When are innovativeness and responsiveness effective in a foreign market?

Abstract

Good managerial understanding of the mechanisms underlying the effectiveness of entrepreneurial orientation (EO) and market orientation (MO) in dynamic foreign markets improves the international competitiveness of the entire firm. Drawing on the dynamic capability view, this study contributes to the international strategy and entrepreneurship literature by extending our understanding of the actionable components of the EO/MO of firms' foreign units, that is, innovativeness and responsiveness. The study examines relationships between the actionable components and the performance of industrial firms' wholly owned subsidiaries and cooperative arrangements in foreign markets. The results indicate that innovativeness and responsiveness are directly and positively associated with the performance of the foreign unit. Higher institutional barriers make innovativeness less effective, while full ownership strengthens the positive relationship with responsiveness. Contributions to the literature are discussed. Abstrakt Das Managementverständnis der Mechanismen, die der Effektivität der unternehmerischen Orientierung (EO) und der Marktorientierung (MO) in dynamischen Auslandsmärkten zugrunde liegen, verbessert die internationale Wettbewerbsfähigkeit des gesamten Unternehmens. Diese Studie stützt sich auf die Dynamic Capabilities View und liefert einen Beitrag zur Literatur zu internationaler Strategie und Unternehmertum, indem sie das Verständnis der verwertbaren Komponenten von EO/MO der ausländischen Einheiten von Unternehmen, d.h. Innovationsfähigkeit und Reaktionsfähigkeit, erweitert. Die Studie untersucht die Beziehungen zur Leistung von hundertprozentigen Tochtergesellschaften und Kooperationen von Industrieunternehmen auf ausländischen Märkten. Die Ergebnisse zeigen, dass Innovation und Reaktionsfähigkeit direkt und positiv mit der Leistung der ausländischen Einheit

Impact of innovativeness, risk-taking, and proactiveness on export performance in a developing country: evidence of qualitative study

“…They also responded to the calls of Covin & Miller (2014) and Wales (2016), who have reiterated the need for qualitative studies to refine the insight into EO manifestation within the organization, which has an impact on the performance of international ventures. Furthermore, our findings meet several scholars’ inquiries for investigating EO impact on foreign market performance in a disaggregated manner as they have a diverse impact (Dai et al , 2014; Pehrsson, 2019; Pehrsson, 2016; Shan et al , 2016). The present research has also responded to the inquiry of SMEs’ strategic orientation and export success in international business (Knight et al , 2020).…”

“…Therefore, many studies called for further research on the impact of EO on firm performance (Pehrsson, 2019; Rua et al , 2017; Knight, Moen, & Madsen, 2020). In the context of methodology, several studies suggested that EO dimensions’ nature on firm performance is vital to explore EO and SMEs’ internationalization (Miller, 2011; Jones et al , 2011).…”

The Impact of Entrepreneurial Orientation on Foreign Market Entry: the Roles of Marketing Program Adaptation, Cultural Distance, and Unanticipated Events

“…Based on theoretical roots anchored in the notion of matching firms' strategic orientation, traits and capabilities with those required by the environment in which they operate, we use the dominant logic (Prahalad and Bettis 1986) and adaptation (Chakravarthy 1982) frameworks, to propose that the effectiveness of EO in foreign market entry depends on the degree to which the traits that reflect a strong EO are beneficial to the entry. Furthermore, the notion that a strong EO imbues firms with a greater capacity to modify their capabilities and better align them with the market is consistent with the premise that EO is a dynamic capability (Jantunen et al 2005;Pehrsson 2019).…”

Management Control Systems and Performance: The Mediating Role of Organisational Capabilities in Malaysia

“…Market responsiveness is crucial to a company's performance because it manifests the firm's strategies in foreign markets and are actionable (Cadogan, 2012). Pehrsson (2019) demonstrates that market-driven responsiveness is an actionable component of strategic orientations that affect performance. The ability of an organisation to quickly respond to customers' needs and demands enhances customer satisfaction, and thereby is a value-creation capability critical for sustained competitive advantage.…”