Academic journal article South Asian Journal of Management

The Internationalization Process of Italian Fashion Firms: Looking for an Analytical Generalization

Academic journal article South Asian Journal of Management

The Internationalization Process of Italian Fashion Firms: Looking for an Analytical Generalization

Article excerpt

This study aims to explore the process of internationalization in Italian fashion firms, focusing on the strategy-structure fit and the role of the founding team in providing such a fit. On the basis of a single case study of a leading fashion firm, it emerges that classic deterministic theories of strategy-structure fit in growing firms offer a poor guide. The strategy is entirely 'emergent' and inspired by the specific talents of the founding team. Evidence confirms the causal link between strategy and structure: company structure is network-based and evolves according to the emerging strategy. However, the development route does not follow any deterministic model: The Uppsala model of incremental and cognitive internationalization, especially in its revised and network-based form, appears to be a more appropriate reference, being characterized by creative dynamics that are constantly evolving, in line with the founders' vision and strategy.

INTRODUCTION

This study aims at exploring the process of internationalization in the Italian fashion industry, focusing on the strategy-structure fit and the governance of the 'founding team' (Beckman, 2006) in providing such a fit.

A coherent fit between strategy and structure is considered, in fact, a necessary condition for growth and it is one of corporate governance's main responsibilities (Chandler, 1962). In fast growing Small and Medium Enterprises (SMEs) such governance of the strategy-structure fit is provided by the founder or by the founding team (Loane et al, 2007). The issue is especially critical for growing, internationalizing SMEs in the Italian fashion industry because of the special relevance of change that characterizes both the process and the industry (Figure 1).

The role of the founding team in the growth of the firm has been frequently investigated in technology-based ventures and empirical support has been provided for some findings. Eisenhardt's seminal work on USA semiconductor ventures has verified significant main and interaction effects for the founding team on firm growth (Eisenhardt and Schoonhoven, 1990), with specific reference to: 'previous joint work experience'; 'founding team size'; and 'variation in the industry experience of the founding team'. Others have focused on commitments and resources in technologybased start-ups in Taiwan. Combining a resource -based view and social capital theory; they have shown that resources and trust gained by the entrepreneur will enhance the commitment of founding team members which will further contribute to the competitive advantage of new technology-based firms (Lei-Yu et ah, 2009, p. 345). Colombo and Grilli (2005), in accordance with competence -based theories, show a positive relation between the growth of new technology-based Italian firms and founders' years of university education in economic and managerial fields and to a lesser extent in scientific and technical fields; similarly, based on their econometric estimates, prior work experience in the same industry of the new firm is positively associated with growth, while prior work experience in other industries is not; furthermore, it is the technical work experience of the founders as opposed to their commercial work experience that determines growth in technology-based Italian firms (Colombo and Grilli, 2005). The relevance of founding team experience for enhancing the chances of survival and growth of a new venture has also been highlighted in a representative sample of Swedish new ventures (Delmar and Shane, 2006). Stam and Elfring (2008), using a data set of 90 new ventures in the emerging open source software industry in the Netherlands, show that social capital that is embedded in the intra- and extraindustry ties of a new venture's founding team influences the relationship between the firm's entrepreneurial orientation and its performance. Beckman (2006) has shown, for a sample of 170 young high-technology firms in California's Silicon Valley, that shared understandings that emerge from common prior company affiliations and the creativity associated with diverse prior company affiliations have an impact on firm behavior and growth: shared understanding suggests easier implementation and speed, whereas unique knowledge is associated with innovation and change (Beckman, 2006, p. …

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