International Entrepreneurial Culture and

Growth of International New Ventures

Introduction
An International New Venture (INV) is the firm that has achieved a substantial proportion of international
sales within 5 years after inception or a critical incident. A critical incident can be an internal or external
factor affecting internationalisation such as a change of management, rapid client followership or
acquisition.
An International Entrepreneurial Culture (IEC) is that organisational culture that enables and empowers
the entrepreneurial activities of the firm abroad. The six dimensions of IEC are:
International Motivation
Innovativeness
Risk Attitude
Market Orientation
Learning Orientation
Networking Orientation

6 Dimensions of IEC
International
motivation

International
Innovativeness

International Risk
Attitude

linked to the
process of
commencement
and invigoration
of enterprise
management and
employee
behaviour
towards foreign
ventures

deals with the

proclivity of the
firm to support
new and creative
ideas, products
or processes for
markets abroad.

extent to which
the firm is
committed to
extensive and
risky acts abroad.

International
Market
Orientation
captures the
proclivity of the
firm to seek
superior value
for its foreign
customers.

International
learning
Orientation

International
Networking
Orientation

refers to the
inclination of the
firm to
energetically
attain
intelligence on
foreign markets
and make
effective use of it.

degree to which
the firm accesses
resources from
its environment
with competitors
or noncompetitors
through alliance
formation for its
foreign activities.

Growth Phases of INV

Born Global
(BG)

Born Again
Global (BAG)

Born
International

follow a path of
internationalisation
in many countries
of the world, even
those that are
geographically
outside the home
continent and
psychically different
than their home
country.

These firms are

typically well
established in their
domestic markets
and then suddenly
internationalise
following a critical
incident.

firms that go
abroad rapidly
within their home
continent but do
not globalise to
other continents to
a large extent

Firms Studied
Biohit (BG
Path), 1988

IonPhase (BG
Path), 2001

manufactures liquid
handling products and
diagnostic test systems
for use in research,
health care and
industrial laboratories.

produces advanced
semiconductive
polymers to solve static
electricity problems in
a number of
existingcommercial
plastic applications in
the telecom, chemical
and automotive
sectors.

4th Phase

3rd Phase

Innohome (BI
Path), 2005
produce security
products that enable
prevention of fire,
water leakage, and
other damage related
to cookers and other
home appliances
common in homes all
over the world.

Mapvision
(BAG Path),
1987
Moved from offering
fully customer-based
special measurement
projects in the 1980s
and 1990s towards
offering optical
measurement products
for use on assembly
lines in the automotive
industry.

2nd Phase
2nd Phase

International Entrepreneurial Culture of the Firm and Its Influence on Growth

International Motivation
Biohit
- The founder had a global vision and
high motivation to pursue global
opportunities
- The culture was very open, particularly
in theinitial phases
- The bureaucracy, including ISO
regulations, use of project milestones
and more formalised global
management processes, increased along
with the growth of firm size, decreasing
somewhat motivation

Ionphase
- Culture- not very motivating
- The founder was technology oriented,
but a CEO with global vision and
motivation to globalise the firm was
hired in the second phase
- However, the firm was venturing with a
variety of international opportunities,
unable to benefit from global synergies
- Development of motivation: low (phase
1) high (phases 23)

International Motivation
Innohome

- The founders had an international

vision and high motivation
- The entrepreneurs were highly
motivated and determined
- The small number of personnel and
low level of bureaucracy led to
fast decision making
- Motivation was high,
- Development of motivation: high
throughout phases (12)

Mapvision
- The initial founders had a domestic
focus, but new management had a
global vision
- In the early phase the firm was domestic
but the new management had a high
motivation to become global
- The firms size started to grow so that
the teams size required more formal
organisation and management
- Development of motivation: low (phase
1) high (phase 2)

Innovation Propensity and Risk Attitude

Biohit

Ionphase

- Founded in 1988 by a highly

innovative
entrepreneur who was able to develop
and commercialise innovative
electronic and mechanical pipettes
- Led in the later phases to expansion
into diagnostic business and to the
introduction of a new consumer
product
- Development of innovativeness: high
(phases 13) Moderate (phase 4)

Founded in 2001 by a highly innovative

entrepreneur based on an initial idea
from his licentiate thesis
- Innovativeness at the early phase was
dictated by the founder
- During commercialisation the new
management put more rigorous
processes in place
- Development of innovativeness: high
technology propensity in early phase
(phase 1) high (phase 23)

Innovation Propensity and Risk Attitude

Innohome

Mapvision

- Founded in 2005 by an innovative

serial entrepreneur who later became
the managing director
- Very innovative, entrepreneurial, and
proactive founders, although often
too much; and, this could pose a risk
for the current business
- Strong technology capabilities, many
awards for innovative products
- Development of innovativeness: high
throughout the phases (12)

- Founded in 1987 as a spin-off from the

State Research Centre of Finland to
benefit from highly technology
- As a result of new ownership, strong
technology capabilities and expertise
combining CAD and photogrammetry
were obtained
- A certain type of rigidity was considered
important - Development of innovativeness: high
but without international applications (phase
1) high (phase 2)

International Risk Attitude

Biohit

Innophase

- culture was very open with risk taking and

creativity encouraged. The firm had
followed a policy of not punishing those
who took risks and failed
- Lately, however, risk taking has
decreased with respect to foreign
operations and more hesitation
appeared
- Development of risk attitude: high
(phase 13) ? moderate (phase 4)

- Introductory phase characterised by

investments into high risk technology
and development of many simultaneous
products
- Commercialisation and foreign
expansion driven by aggressive foreign
expansion strategy
- Development of risk attitude: high
throughout phases (12) ? moderate
(phase 3)

International Risk Attitude

Innohome

Mapvision

- Entrepreneurs ready to take risk as

they had a strong belief in business
opportunities
- Expansion plans were narrowed from
a large scope to a more focused
country approach after initial
difficulties and worsening finance
situations
- Development of risk attitude: high
(phase 1) ? moderate (phase 2)

- As a spin-off from the State Research

Centre of Finland, the propensity for
international risk was low in the early
phase
- New entrepreneurs were ready to take
risk and they believed in growth
potential. However, they were mainly
ready to build the business with the
revenues generated from domestic
business

International Market Orientation

Biohit

Ionphase

- Working closely with opinion leaders

such as medical experts to understand
foreign market requirements and
promote new products
- OEM customer requirements and
customer feedback was taken seriously
- Marketing capabilities and interfunctional
coordination limited growth in the new
diagnostic business
- Development of market orientation:
high (phases 13) ? moderate (phase4)

- International market orientation low in

the introductory phase driven by the
technology oriented founder
- Following the appointment of a new
CEO, commercialisation and foreign
entry enabled working closely with
plastic processors and end-customer
MNCs in different application areas
- Development of market orientation: low
(phase 1) ? high (phases 23)

International Market Orientation

Innohome

Mapvision

- Innovations based on careful analyses

of customer needs
- Major technical adaptation
requirement initially delayed stove
alarm product launch
- Development of market orientation:
high (phase 1) high (phase 2)

- As a spin- off from the state scientific

research centre, it had a technology
orientation
- It changed when it was acquired by a
domestically operating software specialist
- Development of market orientation: low
(phase 1) high (phase 2)

International Proactiveness
Biohit
- The firm was introducing many new
products and marketing techniques
before competitors
- Ability to proactively develop the main
business and be ahead of changing
market conditions has decreased along
growth and due to focus on internal
organisational restructuring
- Development of proactiveness: high
(phases 13) moderate (phase 4)

Ionphase
- International proactiveness low in the
introductory phase since even the
competitor analysis was non-existent
- Extensive competitor has
enabled proactively positioning the
firms products into a growth segment,
which the old industry competitors had
difficulty in addressing
- Development of proactiveness: low
(phase 1) ? high (phases 23)

International Proactiveness
Innohome

Mapvision

- The firm was ahead of competitors in

introducing revolutionary security
products and innovative promotion
Techniques
- The firm actively sought foreign enduser
feedback and used it to understand future
needs
- proactiveness: high
throughout the phases (12)

- The international proactiveness was

missing until the new owners and
management changed the orientation
towards being highly proactive
- Their offering was well positioned to
replace the former solutions by
competitors
- Development of proactiveness: low
(phase 1) ? high (phase 2)

International Learning Orientation

Biohit
- The founders experience from earlier
business was useful for product
development, commercialisation and
entering foreign markets
- Learning through research cooperation
between scientific experts
- Learning from OEM partnerships about
market requirements
- From explorative learning about
innovative products to exploitative
learning about large scale production
and distribution
- Development of learning: high
explorative (phases 12) ? high
exploitative (phases 34)

Ionphase
- The firm was inward directed and
international learning was rather low
- A new board and management team,
including its CEO, brought international
experience to the firm and
enabled explorative learning
- Foreign expansion was enabled by
introduction of more rigid processes,
which increased exploitative learning
through systematic collaboration with
foreign customers
- Development of learning: low (phase
1) ? explorative learning (phase 2) ? exploitative
learning (phase 3)

International Learning Orientation

Innohome

- The founders serial entrepreneurial

and large firm background was useful
for product development,
commercialisation and entering
foreign markets
- Learning was of explorative nature in
which challenges encountered in
entering foreign markets and
developing knowledge
- Plans and budgeting were prepared to
convince investors, but the actual
business was run without too much
planning
- Development of learning: high
explorative throughout all phases
(12)

Mapvision
- Founded in 1987 by researchers from
the State Research Centre of Finland
- Following the new owners
involvement, the first optical
measurement products were developed,
accepted and delivered for glass
measurement purposes and global car
industry suppliers
- The new owners had sales and
marketing experience and were willing
to explore the markets with this
technology
- Development of learning: domestic
learning (phase 1) International
explorative learning (phase 2)

International Networking Orientation

Biohit
- Using a network of contacts from the
earlier firm to establish subsidiaries
rapidly and find suitable distributors in
foreign markets
- OEM private label firms, e.g. 3M and
Johnson & Johnson were leveraged to
access markets rapidly
- Development of networking: high
throughout all phases (phases 14)

IonPhase
- In the initial introduction phase
networking was limited due to the
founders orientation
- Networking has become more important
since the change in management and
the actual commercialisation took place
- Development of networking: low (phase
1) ? high (phases 23)

International Networking Orientation

Innohome
- Good network of partners,
subcontracting manufacturing, and
customer service and logistics
outsourced
- Leveraging large partner channels and
brands
- Development of networking: high
throughout all phases (12)

Mapvision
- A spin-off from the State Research
Centre of Finland. The networking
orientation was initially domestic
- Following the change in management,
international networking with car
manufacturers and their producers of
production lines became central
- Development of networking: low (phase
1) high (phase 2)

Development of Propositions
Proposition 1: The motivation of the INV towards the
global marketplace leads to the BG or BAG path,
while the motivation of the INV towards the
international marketplace leads to the BI path.

Proposition 2: International motivation positively

affects advancement of the INV through the earlier
growth phases [13], while negatively affects
advancement towards the last phase [4].

Proposition 3: (a) International innovation

propensity, (b) international risk attitude, (c)
international market orientation and (d)
international proactiveness positively affect the
advancement of INVs through the earlier growth
phases [13], while they negatively affect
advancement towards the last phase
[4].

Development of Propositions
Proposition 4: International explorative learning orientation
positively affects advancement through the earlier growth phases
of INVs [12], while international exploitative learning
orientation positively affect advancement through their later
phases [34].

Proposition 5: An international networking orientation positively

affects advancement through the earlier and later growth phases
of INVs.

Thank You
Pooja Lalwani (HR001)
Anusha Srivastava (HR004)
Sravanthi Karoor (HR007)
Aashka Humble (HR010)