Strangers in a strange land: strategy development for diminishing liabilities of newness and foreignness in transnational entrepreneurial companies
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Date
25/11/2014Item status
Restricted AccessEmbargo end date
31/12/2100Author
Stoyanov, Stoyan Petrov
Metadata
Abstract
Entrepreneurial migration has become increasingly common as a result of globalization
and regional economic integration, and the economic contribution of immigrant
entrepreneurs is increasingly appreciated. Many of these immigrant entrepreneurs
become transnational entrepreneurs (TEs), in that their business activities link the
markets of their home countries and their new host countries. Entrepreneurship,
International Entrepreneurship and Internationalization Process research has emphasized
the role of networks and of social capital for entrepreneurs for addressing the liabilities
of foreignness or of outsidership when they address new markets. Research has not,
however, addressed the role of networks for TEs, nor the role of networks in their
strategies.
This thesis asks how participation in Diaspora networks helps transnational
entrepreneurs diminish liabilities of newness and foreignness, and how transnational
entrepreneurs successfully realize and manage business embeddedness at an
interorganizational level. A qualitative study is undertaken with 12 Bulgarian-owned
service-consulting companies in London. Data came from semi-structured interviews of
the entrepreneurs involved and their employees, which was combined with participant
observations and oral life story narratives.
Three overall contributions are developed from the findings of the study. First, the study
makes a theoretical contribution to the field, by introducing the ‘resource orchestration’
framework in the study of entrepreneurs’ capabilities and resource configurations.
Modifying this framework with the inclusion of a time dimension adapts it to the
dynamism of process research. This helps the study to show how TEs typically undergo
a sequence of processes in which they leverage their Diaspora networks in order to
access, acquire, and adapt knowledge and capabilities. It is these processes that allow
them to reduce the liabilities of foreignness that they face, and embed themselves in their
new local environments.
Second, the study illuminates heretofore unexplored processes of TE integration that
reduce their liabilities of newness and foreignness and help to align with their new
foreign country market environment. This involves preparation, paradigm shift, and
initiation stages, each one being facilitated by embeddedness within a Diaspora
community. It is through these integration processes that entrepreneurial resource
orchestration is achieved, and the synchronization of resource structuring and bundling
processes.
Third, the findings challenge an assumption often encountered in entrepreneurial and
international entrepreneurial network and social capital research that the co-existence of
strong ties and bridging ties – referred to by Burt (1992) as an ideal configuration – is
exceedingly rare. This study finds evidence of their frequent co-existence in the
Diaspora network, and shows this configuration to underpin the operation and growth of
the network. It shows how TEs have a particular opportunity to access, orchestrate and
employ this valuable form of social capital, and doing this in the ways shown not only
enables their own entrepreneurial success, but also their economic contribution to their
host communities.