Entrepreneurial orientation

The relationship between entrepreneurial vision and internationalization is a long established (Etemad 2004) but relatively unexplored area in the field of interna-tional business literature. This section does not explore internainterna-tional entrepre-neurship per se, but rather investigates the implications of entrepreneurial tion in market knowledge competence. For this purpose, entrepreneurial orienta-tion is seen in a variety of contexts: the orientaorienta-tion of the firm’s top management team and employees towards expanding exports, the building of a knowledge sharing environment and the learning orientation of the firm. Within the context of this study and the knowledge-based view of the firm, international orientation is approached through linking the managerial ability to utilize resources effec-tively and efficiently for the purposes of export expansion. More specifically, entrepreneurial orientation focuses on the efforts the top management team of a small- and medium-sized firm put on creating a proactive strategy to search for foreign market knowledge, on setting up an open and decentralized organizational environment and on the sharing of key knowledge.

The knowledge-based view explains a firm’s success from the viewpoint of its ownership of difficult-to-imitate resource combinations (Wernerfelt 1984; Barney 1991). Resources are assets which enable a firm to conceive and implement strat-egies to improve competitive positions. Because the knowledge and learning of members of the top management team is individual and specific and which cannot be transferred unless an individual moves to another company, the top manage-ment can be said to represent a strategic managerial resource for a firm. The ex-perience, strategic vision and the behaviour of the managerial resource have been mentioned as crucial to international success (Oviatt and McDougall 1994).

The analysis of the case studies reveals information concerning the distinctive tasks of top management and export managers in software vendor firms. Collec-tively, top management and export manager roles are found to be related to an active search for international opportunities to sell the product and to organize knowledge of the market within the firm. While the top management’s efforts relate to providing the conditions for this active search and the free flow of

infor-mation within the firm, the export managers act as the front-line personnel who explore international opportunities. In the case of smaller- and medium-sized firms, the smaller the firm is the more the role of top managers and front-line ex-port managers tends to overlap. For SMEs from the high technology sector, when the external environment is constantly changing, the commitment of resources to the market is impossible without creating internal resources; top and front-line managers must have a common vision in creating resources for the market. Thus, the roles of top management and front-line export managers seem to converge here as well.

The above-mentioned overlap can also be explained by the phenomenon of ‘orga-nizing for knowledge’, as both top and front-line managers act to organize the knowledge of the external and internal markets, particularly relevant to those ac-tivities which require managerial orientation and input. These arguments also coincide with one of the main themes in entrepreneurship studies, which concen-trate on why, when and how opportunities for the creation of goods and services come into existence. Shane and Venkataraman (2000) mention entrepreneurial opportunities as those situations in which new goods, services, raw materials and organizing methods can be introduced and sold at a greater cost than the cost of producing them. It is clear that the top management’s vision to support an open environment in the firm and to transfer and share knowledge is one factor which facilitates front-line export managers to perform the necessary activities to intro-duce and sell products and to develop procedural knowledge related to exports within the firm.

Organizing knowledge from various sources has been stressed as critical in the search for international opportunities (Shane 2000). Knowledge related to the foreign market and customers is organized from external sources such as local partners and disseminated within the organization. Shane (2000) argues that a flow of information from these external sources to within the firm creates symme-tries between external and internal information. This information symmetry is further linked to increased opportunity identification by managers. For example, if technical (R&D) and market planning teams do not share a common vision, the matching of internal and external knowledge may not take place. In a similar vein, Cohendet, Llerena and Marengo (2000:107) also support the idea that this entrepreneurial function is a source of competitive advantage for firms, as entre-preneurs create an external environment by developing certain business relation-ships. Moreover, they build an internal configuration of the firm-specific re-sources that meet the requirements of the external environment. Thus, through an entrepreneurial function, entrepreneurs create a link between the external and the

internal environments. To internalize the external information, firms sometimes need to experiment with new products and upgrade internal routines.

Morgan et al. (2003) state that firms belonging to a turbulent and dynamic envi-ronment must pursue a persistent change in behaviour, and learn to deal with in-formation acquisition, dissemination and transfer processes in order to sustain improved performance. Jaworski and Kohli (1993) have also identified that a positive attitude, meaning the willingness of individual persons to change and innovate, is a key to organizational adaptability in the face of a turbulent envi-ronment.

Further, vision regarding the growth of business in foreign markets is purely an entrepreneurial input. The crucial role of the entrepreneur is to develop and dif-fuse a specific vision of the firm’s context and future (Cohendet et al. 2000:108).

This is because to recognize strategic resources and knowledge such as specific capabilities to exploit international opportunities and matching them with the ex-ternal and inex-ternal environments demands entrepreneurial input. A specific vision is important, as it develops a set of beliefs in the firm which guides resource commitments in international markets when opportunities arise. In accordance with this vision, an entrepreneur will strive to develop the position of the firm, adjusting its strategy in the internal as well as external environments. Entrepre-neurial vision has also been linked to change in strategies, or strategic renewal, when new resources are created or acquired during the matching process (Dess and Lumpkin 2005). Further, entrepreneurial vision has also been linked to a

‘shared belief’ in the organization that facilitates managerial efforts to introduce or change routines /processes. Creating a shared pool of common knowledge may resolve conflicting opinions in organizations by influencing beliefs. This appeared in the preliminary case study when a product development routine was changed and the SVP faced problems in convincing the product development team of its positive effects.

In sum, entrepreneurial orientation can be approached from the viewpoint of the creation of an environment that fosters the implementation of entrepreneurial strategies. Entrepreneurial vision diffuses throughout the firm and collective commitment from employees arises. For technological firms, a clear vision to coordinate resources and direct strategies in the face of a rapidly changing envi-ronment is a key to the synthesis of external and internal information and knowl-edge. Thus, it can be proposed:

H5: The entrepreneurial orientation of an exporting firm will have a positive rela-tionship to export expansion capabilities.

In the statistical analysis, this relationship will be tested for all four kinds of ex-port expansion capabilities.