THE DEVELOPMENT OF THE FOREIGN OPERATION MODES DURING THE GROWTH OF INTERNATIONAL NEW VENTURES

Abstract

Earlier studies have indicated that there is an emerging amount of firms that internationalize and even globalize aggressively. The International New Ventures (INV) grow internationally from inception without the benefits of organized structure, previous business knowledge and experience or large resource pools. The operation mode strategies of the INVs were investigated during the growth of the venture and in the influence of the entrepreneurial orientation of the firm. INVs were identified as firms that within three years from inception were able to generate 25 % of their sales from outside the home country. The operation modes of these firms were categorized using the criteria of direct-investments and function of the operations. The growth of the firms was studied through four growth phases adapted to the characteristics of INVs. Furthermore the influence of international entrepreneurial orientation on the foreign operation mode of the firm was examined. The data for the empirical analysis was collected through an Internet-based survey. The sample firms were contacted first by phone after which the survey was emailed to the respondents. The sample consisted of 202 Finnish-based firms that were established earliest in the year 1985 and met the INV criteria. The results of the study indicate that the commitment of the INV deepens when it advances through the growth phases. The entrepreneurial orientation has more detailed influences on the operation modes. The companies that have highly innovative, risk-taking and proactive posture do prefer deeper involvement and commitment in foreign markets. This research is part of the "Born Globals - Growth Stages and Survival" -cooperation project between the University of Vaasa, Aalto University School of Economics and six firms. I would like to thank the financiers of the project: the LIITO-program of the Finnish Funding Agency for Technology and Innovation (Tekes), and the partner firms.