Oleksiy Osiyevskyy

Internalization theory, entrepreneurship, and international new ventures

Purpose – The aim of the article is to establish robust linkages between internalization theory and the empirical phenomenon of international new ventures (INVs). Here, the focus is on firm-specific advantages (FSAs) critical to early new venture internationalization. Design/methodology/approach – On the conceptual level, we explain how the INV literature can easily be accommodated using an internalization theory lens, and we formulate hypotheses to that effect. On the empirical level, we use the Kauffman Firm Survey (KFS) dataset, which includes a panel of 4,928 US-based new businesses founded in 2004, tracked over their early years of operations. We use logistic regressions building upon pooled cross-sections, and including lagged dependent variables. Findings – INV-type foreign expansion is a special case of international growth, easily and credibly predicted by internalization. No new theory beyond internalization theory is needed to explain this phenomenon. Originality/value – The early stages of the...

Business Sense or Subjective Satisfaction? Exploring the Outcomes of Business Planning Comprehensiveness in the SME Context

Does business planning have any impact on the performance of small and medium-sized enterprises (SMEs)? Despite numerous studies in management and entrepreneurship literature, the answer remains contested. The authors address this research question empirically by exploring the composite business planning comprehensiveness construct, reflecting the degree to which business planning practices are embraced in all domains of firm management. Employing a survey of SME owners in the USA and Canada (N = 568), they explore the performance outcomes of this construct. The results demonstrate that business planning comprehensiveness is positively associated with the operational and subjective performance of the firm, but not with its financial performance.

The value matrix: a tool for assessing the future of a business model

Good companies innovate. In the process, they consider target markets, target customers, new product or service offerings, and the positioning of these relative to competitors. This forms a basic strategy for the innovation. However, the lesson of competitive dynamics today is that innovation effort stops short of its ultimate potential if it does not also embrace the business model possibilities provided by the innovation itself. This short article provides a strategic lens for considering the efficacy and power of a business model for a product or service innovation.,The current paper is grounded in the empirical results of an ongoing longitudinal study (undertaken by the authors team in the U.S., Canada and Ukraine) aimed at exploring the structure, characteristics, evolution, and performance outcomes of organizational business models.,The business model’s key characteristics are customer value (the “effectiveness side” of the equation, i.e., doing right things for customers that the latters are ready to appreciate and pay for, but not always to the focal firm) and business value (the “efficiency side” of the equation, reflecting translation of the customer value into profit). Importantly, our evidence strongly reveals the dynamic nature of the business model construct, implying that the companies evolve in terms of these two dimensions.,The recommendations part of the article is primarily based on the in-depth analysis of the recent history of large companies that were struggling to: sustain customer value, and develop and apply internal product and production platforms to increase operating efficiency, and hence business value. All these firms had either slipped into or were in the danger of slipping into Impostor status, and were seeking ways to regain and sustain their Innovation advantage, often over newer entrants in their respective industries.,Introduction of the Business Model Value Matrix allowing to analyze the current company’s business model; practical recommendations regarding getting to and remaining in the Winner quadrant

Expertise, university infrastructure and approaches to new venture creation: assessing students who start businesses

Abstract Within the broader literature on contextual determinants of effectual and causal cognitive logics, the paper explores the drivers of causal and effectual reasoning in student-founders of new ventures, particularly focusing on the role of university entrepreneurship-related offerings and student prior business experience. Using the Global University Entrepreneurial Spirit Students’ Survey (GUESSS), the study involves a sample of 2179 student entrepreneurs from 26 countries. Our findings indicate that university entrepreneurship-related offerings such as curricular programming, co-curricular activities, and financial support play a differentiating role in the proclivity towards causal or effectual approaches across the groups of experienced and inexperienced student entrepreneurs. We also provide evidence that effectuation and causation are not mutually exclusive constructs: they are intertwined and can unfold simultaneously.

The Role of Business Models in the Development of New Technology-Based Firms

In the process of development of new technology-based firms (NTBFs), the crucial role belongs to establishing an effective and efficient business model to deploy the focal technology in a sustainable way. As such, it becomes clear that the business model design and testing/validation become the essential parts of a startup process; yet, so far, the topic of the business model in the context of NTBFs has received insufficient attention in the literature. Drawing on the basic theoretical and empirical insights from entrepreneurship and strategy research, this chapter scrutinizes the topic of the ontological nature of a firm’s business model within the NTBF context, and its relatedness and distinction from strategy, technology, and innovation. From definitional issues, we proceed to discussing the role of the business model in the process of development of NTBFs. Then, we summarize the available empirical material to formulate the most frequently occurring problems with new ventures’ business models that prevent their development, paying particular attention to ways of preventing and dealing with such problems. The developed conceptual framework of business model-related NTBF challenges is illustrated and corroborated with the mini-cases of technology ventures.

Shapeholders: managing them as allies, partners and significant constituents

Purpose The authors review the concept of building relationships with Shapeholders,: a broad group of players that have no financial stake in the company yet can substantively influence it. The process for doing this is the subject of a new book by Mark Kennedy, Shapeholders: Business success in the age of social activism. Design/methodology/approach The authors examine Mark Kennedy’s framework for managing the firm’s shapeholders, a model composed of seven basic steps (7A’s): Align with a purpose, Anticipate, Assess, Avert, Acquiesce, Advance common interests, and Assemble to win. Findings Managing corporate reputation in alliance with enlightened shapeholders is a potential defense against self-aggrandizing schemes to wantonly maximize shareholder value in the short run. Practical implications Managing shapeholders is part of the messy democratic process that works when power is apportioned fairly among those affected by a firm’s decisions, and this process underpins the winning business models of true market leaders. Social implications Stakeholders previously discredited as mere “mosquitos” have gained new power, particularly when their legitimate concerns and unfair treatment resonate with the interests of a significant segment of the public and influential shapeholders. Originality/value Shapeholders can create enormous opportunities for smart managers capable of effectively engaging with them.

Toward Resolving the Reflective-Formative Measurement Debate: Theoretical Framework and an Empirical Investigation—An Abstract

Acknowledging the ontological and epistemological differences inherent between formative and reflective measurement paradigms, we advocate an information processing approach in explaining the efficacy of these approaches in conceptualizing attitudinal constructs. Specifically, we focus on the measurement of corporate reputation, examining two competing measurement conceptualizations: second-order reflective model versus second-order formative model. Drawing from dual-processing theories we explain the underlying theoretical mechanisms at play in the activation of reflective versus formative conceptualizations of corporate reputation contingent upon an individual’s level of “need for cognition” trait. Using mobile phone customers in two countries, we provide empirical validation to both conceptualizations, and thus both reflective and formative models are plausible. However, their model fit varies across the levels of individuals’ “need for cognition.” As a methodological contribution, we propose a novel “jackknifing” methodology in structural equation modeling to conduct statistical tests of our proposed cognitive contingency model. By this means, the study brings us one step closer in an attempt to reconcile the validity of both measurement paradigms.

Business Model Design and Innovation in the Process of Expansion and Growth of Global Enterprises

In recent years, the concept of business models has gained substantial attention in strategic management literature, as researchers and management practitioners realize that business model is the primary mechanism for value creation and appropriation by firms in a market economy. As such, a business model should become one of the main units of analysis in strategy scholarship. Yet, whereas the recent literature provides a good understanding of the role of business models in high-tech companies and new ventures, the role of business models for other types of enterprises, including established multinational companies, needs further research. In this chapter we intend to fill this gap by addressing the following questions: 1) What is the role of business models in today’s global business? 2) How can business model design and innovation facilitate the expansion and growth of global enterprises? 3) What are the peculiarities of business model analysis, design and change in multinational contexts? Drawing on insights from evolutionary and resource-based perspectives, we provide answers to these questions, clarifying our conceptual argument with illustrative mini-cases of failures of global enterprises having to adjust their business models in multinational contexts in the process of expansion and growth.

Value creation mechanisms of business models: Proposition, targeting, appropriation, and delivery

Management scholars and practitioners generally agree that the primary functions of a business model are value creation and value capture. However, the meaning (conceptualization) of these terms, their measurement, and the factors and mechanisms affecting them remain contentious. In the current article, we provide answers to these questions by clarifying the consumers’ value creation and business value capture constructs. Then, we demonstrate how they are determined by four business model mechanisms: value proposition and value targeting (affecting consumers’ value through willingness to pay) and value appropriation and value delivery (affecting business value through price and cost). We demonstrate that a fine-grained analysis of a business model’s value creation cannot be adequately performed without reference to these four mechanisms. The developed conceptual framework is illustrated and corroborated by the mini-case vignettes. We finish by outlining an application of the proposed framework to two crucial real-world business model situations: escaping the Giver Trap and remaining the Winner.

Three value-focused strategic questions for continuously updating your business model

The article describes how a well-functioning, competent system of self-evaluation of customer value creation and delivery can be an essential part of a corporate initiative to reach or sustain the winner state.”,The true value the firm’s customers are obtaining from interactions with the firm can be assessed by obtaining candid answers to the following three strategic value-focused business model questions: 10;(1)9;How do you make sure you are offering the benefits your customers really appreciate most? 10;(2)9;What group of customers is the primary focus of your efforts? 10;(3)9;How do you help your customers fully appreciate the delivery of the benefits offered? 10;These three questions were derived from an in-depth investigation of the business models of real-world firms that succeeded in moving to and remaining in the winner state, an ongoing longitudinal study undertaken by the authors’ team in North America, Southeast Asia and Europe.,Based on the authors’ research, companies with sustainable winning business models institutionalize the processes of systematic, ongoing collection of the information about customer value, integrating it into the strategic decision making processes.,To be effective, according to our research, the analysis needs to consider value proposition (what is promised), value targeting (who is the primary recipient) and value delivery (how the promise is fulfilled) separately, which most companies don’t do.,The article offers top executives, marketing executives and board members process for updating and adjusting the business model so that it continues to produce superior revenue, operating profit and ongoing customer and shareholder satisfaction.