FIRM RESOURCES FOR INTERNATIONALIZATION OF SMES FROM EMERGING COUNTRIES: A MULTIMETHOD STUDY

ABSTRACT Purpose: This article investigates and classifies firm resources for the internationalization of small and medium enterprises (SMEs) from emerging countries. Originality/value: SMEs from emerging countries in global markets evidence their more restricted access to resources for internationalization. The mainstream international business literature classifies firm’s resources identified in large companies from developed economies. This research classifies firms’ internationalization resources located in different emerging countries based on a systematic literature review (SLR) and interviews. This paper contributes to the theoretical development about the internationalization of SMEs from emerging countries, indicating the importance of organizational resources in this process. Design/methodology/approach: This paper presents an exploratory research developed in two stages: a SLR on emerging countries and interviews with experts, institutions, and SMEs about the Brazilian context. Bibliographic research and an interview with semi-structured script were adopted as data collection techniques. Interviews were analyzed with NVivo software using content analysis technique and providing categorization of resources. Findings: Up to 2016, 15 works mentioned resources for the internationalization of SMEs from emerging countries and seven were done in Asia. We identified 72 resources in ten emerging countries. Organizational resources predominate. The use of financial resources in Brazil contradicts the trend in other emerging countries. More tangible resources seem less strategic for SMEs’ internationalization from emerging countries when compared to more intangible resources, as organizational ones.

The conceptualization of dynamic resource orchestration framework as an anchor for organizational resilience

The objective of this paper was to present a dynamic resource orchestration framework as a source of organizational resilience through blended orchestration of the firm's dynamic and static resources to generate sustained value during disruptive shocks. We adopted an integrative literature review methodology and proposed a dynamic resource orchestration framework as a managerial option to create and sustain firm value. Conceptually, a dynamic resource orchestration framework was presented as the integration of firm resources and managerial capability. We proposed dynamic resource orchestration as a model input impacting organizational resilience through the combined effects of resource accumulation, resource orchestration, and managerial capabilities. Through a thorough examination of the literature production anchored on dynamic capabilities framework and organizational resilience, we advanced a perspective that the ultimate source of combined firm resilience and sustainable competitive advantage does not necessarily accrue from the resources at a firm's disposal but by how management dynamically blends and orchestrates the existing resources, thereby creating an optimal source of capability. Our proposed conceptualization was based on the assumption that dynamic capabilities are part of firm resources and, therefore, strategic orchestration of dynamic capabilities leads to superior firm resourcefulness and consequential sustained resilience. We identified gaps and proposed directions for future research.

Testing open-source visualization tools with small- and medium-sized enterprises ecosystem data: Towards the understanding of innovation ecosystem design

This article explores open-source visualization tools to enhance the understanding of small- and medium-enterprise (SME) ecosystem structures. Ecosystem approaches are becoming important in business strategy and innovation where organizations are heavily relying on inter-firm resources to innovate. Consequently, the traditional firm-focused business models face challenges, making it difficult for interconnected and diverse actors to co-create across firm boundaries. This challenge is even worse for manufacturing SMEs, who often lack the tools to make sense of their innovation ecosystem structures. We carried out a rich ethnographic investigation in three cases in the United Kingdom: the ceramic artist ecosystem, the 3D printing bureau ecosystem and the FabLab ecosystem. From the initial thematic analysis results, all actors highlighted the difficulty in understanding ecosystem networks. The following ecosystem attributes were identified as essential in understanding SME ecosystem structures: clusters and bridges, tie size, structural holes, role structure and interactivity. In this article, fourteen open-source visualization tools are tested to compare how well different tools reveal the six ecosystem attributes. Our findings demonstrate that open-source visualization tools have different affordances, most of which are useful in revealing ecosystem attributes. Results show that most visualization tools help aid the understanding of SME ecosystem structures. This study contributes new knowledge on the scarce subject of designing and managing ecosystems, presenting a unique approach to explore and understand ecosystem configurations. The study identifies limitations in open-source visualization tools and offers the design management community a set of recommendations for further development of visualization tools to support decision-making.

Corporate Social Innovation in Developing Countries

Although corporate social innovation studies in developing countries acknowledge the importance of firm resources and capabilities for attaining social goals, they overlook the way in which these interact with broader institutions to generate successful outcomes. We address this gap by exploring the relationship between firm resources-capabilities and institutions that is conducive to meeting both business and social interests in developing countries. By employing a fuzzy-set qualitative comparative analysis of corporate social innovation projects performed by joint ventures of Dutch SMEs and their local partners in developing countries, we show that firm resources and/or capabilities complement strong institutions in these countries. Corporate social innovation can also be facilitated by firm capabilities in running highly legitimate projects that substitute institutional voids in these economies, attesting to multiple paths that corporations can take to achieve social innovation.

Resource Redeployment

Firm resources and capabilities provide a basis for competitive advantage over rivals. By providing a platform for profitable expansion or contraction of firm boundaries, they also underlie corporate advantage—where a corporate parent creates more value than its individual businesses could generate if they were not part of the corporate parent. This article clarifies our current understanding of resource redeployment—one mechanism through which resources might contribute to corporate advantage. Resource redeployment involves a partial or complete withdrawal of resources (and capabilities) from one use and reallocation to another opportunity inside the firm. It typically refers to redeployment of non-financial resources, such as tangible, intangible, and human capital, as we do so here. Capital might also be redeployed, but since its redeployment entails few or no sunk adjustment costs it deserves separate attention, and is only discussed briefly below to highlight similarities with resource redeployment. Resource redeployment represents an explicit preference for internal markets over external markets. Flexibility is a primary benefit for firms having potential for resource redeployment, if they can pursue opportunities more efficiently than firms relying on external markets. Having more flexibility to redeploy should inspire firms to enter markets at lower levels of expected performance and exit markets at higher levels of expected performance. More generally, firms should expand and retrench from markets more fluidly than firms lacking potential for efficient resource redeployment. While this mechanism for corporate advantage has been recently explicated in the literature, it has important precedents. Empirical examination of resource redeployment is just underway. Finally, it is important to clarify how corporate advantage tied to resource redeployment differs from other determinants of corporate advantage. Each of these issues is discussed below, along with future research opportunities.

Extending the Microfoundations of Capability Development and Utilization: The Role of Agentic Technology and Identity-Based Community

Scholars often simplify the treatment of capability development and utilization by focusing on individual-, process-, or structural-level factors independently. However, by following a microfoundation perspective to the treatment of capabilities this chapter endeavors to consider these levels collectively. In doing so, the chapter connects well-known managerial processes, such as resource orchestration, with novel yet increasing salient factors of agentic technologies (which act as another individual-level factor that constrains, complements, or substitutes for human agency) and identity-based community (which acts as another structural-level factor that conditionally provides the firm resources to promote its ideology-centric utility function). The integration of these three factors within the microfoundation literature promotes the investigation of research questions relevant to contemporary organizations. The chapter contextualizes potential questions in each section, including separate treatments of each factor as well as their collective consideration.

The Impact of EA-Driven Dynamic Capabilities, Innovativeness, and Structure on Organizational Benefits: A Variance and fsQCA Perspective

Enterprise Architecture (EA) allows firms to create value on the firm and operational levels. This paper argues that firms’ EA-driven dynamic capabilities lead to innovative value-creating actions and, ultimately, improve organizational benefits. Hence, we propose a theoretical model that explains how these dynamic capabilities enable the innovativeness of firms. Moreover, we explain the contingent role of an organic firm structure and its relation to firm innovativeness. Data within this study is collected from 299 CIOs and IT managers. This study uses a variance-based approach and a complementary fuzzy-set qualitative comparative analysis (fsQCA) to analyze the model’s hypothesized relationships. Our study outcomes demonstrate a positive relationship between EA-driven dynamic capabilities and firms’ innovativeness as well as between innovation and organizational benefits. Our post-hoc analyses using fsQCA reveal various circumstances in which organic firm structure and valuable, rare, inimitable, and non-substitutional (VRIN) firm resources are particularly relevant for firms to obtain high levels of firm innovativeness.

Performance Shortfalls and R&D Investment Change: Aspirations, Actions, and Expectations

Built on the Behavioral Theory of the Firm, the paper examines how firm response to performance feedback is influenced by firm expectation on the likelihood of an action to close the performance gap. Using firm level change in R&D intensity as a problemistic search behavior, we explore how performance shortfalls relative to social and historical aspirations may prompt underperforming firms to adjust its R&D investment intensity, and how the magnitude of this adjustment is moderated by firm resources, past experience, industry and market conditions. We conduct our analysis using a longitudinal sample of Chinese firms listed on the ChiNext Board between 2009 and 2017. Our results indicate that underperforming firms increase their R&D intensity to a larger degree than their over-performing peers and periods when these firms have substantial cumulated R&D spending, abundant organizational slack, and are competing in more dynamic industries. We also document that these moderating factors influence relationships between social and historical aspirations and R&D investment decisions in a distinct way. We conclude that firm internal resources, capabilities and external industry and market conditions all affect firm expectations, and consequently shape the direction and magnitude of organizational actions in response to performance aspirations.

Resource indivisibility, lumpy costs and the multinationality–performance relationship

PurposeThe relationship between multinationality and firm performance is a central issue in the international marketing and business literatures. Predominantly, this body of research has tried to identify a single, generalized pattern for this relationship. However, despite the vast number of studies, results have been characterized as mixed or inconsistent. In this study, we take a fresh look at this relationship.Design/methodology/approachWe focus on a key inducement to expand firm multinationality – the search for a more efficient way to exploit firm resources, and also on a specific operationalization of multinationality – firm geographic scope. We use a formal analytical model analyzing the trade-off between benefits and costs arising from expanding firm geographic scope and emphasizing the role of lumpy costs emanating from resource indivisibility.FindingsThe relationship between geographic scope and performance cannot be confined to a single pattern, but instead, may have any one of a set of patterns: negatively monotonic shape, inverted U-shape, S-shape, M-shape or, multiple-wave inverted U-shape.Practical implicationsThe current study offers managers some guidelines to identify which of the above patterns fits their firm's specific case, and to identify the optimal level of geographic scope for their firm.Originality/valueWe conclude that the search for a single, generalized pattern for multinationality-performance is largely futile, whereas the focus on specific inducements and operationalizations for multinationality allows us to explain when and why specific patterns are more likely to occur.

Interfirm network structure and firm resources: Towards a unifying concept

PURPOSE: The objective of this paper is to propose a concept of network resource distribution that systematically unifies the resource-based and network-based perspectives on interfirm networks and enables integrated analysis of how firm resources and network structure interact to affect firm performance. METHODOLOGY: This conceptual paper first reviews the extant literature on interfirm networks and then develops the unifying concept of network resource distribution. FINDINGS: The literature review indicates that strategy scholars have long sought to integrate the resource-based view and the social network explanations of firm performance but, thus far, only a partial integration has been achieved. In particular, studies on the resource-level heterogeneity of interfirm networks have largely been limited to the analysis of firm dyads. How firm resources and network structure beyond the immediate network partners interact to affect firm performance has not yet been adequately addressed. The proposed unified concept of network resource distribution systematizes prior research and illuminates how network structure and firm resources interact to affect firm performance beyond the immediate network partners. IMPLICATIONS FOR THEORY AND PRACTICE: For theory, this paper highlights gaps in the extant literature on interfirm networks and proposes a unifying concept that can be utilized to address these gaps and to develop further theory in the area. For practice, this paper encourages managers not to limit their analyses of strategic alliances to immediate partnerships; it is also crucial to consider the partners and their resources, and reflect on how they are related to one another outside of the immediate partnership portfolio. ORIGINALITY AND VALUE: Network resource distribution is a novel concept that ties together and systematizes various strands of research on interfirm networks, thus providing a foundation for future research in the area. The concept is also amenable to detailed operationalization, facilitating subsequent quantitative testing of theoretical arguments combining firm resources and the structure of a network.