Accelerated Internationalization Among Inexperienced Digital Entrepreneurs: Toward a Holistic Entrepreneurial Decision-Making Model.
| Verfasser | Gabrielsson, Mika |
| Posten | RESEARCH ARTICLE |
1 Introduction
Digital technologies enable entrepreneurial activity that incorporates novel technology and creates new business ventures. Consequently, there has recently been additional room for accelerated internationalization, particularly during the COVID-19 pandemic (see e.g., Fraccastoro et al., 2021a). The current research perspective is that digitalization is changing entrepreneurs' decision-making processes and outcomes such that they are becoming more fluid and feature goals that are less predefined than previously (Nambisan, 2017). Jiang and Tornikoski (2019) reported that inexperienced entrepreneurs face several forms of uncertainty, which they neither fully comprehend nor know how to address. Interestingly, the number of firms in several industries successfully achieving accelerated internationalization, despite their entrepreneurs being inexperienced, seems to be growing (Luostarinen & Gabrielsson, 2006; Rosenberg, 2018). The common feature of many of these entrepreneurs seems to be that they run digital ventures that successfully leverage networks (Bell & Loane, 2010). This study aims to extend extant research by investigating entrepreneurs' decision-making in connection to the networking of digital firms during accelerated internationalization.
Prior research proposes that entrepreneurial decision-making logics, such as effectuation, can facilitate networking and mitigate the resource shortfall that can hinder young and inexperienced firms (e.g., Dew et al., 2011; Galkina & Chetty, 2015; Prashantham et al., 2019; Sarasvathy, 2001). A complementary perspective stems from an emerging digital entrepreneurship stream of research suggesting that different elements of digitalization--such as artifacts (e.g., mobile apps), platforms (e.g., Apple Appstore), and infrastructure (e.g., social media)--facilitate the decision-making and networking of entrepreneurs to potentially enable accelerated internationalization.
The empirical part of this study explores a globally renowned and successful digital entertainment company, to which we assign the pseudonym Alpha. Alpha has expanded from being a mobile-game developer to creating movies and being at the center of an extensive franchising business. The firm started as a university project and became a global industry leader in less than 15 years. The firm has faced many key events and made some great decisions throughout its existence despite its entrepreneurs having almost no prior international business experience or networks at the outset. Alpha's success runs counter to the conventional wisdom on international business that holds entrepreneurs' international experiential knowledge determines venture creation, growth, and foreign expansion (Eriksson et al., 1997; Kessler & Frank, 2009; Politis, 2005). Effectuation theory (Sarasvathy, 2001) does not explain accelerated internationalization by inexperienced entrepreneurs running digital ventures; albeit the extension of the theory to interpret networking behavior is beneficial (Galkina & Chetty, 2015; Prashantham et al., 2019). The digital entrepreneurship stream of research has not addressed exceptional internationalization behavior either (Nambisan, 2017), although digitalization does have an intuitive appeal to explain this exceptional behavior.
Based on an extensive literature review of these two streams, we note a research gap around examining entrepreneurs' decision-making in connection to networking within the digital community during accelerated internationalization. The current research also addresses the calls for studies focusing on digital entrepreneurs involved in accelerated internationalization, covering the entire firm lifecycle from birth to maturity (Cavusgil & Knight, 2015; Coviello, 2015). Consequently, this study focuses on the following research question: How do entrepreneurs' decision-making logic and networking within the digital community interact over the course of accelerated internationalization?
The methodological approach selected in the current study responds to calls in recent international business research suggesting that the available qualitative research could benefit from greater methodological transparency (e.g., Ji et al., 2018). Instead of the currently popular positivistic approach, we are guided by the philosophy of social constructionism (Berger & Luckmann, 1967; Burr, 1995; Ritchie et al., 2013), the ontological assumption of subjectivism, and the subjective epistemological assumption (Eriksson & Kovalainen, 2015), associated with the data of specific descriptions (Denzin & Lincoln, 2011; Ritchie et al., 2013), such as discourses, understood as comprising meaning frames (Edwards, 1997; Hall, 1997). Birkinshaw et al. (2011) suggested that the use of interpretative qualitative methods and techniques can provide a comprehensive understanding of different processes in international business research. When researchers open organizational processes with questions based on how, who, and why, qualitative methods can reveal individual and collective actions as they unfold over time (Doz, 2011).
We contribute to the earlier international entrepreneurship literature by extending the research on entrepreneurial decision-making into the digital networking context. More specifically, we frame our investigation with the literature of effectuation and digital entrepreneurship and also clarify the roles of a global mindset, entrepreneurial means, commitment, and learning and knowledge in the internationalization of inexperienced digital firms.
Accordingly, we propose a revised entrepreneurial decision-making model, advocating three decision-making alternatives applied by entrepreneurs to increase commitment within the digital community. The value of that contribution (see Corley & Gioia, 2011) lies in the new entrepreneurial decision-making model presented explaining accelerated internationalization. That explanation also makes a major contribution to international entrepreneurship research by unveiling entrepreneurial decision-making in the context of accelerated internationalization (Galkina & Chetty, 2015; Oviatt & McDougall, 1994; Prashantham et al., 2019; Sarasvathy, 2001). The explanation is particularly apposite regarding networking within the digital community. Furthermore, our model acknowledges the role of new digital environment and the emergence of digital entrepreneurship in accelerating internationalization, which has largely been ignored and may partly explain this behavior (Nambisan, 2017). Finally, the proposed framework contributes to research examining the maturing of firms undertaking accelerated internationalization (see also, Gabrielsson et al., 2014).
2 Theoretical Review
Our conceptual foundation is based on a systematic literature search of the most relevant journals related to studies investigating effectuation, networking, and digital entrepreneurship. We used Reuter's Web of Science database and EBSCOhost (multiple databases) to perform an advanced search within relevant journals publishing international entrepreneurship research, such as Entrepreneurship Theory and Practice, Journal of the Academy of Marketing Science, Journal of Business Research, Journal of Business Venturing, Journal of International Business Studies, Journal of International Entrepreneurship, Journal of Marketing, Journal of Marketing Research, Journal of World Business, Management International Review, and Small Business Economics. We considered articles published up until 2021. We searched for the keywords internationalization, accelerated internationalization, effectuation, commitment, and digital entrepreneurship appearing anywhere in the text (including the title, abstract, keywords, and main text). Interestingly, the literature reviewed revealed that there is one stream of research under label entrepreneurs' decision-making logic that covers research dealing with use of effectuation logic and networking. Moreover, there is another stream of research that can be labeled as digital entrepreneurship, which provides insights into how entrepreneurial firms can internationalize within the digital community. However, there is no mention in the literature about how entrepreneurial decision-making logic and related networking applies to digital entrepreneurship in the context of accelerated internationalization. The following sections review earlier research and draw conclusions based on those studies; we present our positioning against the identified key articles in Table 1.
2.1 Entrepreneurial Decision-Making
Earlier research suggests that international experiential knowledge exerts a key influence on accelerated internationalization, such that prior knowledge of foreign markets can enhance the speed with which an entrepreneurial team perceives opportunities (Oviatt & McDougall, 2005; Reuber & Fischer, 1997). Entrepreneurs are always at the heart of decisions and are also the key individuals from a learning perspective. Penrose (1966) asserted.
Experiential knowledge can only be learned through personal experience. 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). The balance between entrepreneurial resources (e.g., international experiential knowledge) and international market conditions (e.g., market turbulence and position in a network) can cause uncertainty for entrepreneurial firms expanding internationally relatively soon after their foundation (see, e.g., Magnani & Zucchella, 2019). While more information can address uncertainty (Luce & Raiffa, 1957), decision-makers never have full access to all available information (Kirzner, 1973). Hence, they are cognitively limited and likely to fail to solve highly complex...
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