Kalevi Kyläheiko

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.

An analytic approach to production capacity allocation and supply chain design

Abstract The aim of this paper is to propose a framework by which the risks related to a customer–supplier relationship, the service requirements by the customers and the strategies of the supplier company can be included in production capacity allocation and supply chain design. Essentially, the target is to prepare a sales plan where the limited production capacity is allocated to the customers based on their strategic importance and the risk involved. Furthermore, the supply chain is designed on the basis of the customers’ strategic importance and service requirements. The framework is demonstrated with a numerical example and it is based on integrating the analytic hierarchy process (AHP) and mixed integer programming (MIP).

Filling a gap in traditional transaction cost economics:: Towards transaction benefits-based analysis

Abstract This paper analyzes dyadic partnership formation between asymmetric buyers and specialized suppliers. In the first part of the paper different economics of organization-based approaches are evaluated. Their basic implications concerning the rise of partnerships are derived. In the second part a dynamized transaction cost and benefit model is introduced to analyze the most critical elements of a typical partnership decision. The final part is based on insights from practice and in-depth interviews among 12 specialized suppliers and their four large incumbent partners in the Information and Telecommunications Industry.

Dynamic capability view in terms of real options

Abstract In this paper we will make an attempt to open up the black box of the modern basic theory of strategic management, i.e. the resource-based view. We will launch a dynamized version about it and interpret its usability in terms of real options applications. According to the dynamic capability view of the firm , the company consists of human, physical and financial resources and its knowledge base, which, in turn, consists of already existing and routinely exploited, i.e. static and not yet fully developed or exploited dynamic capabilities, which both can be produced either internally by the firm itself or externally through the open market or networks. It is widely recognized that in modern firms especially the development, creation and management of dynamic capabilities is of utmost strategic importance. Our paper focuses on the hard issue of managing and valuating dynamic capabilities when designing the strategic boundaries of the firm, let us say when making decisions about network relations. To be able to do this, we will take a broad look at the real options approach as a special method to shed some light on the very aspects of coping with technological and market uncertainty. Some empirical industry-related illustrations about real options applications are launched as well.

Kirznerian and Schumpeterian entrepreneurial‐oriented behavior in turbulent export markets

Purpose – The purpose of this paper is to shed light on the mechanisms by which entrepreneurial‐oriented behaviours (EOB) enhance international business performance. In so doing, the authors demonstrate that different dimensions of EOB may need to be emphasized or dampened, depending on the environmental conditions facing the firm.Design/methodology/approach – A survey of 783 Finnish exporters is undertaken, and the relationships between the dimensions of EOB and business performance are assessed.Findings – It is found that Kirznerian manifestations of EOB have stronger positive relationships with export profits when markets are relatively stable, whereas Schumpeterian manifestations of EOB have stronger positive relationships with export profits when markets are more dynamic.Research limitations/implications – The study has implications for researchers studying multidimensional strategic orientations. The approach adopted is novel, in that instead of adopting a fully aggregated or fully disaggregated app...

Strategic options‐based framework for management of dynamic capabilities in manufacturing firms

Purpose – The purpose of this paper is to launch a dynamic strategic framework for a manufacturing firm for the digital age. The papers dynamic capabilities‐ and strategic options‐based framework is comprised of the following key issues: how to sense the weak signals at the customer interface and how to formulate them as strategic options; how to exercise these options in the (often) intangible assets markets that are imperfect or even non‐existent; how to appropriate and/or share strategically relevant productive knowledge in order to obtain competitive advantage (CA) over the rivals, (iv) how to recognize the opportunities and threats of the underlying industrial structure, especially the economies of scale and scope and network externalities; and how to proactively reconfigure and reshape the existing knowledge base and capabilities in order to sustain the CA obtained.Design/methodology/approach – The paradigm of creating CA is opened up in the context of knowledge‐based engineering and digital manufa...

Making sense of technology : Towards a synthesis between neoclassical and evolutionary approaches

This paper reveals and analyzes the methodological commitments of two economics-based paradigms, which are used as background theories within production economics. We do not offer any standard survey but a critical methodological review which makes an attempt to show that neoclassical and evolutionary approaches can be viewed as supplementary, not as rival candidates. Both approaches are suitable for some specific decision-making situations. We emphasize that the basic differences can be traced back to cognitive and technological assumptions used. Hence, the use of each approach should be evaluated in light of these criteria. All the results obtained are based on a recent methodological device called the methodology of isolation.

A knowledge-based view of growth in new ventures

Purpose – The establishment and growth of new ventures play a major role in wealth creation in most industrialized economies. Consequently, there is much emphasis these days on how to foster their growth, and on determining the fundamental prerequisites. The purpose of this paper is to propose an evolutionary knowledge‐based framework for understanding and testing the linkage between the nature of the firms knowledge and its growth.Design/methodology/approach – The empirical analysis is based on an extensive survey of 171 new ventures in the information and communications technology industry.Findings – The findings indicate the existence of a relationship between some of the proposed knowledge determinants and new venture growth. For example, the ability to scale the firms knowledge‐based resources in economic terms has an effect on past and future growth as well as on growth orientation.Research limitations/implications – Whereas there is growing interest in the growth of entrepreneurial new ventures, ...

Coping with uncertainty – exploration, exploitation, and collaboration in R&D

This paper studies the formation of and the motives for research and development (R&D) activities. In it, we explore the linkages between explorative and exploitative R&D activities and the different types of governance structures firms use when organising R&D. Additionally, we analyse the relationship between different kinds of firm-external uncertainties arising from the operating environments and the organisation of R&D activities. Finally, we scrutinise the impact of the collaboration mode on a firm’s innovative performance, and stress the important role of knowledge sharing as a generator of success in innovative performance. We employ survey data from our sample of 299 Finnish companies. The findings indicate that a firm’s choice of R&D governance structure is partly affected by the selection of an explorative or exploitative strategy, which in turn depends on the degree of firm-internal uncertainty. External dynamism is an additional factor affecting the choice of the preferred governance structure.

Valuing technological capabilities ? the strategic options perspective

Achieving the best performance presupposes the continuous upgrading of tools for performance analyses. The traditional tools that have their roots in accounting calculations and process engineering reactively emphasise ex post analyses, whereas obtaining and sustaining business excellence proactively needs an ex ante orientation. A recent method enabling future orientation in the strategic performance analysis toolkit is the Real Options Approach (ROA), which has its roots in finance. In the paper, we look at the pros and cons of using this approach when dealing with strategic management issues that, in turn, are the bases for successful performance in a turbulent environment. By means of technology management illustrations, we emphasise the strategic advantages of the real/strategic options. As a theoretical focal point, we use the dynamic capability view of the firm that is suitable when coping with tangible and, more importantly, intangible resources and capabilities. In addition, a numerical example is introduced to demonstrate how a new capability can be valuated.