Have We Made It? Investigating Value-Creating Strategies in Early Internationalizing Ventures

The extant research on early internationalizing ventures focuses primarily on these ventures’ start-up phase or their initial internationalization. Scarce attention is paid to how these ventures grow, if at all, beyond their start-up phase or initial internationalization phase. In this paper we explore how international new ventures transition from the internationalizing phase to the phase of being international, and whether they actually made it to that phase. Understanding whether and how these ventures reach their made-it point would contribute to our understanding of how early internationalization affects a venture’s survival and growth. In this we draw on the dynamic capability theory of the firm.

Given the scarcity of theoretical understanding and empirical evidence in this substantive area of research, we adopted a multiple case study methodology for the purpose of theory building. Following an intensity sampling strategy, we purposefully selected information-rich, but not extreme two-case companies. We initially collected unobtrusive data in the form of running records and mass-media news reports from the inception of the case companies. We then conducted in-depth interviews with key decision makers of the case companies, namely their co-founders and CEOs. We employed critical incident technique guidelines for data analysis.

Grounded in data, the following constructs emerged related to value creation: strategic experimentation, gestalt tensions, and legitimacy lies. Entrepreneurs experiment with and reconfigure their venture at several levels: goal (vision), decision (strategic) and behavioral (tactical) levels of the organizational gestalt in order to reach a threshold level of practiced activity. Entrepreneurs’ strategic experimentation efforts are fueled by tensions that exist at these three levels of the organizational gestalt. During this experimentation process, entrepreneurs may tell legitimacy lies to legitimate their ventures in the eyes of their stakeholders.

Given the instrument we employed to explore the issues and concerns identified above, our results are limited in scope. However, we put forward a number of questions and conjectures to guide future research in this currently under-researched area of international entrepreneurship. We have also suggested employing the concept of turning point in future research to advance our understanding of the dynamic capability view of international new ventures.

Understanding whether and how international new ventures reach their made-it points would contribute to our understanding of how early internationalization affects international new ventures’ organizational survival and growth.

We have put forward the concept of the made-it point to aid international entrepreneurship researchers to investigate the continued growth, evolutionary patterns, as well as organizational survival of international new ventures.