Internetalisation : the Internet's influence on international market growth in the firm's outward internationalisation process

It has been suggested that the Internet is the most significant driver of international trade in recent years to the extent that the term =internetalisation‘ has been coined (Bell, Deans, Ibbotson & Sinkovics, 2001; Buttriss & Wilkinson, 2003). This term is used to describe the Internet‘s affect on the internationalisation process of the firm. Consequently, researchers have argued that the internationalisation process of the firm has altered due to the Internet, hence is in need of further investigation. However, as there is limited research and understanding, ambiguity remains in how the Internet has influenced international market growth. Thus, the purpose of this study was to explore how the Internet influences firms‘ internationalisation process, specifically, international market growth. To this end, Internet marketing and international market growth theories are used to illuminate this ambiguity in the body of knowledge. Thus, the research problem =How and why does the Internet influence international market growth of the firm’ is justified for investigation. To explore the research question a two-stage approach is used. Firstly, twelve case studies were used to evaluate key concepts, generate hypotheses and to develop a model of Internetalisation for testing. The participants held key positions within their firm, so that rich data could be drawn from international market growth decision makers. Secondly, a quantitative confirmation process analysed the identified themes or constructs, using two hundred and twenty four valid responses. Constructs were evaluated through an exploratory factor analysis, confirmatory factor analysis and structural equation modelling process. Structural equation modelling was used to test the model of =internetalisation‘ to examine the interrelationships between the internationalisation process components: information availability, information usage, interaction communication, international mindset, business relationship usage, psychic distance, the Internet intensity of the firm and international market growth. This study found that the Internet intensity of the firm mediates information availability, information usage, international mindset, and business relationships when firms grow in international markets. Therefore, these results provide empirical evidence that the Internet has a positive influence on international information, knowledge, entrepreneurship and networks and these in turn influence international market growth. The theoretical contributions are three fold. Firstly, the study identifies a holistic model of the impact the Internet has had on the outward internationalisation of the firm. This contribution extends the body of knowledge pertaining to Internet international marketing by mapping and confirming interrelationships between the Internet, internationalisation and growth concepts. Secondly, the study highlights the broad scope and accelerated rate of international market growth of firms. Evidence that the Internet influences the traditional and virtual networks for the pursuit of international market growth extends the current understanding. Thirdly, this study confirms that international information, knowledge, entrepreneurship and network concepts are valid in a single model. Thus, these three contributions identify constructs, measure constructs in a multi-item capacity, map interrelationships and confirm single holistic model of ‗internetalisation‘. The main practical contribution is that the findings identified information, knowledge and entrepreneurial opportunities for firms wishing to maximise international market growth. To capitalise on these opportunities suggestions are offered to assist firms to develop greater Internet intensity and internationalisation capabilities. From a policy perspective, educational institutions and government bodies need to promote more applied programs for Internet international marketing. The study provides future researchers with a platform of identified constructs and interrelationships related to internetalisation, with which to investigate. However, a single study has limitations of generalisability; thus, future research should replicate this study. Such replication or cross validation will assist in the verification of scales used in this research and enhance the validity of causal predications. Furthermore, this study was undertaken in the Australian outward-bound context. Research in other nations, as well as research into inbound internationalisation would be fruitful.

Four years on – are the Gazelles still running? A longitudinal study of firm performance after a period of rapid growth

Gazelles, or very rapidly growing firms, are important because they contribute disproportionately to economic growth. There is a concern that some of these firms pursue growth too aggressively resulting in lower subsequent performance. We investigate the relationship between growth and subsequent profitability for gazelle firms, and how this is moderated by firm strategy. Previous empirical research regarding the growth-profitability relationship for firms in general is rather inconclusive, with only one study specifically investigating gazelle firms. Likewise, there are theoretical arguments both for and against growth leading to profitability that equally apply to gazelle firms. Further, while contingency theory might suggest the relationship depends on the firm’s strategy, earlier studies have not investigated this relationship. We address these questions using longitudinal data (seven years) for a sample of 964 Danish Gazelle firms. Our study finds a clear positive relationship between growth and subsequent profitability among gazelle firms. Moreover, this relationship is stronger for firms pursuing a broad market strategy rather than a focus or niche strategy. An important managerial implication is that the growth strategy should be clearly integrated with the general strategic orientation of the firm.

International entrepreneurship for SME business growth : a resource and dynamic capability view of the firm : an internet context

This research explores the relationship between international business Internet capabilities and international entrepreneurial characteristics. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic environments. However, the international entrepreneurial characteristics which are seen as a precursor to leveraging such capabilities are still vague. Given this finding a conceptual framework is constructed and research issues are then developed in order to focus attention on the relationship between the Internet and a firm’s resource base, dynamic capabilities and international market performance.

Entrepreneurial growth : the role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.

Four years on: Are the gazelles still running? A longitudinal study of firm performance after a period of rapid growth

This article examines variations in performance between fast-growth – the so-called gazelle – firms. Specifically, we investigate how the level of growth affects future profitability and how this relationship is moderated by firm strategy. Hypotheses are developed regarding the moderated growth–profitability relationship and are tested using longitudinal data from a sample of 964 Danish gazelle firms. We find a positive relationship between growth and profitability among gazelle firms. This relationship is moderated, however, by market strategy; it is stronger for firms pursuing a broad market strategy rather than a niche strategy. This study contributes to the current literature by providing a more nuanced view of the growth–profitability relationship and investigating the potential for the future performance of gazelle firms.

Reflections on the transformation of my meaning making to support the organic growth of a firm

The objective of my Portfolio is to explore the working hypothesis that the organic growth of a firm is governed by the perspectives of individuals and such perspectives are governed by their meaning-making. The Portfolio presents explorations of the transformation of my meaning making and in adopting new practices to support the organic growth of a firm. I use the work of other theorists to transition my understanding of how the world works. This transition process is an essential tool to engage with and understand the perspectives of others and develop a mental capacity to “train one’s imagination to go visiting” (Arendt, 1982; p.43). The Portfolio, therefore, is primarily located in reflective research. Using Kegan’s (1994) approach to Adult Mental Development, and Sowell’s (2007) understanding of the visions which silently shape our thoughts I organise the developments of my meaning making around three transformation pillars of change. In pillar one I seek to transform an unthinking respect for authority and break down a blind pervasiveness of thought within my reasoning process arising from an instinct for attachment and support from others whom I trust. In pillar two I seek to discontinue using autocratic leadership and learn to use the thoughts and contributions of a wider team to make improved choices about uncertain future events. In pillar three I explore the use of a more reflective thinking framework to test the accuracy of my perceptions and apply a high level of integrity in my reasoning process. The transformation of my meaning making has changed my perspectives and in turn my preferred practices to support the organic growth of a firm. I identify from practice that a transformative form of leadership is far more effective that a transactional form of leadership to stimulate the trust and teamwork required to sustain the growth a firm. Creating an environment where one feels free to share thoughts and feelings with others is an essential tool to build a team to critique the thoughts of one other. Furthermore, the entrepreneurial wisdom to grow a firm must come from a wider team, located both inside and outside the boundaries of a firm. No individual or small team has the mental capacity to provide the entrepreneurship required to drive the organic growth of a firm. I address my Portfolio to leaders in organisations who have no considered framework on the best practices required to lead a social organisation. These individuals may have no sense of what they implicitly believe drives social causation and they may have no understanding if their meaning making supports or curtails the practices required to grow a firm. They may have a very limited capacity to think in a logical manner, with the result they are using guesses from their ‘gut’ to make poor judgements in the management of a firm.

Technological regimes, Schumpeterian patterns of innovation and firm-level productivity growth

The article investigates the relationships between technological regimes and firm-level productivity performance, and it explores how such a relationship differs in different Schumpeterian patterns of innovation. The analysis makes use of a rich dataset containing data on innovation and other economic characteristics of a large representative sample of Norwegian firms in manufacturing and service industries for the period 1998–2004. First, we decompose TFP growth into technical progress and efficiency changes by means of data envelopment analysis. We then estimate an empirical model that relates these two productivity components to the characteristics of technological regimes and a set of other firm-specific factors. The results indicate that: (i) TFP growth has mainly been achieved through technical progress, while technical efficiency has on average decreased; (ii) the characteristics of technological regimes are important determinants of firm-level productivity growth, but their impacts on technical progress are different from the effects on efficiency change; (iii) the estimated model works differently in the two Schumpeterian regimes. Technical progress has been more dynamic in Schumpeter Mark II industries, while efficiency change has been more important in Schumpeter Mark I markets.

Modeling growth strategy in a biotechnology startup firm

The top managers of a biotechnology startup firm agreed to participate in a system dynamics modeling project to help them think about the firm's growth strategy. The article describes how the model was created and used to stimulate debate and discussion about growth management. The paper highlights several novel features about the process used for capturing management team knowledge. A heavy emphasis was placed on mapping the operating structure of the factory and distribution channels. Qualitative modeling methods (structural diagrams, descriptive variable names, and friendly algebra) were used to capture the management team's descriptions of the business. Simulation scenarios were crafted to stimulate debate about strategic issues such as capacity allocation, capacity expansion, customer recruitment, customer retention, and market growth, and to engage the management team in using the computer to design strategic scenarios. The article concludes with comments on the impact of the project.

Growth of the Firm and Economic Backwardness: A Case Study and Analysis of China's Mobile Handset Industry

Economic backwardness often influences the growth of firms in developing countries. In this paper, we investigate the growth conditions and paths available for latecomers competing with first movers. Employing the concepts of boundaries of the firm and the disadvantage of backwardness, we present a case study of China's mobile handset industry and proceed to develop a simple model. We find that although significant disadvantage does not allow latecomers to grow, there are possibilities for changing the conditions of growth if latecomers can utilize outside resources and/or indigenous advantages.