Appendices
Appendix 1 Types of international new ventures Appendix 2 Conceptual model
Appendix 3 Overview of internationalization profile Gemser et al.(2004) Appendix 4 Table 1. Overview of Cases
Table 2. Cultural dimensions and GDP/Growth GDP Appendix 5 Overview of possible modes of entry
Appendix 6 Propositions overview
Appendix 7 Summary of propositions
Appendix 8 Interview Protocol
Appendix 9 Interview questions
Appendix 1 Types of international new ventures
Source: McDougall, P.P., Oviatt, B.M. (1994), p.59 figure 3
The firms researched are situated in the first quadrant. The firms are involved in a
maximum of nine countries. Furthermore, the firms only use export as the mean to
internationalize, holding no substantial investments in foreign markets.
3
Appendix 2 Conceptual model
International Experience - International
assignment/work - Education abroad - Cultural
background
Risk Perception
- risk tolerance - willingness to
take risk
Global Mind-set - pro-activeness - commitment - international
vision
Internationalization Profile
- Country selection - Entry Mode - Speed of
international ization
Learning Managerial Characteristics Internationalization
Networks - Social
relations - Business relations
0.A. 1.A. 1B. 1.C.
2.A. 2.B. 2.C.
3.A. 3.C.
0.B. 3.B.
4.B. 4.C.
4.A.
0.C.
Stage 1 Stage 2
Appendix 3 Overview of internationalization profile Gemser et al.(2004)
Dimension one is the attitude of the managers towards internationalization activities, the second dimension used is the foreign entry mode, form low-commitment, low risk to high-commitment high risk modes of entry. The third dimension covers the number of entries. The fourth dimension regards to which world region is covered by the firms’
internationalization activities and the last dimension measures the market similarity.
5
Appendix 4 Table 1. Overview of Cases
BION B.V. BIOBLEND BIOLOCK BIOBEST B.V.
Year of establishment 2002 2002 2003 2003
Turnover first full book year 60.000 (70% FSTS) 200.000 (80+% FSTS) 100.000 (75% FSTS) 700.000 (60 % FSTS)
FTE's 7 3 2 0
PTE's 0 4 1 7
International Experience(ad
a) Academical Academical/Business Academical Business/Academical
Risk Perception (ad b) low low low low
Global Mindset (ad c) medium high high medium high high
Networks (ad d) formal (academical) formal
(acamical/business) formal (academical)
formal
(academical/business)
The categorization in this table is an indication of the different aspects the firms display. However, it is partly based on tentative reasoning of the author and should be perceived in that sense.
Ad a: International experience is divided in Academical, Acdemical/Business, Business/Academical, Business Ad b: Risk Perception: willingness to take risk, tolerance of risk
Ad c: Global Mindset: pro-activeness, commitment to internationalize, international vision Ad d: Networks: formal (business), formal (academical), informal (friends, familie etc.)
Table 2. Cultural dimensions and GDP/Growth GDP
BION B.V
Countries
Hofstede
values(PDI,IDV,MAS, UAI)
GDP/Growth
GDP(2003) Regions
France 68, 71 ,43, 86 1.8 trillion / 0,5 Europe England 35, 89, 66, 35 1.8 trillion /2,2 Europe Germany 35, 67, 66, 65 2.4 trillion /-0.1 Europe United States 40, 91, 62, 46 10.9 trillion /3.1 North-America Switzerland 34, 68, 70, 58 320.1 billion /-0,4 Europe
BIOBLENDtechnologies
France 68, 71 ,43, 86 1.8 trillion / 0,5 Europe England 35, 89, 66, 35 1.8 trillion /2,2 Europe Germany 35, 67, 66, 65 2.4 trillion /-0.1 Europe United States 40, 91, 62, 46 10.9 trillion /3.1 North-America Switzerland 34, 68, 70, 58 320.1 billion /-0,4 Europe
Spain 57, 51, 42, 86 838.7 billion /2,4 Europe
Italy 50, 76, 70, 75 1.5 trillion /0,3 Europe
South-Africa 49, 65, 63, 49 159.9 billion/1,9
Africa-Sub- Saharan India 77, 48, 56, 40 600.6 billion /8,6
East Asia &
Pacific
BIOlock
United States 40, 91, 62, 46 10.9 trillion /3.1 North-America France 68, 71 ,43, 86 1.8 trillion / 0,5 Europe
BIObest B.V.
Belgium 65, 75, 54, 94 301.9 billion /1,1 Europe
Germany 35, 67, 66, 65 2.4 trillion /-0.1 Europe
Netherlands 38, 80, 14, 53 511,6 billion/-0,5 Europe
In general, the markets that are selected for the development of international activities are highly dissimilar on three dimensions, the Power distance, the Masculinity and Uncertainty avoidance. These three dimensions are higher than the Dutch dimensions.
Cultural dissimilarities thus not seem to affect the selection process of markets. The
results show also that foremost growth markets are selected to internationalize. The
markets that are not growing, are in general very large, which could mean that the low or
7
negative growth of this markets is not important for small firms researched. In general,
markets that are selected display either higher economic growth than the domestic
markets or are larger in volume. However, there seems to be a preference towards the
selection of European markets.
Appendix 5 Overview of possible modes of entry
Based on the stage model, the following different stages of internationalization are identified:
1. Licensing/ Franchising
2. Export by independent representatives 3. Export by dependent representatives
4. Joint-Venture (strategic alliance/ equity/non-equity) 5. Sales subsidiary
6. Production/ manufacturing
These different stages are based on the facts that represent the intensity of involvement
in foreign markets and the related risk factors coinciding with these modes of entry.
9
Appendix 6 Propositions overview
0.A. International experience is positively related to the risk tolerance and the willingness to take risk.
0.B. The international experience of the TMT member is positively related to the global mindset of the TMT members.
0.C. The international experience of the TMT members is positively related to the existence of business and social relations in foreign countries/markets.
1.A. The risk perception of the specific country of the TMT members is positively related to the country selected to internationalize.
1.B. The form the entry mode will be positively influence by the risk perception of
the TMT.
1.C. The risk perception of the TMT is positively related to the rapid internationalization trajectory of an INV.
2.A. The selection of a foreign country/market by an INV is positively related to the previous international experience of the TMT in that specific
market/country.
2.B. The international experience of the TMT is positively related to higher order entry modes with presenting high-commitment and high risk that an INV uses to internationalize.
2.C. The INV is more likely to develop international activities in an early stage due to the international experience of the TMT.
3.A. Due to the global mindset of the TMT is more likely to select the country on a global scale, than on a scale of similarity.
3.B. The more the TMT displays global mindset, the more likely that the internationalization of the activities takes place by modes of entry that presents higher commitment and higher risk.
3.C. The global mindset of the TMT is positively related to the speed of internationalization process of an INV.
4.A. The international expansion of a INV is more likely to be into
countries/markets where social or business networks of the TMT are present or exist.
4.B. The INV is more likely to select forms of internationalization beyond those characterized by low-commitment, low risk because of the use of business and social relationships
4.C. The speed of internationalization activity of INVs is positively related to existing
the social and business networks of the TMT.
Appendix 7 Summary of propositions
Number of
Proposition Proposition Proposition result
0.A. International experience - Risk Perception Mixed Support 0.B. International experience - Global Mindset Mixed Support 0.C. International experience - Networks Support
1.A. Risk Perception - Country Selection Support
1.B. Risk Perception - Entry Mode Mixed Support
1.C. Risk Perception - Speed of Internationalization Support
2.A. International Experience - Country Selection Mixed Support 2.B. International Experience - Entry Mode No Support 2.C.
International Experience - Speed of
Internationalization Support
3.A. Global Mindset - Country Selection Support
3.B. Global Mindset - Entry mode No Support
3.C Global Mindset - Speed of Internationalization Support
4.A. Networks - Country Selection Support
4.B. Networks - Entry Mode No Support
4.C. Networks - Speed of Internationalization Support
11
Appendix 8 Interview Protocol
Interview protocol
Introduction
Young start-up firms like yours, that internationalize very rapidly, are of crucial importance for the Dutch economy. Small sized firms account for more than 90% of the employment and more than 50 % of international trade. As Master of Science Student at the Faculty of Management & Organization, University of Groningen, I am interested in the entrepreneurial activities that enable you to internationalize quickly. By participating in this study, you receive a copy of the results of this study, which identifies critical considerations in the internationalization trajectory of small firms, their strategies and needed managerial capabilities.
The questions in this interview attempt to identify the relation between the international experience, managerial characteristics and internationalization process of New Ventures.
The goal of this interview is to collect data on the previous mentioned relation.
Participation of you and your firm will help clarify the drivers and motivations of the internationalization trajectory of new ventures.
The results of these interviews will be presented according the Faculty Codes of
Conducts, ‘Openbaarmaking afstudeerverslag’. This means that two versions of the
master thesis will be submitted to the faculty of Management & Organization. One
public version, in which individual or firm names will not be disclosed. This one will
solely available through the Rijks University Library and in full-text in the faculty of
Business Library and is not accessible through search machines. The second version,
with full disclosure will be confidential and only presented to the coordinating teachers
and the defence committee.
Structure of interview
The following interview structure and questions are used in this research. Although these questions are presented in English, all are translated into Dutch because of the Dutch origin of the firms and interviewees in the sample.
The interview structure is as follows. First for each variable in the conceptual model a sequential interview structure is used. This is done to research the variable at hand and is used as an input for the questions related to the relations in the first and second stage of the research. A graphical overview of one of these sequences (international experience, risk perception and internationalization profile) is provided in figure 1.
Figure 1. Research sequence for international experience-risk perception-international profile
In short this means that first questions related to the international experience will be asked. The answers of this outcome will be used to asses how much and what kind of international experience a manager has and taken as a starting point for the questions related to the risk perception the manager has of developing international activities. The results will be used in the second stage of this research, in which the impact of the risk perception on the internationalization profile is assessed. The interview thus will be semi-structured, which means that the interviews take place topic-by-topic and are based on open questions regarding above-mentioned topics.
Int. Exp. --->Risk Perception.---> Int. Profile
(Man. Charac)
Q1---> R1 Q4---> R4 Q6---> R6 Q2---> R2 --- --- Q7---> R7 Q3---> R3 Q5---> R5 Q8---> R8
13
Een Onderzoek Naar de Ontwikkeling van Internationale Activiteiten In Jonge Ondernemingen
Datum:
Betreft: Onderzoek in uw bedrijf Geachte heer/mevrouw,
Ondernemingen zoals die van u hebben zich ontwikkeld tot een speciaal type die zeer belangrijk zijn voor de Nederlandse economie. Uit onderzoek is gebleken dat kleine ondernemingen voor meer dan negentig procent van de Nederlandse beroepsbevolking de werkgelegenheid verzorgen en meer dan vijftig procent van de internationale handel vertegenwoordigt.
Als afstuderend MsC International Business & Management student aan de faculteit Bedrijfskunde, Rijksuniversiteit Groningen, ben ik geïnteresseerd in informatie te verkrijgen over de barrières waar u tegen aanloopt en de problemen die u heeft in het proces om succesvol zaken te doen. U bent geselecteerd op basis dat u op dit moment actief bent op de farmaceutische industrie. Mijn onderzoek bestudeert de invloed van de manager, ondernemer of oprichter van uw bedrijf op de ontwikkeling van buitenlandse activiteiten. Het doel van dit onderzoek is meer duidelijkheid te verschaffen en betere inzichten te krijgen, waarom ondernemingen zeer snel na hun geboorte internationale activiteiten gaan ontwikkelen.
Als u aan de volgende onderzoekscriteria voldoet, uw bedrijf is niet ouder dan 3 jaar en u heeft een minimale omzet vanuit buitenlandse activiteit van 25 procent, dan zou ik uw bedrijf graag willen uitnodigen om te participeren. Als u participeert in dit onderzoek, krijgt u een exemplaar van het resultaat van dit onderzoek, dat informatie verschaft over de beste strategieën om buitenlandse markten te benaderen, die geassocieerd kunnen worden met beter financieel succes en snellere groei van uw bedrijf.
Het onderzoeksproces zal gebeuren doormiddel van een open interview met één of meerdere managers, ondernemers of oprichters van uw bedrijf. Het interview zal ingaan op de eventuele internationale ervaring die deze individuen hebben, de karakteristieken van het managementteam en de internationale ontwikkeling van uw bedrijf. Het interview zal plaats vinden op de plaats en tijd die u het beste uitkomt en zal ongeveer twee uren in beslag nemen.
De resultaten van dit onderzoek zullen volgens de richtlijnen van de Faculteit Bedrijfskunde (Rijks Universiteit Groningen) ‘Openbaarmaken Afstudeerverslag’ gepresenteerd worden.
Naar aanleiding van deze brief vraag ik u om te reageren of u wilt participeren in mijn afstudeeronderzoek. Ik hoop dat u positief tegenover de inhoud van deze brief. Voor verdere informatie of als u geïnteresseerd bent in deelname, kunt u met mij voor 1 Juni 2005 contact opnemen via het onderstaande mail adres of telefoonnummer.
Hoogachtend,
In afwachting van uw reactie, Gijs Spil
MsC International Business & Management, Rijksuniversiteit Groningen, te Groningen
Appendix 9 Interview questions
1.1 Personal details
Can you give me a short overview of your self; Name, date of birth, place of birth, nationality, marital status?
What kind positions did you fill before joining/founding this firm?
What kind of position/role do you currently fill in your firm?
How long are you already active in your firm?
In what kind of industry is you firm active? Industry, age, market size?
1.2 International experience
(International experience measures are based on Fischer and Reuber (1996))
Do you or any other members of the current top management team have experience in selling, working or operating outside the Netherlands? If no, why not? If yes, which country, which firm, which position and for how long?
Have you ever been outside the Netherlands for study reasons? Where, how long?
Did you studied in a foreign language? Where, what language?
1.3 Risk perception
(Statements related to risk perception are adapted from Roth (1992) and Harveston (2000))
What is opinion about the statement: Domestic activities are much easier to manage than international activities?
Is your attitude positive or negative regarding the international expansion of your firm?
Yes, no. Why?
Do you and thus your firm take/took chances on international opportunities? Which?
How? Example?
Did the firm use performance measurement to asses the international expansion?
Do you think the performance measurement mechanism gave you more insights in the possible risk of internationalization. How, example, which risks considered?
What kind of measures did you use to assess risk?
To what extent does risk play a role in the development of international activities?
Would you consider international activities to be more risky than domestic activities?
Why?
Would you consider yourself a risk-taker in internationalization?
15
1.4 Global mindsets
(Statements related to Global Mindsets, taken from Nummela et. al (2004))
Pro-activeness
Do you think that it is important for your firm to internationalize? Why?
Was it important for you to directly internationalize? Why?
Is internationalization the only way to achieve your growth objectives? Why?
What benefits do you perceive in internationalizing? Are they worth the resources committed?
What kind of contributions could international activities bring to your firm in terms of growth or profits? Are they worth the resources committed?
Is the growth on which you are aiming achieved mainly through domestic or international activities? Why?
Is your firm actively exploring the idea of new products and the possibilities of these products in foreign markets?
Commitment to internationalize
How willing are you to take the activities of the firm to the international markets?
Example?
What kind of commitment in terms of financial or managerial resources are being used in an for international markets? How does this differ from your competitors?
Can you give an indication of the time the firm’s management uses to plan and coordinate international operations?
International vision
(Based on Dichtl, Koegmayr & Mueller (1990))
Do you see the whole world as one big market place, or do you find that foreign countries/markets display different characteristics? Why? Example?
What is your attitude about developing international activities in non-similar regions, like in East Asia, Pacific? Can you explain yourself?
Does the internationalization in non-similar markets give your firms advantages or disadvantages? How, why, give example.
1.5 Networks
Did you or any other member of the top management team have networks in other countries before joining or founding your firm? What kind? Based on what sort of contacts?
Did you use contacts of networks to become an international active firm or develop international activities? Which? How and Why?
Where the networks the TMT members had helpful in the development of international activities? How?
1.6 Internationalization profile
In which countries are you presently active? How where these selected?
Is your firm presently seeking for new foreign markets for the current products?
Example?
What sorts of entry modes did you use to internationalize?
Is there a predominant mode of entry that your firms uses when internationalizing? Why is this entry mode selected?
When did you start to develop international activities direct after inception? Why?
17
Overview of questions about relations
2.1 International experience - Risk perception
Did the international experience you have had influenced your attitude of towards using internationalization as a mean to increase profits?
Do you think that your international experience helped you in familiarizing with the new market? How, example?
Is there a difference in perception of risk before and after you had your international experience?
How does international experience affect your risk perception in internationalizing?
Do you think that the risk you run is reduced in the international activities of your firm is because of the fact that you had international experience? How?
Are you more willing to take and tolerate risk as you gained international experience?
How does the international experience you have had influenced the willingness tot take and tolerance of risk?
2.2 International experience - Global Mindset
Pro-activeness
Did your international experience create more awareness about the possibilities that are abroad? In what way? Example?
Do you think that the motivation and drivers of your firm’s internationalization lies in the fact that you had international experience?
Are you presently seeking actively for new partners or customer to expand international activities?
Does international experience strengthen your commitment to foreign markets? How?
Commitment
Did the amount and sort of international experience led you to commit more or additional resources to the development of international activities? How, example!
International vision
Did your international experience broaden you mind when thinking about markets for your products?
Did your international experience realize you that foreign market is not significantly different from the domestic market?
How did exposure to foreign markets, cultures affect your international vision?
Has the international experience you had influenced the pro-activeness to
internationalize, the commitment for this and the international vision you have towards
these markets?
2.3 International experience – Networks
Did your networks originated from your international experience?
If you used these networks to internationalize, where these a result from the international work/assignment, your study abroad or because of your cultural background?
Has the international experience you have influenced the amount and sort of networks you have? Example?
3.1 Risk perception – Internationalization Profile
Before you internationalized in a foreign market, did you assess the different markets on risk?
Did you select markets that had in your perception a lower amount of risk, due to the previous experience in these markets?
Do you think that the entry mode currently used is based on your willingness to take risk?
Is the extent of the internationalization of your firm related to the risk that you see in the foreign market?
3.2 International experience – Internationalization Profile
Which countries that the firm selected to internationalize are based on your international experience? Example? Why?
Is the predominant mode of entry your firms currently uses to internationalize comparable to the ones you where already familiar with?
Do you think that the international experience you have had facilitated the fast internationalization of your firm? Why?
Has your international experience had any impact on your country selection, mode of entry or speed of internationalization? If so? Why?
3.3 Global Mindset - Internationalization Profile
Is the development of international activities a result of your vision that international expansion is an important way to expand business?
Did the attitude you have towards internationalization influenced the selection process of countries?
What do you think is the most appropriate entry mode for your business, if you had no resource constraints? Is this a result of your international vision?
Why did you see a need to internationalize quickly? Example?
Did your attitude towards internationalization influence the speed of the internationalization that occurred?
3.4 Network – Internationalization Profile
19
