Towards an integrated and longitudinal life-cycle framework of international entrepreneurship: Exploring entrepreneurial orientation, capabilities, and network advantages overcoming barriers to internationalization

Abstract

This article consists of five complementary parts. The Introduction portrays the increasing challenges of entrepreneurial internationalization encountered by smaller and younger firms facing highly competitive, difficult, and near-crisis environments. The literature review of the extant internationalization theories, in five related streams, will examine each stream’s benefits, contribution, and difficulties from the evolving perspective of an internationalizing enterprise over the span of its life-cycle, ranging from embryonic to growth and maturing stages. Based on the current and prevailing experience, a longitudinally integrated internationalization framework addressing different aspects evolving over the firm’s life-cycle stages is proposed and its necessary building blocks are discussed. A critical examination of the framework from the perspectives of both the received theory and ongoing practice points to its advantages and opportunity for further complementary scholarly developments beyond this article.

Introduction

Procrastination has been a common human tendency in formulating a solution for relatively involved and difficult problems before they would reach a critical importance. For example, humanity has collectively had the opportunity to reduce, if not stop, global warming for a long time. From an entrepreneurial perspective, this has been not only a forgone opportunity but also causing untold and increasing damages. Ironically, the world seems to be less entrepreneurially oriented than entrepreneurs.

The global warming issues have been with humanity for more than 5 decades and it has been getting more serious continuously, and we are still in the process of negotiating to get commitments to reduce our hazardous emissions in the next 10 to 30 years before 2050.¹ We can all observe that global warming damages have been intensifying in the past 40 to 50 years and nearly everyone has been affected buy it. It has been inflicting higher damages on ever-larger population of the world with torrential rains, massive floods and mud-slides, hurricane, tropical cyclone, and typhoon in parts of the world that had not experienced such increasing intensities before, while droughts, extreme heat, and forest fires are threatening, or destroying, in other parts of the world, all of which are further contributing to the ongoing global level crises. Although, the humanity has known about the potential symptoms of global warming, and may have experienced its damage, affecting practically everyone over the past 30 to 40 years, we have neither developed capabilities nor yet collectively prepared to deal with the unfolding crisis. While these crises’ costs are mounting, their related opportunities are becoming increasingly more precious, but eroding at the same time. The question is what has been stopping us from taking advantage of opportunities and reducing costs at a global level at the same time? This question is not far from entrepreneurs not taking, not realizing, or not being capable of taking entrepreneurial action to achieve their entrepreneurial dreams, aims, and objectives and delivering benefits to their stakeholders. The parallel question is what has been stopping them, both at the global and individual levels to proceed? The preliminary answer seems to lie in the absence of strong will to take positive steps. From an entrepreneurial perspective, entrepreneurial orientation, vision, or clear pathways on which aspiring entrepreneurs could embark have been missing. From a practical, if not a radical, perspective, the above absences maybe due to the lack of collective agreement on a clear pathway with equally recognizable milestones on the road to entrepreneurial destinations. In short, the above global warming theme should serve as an analogy for building capabilities to decaying opportunities and rushing to transform them into structures that benefit all of us as a whole, before it is too late. Ironically, the world experience with the COVID-19 pointed to our collective abilities to mitigate the accelerating socio-cultural and economic damages that were brought under near full control in less than 3 years, pointing to our collective capabilities, should the humanity decide to deal with the respective issues as it was done in the pandemic.

Due to the global scale of the problem, the popular media soon coined the phrase of “New Normal” without much elaboration about the characteristics of the newly emerging situation; which points out that the proven routine past practices would no longer work and there is a need for adopting new regime requiring a re-examination of the past and possibly devising new strategic action in a timely fashion to reflect, and possibly avoid, repeating the past and resolving the newly emerging problems.

Following the totality of the above arguments, international entrepreneurship is on the dawn of a new era of challenges and opportunities requiring innovative solutions. It is, therefore, incumbent on scholarly research to raise the following questions and suggest some solutions: (i) How and why some smaller and internationalized enterprises failed to deal with the unexpected even caused by the COVID pandemic locally and internationally; (ii) How should they prepare for an ongoing, or another unexpected, problem occurring in the very near horizon; and more importantly (iii) How should the entrepreneurially-oriented enterprises prepare to formulate new strategies for the emerging problems and situations given their prevailing (e.g., age, capabilities, experience, and information) constrained resources?

Aims, objectives and research questions

As stated above, the primary aim of this article is to explore how and why some smaller and younger internationalizing firms have not been, or are not yet, highly successful, while others consistently find new opportunities and prosper by exploiting them over time. The initial critical examination of the extant theoretical streams, or families, of the literature, each following its own assumptions and patterns of developments, suggest a critical examination for formulating adaptations and change in some of their specific characteristic are necessary to meet the currently prevailing “new normal” conditions. Accordingly, we will examine aspects of the extant theory from the perspective of smaller and younger enterprises over their lives, while aspiring to internationalize in their early stages of life-cycle—soon after starting-up, proceeding to continue evolving over their later stages and successfully reaching successful maturity eventually. Accordingly, the research questions facing us are (i) Whether internationalizing firms can, or should, replicate their early-life strategies or should they broaden and enrichen them as they evolve for reaching more diverse international markets in order to achieve higher global competitiveness over time, and (ii) Can they rely on the received theory to grow continually, or is there a need for constructing new building, or different strategic-building blocks to sustain their evolving international developments over their evolving lives and later stages of their life cycle as they grow internationally and mature overtime?

The structure of this paper

This paper consists of the following parts. Following the above introduction portraying the challenging environment that smaller and younger firms experience, a literature review of the extant literature in five streams, each discussing a family of related theoretical developments, will be presented to set the stage for further examination of the received theories for their general efficacy to solving entrepreneurial internationalization’s ongoing challenges and problems, or if structural development and modifications are required. In the “Further development” section an examination and questioning of the received theoretical streams from entrepreneurial internationalization perspective will highlight their respective shortcomings and provide potential directions and lessons, which motivated the construction of an integrated and longitudinal framework carefully, built on a small number of critical building blocks patterned after, and reflecting the prevailing practices; but not strictly based on the extant theory. The “Discussion” section will build on the complementary research of the other four published articles included in this issue with two clear tasks in mind: (i) Seeking to identify aspects of the proposed framework that could, or should, be improved and refined beyond this article, and (ii) Pointing out short-comings in the received theory in need of further improvements for their respective increased applicability to the currently prevailing conditions facing smaller and younger enterprises aspiring to internationalize prudently and successfully. A brief Conclusion suggesting complementary new avenues for extending this research is presented at the end.

Literature review

The building blocks of Internationalization Theory have been evolving in separate streams over the past 60 years, going back to the late 1950s, complementing, converging, and also differentiating the extant literature from the prevailing state of international business at the time. This brief review will highlight them in five distinguishable and related streams with different beginnings, orientations, perspectives, and relatively different implications for international entrepreneurship; while all related to, and shedding light on, the firm’s process of entrepreneurial internationalization.

Brief overview of stream no. 1: Exporting and the “I-Models”

The earlier theoretical developments of this stream followed the actual acts of exporting from one home-country to a host-country and then to a number of other foreign local country markets over time. Earlier researchers (e.g., Vernon 1966; Bilkey 1978; Cavusgil (1980a, b, 1982), and Kogut and Harbir 1988) offered a deeper understanding, and improved-upon exporting, so that an exporting firm could attain foreign growth, generate revenues of foreign origin, increase its economies of scale, enrich its experiential knowledge, learning and benefiting from international competitors, and become more globally competitive more effectively in a shorter span of time. The shortening of product life-cycles (PLCs) increased the importance of time pressure in favor of conducting more research, development, and innovation-based exporting than an emphasis on entering into more environmentally-similar markets (Johanson and Wiedersheim-Paul 1975 and 1977, and Johanson and Vahlne 1977 and 2009) that suggested faster gains in experiential knowledge (i.e., The initial aim in the U-Models, highlighted below). Consequently, most firms offered something of higher value than those of others, e.g., new products, better quality at lower prices, and innovative features, which were enhanced through innovation enabling higher competitiveness and responsiveness globally, as opposed to concentrating on environmental similarities (or avoiding differences), for prolonging the firm’s products life cycle (PLC), across time and similar markets; but did not explicitly suggest that the younger firms should diversify through further inventions, and innovations, to enter markets offering higher opportunities, but in less similar markets, as compared to their home market(s).

The beginning of this stream can be traced back to Penrose’s (1959) seminal theory of firms’ growth sowing the seeds for the behavioral theory of the firm, and the resource-based view of the firm, both of which were articulated later by Cyert and March (1963), Barney (1991), and Grant (1996), respectively, suggesting that the initial, and possibly experimental, exporting could provide a platform for incremental international growth, which could enhance revenues through expanding exporting activities capable of exposing the management to diverse international opportunities and providing them with additional capabilities, information, knowledge, and resources over time. Related to, if not within this Stream, Vernon’s (1966) theory of international product life cycle (IPLC) suggested that exporting to selective international markets became a deliberate strategic action in innovative firms, which not only transformed the initial exporting to local production and exporting from there to other markets; but it also prolonged the product life cycle of a firm’s range of innovative product(s) beyond its home market as they were further adapted for environmental diversity and generated many corresponding advantages for the firm over time. The end-result of the IPLC was that an initially exporting firm would generate intellectual property revenues and eventually outsource a wide range of products from others, which had experientially adapted their respective production processes and augmented the initial innovation(s) to enhance the ultimate customers’ perceived values (CPVs) that has since become an accepted criteria for international customers buying higher quality and value exports and in turn stimulating exporting firms’ internationalization.

The concepts of innovation and innovative products attracted much early research by many scholars, including, but not limited to, Bilkey and Tesar (1977), Bilkey 1978 and 1982, Cavusgil (1980a, b, 1982), Reid (1981 and 1983), Cavusgil and Godiwalla (1982), Czinkota (1982), Dichtl et al. (1990), Reid and Rosson (1987), and Welch and Luostarinen (1993). Exporting, especially for smaller and home-market-oriented firms, required a comparative examination of their home, and host marketing and distribution processes to meet differences in the consumer behavior and environment by improving upon them to generate benefit for both the home and host markets, which would in turn result in incremental learning and consequent improvements in the firm’s operations, innovation processes, and competitiveness in all markets, including its home market. A notable difference in this stream is the works of Luostarinen (1980), Luostarinen and Welch (1997) and Welch and Luostarinen (1993), which suggested importing from a lower-cost (or higher value) international source(s) could enhance the firm’s competitiveness and growth at home and subsequently lead to exporting to the rest of the world later on. This research not only set the early foundations for outsourcing from lower-cost, or higher-value, production sites for international sales elsewhere, but it also pointed out that inward internationalization could be used to gain competitiveness at home and possibly lead to outward internationalization subsequently. The inward-outward internationalization interactions were further examined by others later-on, including Kaminski and Smarzynska (2001) and Korhonen (1999). In short and due to the examination of firms’ (or competitors’) products and processes leading to improvements, innovation, and change, this family of research and theory building is known as the innovation-based (or the I-Models) of internationalization).

Brief overview of stream no. 2: Internationalization and the “U-Models” or the “P-Models”

The initial work of Johanson and Wiedersheim-Paul at the Uppsala University in 1975 and 1977 (Johanson and Wiedersheim-Paul (1975 and 1977) served as the early seeds for the development of this stream. Initially, it examined the cases of four Swedish pharmaceutical firms expanding into other neighboring Scandinavian countries. Johanson and Vahlne (1977) improved upon the earlier publications and proposed a process model. As a result, the model is also referred to as the process or the “P-Models” or the "U-Models" of internationalization. Similar to its predecessors, the model assumed that firms operating in the host mark do not have perfect access to, nor a perfect comprehension of, information about their potential host’s overall environment requiring them to gain experiential knowledge locally to obtain a deeper comprehension of relevant information about the market characteristics, competitors, consumers, and others in order to enable the firms to serve the market better and increase the firm’s commitment to the market over time (e.g., going from simple exporting to local production and marketing). It suggested that a firm could commit more to a host market as its management gained more information experientially, reduced its risk exposure, and also succeeded in managing its local operations more effectively.

This model has been revised repeatedly by its original authors, including Johanson and Vahlne (1977, 1990, 1998 and 2003) and Vahlne and Johanson (1975 , 2002, 2013 and 2017). It has been extended beyond exporting and into eventual local operations in many counties overtime as the firm gained increased experiential knowledge and committed more to each host-market. It has, therefore, become more comprehensive in its scope, but with much slower progress than the I-Models, discussed earlier, and the other streams that developed later. The noteworthy point about the above two streams is that firms would respond to a perceived, or substantiated, opportunities with their internationalization strategies. In the I-models, Innovation in products to adapt to market differences mobilized further internationalization, while higher commitment to more local operations and local processes in the P-models lead to higher internationalization. However, both streams appear to be less entrepreneurially oriented and relatively slower, but strategically more prudent, than other steams discussed below.

Brief overview of stream no. 3: Hybridization of models, networking, and change in the unit of analysis—The H-Models

The previous two streams’ focus was mainly on the focal firm deciding and managing its process of internationalization without collaboration or partnership with others for the most parts (with the exception of Luostarinen (1980) and Welch and Loustrainen and (1993) on inward-outward internationalization). Stream no. 3 combines not only certain aspects of the previous two Streams’ processes—i.e., exporting and progressive internationalization—but it also broadens the unit of analysis from the principal firm to a network of cooperating firms that are, or could potentially be, involved in joint internationalization processes. Furthermore, this stream allowed for increasing collaboration among networked companies’ internationalizing directly as well as benefitting indirectly from their collaborative relations with others with similar aims and internationalization interests, most, but not all, of which were equally beneficial to the members and the network as a whole.

The topic of the network had been used broadly, and in different disciplines, including political Sciences, Psychology, and Sociology, before it was introduced by Johanson and Mattsson (1988) to international business for augmenting, or even enabling, internationalization through networking processes, followed by others’ recognition that collaboration among smaller firms, especially in the local foreign markets, could mitigate against “outsidership” (Johanson and Vahlne 2009). Similarly, Bell et al. (2003) reported on complementary layers of direct and indirect collaboration among smaller firms in nested and larger networks. Collectively, network members were expected to benefit from their direct and indirect cooperation with other members in their network as they were assisted by, and benefited from, network members, in promoting exports and exporting (i.e., the I-Models) and non-sequential internalization activities internationally (i.e., the P or U-Models) among SMEs (Osarenkhoe 2009). Networking and cooperative arrangements enabled entry into international markets with more complexities far-beyond a small firm’s capabilities and resources. Consequently, smaller firms began to expand their cooperative relations for developing higher incremental capabilities, acquiring more information, knowledge, and accumulating resources through collaborative networking beyond those of their own (Per Andersson 2002a, Svante Anderson 2002b, and Björkman and Forsgren 2000). One of the end-results of cooperation was gaining access to the network’s physical resources and highly valuable tacit knowledge (Nonaka and Takeuchi 1996 and Nonaka et al. 2014)² as well as contacts in international markets, which helped to expedite their internationalization processes and reduced their associated foreign local costs and risks. This family of benefits motivated extensive research and publications in the topic, including Araujo and Easton (1996); Brennan and Turnbull (2002); Bridgewater (1999); Chen and Chen (1998); Ghauri and Holstius (1996); Hunya (1998); Kaminski and Smarzynska (2001); Ritter and Gemünden (2003); Rumyantseva and Tretyak (2003); Salmi (2000), and Wilkinson (2001) (See the “Further developments” section for more elaboration and discussions). In short, this stream highlights the benefits of longer-term and mutually beneficial relationships with suppliers, service providers (e.g., members of the distribution channels in international markets) and even customers to improve upon the ultimate CPVs while receiving and delivering mutual benefits to most stakeholders.³ However, most network relations are context-bound and may inhibit other strategies (e.g., collaboration with members of competing networks).

Brief overview of stream no. 4: Internationalization of large firms

While the theories of Stream No. 1 (i.e., the I-Models) primarily addressed smaller firms and entry into relatively different international markets, the theories of Stream No 2 (i.e., the U-Models) were found to be applicable not only to firms of all sizes, including smaller, growing and becoming larger internationalized firms, such as multinational enterprises (MNEs). However, the theoretical foundations in the fourth Stream are primarily focussed on MNEs and foreign direct investments (FDI). A few significant developments of this stream are noteworthy here. Buckley and Cason’s (1976) internalization theory opened a new frontier for research and thinking about FDI, MNEs, and other firms dealing with intermediate goods,⁴ suggesting that larger firms, and possibly with tightly structured networks, could create an internal market for their own intermediate goods to profit from controlling prices and reducing uncertainties of the traditional market transactions in intermediate goods. Subsequently, Dunning (1977) presented his initial Eclectic theory of internationalization, and further revisions (Dunning 1988), which relied basically on the “Internalization” concept. The theory has three critically significant components—i.e., the firm-specific advantages (FSAs), the location-specific advantages (LSAs), and internalization (I); where the MNEs' managed their interactive integration to support their further internationalization. Basically, the international growth of the MNE was accomplished through foreign direct investment, which created and expanded the MNE’s network of sister-subsidiaries in different locations with significant LSAs that the MNE could augment with its FSA for efficient exploitation and sales through their network of sister subsidiaries, sharing their internal markets, and with ultimate sales to others through external regular markets. The Eclectic theory’s approach transformed the MNE to a network of sister-subsidiary, with their internal market of their own, through which intermediate goods and resources could be priced, sold, or acquired at internally determined prices that maximized the MNE’s objectives. However, these developments helped, if not enabled, most members of the MNEs’ subsidiary network to become relatively specialized to take advantage of scale-economies; but would not cover all operational functions in their local markets; as their internal market enabled them to have effective offerings supplied by other members of their internal market. For example, they could rely on other sister-subsidiaries for certain products (or services), and also on the local distribution network as well as other service-providers and suppliers to compete effectively locally and internationally. Consistent with the Eclectic theory’s internalization, some MNE expanded to new markets and initially took their home suppliers along with them to the new market location (e.g., Japanese auto-makers’ expansion to the US markets), which provided them with more competitive positions with lower operating risks in those markets earlier on. Although, this arrangement initially reduced the adverse impact of competing in the foreign market with the help of their previously established networks, they eventually diversified by inviting other suppliers and service providers to join their network, which in turn enabled them to take advantage of local LSAs, and tacit local knowledge, on the one hand, and allowed local firms to internationalize indirectly on the other. Such arrangements have proven highly potent and beneficial to relatively smaller firms as they “internationalized at home” by supplying to the MNE’s local and international markets. A similar international marketing strategy, called piggy-backing (Czinkota 1982), enables smaller local suppliers to indirectly internationalize by supplying their product(s) to MNEs without exposure to the complexities and costs of typical internationalization.

In short, this stream points to internationalization advantages that were not achievable through other streams when an internationalizing firm would not own its network of sister-subsidiaries, nor could create and control its own Internal Market. However, not much stops a smaller internationalizing firm to form and manage its dedicated network of suppliers with an amicably cooperative governance, from which all involved institutions can mutually and synergistically, if not symbiotically (Etemad, Dana and Wright 2000, Dana, Etemad and Wright 2001), benefit as if they were a member their mutual internal market (We will further examine this topic in the next stream, below).

Brief overview of stream no. 5: The born globals, born regional, international new venture, and rapidly internationalizing enterprises (The INV-Models)

This Stream is the youngest, fastest developing, and the most responsive to environmental and contextual change than other streams before it. Generally, firms in this stream have capitalized on some effective and potent strategies (e.g., networks) to take advantage of international opportunities, save time, while mitigating, if not avoiding, forces impeding smaller, and younger entrepreneurial enterprises’ relatively faster and efficient internationalization (Kuivalainen et al. 2012a and Kuivalainen et al. 2012b), Bell et al. (2003) (e.g., Avoiding the slow process of gaining experiential knowledge in the U-Models through networking with local suppliers and service-provider). As the primary agents of this stream, for example, the Born Globals (McKinsey and Company 1993, Rennie 1993, Knight and Cavusgil 1996 and Cavusgil and Knight 2015), and the New International Ventures (Oviatt and McDougall 1994, McDougall and Oviatt 2000) have used their own limited objective knowledge and resources (Penrose 1959, Barney 1991, amongst others) (e.g., technology or intellectual property) and have complemented them by leveraging their network partners’ capabilities, tacit knowledge (e.g., the local experiential knowledge of partners) and their resource to enter international markets at a faster pace. Similarly, Born Regionals (Sui et al. 2012) and rapidly internationalizing enterprises (RIEs) (Etemad 2011, Etemad and Wu 2013, Keen and Etemad 2012) have also capitalized on their international collaborators and network members to internationalize before the market value or the utility of their FSAs (e.g., intellectual properties and knowledge) would begin to decay rapidly overtime, as intellectual properties usually do. The noteworthy point is that most innovations and new commercialized knowledge have a limited life span, as advances in objective knowledge or innovation, especially by others, result in declining or eroding their value after some time, which in turn exerts pressure on the firm to attain as much value in international markets before decays set in and more advanced innovation, new products or knowledge replace their original advantages.

This stream’s relatively rapid internationalization points to the power of collaboration and networks in overcoming smaller, younger, and resource-constrained enterprises’ resource limitations and time pressures in their earlier stages of internationalization. Furthermore, rapidly internationalizing firms, especially in the free trading areas (e.g., ASEAN, European Union, and North American Free Trade Area) have been taking advantage of already established networks within the region (Sui, et al. 2012) to grow regionally on their way to internationalize beyond the region. Again, these firms are exploiting the already established networks (e.g., local distribution channels) beyond their home-base and leverage their incremental cooperative and network advantages to internationalize regionally and globally over time (Olejnik and Swoboda 2012; Kuivalainen et al. 2012b and Sui et al. 2012). In short, the smaller, younger, and entrepreneurially oriented firms in this stream seem to view time as a precious resource and capitalize on capabilities, connections, knowledge, and resources that their network members and cooperative arrangements can offer them to internationalize effectively, entrepreneurially, and rapidly, which in turn point to these entrepreneurially oriented firm’s recognition of the higher value of the opportunity, resource and their respective time trade-offs motivating them to opt for optimizing time-sensitive opportunities of international growth and time, where in the absence of collaborative arrangements, their resources and capabilities would impose the upper bounds and limit their internationalization. As a result of their leveraging capabilities and resources, these firms have gained higher benefits from exploiting their time-sensitive opportunities than in the previous streams (We will further examine this topic in the “Further development” section, below).

Further developments

For further reflections on the above theoretical streams and the possibility of additional developments, we propose two realistic scenarios for the internationalization of smaller, younger, and relatively resource-constrained enterprises, as platforms for enabling further assessment of potential contributions of the above theoretical streams in particular, and the extant literature in general. However, more emphasis will be on interactions between time, capabilities, opportunities, and resources to simulate the on-going challenges encountered by smaller and younger firms experiencing their prevailing realities for possibly enabling us to propose a time-related framework for the internationalization of firms over their life-cycle ranging from their embryonic to highly mature stages.

More specifically, the assessment question before us is: how and which of the above theoretical streams can expedite a typical smaller and younger firm’s internationalization, where time is considered as an influential, valuable, but expiring, resource (i.e., Circumstances, where the knowledge and intellectual property behind an innovative product(s) have short life and decay with time) for exploiting an opportunity, which is also time sensitive, and when the firm is incapable of withstanding prolonged and slow internationalization processes (e.g., the U-Models’ slower processes), as they could lead to decays in, and possible loss of, opportunity(ies) potentially contributing to a firm’s eventual demise. The two scenarios are briefly highlighted below.

Simple scenario of a young firm’s early stage internationalization: Need for cooperating with others

The simplest internationalization scenario could start with an entrepreneurially-oriented firm’s (or its principal entrepreneur’s) perception of an international opportunity(ies) that can be exploited by simply exporting of the firm’s goods (and services) to a selected international market as quickly as possible, and to others over a short span of time there after. The basic assumption here is that the firm is young and resource-constrained in the early stages of its life-cycle. As discussed in the stream no. 5, above, such internationalization could start in neighboring, regional, and environmentally similar markets, but could also begin elsewhere and expand beyond eventually. Although the formation, the structure, and the extent of resources of a home-based firm on its way of internationalizing have fallen outside the discussion and scope of the traditional theories of internationalization (e.g., the U-Model and I-Models, discussed above); the received theory has addressed ways to minimize, and possibly avoid, potential barriers, difficulties, and associated operational risks of a firm entering into a foreign market without relating them to their potential opportunity costs, resource requirements, capability limitations, amongst other constraints, and aims of the firm’s internationalization. The U-models, for example, suggested a slow and methodical entry for gaining experiential knowledge by initially operating in similar foreign market before expanding beyond without due consideration for time and extent of opportunities. Similarly, the I-Models implicitly assumed that the firm would already have, or could devise, an innovative strategy to overcome barriers and achieve its objectives in foreign markets by the virtue of its new or innovative products. Both models would suggest initially entering a “culturally, and psychically close” market to the firm’s own home market(s) to learn the tacit knowledge of the environment, which could involve losing the valuable opportunity, time, and resources. Furthermore, the way in which a smaller, younger, and home-based firm assess “familiarity and its psychic distance” before entering the markets were not fully addressed, nor the early internationalization research elaborated on that topic.⁵ Stated briefly and differently, the U- and the I-Models did not consider the opportunity and transaction costs (Williamson 1975) of entry into a foreign market to develop a perspective on the overall cost-benefits of internationalization by an aspiring entrepreneurial enterprise before entering and getting involved in a foreign market. The early concern of the process theory (the U-Models) was the risks of entering into a “dissimilar” market regardless of its potentially large opportunity, as dissimilar markets could expose the firm, especially smaller and younger firms, to higher difficulties and risks that it had not yet experienced in the past, and presumably would not be capable of handling them affectivity and quickly due to its limited resources and lack of experiential knowledge. As reviewed earlier, the logical implications of such propositions would be internationalization only in “culturally similar and psychically close” to the firm’s home market; but not into the unfamiliar and psychically distant market even when they would offer much larger opportunities. In contrast, such relatively large opportunities would be the primary motive attracting a typical entrepreneurial firm to consider internationalization as early as possible to avoid losing the opportunity to competitor or decaying with time. Stated differently, time-sensitive opportunities were not a part of internationalization criteria in the earlier literature of internationalization.

It appears that entrepreneurially oriented firms differ in their approaching opportunity from that in the extant theories. Although, time is a critical factor in innovative and knowledge-intensive products (and service) and should have been treated by both the early research in the U-Model and I-Model streams, it did not play influential role. In contrast, both the perceived magnitude of opportunity and time limitations for exploiting an opportunity are of the essence to entrepreneurship and are assessed seriously and without exceptions. This argument suggests that the application of the time-consuming U-Model would be a tantamount to a firm losing its potential opportunity in the shorter term and face possible demise in the longer horizon.

Aside from time-opportunity interactions, one of the main assumptions, taken as an acceptable principle, in both the U-Models and partially in the I-Models of internationalization, was that all information about a potential foreign market was mainly tacit, inaccessible, and therefore, could not be acquired except by experiencing it locally over time, which are proven to be unrealistic. Even in case of an exceptional and highly tacit local knowledge, a cooperative local agent could be engaged to provide it. In light of the above discussions, the implication and lessons of the U- and I-Models would be unrealistic for entrepreneurially oriented smaller and younger enterprises, especially where large opportunities in the environmentally different market were available and could be exploited by simple exporting through a local importer, when the sole entrepreneur, or the small home-based firm, would be incapable of dealing with potential difficulties of the host’s (importing) unfamiliar environment (i.e., the economic, institutional, socio-culture and legal differences) alone and on its own, nor would it be prepared to absorb the potential foreign risks of entering that market and not fully realizing its opportunity and losing the required time for accomplishing its objectives. However, as reviewed earlier (e.g., in the Stream no. 5), Born Globals (BGs), Born Regionals (BRs), International New Ventures (INVs) and Rapidly Internationalizing Enterprises (RIEs) have internationalized rapidly, mostly relying on local partners or network members as briefly highlighted in Streams number 3, 4 and no. 5, above. Generally, there are a few competent local importing companies, with proven track-records, from which an exporting firm could select for introducing its products or services in the foreign local market and making them available to potential local customers through the local distribution channels along with other products and services. Viewed differently, a network of local firms could easily overcome the exporting firms’ incapabilities and nearly, if not totally, shield it from losing the market opportunity, valuable time, and intellectual property (e.g., a highly time-sensitive innovative product or service) without much concern (i) for the true characteristics of the local information or knowledge (i.e., whether it is explicit or tacit or how they can be acquired) or (ii) for bearing undue risks. The above discussion in general and readily available early and simple collaborative internationalization point to certain inconsistencies in the traditional theories by not providing for a few important concepts in the internationalization of an entrepreneurial firm that would be prepared to voluntarily forgo a part of its potential international revenues to its collaborators for its lack of capabilities in fully operating independently in a foreign market, which is achievable by reaching and operating through a cooperative local importing firm that could readily perform marketing through its network of local distribution channels and marketing network. This argument suggest that (i) “Networking” or “collaborative arrangements” with one or a few local firms with the required capabilities could avoid potential risk exposures as if the firm alone was capable of performing the tasks, (ii) Implicitly trusting, or contractually obligating, a local network of firms to represent the exporting firm in the unfamiliar foreign market, and (iii) Assisting the exporting firm to avoid facing barriers of entering into a potentially different and difficult socio-economic and legal environment, but offering attractive opportunities, which could be exploited through cooperative and mutually beneficial transactions with a local firm, or network of firms, without losing valuable opportunity, time, and resources in vain.

A maturing firm scenario

As discussed above, a firm may have to rely on others’ capabilities, and leverage them, to augment its own and enable it entering international markets in its early stage of internationalization. Logically, a younger firm reaches a point in time that, it would decide if it should increase its own capabilities and resources independently or to continue with collaborating with others. Although collaboration with others could provide the required complementary resources, without which internationalization may not be possible for resource-poor firms, especially in its early stage of its life, it is not costless,⁶as the opportunity costs of collaboration begin to exceed the value of foregone opportunities and marginalize the incremental value of others’ resources after some time. At a point in time, an entrepreneurially oriented firm realizes its need to achieve the full potential of its opportunities by growing consistently, possibly on its own, before its opportunities decay with time. Such costs include two components: (i) The cost of sharing a part of its potential international revenues with the members of its networks, and (ii) The strategic costs of restriction inherent in cooperation and partnership as compared to the firm’s independent decision-making, both of which could adversely affect the firm’s consistent exploitation of its opportunities and continuous strategic growth over the opportunity’s limited and shortening time span. To reduce, and possibly avoid, such costs, the firm would need to develop, or acquire, its own capabilities, especially the necessary knowledge of certain foreign markets that could offer high strategic value, where collaboration with others would reduce, if not compromise, their cumulative net value over time.⁷ Consequently, a growing firm will have to decide at a point in time to develop its own capabilities, acquire its own knowledge, and information, even broaden and enrich its own exclusive access to international markets to avoid the insufficient capabilities’ adverse effects. Combined, such capability developments would enable the firm to take full advantage of its own capabilities by, for example, transforming its earlier cooperative partnership into synergistic collaboration and possibly advance them into symbiotic relationships (Dana et al. 2000 and Dana et al. 2001), to overcome both the undue costs and overcome various barriers across the global markets for achieving more efficient growth overtime. Alternatively, it can acquire a part of the network that could critically impact its independent operations, but this option is not feasible for all firms.

In short, the above discussion points out that firms with constrained resources could initially leverage their networks’ capabilities and capitalize on those resources before increasing opportunity costs diminishes their value; while not much deters the firm from developing its own capabilities and resources, even from the outset, to operate independently of others, especially when the explicit and implicit costs of foregone opportunities reduce the perceived value of the consequent accomplishments. However, such strategy would not be easily or rapidly accomplished by smaller firms, as many larger firms have shied away from near-independent operations internationally.⁸

Strategically, therefore, in a longitudinally integrated internationalization (or life cycle theory of an internationalizing firm for short) a typical growing firm may have to embark on a developmental path by sequentially and progressively by building on the following basic building-blocs over time, including (i) Identifying international opportunities as early as possible (i.e., which is an inherent and routine early initiative in entrepreneurial orientation), (ii) Building and expanding its networks in earlier stages of its life span, when its own capabilities and resources are constrained and cannot be expanded quickly before opportunities decay and erode, (iii) Acquiring, accumulating, or building, its own required capabilities and resources, including knowledge, as they assume increasing strategic importance overtime, (iv) Transforming its earlier cooperative relations into synergistic and trusting collaborative relations with its stake-holders, including the members of its local networks, in order to reduce, and possibly avoid, operational risks, (v) Removinge or bridging-across barriers for exploiting its perceived opportunities, (vi) Learning with, and from, others to enhance its own capabilities, and more importantly, and also (vii) Examining its past conduct to learn how to innovate potent new approaches, including an effective reconfiguration of its value-creation-equation and business model for higher competitiveness, efficiency, and international growth.

The lessons of the above scenarios

The above two scenarios point to the need for a dynamically evolving strategy over a firm’s life-cycle, staring from the firm’s earlier embryonic-stages attempting to establish a small presence in international markets to later stages when the firm is substantially grown, internationalized, and matured. In the context of the literature review of the different theoretical streams, highlighted earlier, the evolution of an initially smaller and younger entrepreneurially oriented enterprise experiencing strategic evolution over the spans a few streams, including the U- and I-models before it could adopt a hybrid strategy seems not feasible and possibly impractical. The above discussion further suggests a need for an evolving theory, especially when the firm desires to grow to fully exploit its opportunities in the international markets as widely as possible and in timely fashions to avoid erosion of opportunities and shortening of time. Logically, a comprehensive framework, or a theory, should be able to address issues of all stages of a firm’s life cycle with evolutionary processes comprising a family of a few (e.g., four or five) related strategic actions for an early-stage enterprise to become more resourceful, and more mature overtime, when the firms own resources enabling it to grow independently with more potent strategies of its own over time. This discussion further suggests that in early life-cycle stages, when the firm’s most operations are mainly in its home, its constrained resources may require strategic dependence on others, while its accumulated experience and resources when it is approaching high growth and maturity stages later in its life have progressively increased and it could rely on its own capabilities and resources. This arguement would in turn suggest that a firm aspiring to grow needs to primarily increase its dynamic capabilities to enable increasingly more self-dependence for deploying more potent strategies over time independently; but such evolving strategies do not rule-out the use of the wide networks for leveraging their complementary and valued resources, especially when the firms need to increase its agility to expedite its re-configuration of its business model for higher global competitiveness.

As stated earlier, most of the above evolutionary processes, especially the possibility of opportunity decay and continuous shortening of time to exploit opportunities, have not been within the perspectives of the earlier theoretical streams as reviewed earlier. As a result, a young start-up aspiring to internationalize would not be able to rely strictly on the earlier theoretical streams, as for example, the slow processes of the U-Models would run against the clock; but it would rather learn lessons from a combination of few well-developed aspects of the theoretical streams to augment its strategic capabilities, resources, time, and opportunities to nearly match those of the firm’s competitors to succeed in international markets. This discussion in turn points to a need for a questioning the applicability of our received theories and re-examining each stream’s influence and contribution to a steady construction of the necessary building-blocks in a typical entrepreneurial internationalization.

In favour of time and space, and also based on the above discussions, we will highlight aspect in the construction of only five essential structural building-blocks and will re-examine them critically for possible improvements in the “Discussion” section.

Towards the construction of the basic building-blocks of a longitudinal framework of entrepreneurial internationalization

Following-up on the above discussion, our preliminary list of the basic building-blocks consists of constructing dedicated structural building blocks for⁹ (i) Increasing the positive impacts of Entrepreneurial Orientation (EO) in order to create, or identify, opportunities and to explore exploiting them in a timely fashion, (ii) Exploring how to access the required resources to enable opportunity exploitation through, for example, networking and cooperating with others in the earlier stages of the firm’s life, (iii) Acquiring, accumulating, or building the firm’s own necessary capabilities and resources for less-dependent, if not independent, opportunity exploitation, (iv) Reconfiguring the firm’s value-creating equation and building the required resources and capabilities to support its continual opportunity exploitation for continuous growth over time by entering into promising international markets, and (v) Building bridges across barriers and difficulties to facilitate international growth over time. In favour of time and space only a selective number of the above building blocks is briefly highlighted below.

Entrepreneurialship orientation and opportunities

Even before the increased popularity of entrepreneurship, going as far back as are as 1940s, prominent entrepreneurship scholars, including Hayek (1945) and Kirzner (1973 and 1997), have consistently maintained that there would be no entrepreneurship without the commitment to, and entrepreneurial orientation, to lead to opportunity recognition and its subsequent exploitation by acting on it. Stated differently, entrepreneurship starts with perceiving, envisioning, identifying (Kirzner 1973 and 1997), or creating (Schumpeter 1934) an opportunity; and entrepreneurial orientation is the very seed that gives rise to the essence of entrepreneurship, which produces the means and tools for realizing opportunities entrepreneurially. The process of opportunity recognition and exploitation are usually embedded in the international context(s) and usually experience the cross-cultural difference. In international entrepreneurship, for example, opportunity exploitation is likely to face more complexities than those at home, as the idea, perception, or knowledge that leads to the discovery of a Kirznerian opportunity (Kirzner 1973 and 1997) or the creation of a Schumpeterian opportunity (Schumpeter 1934) are likely to be conceived, or devised, in one environment and exploited in a different one with different needs and wants causing mismatches that should be resolved before effective exploitation. Etemad (2015) suggests that there is a high likelihood that entrepreneurial orientation (EO) would experience continuous evolution over time, as entrepreneurs learn more about change in the components of EO’s Construct.¹⁰ In the initial construct of EO, Miller (1983) proposed three basic attributes (i.e., Innovativeness, Pro-activeness, and Risk-taking), and Lumpkin and Dess (1996) added two more (i.e., Competitive Aggressiveness and Autonomy) and further elaborated on EO (Lumpkin and Dess 2001). It is noteworthy that nearly all characteristics of the I-Model of Internationalization (i.e., the stream no.2, above) had implicitly subsumed Miller’s three EO’s attributes, while Lumpkin and Dess’s (1996) “competitive aggressiveness” behavior could be nearly impossible to acheive by a smaller, younger and resource-constrained firm competing in competitive international markets; unless the firm can deploy mitigating strategies, such as collaboration with local and international partners, which runs counter to Lumpkin and Dess’s attribute of “autonomy.” However, the internationalizing firm should be able to maintain its autonomy soon after the acquisition of the necessary dynamic capabilities (discussed below), which in turn suggests a need for some modification of the received EO construct for early applications by SMEs in international market. Although, there is a general support for EO in the firm’s relatively safer and familiar home market; the diverse characteristics of international market environments may require adjustments before an early-stage young firm can be truly autonomous and exercise aggressive competitiveness at the same time. This discussion supports our earlier suggestion that there is a need for constructing a dynamic framework (or theory) with evolving building-blocks capable of accounting for the firms’ evolutionary process and strategies in response to changing environments from the early- to maturing-stages over time.

Internationalization exposes the firm to different markets, requiring an understanding and tolerance for differences, possible risks, and potentially adverse impacts of unexpected differences. Such difference, especially in consumer behaviors, are likely to have critical impacts on the nature of opportunities, their realization, and consequent growth. Similarly, entry decision into a new market requires some prior experiential knowledge, or substantive information, followed by a need to learn about market characteristics so that the firm can adjust its entrepreneurial orientation, capabilities, and strategic posture to meet market requirements for gainful performance over time, independently, or collaboratively in partnership with other local, or international, firms if and when necessary. The efficacy of these processes and the extent of their impact on performance will not only depend on the firm’s initial EO (including innovativeness or innovation orientation (IO)) but also on other capabilities, including marketing orientation (MO),¹¹ learning orientation (LO), and collaborative orientation (CO),¹² among other dynamic capabilities (Etemad 2015 and 2022b). Market-oriented firms, for example, are capable of adapting, and consequently are likely to be more successful in diverse markets than others. Operationally, the emerging concept of customer-centric strategy is parallel to, if not a part of, the firm’s market orientation (MO), which requires a relatively high sensitivity to differences in customers’ needs and market behaviors that affect the ultimate consumer’s perception of value (CPV). Similarly, a higher learning orientation enables the firm to learn faster and more effectively by itself, as well as with, and from, others’ experience and knowledge to achieve higher and better performance outcomes than those with lower LO, especially when time is an influentially critical factor. Logically, higher learning orientations can also lead to a faster and higher customer satisfaction, especially when there is a paucity of pertinent explicit information, or when there are significant environmental and institutional differences, making collaborative learning relatively difficult. As discussed earlier, the state of the firm’s resources, capabilities, and risk-taking, especially in its earlier life-cycle stages, may favor a form of collaborative approach, as opposed to independent operations, in international markets.¹³ In an extensive discussion of internationalized small digitized ventures (ISDVs) Etemad’ (2022a) research highlights how digitized very small firms with high EO, MO, CO, and LO have succeeded in their respective internationalization through multi-sided online platforms, such as Alibaba.com, Amazon.com, and Shopify.com, amongst many others. Stated briefly and differently, the entrepreneurial orientation can serve as the most significant building blocks in an integrated and longitudinal internationalization framework to enrich our analysis, deepen our understanding and enable more successful internationalization without hindering other aspects.

Cooperative, collaborative, and networks enabling incremental capabilities in early-stage entrepreneurial internationalization

The concept of the network has been broadly used in several disciplines, including—political sciences, psychology, sociology, industrial marketing, innovation, and entrepreneurship studies, as reviewed earlier. However, and depending on its contextual use, the term “network” refers to, and describes a relatively different phenomena in business; but it generally refers to a non-trivial dependence and relationship among the member of a network, mainly depending on the central and nodal firms. In business-related contexts, a network is defined in terms of a set of relationships between members in one, or a family of, business activities with incremental mutual benefits to network members not available in the absence of network connections and cooperations (Gemünden 2003; Rumyantseva and Tretyak 2003, Forsgren and Johanson 1992, p. 5). Although the importance and uses of networks, and networking as an internationalization strategy, are not well established, the large and older enterprises, such as MNEs, have routinely and successfully operated through their own network of sister subsidiaries that are not all necessarily wholly owned¹⁴ (Dunning 1980), which allows MNEs to also control their “internal markets” for its incremental advantages (Dunning 1977; Buckley and Casson 1976; Rugman 1981, among others). Similarly, and despite its unavoidable use by early-stage younger firms, the traditional and the older theories of internationalization (e.g., the U-Models and I Models) have not explicitly acknowledged its presence, use, and usefulness, when younger firms cannot enter to a new foreign market without cooperation with local firms possessing the necessary tacit knowledge of the foreign market.

As reviewed earlier, most firms, local or international, need to rely on the local distribution channels, which is a well-coordinated and specialized network and most firms, regardless of their age and size, would not be able to operate locally, especially in the early stages of their life-cycle without using the local distribution channels. Even for well-established firms, the distribution channels are treated as “intrafirm network” and its positive contributions are well recognized. Although the Born Global, INV, Born Regionals, and RIE stream of internationalization (i.e., Stream No. 5) depend on, and use, various networks arrangements (including international supply chain(s), international logistics, local distribution, and others) in support of their relatively rapid internationalization, the general contribution of active networking for gaining advantage and augmenting necessary capabilities over a firm’s evolving life-cycle are not explicitly recognized, nor recommended by the received theory (e.g., nearly all of the above streams except for the networking and collaborating stream).

It is noteworthy that, the local members of the cooperative networks are more likely to overcome local barriers, augmenting an internationalizing firm’s local reach, local knowledge and even enhancing its dynamic capabilities than those of an independent young foreign firm freshly entering a local market as it may take longer time and much efforts for a foreign smaller, and resource-constrained firm to achieve the same status without network connections. The absence of cooperative, collaborative, and networking may adversely affect the extent of the early-stage firm’s opportunity exploitation; and furthermore, it may also make it nearly impossible for the firm to reconfigure its business model, dynamic capabilities, and resources to prepare for other emerging opportunities in the very near horizon. In short, establishing and taking advantage of a collaborative or networking arrangements for reaching international markets can be viewed as a bridge connecting the two shores across a wide gulf of troubled waters for vessels incapable of avoiding, or even mitigating, large risks of reaching safely from one to the other shore.

Dynamic capabilities in entrepreneurial internationalization

We distinguish a few different modes of capabilities. The dynamic capabilities (DC) of a sole entrepreneur are limited to the capabilities of the entrepreneur and constrained by the entrepreneur’s extent of experience, orientation, commitments, and knowledge, among others. A large group of entrepreneurs, some of whom might not consider themselves as entrepreneurs, fit this category. Examples include artists, sole creative professionals, individual musician and performing artists, painters, and sculptors, as they rely on their own specialized capabilities; but are generally not capable of solving problems unrelated to their primary specialization.¹⁵ In contrast, the dynamic capabilities of highly experienced, larger, older, and internationalized firms are more diverse and richer than those of an individual entrepreneur, or young start-ups. They should not be, therefore, considered and treated similarly. Logically, the firm’s, the individual entrepreneur’s, or its top management team’s (TMT’s) diversity of international market experiences, challenges, exposures, knowledge, resources, and involvements in more complex problems (or environments), among others, should be considered as factors contributing to the accumulation, and enriching of, their respective dynamic capabilities.

In the earlier discussion of dynamic capabilities, Teece et al. (1997) and Teece (2007 and 2010) argued that a firms’ dynamic capabilities would enable it to develop new innovative products (or services), which would in turn allow it to respond to the changing, or evolving, market needs and to achieving, maintaining, and even increasing, the firm’s competitiveness. In competitive and dynamic environments of international markets, dynamic capabilities assume a greater importance in preserving the internationalizing firm’s local competitive advantage and even augment their global competitiveness over time. Teece (2007) further argued that an aspiring firm would need to be capable of dynamically developing capacities, capabilities, skills, and resources, including technologies, to enable it to “sense” (i.e., identify, or recognize) and “seize” (i.e., exploit) potential opportunities. As argued earlier, the perception of an international opportunity is the primary and necessary condition for internationalization success; but it is unlikely to be sufficient for sustaining the firm’s value-creating performance, especially in competitive and changing international environments (Teece 2007), where many local and international firms strive to preserve their market positions, and possibly improve upon them, by augmenting and continually updating the micro-foundations of dynamic capabilities—sensing, seizing, and reconfiguration, as they are critically vital to each firm’s sustaining its competitive advantage nearly at all times.

In the context of entrepreneurship, the dynamic capability term “sensing” refers to “the perception or recognition of opportunity,” where the exploitation of the identified opportunity requires the capacity to deploy all the necessary capabilities to, for example, serve an international market successfully in order to benefit from the identified opportunity(ies) there. As argued earlier, a smaller firm with constrained resources aspiring to internationalize to exploit an opportunity may have to rely on the capabilities of its network members to take advantage an existing, or incipient, international market.

“Sensing and seizing” also include the capacity to identify constraining factors that may inhibit the firm from responding to an evolving opportunity as the market changes (Helfat and Winter 2011) or to accomplish the already perceived, or sensed, opportunity (Helfat and Peteraf 2015). Expectedly, the operational definition of sensing market opportunity has evolved over time as advances in, for example, computer-assisted information technology and communications (CITs) have affected operations, but the basic concept of opportunity sensing remains as vital as ever before.

Teece (2007) and (2010) also pointed to the importance “seizing” (i.e., that is taking steps to exploit an already sensed opportunity for realizing its benefits), may require a dynamic examination of firm’s value-creation equation and its business model to assess if the firm’s current structure of capabilities would allow for realizing the opportunity, or if there is a need for restructuring, or reconfiguring, them to seize the already sensed opportunity. As a result, the ability to re-configure a firm’s resources for seizing opportunities in a timely fashion becomes a critical component and integral part of a firm’s micro-foundation of dynamic capabilities, which enable the firm to grow through “seizing” already “sensed” opportunities and preparing for seizing other potential opportunities by modifying, or reconfiguring, its operations for continued growth in, for example, another segment of its current market or an opportune market elsewhere. It is, however, noteworthy that, the process of entering each international market should be viewed as incremental value creation by offerings higher values to their respective consumers, which in turn depends on a firm’s ability to re-configuring its business model for higher efficiencies to meet more difficult challenges.

Eisenhardt and Martin (2000) further suggest that dynamic capabilities, such as knowledge resources, enable firms to develop competitive advantage for higher competitiveness in changing environments, where the patterns of change are at best quasi-predictable. Managers’ capability to analyze situations to plan and organize (or re-organize) their existing capabilities, resources, and knowledge, where their knowledge is a mix of the firm’s past experiences and values, as well as contextualized emerging information. Logically, and in light of the new information, the firm should retailor (or reconfigure) its current dynamic capabilities based on the emerging information and decision makers’ view of the unfolding environment supported by their accumulated tacit knowledge (Nonaka and Takeuchi 1996 and Teece 2007), which would suggest that effective dynamic capabilities must depend on reliable real-time information to signal organizational change or to start the re-configuration processes of its value-creating activities. These signals enable the managers to adjust their plans accordingly.

In short, potent and timely dynamic capabilities should be considered as one of critically necessary building block for firms’ successful internationalization, regardless of age, home-base, industry, and size. Stated differently, a firm cannot grow internationally without continually reconfiguring its capabilities for realizing both the ongoing and emerging opportunities in an evolving environment in the very near horizon, which also points to the critical importance of agility (or a significant dynamism) in re-configuring capabilities. Naturally, the above dynamic capabilities become more important as there is a shortening of the time-period for exploiting opportunities (i.e., it is either short or becoming even shorter, with the passage of time). Accordingly, the impact of time is highlighted below.

The importance of time, improvisational capabilities, and strategic agilities as building blocks

Generally, opportunities are time-sensitive and should be “sensed and seized” while the opportunity is still available. Therefore, time should be treated as an important, but a limited, resource, that decays with time and expires after a period, which requires agility in “sensing and seizing” the opportunity within that period. This argument suggests that strategic agility should be viewed as a valuable resource or indispensable capability, when time is precious resource as well. However, neither time nor strategic agility, or simply agility, are recognized as an enabling building block by the traditional approaches to internationalization strategy. Agility is not only necessary for time-sensitive opportunity recognition, but it is important to solving entrepreneurial challenges before the value of the opportunity declines, or possibly expires. The important managerial challenge in most firm’s strategic agility depends-on other capabilities, including dynamic capabilities and improvisational capabilities, when the time span is short and potential solutions need implementation in a short and timely fashion within the given time span. Ideally, a firm should prolong the time span of its opportunities by staying far-ahead of the prevailing trends, which requires foresight that depends on most capabilities, including agility and improvisation.

Given the critical importance of time, strategic agility is defined in terms of timely decision-making to execute business strategies in advance of the emerging environmental trends (Glaister, Liu, Sahadev, & Gomes, E. 2014). Although time pressure is not explicitly mentioned, time is implicit in the concept of trends, which are sensitive to influetial actions and change over time. In traditional strategic management approaches, time’s primary importance is in the sharpening focus of strategic processes that redirect, or “re-configure,” the core business operations within a usually compressed span of time. However, such transformation(s), or redirection(s), may take a longer time than expected, which is not consistent with the neccessary strategic agility for change or in uncertain environments, as the strategic agility processes aim to reinvent or reshape the core business processes as quickly as possible to avoid losing much time. As time becomes a more crucial factor in achieving business goals, improvisational capabilities—innovative and effective strategic action without prior, or prolonged, preparations—can play an equally important role in improving upon strategic agility, when there is a need for fast, spontaneous, and possibly unplanned actions holding the likelihood of saving the opportunity, or stopping the ongoing ineffective processes, with unclear consequences (Doz and Kosonen 2010).

Doz and Kosonen (2008) suggest that strategic ability is composed of three meta-capabilities, namely, strategic sensitivity,¹⁶ collective commitment,¹⁷ and resource fluidity,¹⁸all of which must be present and effective simultaneously.

Given the necessity of timely responsiveness in the context of unexpected, unpredictable, or unceratin, events Glaister et al. suggest that improvisation, as a part of entrepreneurial capabilities, offers a potential pathway for potent reconfiguration (Glaister et al 2014). As anticipation and planning in turbulent environments are relatively difficult, Bahrami and Evans (2011) argue that “we need the capability to draw on our “reflexive instincts” to act “in situ,” to improvise quickly and spontaneously, as new triggers unfold” (Page 23).

In relation to opportunities, unexpected events may give rise to, or destroy, emerging opportunities without prior early warnings. The cumulative costs of lost opportunities associated with lack of significant dynamism in capabilities for seizing emerging opportunities in a timely fashion become relatively high (i.e., the cumulative value of not seized opportunity over time), which points to the critical importance of agility based on prior planning for timely re-configuration, and possible diversification, of the current dynamic capabilities and resources (Pavlou and El Sawy 2010). Similarly, Cunha et al. (1999), discussed the reasons for which improvisational capabilities should be simulated for conditions necessitating them, such as the lack of, or insufficient, time for planning and rapid implementation under time pressure, as well as the challenges of sensibly sensing opportunities created by unanticipated events in the absence of proper agility or improvisational capabilities. Operationally, the improvisational capabilities could be viewed as an spontaneous initiative triggered by the emergence of the previously-unexpected event(s) enabling the firm to reconfigure its existing resources in a timely fashion for sensing and seizing new opportunities created or expedited by the unanticipated novel events. Combined, improvisational and dynamic capabilities are necessary to enable the reconfiguration of resources and capabilities to respond effectively to rapidly unfolding change (Pavlou and El Sawy 2010). The above arguments suggest two possible options, including (i) the need for a ready-to-use alternative capabilities that are stored for the rainy days and can be used quickly to address the unexpected events triggering emerging opportunities, especially in a competitive and fast-changing market environments; and alternatively, (ii) developing or acquiring potently rich dynamic strategies for creating tailor-made capabilities for seizing the rapidly emerging opportunities before others do so. Such rapid and timely processes could be viewed as “improvisational capabilities” that can complement the ongoing dynamic capabilities as the needs arise.

The importance of time and strategic agility in SMEs facing unexpected crisis

The likelihood of unexpected events in more competitive and dynamic environments is much higher than in orderly and slowly changing environments. Logically, the role of improvisational strategy becomes more critical when the time pressure, and the extent of environmental turbulence, do not allow the firm to sense, or seize, emerging opportunities through its regular procedures easily, or its existing dynamic capabilities are incapable of seizing the opportunity. Naturally, smaller, younger, and more resource-constrained enterprises face a higher likelihood of facing such conditions more frequently, which suggests both the improvisational and agile capabilities should be considered as stored back-up to routinely used strategies. Furthermore, their effectiveness should be frequently examined through simulation of unexpected or unusual scenarios, ready for deployment in exceptional conditions such as rapidly changing environments or the occurrence of unpredictable events.¹⁹

Unanticipated events, such as the COVID-19 pandemic, deprived unprepared firms of the opportunity to create and offer continued and consistent value in a timely fashion (Etemad 2020). As a result, firms that could alter their business model quickly to seize the newly emerging opportunities succeeded in maintaining, or even increasing, their value creation, while those who could not re-configure their operations in a timely fashion faced the likelihood of demise early-on. The concept of agility, or the critical importance of time, is dependent on the management’s perception of an emerging, or pending, change adversely affecting the firm’s ongoing value creation, which would necessitate a rapid reconfiguration of dynamic abilities to restore value-creation processes by altering previous business models as quickly as possible to preserve value-creation. Doz and Kosonen (2010) defined strategic agility as an organization’s capacity to make strategic commitments while staying nimble and flexible. Similarly, Junni et al. (2013) defined it as the “ability of the organization to renew itself and stay flexible without sacrificing efficiency” (p. 596). In the context of the supply chain, agility is defined as the firm’s capability to adapt or respond quickly to a changing market environment. In short, strategic agility is, therefore, the critical means, by which organizations can transform and reinvent their business model, and possibly themselves, to adapt, survive, and ultimately succeed relatively quickly, to avoid an unexpected and rapid environmental change that can cause the firm’s possible demise.

Discussions: Assessing the Longitudinal Life Cycle Framework

This discussion’s objective is to examine if the above structural building blocks of the proposed longitudinal framework relate to, and reflect, the actual and prevailing practice of international entrepreneurship as documented by the current research and publication. As discussed earlier, structure building blocks of the longitudinal framework were constructed to primarily address, and bridge over, the received traditional theories inconsistencies with the prevailing practices and processes that entrepreneurially oriented smaller firms routinely utilize in internationalizing successfully earlier in their life cycle, which also evolve as they further grow internationally in the later stages of their economic lives. Stated differently, the internationalization strategy is not static and evolves with time, and there is a need for incorporating time into the time-related strategy for continued value creation internationally through internationalization.

However, the foundations of most traditional theories, as briefly reviewed in the literature review earlier, reflect practices of mainly larger and older companies without explicit provisions for smaller firms’ growth and evolution over time. In contrast, entrepreneurially oriented enterprises’ practices, procedures, and strategies will have to evolve to become better-suited for their changing environment, and higher global competition, giving rise to differences between the precepts of the older received theory and those of the current growth-oriented practices.

Consistent with the above observation, any theoretical proposal must be subjected to a critical examination and testing against the prevailing practice based on a rigorous criteria. The criteria for testing the viability and reliability in this article is to compare the proposed longitudinal framework’s features, building blocks, and its implication against a few important aspects of international entrepreneurship to ensure prudence and concordance with the real practice. The assessment criteria used here include (i) Examining the practical and theoretical reliabilities and viabilities of the frameworks’ structural building blocks against the accepted and widely used real practice, (ii) Assessing the framework’s extent of the capturing, and reflecting, the real, strategically sound, and successful practices, (iii) Examining if the proposed framework, and its structural building blocks, are capable of improving upon the widely accepted and evolving practices, and (iv) If the longitudinal framework as a whole holds the promise of offering substantive augmentation and improvements to entrepreneurial internationalization of smaller, younger and aspiring enterprises over time.

The actual task of assessing the proposed framework against the above criteria, and the state of prevailing practice, as portrayed by the real and ongoing practice is performed by comparing the lessons and implications of the framework against a few diverse scholarly research portraying the actual practice and reflecting the above assessment criteria as closely as possible. Naturally, the rigor of the examination can make a substantial difference. However, we aspired to learn from the assessment to push the longitudinal framework towards a grounded theory of entrepreneurial internationalization over time.²⁰ The main aim of this comparison is, therefore, not to accept or reject the proposed framework. Rather, it is not only to identify how and where improvement can be introduced in the proposed framework; but also pave a pathway for further scholarly efforts towards the development of a comprehensive theory, reflecting entrepreneurial internationalization as realistically as possible beyond the scope of this article.

Four double-blind peer-reviewed papers from the collection of papers in the journal’s published “online first”, reflecting a diverse range of issues, were used to at least perform the first task of examining the proposed frameworks and pointing to its possible shortcoming for further scholarly research and possible improvements in the very near future. Stated differently, this “Discussion” section presents a critical examination of the longitudinal and integrated framework and its structural building blocks with a view to identifying potential practical and theoretical improvements beyond this article. It is noteworthy that the following order of the four accepted papers appearance is not reflective of their importance, or lack thereof, but it was their likelihood of pointing out shortcomings of the framework for further improvements in topics related to entrepreneurial internationalization.

As a part of the collective assessment of the proposed longitudinal framework, the first paper in is entitled as “The upcoming rise of SMEs in cross-border public procurement: is it a matter of networking capabilities?” and is co-authored by Teresa Fayos, Haydeé Calderón, Juan Manuel, García-García, and Belén Derqui. As reflected in the title, at least three critical issues are examined by this paper's co-authored research, including:

• i) The Coherence with the U-Models. The cross-border internationalization is consistent with the Uppsala Model, due to its proximity to the firm’s home base to its neighboring country, possibly providing for a shorter physical and psychic distances, and relative ease of learning experiential knowledge because of the proximities as proposed by the primary architects of the U-Models (Johanson and Wiedersheim-Paul 1975 and, Johanson and Vahlne 1977) and as briefly highlighted in stream no. 1. The above attributes collectively suggest that entrepreneurially oriented enterprises could prefer cross-border internationalization to more distant markets; but that does not seem to be a favorite practice, except for cross-board entries in free trade areas.

• ii) Characteristics of Public Procurements. Public procurements have a range of complexities and challenges that are higher than those of regular markets, which are usually beyond the capabilities of smaller and younger firms in the neighboring countries. Generally, public procurements are financed by national taxes and prefer national suppliers, which pose additional challenges to smaller foreign enterprises, regardless of their locations and the quality of their offerings, which are not explicitly addressed by our received theories, and more importantly,

• iii) Additional Challenges of Public Procurements Suppliers. Dealing with governments needs intimate familiarity with governmental regulations regarding procurements that require much more time, effort, and resources that exceed those of dealing with regular buyers and regular markets. The costs of such additional resources (time, knowledge, resources, etc.) pose difficulties that smaller firms prefer to avoid. Such additional challenges are not discussed by the U-Models, nor by the I-Models, which require additional capabilities to meet public procurement specifications that typical smaller firms usually lack. This paper suggests that networking with national companies in the neighboring countries can overcome nearly most challenge of cross-border public procurement, which concur with the third building block of proposed framework, suggesting that smaller and younger firms in their early stages of internationalization should engage foreign local partners to augment their capabilities in neighboring markets in particular, and in the international markets in general, in order to bridge over most of the difficulties outlined by U-Models. The positive contribution of the research supporting the above paper is at least three folds, including (i) The entrepreneurial enterprises that detect entrepreneurial opportunities in the neighboring markets need to balance the costs and benefits of such opportunities, (ii) Assess if they have the required capabilities, competitiveness, local contacts, knowledge, resources and time to bid for public procurements, and (iii) Examine a range of potential partners capable of resolving the additional complexities of supplying and selling to the national government, as opposed to selling to regular customers in the neighboring market(s); which are consistent with, and supportive of the proposed framework.

The second paper in the collective assessment of the proposed longitudinal framework is entitled as “Entrepreneurial choices depend on trust: some global evidence” and is co-authored by Esa Mangeloja, Tomi Ovaska, and Ryo Takashim. This paper picks up where the previous paper left off. Briefly, its findings suggest that not only trust should be a critical aspect in forming partnership; but also its findings indicate that it has been widely practiced. Stated differently, trust could be considered as the glue connecting the partners as if they were parts of one integral entity, which could potentially enhance all aspects of an enterprise’s presence in a foreign market. Similarly, trust can bridge-over many of the challenges of a foreign market as the trusted local partner represents both partners as an integral unit to reduce the required time for resolving the higher complexities of marketing in a foreign local market to the levels of their local counterparts, because of the trusted local partner’s presence there. The research supporting this article also raises two issues: (i) Why trust has not been an explicit and integral part of our received theories? and (ii) The discussion of cross-cultural trust is also missing in the received theories and is a strong candidate for incorporation into the Networking and Cooperation Building Block (i.e., criteria for selecting collaborators and network members in early stages) of the proposed longitudinal framework. A cautionary point, however, is that building trust may require much time and special efforts, with the likelihood of higher opportunity costs than the value of the prevailing opportunity in the short term; but it may provide substantial benefits in the longer term, which in turn points to the strategic importance of time as a critical resource in internationalization. Furthermore, the value of the entrepreneurial opportunity(ies) may decline over the required time for building and cultivating trust. In short, scholars need to consider the trade-offs of the above costs and benefits in improving upon, and enriching, the various structural building blocks of the proposed longitudinal framework, including the influential interactions of time with nearly all structural building blocks of the proposed longitudinal framework.

The third paper in the collective assessment of the proposed longitudinal framework is entitled as “Dynamic capabilities in sole proprietorships: theoretical model through grounded theory” and is co-authored by Víctor Hugo Nopo Olazabal and Niria Marleny Goni Avil. The rich research supporting this paper covers a number of topics related to the proposed longitudinal framework. The paper starts with examining the capabilities of sole entrepreneurs, such as musicians and artists, who initially and basically, rely on their own capabilities and resources to exploit their perceived opportunities. The logical implication of this issue is that the theory of entrepreneurship’s basic unit of analysis could be, if not should be, the sole entrepreneur to reflect the earliest stage, and possibly the true beginning, of entrepreneurship not as a start-up enterprise, but as that of an individual entrepreneur, regardless of the sole entrepreneur’s age, experience and resources. Generally, an enterprise is more capable than a sole entrepreneur, who needs to become more resourceful and resolve a few challenges to resemble an enterprise. This issue raises the question of how sole entrepreneurs acquire the necessary capabilities and resources to realize opportunities that are generally beyond a sole entrepreneur’s capabilities. By a logical extension, the younger smaller enterprises in their earlier stages of life-cycle are similar to sole entrepreneurs in need of acquiring higher capabilities and formulating potent strategies to meet their growing challenges, especially when facing uncertain situations that may demand higher capabilities and resources. As discussed in the building block on the dynamic capability of the proposed longitudinal framework, building dynamic capabilities is a necessary challenge for all internationalizing firms, regardless of their age and size, as some competitors in international markets possess richer capabilities and pose difficult competitive challenges in international markets to an aspiring smaller and younger firm lacking comparable capabilities and resources.

On the positive side, this research confirms the importance of the capability and cooperative building block’s recommendations that capabilities can be developed internally as well as acquired through cooperation, collaboration, and networking for learning with, and from, others to raise a firm’s capabilities. Such collaborations usually result in higher joint capabilities and equally higher competitiveness against others. A frequent and vivid example of such cooperations leading to higher global competitiveness are readily observable in cases of the International Small, Digitized (and Specialized) Ventures (ISDVs) (Etemad 2022a), which are becoming supplier to large and highly competitive global multi-sided online platforms.²¹ On the debit side of the ledger, however, supplying to global online platforms demands both dynamic agility and improvisational capabilities that smaller firms need to acquire on their own, or through collaboration with their respective networks possessing the required capabilities, which may make them into a member of a nested network that could offer higher and diverse capabilities and also pose managerial challenges of their own depending on the capabilities and the structure of the network.

On the constructive side, the true practices of sole entrepreneurs in this paper point to how the use of social media, at relatively low costs, has resulted in higher international sales for local artists and musicians far beyond their capabilities in the absence of using social media, which in turn suggests a longitudinal entrepreneurial framework needs to introduce an active on-line presence in general, and the strategic use of social media in particular, as a complementary capability for raising higher dynamism, timeliness, and agility. These challenges remain for further scholarly research to complement the proposed framework in general, and its Dynamic Capability, Agility, and Improvisational Building Block in Particular beyond this article.

The fourth and the final paper in the collective assessment of the proposed longitudinal framework is entitled as “Government support, strategic alliance and internationalization: Evidence from indigenous Ghanaian exporters “and is co-authored by Lydia Nyankom Takyi, Vannie Naidoo, and Courage Simon Kof Dogbe. The research supporting this paper points to a few broad shortcomings in both the received theory and the proposed framework, including, for example, (i) the received theories’ oversight of indigenous firms’ internationalization from emerging markets aspiring to compete in global markets, and more importantly, (ii) the ignored presence and positive contribution of national governments to advancing capabilities of their national firms, which can further enable them to enter into international markets and successfully compete globally. Such governmental contribution can cover a very wide range, anywhere from information about international markets, direct assistance (e.g., R&D subsidies), and indirect (investment in advancing the capabilities of potential employees through specialized education and training) in enhancing and augmenting national firms’ dynamic capabilities. This oversight is likely to be due to the origin of most traditional Internationalization theories in more advanced and industrial countries on the one hand; and taking government assistance and subsidies as a part of the industrial and advanced country environments on the other, while the latter is not the case in the emerging economies. Furthermore, the research of this paper also points to the longitudinal framework’s building block of dynamic capabilities and cooperative arrangements not acknowledging the potentially significant contribution of governments to national firms in nearly all environments. Furthermore, and for the price of asking, governments can provide invaluable information regarding both the international opportunities and barriers similar to what local partners can possibly offer. Such shortcomings and its further improvement remain for others’ scholarly efforts to incorporate diverse capabilities and valuable resources of the national government in assisting the internationalization of national firms in a variety of ways that others entities cannot.

Conclusion and implication

In conclusion, the above novel experiment of subjecting the proposed longitudinal framework, and its building blocks, to a critical and objective examination by already published peer-reviewed research papers accomplished its three expected objectives of (i) identifying the framework’s shortcomings for further scholarly improvements to enrich our theories and deepening our collective understanding, (ii) Supporting the framework’s time-related life-cycle perspective introducing the time-related strategic evolution in an enterprise over time due to enterprises’ gaining experience, capabilities and resources, over its respective and evolving life-cycle stages, which all require our collective recognition that an enterprise has a specific, as opposed to a generic, characteristics, which evolves over time as a significant theoretical contributions that enable our more precise analysis, and (iii) The proposed framework’s progressive building blocks point out how an internationalizing enterprise could concentrate on augmenting and strengthening its capabilities depending on its state of needs, capabilities and resources in relation to its entrepreneurial orientations and opportunities. Consequently, the framework is distinguishing the significant difference between firms in their embryonic, the very early, and maturity stages of life-cycle, which leads them to concentrate on the most critical building blocks at the time, to follow potentially different international growth strategies and trajectories, based on their significantly different characteristic, especially in their very early years in their lives. Objectively, and in contrast to the generic nature of the traditional theories, this life-cycle approach may have paved the road for applying the specific lessons of complementary theories (e.g., Strategic Management), for proposing new perspectives fitting the focal firms' respective situations as if each of them is a nearly unique entrepreneurial enterprise, which may lead to arriving at more effective and potent internationalization strategies for a given enterprise.

The implication of this article fall in theoretical, practical, and public policy categories, as follows:

Theoretically, the critical role of building capabilities, resources, and their respective impact on augmenting an enterprise’s optimal growth trajectory need to be seriously considered. Similarly, an examination of the network’s ability in raising capabilities, building trust, and preparing the enterprise for accepting certain level of risk-taking for higher innovativeness and global competitiveness, especially in the context of the collaborative arrangement, as presented earlier, needs our further attention.

The managerial and practical implication of the proposed framework are two folds: (i) The intrinsic value of time-sensitive-opportunity needs higher attention so that its true potentials can be better optimized, and possibly fully realized if firms develop higher agility capabilities from the outset than otherwise, and (ii) Those components of the dynamic capability’s micro foundation (i.e., sensing, seizing, and reconfiguring), which can potentially help a firm “sensing” how to discover, or create, opportunity(ies) for “seizing” them continually over their full lifetime value as fast and as as efficiently as possible should also assume higher importance and be placed at the firm’s top of managerial challenges.

The public policy implication of the suggested framework is that public policy needs to be more receptive to investments in augmenting younger firms’ capabilities, which are highly likely to generate much higher paybacks over the possibly longer lives of such firms, than similar investments, directly or indirectly, in more influential mature enterprises.

In closing, this journal invites scholars to take up the wide range of challenges articulated in this article, especially those in the “Discussion” section. Furthermore, the journal invites the interested scholarly community to add as well as further develop the various building blocks of the proposed longitudinally integrated framework towards a comprehensive theory responsive to the needs of firms in their respective stages of life cycles, from their early embryonic to highly mature stages.