Proactive Learning Culture: A Dynamic Capability and Key Success Factor for SMEs Entering Foreign Markets

I. Gnizy, W. Baker, A. Grinstein

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Purpose-Although small and medium sized enterprises (SMEs) account for a significant portion of international trade, little is known about the role of strategic orientation culture in improving their foreign launch success. Three orientations-market, entrepreneurial, and learning are all related to organizational learning priorities and reflect a higher order dynamic capability (DC), proactive learning culture (PLC). The authors assert that PLC is particularly important to SMEs whose lack of market power and resources render them vulnerable in risky foreign market launch. Marketing program adaptation and local integration are examined as behavioral mediators of the impact of PLC on foreign market launch success. The paper aims to discuss these issues. Design/methodology/approach-The DC framework guides the study. The authors employ a model with a higher order PLC, two mediating behaviors, and firm foreign market launch success to report on an empirical study of US SMEs that operate in foreign markets. The authors used hierarchical regression analysis and extensive post hoc analyses/robustness checks. Findings-Consistent with the DC framework, SMEs’ foreign launch success is driven by higher and lower order behaviors. The impact of the higher order PLC construct was mediated by two lower order behaviors, marketing program adaptation and local integration. Notably, PLC’s influence is stronger than the influence of any subset of its one/two/three first order components. Practical implications-SMEs need to pay attention to an array of organizational learning processes that combine to engender a PLC, which help optimize the deployment of more tangible, lower order behaviors required for foreign launch success. Originality/value-Introducing PLC as a DC that enables firms to proactively develop marketoriented, innovative capabilities using a knowledge-based approach. The elements of PLC reflect a more complete view of the role of learning in driving the assembly of lower order behaviors in foreign market launch, which requires both a market-oriented approach and the ability to innovate under conditions of uncertainty. While each element of PLC is valuable, the higher level impact of all three facilitates a more effective culture for those firms, which choose to enter new markets.
Original languageEnglish
Pages (from-to)477-505
JournalInternational Marketing Review
Volume31
Issue number5
DOIs
Publication statusPublished - 2014

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Key success factors
Small and medium-sized enterprises
Learning culture
Dynamic capabilities
Marketing
Organizational learning
Innovative capability
Market power
International trade
Design methodology
Knowledge-based
Robustness
Learning process
Resources
Empirical study
Uncertainty
Strategic orientation
Hierarchical regression
Market orientation
Mediator

Cite this

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title = "Proactive Learning Culture: A Dynamic Capability and Key Success Factor for SMEs Entering Foreign Markets",
abstract = "Purpose-Although small and medium sized enterprises (SMEs) account for a significant portion of international trade, little is known about the role of strategic orientation culture in improving their foreign launch success. Three orientations-market, entrepreneurial, and learning are all related to organizational learning priorities and reflect a higher order dynamic capability (DC), proactive learning culture (PLC). The authors assert that PLC is particularly important to SMEs whose lack of market power and resources render them vulnerable in risky foreign market launch. Marketing program adaptation and local integration are examined as behavioral mediators of the impact of PLC on foreign market launch success. The paper aims to discuss these issues. Design/methodology/approach-The DC framework guides the study. The authors employ a model with a higher order PLC, two mediating behaviors, and firm foreign market launch success to report on an empirical study of US SMEs that operate in foreign markets. The authors used hierarchical regression analysis and extensive post hoc analyses/robustness checks. Findings-Consistent with the DC framework, SMEs’ foreign launch success is driven by higher and lower order behaviors. The impact of the higher order PLC construct was mediated by two lower order behaviors, marketing program adaptation and local integration. Notably, PLC’s influence is stronger than the influence of any subset of its one/two/three first order components. Practical implications-SMEs need to pay attention to an array of organizational learning processes that combine to engender a PLC, which help optimize the deployment of more tangible, lower order behaviors required for foreign launch success. Originality/value-Introducing PLC as a DC that enables firms to proactively develop marketoriented, innovative capabilities using a knowledge-based approach. The elements of PLC reflect a more complete view of the role of learning in driving the assembly of lower order behaviors in foreign market launch, which requires both a market-oriented approach and the ability to innovate under conditions of uncertainty. While each element of PLC is valuable, the higher level impact of all three facilitates a more effective culture for those firms, which choose to enter new markets.",
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Proactive Learning Culture: A Dynamic Capability and Key Success Factor for SMEs Entering Foreign Markets. / Gnizy, I.; Baker, W.; Grinstein, A.

In: International Marketing Review, Vol. 31, No. 5, 2014, p. 477-505.

Research output: Contribution to JournalArticleAcademicpeer-review

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T1 - Proactive Learning Culture: A Dynamic Capability and Key Success Factor for SMEs Entering Foreign Markets

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AU - Baker, W.

AU - Grinstein, A.

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AB - Purpose-Although small and medium sized enterprises (SMEs) account for a significant portion of international trade, little is known about the role of strategic orientation culture in improving their foreign launch success. Three orientations-market, entrepreneurial, and learning are all related to organizational learning priorities and reflect a higher order dynamic capability (DC), proactive learning culture (PLC). The authors assert that PLC is particularly important to SMEs whose lack of market power and resources render them vulnerable in risky foreign market launch. Marketing program adaptation and local integration are examined as behavioral mediators of the impact of PLC on foreign market launch success. The paper aims to discuss these issues. Design/methodology/approach-The DC framework guides the study. The authors employ a model with a higher order PLC, two mediating behaviors, and firm foreign market launch success to report on an empirical study of US SMEs that operate in foreign markets. The authors used hierarchical regression analysis and extensive post hoc analyses/robustness checks. Findings-Consistent with the DC framework, SMEs’ foreign launch success is driven by higher and lower order behaviors. The impact of the higher order PLC construct was mediated by two lower order behaviors, marketing program adaptation and local integration. Notably, PLC’s influence is stronger than the influence of any subset of its one/two/three first order components. Practical implications-SMEs need to pay attention to an array of organizational learning processes that combine to engender a PLC, which help optimize the deployment of more tangible, lower order behaviors required for foreign launch success. Originality/value-Introducing PLC as a DC that enables firms to proactively develop marketoriented, innovative capabilities using a knowledge-based approach. The elements of PLC reflect a more complete view of the role of learning in driving the assembly of lower order behaviors in foreign market launch, which requires both a market-oriented approach and the ability to innovate under conditions of uncertainty. While each element of PLC is valuable, the higher level impact of all three facilitates a more effective culture for those firms, which choose to enter new markets.

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