Academic journal article International Journal of Entrepreneurship

What Do We Know about the Core Competencies of Micromultinationals?

Academic journal article International Journal of Entrepreneurship

What Do We Know about the Core Competencies of Micromultinationals?

Article excerpt

INTRODUCTION

Traditionally, small and medium-sized firms (SMEs) were considered to seldom proceed beyond the export stage in their internationalization ventures. Advanced modes of internationalization involving constellation and investment (C&I) modes, such as licensing, franchising, joint ventures, strategic alliances, and subsidiaries, were typically used to characterize the international growth of large firms. The word multinational has been traditionally reserved for activities of these large international firms (e.g. Caves, 1982; Oman, 1984). However, C&I modes of internationalization have been increasingly used by SMEs that seek to gain competitive and collaborative advantages worldwide. Recent research (e.g. Dimitratos, Johnson, Slow, & Young, 2003; Ibeh, Johnson, Dimitratos, & Slow, 2004; Borchert & Ibeh, 2006; Allison & Browning, 2006; Ibeh, Borchert, & Wheeler, 2009; Prashantham, 2011) has acknowledged the emergence of micromultinationals (mMNEs), which are SMEs "that control and manage value-added activities through constellation and investment modes in more than one country" (Dimitratos et al., 2003, p. 165). Mathews & Zander (2007) add to this literature, highlighting the innovation integration strategies of mMNEs and identifying specific mMNEs that serve as examples of this emerging class of firms. Further research into this growing and special category of internationalized firms is warranted, and mMNEs thus form the focus of enquiry in this study.

Limited evidence exists on the success factors related to mMNE international activities. Knowledge of SME export operations is extensive, yet there is a lack of studies investigating the enablers to internationalization for small firms that go abroad through C&I modes. In order to study this theme, we borrow concepts from the resource-based view of the firm, which provides valuable insights into how organizational routines and capabilities may render a competitive advantage likely to provide rents to the firm. An equally significant theme for the mMNE research agenda is how these small firms can overcome their resource constraints and effectively manage to prevail over complexities stemming from both organizational inefficiencies and environmental challenges (Ibeh et al., 2009).

Providing insights into these issues would have valuable research, managerial and public policy interest. Researchers would be able to develop a more coherent body of knowledge concerning this unique category of internationalized SMEs. mMNE managers may be able to attain superior organizational performance. Public policy organizations can formulate courses of action and intervention measures designed to assist mMNEs in their internationalization ventures. Therefore, the research objective of this study is to determine the competencies upon which these firms may rely on in order to successfully expand abroad.

The article proceeds as follows. In the next section we explore the existing body of knowledge on mMNEs and key themes in the resource-based view literature that may be related to the organizational competencies of these firms. Following this, we elaborate on the case study methodology we followed to collect data on the investigated firms. We then discuss the empirical findings structured around success factors that enable mMNEs to succeed abroad. Finally, we draw implications for theory, practice and public policy.

RESEARCH BACKGROUND

Although there are many studies on the internationalization of small firms (see Coviello & McAuley, 1999 and Manolova & Manev, 2004 for literature reviews), no cohesive body of literature on mMNEs appears to exist. The body of literature that is perhaps the closest to mMNEs is that of international new ventures or born globals. These firms become 'global' from the beginning of their business operations, often disregarding their domestic markets (McDougall et al. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.