Online via Zoom (registration: Szimlerk@ceu.edu)
Chair: Michael LaBelle, Associate Professor, CEU, Department of Economics
Manlio Del Giudice, Full Professor of Management at the University of Rome (External member)
György Bőgel, Associate Professor, CEU Department of Economics and Business (Advisor)
Yusaf Akbar, Associate Professor, CEU Department of Economics and Business (Internal member)
Jonathan Calof, Full Professor, Telfer School of Management, University of Ottawa Department of Economics (External examiner)
Yusaf Akbar, Associate Professor, CEU Department of Economics and Business (Internal examiner)
The doctoral thesis is available for inspection at the CEU Department of Economics and Business.
Purpose – The firm’s network is gaining a great deal of attention as an important nexus of study as it is considered to be a significant holder and influencer of a firm’s knowledge, which in turn is widely recognized as a unique source of competitive advantage. Although the literature tends to focus on social networks or inter-firm relationship networks, it has seldom addressed networks at the operational level which involves examining the influence of the firm’s internal configuration of activities on growth. This study aims to find evidence of the extent to which network focus plays a role in the internationalization and scalability of young enterprises. Specifically, the study posits that international new ventures (INVs) are potentially recognizable in the early years by the idiosyncratic use of the network as a holder of knowledge and information in a strategic internationalizing posture. In this regard, the network is viewed as a key component of the coordination of value chains in the combination with technological learning and ambidexterity, namely exploitation and exploration activities.
Design/methodology – The study adopted a sequential, mixed-methods approach (quant-Qual) with an emphasis on the qualitative study. In the first (quantitative) stage, the research question tested the significance of network factors (network embeddedness, technological learning, ambidexterity) in influencing the level of international expansion and scalability, as well as through moderating effects. Surveys aimed at 200+ young enterprises (up to seven years old) with the potential of becoming INVs were disseminated to a wide range of innovation hubs across Europe, resulting in 40 usable responses. Five firms were then purposively selected in order to allow a further, in-depth (qualitative) investigation via online calls with CEOs or members of top management. During this stage, the quantitative results were thoroughly analyzed, thereby deepening understanding of the moderating role of organizational connectedness, which proved to be significant in the relationship between network focus and scalability. To this end, the study looked at the knowledge information flows at the activity level in the value network to highlight the mechanisms and processes in place in the business scalability path.
Findings – In the quantitative analysis, the network focus resulted in significant scalability only if moderated by organizational connectedness. The qualitative study confirmed this result, finding organizational connectedness to be a critical factor for scalability, relying on agile structures and showing high sensitivity to the impact of network embeddedness.
Technological learning and ambidexterity were found to be two instrumental factors that, when combined with network embeddedness, strengthen the process of acquiring new knowledge and information about internationalization and high-potential opportunities.
The case analysis emphasized that network management and knowledge information flows, occurring along the value network, must be analyzed against the relative phase to which the firm has evolved. Through the adoption of a phase-model approach, a better strategic posture of the firm towards network focus becomes more evident. In fact, while in the emergence phase, the identity-based network and cohesiveness are found to be predominant. In the early growth and expansion phases, the network strategy shifts toward a calculative-based network directed at filling structural holes and reaching a globally relevant network.
Overall, the qualitative study findings emphasize the need to develop a network-based strategy to stimulate growth systematically, which in turn will facilitate the optimization of knowledge and information towards scalability. The interviewed firms viewed network focus mostly from an operational standpoint, and less from a strategic one.
Practical implications – The study’s main applicable finding was the proposed adoption of a value network approach in a firm’s growth strategy. The cases analyzed demonstrated that increasing internal and external connectedness strongly benefits young firms that can effectively manage resources that emerge from the network (in primis knowledge and information flows) towards scalability and international expansion. The implications of the findings are also pertinent to public policy that supports the internationalization of young enterprises. In particular, there is a need to recognize, at an early stage, INVs’ potential and to support their strategies in network development by identifying key activities and attributes at different phases.
Research limitations – While the quantitative sample size was relatively small, the qualitative side of the research could balance this limitation by conducting a retrospective, longitudinal analysis that delved into the internationalization path of each selected case.