Purpose
The extant research on early internationalizing ventures focuses primarily on these ventures’ start-up phase or their initial internationalization. Scarce attention is paid to how these ventures grow, if at all, beyond their start-up phase or initial internationalization phase. This paper aims to explore how international new ventures transition from the internationalizing phase to the phase of being international, and whether they actually made it to that phase. Understanding whether and how these ventures reach their “made-it” point would contribute to our understanding of how early internationalization affects a venture’s survival and growth. In this, the authors draw on the dynamic capability theory of the firm.
Design/methodology/approach
Given the scarcity of theoretical understanding and empirical evidence in this substantive area of research, the authors adopted a multiple case study methodology for the purpose of theory building. Following an intensity sampling strategy, they purposefully selected information-rich, but not extreme two-case companies. The authors initially collected unobtrusive data in the form of running records and mass-media news reports from the inception of the case companies. They then conducted in-depth interviews with key decision makers of the case companies, namely, their co-founders and CEOs. Critical incident technique guidelines for data analysis were employed.
Findings
Grounded in data, the following constructs emerged related to value creation: strategic experimentation, gestalt tensions and legitimacy lies. Entrepreneurs experiment with and reconfigure their venture at several levels: goal (vision), decision (strategic) and behavioral (tactical) levels of the organizational gestalt to reach a threshold level of practiced activity. Entrepreneurs’ strategic experimentation efforts are fueled by tensions that exist at these three levels of the organizational gestalt. During this experimentation process, entrepreneurs may tell legitimacy lies to legitimate their ventures in the eyes of their stakeholders.
Research limitations/implications
Given the instrument the authors used to explore the issues and concerns identified above, the results are limited in scope. However, a number of questions and conjectures are put forward to guide future research in this currently under-researched area of international entrepreneurship. The authors have also suggested using the concept of turning point in future research to advance the understanding of the dynamic capability view of international new ventures.
Practical implications
Understanding whether and how international new ventures reach their made-it points would contribute to the understanding of how early internationalization affects international new ventures’ organizational survival and growth.
Originality/value
The authors have put forward the concept of the made-it point to aid international entrepreneurship researchers to investigate the continued growth, evolutionary patterns and the organizational survival of international new ventures.
A Capabilities Perspective on the Effects of Early Internationalization on Firm Survival and Growth
