Abstract
Be international? Be innovative? Be international and innovative? Following the logic of the upper echelon (UE) perspective, this paper studies the impact of the entrepreneur(s) demography, background, and experience on their strategic choices, i.e., innovation, internationalization, or a combination of the two strategies. We employ cluster analysis on a sample of 88 Italian Small- and Medium-sized Enterprises (SMEs) operating in different industries to classify the firms along their entrepreneur(s)’ characteristics. Three significantly different clusters emerge, i.e., the typical Italian family firms, a group of businesses led by solitary self-made men, and the team-founded firms. The three groups are related to differences in internationalization behavior and innovation practice. Family-led firms are mainly domestic and concentrated on product innovation, while team-founded firms combine intensive internationalization with innovative marketing and management practices. A third cluster describes the solitary founder with serial business experience, whose businesses foster product and process innovation combined with moderate levels and scope of internationalization. Furthermore, our findings reveal that internationalization tends to be related to the type of innovation, much more than to R&D intensity or other measures of novelty (i.e., radical or incremental).
Abstrakt
Internationalisierung? Innovation? Internationalisierung und Innovation? Der „Upper Echelon“-Theorie folgend untersucht diese Studie Unternehmer-Charakteristika (demographische Merkmale, Erfahrung, Ausbildung etc.) als Einflussfaktoren auf strategisches Verhalten, im konkreten Fall auf die Wahl von Internationalisierungs- und/oder Innovationspraxis. Mittels Cluster-Analyse gruppieren wir 88 italienische KMU aus unterschiedlichen Branchen anhand der Merkmale ihrer Gründer. Es bilden sich drei deutlich unterschiedliche Cluster: das typische italienische Familienunternehmen, eine Gruppe von Unternehmen, die von „Selfmademan“ geleitet werden, und jene Unternehmen, die von mehreren Partnern gegründet wurden. Die drei Firmengruppen unterscheiden sich signifikant in ihrem Internationalisierungs- und Innovationsverhalten. Familiengeführte Unternehmen sind vor allem auf den Heimmarkt und auf Produktinnovation konzentriert, während Team-gegründete Firmen globale und intensive Internationalisierung mit innovativem Marketing und Management kombinieren. Die von „Selfmademen“ geleiteten Firmen verbinden Produkt- und Prozessinnovation mit mittlerer Internationalisierungsintensität auf limitierter geografischer Skala. Die Ergebnisse unserer Studie zeigen auch, dass Internationalisierungserfolg mehr mit der Art der Innovation, als mit F&E Intensität oder Indikatoren wie radikaler oder inkrementeller Neuerung verbunden ist.
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Notes
Definition of SME acknowledged by the EU Commission Recommendation 2003/361/EC (6 May 2003). It defines micro, small, and medium company on the respective bases of headcount, turnover, or balance sheet total.
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Acknowledgments
Stefano Denicolai and Birgit Hagen gratefully acknowledge financial support from the Cariplo Foundation International Recruitment Call “The internationalization of Italian firms: the role of intangibles, managerial resources, and corporate governance”.
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Summary Highlights
Contributions: Following the Upper Echelon perspective, this study uncovers entrepreneurial profiles understood as combinations of entrepreneurs’ demography and characteristics. It is one of the few studies which uses such profiles as a key factor in explaining small firms’ strategic choices in terms of internationalization and/or innovation and to provide a better understanding of the interplay—or the trade-off—between these two growth strategies.
Research Questions/Purpose: Do differentiated entrepreneurial profiles exist in the small firm context? Are these entrepreneurial profiles related to the growth strategy, i.e., internationalization and innovation, of small firms?
Results/Findings: We outline three entrepreneurial profiles across multiple demographic entrepreneurs’ characteristics and relate them to different internationalization and innovation practices: the typical Italian family-led firm, a group of businesses represented by solitary self-made men, and the team-founded firms. The three groups vary in their internationalization and innovation behavior. We also find that the interdependency between innovation and internationalization is more a question of type of innovation (e.g., product vs process) than of degree of novelty (e.g., incremental vs radical).
Theoretical Implications and Recommendations: First, we extend the upper echelon perspective which predicts organizational outcomes based on the demographic characteristics and traits of the top management teams to the small, longer established firm and entrepreneurial teams and their internationalization and innovation behavior. Secondly, we add to entrepreneurship studies through shifting attention from the single entrepreneur to entrepreneurial teams. Finally, we add to the discussion on the relationship between innovation and internationalization.
Practical Implications and Recommendations: Entrepreneurs and managers may profit from our findings by identifying and comparing with different entrepreneurs’ profiles and associated strategies. This might lead to closing the gap in entrepreneurial competences and may show routes to improved internationalization and innovation strategies and better performance and growth.
Stefano Denicolai, Birgit Hagen and Alessia Pisoni contributed equally to this work.
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Denicolai, S., Hagen, B. & Pisoni, A. Be international or be innovative? Be both? The role of the entrepreneurial profile. J Int Entrep 13, 390–417 (2015). https://doi.org/10.1007/s10843-015-0143-y
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DOI: https://doi.org/10.1007/s10843-015-0143-y