International opportunity: a review and a research agenda

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, Denmark
Tuija Mainela and & Servais, 201320.11.2011
Mainela, Puhakka Vesa Puhakka,

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)


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 Discovered opportunity Exogenously born from market/industry changes
opportunity 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)

3. 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

3. 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 II
2. 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

2. 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


International opportunity: a review and a research agenda

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