Kaisu Puumalainen

Nature and dynamics of appropriability: strategies for appropriating returns on innovation

The appropriability regime represents a combination of available and effective means of protecting intangibles and innovations, their profitability, and the increased rents due to research and development. It has a central role in appropriating returns on investment, but the nature of appropriability and the strategies for appropriation may not be fully known to managers, or even to researchers. The aim in this study, therefore, is to categorise the appropriability regime by extending, combining and complementing previous research. We also conducted a survey among 299 companies in order to determine the roles, availability, strength and efficiency of appropriability mechanisms. Such mechanisms offer institutional protection in the form of intellectual property rights, contracts and labour legislation, tacitness of knowledge, lead-time, practical secrecy and human-resource management. As a result, we suggest a conceptual clarification of the appropriability regime, and offer empirical evidence to increase understanding of the appropriation of returns on innovation.

Dynamic knowledge-related learning processes in internationalizing high-tech SMEs

Abstract This paper studies the internationalization of high-tech small- and medium-sized firms (SMEs). The traditional internationalization theories suggest that the firms international involvement increases in stages as a result of incremental learning. However, the small information and communications technology (ICT) companies are often characterized as born globals , showing very rapid and intensive international growth enabled by the use of external resources, such as partnerships and networks. Adopting a knowledge-based view of the firm has proved to be a useful way to theoretically explain the internationalization process of these ICT SMEs. However, in our view, the crucial dynamic aspects of knowledge development have not received enough attention in previous empirical studies, which have typically been more like static snapshots. In this paper, we will first launch an evolutionary knowledge management model, derive then its basic theoretical propositions and finally test them empirically in terms of a longitudinal survey of small- and medium-sized software and content providers in the Finnish ICT-sector (from the year 1999 to 2001). Most of the results are straightforward and show that at least some of the proposed knowledge-related determinants really have significant effects on the dynamics of internationalization.

The role of trust in organisational innovativeness

– The purpose of this paper is to analyse the effects of the dimensions of organisational trust on organisational innovativeness in a relatively large survey sample of the information and communication technology (ICT) and paper and pulp industries in Finland., – Organisational trust is deemed to consist of both interpersonal and impersonal types of trust. The empirical part of the study shows the relationship between various types of trust and dimensions of organisational innovativeness. Quantitative empirical analysis is based on a survey of 40 organisational units and 214 respondents within the ICT and paper and pulp industries., – The impact of different types of organisational trust on dimensions of organisational innovativeness was analyzed. The results imply that the impersonal form in particular, namely institutional trust, has an important role in determining organisational innovativeness., – This study contributes both to the literature on organisational innovativeness, as well as to the emerging theory on trust, in its approach to trust as not only an interpersonal issue, but also as something with impersonal aspects., – It is suggested that managers should pay special attention to impersonal forms of trust, i.e. to the institutional dimension of organisational trust. Above all, institutional trust and its development could be seen as a strategic question for companies., – This study makes a significant theoretical contribution by examining the linkages between various dimensions of organisational trust and organisational innovativeness, which have previously been studied only to a very minor extent. It thus provides a richer understanding of the relationship between organisational trust and innovativeness.

Export marketing, interfunctional interactions, and performance consequences

Firms with export operations have internal environments that are often geared toward serving the home market. As a result, export marketing and other business functions compete for resources, which thus increases the likelihood of conflict between them. Using survey responses from more than 700 exporting firms, the authors test a model of the antecedents and consequences of two important interaction variables: exporting’s interfunctional connectedness and conflict. The model explains 52 percent and 49 percent of variance in exporting connectedness and conflict, respectively. The authors identify the key drivers of successful interactions as follows: management commitment, organizational training and reward systems, relative functional identification, centralization, and export employee job satisfaction and commitment. The authors also demonstrate that connectedness is most critical for export success when export markets are in a state of turbulence, whereas conflict is most detrimental when the firm’s export environment is stable.

Market‐oriented behavior

The activities of service and product firms are compared in terms of their market‐oriented behavior in their export operations (i.e. their export market‐oriented (EMO) behavior). Empirical analysis conducted on a sample of 783 Finnish exporters containing both service and product firms uncovered several interesting differences: service and product firms differed in their level of EMO behavior; the direct effects from EMO behavior to various dimensions of export success were invariant across the samples; however, the export environment moderated the link between EMO behavior and export profit performance in different ways across the samples. The results indicate that EMO behavior may be more appropriate under certain environmental conditions, and less appropriate under others. However, the nature of the relationship between EMO behavior and export success may also depend on whether the firm’s core export market offerings are services or physical products.

The impact of global economic crisis on SMEs: Does entrepreneurial orientation matter?

Purpose – The purpose of this paper is to examine the role of the entrepreneurial orientation (EO) in global economic crisis and whether it can mitigate the negative effects of economic crisis both on firms operations and on firms financial performance.Design/methodology/approach – A quantitative approach is used to test the hypotheses. Principal component analysis and multiple regression analysis are used on the empirical survey data.Findings – Results based on a sample of almost 200 Finnish small and medium‐sized enterprises indicated that the different dimensions of the EO can have diverging effects on how firms are impacted by the recession. In general, the more innovative and proactive the firm is, the less its operations are affected by the recession and the more risk‐taking the firm is, the more its profitability is affected by recession.Research limitations/implications – A longitudinal design – rather than the current cross‐sectional design – would give a better premiss to explore the causal re...

Strategic flexibilities and export performance

Purpose – The study aims to develop and test a model of export performance, focusing on the degree to which firms have different types of export flexibility and the degree to which firms adopt market‐oriented behavior in their export operations (i.e. their degree of export market‐oriented [EMO] behavior). Furthermore, the study seeks to examine the moderating roles that EMO behavior and export environment play with respect to the relationships between export flexibility dimensions and export performance.Design/methodology/approach – The model is tested on a sample of 783 exporting firms. Data were collected via mail survey. Analysis was undertaken using structural equation modeling.Findings – EMO behavior moderates the relationship between export flexibility and export sales performance. However, EMO behaviors moderating role differs depending on (a) the source of the export flexibility, and (b) the environmental conditions the firms face. Increasing levels of EMO behavior are associated with increased e...

The power of TQM: analysis of its effects on profitability, productivity and customer satisfaction

This article analyses the effects of total quality management (TQM) in an organisational context. In our analysis we study how the experience (or age or application time) of TQM and the depth (level of self-assessing scores of the business unit) of TQM affect the performance of the unit measured with customer satisfaction, profitability and productivity. Our unique research setting was based on longitudinal data from a global integrated process products company. The results of our analysis indicated that TQM does have an effect on all three types of performance measured. However, there was variation in whether the effects come from the experience of TQM or its implementation. As the results of this study are based on one Case Company, the utilisation of the results as such may be somewhat limited.

Market orientation and internationalisation in small software firms

Purpose – This paper aims to analyse the role of market orientation in the internationalisation of small software firms.Design/methodology/approach – The study combines qualitative case studies with quantitative data from the firms in question.Findings – Market orientation in the internationalisation of knowledge‐intensive small firms consists of three elements: customer orientation, competitor orientation and value‐network coordination. Achieving a successful balance between these elements will considerably smoothen the internationalisation process.Practical implications – The results of this study suggest that small companies should consider their market‐oriented behaviour in line with their value network. The role of market orientation may also vary according to market‐pull or technology‐push conditions.Originality/value – This study is among the first empirical contributions to combine the internationalisation and market‐orientation approaches in studying SMEs. It also contributes to achieving a bette...

The Interaction Between Market Orientation, Industry Environment and Business Success: Evidence from an Exporting Context

Abstract The present study extends the export market orientation research examining the impact of industry environment on the relationship between export market orientation and export performance using responses of 783 exporters. Our approach yields a better predictive validity for performance than earlier studies, and explains how the environment moderates the relationship.