About AMA

Executive Summary
In this article, Freeman, Edwards, and Schroder explain how entrepreneurial smaller firms overcome constraints to early and rapid internationalization to become born-global firms. Constraints identified in the extant literature are lack of economies of scale, lack of resources (financial and knowledge), and aversion to risk taking. Managers of born-global firms use technology to achieve competitive advantage and use networking competencies to develop a range of alliances and collaborative partnerships. This article reveals the approach that managers take to risk management, their ability to achieve economies of scale soon after inception and to share the financial burden through alliances/partnerships, how they manage the risks of high financial exposure and limited market knowledge through “client followership,” and how they go about their rapid internationalization process. Collaborative partnerships provide greater levels of market knowledge and sharing of the financial burden for rapid, simultaneous, multiple-market expansion and penetration by small and medium-sized enterprises.

The small and medium-sized enterprises in this study experienced rapid growth, which previous research has identified as a destabilizing factor leading to problems of coherence and market risk. However, Freeman, Edwards, and Schroder find that the early and rapid growth was managed so that it was not destabilizing. Although many firms experience problems of lack of coherence and market risk, this study reveals how managers can manage these particular issues. The small firms shared risks through strong partnerships and, in this sense, were “sheltered” from the full impact of their acceleration. Freeman, Edwards, and Schroder explain how smaller firms achieve rapid growth internationally through alliances with suppliers, distributors, and joint-venture partners and how these relationships change over time to meet the changing needs and circumstances.

Although Freeman, Edwards, and Schroder’s research supports prior findings that born-global firms are forced to focus on innovative products, they also explain that this is just one of five strategies firms use to achieve early, rapid internationalization while sharing the risks involved. The innovative approaches employed by managers of born-global firms exploited firm-specific factors (organizational capabilities), exhibiting an absence of incrementalism. Thus, the stage model has little application because the firms studied adopted some stages but not others and did so in no incremental order. Indeed, they moved among the stages over time as a way to manage their levels of risk. The key constraints are not unusual to small firms. However, managers of smaller born-global firms respond with strategies that allow them to expand rapidly into international markets while sharing both resources and risks.

Biography
Susan Freeman is a senior lecturer in the Department of Management at Monash University. She received her BEco, MEdSts, andPhD from Monash University and her DipEd from Mercy College. Her areas of expertise and interest include internationalization of the firm, international strategic alliances/joint ventures, and entry and expansion modes. She also has experience in the airlines, high-tech software/hardware, and professional services industries. In addition to Journal of International Marketing, she has also recently published in International Journal of Service Industry Management, and Journal of East-West Business, and she has published chapters in Studies of Small and Medium Enterprises in East Asia: Small and Medium Enterprises in East Asia: Sectoral and Regional Dimensions and Sustaining Growth and Performance in East Asia: The Role of Small and Medium Sized Enterprises. Areas of research interest that she is currently exploring or would like to explore in the future include types of entrepreneurial approaches being adopted by born-global firms in cross-border comparison of NAFTA, CEC, and Asia-Pacific regions and the internationalization of professional services into emerging markets of NAFTA, CEE, and Asia-Pacific.

Ron Edwards (PhD) is an associate professor in the Department of Management at Monash University. His area of marketing expertise and interest is international business. In addition to Journal of International Marketing, he has also recently published in Asia Pacific Business Review, International Journal of Value Chain Management, Journal of Teaching and Learning, Journal of Asian Business, and Neural Parallel & Scientific Computations. Areas of research interest that he is currently exploring or would like to explore in the future include multinational corporation strategy in Asia, country branding, and strategic implications of economic integration.

Bill Schroder is a professor in the Department of Marketing at Monash University. He earned his PhD from Purdue University. His area of expertise and interest is business-to-business marketing. He has had significant work and/or consulting experience in the food-processing and distribution industry. Areas of research interest that he is currently exploring or would like to explore in the future include horizontal business-to-business relationships and business networking.