Knowledge creation dynamics within the international new venture

• Published in: European business review Vol. 27; no. 2; pp. 182 - 213
• Main Authors: Fuerst, Sascha, Zettinig, Peter
• Format: Journal Article
• Language: English
• Published: Bradford Emerald Group Publishing Limited 09.03.2015
• Subjects: Absorptive capacity; Business; Competitive advantage; Cooperation; Dynamics; Entrepreneurs; Entrepreneurship; Experiential learning; Globalization; Grafting; International business; Knowledge acquisition; Knowledge management; Learning; Markets; Networks; Sales; Strategic management; Strategy; Studies; Colombia; Switzerland; Born global; Organizational learning; Knowledge acquisition; International new venture; Effectuation; Latin America
• ISSN: 0955-534X; 1758-7107
• DOI: 10.1108/EBR-03-2013-0036

Purpose – This paper aims to examine the dynamic process of knowledge creation of the international new venture (INV) through the interaction with network partners. The process of how INVs make use of external sources for the acquisition of international market knowledge is not well-understood. Design/methodology/approach – To uncover the dynamics of the knowledge creation process, the authors applied event-driven process research by following the internationalization process of four INVs in real time. More specifically, they adopted qualitative diary research combined with periodic follow-up interviews as the main data collection method. A visual mapping strategy was used for the analysis of the process data. Findings – The analysis shows that different pathways of knowledge acquisition through congenital learning, searching, vicarious learning and grafting interact with each other. Grafting and experiential learning alongside the partner lead to the acquisition of internationalization knowledge in particular. Knowledge sources for international market knowledge are proactively created by the entrepreneurs. The wider effectual stakeholder network constitutes an important source for international market knowledge. Research limitations/implications – The authors followed the early internationalization process of the case firm in real time over a 10-month period. This provides a limited window of observation. Future research might extend the observation period to examine further the evolutionary nature of the different learning types throughout the growth of the INV. The case firms operate in Internet-enabled businesses and are all located in the same country and city (i.e. Colombia and the city of Medellin). Future studies might focus on firms operating in different industries and geographical areas. Practical implications – Congenital technological knowledge is a prerequisite for internationalization. The entrepreneur, however, does not need to rely on congenital international market knowledge. Such knowledge can be developed through network partners. Foreign business and institutional knowledge can be obtained vicariously, also from professional advisors. Internationalization knowledge, however, needs to be developed in close interaction with an international cooperation partner, where a strong relationship commitment prevails. Originality/value – The authors use effectuation theory combined with process research methods to gain insights into the dynamics of knowledge creation within the INV. Thereby, they are able to shed light on the dynamics of the process that is difficult to capture through cross-sectional research designs. Research on the internationalization process of young ventures in the context of Latin America is scarce. Therefore, the paper contributes new knowledge about the development of these firms in that particular region.