As mentioned earlier, this research aims to explore how small service agencies utilize their network relationships entrepreneurially to enhance their interna- tionalization capabilities. A framework for analysis is presented in Figure 7.1.
The framework takes a processual perspective on the network-based inter- nationalization ‘pathways’ adopted by small service firms. It argues that networking may be an important strategic element in the growth and inter- national development of such firms. The emphasis is on the entrepreneurial capabilities of these firms to exploit network relationships (interorganizational or interpersonal) developed through international transactions or emerging through serendipitous events. Altogether, the framework takes a holistic view of international entrepreneurship, and argues that international initiatives can develop as a result of strategic as well as informal, unstructured interaction of the firm with its network’s actors. Relationships with these actors play an instrumental role in the firm’s ability to carry out its international initiatives.
Multipolar networks
International Entrepreneurial Initiatives/Motives
Firm-specific Characteristics
• Leadership Characteristics and Managerial Commitment
• Internationalization Motives, Attitudes and Risks Tendency
• Firm’s Resource and Skills Bases
Characteristics of Service Output/
Provision
• Intangibility
• Heterogeneity
• Perishability
• Simultaneity of Production and Consumption
• Client Participation in Service/Delivery
External Influences
• Incentives/Market Pull
• Domestic Push
• Market Opportunities
• Globalization of Clients
Internationalization
Unipolar networks DYNAMISM
International Networks Firms
Firm-specific Influences
Transactional or Relational Space
Independent Interdependent Degree of Dependence
Figure 7.1 International entrepreneurship and network dynamics: a conceptual framework
Dev K. Boojihawon 109
On the left-hand side of the framework, it is argued that an interactive combination of firm-specific influences and external industry characteristics can affect the motives for international entrepreneurial initiatives and the ways in which they are executed. At the firm level, Cicic et al. (1999) and Ibeh and Young (1999) suggest that individual and firm-level factors (identified as firm-specific characteristics in Figure 7.1) are antecedents to small service firms’ entrepreneurial export orientation. Also as mentioned earlier, service products are characterized by distinct features that can invariably affect the mode of international expansion adopted by small service firms (for example, intangibility and heterogeneity). Additionally, external industry-level factors (market pull from overseas, domestic push from saturation of home markets, etc.) are also expected to influence the motives to internationalize for these entrepreneurial service SMEs.
These influences in turn affect the types of relationships management can engage in, as given in the right-hand side of the framework. This shaded area defines a space in which the scope of networking strategies for internationali- zation is defined by a range of options to integrate networks that vary in their levels of international involvement; from unipolar through to multipolar networks (represented vertically here, see Wright and Dana, 2003; Dana et al., 2004), and which are also defined by varying degrees of dependence from complete independence to tight interdependence (represented horizontally here, see Etemad et al., 2001). This ‘scope of network dynamism’ maps out a transactional or relational space in which small service firms can build ‘ties’
(Granovetter, 1985) or create relationships to carry out their international activities. On this basis, two research questions govern the focus of this framework:
1. How do firm-specific and industry characteristics influence international entrepreneurship in small service firms? And,
2. How do small service firms entrepreneurially utilize network relationships to undertake international activities?
Methodology
The research reported in this chapter draws from the empirical data of a major process-oriented examination of the international strategy of advertising agen- cies based in the UK. The study was qualitative in approach and 19 case studies were conducted. The case method was appropriate given the limited amount of empirical work investigating the international entrepreneurial behaviour of small service firms. The method was useful for developing a detailed under- standing of the phenomena and provided the flexibility to explore concepts, or insights that changed, or emerged, during the data collection process. This
flexibility added to the richness and quality of the data as the research process unfolded (Yin, 1994). This was beneficial as the researchers wanted to ‘get close’ to the socially constructed realities and experiences of the advertising agencies and their international strategy processes.
The following sampling frame was adopted. The companies approached were from the list of the top 300 advertising agencies in the UK, compiled by Campaign (2000). The agencies were selected on the basis of their degree of international involvement, level of fee income and the extent to which they were servicing international clients. These criteria provided coherence throughout the case research design and analysis, as they would intentionally limit the variance in the sample, thereby making cross-case analysis mean- ingful (Yin, 1994). The case study sampling process was expected to recruit between 15 and 25 firms, with the possibility of securing multiple respondents in each of them. From the list of the top 300 agencies, those with fee income of less than £3 million were screened out because of their small size and strong domestic orientation. This left about 150 agencies to choose from. All of these agencies were randomly approached on a convenience basis, keeping in mind the requirement of ‘theoretical saturation’ (Eisenhardt, 1989) that underpins qualitative inquiry. A sample of 19 agencies agreed to participate in the study, six of which were small and medium-sized advertising companies (SMAs). Only three of these are analysed and presented for the purpose of this chapter. It is important to note that the three cases described here are not necessarily repre- sentative of all the SMAs but do allow for some theoretical generalizations (Eisenhardt, 1989).
In-depth interviews were used as the primary mechanisms to explore issues, events, feelings, knowledge and experiences in detail around the issues of interest. The interviews were semi-structured but non-directed. The respondents principally comprised senior-level managers with significant experience and involvement in strategic decision-making in their respective agencies. The interviews lasted between 45 minutes and 2
½
hours. Each interview was taped, transcribed and complemented with notes and memos that were taken during discussions. A total of approximately 600 pages of data were assembled through this process. The initial insights from the data were revealed during the interview process and the analysis became more fine-grained and systematic as the fieldwork progressed. Once this had been developed, attention was directed towards the elements of international entrepreneurial behaviour of each firm based on the conceptual framework. Qualitative data were content- analysed using the NVIVO software package and the procedures recommended by Miles and Huberman (1994) and Shaw (1999), who emphasize the use of matrices and diagrams for reducing and visualizing data. In the section below, the international entrepreneurial behaviour and the distinct networking strategies of three SMAs are delineated.Dev K. Boojihawon 111