This research examines how family firms identify international opportunities. Family firms are characterised by long-term orientation, being risk averse, and benefiting from familiness capital, resources and capabilities related to family involvement and interactions. Built upon opportunity identification theory and in two perspectives of accidental discovery and purposeful search, we explore the role of social and business networks, and prior knowledge in a first and subsequent international opportunity identification by family firms. In addition, we attempt to understand the role of family characteristics in the process of opportunity identification. Multiple case studies were carried out with seven family businesses from emerging economies, namely, India, Turkey and Taiwan. The findings of this research illustrate that because of being risk averse and long-term oriented, family firms are more likely to identify the first international opportunity through accidental discovery and subsequent international opportunities through purposeful search. The findings of this research show that, as risk-averse firms, family firms are not proactive in initiating international opportunity identification but rather learn about opportunities through accidental discovery. After the first experience of internationalisation, family firms engage in a more purposeful search to identify avenues that will aid their longevity through internationalisation. In the identification of firms' first international opportunities, it is mainly social networks that play a crucial role, especially those that contain international industry and market-specific knowledge. There is also a positive relationship between a family entrepreneur's prior knowledge and international opportunity identification and this relationship is moderated by the prior knowledge of their network. Familiness capital of these organisations can also play a role in long-term international opportunity identification.
Purpose
– The purpose of this paper is to explore how employing corporate social entrepreneurship and developing a network of relationships with non-governmental organisations (NGOs) can support and contribute towards the internationalisation of service firms into the base of the pyramid (BOP) markets in emerging markets.
Design/methodology/approach
– This research adopts an exploratory approach employing qualitative multiple case studies. Three service firms that have targeted the BOP markets in India were studied. In total, 25 in-depth interviews were conducted with multinational corporations (MNCs) and their NGO partners. Data analysis was facilitated through pattern matching and systematic case comparison.
Findings
– The findings reveal that, by engaging in social entrepreneurship, these MNCs have focused on the neglected needs of the BOP population, developed sustainable solutions and empowerment, and started with social value creation and postponed value capturing. The pursuit of corporate social entrepreneurship has paved the way for them to establish relationships with NGOs. While the MNCs have mainly had the technical knowledge and financial resources required, collaboration with NGOs have allowed them to learn about the BOP’s specific needs and benefit from the NGOs’ knowledge, human resources and good relationships in this market.
Originality/value
– This research unravels how service firms can seize opportunities at the BOP. The authors build on social entrepreneurship theory and bring new insights to the field of international business. In addition, the authors broaden the network view and show how networking with social actors such as NGOs enables the mobilisation of resources, actors and activities in emerging markets.
This research also examines the generalisability of the social capital theory (Nahapiet and Ghoshal, 1998) and dynamic capability perspective (Teece, 2007) in the context of emerging markets by highlighting if and how a combination of internal social capital and participative governance capability can enhance the international performance of family firms. Finally, the findings of this research will shed light on the strategies that family firms' managers from emerging economies should employ to better benefit from the family relationships in their firm and enhance their international firm performance.
Theoretical backgroundIn this section, we first review the literature of social capital theory and introduce different dimensions of internal social capital, then follow this with the literature review of dynamic capability, and the introduction of participative governance capability. After that, we develop the related hypotheses based on these concepts.
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