Tuija Mainela and Vesa Puhakka, 20.11.2011 The Concept of International Opportunity in International...

Tuija Mainela and Vesa Puhakka, 20.11.2011

The Concept of International Opportunity in International Entrepreneurship: A Review

and a Research Agenda

International Journal of Management Reviews (early view)

http://onlinelibrary.wiley.com/doi/10.1111/ijmr.12011/abstract

Tuija Mainela^, Vesa Puhakka^ and Per Servais^^

^University of Oulu, Oulu Business School, Finland^^ University of Southern Denmark, Department of

Marketing & Management, DenmarkMainela, Puhakka & Servais, 2013


Background of the study

• Developments in IE as a field of research• an emerging field ►► discrete disciplinary area• INV/BG phenomenon ►► international entrepreneurial behaviours• internationalisation or entrepreneurship ►► more balanced

building on both disciplines

• Towards international opportunities (IOs) as the core of IE research• opportunity discovery as the most central function of

entrepreneurship (Shane & Venkataraman 2000)

• opportunity development, knowledge and opportunities available through relationship networks (Johanson & Vahlne 2006, 2009)

• discovery, enactment, evaluation, and exploitation of opportunities - across national borders (Oviatt & McDougall 2005, p. 540)

Mainela, Puhakka & Servais, 2013


Purpose

• Facilitate the cross-fertilization and integration of the internationalization and entrepreneurship theories in IE

– Analyzing how the concept of the IO is built in the root fields

– Analyzing the variety of approaches to IOs used in IE research and our current knowledge on IOs in IE research

• Push the IE field further as a field focused on IOs

– Proposing a definition of the concept of IO in IE research taking into account both E and I

– Proposing a future research agenda for IE research on IOs



Conceptualizations of opportunities in extant research

Elements Types Determining characteristics Form of opportunity Innovation opportunity Creates disequilibrium in markets

Arises from entrepreneurial creativity (behind it is dissatisfaction) Starts with economic invention Is driven by attitude, motivation and propensity for risk in entrepreneurial action Develops new economic value through ventures with better solutions than those existing in markets Involves new cross-border resource combinations

Arbitrage opportunity Creates equilibrium in markets Arises from a failure of the market mechanism Starts with noting of demand-supply inefficiencies Is driven by entrepreneurs alert to market information Develops new economic value through exploitation of disparate knowledge as a new offering to markets Involves development of the ways the firm operates across borders

Existence of opportunity

Discovered opportunity Exogenously born from market/industry changes Exists without human awareness of its existence Appears as a complex entity Recognized through active search behavior Exploited through rational decision making under risky conditions Emphasizes resource allocation and use at inception of the business

Created opportunity Endogenously created through the entrepreneurial action Created through human imagination and social interaction Appears as a flexible activity Results from everyday entrepreneurial practice Developed through interaction with others under true uncertainty Emphasizes gradual investment of resources and convincing others in business development



Method of the review

Selection of Journals• Business and management journals 2010 ISI-impact

factor >1.000 – 118 journals

• Most influential IB journals + dedicated E journals – MIR & JIM added

• JIEN & EMJ

Selection of Articles• Years 1989-2012 (plus articles in press)

– Manual review of the titles in journals• intentionally kept wide in scope• cross-checked through a keyword search

– Manual review of titles, abstracts, keywords -> both I + E– Manual review of theoretical frameworks

• explicitly integrated concepts from both IB & E



Review Protocol



Analysis Procedure



Reviewed Articles



Overview of IE research on IOs

• IO found in the reviewed research– as a concept in the theoretical framework– as a variable in a questionnaire– as a topic in an interview guide – in conceptualizing and modeling research results

• Many claims of importance, much less in-depth treatment

• only a few explicit definitions of the concept• many studies seem to treat the IO as if it was a

commonly-understood concept• in practice significant variation in the key elements of

the research and the implicit meaning of IO



Approaches to IOs in IE research I

1. What kind of resources, capabilities and knowledge needed to exploit IOs in terms of INV establishment or business renewal? • IOs as possibilities to combine dispersed, cross-border, latent

resources • IOs as the triggers that prompt entrepreneurs to establish an INV • IOs as new products/services resulting from opportunity-related

activities innovation opportunities and discovered opportunities on the basis

of new resource combinations (e.g. Autio et al., 2000; McDougall et al., 1994)

2. How proactive and risk-seeking mindsets, orientations and strategies of firms allow for early international market entry? • IOs as external to the firm (in the market) • IO is seen as a stimulus for internationalization• IO identification as the first stage of the internationalization process arbitrage opportunities in foreign markets (e.g. Crick and Jones, 2000;

Crick et al., 2001; Oviatt and McDougall, 2005)



Approaches to IOs in IE research II

3. How IOs are constructed through a process of international entrepreneurial acting?• IOs socially constructed, interactive and context-embedded

processes• episodic and event-based nature of IO creation emerging approach covering created opportunities (e.g. Johanson

& Vahlne, 2009; Chandra et al., 2009; Fletcher, 2004; Schweizer et al., 2010)

Rarely an in-depth analysis of the IO as the subject of the behaviors or of those behaviors themselves

Less than half of the articles provide an explicit definition of an opportunity Influence on study design?

Often-implicit conceptualizations and rare operationalizations readers and respondents to decide what constitutes an IO?



Findings on IOs in IE research I

1. Realization of IOs in INVs and MNCs• exploiting an IO requires the competencies to control cross-border

resources and activities• the application of entrepreneurial skills to turn resources into new

value• the use of flexible organizing methods

2. Exploitation of international market arbitrage• greater strategic opportunities the motives for international market

entry• exploitation of IOs requires managerial experience, competence and

commitment and ability to form international partnerships • entrepreneurial orientation, international growth orientation, activity

and networking affect perception of IOs and accelerate internationalization

• exploitation of IOs range from planned strategy formation through to opportunistic responses to serendipitous encounters

• rapid learning valuable for the growth of INVs but not for the survival



Findings on IOs in IE research II

3. Contexts favorable to IO development• IOs arise at intersection of various, often rival or controversial,

interests• entrepreneurial communities of practice as the discoverers of IOs• multinational and multicultural border zones bring cultural resources

and practices to construct new IOs in collaborative and unorthodox ways (e.g. transnational entrepreneurship)

4. Socially constructed emerging IOs• the processual nature of IOs• the social and cultural determinants of IOs• IOs expand over time driven by innovative managers• IOs both break old institutions and create new ones

5. IOs resulting from actions and interactions in daily business• IOs emerge from everyday practice• IOs as created in interaction in relationships



Future research agenda I

• Definition of IO– An international opportunity is a situation that both spans and

integrates elements from multiple national contexts in which entrepreneurial action and interaction transform the manifestations of economic activity.

1. The creative-cognitive approach to IOs in IE• opportunity discovery as a process of organizing and interpreting

information in order to construct a business concept• human perception and an entrepreneur’s cognitive models of sense-

making as determinants of the IE actions • an IO is about creating a meaning based on information gathered

from around the world that may well be historically, culturally and socio-economically ambiguous, rather than arriving at a decision within a given decision space and based on given information

• adopting the cognitive process as the unit of analysis• analysis of schemas, heuristics and cognitive styles



Future research agenda II2. The context embeddedness approach to IOs in IE

• opportunities as created in specific social settings• integration of multiple national contexts a necessary driver of IO

creation

• the international context as the unit of analysis • data collection at the level of communities and networks to

understand the dynamics

3. The interaction-focused approach to IOs in IE • creation of opportunities as a dialogical process of enacting the

opportunity through involving others in the development• interactions in the international partnerships, customer-supplier

and institutional relationships as the basis for IOs• interacting in relationships to create shared interests

• the interaction within relationships as the unit of analysis• requires collecting dyadic data



Future research agenda III

4. The practice approach to IOs in IE• entrepreneurial internationalization is the everyday practice of

the entrepreneurs and managers• IOs are objects of ordinary work; they are made real when key

people see the challenges as a spur to new business creation, without the prerequisite of an overly-detailed or specific form

• the entrepreneurial practice as the unit of analysis • following how normal tasks in entrepreneurs’ working lives lead

to IOs• data collection on practice necessitates getting close to

international entrepreneurs to observe and record their actions• everyday practice is difficult to describe outside of its

actualization, which makes various integral and active dialogical methods and self-reporting appropriate in data collection



Suggested approaches for future research


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