The Born-Global Firm by Gary Knight and Tamar Cavusgil - Article Example

Student Name: Tutor: Title: Article Review Course: This is a critical review of the article titled “The born-global firm” is written by Gary Knight and Tamar Cavusgil. Gary Knight is an associate professor at Florida State University. He has done research on international marketing strategy, international entrepreneurship, and internationalization of small and medium size enterprises. He has written over sixty journals and refereed conference articles. He has a vast experience of teaching across universities like in Paris, Tokyo, Valencia, and London. He attained his PhD at Michigan State University. Professor Tamer Cavusgil is a faculty chair at Michigan State University. He specializes in early internationalization, international marketing strategy, as well as export trade policy. He has written several books and more than one hundred refereed articles. He serves at the editor-in-chief of Journal of International Business Studies and sits on editorial review boards of several professional publications. This article was published in 2004 and has been revised once. The main aim of this article is to the role of innovative culture as well as organizational capabilities within the early adoption of internationalization and international performance within global born firms. This article is well researched and provides rich addition to internationalization literature. It also gives suggestions for further research. The critical review analyzes the article in detail. This article investigates widespread of emergence of born globals across the world. The authors look at the phenomenon of early internationalization as well as capabilities that born globals for attaining superior performance within the international markets. The phenomenon seems to be largely universal in almost all main trading countries. Born globals develop rapidly to become international entities. Early internationalization is likely driven by globalization of markets and technological advances in production methods, information and communication technologies, international and transportation logistics hence reducing transactions costs as well as facilitating huge growth in international trade (Sharma & Blomstermo, 2003). Entrepreneurial orientation is responsible for innovative practices and processes that are geared towards maximizing organizational success within the new markets. An international entrepreneurial orientation hinders the development of major strategies such as quality focus. Any firm seeking to internationalize has to choose suitable modes of entry. Young-resource poor firms resort to exporting as their basic mode of entry into foreign markets as compared traditional multinational enterprises. Intermediaries in the foreign markets have strong market knowledge as well as specific competences, as well as performance strategic functions within the foreign markets. Whereas born globals have superior capabilities, they have to rely in some areas on the capabilities of foreign market facilitators for dealing with various complexities on the ground. Leveraging foreign distributor competences describes the likelihood of born globals to use the services of foreign independent distributors and their specific competences to maximize performance outcomes that are attributed to downstream business activities in foreign markets. Top managers that are aggressive and eager for international success always leverage competent foreign distributors. Foreign distributor competences have the ability or are supported by the quality focus of a firm. Previous studies have concluded that there is a positive correlation between the firm size and research and development activities. Research and development productivity declines with age and size. Knight and Cavusgil (2003) carried out cross-industry survey for collecting primary data. They searched literature to get sufficient information on key constructs as well as scales suitable for measuring them. An instrument test was carried out by administering a draft questionnaire to four international business scholars that facilitated refinement of the instrument. A pilot study was carried out among eighty-two small exporting firms for the purpose of refining the questionnaire. Exploratory factor analysis was carried out to remove any potentially troublesome items. The data collected was analyzed accordingly. Findings show that the strong innovative nature of the born-global firms is responsible for these businesses in the cultivating particular types of knowledge. Innovative activities within these firms are responsible for venturing into new markets as well as reinvention of the operations of the firm to serve the markets at optimal level (Aspelund & Moen, 2001). The findings also showed and confirmed the significance specific key organizational capabilities that jeopardize international success within born globals. Organizational capabilities are major sources of performance advantages for firms. Born globals refers to young businesses identified by a specific pattern of innovativeness that result into early internationalization. Resource-based perspective states that the foundational resources of a firm are very vital in diverse business environments since they offer a stable foundation for development of strategy. Small and young firms endure scarcity of human financial as well as tangible resources that occasion reduced competitive options. Advances in information, production, communication and logistics technologies have created a business environment where young and smaller firms can take part in global markets actively. Lack of an embedded infrastructure as well as managerial mindset facilitates rapid and early internationalization (Andersson & Wictor, 2003). International entrepreneurial orientation is important to firms since it seems to drive them to come up with high-quality products that are distinctive as well as technologically advanced. International marketing orientation is vital to born globals. Strong associations that born globals create with competent foreign distributors help in paving the way for performance that is superior abroad. Foreign distributors offer local advantages that are attributed not only to downstream practices, but also for gathering market intelligence creating links with major foreign contacts and developing new buyer segments. Knight and Cavusgil (2003) conclude that youth as well as absence of experience and paucity of human, financial and tangible resources do no longer hinder large-scale internationalization, as well as global success of any firms. They suggest that future research has to focus on deepening the understanding of early adopters of internationalization that shows a prevalent and ongoing trend. Knight and Cavusgil (2003) provide an expansive information background in this article about the topic under investigation. This background is very important in making the reader understand the significance of the current research. The authors have explored the phenomenon of internationalization and have analyzed various theories that would explain the reason why born global grow rapid in the international market. The article is well written and well thought throughout where the ideas build systematical on each other. A layman has an opportunity to follow every argument in the article without feeling lost. The style used for writing this article suits the intended audience who will be looking for information about internationalization theories. The authors have used different sources to support their argument. This article provides important information about firm’s internationalization but also offers a platform for further research to be carried out. The use of cases studies enhances the believability of the article and makes it easier for a reader to point out other cases from world examples. Internationalization of business may appear to be an easy topic but hard to explain. Knight and Cavusgil (2003) have incessantly used theories to explain various phenomena in the international business world. The literature review is rich with analysis of various studies that have been carried out on the topic under discussion. The authors have successfully identified the gaps in the current research and explained the importance of their investigation. Some trends facilitate early stages of internationalization by on their own they are not sufficient to explain interesting processes at work in the internal environment of a firm. There has been scarce research that tries to explain the reason why born globals are likely o internationalize early (Gabrielsson et al, 2008). There has been inadequate empirical research that evaluates the factors that occasion superior performance internationally of these young and highly entrepreneurial firms. There is limited empirical research that uncovers the actual bundles of capabilities that accompany innovative firms. They have emphasizes why the current research is important. Identifying gaps in the previous studies set the stage for further research to be carried. The Knight and Cavusgil (2004) have successful defines the purpose of the research. The authors have acknowledged the use of secondary sources and they have properly referenced any materials for the sources. Knight and Cavusgil (2004) have developed hypotheses that have guided their research. They propose that young firms having a strong innovation culture as well as a proclivity to pursue international markets is likely to internationalize early as compared to internationally oriented young firms that do not have an innovative culture. The research suggests that born globals are entrepreneurial. The authors have also revisited other studies that have discussed internationalization of business. Specific case studies have been used to explain other theories that explain the internationalization phenomenon. Development of various hypotheses shows the deeper understanding of the topic by the authors. Knight and Cavusgil (2004) are accomplished scholars who have written vastly on various topics. Knight and Cavusgil (2004) have also divided the article into different sections that makes it easier for the reader to follow. They have traced the history of born globals and how they internationalize early. The use of subheadings makes it simple to follow the thoughts and ideas being discussed in the research. The literature review section has discussed extensively various theories that explain the born-global internationalization. The method section outlines in detail how the researchers went about carrying out their investigations. They explained how the research instruments were developed and tested. The method is elaborate and show step by step how the authors went about gathering their primary data. They have defined the various constructs that were used in the research. They have gone ahead to link the content of the article with various materials in the appendix. The appendix has been used to decongest the main article and be used as a reference point. The authors carried surveyed-based research on born-global firms in order to validate findings from qualitative phase. Use of charts has enhanced the interpretation of ideas that they are projected in the article. However, it will be difficult for a layman to crack the complex mathematical calculations. Here it will require an expert to digest the various formulas that have been used in the article. The data analysis section plays an important part in explaining what is covered in the method. The various constructs that have been used are tabulated in the data analysis section and their mean and standard deviation derived. Three hypotheses developed by the authors were fully supported while two of them were partially supported. The discussion section is elaborate and explains in details the findings and the relationship with the developed hypotheses. The findings showed and confirmed the significance of particular key organizational capabilities that affect international success in the born globals. The article concludes with a comprehensive conclusion that wraps up what has been covered in the article. Knight and Cavusgil (2004) further provide suggestions for further research. The article provides a rich background about internationalization of born globals and it additional literature. They end by acknowledging everyone who facilitated them in covering the research that resulted in this article. The article is beautifully written and contains important statistics that give empirical evidence for future research. There are plenty of references that have been provided at the end of the article. The sources were well referenced in the article through in-text citation. This shows that there was thorough research before the study being carried out and the article written. Knight and Cavusgil (2004) have explored an important topic with regard to international marketing strategy. They have tried to explain why born-globals internationalize early. They have pointed out gaps in the previous studies that warranted further research. They have used vast resources to give the background to their study. The findings have supported fully three out of the five hypotheses formulated at the start of the study. Various case studies have been discussed in relation to the topic under discussion. This article provides crucial empirical evidence to the field of international entrepreneurship as well as international marketing strategy. This article review summarizes the main themes in the article and evaluates its contribution to the field of internationalization. This is a good article that scholars within the discipline will find informative and rich in empirical evidence about the topic of born-globals internalization. The innovative culture of the firm as well as its capabilities defines its internationalization. References Andersson, S. and Wictor, I., 2003. Innovative internationalization in new firms: born globals–the Swedish case. Journal of international entrepreneurship, 1(3), pp.249-275. Aspelund, A. and Moen, Ø., 2001. A generation perspective on small firm internationalization: From traditional exporters and flexible specialists to born globals. In Reassessing the Internationalization of the Firm (pp. 197-225). Emerald Group Publishing Limited. Gabrielsson, M., Kirpalani, V.M., Dimitratos, P., Solberg, C.A. and Zucchella, A., 2008. Born globals: Propositions to help advance the theory. International Business Review, 17(4), pp.385-401. Knight, G., and Cavusgil, S.T. 2004. the Born-global Firm. Journal of International Business Studies, 35(2), pp.124-141. Sharma, D.D. and Blomstermo, A., 2003. The internationalization process of born globals: a network view. International business review, 12(6), pp.739-753. Read More