Effectual control and small firms' international performance: the mediating role of partnership and gaining new knowledge

Abstract

PurposeExtant research has studied how entrepreneurial cognition influences firm international performance but what mechanisms translates entrepreneurial cognition into international performance remains a puzzle in the field. In this paper, the authors utilize effectuation theory to theorize this association.Design/methodology/approachUsing a survey of 164 internationalizing small firms from New Zealand, the authors examined a model of entrepreneurial cognition, action and gaining new knowledge as a framework to explain how effectual control, partnership for new opportunity creation and gaining new knowledge influence small firms' performance.FindingsThe authors found that partnership for new opportunity creation, and gaining new knowledge are two important mediation mechanisms in the focal association between effectual control and international performance.Research limitations/implicationsThis study is a cross-sectional design. Considering the importance of time in cognition and action, future research should utilize longitudinal research design.Practical implicationsThe authors’ findings provide implications for both small firms' managers and policymakers. These findings identify the critical importance of continuous knowledge development in internationalization process. Policymakers can help small firms gain more relevant and timely information about international markets and incorporate them in their decision-making to further develop international opportunities.Originality/valueThe authors contribute to international entrepreneurship research by delineating and verifying the important associations between entrepreneurial cognition, action and gaining new knowledge and their outcomes for firm's international performance. The authors also contribute to effectuation theory by elaborating on effectual control and how this logic leads to the development of new knowledge.

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External environment and internal dynamics of “born global”: strategic and operational firm performance

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CONCEPTUAL FRAMEWORK ON MARKET ORIENTATION AND PERFORMANCE OF SMEs: ALLIANCES AS MEDIATING

“…Previous research on domestically operated Pakistan SMEs by Ahmad et al (2021c) reveals that alliances play an important role as a mediator between market orientation and performance. Karami et al (2022a) study on effectuated control, alliances, getting new knowledge, and international performance provides evidence that effectuate control results in the perspective of effective international performance through alliances and acquiring knowledge. According to previous research by Nakos et al (2019g), the regression results are significant when both market orientation and partnerships are included.…”

“…The study was necessitated for SMEs due to the varying business conditions and major competitors in the global business and the continued emergence of new customer preferences in global markets. Furthermore, Karami et al (2022b) employed perceptual measurement of international performance in prior research. Doubtless, Tolstoy et al (2022) argue that further effort is needed to make better use of objective data or multi-source performance assessments to develop more accurate evaluations of the association between antecedents and international performance.…”