Exploring Strategies of American Small Business Owners in United Arab Emirates

Exploring Strategies of American Small

Business Owners in United Arab Emirates

Section 1: Foundation of the Study

Some American small business owners have chosen to initiate operations in

foreign markets to gain more revenue and increase operational longevity (Baronchelli &

Cassia, 2014). Small business entrepreneurs whose intentions are to operate

internationally have various labels such as international entrepreneurs (IEs), international

new ventures, or born global firms (Covin & Miller, 2014; De Clercq, Sapienza, & Zhou,

2014). Small business entrepreneurs who operate internationally could gain corporate tax

breaks as well as have access to more resources such as unsaturated markets and reduced

labor costs, which can create competitive advantages and profits (Johnson, Arya, &

Mirchandani, 2013). Conversely, many small business owners lack the understanding on

how to start and operate an international business (Roudini & Osman, 2012). Some small

business owners looking to commence operations in foreign territories ponder whether

there are certain entrepreneurial strategies needed to ensure a successful international

venture (Roudini & Osman, 2012). Understanding the strategies needed to operate

internationally could lead to more business revenue and increase chances of staying in

business (Montalbano, Nenci, & Pietrobelli, 2017).

Background of the Problem

International business scholars have long debated the advantages and

disadvantages of globalization (Davidson, Heyman, Matusz, Sjöholm, & Zhu, 2014; Qin

& Ndiege, 2013) and how it has changed the way small business owners compete in a

turbulent economy (Cheng, Filzah, & Hoe, 2011). To gain revenue and competitive

advantages, an increasing number of U.S. business owners are expanding horizons, either

by outsourcing jobs overseas or by otherwise commencing operations overseas

(Hilmersson, 2014). Managers of large companies have been at the forefront of this

movement; however, small business owners have shown interest to compete

internationally as well (Mainela, Puhakka, & Servais, 2014). One question IEs face is

whether different entrepreneurial strategies are necessary in the global arena compared to

home (Nkongolo-Bakenda & Chrysostome, 2013). Starting a new business is a risky

venture regardless of the location as most domestic business startups close within 5 years

(Small Business Administration, 2015). IEs deal with additional challenges, such as

cultural differences, language barriers, corruption, and financial repatriation (Hisrich,

2013). Many American small business entrepreneurs do not know how to be successful in

a global market (Roudini & Osman, 2012).

Problem Statement

Many service, retail, and information technology based small business owners

could earn profits and increase chances of longevity beyond the critical point of 5 years

by also operating in a foreign country (Cavusgil & Knight, 2015). More than 70% of

worldwide revenue for American businesses comes from consumers located outside of

the United States in emergent markets such as India, the Middle East, and Northern

Africa (International Trade Administration, 2016). Middle class consumers in emerging

countries are increasing twice as fast as the overall world’s population (Guarin &

Knorringa, 2014). The general business problem was that many American small business

owners are not operating in and capitalizing on emergent markets such as the United

Arab Emirates (UAE). The specific business problem was that some American small

business owners lack the strategies for successful international entrepreneurship that may

lead to competitive advantages as increased revenue and operational longevity.

Purpose Statement

The purpose of this qualitative multiple case study was to explore strategies

American small business owners use for successful international entrepreneurship that

may lead to competitive advantages, such as increased revenue and operational longevity.

The target population for this multiple case study was American small business owners

who had been operating in the UAE for at least 5 years. Each selected participant needed

to own a small international entrepreneurial firm operating in the UAE for at least 5 years

and have some affiliation to a nonprofit service organization that may help IEs, such as

the I-E Scholars or the U.S. Embassy. Positive social change may occur if American

small business entrepreneurs can incorporate the results from this study to implement

strategies needed for successful international entrepreneurship that could lead to

increased income and operational longevity. Strategies I gathered and reported in this

study may evoke business growth and the employment of additional individuals within

the community where the IE operates. In addition, scholars may use the findings and

contributions arising from the study as a medium to research international

entrepreneurship in additional emergent markets.

Nature of the Study

The method and design I used in this study was a qualitative case study analysis.

Yin (2014) stated researchers use a qualitative method to explore a phenomena and the

perspectives of participants within a study. By using a qualitative method, a researcher

may provide detailed descriptions based upon a phenomenon or lived experience

(Seidman, 2013). Qualitative research leads to an interpretivist view, based on how and

what inquiries about a real-life phenomenon that cannot be achieved by a positivist view

that makes use of yes or no questions (Bernard, 2013). A positivist perspective from

quantitative research would not have been appropriate because this study did not contain

propositions that needed to be tested. Performing a quantitative study may have yielded a

larger sample; however, the breadth achieved would have sacrificed depth of a qualitative

study (Punch, 2013). A mixed-methods study combines quantitative and qualitative

approaches (Palinkas, Horwitz, Green, Wisdom, Duan, & Hoagwood, 2013). However, a

mixed-methods approach would not have been suitable to this study, as the

interviewbased nature and sample size were not conducive to conducting quantitative

analyses.

In conducting this multiple case study, I used a purposeful sample to consider

American IEs who have operated in the UAE for at least 5 years. Palinkas et al. (2013)

stated researchers that have used a purposeful sample specifically target participants from

a larger group to obtain detailed information on the phenomena of concern. Using

purposeful sampling, my aim was not to select participants at random or conclude with

generalizations (Palinkas et al., 2013). This study represents my understanding of the

strategies from American IEs who have operated outside the country for at least 5 years.

In a purposeful case study, researchers focus on the human experience (Yin, 2014), which

can be used to identify strategies on how to become a successful IE. A case study is

conducive for explanatory enquiries because researchers may use a holistic approach,

which includes scrutinizing documentation, and asking a participant how and why

questions (Seidman, 2013). Kafle (2013) distinguished between two primary types of

case studies that deal with a phenomenon: empirical and hermeneutic. Southwick,

Bonanno, Masten, Panter-Brick, and Yehuda (2014) stated that researchers use an

empirical case study to focus or interpret participants’ experiences or an event, while

Silverman (2013) stated that in empirical case studies, researchers seek to define a

phenomenon from an experience instead of a theory.

Kafle (2013) described hermeneutic case studies as opposite from empirical,

wherein researchers seek to interpret a method or theory. In this study, I explored actual

lived experience; therefore, the study was empirical. A case study differs from a

qualitative phenomenological study because in the latter, researchers take a philosophical

approach to capture the essence of a human lived experience, thus often taking a

hermeneutical path to interpret a method or theory (Kafle, 2013). Researchers, who

choose an ethnographic design use direct field observation, while scholars who use

grounded theory begin with a broad topic, then make deductions (Merriam, 2014); neither

was feasible for this study. However, in an empirical case study design, the researcher

explicitly describes the process used to obtain the results and findings (Silverman, 2013).

Research Question

The central research question for this study was: What strategies do American

small business owners use for international entrepreneurship that may lead to increased

revenue and operational longevity?

Interview Questions

1. What strategies have you implemented to begin and operate a business the UAE?

2. What strategies enabled entry into the UAE?

3. What uncertainties and hindrances did you anticipate prior to opening a business

in a foreign territory? What strategies did you use to handle them?

4. What uncertainties and hindrances are you currently dealing with while operating

in a foreign territory? What strategies did you use to handle them?

5. How did previous strategies that you may have had (i.e., previous management,

entrepreneurship, international business skills) help create your international

business?

6. How have you used business networking strategies (if any) to sustain your

company in a foreign environment?

7. What strategies do you use to gain resources needed to operate in the UAE?

8. What strategies do you use to sustain your business when operating in the UAE?

9. What additional information would you like to discuss regarding this topic?

Conceptual Framework

The most frequent theory that IE scholars use when studying IE strategies has

been the resource-based view theory (RBV; McDougall‐Covin, Jones, & Serapio, 2014).

Small IEs typically do not have the same level of resources as large companies; therefore,

the RBV has been the primary theory IEs use to compete in the similar markets

(McDougall-Covin et al., 2014). IEs compile internal tangible and intangible resources to

adjust strategies to exploit external opportunities (Barney, 2014). The more valuable and

scarce the skill or resource is, the better (Park, LiPuma, & Prange, 2013).

In 1984, Wernerfelt coined the term RBV by gathering principles established by

Coase (1937) and Penrose (1959), who described specific strategies used by supervisors

to strengthen organizations. IE scholars use RBV to formulate strategies of value creation

for business owners who enter a new venture (Brouthers et al., 2015). International

entrepreneurship literature about RBV has been interpreted by managers who are

searching for ways to manipulate capabilities in order to form a strategy to gain a

competitive edge, which in turn creates value (Yao, Yang, Fisher, Ma, & Fang, 2013).

One tenant of the RBV theory is that disparities in competitive markets result from

variations in resources and strategies (Barney, 2014). The RBV theory emphasizes

strategies over tangible resources because the former enable managers to leverage the

latter (Park et al., 2013). Many IEs use networking strategies to expand into new markets

(Brouthers et al., 2015).

Operational Definitions

This operational definitions section will include explanations of key terminology I

used throughout the study for the clarity and understanding of the reader.

Capability: The combination of dedication, procedures, and resources that create

steadiness towards productivity needed to achieve the goals of the firm (Autio, George, &

Alexy, 2011).

Entrepreneurial strategies: The tactics in which business owner (s) create and

adjust the plan of procedures that are used to acquire necessary resources to perform

favorable actions recognized in the market (Cavusgil & Knight, 2015).

Entrepreneurship: Processes that are primarily focused around how, by whom,

and what controls opportunities that create future goods and services that can be found,

assessed, and exploited (Covin & Miller, 2014).

International entrepreneur(s) (IE, IEs): Individuals, also known as born globals,

who discover opportunities and act, evaluate, and exploit resources across national

borders to create future goods and services (Zhang et al., 2009).

International entrepreneurship: The act of entrepreneurs who are finding,

assessing, acting upon, and exploiting resources and opportunities outside of their home

country to create future services and products (Oviatt & McDougall, 2005).

Resources: Possessions owned and /or regulated by a firm’s owner, who can

create and build strategies (Andersson & Evers, 2015).

Assumptions, Limitations, and Delimitations

Assumptions are the researcher’s expected outcomes that are not verified (Simon,

2013). In this study, I assumed that the participants would respond honestly and openly to

interview questions. I also assumed that the participants could accurately recall the

strategic maneuvers and strategies used that led to successful international

entrepreneurship for at least 5 years.

Limitations are the constraints that have an impact on the study (University of

Southern California, 2014). My data collection and analysis in this study did not include a

specific type of international entrepreneurial firm other than five IEs who had operated in

the UAE for at least 5 years. Yin (2014) stated that multiple case studies have constraints

because there are boundaries that are limited to a specific subject or phenomenon within

each case. In a qualitative study, data are limited to a participant’s personal experiences

and perceptions (Hancock, 2015), and in this case, the entrepreneurial strategies believed

to determine international business success. The location in which the IE operates may

not be suitable to every type of business and every global market. Location, time, and

five American entrepreneurs who had been operating the UAE for at least 5 years

bounded this study.

Delimitations are boundaries researchers set for the purpose of focusing on the

scope of the study (Simon, 2013). I limited participation in this study to five American IE

firms that had been operating in the UAE for at least 5 years. The results of this study

might not be generalizable to large businesses or businesses not in a service-related

industry or to non-American IEs. I did not consider the globalization of business apart

from the specifics of entrepreneurial strategies. The scope of this study entailed

interviewing five American entrepreneurs, who had been operating in the UAE for at

least 5 years, with semi-structured opened-ended questions on what business strategies

each used.

Significance of the Study

The findings from this study may be of significance to small business owners who

want to obtain an enhanced understanding of strategies needed to operate in an

international setting. This study may fill some gaps in international entrepreneurship

literature by revealing practices that lead to the competitive advantages of increased

revenue and longevity for small business owners. Future scholars may use the research

results from this study to generate new knowledge about international entrepreneurship in

an emergent market. The results of the study might contribute to positive social change

by increasing the opportunity for more small businesses to succeed in the prevailing

global environment. As more IEs succeed, owners may help strengthen the foreign

economy in which they operate by adding a tax base, employing local workers, or

providing access to unique retail or service products.

Contribution to Business Practice

Roudini and Osman (2012) noted that information regarding skills needed for

small entrepreneurs is beneficial because owners can tap into global markets to gain

competitive advantages and greater profit. IE scholars have believed information on IE

strategies is sparse (Brouthers, Nakos, & Dimitratos, 2015). A qualitative study could

provide a richer description of approaches needed to succeed as an IE (Baronchelli &

Cassia 2014). The results of this study may add to the existing body of literature within

the international business and entrepreneurship discipline by providing information on the

strategies needed for international entrepreneurial success.

Implications for Social Change

Business executives, business owners, and government planners who have a

significant role in international entrepreneurship could use the results from this study to

understand how to develop and deploy international entrepreneurial approaches. Those

strategies may generate a competitive advantage leading to profit and longevity in the

international market. The results from this study may contribute to positive social

changes by increasing the number of American, small business, owners who succeeded in

operating globally. The findings might also lead to local employment opportunities in the

host country. An additional positive social change may be improved local conditions that

promote the worth and development of individuals in the community where the business

operates.

A Review of the Professional and Academic Literature

The purpose of this study was to explore the strategies American IEs use in the

UAE to create competitive advantages such as profit and longevity. The following

research question was the crux of the study: What strategies do American small business

owners use for international entrepreneurship that may lead to increased revenue and

operational longevity? In this section, I will provide a review of relevant literature on

RBV theory, the motivations of global entrepreneurs, IE capabilities and resources, global

business dynamics, and competitive advantage. The relevant literature will include the

capabilities that scholars have determined as successful IE needs.

I located information for this literature review in the following databases:

ScienceDirect, Emerald Management Journals, EBSCOhost, SAGE, ProQuest Digital

Dissertations, ProQuest Central, IEEE Xplore Digital Library, Academic Search

Complete, Management & Organization Studies, ABI/INFORM COMPLETE, Expanded

Academic ASAP, Business Source Complete, Safari Tech Books, Journals@Ovid, Lexis

Nexis Academic, InfoTrac One File, Hoover’s Company Records, Computers and

Applied Sciences Complete, Walden University Dissertation Database, and National

Technical Information Service. I also used Google Scholar to search for unpublished

studies, books for reference material, and government statistical websites to compile the

most recent business data. The table exhibits the numeral compilation of material used for

the study.

Table 1

References References

Summary of Literature

Literature Type before 2013

(1937-2013)

after 2013

(2013-2017)

Total

Doctoral Studies 0 2 2

Germinal and seminal books 8 715

Government and Organizational Websites

Journal articles (peer reviewed)

04 4

186 34 220

Journal articles (non-peer-reviewed) 0 1 1

Percentage of peer-reviewed literature 15% %85 %100

Resource-Based View (RBV) Theory

The RBV is the primary theory connected to IE scholarly literature. Wernerfelt

(1984) formulated RBV based on principles established by Coase (1937) and Penrose

(1959), who described behaviors used by supervisors to strengthen organizations. Global

business executives use RBV for strategies regarding value creation (Brouthers, Nakos, &

Dimitratos, 2015). Small business owners usually do not have access to the same

resources as larger counterparts (Darcy, Hill, McCabe, & McGovern, 2014; Halme &

Korpela, 2014). Small business owners could use RBV to exploit external opportunities

by using existing intangible and tangible resources in new ways for differing situations

(Lin & Wu, 2014). Many established IEs have used the RBV theory to identify core skills

and strategies to manipulate business-related resources in order to gain a competitive

edge, which in turn creates value (Barney, 2014; Yao et al., 2013).

One assumption of the RBV is that each business owner has different resources

and skills to comprise strategies towards gaining competitive advantages (Chen, Jiang,

Wang & Hsu, 2014). Another assumption is that even though some competitors may

replicate products, they are unable to implement the exact same strategies (Lin & Wu,

2014; Mason & Brown, 2013). As an example, an intangible resource as marketing skill

may differ between organizations (Lonial & Carter, 2015; Mason & Brown, 2013).

Intangible resources, such as intellectual knowledge, processes, or property, are immobile

(Halme & Korpela, 2014). IEs have a better advantage to compete when unique skills and

resources are adapted into the business environment (Mason & Brown, 2014). One of the

advantages IEs have when using the RBV is the ability to adapt with change easier than

with larger companies (Vanpoucke, Vereecke, & Wetzels, 2014).

Kindström, Kowalkowski, and Sandberg (2013) suggested a starting point for IEs

is to take inventory of resources and capabilities before entering the foreign market.

Kindström et al. also recommended that owners must first address the firm’s boundaries

internally as well as those of the industry it is in to figure out how to leverage the

resources. Some competitive advantages that have derived from small business owners

using RBV have been the ability to reach an unsaturated market, tailor items to

customers, and find niche markets (Halme & Korpela, 2014; Vanpoucke, et al., 2014). By

using the RBV theory, IEs may be able to tailor products and services for a foreign

clientele. The more valuable and unique the resources and capabilities are, the better

advantage the IE will have in foreign markets as well (Eisend & Schmidt, 2014; Vandaie

& Zaheer, 2014).

Although RBV theory has been widely used, it has detractors. Demil, Lecocq,

Ricart, and Zott (2015) stated RBV theorists view knowledge as a general resource. The

aforementioned authors criticized the theory because it does not adequately predict how

knowledge and learning result in a competitive advantage. Demil et al. claimed also that

the theory is too general and does not adequately identify specific characteristics

managers need. Some IE scholars believed the RBV theory is too narrow and proposed it

should be broadened (Warnier, Weppe, & Lecocq, 2013).

Years after its inception, adaptations to the RBV began to develop. A variation of

the RBV theory is the knowledge-based view, which posits knowledge as an

organization’s most crucial resource (Eisend & Schmidt, 2014). The knowledge-based

view is predicated on the assumption that company employees are repositories of wisdom

that can be obtained through partnerships, prior experience, and firsthand knowledge

(Fletcher, Harris, & Richey, 2013; Martín-de Castro, 2015). Omerzel and Gulev (2011)

declined to recognize the knowledge-based approach as a proper theory because wisdom

is intrinsically unique to each organization and not precisely replicated from one firm to

another to guarantee a competitive advantage.

International entrepreneurship researchers have also considered using the

dynamic capability to create competitive advantages. The dynamic capability is another

adaptation of RBV in which managers use core competencies to adjust short-term

effectiveness in order to build a longer-term competitive edge (Casillas & Acedo, 2013;

Lin & Wu, 2014). Conversely, Arend (2014) indicated that the dynamic capability be

used as a competitive survival technique instead of as a sustainable competitive

advantage. El Shafeey and Trott (2014) acknowledged the RBV theory is still evolving.

Tallman, S. (2015) described RBV theory as useful in determining a business

owner’s capability of building a firm, assimilating to survive, and ability to adjust

internally and externally to the rapidly changing situational settings. For many Small and

medium-sized enterprises (SMEs), financial, human, and tangible resources are scarce;

thus, entrepreneurs must be able to leverage assets for successful international business

performance (Roudini & Osman, 2012). The resources and capabilities managers possess

form the basis of an international strategy (Beleska-Spasova, Glaister, & Stride, 2012;

Chen et al., 2014; Clarke, Tamaschke, & Liesch, 2013). Managers assess the firm’s

resources and capabilities, which ultimately form a strategy used to enter the international

market (Lonial & Carter, 2015).

Although IE studies have proliferated in the last 2 decades, theoretical paradigms

and methodological frameworks remain fragmented (Zander, McDougall-Covin, & Rose,

2015). A considerable amount of IE research incorporated the RBV theory. The theory

has been widely employed in general management, technology, knowledge management,

business strategy research, and business history (Roudini & Osman, 2012).

International Entrepreneurship

The understanding of international entrepreneurship has evolved since its

inception in 1988. Gil-Pechuan, Exposito-Langa, and Tomas-Miquel (2013) stated the

term originated with Morrow (1988) in a study of offshore business ventures and the

contribution of technology to business expansion. Since Morrow’s study, a variety of

business researchers have explored the distinctions between domestic and international

ventures (Terjesen, Hessels, & Li, 2013). A formal conception of international

entrepreneurship emerged in the work of McDougall and Oviatt (1997), who defined it as

“a combination of innovative, proactive, and risk-seeking behavior that crosses national

borders and is intended to create value in organizations” (p. 293). Hulbert, Gilmore, and

Carson (2013) described international entrepreneurship as a process that discovers and

exploits external opportunities to gain business advantage. Butler, Doktor, and Lins

(2010) characterized international entrepreneurship as more of a process than a collection

of characteristics. Covin and Miller (2014) described an IE as an individual globally

engaged in capitalistic risks and opportunities.

Other international entrepreneurship researchers have focused on the topic in a

variety of contexts such as in comparisons of entrepreneurial cultures (Autio, Pathak, &

Wennberg, 2013; Zhang et al., 2009) or venture types (Jones & Casulli, 2014). Some IE

authors focused on alliances and collaborative strategies to gain advantages (Brouthers et

al., 2015) while other authors devoted research to internationalization for SMEs (Kunday

& Şengüler, 2015). Business financing is an elusive aspect within the international

entrepreneurship topic (Terjesen, et al., 2013). Cognition of business leaders in the sense

of mental strategies has also served as a subset topic of a study (Murase, Carter,

DeChurch, & Marks, 2014). International entrepreneurship scholars view management of

knowledge in a broad sense being that the topic of international entrepreneurship as a

collegiate study is new (Naldi & Davidsson, 2013). Acs, Autio, and Szerb (2014)

examined a business profile list that displayed various international entrepreneurship

transactions worldwide. Turcan and Juho (2014) documented threshold strategies based

on entry into foreign markets. Global business scholars entwine exporting with

international entrepreneurship studies as a primary way to get into the global arena

(AlAali & Teece, 2014; Javalgi, Deligonul, Dixit, & Cavusgil, 2011). There is a

multitude of scholarly material about international entrepreneurship expansion for

corporations (Kuratko, Hornsby, & Hayton, 2015; Ming, 2013) and about technological

learning as information technology (IT) firms enter the global marketplace (Khavul,

LiPuma,

Newbert, & Doh, 2013).

International entrepreneurship is a popular academic topic because it combines

international business, entrepreneurship, and strategic management disciplines (De

Clercq, Sapienza, & Zhou, 2014). McDougall‐Covin, Jones, and Serapio (2014) stated

some scholars initially described international entrepreneurship as a branch of

internationalization. More recently, however, it has become a discipline of its own (Jones,

Coviello, & Tang, 2011). International entrepreneurship has challenged the conventional

understanding of the internationalization process by focusing on the entrepreneur (Oviatt

& McDougall, 1994, 2005).

Servantie, Cabrol, Guieu, and Boissin (2016) analyzed 567 peer-reviewed journal

articles published from 1989 to 2015 and concluded that most research on international

entrepreneurship extends from a study by McDougall and Oviatt (2005). Servantie et al.

found most international entrepreneurship research falls into two main categories: a focus

on national entrepreneurial systems with specific behaviors and conditions, or a focus on

the behavior and knowledge of entrepreneurs who operate globally. The purpose of this

qualitative case study was to explore the strategies, which included skills and knowledge

of global entrepreneurs that lead to success.

Motivations of International Entrepreneurs IEs

There are many reasons why entrepreneurs go global, but the dominant one is to

increase profit. Cheng et al., (2011) noted how globalization has opened channels to

resources that entrepreneurs can exploit and that it creates the potential to learn from

business leaders in other countries. Globalization provides openings to new markets,

cheaper goods and services, a broader array of consumers and traders, efficiencies in

resource allocation, relaxed labor laws, and fewer environmental restrictions, all of which

can lead to higher profits (Cheng et al., 2011; Hisrich, 2011). Global business has also

improved relationships among nations by decreasing poverty in developing countries

through increased employment for local residents (Cheng et al., 2011; Zahra, Newey, &

Li, 2014).

Globalization has also changed the mode of business network communication due

to IT (Cavusgil & Knight, 2015). The advent of technology in particular has made the

global network a much closer and faster connection (Cavusgil & Knight, 2015). Hisrich

(2013) noted that early instances of international entrepreneurship were primarily

reactive. A company might receive specialty requests for products or services from global

prospects and respond accordingly (Hisrich, 2013). Eventually, domestic companies

became more proactive in seeking business abroad and extending operations globally

(Hisrich, 2013).

The negative effects of globalization have included violations of human rights and

an exploitation of lax environmental laws abroad (Cheng et al., 2011; Zahra et al., 2014).

Many businesses managers go offshore simply to take advantage of reduced labor costs

and to receive incentives from host governments (Tate, Ellram, Schoenherr, & Petersen,

2014). Hisrich (2011) highlighted Foxconn, a company that manufactures the Apple iPad,

iPhone, and Macintosh computers, and whose employees have criticized it for low wages;

long work hours; unsafe working conditions; and forced, uncompensated overtime.

Doytch, Thelen, and Mendoza (2014) and Bélanger (2014) provided examples of how

American companies operating abroad have abused labor rights by sanctioning child

labor and paying substandard wages.

Managers operating companies abroad face a variety of potential obstacles:

natural or human disasters, changes in foreign exchange rates, difficulty securing

adequate raw material or supplies, communication problems caused by language barriers

or cultural misunderstandings, preference for native businesses, cultural and legal

differences among countries, and the inability to be on-site to oversee offshore operations

(Hisrich, 2013). Becoming profitable is often a long-range proposition (Hisrich, 2013).

Cheng et al. (2011) warned against going global prematurely by not researching the new

business environment adequately. Establishing a business in a foreign country often

creates a series of uncertainties (Autio et al., 2011).

Internationalization

International entrepreneurship scholars have cited internationalization as one of

the most important growth strategies for entrepreneurial firms (Norbck & Persson, 2014;

Sarasvathy, Kumar,York, & Bhagavatula, 2014). Internationalization involves increasing

participation across borders and adapting domestic operations to international

environments (Zander, McDougall-Covin, & Rose, 2015). Research on

internationalization surged in the 1960s and 1970s (Bingham, 2009). Documentation on

how and at what point in an operation managers enter the global market remains elusive

(Cavusgil & Knight, 2015; Madsen, 2013).

Business managers with the primary intent of pursuing global ventures have

existed for years; however, there is a lack of theoretical literature on the topic

(Baronchelli & Cassia, 2014; Oviatt & McDougall, 1994). Technology firms have been

on the forefront of numerous internationalization articles because such owners tend to be

more innovative and flexible with operations that are mainly conducted online (Onetti et

al., 2012). In addition to technology, a substantial amount of internationalization material

involves multinational corporations or managers who started domestically and then

developed globally as incremental managers (Onetti et al., 2012).

Market Entry

Entrepreneurs enter global territories in several ways. The two most common

methods of entry are incremental and born global (Hilmersson, Sandberg, & Pourmand

Hilmersson, 2015; Zhou, Wu, & Barnes, 2012). The international entrepreneurship

scholars most cited for global market entry literature are Johanson and Vahlne.

Incremental market entry. One influential development was the Uppsala theory

(often called U theory), first articulated by Johanson and Wiedersheim-Paul (1975) and

later refined by Johanson and Vahlne (1977; 1990). The theory developed out of four

case studies of Swedish manufacturing firms. The U theory is considered the most

referenced model for business internationalization (Cui, Walsh, & Zou, 2014) business

owners that have used Johanson and Valhne’s (1977) original U theory of

internationalization had taken a gradual approach that began with an occasional export

order that slowly become more regular (Bouncken, Schuessler, & Kraus, 2015).

Luostarinen’s (1979) also devised the product operation model (POM) which is

based on the assumption that business owners typically begin operations domestically,

then export products to countries in close proximity, and continue to slowly expand their

global reach (Gnizy & Shoham, 2014; Osei-Bonsu, 2014). In POM, internationalization

proceeds according to three variables: product (goods and services), operation, and

market (Luostarinen, 1979). The POM has much in common with the U theory, both of

which espouse gradual entry into international markets (Johanson & Vahlne, 1977, 1990;

Luostarinen, 1979; Meng, 2014). These theories are classic explanations of what

international entrepreneurship scholars call the incremental approach to globalization

(Jiang, Li, & Yang, 2014; Yang, Lu, & Jiang, 2017).

Incremental business managers begin expanding operations with a low

commitment to the global market and slowly increase that commitment as they acquire

established relationships with foreign partners (Ahlbrecht & Eckert, 2013; Figueira-

deLemos, & Hadjikhani, 2014). Incremental managers start with new clients in close

proximity and then branch to the more profitable client areas to receive faster feedback

(Johanson & Vahlne 1977; Taylor & Jack, 2013). The managers eventually decrease

resource obligations in areas where sales are lowest, which might be either domestic or

global markets (Johanson & Vahlne 1977; Taylor & Jack, 2013).

Although U theory and POM are similar, there is a difference in several respects.

The U theory attributes the gradual process of internationalization to managers’ lack of

foreign market knowledge, which results in uncertainty. Originally, in the U theory, if

business managers were successful, operations gradually expanded; however, if managers

did not meet sales, actions ceased (Johanson & Vahlne, 2009). Luostarinen (1979)

believed the first sale of purchase constituted foreign market entry. Freeman, Giroud,

Kalfadellis, and Ghauri (2012) suggested an approach for entrepreneurs with limited

foreign experience, which is to trade first with countries in close proximity to the home

market before expanding further. Inexperienced entrepreneurs can also slowly acquire

global experience and expertise that gives managers the confidence to expand further (De

Clercq et al., 2014).

Kuivalainen, Saarenketo, and Puumalainen (2012) cited several examples where

successful internationalization did not conform to the U theory. Vahlne and Johanson

(2013) eventually disclosed that the original U theory centered upon preexisting

relationships to network, build trust, and gain knowledge incrementally in order to control

the resources needed to penetrate international markets. The original Uppsala theory

model contained within the U theory may not exhibit the true dynamics of the

internationalization process to reflect current trends (Monferrer, Blesa, & Ripollés, 2014).

Vahlne and Johnson acknowledged that the original Uppsala theory model did not include

the increasingly common phenomenon of rapid internationalization by aggressive

entrepreneurs (Monferrer et al., 2014). Casillas, Barbero, and Sapienza (2014) specified

30 years after the U theory model was developed, its creators Vahlne and Johnson, still

believed the internationalization process is primarily driven by managers who had

investigational knowledge of the intended global marketplace beforehand.

Born global market entry. To account for the trend that not all global market

entry is gradual, researchers have studied examples of more rapid internationalization. An

early study in this area was by Hedlund and Adne (1985), who identified companies that

skipped stages in the traditional model, a phenomenon called leapfrogging. Rennie

(1993) studied 310 Australian production firms and found that 25% had extensively

exported within the first 2 years after formation and that exports accounted for 75% of

sales. Rennie concluded such business owners intend to exploit the global market and use

the domestic market as a backing for global ventures.

One result of research challenging the assumptions of gradualism was the coining

of a new term: born global. Born globals are business owner(s) who plan to serve

international markets from the beginning of operation (Kuivalainen et al., 2012;

Sekliuckiene, 2015). Other terms for similar operations are international new ventures

and global startups (Oviatt & McDougall, 1994).

Born globals are usually SMEs who typically have managers who are more

flexible than are owners of larger companies because the size of the business allows for it

(Kuivalainen et al., 2012; Oviatt & McDougall, 1994; Paul & Gupta, 2014). Born globals

are able to internationalize more rapidly because they have accumulated less

organizational superstructure (Autio et al., 2011). Born globals are better able to

surmount political and economic barriers and operate in risky markets that are not yet

saturated (Efrat & Shoham, 2012). Tanev (2012) noted most born globals expand

internationally by exporting from direct global sales, leveraging resources from

independent foreign intermediaries, creating joint ventures, or making foreign direct

investments. Born global firms typically have unique and superior product offerings used

to target market segments not customarily supported by traditional, larger firms, thus

creating a niche (Sekliuckiene, 2015). The choice of international market is very

important (Taylor & Jack, 2013). Innovative product offerings are a key contributing

factor to the success of born globals, but the specific strategies that help them become or

remain innovative is unknown (Sekliuckiene, 2015). International entrepreneurship

scholars have studied the steps born globals follow after the initial decision to go

international, but they have not clearly documented time and development as separate

issues (Kuivalainen et al., 2012).

One early assumption was that born globals are mostly technology firms (Hagen

& Zucchella, 2014). More recently, however, researchers have identified a wide array of

born global firms, both product- and service-based (Tanev, 2012). Born global firms

generally offer unique and superior products and services to targeted market segments not

customarily supported by more traditional and larger firms (Dlugoborskyte & Petraite,

2013). Although innovative offerings are a key factor in the success of born globals, the

specific strategies that help them innovate are largely unknown (Kuivalainen et al., 2012;

Sekliuckiene, 2015).

Efrat and Shoham (2012) described born globals as managers of companies that

export 25% of sales within 3 years of inception. For Gabrielsson, Kirpalani, Dimitratos,

Solberg, and Zucchella (2008), that figure was 50%. Paul and Gupta (2014) believed the

requirements to be at least 2 years after the formation of the company with at least 76%

of sales from exports. According to Cannone and Ughetto (2014), born globals begin

companies with specialized products to create a niche market in a foreign country.

Kuivalainen et al. (2012) emphasized that exporting is not always straightforward and

that becoming a born global might take longer than 3 years. Gabrielsson et al. questioned

ratio standards, noting that international activities can be influenced by where the born

global originates, the economy, type of industry, and neighboring markets. Gabrielsson et

al. also stated that being a born global does not guarantee fast-growing foreign sales but

does enhance the long-term effectiveness of internationalizing.

Born globals typically have limited tangible and monetary resources (Tanev,

2012) and often lack financing and international business expertise (Trudgen & Freeman,

2014). Variables that directly affect the progress of born globals are innovation, finances,

strategies for the product, networks and marketing, and organizational learning (Freeman,

Hutchings, & Chetty, 2012). During the introductory phase, born globals rely on tactical

knowledge, which helps with both human capital and developing unique products (Zhou

et al., 2012).

Born globals usually depend on networks, especially for technological knowledge

(Freeman, Hutchings, Lazaris, & Zyngler, 2010; Freeman et al., 2012). Born globals also

often seek funding from both domestic venture capitalists and foreign investors (Braymen

& Wingender, 2014; Humphery-Jenner & Suchard, 2013; Manolova, Manev, & Gyoshev,

2013). For a born global to expand rapidly, managers need to consider and agree to the

details of the partnership relationship (Hohenthal, Johanson, & Johanson, 2014).

Zhang et al. (2009) compared born globals to traditional exporting manufacturing

firms and found differences in international learning capability, networking capability,

and experience. Comparing the incremental and born global approach, Zhang et al. found

the latter focused more on opportunity identification and exploration, whereas

incremental managers try to solve a problem by meeting a particular need. Zhang et al.

also found managers who have used an incremental approach and believed success of

internationalization was due to experience in domestic and familiar market environments

rather than any particular entrepreneurial expertise.

Born again global market entry. Bell, McNaughton, and Young (2001)

introduced the concept of born again globals as an extension to the born global

terminology. Born again globals are described as long established domestic businesses

with managers who are compelled to internationalize due to client followership or a

request for international patronage (Bell et al., 2001). Most born again globals are

managers with a SME who learn through trial and error as they quickly extend globally

taking advantage of opportunities as they go (Freeman, Deligonul, & Cavusgil, 2013;

Kuivalainen et al., 2012). Born again globals differ from born globals because the latter

begins global operations from inception.

Stieg, Hiebl, Kraus, Schüssler, and Sattler (2017) suspected most born again

globals rapidly internationalize due to a change in management or company acquisition.

Unlike the incremental approach, born again global managers quickly change focus and

accept rapid internationalization into countries that are farther in proximity (Kuivalainen

et al., 2012). Schweizer (2013) noted exactly how managers of global bound firms learn

from networking and developing synergistic strategies that enable internationalization

remains elusive. Cavusgil and Knight (2015) claimed research on each method of

internationalization stems from general information regarding their growth and survival.

Strategies of Market Entrance

Stieg et al. (2017) explained internationalization through terms of time and speed,

place of operation, and mode of entry. Hisrich (2011) noted novice entrepreneurs might

need to pace international investments slowly. Park et al. (2014) believed

internationalization depended on familiarity and compatibility with the complexities of

global business. Freeman et al. (2010) thought time is an important factor needed for

global entrepreneurs to cultivate relationships in order to gain and share tactical

knowledge. New global managers can incorporate some aspects of the incremental

approach in order to learn from the global experience of other firms (Zhou et al., 2012).

Cheng et al. (2011) recommended IEs might want to focus on creating a product to fit the

needs of the locals and then exporting them.

Zhou et al. (2012) used the term entrepreneurial proclivity to describe a

combination of market knowledge, innovativeness, and proactiveness. Zhou et al. also

discussed how acquiring market knowledge is complicated because of cultural and

operational dissimilarities between the firm and the host country. Ahmad (2014) noted

would-be IE must prepare for unfamiliar barriers in a host country. As an example, Ajayi

(2016) surveyed 235 small to medium-sized Nigerian agricultural firms and found

resource constraints, corruption, inadequate infrastructure, and lack of export assistance.

Rask (2014) stated that barriers to market entry require creative strategizing. An

especially valuable skill is the ability to improvise in unfamiliar business environments

by being flexible and alert to change (Bingham, 2009). Cheng et al. (2011) suggested IEs

use a strategic management guide as the following: look for uncommon resources or

skills in a host country, meet conditions and needs of local clients, recognize competition

in similar and supporting industries, and devise a plan and strategy to gain a competitive

edge on competitors.

In early studies of internationalization, product differentiation was widely seen as

a superior competitive strategy (Almor, 2013). More recently, scholars have emphasized

opportunity identification more than product differentiation (Jones et al., 2011). After

completing a study based on 323 business journal articles, Jones et al. concluded that

identifying opportunities was the best way to facilitate international business entry.

Su (2013) conducted a qualitative study with 13 Chinese technology firms

regarding market entry. Su (2013) listed exploitation, redeployment of resources, and

learning as key components of internationalization. In both studies, the researchers

emphasized the importance of not only leadership but also followership, along with the

development of social capital (Su, 2013). For Freeman et al. (2010), technological

experience supersedes market-specific experience and operation experience because it

enables a company to promote products faster than competitors can and more quickly

create codependency between buyer and supplier.

Capabilities of an IE

Autio, George, and Alex (2011) described capability as a manager’s competence

to organize an arrangement of resources and processes to attain a desired goal.

Conversely, there are conflicting views of what key capabilities IEs should have to

succeed. IEs must be able to organize, structure, and develop ideas and procedures that

conform to a global environment (Autio et al., 2011; Beleska-Spasova et al., 2012).

Roudini and Osman (2012) delineated four capability dimensions: people, resources,

timing, and opportunity; the first two constitute an initial capacity for internationalization,

while the last two are to seize new possibilities. Beleska-Spasova et al. (2012) developed

a list of four capabilities for IEs: knowledge, organizing, supervision, and technology.

Brannen, Piekkari, and Tietze (2014) emphasized foreign language skill, international

business knowledge, commitment to exporting, and technology intensity. Zhang et al.

(2009) stressed learning propensity, networking orientation, and motivation, while

Monferrer, Blesa, and Ripollés (2014) highlighted a manager’s capability to allocate

resources. Frasquet, Dawson, and Mollá (2013) listed cultural adaptability, openness to

change, and ability to adjust to international demands as key attributes.

Potential capabilities determine the success of entrance and operation in a global

market filled with uncertainties (Hisrich, 2011; Lonial & Carter, 2015). IE capabilities

also determine how intense a global market orientation will be (Kuivalainen et al., 2012).

Fernández-Olmos and Díez-Vial (2013) found born globals to be more successful than

established firms if they are committed to foreign markets and are able to adapt native

elements to a new environment. Griffith and Hoppner (2013) noted the need for IEs to

develop soft skills such as leadership, interpersonal communication, and passion. Such

capabilities will enable one to articulate a global purpose, establish partnerships, acquire

resources, and diversify networks.

Vance, McNulty, Paik, and D'Mello (2016) in addition to Li and Lin (2015)

affirmed the need to focus a product’s marketability on conditions of the host country.

Hisrich (2011) noted the importance of understanding the legal and regulatory

environment of the host country. Lin and Darnall (2015) emphasized the ability to build a

business network because it allows access to opportunities, adds to a firm’s credibility,

and creates strategic alliances. IE orientation drives exploitative and explorative

capabilities, argued Boso, Cadogan, and Story (2013). Some IE authors believed IEs must

discover a balance between exploration and exploitation (Lisboa, Skarmeas, & Lages,

2013). Wei, Samiee, and Lee (2014) stated managers do well to use a RBV in

determining market orientation.

Prior Knowledge

Butler et al. (2010) stated IEs should have the same attributes as domestic

counterparts (i.e., be risk takers, organizers, innovators, etc.). Hohenthal, Johanson, and

Johanson, (2014) believed prior business and market knowledge would enable born

globals to combine existing wisdom with new information. Autio et al. (2011) analyzed

how managers of new startups use experience from previous professional roles to

transfer, modify, and combine skills for new organizational capabilities. Unlike novice

managers with limited knowledge of international markets, entrepreneurial firms with

leaders who have prior knowledge tend to enjoy more rapid and successful

internationalization (Baum, Schwens, & Kabst, 2013; Jones & Casulli, 2014).

Hilmersson, Sandberg, and Pourmand Hilmersson (2015) studied 203 SMEs

where managers had prior market entry experience and concluded that

internationalization knowledge reduces uncertainty. Conversely, using previous methods

can be restrictive to new IEs because transferring old ideas to a foreign environment

might not work (Autio et al., 2011). Rego, Cunha, and Clegg (2012) recommended

business managers to keep an open mind, abandon old business methods, and embrace

innovative strategies conducive to new market dynamics.

Uncertainty

Uncertainty for IEs goes beyond simply being a new company because there are

additional liabilities of being a foreigner (Vahlne, Schweizer, & Johanson, 2012). Sources

for uncertainty abound with different ethical and labor standards, tariffs on goods, politics

and security, cost disparities, and cultural and language differences (Hisrich, 2013).

Uncertainty also accompanies dealing with products and institutional factors (Autio et al.,

2011; Karra et al., 2008), organizational structures (Autio et al.,

2011; Hisrich, 2013), gaining access to resources and market entry (Autio et al., 2013;

Karra et al., 2008), and dealing with consumer needs (Autio et al., 2011; Johanson &

Vahlne, 1977, 1993, 2009). Uncertainty also can be the result of the forced use of

domestic business approaches that may not be appropriate in a foreign country (Rego et

al., 2012). Butler et al. (2010) stated IEs must be comfortable dealing with uncertainty

because managers in a global setting inevitably deal with ambiguity. Indeed, Butler et al.

argued, IEs may need to deal more with uncertainty than with risk, because with risk one

can calculate an anticipated value for the potential actions and pick the action with the

most beneficial expected outcome.

One antidote to uncertainty is the ability to improvise (Hohenthal et al., 2014).

Improvisation depends on the type of business and circumstances (Zahra, 2014).

Improvisation should not govern overarching decisions, such as where to locate an

overseas business (Zahra, 2014). Instead, use it in situations requiring flexibility and

alertness to change (Bingham, 2009). Bingham (2009) mentioned a dearth of information

regarding which condition works best. IEs use less improvisation of opportunities such as

country selection, and more on selected prospects, which permitted flexibility and

alertness to change (Taylor & Jack, 2013). Bingham further explained that after opening a

new venture, planning is more important in handling certain needs if operating in multiple

markets. Some IE scholars have noted improvisation coupled with an awareness of the

need for consistency, produced the most successful outcomes (Autio et al., 2011;

Hohenthal et al., 2014).

Failures and false opportunities are common in internationalization. Initial stages

of international entrepreneurship can be difficult because of established competition

(Oviatt & McDougall, 2005; Uner, Kocak, Cavusgil, & Cavusgil, 2013). The challenge is

how to learn from mistakes (Mainela et al., 2014). Schoemaker and Krupp (2015) noted

that entrepreneurs learn by experimenting, problem solving, and making mistakes. Being

able to recognize an opportunity does not necessarily mean that one is ready to act on it

(Butler et al., 2010). IEs must be able to weigh the risks and uncertainties of identified

opportunities (Kalinic, Sarasvathy, & Forza, 2014). IEs who succeed globally are those

who can identify the opportunities and to adapt to uncertainty (Butler et al., 2010; Cheng

et al., 2011).

Global Business Dynamics

Successful IEs eventually become established industry participants. Successful

IEs do so partly by observing competitors’ methods and deciding which of those to use as

their own (Andersson, Danilovic, & Hanjun, 2015). Oparaocha (2015) noticed after

performing a multi-case study that SMEs were able to achieve more goals with

interdependent system partners.

In areas where political pressure makes continuing operation untenable, managers

can continue in the same industry elsewhere (Vissak & Zhang, 2016). Alternatively,

managers might elect to withdraw entirely from the global market and focus efforts

domestically (Javalgi et al., 2011). Exiting permanently might not be the best decision,

because lessons to learn in order to reenter the market (Vissak & Zhang,

2016).

Competitive Advantage

International entrepreneurship is a progressive phenomenon because it involves

trying to secure opportunities for growth and profitability, compete for resources, and vie

for a competitive advantage (Bingham, 2009). Butler et al. (2010) extended what Oviatt

et al.’s (1994) work entailed about three elements of unique resources for sustainable IE:

flexibility, keeping certain business transactions internal, and knowing the underlying

methods to create a product or service. Cheng et al. (2011) recommended a strategic

management process when embarking globally to monitor economic trends in markets

and global stakeholders.

Competitive advantages are optimal. A competitive advantage is more likely to

result when a business produces a product at a lower cost or supplies a product that the

market lacks but for which there is demand (Casadesus‐Masanell & Zhu, 2013; Cheng et

al., 2011). Competitive advantages also occur when business owners surpass competitors’

ability to respond to clients’ needs (Salunke, Weerawardena, & McColl-Kennedy, 2013).

IE scholars provided similar advice about how to gain competitive advantages. Coelho

and Laporte (2014) recommended keeping a short life cycle for perishable products.

Karra et al. (2008) highlighted how IEs attempt to acquire superior local talent and labor

(i.e., human capital), and, when necessary, alter business models and practices to fit the

host country.

When seeking competitive advantages, IEs might have to unlearn skills used

successfully in the past, especially if they were involved in domestic markets or in a

multinational firm for a long time (Kumar, 2013). Cheng et al. (2011) stated IEs should

think globally but tailor products and services locally. Cheng et al. listed three factors

contributing to competitive advantages: uncommon resources or skills, foreign

subsidiaries that help with local needs when specific situations arise, and a subsidiary that

understands global networks.

Information acquisition and adaptive capability play a large role in achieving and

maintaining a competitive edge (Mao, Liu, Zhang, & Deng, 2016). Trade shows and

conferences can help IEs gain knowledge (Jia, Rutherford, & Lamming, 2016). Karra et

al. (2008) studied an IE who founded two successful ventures, and identified three

components of successful value creation in a global venture: ability to identify

opportunities, possession of multifaceted international resources, and capacity for

crosscultural collaboration. Lages, Mata, and Griffith (2013) recommended changing

global marketing tactics when facing declines in performance, and moving to different

areas when necessary.

Networking

One disadvantage born globals face is lack of access to the resources that

established multinational corporations have (Cavusgil & Knight, 2015). A way to

overcome that disadvantage is through networking (Hohenthal, Johanson, & Johanson,

2014). Zhang et al. (2009) defined networking as the ability to capture resources by

creating alliances and social connections. Networks can involve either individuals or

organizations that help connect clients, suppliers, service providers, and government

entities (Zhang, Tansuhaj, & McCullough, 2009). Chang, Jack, and Webster (2017)

discussed how most IEs constantly seek out resources from the external environment and

inter-firm networks.

In external networking, contacts help new enterprises cope with challenges in

obtaining customers and suppliers in the early phase of business formation (Sigfusson &

Chetty, 2013). Entrepreneurs commonly perform external networking to expand the firm

and establish reputation-enhancing relationships with other parties to share valuable

information, finances, and technology (Dobson, Breslin, Suckley, Barton, & Rodriguez,

2013). Networking is important in developing entrepreneurial capabilities used to form

strategies and to enhance learning (Sigfusson & Chetty, 2013).

An entrepreneur’s social position within a network affects his or her success

(Stam, Arzlanian, & Elfring, 2014) and networks typically reflect the patterns of

interaction in a particular community, district, or region (Rauch, Rosenbusch, Unger, &

Frese, 2016). An entrepreneur’s network position provides access to external information

and knowledge, which can increase production (del-Corte-Lora, Vallet-Bellmunt, &

Molina-Morales, 2017; Semrau, & Werner, 2014). Knowledge gained from networks

transforms into producing new products and improving existing ones (Chen, Chang, &

Lee, 2015). Torkkeli, Kuivalainen, Saarenketo, and Puumalainen (2016) researched how

effective networking contributed to successful internationalization.

Zhang et al. (2009) emphasized networking as one of the main strategies for IE,

because it helps to diminish a few uncertainties managers have of not understanding

everything in their field. Having networking capability is imperative in acquiring

resources such as strategic information, reliable foreign partners, and the latest

information on the industry (Roudini & Osman, 2012). IEs maximize the benefits of

networking through associations and various business networks to acquire and control

transferrable assets to international locations (Oparaocha, 2015). SMEs heavily rely on

technological resources and local partners to help them expand to many markets in a short

period of time (Ciravegna, Lopez, & Kundu, 2014); Fernandez-Olmos & Diez-Bial,

2013).

The effectuation theory correlates to successful entrepreneurial networking.

The effectuation theory originated with Sarasvathy (2001) who interviewed 27 expert

entrepreneurs about their strategies of starting a business and dealing with situations of

uncertainties (Sarasvathy, Kumar, York, & Bhagavatula, 2015). Sarasvathy composed

principles from the results known as effectuation logic for new entrepreneurs to help

create opportunities with network partners by sharing resources that are currently

available and shaping goals based upon what each has to offer (Ciravegna et al., 2014).

Networking also facilitates greater technological capability. Ramos, Acedo, and

Gonzalez (2011) studied 945 SMEs and found having access to technology helped

accelerate internationalization. Pérez-Luño, Wiklund, and Cabrera (2011) studied 2,942

managers and found that when IEs collaborate with other firms, 54% adopt innovations of

those in their network, 7% generate innovations on their own, and 39% combine the two.

Karra, Phillips, and Tracey (2008) identified successful IEs as being able to develop the

cross-cultural connections needed to foster global relations with partners throughout

different parts of the supply chain.

Advances in technology, communication, social networks, and transportation have

made connectivity for global ventures easier (Oviatt & McDougall, 2005). As an

example, many IEs use social networks such as LinkedIn to build partnerships (Sigfusson

& Chetty, 2013). Freeman et al. (2010) believed many skills, techniques, and experiences

are difficult to codify because they occur in social networks. Despite technological

advances, however, there is still a lack of understanding about how managers develop and

maintain networking partners (Sigfusson & Harris, 2013).

Gaps in Literature

Congruent with the lack of literature on strategies needed for IE future value

creation, many aspects of the IE topic are sparse and tenuous. Among what is not known

is how IE’s ethics, values, and personal agendas affects learning and responding to

business opportunities and uncertainties (Baumann-Pauly, Wickert, Spence, & Scherer,

2013; Knudsen, 2013). Information is also needed about environmental forces that

influence learning and internationalization performance of minority groups (Mitchelmore

& Rowley, 2013; Sciglimpaglia, Welsh, & Harris, 2013). Javalgi, Deligonul, Dixit, and

Cavusgil (2011) stated that IE scholars perform too few studies on IEs in other emergent

markets as India. De Vita, Mari, and Poggesi (2014) researched gaps concerning limited

research on entrepreneurship in developing countries. Hagen, Denicolai, and Zucchella

2014) identified gaps regarding effective approaches to increase performance and

sustainable growth for many areas of IE literature.

Transition

In Section 1, my discussion centered on why exploring strategies needed for

international entrepreneurship may be beneficial to small business entrepreneurs.

Highlighted in the foundation of the study and the background of the business problem

was how globalization has opened the path to more business opportunities and profit. The

problem statement embodied the premise of this study, which was the exploration of

strategies needed for international entrepreneurship. The purpose statement included the

importance of studying IE strategies, which could lead to longevity, competitive

advantages, and profit for small business owners who want to operate internationally.

Section 1 also encompassed the nature of the study, which was an area I used to

justify why a qualitative method was sufficient to examine a human experience or event.

Section 1 included the central research question regarding the necessary IE strategies in

addition to the interview questions asked to the participants. The conceptual framework

segment featured an explanation of why the RBV complimented the study. The RBV was

what most international entrepreneurship scholarly literature attributes to how small

businesses configure resources to gain competitive advantages and enter the global

market successfully. The operational definitions of terms consisted of a list of technical

terms used in the study. Also covered were assumptions that are facts thought as true, a

limitations list of potential shortcomings, and delimitations, which were the boundaries of

the research. Section 1 also included the significance of the study, how the research could

lead to social changes by creating wealth for small business owners, and employment for

residents in the host country.

Section 1 also consisted of a literature review of relevant scholarly material that

divulged how researchers could connect the RBV to business practices to create tangible

and intangible assets needed to acquire a competitive advantage. Section 1 also

encompassed the history of IE and its evolution from an incremental approach to full

immersion into foreign territory. Section 1 had information regarding the profit-based

motivations of IE, strategies to market entry that highlighted trade, hypothetical

capabilities of IEs, benefits of having prior experience when entering the global market,

uncertainties of operating in a foreign country, general global business dynamics,

potential ways to competitive advantages, and how networking is beneficial. Section 1

closed with general gaps in international entrepreneurship literature.

Section 2 will begin with a reiteration of the purpose statement. Section 2 will

contain the role of the researcher and the type of participant sought. Section 2 will also

display that as a Walden University researcher, I adhered to the school’s Institutional

Review Board (IRB) guidelines. Section 2 will include how a qualitative research method

and a case study were suitable for an exploratory descriptive study. Section 2 will also

consist of a discussion on the population and sampling component, which exhibits the

requirement for five participants for this study. Also included in this section will be a

description of the ethical protections to maintain a safe and confidential environment for

the IE. Section 2 will end by exhibiting the data collection instrument, which is a list of

interview questions, the data collection technique that highlights several settings the

interview may occur, the data analysis used to scrutinize interview results and documents,

and the preservation of reliability and validity of research by keeping a personal journal.

The central research question for this study will be in Section 3. A brief summary

of the findings from conducting the interview and comparing the results with industry and

commercial reports will also be in Section 3. A list and an explanation of resonating

themes will also be contained in this area. Section 3 will exhibit the comparison of results

to the scholarly information found in the literature review and any new studies that arose

before this study ended. This segment will conclude with the results of the study

amalgamated into the conceptual framework and current literature on effective business

practices.

Section 2: The Project

The following section will contain a detailed plan regarding the data I collected

from five small international entrepreneurship firm owners through semistructured

interviews and review of cultural guides and government information needed to operate

in the UAE. The type of services offered from the small business owners may have

provided insights on how the firm’s structure may affect the strategies. In section 2, I will

also discuss elements of the data collection process to include the following: purpose

statement, role the researcher, research participants, research method and design,

population and sampling, ethical research, data collection instruments, data collection

techniques, data organization techniques, and reliability and validity.