? Which factors influence these stages? The method used is the case study and the information was gathered through interviews and secondary data. For the theoretical approach, I have used the indicative ‘stages’ of the growth/life-cycle modelsby Churchill and Lewis (1987) and Smallbone and Wyer (2006), a framework focusing oninternational growth, international market strategy, international entrepreneurship and cultureand international organisation. The Rubber Company was studied from 1990 to 2007, which suggests that three CEOs have been in charge of the company; the founder, external CEO I and CEO II. The company’s development and expansion over the study period were followed and related to the stages of growth/life-cycle model and theoretical framework. The stages analysed are the Entrepreneurial stage (1990–1999), the Expansion stage (2000–2004) and the Industrial stage (2005– ). The three CEOs took part in different stages, which affect firm development. The Rubber Company is still growing and very entrepreneurial, over time lifting its development curve to newlevels. Market strategy has changed from distributors to subsidiaries. Unknown global segmentshave been developed. Critical incidents over time have been the founder’s way of acting during the second stage in relation to CEO I, who came from a much larger company with a strong support staff. In combination with the fact that the founder was still the owner and had the power, this did not make it easy to change the company to a new stage of development. He also did not have the experience of working in a smaller company. CEO II already had a close relationwith the founder and thus he was more quickly accepted. During the Industrial stage, the new investor supported the firm’s strong development.The ongoing Entrepreneurial stage on the business development curve indicates even faster growth for the Rubber Company. For that situation, entrepreneurship strategies must be more open, decentralised and teamwork-oriented. Another management style is later required to leadand expand the company. Since 2005, the company has been in the Industrial stage; i.e.expanding even faster in the global market. A value-added pricing concept has been developed. The company’s external focus on customers and relations is very important. CEO II suggests that traditional multinationals have too much of an internal focus. The learning process in the Rubber Company has been present from inception, but the firm hashow become more professionalised through international workshops. For the culture and vision,it is important to agree on the internal values of the company all over the world – the “CompanyWay” of doing business. Entrepreneurship strategies have changed from an entrepreneur deciding in most cases to a more coaching style of leadership. New owners have now invested inthe company and capital for expansion is available.The most interesting question is how the Rubber Company grows over time and how management continuously manages to shift the life-cycle curve to new levels. A Born Global company grows and develops in its special way according to the prevailing theory. However,when it is growing, it is more and more like a traditional company but still with an extreme entrepreneurial focus, in some cases because of the founder.

Place, publisher, year, pages
Halmstad: Halmstad University, 2011
Keyword
Internationalisation, Born Global, Entrepreneurial and Expansion, and Industrial Stages, Market Strategy, Growth, Value-Added pricing
National Category
Business Administration
Identifiers
urn:nbn:se:hh:diva-19346 (URN)
Note

Unpublished article.

Available from: 2012-08-27 Created: 2012-08-27 Last updated: 2012-08-27Bibliographically approved

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