Entrepreneurship and international new ventures
Article builds on the seminal work of Oviatt and McDougall which they argue that INVs are very important. Previous researchers have overlooked the international new ventures issues but Oviatt and McDougall raised this issue and not only raised, they gave the wider view of Internationalization and advantages of INVs to the world. The article raised the worldwide interest in INVs and raising the important issues. The decision for a new venture to internationalize at setting up is influenced by the size of its home market and by its production capacity, as well as by cultural and economic forces that also influence other more traditional firms that stage their entry into international markets. Oviatt and McDougall's article recognized and clear international new ventures (INVs) and their well-known role in the global marketplace.
The article also describes briefly about the importance of International entrepreneurship (IE). The area of "international entrepreneurship" has received significant scholarly attention with the development of strong conceptual models during the last decade (e.g., McDougall and Oviatt, 2000; DeClercq et al., 2005; Zahra and George, 2002). They argued that access into International market by the international new ventures is important and he disagreed with the previous researcher which stated INVs as “distinct breed”. Younger and INVs establishes its companies by using their entrepreneurial activities to create a big value to internationalize their operations and business activities.
There were many things which were identifies in Zahra article that gives the competitive advantages to new firms in globalised economy. Although she mentioned there were few points which were overlooked by the Oviatt and McDougall, but overall she argues in favour of INVs, SME’s and IE. Many people don’t push Young businesses to move forward to move into global market quickly but she argues according to Oviatt and McDougall that INV gives more competition and makes more profit and massive growth. For many years, many organizations have been growing their businesses through mergers and acquisitions. They are equally important and they do contribute a lot to the economy, but this article argues that INVs should be given chance for the growth of small and medium size businesses. “One of the Oviatt and McDougall’s key insights was in drawing intention to the fact that new ventures do not need to own their resources in order to internationalize their operations, a widely accepted view by the scholars (Stevenson and Gumpert in 1985). Article stated that when there was a rapid change in the technology, competitive environment, form strategies are prompting young firms to seek cooperative relationship with each other and this gave them access to new technologies and markets. They have used Internet widely and have been successfully, they also were benefited from each other by co-operating.
The Publication of Oviatt and McDougall’s ‘towards a theory of international new ventures’ (1994) has spurred worldwide interest in understanding the factors that lead to early internalization of younger firms. Oviatt and McDougall were impressed with the small business effort toward international market. They delivered lot of lectures in universities, delivered workshops and training throughout to promote the Internationalization of new businesses. They further describe briefly that Roles of SMEs in international trade, documenting their growing skills in transferring knowledge and managerial skills in global marketplace. I believe that SMEs are very important and are the driving force for the innovation and completion to the global market. In India, the SMEs firms play a major role in the economy. In recent years, when globalization was coming to India, these were the firms which consistently had higher growth as compare to other industrial sector. Many young and new firms have been doing franchise business after doing proper research before entering into market. As mentioned by Oviatt and McDougall that they are the people who bring innovation, give tough competition to the other firms, makes more profit, takes higher risk and grow massively. They are the one who spot the opportunities quickly in international market and they develop new ways to exploit the opportunities. “Reflecting on Oviatt and McDougall’s (1994) paper, one can assume that they never accept prevailing entrepreneurial vies that are built on Kirzner (1973), where opportunities exist in the environment and some entrepreneurs are more alert than other in spotting recognizing and exploiting these opportunities.”
There are many risk associated with internationalization and so are the advantages and disadvantages with young new firms. The most important factor is that how these young firms enter the global market with less experience and succeed. New firms have used the technologies to reach their customers, suppliers easily. I totally agree with the article that all are the key factors underlying success in the international business environment. Although lot of things has to be add to prove that young and new firms are equally important despite the fact that they are less experiences and small in size. We should all appreciate young firms for being brave and entering into global market with working hard to overcome the barriers with good approaching strategy. Young firms and their manager believe that experience comes with the years and interaction with new firms. Oviatt and McDougall (2002) have revised their views that innovativeness, proactiveness and risk taking are the qualities of Entrepreneurship. It is clearly understood that when a young entrepreneur enters a global market, he brings lot of innovative products with positive and less monopoly approach. As Suggested by the Dimitratos and Plakoyiannaki (2003) in the article that international entrepreneurial culture embodies 6 dimensions, which are market orientation, learning orientation, innovation, willingness to take risks, obtain resources through cooperative ventures, and they give rewards and incentives to their employers as suggested and described by the child (2005).
Dubai is the biggest example of such business and young venture as described by the Oviatt and McDougall and supported by the Zahra. When Dubai came into being and globalization was implemented, many young and new firms came into being and they not only survived, they became the MNC’s in few years. Research has concluded that the lack of age (Oviatt and McDougall, 1994) and size (Westhead et al., 2001) are no longer reasons for not pursuing internationalization.
Internationalization has become an automatic solution for entrepreneurial firms; it means that they can have more involvement in the international market and operations. Young firms adopt such strategy so that they can be fit into international environment. The goal of internationalization for young firms is to compete more with MNCs and to make improved profit. In order to succeed well in international markets, these young firms have to adopt such strategic decision so that they can easily mix up with local and international market. Young ventures can proceed with the globalization and internationalization with acquisition, integration and use of knowledge about foreign markets and through their strong commitment. They eventually get the clear picture of the market and gradually increase their knowledge. I believe that Internationalization process is bit slowly, because some companies want to avoid the risk associated with it and to wait to get full knowledge by the time.
International new ventures are potentially very important and interesting for business and economics. They often bring lot of innovations, new organizational structure which is important as argued by the Robert (2004). They use lot of technology, which is very important in today’s world to survive. International new ventures are an more and more important occurrence that is contrasting with traditionally expected characteristics of multinational enterprises. Conclusion is that International new ventures are very important and especially in globalization, it is one of the most important boosters for any Economy. It brought lot of changes in the structure, brings innovation, new technology ideas and also gives competition to MNCs and which result in lowering the price of the product.
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