Susanna Khavul

Informal Family Business in Africa

Employing grounded theory based on comparative case studies of informal microfinanced businesses in East Africa, we build a theoretical foundation for studying the establishment and evolution of family firms in emerging markets. We show that East African entrepreneurs not only use both strong family and strong community ties to establish and grow businesses, but they also use strong community ties to counterbalance the obligations that strong extended family ties create. In addition, we show that economic informality presents opportunities for some entrepreneurial businesses but not others to cycle rapidly from opportunity to opportunity as they maneuver toward higher value–creating ventures.

New Financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer-to-Peer Innovations

New financing alternatives, such as microfinance, crowdfunding, and peer–to–peer lending, have expanded rapidly. To date, few studies have investigated the antecedents and consequences of these financing mechanisms. This special issue provides an academic foundation for understanding new financial options that entrepreneurs can now use to start and grow ventures. In the introductory article, we integrate strands of the literature on emerging innovations in entrepreneurial finance and provide a framework for a systematic approach to new research questions. We conclude with a discussion of the six papers in the special issue and demonstrate how they contribute to the framework.

Harnessing Innovation for Change: Sustainability and Poverty in Developing Countries

To date, a well-developed business perspective on how to promote sustainability for those in poverty is sorely lacking. For sustainability enhancing innovations in developing countries, poverty presents unique challenges. In this paper, we argue that if sustainability enhancing innovations introduced in developing countries are to stick, they need to be designed with local customers, networks, and business ecosystems in mind. We illustrate this view using case examples from mobile telephony, fuel efficient stoves, clean drinking water, and household electrification. Our paper underscores the need for todays managers to understand poverty as an integral part of the sustainability nexus and the new international business equation.

Strategic commitment and timing of internationalization from emerging markets: evidence from China, India, Mexico, and South Africa

In a study of 257 new ventures from China, India, Mexico, and South Africa, we find support for the mediating effect of strategic early internationalization on international sales intensity. We argued that when new ventures from emerging markets internationalize early and with commitment, the legitimacy they acquire helps them overcome liabilities of newness and foreignness. We develop a typology of international new ventures that, based on strategic intent and timing of internationalization, distinguishes strategic early internationalizers from persistent, serendipitous, and long‐term internationalizers. We show that strategic early internationalization accounts for over half of the explained variance in international sales intensity and either fully or partially mediates the effects of managerial knowledge and market orientation on international sales intensity.

Harnessing Innovation for Change

To date, a well-developed business perspective on how to promote sustainability for those in poverty is sorely lacking. For sustainability enhancing innovations in developing countries, poverty presents unique challenges. In this paper, we argue that if sustainability enhancing innovations introduced in developing countries are to stick, they need to be designed with local customers, networks, and business ecosystems in mind. We illustrate this view using case examples from mobile telephony, fuel efficient stoves, clean drinking water, and household electrification. Our paper underscores the need for todays managers to understand poverty as an integral part of the sustainability nexus and the new international business equation.

Going global with innovations from emerging economies: Investment in customer support capabilities pays off

Globalization of innovation calls for entrepreneurial new ventures from emerging economies to develop customer-focused dynamic capabilities. The authors argue that firms with proprietary technology and a strategic intent to internationalize invest in international customer support capabilities to satisfy the demands of their most important international customers. Using a unique sample of 173 international new ventures from China and India, the authors show that such investments are associated with improved organizational learning and performance. The results suggest that globalization pays off when entrepreneurial firms from emerging economies invest in ongoing support of their most important international customers.

Capability Development, Learning and Growth in International Entrepreneurial Firms: Evidence from China

In recent years, there has been an upsurge in firms entering the international market at increasingly early age. The Organization for Economic Co-operation and Development (OECD) estimates that more than a quarter of the worlds small manufacturing firms enter international markets within 10 years of their founding and derive a substantial percentage of their revenue from foreign sources (OECD, 1997). In addition, between 1 and 2% of small manufacturing firms are estimated to be international at inception – that is, within 2 years of their founding (OECD, 1997). Being new and proactively international at the same time, international entrepreneurial firms seem to contradict prevailing theories that see internationalization as a gradual process (McDougall, Shane, & Oviatt, 1994).

International responsiveness of entrepreneurial new ventures from three leading emerging economies

Purpose – The purpose of this paper is to answer the question, “How do international new ventures (INVs) from emerging economies become responsive to the demands of their international customers?”Design/methodology/approach – The authors propose a model of international responsiveness that incorporates founding team experience, international firm experience, international strategic orientation, and investment in international supply chain and test the model using data from 293 INVs from three leading emerging economies: China, India, and South Africa.Findings – Results show that for INVs from emerging economies international strategic orientation mediates the relationship between international firm experience, investment in international supply chain, and international responsiveness. In addition, the authors identify a significant difference in the effects of international strategic orientation on international responsiveness among subgroups of INVs.Practical implications – Given the specific context of ...

Entrepreneurial alertness as a pathway to strategic decisions and organizational performance

Entrepreneurial alertness can play a vital role in the identification and creation of opportunities involving early-stage ventures. However, the strategic function of entrepreneurial alertness in more mature organizations has not been explored. In a field study of organizations responding to an environmental disruption, we explore if entrepreneurial alertness influences decisions involving the creation and maintenance of competitive advantage. We find a direct effect of entrepreneurial alertness on strategic change decisions and organizational performance. Moreover, we find a synergistic influence of entrepreneurial alertness and other cognitions, including issue categorization and assessments of uncertainty, on strategic decisions. Findings demonstrate that managerial decision makers can take multiple, reinforcing pathways when heeding change.