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Internationalization of Video-Game Studios from Emerging Markets: A Colombian Case Study Based on an Activity-Based View
Abstract
The purpose of this chapter is to provide, from an activity-based micro-perspective (Johnson, Melin and Whittington), a conceptual understanding and a theoretical interpretation of the internationalization process of a born-global video-game development studio from Colombia. Based on theories testing, this chapter provides an answer to the question: Which learning experiences from C2 Game Studio (the studied company) could shed additional light on existing theories to explain the internationalization practices, processes and strategy followed by a videogame development company from an emerging-economy country? The research design of this study was based on a paper by McDougall, Shane and Oviatt (1994). Nonetheless, it uses a case-study approach, and an ethnographic methodology was implemented for the data collection.
This article synthesizes qualitative evidence from ethnographies within video game development companies. A best-fit framework synthesis was conducted, combining the strengths of framework and thematic analysis to interpret the results of 55 ethnographic studies. The analysis revealed that the field of video game development is dominated by technologists and publishers with economic and cultural capitals determining the positions within the field. Within every studio cultural, economic, and social capitals significantly influence developers’ experiences, with persistent issues of job precarity, extended working hours, and underrepresentation of marginalized groups. Developers often face limited creative freedom and significant control which affects their work dynamics and inclusion efforts. Despite these challenges, some studies highlighted peripheral areas where diversity is actively sought and valued. The findings underscore the need for targeted interventions at multiple ecological levels to foster a more inclusive and diverse video game development industry.
En este artículo se revisan los estudios de negocios internacionales en Latinoamérica y se presenta el resto de artículos incluidos en este especial sobre estudios de negocios internacionales y Latinoamérica. Los artículos son los finalistas al premio al mejor artículo que se entrega en el encuentro 2010 de la sección de Latinoamérica de la Academy of International Business. Reflejan la promesa de usar Latinoamérica como centro de investigación para avanzar en la teoría de los negocios internacionales.
Information and telecommunications technologies have profoundly altered the distribution channels available for a wide range of goods and services. In this paper we analyze a particular class of products, information goods and develop a first framework for predicting which information goods are most likely to see their production, distribution, and consumption patterns altered by the net, which are likely to see shifts in power and profitability, and which are likely to remain unchanged for the foreseeable future. We focus on music and news as a selected couple of very different information goods industries that follow two very different trajectories. Our results suggest that the power structure in news distribution is unlikely to be transformed rapidly. In contrast, the power structure in music is transforming rapidly. Star acts no longer need their record labels to certify their music to their fans, and digital production and distribution have reduced or eliminated the value of other assets owned by the record companies. The framework we use to analyze these two industries can readily be applied to a range of others … from the production of television soap opera series to the publication of academic journals in polymer chemistry.
Purpose
The internationalization of local Brazilian firms is a very recent phenomenon, especially when considered in terms of the accelerated growth in the number of Brazilian‐owned multinational companies and the intensity of foreign investment that began in the year 2000. While the specialized literature has focused increasing attention on this new trend, the profound transformation of Brazilian production during the 1990s remains a challenging theme for researchers. This paper aims to analyze the changes undertaken by Brazilian firms in pursuit of competitiveness.
Design/methodology/approach
The data utilized were furnished by the Institute for Applied Economic Research, a governmental think tank, that has combined and expanded upon the main Brazilian databases that provide reliable information about industrial firms: the Annual Survey of Industry carried out by the Brazilian Institute of Geography and Statistics (IBGE); the Annual Social Information Report, conducted by the Ministry of Labor and Employment; the Foreign Trade Secretariat, under the Ministry of Development, Industry and Foreign Trade, and the Industrial Survey of Technological Innovation also sponsored by the IBGE. This procedure allows to access extremely wide‐ranging analyses covering businesses responsible for more than 90 percent of value added by Brazilian industry.
Findings
The principal finding of this paper indicates that enormous changes in business strategy occurred in the 1990s, modifying Brazilian companies' historical orientation towards the internal market. Significant increases in exports and outward foreign direct investment, consequently led a significant group of Brazilian companies to compete in more sophisticated markets. These new strategies of internationalization are supported by these companies' systematic pursuit of innovative processes. Aggregate data from internationalizing companies show that the most advanced group, characterized in this paper as “A‐class companies,” exhibit a standard of competitiveness, salaries, investment in R&D and new product launches found only in Brazil within the local subsidiaries of foreign multinationals.
Originality/value
Various studies have attempted to capture the difficulties and barriers that the Brazilian economy faced at the beginning of economic liberalization. Despite their differences, most of the analyses are confined at the macro level and make the ease and rapid expansion of internationalizing companies a surprising observation. In contrast, this paper emphasizes microeconomic factors and argues that the changes that occurred throughout the 1990s within the structure and strategies of Brazilian businesses were for the most part overshadowed by macro visions (especially those focused on fighting inflation). To capture these changes, especially those that had an impact on improved competitiveness, a new methodological approach has been designed.
The contemporary relevance of the so-called Uppsala
Internationalisation Model is discussed. This is a framework advanced by
a number of Swedish colleagues describing the typical process of
“going international”. Johanson and Vahlne respond to the
criticisms of the model they proposed in the 1970s and relate it to the
Eclectic Paradigm Model and the Networking literature. The concepts of
the advantage package and the advantage cycle in the
internationalisation context are also introduced.
Purpose
The purpose of this paper is to examine the phenomenon of the born global firm (BGF) in the Indian context. Specifically, the paper explores firm‐level characteristics (from the Indian IT industry) which act as initiating forces for firms which have made cross‐border acquisitions within five years of incorporation.
Design/methodology/approach
The paper uses inductive reasoning to derive a theoretical framework of analysis, using constructs from the resource‐based view and institutional theory.
Findings
The paper posits that firm resources, personal and network characteristics of its founders, age of the firm and institutional factors act as the initiating factors for a BGF.
Originality/value
This is the first study on the phenomenon of the BGF from India, which is an important emerging market, and has pioneering value, contributing to the growing literature on the topic.
This introductory paper provides a background to the origins, themes and papers of this Special Issue on Micro Strategy and Strategizing. Our overarching argument is that, while the field of strategy has traditionally concentrated on the macro-level of organizations, it needs now to attend to much more micro-level phenomena. We propose an activity-based view of strategy that focuses on the detailed processes and practices which constitute the day-to-day activities of organizational life and which relate to strategic outcomes. The paper develops this view by considering two bodies of theory, those of the resource based view and institutionalism; two bodies of empirical work, those on corporate diversification and structure; and finally the process tradition of strategy research. The paper identifies the benefits of the activity-based view and introduces some challenges for further research. It concludes by introducing the papers in this Special Issue.
Research on internationalization of emerging market firms (EMFs) has received an increasing attention in the international management field. A central argument in a majority of these studies is that the internationalization of EMFs is different from that of firms from developed economies, and existing internationalization theories are insufficient to fully explain this new phenomenon. We conduct a critical review of important studies on the internationalization of EMFs to address two related questions. First, is the internationalization of EMFs really a new phenomenon, never been witnessed in the past? Second, does it warrant new theoretical developments?Our review suggests that there are important variations in the internationalization strategies of EMFs and developed economy firms and within EMFs from different emerging economies and during different time periods. A thorough understanding of motivations, paths, processes, and performances of EMFs does require new theoretical approaches that can take into account the unique aspects of EMFs.
The Uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977. Now the business environment is viewed as a web of relationships, a network, rather than as a neoclassical market with many independent suppliers and customers. Outsidership, in relation to the relevant network, more than psychic distance, is the root of uncertainty. The change mechanisms in the revised model are essentially the same as those in the original version, although we add trust-building and knowledge creation, the latter to recognize the fact that new knowledge is developed in relationships.
This review article starts from the question: how does the global business system appear to a challenger firm, and how have
challenger Multinational Enterprises (MNEs) from formerly peripheral areas such as the Asia Pacific established themselves
successfully, against the sometimes fierce resistance of incumbents? To answer this question, the review develops an argument
concerning the pluralistic character of the process of globalization, as contrasted with the conventional account that sees
global processes creating uniformity and convergence. This alternative account is based on a review of the experiences of
latecomer and newcomer MNEs, particularly those from the Asia Pacific—such as Acer, Ispat International, Li & Fung and the
Hong Leong Group—that are dubbed “Dragon Multinationals.” I argue that the innovative features that these MNEs share, such
as their accelerated internationalization, strategic innovation and organizational innovation, fit particularly well with
the characteristics of the emergent global economy as one of complex inter-firm linkages. The core proposition of the review
is that this complementarity between the characteristics of the emergent global economy and latecomer and newcomer strategic
and organizational innovations is what drives the remarkable success of these Asia Pacific firms in establishing themselves
as serious international players. Such a proposition carries implications for the process of globalization as well as for
the dominant frameworks utilized in International Business. The review argues that Dragon Multinationals adopt a different
perspective to the resources accessed through internationalization, and that this requires a rethink of the criteria normally
utilized in resource-based accounts of strategy. The challenger firm internationalizing in order to access resources also
poses a challenge to the dominant OLI (ownership, locational, internalization) account of multinational advantage. Thus it
is argued that the question posed at the outset goes to the core of the IB frameworks, and thereby counts as one of the ‘big
questions’ that should guide research in IB in the 21st century.
This paper reviews the progress of the research agenda initiated by The Future of the Multinational Enterprise (1976). Focusing initially on the problem of explaining the existence of the multinational enterprise, the agenda soon broadened to encompass the analysis of alternative modes of foreign market entry, the role of international joint ventures, the impact of innovation on corporate growth, and the role of culture in international business. The core philosophy – based on the Coasian nature of the firm and on rational action modelling – has remained constant, while the widening range of applications has encouraged synthesis with theories developed in other fields of research. Success in answering any one question invariably generates new questions, which must in turn be answered through a further extension of the theory, and this dynamic continues to drive the development of the theory today. Internalisation theory has retained its validity and its vitality over the past 30 years, and is currently being extended into new fields of international business research.
On the basis of empirical research, a model of the internationalization process of the firm is developed. The model focuses on the gradual acquisition, integration and use of knowledge about foreign markets and operations, and on the incrementally increasing commitments to foreign markets. In particular, attention is concentrated on the increasing involvement in the individual foreign country.© 1977 JIBS. Journal of International Business Studies (1977) 8, 23–32
Location of new products, 191. — The maturing product, 196. — The standardized product, 202.
Introduction to the Second Edition - Preface - The Multinational Enterprise in the World Economy - A Long-run Theory of the Multinational Enterprise - Alternative Theories of the Multinational Enterprise - The World's Largest Firms - Predictions and Policy Implications - Index
Although problems of reliability and validity have been explored thoroughly by experimenters and other quantitative researchers, their treatment by ethnographers has been sporadic and haphazard. This article analyzes these constructs as defined and addressed by ethnographers. Issues of reliability and validity in ethnographic design are compared to their counterparts in experimental design. Threats to the credibility of ethnographic research are summarized and categorized from field study methodology. Strategies intended to enhance credibility are incorporated throughout the investigative process: study design, data collection, data analysis, and presentation of findings. Common approaches to resolving various categories of contamination are illustrated from the current literature in educational ethnography.
The spread and growth of multinational corporations over the past two decades raise major public policy questions. Unfortunately, understanding of the economic behavior of the multinational corporation is incomplete. For example, the usual hypotheses of international investment may not be entirely adequate to explain direct investment by European multinational corporations in the United States. Thus, a new hypothesis, based upon rivalistic behavior among firms, is presented and tested.' It is concluded that this hypothesis might add some additional explanatory power with policy implications for European direct investment in the United States.
The formation of organizations that are international from inception-international new ventures-is an increasingly important phenomenon that is incongruent with traditionally expected characteristics of multinational enterprises. A framework is presented that explains the phenomenon by integrating international business, entrepreneurship, and strategic management theory. That framework describes four necessary and sufficient elements for the existence of international new ventures: (1) organizational formation through internalization of some transactions, (2) strong reliance on alternative governance structures to access resources, (3) establishment of foreign location advantages, and (4) control over unique resources.
Emerging economies are low-income, rapid-growth countries using economic liberalization as their primary engine of growth. They fall into two groups: developing countries in Asia, Latin America, Africa, and the Middle East and transition economies in the former Soviet Union and China. Private and public enterprises have had to develop unique strategies to cope with the broad scope and rapidity of economic and political change in emerging economies, This Special Research Forum on Emerging Economies examines strategy formulation and implementation by private and public enterprises in several different regional settings and from three primary theoretical. perspectives: institutional theory, transaction cost economics, and the resource-based view of the firm. In this introduction, we show how different theoretical perspectives can provide useful insights into enterprise strategies in emerging economies. We discuss the special methodological as well as empirical challenges associated with doing research in emerging economies. Finally, we briefly summarize the individual contributions of the works included in our special research forum.
Purpose
– This paper aims to explore how firms from a Latin American market internationalise using the resource-based view of the firm as a theoretical foundation. Specifically, it examines the internationalisation process of three Chilean companies that have become relevant international players.
Design/methodology/approach
– Drawing on interviews with company managers, as well as industry data and corporate reports, this paper provides insights into the successful internationalisation process of emerging market firms.
Findings
– The findings of this study suggest that specific capabilities and resources, such as belonging to a family conglomerate, domestic and foreign partnerships and networks, innovation and market orientation, and an experienced management team, are required for emerging market firms to internationalise and improve their performance in foreign markets.
Originality/value
– This study is one of the few to address the internationalisation process of Chilean companies.
The authors identify the following key constraints that smaller born-global firms face: lack of economies of scale, lack of resources (financial and knowledge), and aversion to risk taking. The authors explore how such firms overcome these constraints by using technology to achieve competitive advantage and by networking competencies to develop a range of alliances and collaborative partnerships. Thus, the article focuses on a particular aspect of business-to-business marketing, namely, how small 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 of the partners.
By extending interpretative methods to business settings, this paper formalizes a model of Ethnographic Case Study (ECS) built upon extensive literature review and abductive elaboration of two-year fieldwork on 12 Italian companies. Objectives and related contributions are twofold. First, key compulsory and complementary stages of ECS marketing research are presented for business contexts. Second, the paper envisions the quality of the knowledge generated through the ECS inquiry, and argues that the methodological peculiarities of this approach may help reduce the relevance gap affecting business research. The systematic cooperation between researchers and practitioners along the ECS phases may benefit relevance through (i) the fine tuning of reciprocal expectations, (ii) the sharing of the research experience, (iii) the multiplication of the beneficiaries of the findings granted by ECS, and (iv) the participation in the process of knowledge dissemination. In this light, the ECS model supports the convincement that methods are not only a way to theory validation but also to theory discovery.
Purpose
The purpose of this paper is to examine the magnitude of country, industry and firm‐specific effects for firms competing in emerging economies and also explore differences between high and low performers.
Design/methodology/approach
The authors use ANOVA methodologies on samples from firms competing in Latin America between 1990‐2006.
Findings
It was found that the firm‐specific effect is the most important one, and relatively equivalent in magnitude to the firm‐specific effects found in developed countries. Country and industry effects are less important than the firm‐specific effect. Contrary to previous studies that indicate that the country effect is relatively more important in emerging economies, the authors found that it is even less important than the industry effect, a result that has important implications for strategic management and international business theory. The source behind the strong firm‐specific effects might stem from their resources and capabilities to manage and take advantage of the institutional and macroeconomic environments. Further analysis indicates that the firm‐specific effect is relatively more important for firms showing high performance than for those firms showing low performance.
Research limitations/implications
Through these findings the authors feel that further research is needed so as to arm future managers with a more clear and comprehensive strategy when doing business in a Latin American country. The paper's findings are specific for large public corporations in Latin America.
Practical implications
The paper allows managers to think about sources of competitive advantages in emerging economies.
Originality/value
The paper shows that, despite weak institutional contexts and highly volatile macroeconomic environments, managers in the region should be able to obtain substantial differences in economic performances within the region. Activities needed for such differentiation might differ from those carried out in developed countries, with more emphasis on managing institutional voids and periods of economic and political cycles but the result should be the same.
Presents the findings of a comparative study into the export
behaviour and internationalization of small computer software firms in
Finland, Ireland and Norway. These findings challenge many of the
underlying assumptions of conventional internationalization
“stage” theories and lead to the conclusion that such
theories do not adequately reflect the internationalization process
among small computer software firms.
Purpose
This study aims to investigate the internationalisation strategies of small games development firms from Poland and Hungary.
Design/methodology/approach
This enquiry adopts a qualitative approach, whereby firms were identified from online searches, and secondary information was sought on each firm prior to in‐depth interview, in order to highlight the issues relating to internationalisation/growth.
Findings
The paper provides evidence that small games development firms undertake rapid internationalisation, despite resource constraints. Firms were founded by teams of entrepreneurs who unlike many other international entrepreneurs, did not have a priori experience, sometimes moving from being hobbyists into commercial operations. These often exist in a pre‐natal phase some years before formal incorporation, an important phase when many of the resources required are sourced. The findings show only partial support for RBV, as these firms were acquiring and controlling resources from their environment on a freelance and low commitment basis. The authors speculate that these firms display dynamic capabilities of the highest order in order to do so.
Research/limitations/implications
This enquiry adds to understanding of the (international) growth strategies of small games development firms, and gives insight into how they access dynamic capabilities. However, the number of firms investigated is small and from two Eastern European countries, therefore further larger scale research should be undertaken.
Originality/value
Based on this exploration new insights are developed with regard to an under researched sector, and how such firms undertake rapid internationational growth, despite being particularly resource constrained. In particular, the entrpreneurs in these firms have little experience and creatively acquire and control resources in order to grow rapidly. The authors speculate that they display advanced dynamic capabilities.
Investigates network dyads and the manner in which control is exercised in these structures. Four entrepreneurial, high growth firms, each from a different industry, were selected to participate in this ethnographic analysis. The represented industries are telephone equipment, clothing, computer hardware, and environmental support systems. Seven network dyads were identified for the four firms considered. The partnerships were typically other members of the value chain - e.g., suppliers, distributors and final customers. The analysis identified three phases for the network dyad development: preconditions for exchange, conditions to build, and integration and control. The first phase, preconditions, utilized prior relations in addition to personal and firm reputations to reduce uncertainty and establish expectations and obligation. The second phase, the building process, has significant reliance on the trust and the development of reciprocity norms. The third phase is marked by three forms of integration: operational, strategic, and social control. Examination of the four firms and their seven dyadic relationships support the model. These firms were found to be engaged in stable, sustained relationships with a high degree of cooperation and collaboration. The mode of exchange found in these dyadic relationships is characterized as a network form of governance, which appears to be beneficial to high growth firms. Further research using this model could be done for R&D partnerships, cooperative marketing agreements, and other forms of strategic alliances and joint ventures. (SRD)
No one has the right, and few the ability, to lure economists into reading another article on oligopoly theory without some advance indication of its alleged contribution The present paper accepts the hypothesis that oligopolists wish to collude to maximize joint profits It seeks to reconcile this wish with facts, such as that collusion is impossible for many firms and collusion is much more effective in some circumstances than in others The reconciliation is found in the problem of policing a collusive agreement, which proves to be a problem in the theory of information A considerable number of implications of the theory are discussed, and a modest amount of empirical evidence is presented
International new ventures (INVs) represent a growing and important type of start-up. An INV is defined as a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries (Oviatt and McDougall 1994). Their increasing prevalence and important role in international competition indicates a need for greater understanding of these new ventures (Oviatt and McDougall 1994).Logitech, as described in a case study by Alahuhta (1990), is a vivid example of an INV. Its founders were from two different countries and had a global vision for the company from its inception. The venture, which produces peripheral devices for personal computers, established headquarters in both Switzerland and the U.S. Manufacturing and R&D were split between the U.S. and Switzerland, and then quickly spread to Taiwan and Ireland. The venture's first commercial contract was with a Japanese company.Using 24 case studies of INVs, we found that their formation process is not explained by existing theories from the field of international business. Specifically, neither monopolistic advantage theory, product cycle theory, stage theory of internationalization, oligopolistic reaction theory, nor internalization theory can explain the formation process of INVs. These theories fail because they assume that firms become international long after they have been formed, and they therefore highlight large, mature firms. They also focus too much on the firm level and largely ignore the individual and small group level of analysis (i.e., the entrepreneur and his or her network of business alliances).We propose that an explanation for the formation process of INVs must answer three questions: (1) who are the founders of INVs? (2) why do these entrepreneurs choose to compete internationally rather than just in their home countries? and (3) what form do their international business activities take?Who are the founders of INVs? We argue that founders of INVs are individuals who see opportunities from establishing ventures that operate across national borders. They are “alert” to the possibilities of combining resources from different national markets because of the competencies (networks, knowledge, and background) that they have developed from their earlier activities. Following the logic of the resource-based view of the firm, we argue that the possession of these competencies is not matched by other entrepreneurs. Only the entrepreneur possessing these competencies is able to combine a particular set of resources across national borders and form a given INV.Why do these entrepreneurs choose to compete internationally rather than just in their home countries? The founders of INVs recognize they must create international business competencies from the time of venture formation. Otherwise, the venture may become path-dependent on the development of domestic competencies and the entrepreneur will find it difficult to change strategic direction when international expansion eventually becomes necessary. As the founder of one INV explained, “The advantage of starting internationally is that you establish an international spirit from the very beginning” (Mamis 1989:38).What form do their international business activities take? Founders of INVs prefer to use hybrid structures (i.e., strategic alliances and networks) for their international activities as a way to overcome the usual poverty of resources at the time of start-up.This study has important implications for the practice of management. In financing decisions relating to INVs, venture capitalists and other venture financiers should look for entrepreneurs who have a global vision, international business competence, and an established international network. When entrepreneurs start INVs they should create hybrid structures to preserve scarce resources. Finally, given the path-dependence of competence development, founders of new ventures should consider whether establishing a domestic new venture with plans to later internationalize will be as successful a strategy as establishing a new venture that is international from inception.
Why do new technology-based firms (NTBFs) cooperate? Starting from Teece's [Teece, D.J., 1986. Profiting from technological innovation: implications for integration, collaboration, licensing, and public policy. Research Policy 15, 285–305] conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence-based tradition and in the social structure perspective, we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm-specific characteristics and the nature of the alliance. In particular, a distinction is made between exploitative commercial alliances and explorative technological alliances. The econometric estimates, based on a large sample of Italian young high-tech firms that are observed from 1994 to 2003, provide strong evidence supporting two key intuitions of Teece's work. First, the “combination of specialized complementary assets” appears to be a key driver of the formation of exploitative commercial alliances by NTBFs. More specifically, patent holding affects positively the likelihood to establish commercial alliances, but this propensity is found to rapidly decrease with firm size, suggesting that as long as NTBFs become larger and possess specialized commercial assets their urge for commercial alliances diminishes. Second, following the parallelism set forth by Teece between search for alliance partners and access to external financing, the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller NTBFs. In this respect, our results clearly support the view that sponsor institutions as public research organizations, venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance.
This paper reexamines two hypotheses associated with earlier versions of the product cycle model. The first hypothesis, that innovations are almost always located in the home country of the parent company, is rejected on the basis of evidence drawn from one hundred years of U.S. Patent Office data. The second hypothesis, that the international dispersion of activity is led by technology leaders, is historically valid. However, over the last twenty years, technology leaders have been ahead instead in the globalization of technology--that is, in developing internal international networks to exploit the locationally differentiated potential of foreign centers of excellence. (c) 1995 Academic Press, Inc. Copyright 1995 by Oxford University Press.
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