Skip to main content
SpringerLink
Log in

Dynamic managerial capability of technology-based international new ventures—a basis for their long-term competitive advantage

Dynamische Management-Capabilities technologiebasierter internationaler Existenzgründungen—eine Basis für ihren langfristigen Wettbewerbsvorteil

  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

The article focuses on long-term development of technology-based international new ventures (INVs) and discusses aspects of managing such ventures once they are past the initial success and rapid internationalization and enter the stable development phase. The study builds on an in-depth process case study of a technology-based INV conducted over the period of 3.5 years, starting 8 years into the firm’s history. This unique design has enabled close observation of the specific events and challenges, the firm has been facing after its initial success, and of the aspects in the firm’s management that have enabled the INV to survive challenging events and periods in its development, including partial change of ownership and management, the international economic recession, adaption of its managerial processes to stable operations rather than entrepreneurial search and choice of markets in relation to resource availability. The study takes the dynamic capability perspective and focuses on INVs’ management, which are seen as founders and builders of the processes, rules and structures that lay the basis for long-term competitive advantage for such firms. Based on the findings, specific aspects of the dynamic managerial capability of technology-based INVs are conceptualized and summarized into a set of propositions and a model.

Abstrakt

Der Artikel ist der langfristigen Entwicklung technologiebasierter internationaler Existenzgründungen (international new ventures; INVs) gewidmet. Er diskutiert Managementaspekte derartiger Gründungen für die Phase der stabilen Entwicklung, die auf Anfangserfolge und den Prozess rascher Internationalisierung folgt. Die Untersuchung basiert auf der vertiefenden Prozess-Fallstudie eines technologiebasierten INV, die im achten Jahr der Existenz des Unternehmens begonnen und über einen Zeitraum von 3,5 Jahren hinweg durchgeführt wurde. Dieses einzigartige Fallstudien-Design hat es ermöglicht die spezifischen Ereignisse und Herausforderungen für das Unternehmen nach seinen Anfangserfolgen sowie diejenigen Aspekte im Management des Unternehmens, die dem INV das Überleben angesichts herausfordernder Ereignisse und Perioden in seiner Entwicklung ermöglicht haben, im Detail zu analysieren. Diese Aspekte umfassten die teilweise Auswechslung der Eigentümer und des Managements, die internationale ökonomische Rezession, die Anpassung der Management-Prozesse an stabiles Wirtschaften anstelle entrepreneurialer Suche und die Auswahl von Märkten im Verhältnis zur Ressourcenverfügbarkeit. Die Studie verfolgt die Dynamic-Capability-Perspektive und fokussiert auf das Management von INVs, dessen Mitglieder als Gründer sowie Urheber der Prozesse, Regeln und Strukturen betrachtet werden, die das Fundament für den langfristigen Wettbewerbsvorteil solcher Unternehmen bilden. Ausgehend von den Ergebnissen der Untersuchung werden die spezifischen Aspekte der dynamischen Management-Capabilities technologiebasierter INVs konzipiert sowie in einem Set von Arbeitshypothesen und in einem Modell zusammengefasst.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Adner R, Helfat CE (2003) Corporate effects and dynamic managerial capabilities. Strateg Manag J 24:1011–1025. doi:10.1002/smj.331

    Article  Google Scholar 

  • Agarwal R (1998) Small firm survival and technological activity. Small Bus Econ 11:215–224. doi:10.1023/A:1007955428797

    Article  Google Scholar 

  • Almus M, Nerlinger EA, Steil F (1999) Growth determinants of start-ups in eastern germany: a comparison between innovative and non-innovative firms. ZEW Discussion Papers, No. 99–05, Center for European Economic Research, Leibniz Information Centre for Economics

  • Altshuler L, Tarnovskaya VV (2010) Branding capability of technology born globals. J Brand Manag 18:212–227. doi:10.1057/bm.2010.47

    Article  Google Scholar 

  • Aspelund A, Madsen TK, Moen Ø (2007) A review of the foundation, international marketing strategies, and performance of international new ventures. Eur J Mark 41:1423–1448. doi:10.1108/03090560710821242

    Article  Google Scholar 

  • Autio E, Sapienza H, Almeida J (2000) Effects of age at entry, knowledge intensity, and limitability on international growth. Acad Manag J 43:909–924. doi:10.2307/1556419

    Article  Google Scholar 

  • Bingham CB, Eisenhardt KM, Davis JP (2007a) Opening the Black Box of Organizational Expertise: Understanding What Firms Learn from Their Process Experience and How That Learning Unfolds over Time. University of Maryland working paper

  • Bingham CB, Eisenhardt KM, Furr NR (2007b) What makes a process a capability? Heuristics, strategy, and effective capture of opportunities. Strateg Entrep J 1:27–47. doi:10.1002/sej.1

    Article  Google Scholar 

  • Blackburn RA (2003) Small firms, innovation and intellectual property management. The context and a research agenda. In: Blackburn RA (ed) Intellectual property and innovation management in small firms. Routledge, London

    Chapter  Google Scholar 

  • Bryman A, Bell E (2003) Business research methods. Oxford University Press, New York

    Google Scholar 

  • Collis DJ (1994) Research note: how valuable are organizational capabilities? Strateg Manag J, Spec Issue Compet Organ Behav 15:143–152. doi:10.1002/smj.4250150910

    Google Scholar 

  • Dimitratos P, Plakoyiannaki E (2003) Theoretical foundations of an international entrepreneurial culture. J Int Entrep 1:187–215. doi:10.1023/A:1023804318244

    Article  Google Scholar 

  • Dingwall R (1997) Accounts, interviews and observations. In: Miller G, Dingwall R (eds) Context and method in qualitative research. SAGE Publications, London

    Google Scholar 

  • Drucker PF (1985) Innovation and entrepreneurship: practice and principles. Classic Drucker collection edition 2007. Elsevier/Butterworth-Heinemann, UK

    Google Scholar 

  • Dubois A, Gadde L-E (2002) Systematic combining: an abductive approach to case research. J Bus Res 55:553–560. doi:10.1016/S0148-2963(00)00195-8

    Article  Google Scholar 

  • Easton G (2010) Critical realism in case study research. Ind Mark Manag 39:118–128. doi:10.1016/j.indmarman.2008.06.004

    Article  Google Scholar 

  • Eisenhardt KM (1989) Making fast strategic decisions in high-velocity environments. Acad Manag J 32:3543–3576. doi:10.2307/256434

    Article  Google Scholar 

  • Eisenhardt KM (2002) Building theories from case study research. In: Huberman AM, Miles MB (eds) The qualitative researcher’s companion. Sage Publications, Thousand Oaks, pp 5–35

    Google Scholar 

  • Eisenhardt KM, Martin JA (2000) Dynamic capabilities: what are they? Strateg Manag J Spec Issue Evol Firm Capabilities 21:1105–1121. doi:10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-E

    Article  Google Scholar 

  • Freeman S, Cavusgil ST (2007) Toward a typology of commitment states among managers of born-global firms: a study of accelerated internationalization. J Int Mark 15:1–40. doi:10.1509/jimk.15.4.1

    Article  Google Scholar 

  • Freeman S, Edwards R, Schroder B (2006) How smaller born-global firms use networks and alliances to overcome constraints to rapid internationalization. J Int Mark 14:33–63

    Article  Google Scholar 

  • Freeman S, Hutchings K, Lazaris M, Zyngier S (2010) Model of rapid knowledge development: the smaller born-global firm. Int Bus Rev 19:70–84. doi:10.1016/j.ibusrev.2009.09.004

    Article  Google Scholar 

  • Gassmann O, Keupp MM (2007) The competitive advantage of early and rapidly internationalising SMEs in the biotechnology industry: a knowledge-based view. J World Bus 42:350–366. doi:10.1016/j.jwb.2007.04.006

    Article  Google Scholar 

  • Gray B, Farminer A (2014) And no birds sing—reviving the romance with international entrepreneurship. J Int Entrep 12:115–128. doi:10.1007/s10843-014-0125-5

    Article  Google Scholar 

  • Greiner LE (1998) Evolution and revolution as organizations grow. Harv Bus Rev 76:55–68

    Google Scholar 

  • Hagen B, Denicolai S, Zucchella A (2014) International entrepreneurship at the crossroads between innovation and internationalization. J Int Entrep 12:111–114. doi:10.1007/s10843-014-0130-8

    Article  Google Scholar 

  • Kale P, Singh H (2007) Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm-level alliance success. Strateg Manag J 28:981–1000. doi:10.1002/smj.616

    Article  Google Scholar 

  • Karra N, Phillips N, Tracey P (2008) Building the born global firm: developing entrepreneurial capabilities for international new venture success. Long Range Plan 41:440–458. doi:10.1016/j.lrp.2008.05.002

    Article  Google Scholar 

  • Kazanjian RK, Drazin R (1989) An empirical test of a stage of growth progression model. Manag Sci 35:1489–1503. doi:10.1287/mnsc.35.12.1489

    Article  Google Scholar 

  • Kazanjian RK, Drazin R (1990) Stage-contingent model of design and growth for technology based new ventures. J Bus Ventur 5:137–150. doi:10.1016/0883-9026(90)90028-R

    Article  Google Scholar 

  • Kazanjian RK, Drazin R (2000) A stage-contingent model of design and growth for technology-based new ventures. J Bus Ventur 5:137–150. doi:10.1016/0883-9026(90)90028-R

    Article  Google Scholar 

  • Keupp MM, Gassmann O (2009) The past and the future of international entrepreneurship: a review and suggestions for developing the field. J Manag 35:600–633. doi:10.1177/0149206308330558

    Google Scholar 

  • Kitching J, Blackburn RA (2003) Innovation, intellectual property and informality: evidence from a study of small enterprises and some implications for policy. In: Blackburn RA (ed) Intellectual property and innovation management in small firms. Routledge, London

    Google Scholar 

  • Knight GA, Cavusgil ST (2004) Innovation, organizational capabilities, and the born global firm. J Int Bus Stud 35:124–141. doi:10.1057/palgrave.jibs.8400071

    Article  Google Scholar 

  • Knight GA, Kim D (2009) International business competence and the contemporary firm. J Int Bus Stud 40:255–273. doi:10.1057/palgrave.jibs.8400397

    Article  Google Scholar 

  • Knight G, Madsen TK, Servais P (2004) An inquiry into born-global firms in Europe and the USA. Int Mark Rev 21:645–665. doi:10.1108/02651330410568060

    Article  Google Scholar 

  • Langley A (1999) Strategies for theorizing from process data. Acad Manag Rev 24:691–710. doi:10.2307/259349

    Google Scholar 

  • Madsen TK, Servais P (1997) The internalization of born globals: an evolutionary process? Int Bus Rev 6:561–583. doi:10.1016/S0969-5931(97)00032-2

    Article  Google Scholar 

  • Miles MB, Huberman AM (1994) Qualitative data analysis: an expanded sourcebook. Sage, Thousand Oaks

    Google Scholar 

  • Mintzberg H (1979) An emerging strategy of “direct” research. Adm Sci Q Spec issue Qual Methodol 24:582–589

    Google Scholar 

  • Montealegre R (2002) A process model of capability development: lessons from the electronic commerce strategy at Bolsa de Valores de Guayaquil. Organ Sci 13:514–531. doi:10.1287/orsc.13.5.514.7808

    Article  Google Scholar 

  • Mort GS, Weerawardena J (2006) Networking capability and international entrepreneurship: how networks function in Australian born global firms. Int Mark Rev 23:549–572. doi:10.1108/02651330610703445

    Article  Google Scholar 

  • Mudambi R, Zahra SA (2007) The survival of international new ventures. J Int Bus Stud 38:333–352. doi:10.1057/palgrave.jibs.8400264

    Article  Google Scholar 

  • Oviatt BM, McDougall PP (1994) Toward a theory of international new ventures. J Int Bus Stud 25:45–64. doi:10.1057/palgrave.jibs.8490193

    Article  Google Scholar 

  • Pavlou PA, El Sawy OA (2011) Understanding the elusive black box of dynamic capabilities. Decis Sci 42:239–273. doi:10.1111/j.1540-5915.2010.00287.x

    Article  Google Scholar 

  • Penrose ET (1959) The theory of the growth of the firm, revised edition of 1995. Oxford University Press, Oxford

    Google Scholar 

  • Pettigrew AM (1990) Longitudinal field research on change: theory and practice. Organ Sci Spec Issue Longitudinal Field Res Methods Stud Process Organ Chang 1:267–292. doi:10.1287/orsc.1.3.267

    Google Scholar 

  • Rialp A, Rialp J, Knight GA (2005) The phenomenon of early internationalizing firms: what do we know after a decade (1993-2003) of scientific inquiry? Int Bus Rev 14:147–166. doi:10.1016/j.ibusrev.2004.04.006

    Article  Google Scholar 

  • Stevenson HH, Jarillo JC (1990) A paradigm of entrepreneurship: entrepreneurial management. Strateg Manag J 11:17–27

    Google Scholar 

  • Teece DJ (2007) Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strateg Manag J 28:1319–1350. doi:10.1002/smj.640

    Article  Google Scholar 

  • Teece DJ, Pisano G, Shuen A (1997) Dynamic capabilities and strategic management. Strateg Manag J 18:509–533. doi:10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

    Article  Google Scholar 

  • Van den Bosch FAJ, van Wijk R (2001) Creation of managerial capabilities through managerial knowledge integration: a competence-based perspective. In: Sanchez R (ed) Knowledge management and organizational competence. Oxford University Press, Oxford

    Google Scholar 

  • Weerawardena J, Mort GS, Liesch PW, Knight G (2007) Conceptualizing accelerated internationalization in the born global firm: a dynamic capabilities perspective. J World Bus 42:294–306. doi:10.1016/j.jwb.2007.04.004

    Article  Google Scholar 

  • Winter SG (2003) Understanding dynamic capabilities. Strateg Manag J 24:991–995. doi:10.1002/smj.318

    Article  Google Scholar 

  • Yin RK (2003) Case study research: design and methods, 3rd edn. SAGE Publications, London

    Google Scholar 

  • Zahra SA, George G (2002) Absorptive capacity: a review, reconceptualization, and extension. Acad Manag Rev 27:185–203. doi:10.5465/AMR.2002.6587995

    Google Scholar 

  • Zahra SA, Ireland RD, Hitt MA (2000) International expansion by new venture firms: international diversity, mode of market entry, technological learning, and performance. Acad Manag J 43:925–950. doi:10.2307/1556420

    Article  Google Scholar 

  • Zahra SA, Sapienza HJ, Davidsson P (2006) Entrepreneurship and dynamic capabilities: a review, model and research agenda. J Manag Stud 43:917–955. doi:10.1111/j.1467-6486.2006.00616.x

    Article  Google Scholar 

  • Zhang M, Tansuhaj P, McCullough J (2009) International entrepreneurial capability: the measurement and a comparison between born global firms and traditional exporters in China. J Int Entrep 7:292–322. doi:10.1007/s10843-009-0042-1

    Article  Google Scholar 

  • Zollo M, Winter SG (2002) Deliberate learning and the evolution of dynamic capabilities. Organ Sci 13:339–351. doi:10.1287/orsc.13.3.339.2780

    Article  Google Scholar 

Download references

Acknowledgement

The author would very much like to thank the management and all engineers at “DanAmplifier” for being exceptionally collaborative in this research project. She would also like to thank her colleagues at Lund University, Ulf Elg and Kristina Eneroth, and Tage Koed Madsen from the University of Southern Denmark for their valuable input into the article.

Author information

Authors and Affiliations

  1. Department of Marketing and Management, University of Southern Denmark, Campusvej, 55, 5230, Odense M, Denmark

    Liliya Altshuler Oxtorp

Authors
  1. Liliya Altshuler Oxtorp
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Liliya Altshuler Oxtorp.

Additional information

Summary highlights

Contributions: Based on a longitudinal process study of a technology-based INV over the period of 3.5 years, starting 8 years into the firm’s history, the study conceptualizes the aspects of the dynamic managerial capability, which has carried the firm from its entrepreneurial establishment years into its more mature years of rational and stable management. The study is one of the first of this scope and is quite unique in its methodology to the IE field.

Research Purpose: To explore, which specific challenges technology-based INVs face after their initial rapid internationalization phase, and to explore and discuss specific aspects of the dynamic managerial capability, which is argued to be the basis for competitive advantage of INVs in the long term.

Results/Findings: Seven organizational activities—structures, rules, routines, which have supported the development of the dynamic managerial capability in the firm—are defined and discussed. They are also summarized into a set of propositions and a model.

Theoretical Implications and Recommendations: Ongoing development of INVs is only beginning to be studied, and this is an area of highest interest at the moment, as some of latest JIE issues and conferences show. It is in the academic, practitioners’ and general society’s interest to ensure that INVs survive and grow into successful and stable organizations. The organizational and dynamic capability perspective seems to be working well for investigating processes and development in organizations. A clear recommendation by the author is to conduct more longitudinal process studies of INVs in order to find out more about their challenges, how they overcome them, and hopefully, to be able to draw both theoretical and practical recommendations.

Practical Implications and Recommendations: This is a highly empirical study, with a detailed examination of various stages in the INV’s history and of the firm’s response to its challenges. A number of effective practices have been outlined, and they are believed to be highly useful for other INV managers to consider.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Oxtorp, L.A. Dynamic managerial capability of technology-based international new ventures—a basis for their long-term competitive advantage. J Int Entrep 12, 389–420 (2014). https://doi.org/10.1007/s10843-014-0133-5

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-014-0133-5

Keywords

Search

Navigation