Innovation and internationalization in an emerging market context: Moderating effects of interpersonal and organizational social networks

Among this diverse set of actors, entrepreneurial firms are an interesting group due to their relevance as complementors, innovators, and sources of new ideas and business models, and given the fact that “entrepreneurship in an ecosystem may be different than in other contexts” (Zahra & Nambisan, 2011, p.5). Accordingly, Ojala et al.’s (2022) literature review calls for more studies that examine the role played by entrepreneurs in digital internationalization. The entrepreneurs considered operating on a digital platform such as Instagram crucial for creating their ventures. At the time, the main benefits perceived due to operating on the social media platform were networking embeddedness, customer relationship mechanisms, access to strategic and operational information, and broad reach, in addition to limited investments and costs. After the entrepreneurs had developed their initial products, they typically started out by selling to acquaintances, friends, and family members.

• This research provides an entrepreneurial decision-making model that extends effectuation theory and integrates it with extant research.
• The research question “What is the role of responsible business practices in internationalized SMEs?
• The tools involved are typically internet-enabled, such as forums and blogs, and can increase the visibility of a venture and actualize an affective commitment to stakeholders in the digital community.
• Typically, the firms acted either in response to unsolicited orders, or they targeted the Brazilian diaspora abroad.
• Among this diverse set of actors, entrepreneurial firms are an interesting group due to their relevance as complementors, innovators, and sources of new ideas and business models, and given the fact that “entrepreneurship in an ecosystem may be different than in other contexts” (Zahra & Nambisan, 2011, p.5).
• The third mechanism is continuance commitment to international business that entrepreneurs can foster over time in tandem with accumulated international experiential knowledge.
• The use of websites by these ventures was to some extent surprising; by the time of the first round of interviews, two of the firms had not yet developed websites and three others had started their websites only one or two years after inception.

This study does have a number of limitations, some of which are inherent to the case method, which does not allow statistical generalizations, but emphasizes the “understanding of a research phenomenon” (Ghauri, 2004, p.111) and analytic generalization (Yin, 2009). Thus, we used a sample with homogeneous characteristics, such as size, recency, or industry, but other types of sampling strategy (for instance, outlier or critical case sampling) might unveil different aspects of the phenomenon (Fletcher & Plakoyianni, 2011). All the firms were located in the city of Rio de Janeiro, Brazil, and participated in the same export management program. Also, although this was not a criterion for firm selection, all the firms used Instagram as their main social media platform. Therefore, different aspects might emerge if firms were engaged in other social media or even other types of DPEs.

Keywords

The mechanism relies on applying push-based tools for digital communication to facilitate interactions with known network contacts. The third mechanism is continuance commitment to international business that entrepreneurs can foster over time in tandem with accumulated international experiential knowledge. This research provides an entrepreneurial decision-making model that extends effectuation theory and integrates it with extant research. The resulting holistic entrepreneurial decision-making model explains the accelerated internationalization of digital firms.

Owing to the entrepreneurs’ very limited experience of building a profitable business partnership, the expansion was unsuccessful. The entrepreneurs almost lost their financial independence and the firm failed to realize its international sales forecasts. However, Alpha’s entrepreneurs learned more about the game development industry and used that knowledge to develop new and better games. The entrepreneurs’ digital capability, which now included analytical skills and a specific understanding of the global mobile-game industry, prompted the move toward a causation-based strategic decision to commercialize their first mobile game (a digital artifact). The innovative touch-screen technology exposed the game to new consumers in the digital mobile-game industry and was enabled by the emerging digital global marketplaces or digital platforms.

Literature Review

Even operating in a DPE, small entrepreneurial ventures from emerging economies engage in diasporic internationalization due to the lack of language capabilities and of network contacts in foreign markets with individuals other than those of their own nationality. The empirical evidence suggests that following the effectuation process by relying on either a mindset- or a means-based approach may involve adopting new means or setting new goals. A new finding pertaining to Sarasvathy’s (2001) model is that doing so requires harnessing learning and international experiential knowledge.

• The entrepreneurs’ extensive international experiential knowledge meant they recognized that their brand would deteriorate rapidly if Alpha relied only on leveraging the brand through international consumer firms.
• First, we wrote a detailed chronological report on each case, aiming at how the phenomenon evolved over time (Ghauri, 2004) and the logic behind each firm’s decisions.
• The resulting holistic entrepreneurial decision-making model explains the accelerated internationalization of digital firms.
• Three firms had also established physical stores in the domestic market, but one of them had closed its store due to the Covid-19 pandemic.

Below we have also summarized Alpha’s accelerated internationalization discourses to provide telling insights into the phenomena explored. With experiential knowledge, emphasis is placed on the change in the services the human resources can supply which arises from their activity… experience itself can never be transmitted, it produces a change – frequently a subtle change – in individuals and cannot be separated from them (p. 53). Material preparation and data collection were performed by Luiza Neves Marques da Fonseca and Clarice Secches Kogut.

Appendix: Alpha’s timeline

Even less attention has been paid to the impact of DPEs (Jean et al., 2020) and social media platforms in particular (Fraccastaro & Gabrielsson, 2018; Rialp-Criado et al., 2020) on firm internationalization. Lee et al. (2022, p.1) pointed out that the digital internationalization of small firms using social media platforms “is acutely absent” from the extant literature, despite a few exceptions (Fraccastaro et al., 2021; Lee et al., 2022; Sigfusson & Chetty, 2013). In addition, the extant literature has mostly neglected the role of social media platforms in the internationalization of new ventures in emerging economies (Jean et al., 2020; Lee et al., 2022; Monaghan et al., 2022).

Network embeddedness (Johanson & Vahlne, 2009; Vahlne & Johanson, 2017), the most relevant benefit provided by DPEs in general (Parker, 2016) and social media platforms in particular (Jiménez-Castillo & Sánchez-Fernández, 2019), is therefore not guaranteed. Quite the contrary, although digital internationalization does facilitate contacts and transactions, the scope of internationalization remains within the boundaries of the entrepreneur’s or the venture’s network. This situation is explained by the liability of outsidership (Johanson & Vahlne, 2009), that is, the venture’s reach is limited by how much it can expand the original network using the social media platform. Therefore, developing international customers in a DPE does not happen as easily for small entrepreneurial ventures, particularly those from emerging economies, as the extant literature suggests (e.g., De Reuver et al., 2018; Nambisan et al., 2019). We contribute to the earlier international entrepreneurship literature by extending the research on entrepreneurial decision-making into the digital networking context.

2 DPEs and International Entrepreneurship

They were monitoring other platforms to assess whether the brand should be offered on other platforms simultaneously. Growth-related risks, such as the ability to respond quickly to customer demand, were the final set of risks perceived by the entrepreneurs. The theoretical implications of our findings are related mainly to the type of digital diasporic internationalization examined in this study. There are, however, a number of issues that we can raise related https://bookkeeping-reviews.com/the-impact-of-the-entrepreneurs-social-networks-on/ to what happens when a new venture internationalizes beyond the diaspora. As new ventures advance in their internationalization process, they need to further improve their digital capabilities, which in turn will enable them to expand their internationalization. While some firms served a few customers abroad and delivered their products using Brazilians who carried them in their suitcases, others adopted more professional procedures for handling foreign orders.

• Lee et al. (2022, p.1) pointed out that the digital internationalization of small firms using social media platforms “is acutely absent” from the extant literature, despite a few exceptions (Fraccastaro et al., 2021; Lee et al., 2022; Sigfusson & Chetty, 2013).
• A specific strand of the ecosystems literature deals with entrepreneurial ecosystems (Stam & Spigel, 2016), considering traditional forms of spatial agglomerations, such as clusters (Auerswald & Dani, 2017) and networks of relationships that are not location-bound (Alvedalen & Boschma, 2017).
• Yet, even if the digital diasporic internationalization process examined here does not follow the logic of the original or the revised Uppsala model, there is a substantial leap when the firm decides to go beyond the diaspora, and perhaps it is from there on that the Uppsala logic applies.
• Within the mindset-based approach – a novel process revealed by our research – the entrepreneur mindset is driven by a global vision, which steers the search for new network contacts, initially with a focus on the question of how can I/we interest others?
• Because people describe how they think about a topic, event, or experience through discourse, this method allowed us to analyze the changes in meaning structures over time and, thus, to understand the interviewees’ decision-making processes and digital entrepreneurship during the firm’s internationalization process.

In the case of social media platforms, one of their unique characteristics is the amount of user content that is created and shared (Alaimo et al., 2020), which can be accessed by businesses to improve their product positioning and marketing strategies. Another advantage is the potential to share intangible resources such as brand recognition and members’ reputations, both which could be used to spur internationalization (Nambisan et al., 2019). DPEs can also provide specific advantages for internationalization, reducing transaction costs (Banalieva & Dhanaraj, 2019). Furthermore, DPEs may play a role in reducing small firms’ liabilities of foreignness, outsidership, smallness and newness (Arenius et al., 2005; Hervé et al., 2020; Hurmelinna-Laukkanen et al., 2020; Nambisan et al., 2019). The Alpha entrepreneurs’ initial international experiential knowledge combined with the danger of overdependence and enhanced digital capability (as new means) in mobile-game development was the foundation of their self-efficacy.

Regarding practical implications, we hope the study’s results can inspire and stimulate critical thought by entrepreneurs regarding how they can exploit DPE-related resources to grow in international markets. The small venture internationalization process in a DPE may advance beyond the limits of the diaspora network, or it may stop after incremental gains as the firm/brand increases its visibility among diaspora members. Improving digital presence, at this https://bookkeeping-reviews.com/ point, included not only the development of extra digital capabilities but also the adoption of a multihoming strategy (Kretschmer et al., 2022). For those firms wishing to expand their international presence, it also meant operating foreign pages in the social media and new multi-language websites, suggesting a virtuous cycle of mutual reinforcement in the internationalization-digitalization interplay (Bergamaschi et al., 2021; Dagnino & Resciniti, 2021).

Further commitment to internationalization means not only reinforcing the interplay between internationalization and digitalization but also, at the same time, developing localness. Moreover, the entrepreneurs will have to deal with differences in the cultural and the institutional environment of the markets they enter, particularly developed markets, and they will have to be aware of differences in business practices. Their firms will need to develop a new set of capabilities (Cenamor et al., 2019; Elia et al., 2021) to deal with the new environments.