Born Globals and Entrepreneurial Perspective

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    Born Globals and Entrepreneurial Perspectives

    An exploratory study of entrepreneurial perspectives & Born

    Globals.

    Authors: Sahibzada Muhammad Ziaullah

    Muhammad Ahsan Hassan

    Supervisor: Vladimir Vanyushyn

    Umea School of Business and Economics

    Spring Semester 2012

    MastersThesis, Second year, 15 hp

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    Acknowledgement

    Completion of this theoretical research within the scope of a 15-credit thesis was a

    challenging job requiring consistent concentration and hard work. Thus we considered it

    an opportunity for an effective learning experience to work competently and to bridge

    between academic demand and future anticipation of professional work.

    We believe, it was our supervisor Vladimir Vanyushyn who kept us motivated and

    focused, in times when we were down in our energies. Indeed, his supervision made it

    possible to finish this work in a true spirit and on time. We are thankful to CIIR (Center

    for Inter-organizational Research) and all of its members, for their encouragement. We

    are thankful to our families for being a permanent source of encouragement and support

    for us. We are thankful to USBE for maintaining a wonderful research environment

    with cooperation. We are thankful to God for providing us wonderful lives.

    Sahibzada Muhammad Zia Ullah Muhammad Ahsan Hassan

    samu0013@student.umu.se ahsan_hassan@msn.com

    mailto:samu0013@student.umu.semailto:samu0013@student.umu.semailto:ahsan_hassan@msn.commailto:ahsan_hassan@msn.commailto:ahsan_hassan@msn.commailto:samu0013@student.umu.se
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    Abstract

    This research study further strengthens academic research on Born Globals (BGs). It

    provides an understanding concerning the role of entrepreneurial perspectives in rapid

    internationalization process of Born Global SMEs, which do not follow the traditional

    incremental models of internationalization.

    A systematic literature was synthesized by reviewing past 13 years of academic

    developments in the area of Internationalization and specifically BGs with Web of Science

    used as a primary database.

    In order to encompass the whole longitudinal process of BGs, we decided to use a theoretical

    framework based on distinguishing characteristics of Pace Scale and Pattern. These are the most

    commonly agreed characteristics that differentiate a Born Global from traditional firm that

    follow incremental internationalization process. In order to understand the creation of these

    three distinguishing characteristics we identified not only the underlying factors that give rise to

    these distinguishing characteristics but also the role they play in development of thesedistinguishing characteristics. Further, this role is divided into corresponding developmental

    phases (Pre-startup, Pre-Internationalization and Post-Internationalization).

    Then by interpreting this role in terms of entrepreneurial perspectives, we have tried to find out

    the role of entrepreneurial perspectives in corresponding developmental phases and ultimately

    formation of distinguishing characteristics which symbolize a Born Global.

    Two entrepreneurial perspectives involved in venture development process i-e Causation and

    Effectuation that were broadly explained in the literature. According to Sarasvathy: Causation

    is based on prediction logic whileEffectuation that is based on control logic (Sarasvathy,

    2001, p.243). Both are considered essential areas of human reasoning and entrepreneurial

    decision-making. Further Data was analyzed in connection with BGs distinguishing

    characteristics, underlying factors and their relation with entrepreneurial perspectives of

    Causation and Effectuation

    The findings showed that BGs and the creation of distinguishing characteristics (Pace Scale and

    Pattern) are explained by entrepreneurial perspective of Effectuation while Causation was

    contradictory and further explanation to causation was abandoned. Effectuation theory based on

    it four principles fits with the development of Born Global firms characteristics and its

    Internationalization phases. The logic has improved the understanding of a firm international

    market behavior to internationalize since inception and its entrance into several markets. The

    core supporting areas where effectuation better explains the BGs are; to create opportunities by

    exploiting its means, that are the entrepreneurial traits, knowledge of corridors and social

    networks. These means are helping a firms in origination, development of its pace, scale, pattern

    and further supports in phases of internationalization. Similarly the ways to limit the loss,

    developing partnership and acknowledging the contingencies were the key effectual areas

    explained the BG distinguishing characteristics and contributed to the Phases of

    internationalization. Over all effectual logic gives insight to the BG firms development, its

    operation, expansions and fits with the explanation of rapid internationalization concept.

    Key words: Born Globals, Ef fectuati on, Causation, D istingui shi ng Char acter istics, Pace

    Scale, Pattern, Rapid I nternationali zation , SMEs

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    ContentsAcknowledgement....................................................................................................................... i

    Abstract ......................................................................................................................................... ii

    1 Introduction............................................................................................................................... 5

    1.1 Background.................................................................................................................... 5

    1.2 Problem Discussion....................................................................................................... 5

    1.3 Born Globals and Entrepreneurial Perspectives .............................................................. 6

    1.4 Problem Statement......................................................................................................... 7

    1.5 Purpose ........................................................................................................................... 7

    1.6 Conceptual Framework.................................................................................................. 7

    1.7 Key Definitions............................................................................................................ 10

    1.7.1 Small and Medium Enterprises................................................................................. 101.7.2 Internationalization..................................................................................................... 10

    1.7.3 Born Globals.............................................................................................................. 10

    1.7.4 Causation .................................................................................................................... 10

    1.7.5 Effectuation................................................................................................................ 11

    1.8 Limitations................................................................................................................. 11

    1.9 Outline of the Research Study..................................................................................... 12

    2 Methodology............................................................................................................................13

    2.1 Choice of the Subject...................................................................................................... 13

    2.2 Preconceptions............................................................................................................... 13

    2.3 Research Philosophy...................................................................................................... 14

    2.4 Research Design ............................................................................................................. 14

    2.5 Research Strategy ............................................................................................................ 15

    2.6 Research Methods........................................................................................................... 15

    2.7 Data Collection................................................................................................................ 16

    2.8 Data Analysis.................................................................................................................. 16

    3 Causation and Effectuation Approach.....................................................................................17

    3.1 Causation and Effectuation............................................................................................ 17

    3.2 Key Principles of Effectuation and Casual Contrast...................................................... 22

    3.3 Dynamic Model............................................................................................................... 24

    3.4 Summary ......................................................................................................................... 25

    4 Review &a