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Network knowledge gathering of international new ventures, approaches, and preconditions


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Introduction

Scholars perceive international new ventures (INVs) – the companies that, from inception, seek “to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries” [Oviatt and McDougall, 1994] – as offering more knowledge-intensive products and services compared to gradually internationalizing firms [Harveston and Davis, 2001]. Such knowledge-intensive firms are more likely to develop the learning capacities necessary for rapid adaptation to a foreign environment and to perceive expansion opportunities as being less costly [Autio et al., 2000]. As high knowledge intensity is positively correlated with the speed of internationalization, in the case of INVs, knowledge is perceived to be a driver of internationalization [Brennan and Garvey, 2009; Gulanowski et al., 2018].

Learning may influence the propensity to, direction of, and commitment to internationalization [Bengtsson, 2004] at all the stages of the company's life. Therefore, INVs need to gather knowledge not just at the beginning of their internationalization, but they also need to continue gathering knowledge later on, to support their expansion within existing foreign markets [Fletcher and Harris, 2012]. Although, due to the technological revolution, access to knowledge is much easier now than it was a few decades ago, the constraints on gaining market insights and on knowledge and management skills are still perceived by many small companies to be the key obstacles to internationalizing [Udomkit and Schreier, 2017]. Networking is one of the means of overcoming these barriers, especially in the case of emerging market companies, which lack proper internationalization experience, tangible assets, and institutional support [Tiwari and Korneliussen, 2018]. However, knowledge acquisition through networks can be treated with some firms with opportunism and may be connected with abusing their position in order to gain valuable market insights. It seems important to explore the factors contributing to network partners’ abuse and to determine how to prevent it in different knowledge-gathering processes.

INVs’ internationalization has attracted academic and practitioner interest; however, studies so far have focused mainly on INVs from the Western world. Little is known about INVs from the Central and Eastern European Countries (CEEC) region, although they are important in terms of innovation generation, creation of new products, and the development of own business models that contribute to wealth and job creation [Baranowska-Prokop and Sikora, 2017]. As they make an interesting research context, in our study, we investigate the INVs from Poland, which, on the one hand, has relatively short free-market experience as a post-transformation country, while, on the other hand, it is characterized by a relatively high level of internationalization of the economy. The number of Polish small- and medium-sized enterprises (SMEs) going international directly after inception is estimated to be about 35%–50% [Polish Agency for Enterprise Development (PARP), 2014]. Their sales constitute a high share in the country's export (42% of the 2016 value of exports, according to the European Statistical Office [Eurostat, 2018]. Moreover, small companies present the highest export dynamics – their exports doubled in the years 2007–2014 [Polish Agency for Enterprise Development (PARP), 2017].

As shown in the literature study of Tuomisalo and Leppäaho [2019], the research on INVs’ learning is limited and fragmented. Till now, studies have identified INVs among Polish small and medium companies [Jarosiński, 2013; Przybylska, 2013] and shown some of their idiosyncrasies, such as lack of marketing capabilities [Danik and Kowalik, 2015], high importance attached to networking [Kowalik and Danik, 2019], and conciliatory approach toward network partners [Danik et al., 2016]; however, there is an important research gap in studies on their knowledge-gathering process. Previous studies on knowledge gathering of INVs seem to give much more attention to the proactive development of knowledge during interaction with network partners [Fuerst and Zettinig, 2015]. On the other hand, the problem of motivation in INVs’ learning was tackled only on the margins of previous studies. Empirical studies referring to this issue in the CEEC region (in which companies do not possess as wide internationalization experience and knowledge as the Western firms) are missing. Moreover, intentional vs. unintentional use of the network in knowledge gathering has not been discussed before.

Although some of the previous studies indicate that Polish INVs and exporting SMEs [Danik et al., 2016; Danik, 2017] tend to avoid opportunistic behavior toward their network partners, the problem of relationship abuse connected with knowledge gathering has not been discussed in the context of INVs, which constitutes another research gap.

Meanwhile, as shown below, a lot of knowledge is gathered by chance, often also not fully ethically. As the approach to knowledge gathering can influence the speed, efficiency, and results of learning, it is worth exploring and explaining these processes in relation to the CEEC context, as this can enhance the chances for expansion of locally based firms.

Both the lack of long-term internationalization experience and the missing marketing competencies make knowledge gathering particularly important for Polish INVs. As networking capability is one of their strengths [Danik, 2017], we assume that their knowledge-gathering processes strongly rely on networking. The goal of this study is to find out whether Polish INVs use their network to gather knowledge intentionally or unintentionally, how do they treat their partners in this process, and what are the associations between this intentionality and abusing of the partners.

The paper is based on the organizational learning theory. However, it draws also from the network approach to internationalization. It starts with the literature overview showing the INVs’ internationalization knowledge and learning types, followed by an explanation of the network's role in knowledge gathering and a discussion of potential INVs’ network knowledge-gathering approaches. The next parts present the methodology of our qualitative study, its results, and the discussion, including a proposal for the classification of network gathering approaches.

Literature overview
INV internationalization knowledge

Learning is a process that enables an entity to increase its range of potential behavior through its processing of information. A company learns if any of its units acquires knowledge potentially useful to the organization [Huber, 1991]. Although the other definitions of organizational learning also comprise more elements than knowledge gathering, such as assimilation, exploration, and exploitation of new knowledge [March, 1991; Hessels and van Stel, 2011], in this paper, we apply the one proposed by Huber and concentrate on activities related to knowledge gathering.

The knowledge useful in the internationalization process comprises host market knowledge, technological knowledge, and the knowledge of how to engage in international operations. The ability to gather knowledge about a new host country is critical in helping firms to overcome their liability of foreignness [Oviatt and McDougall, 2005]. Besides foreign market knowledge, companies, especially knowledge-intensive firms for whom knowledge is relatively more important than other inputs [Starbuck, 1992], also need technological knowledge to help them develop new products or to adapt existing products to local markets’ needs. The third type of knowledge useful for the internationalization process is knowledge about how to engage in international operations. This comprises knowledge of market entry strategies, how to implement market entry decisions in new territories (market entry knowledge), and how to manage the enterprise effectively across multiple international territories (international enterprise knowledge) [Fletcher et al., 2018].

Currently, scholars report that experiential knowledge discussed in classical internationalization models is not the only strong predictor of international activities, and they instead indicate a multitude of potential knowledge sources. As shown in the literature study conducted by de Clercq et al. [2012], relying on Huber's [1991] framework, INVs’ learning may have five dimensions depending on the knowledge sources and gathering processes:

Experiential learning – INVs, by definition, cannot learn from international experience before they internationalize [Autio et al., 2000]; however, their experiential learning gains importance at later internationalization stages.

Vicarious learning – knowledge gathering by observing others is supposed to play a central role in decisions regarding early internationalization, as well as influence its speed, breadth, and depth. Knowledge gathering from network partners is best described in the literature; however, vicarious learning can also involve the imitation of other organizations that do not necessarily belong to the network.

Searching or noticing – acquiring knowledge through search, or unintended knowledge acquisition, is discussed in the context of internationalization in a few studies only; however, searching can be perceived as a component of proactiveness and innovativeness, both of which foster internationalization.

Grafting – hiring new managers having technical knowledge, knowledge of foreign markets, or better relationships with foreign networks is reported to accelerate internationalization.

Congenital learning – the INV literature strongly supports the importance of congenital learning for a company's internationalization. The entrepreneur's prior experience is reported to provide greater absorptive capacity for the foreign market knowledge. It also makes managers aware of international opportunities and stipulates the perception of lower internationalization costs [Casillas et al., 2009].

A single company may simultaneously apply different learning types and gather knowledge from different sources. Furthermore, learning needs, priorities, and approaches vary depending on the stage of internationalization [Anderson et al., 1998]. Although congenital knowledge of a firm's founders does influence the pace of going international for young companies, such effects are not visible in relation to older firms, as shown by Casillas et al. [2015]. Inherited and accumulated knowledge can simply get outdated, thereby undermining the performance of the company [Reuber and Fischer, 1997; Fletcher and Harris, 2012]. Congenital knowledge gathering is, therefore, the most important process before internationalization, which can eventually be replaced by experiential learning [Pellegrino and McNaughton, 2015]. Searching is applied before entering a given foreign market, and vicarious knowledge gathering gains importance during the later internationalization phase. Moreover, some types of learning interact: for example, vicarious learning is much more strongly connected with export intensity, if the experiential learning is also high [Casillas et al., 2015].

Networking and knowledge gathering

“A network consists of a set of actors or nodes along with a set of ties of a specified type (…) that link them” [Borgatti and Halgin, 2011, p. 1169]. The social network concept was introduced by Barnes [1954], who, when describing social relationships in a small local society, pointed out the direct and indirect ties connecting people. Nowadays, a social network is generally understood as a set of people who socially interact with individuals. These networks are based on ties to family, close friends, and acquaintances [Granovetter, 1973], whereas business networks are based on directly and indirectly connected business relationships [Anderson et al., 1994]. A business network comprises a network of actors, a network of activities, and a network of resources [Håkansson and Johanson, 1992]. The subnetwork of actors comprises, among others, companies, departments, groups, and individuals, while “the individuals form a social network built on interactions consisting mainly of social exchanges, but information and business exchanges can also take place” [Björkman and Kock, 1995, pp. 520–521]. An important characteristic of business relationships is, therefore, their informal character, as they are based on relations between individuals in the firms [Holm et al., 1996]. Every network has a cultural component comprising values, attitudes, and behaviors influencing the way the individuals interact [Björkman and Kock, 1995]. Because of the interconnectedness and the similarities between social and business networks, it is widely accepted to apply the social exchange networks perspective to analyze cooperation in business relationships within business networks [cf. Björkman and Kock, 1995; Holm et al., 1996]. The social network of INVs can transform into business relationships, and vice versa [Vasilchenko and Morrish, 2011]. Business networks are dynamic – they change depending on the market conditions and entrepreneurs’ needs [Gilmore and Carson, 1999].

Social networks are mostly characterized as personal bonds built upon goodwill and trust [Chen, 1994]; therefore, social networks are claimed to be an efficient means to respond to the global supply chains demand, as they reduce the information and knowledge barriers [Zhou et al., 2007]. INVs take advantage of networks at all stages of internationalization, whereby the role and the nature of these networks change with the age of the company [Hite and Hesterly, 2001], as well as with its progress toward internationalization. Both social and business networks are crucial for a firm's internationalization process. Social networks are critical for INVs’ internationalization, especially at the beginning of this process, wherein they are used to explore internationalization opportunities. Business networks, on the other hand, are especially important for exploiting international opportunities. They help to acquire local market knowledge and customers and to diminish barriers, such as lack of knowledge or skills, caused by INVs’ small sizes [Vasilchenko and Morrish, 2011].

The processes of networking and knowledge gathering are strongly interconnected. On the one hand, repeated interaction facilitates knowledge creation and transfer, as it lowers the barriers to combine and exchange intellectual resources [Nahapiet and Ghoshal, 1998]. Therefore, network development has a positive impact on knowledge creation [Tolstoy, 2010]. And vice versa: entrepreneurs with international experience and knowledge are more likely to be able to use foreign business networks and to have developed the capabilities needed to identify and negotiate with foreign business partners [Reuber and Fischer, 1997]. Entrepreneurs can develop networking skills or competencies over time. They learn from their experience about whom or where to network with, as well as how to do it effectively [Gilmore, 2011]. The ability to search within and across sources of knowledge also depends on the size and heterogeneity of these networks. Entrepreneurs with greater heterogeneity of social ties, as well as past knowledge and experiences, tend to be more creative [Leyden et al., 2014]. Overall, information exchange, learning, and knowledge gathering are reported to be the essence of networking. According to Thornton et al. [2014] organizational networking has four dimensions: information acquisition, opportunity enabling, strong-tie resource mobilization, and weak-tie resource mobilization. Dean et al. [1997] claim that most companies understand networking as “joining together with a common objective, working together, and co-operating”, but the second most common perception is that networks are for “exchange of and sharing of ideas, knowledge, and technology”.

The information that companies obtain via partners can refer to potential suppliers, customers, competitors, technological development, gaps in the market, local knowledge of a foreign market, and so on [Thornton et al., 2013]. Although this market knowledge usually does not directly influence sales figures, companies need to gather a whole range of information to make decisions to develop and improve their offerings [Cui and O’Connor, 2012]. Networks, as information-gathering sources, can be of the highest importance for internationalized companies, as local markets can be very different from their home markets [Thornton et al., 2013]. Oviatt and McDougall [1994] have reported that INVs rely heavily on their foreign partners in the internationalization processes. Learning from network partners supports firms in assessing and evaluating the foreign market situation [Rocks et al., 2005; Gilmore, 2011]. It also maintains awareness of market-related issues, helping, in addition to being an inspiration, stimulating and pressing INVs to internationalize [Bengtsson, 2004; Oviatt and McDougall, 2005].

The study of Gabrielsson et al. [2008] shows that INVs learn because of their capability to get knowledge from channels/network partners or through cooperation with larger initial customers, as opposed to the approach of “traditional” SME exporters. Depending on the type of information needed, companies establish different relations with partners in foreign markets. Thornton et al. [2013, p. 1159] identify three important sources of information-using networks:

Direct interaction partners (i.e., customers and suppliers). These are “the first point of call when firms need to make sense of their current position in the market (i.e., against its competitors)” [Thornton et al., 2013, p. 1159]. Information sharing, in this case, is based on mutual trust and understanding, developed in earlier dealings. The information shared is often adjusted to fit the circumstances of the particular relationships involved. Although customers and suppliers are not allowed to reveal sensitive information about focal firm competitors, they can offer insights about the competitor's position on the market. They can also provide information about market dynamics.

Informal contacts with organizations that do not have trading relationships with a given company. These contacts are an important source of new information, although they are often not based on close or frequent interactions.

Trade events, i.e., trade fairs, trade associations, industry committee meetings, conferences, and seminars.

Using one source of knowledge does not limit the use of another [Fletcher and Harris, 2012]. When a company establishes a multitude of channels through which it can obtain valuable information and combine that information with established, less-established, trust-based, non-trust-based, and new and indirect relationships, it can strongly improve that company's market strategic position [Thornton et al., 2013]. Small companies, however, may lack useful networks and knowledge, as well as knowledge on how to build them. Moreover, developing strong network relationships can also take too long for firms seeking rapid internationalization [Fletcher and Harris, 2012]; therefore, learning through networks may be not so visible at the beginning of their internationalization process in the case of companies missing out on inherited knowledge.

Unintentional vs. intentional network knowledge gathering

After a company's inception, gathering the knowledge useful for internationalization through network partners combines the elements of searching, noticing, vicarious learning, and experiential learning. All the processes may be intentional or not. Searching is intentional by definition and may occur in three forms: scanning (wide-ranging sensing of the international environment), focused search (active search in a narrow segment of the organization's environment, often being an answer to current or suspected problems or opportunities), and performance monitoring (both focused and wide-ranging sensing of the organization's effectiveness in fulfilling its goals). Unlike searching, noticing refers to the unintended acquisition of information [Huber, 1991], being usually informal and involuntary. Noticing is influenced by entrepreneurs’ habits and beliefs, about what is and what ought to be [Starbuck and Milliken, 2006]. It depends on the entrepreneur, whether and how the company will make sense of noticing. Vicarious learning may comprise gathering intelligence or making benchmarking studies, intentionally or unintentionally coming across valuable information [Bengtsson, 2004]. Similarly, experiential learning does not have to be intentional [Bengtsson, 2004].

The use of intentional or unintentional learning depends to a large extent on the knowledge already possessed by the company. According to Autio et al. [2000], learning is most efficient in domains close to firms’ existing knowledge, which allows them to recognize the value of new information, as well as to assimilate and to adopt it. Companies without prior knowledge in a given field may be unable to acquire this knowledge readily. Firms may simply not be aware that they should develop their knowledge without having some prior knowledge to value it appropriately. This self-reinforcing cycle can be a barrier to learn about foreign markets, as knowledge of them can be completely new for the company. As new knowledge cannot be defined in advance and the companies may simply not be able to plan the learning process, the gathering of new knowledge is often an unintentional process. Companies do not search for it actively and deliberately but have the capability to absorb new, unexpected knowledge, as well as to react to unexpected information. This approach is typical for international opportunity exploration, which “can result from an unexpected opportunity rather than through planned action determined by strategic decisions, rational processes, or systematic information gathering” [Vasilchenko and, Morrish, 2011, p. 101]. Such incidental learning, often facilitated by managers, supervisors, and peers, is also perceived to be generally common in the case of small and medium companies [Clarke et al., 2006]. The search for knowledge similar to an existing one, however, can be unintentional, or intentional, as companies know what to search for or at least are able to recognize its value.

The intentional knowledge gathering may be formal, if the company carefully designs the knowledge-gathering process, or informal, if it seeks knowledge deliberately, though without a detailed plan. The second case may occur when the sources of knowledge are not known in advance, so the company creates and uses every opportunity. Unintentional knowledge gathering is informal as it is conducted unofficially and casually without planning.

Another important distinction between intentional and unintentional learning may be the speed of knowledge gathering. In contrast to exploration, exploitation may be “obtained faster, more correctly, and with more intense feedback” [Lin and Si, 2019, p. 197]. Intentional knowledge gathering usually allows faster learning. If knowledge is not intentionally acquired, it may take some time from the moment the information is found until the knowledge is acquired, because of two reasons. First of all, the company may not need the knowledge at the given moment. Secondly, the process of assessing whether it is worthwhile to invest in gaining a given knowledge may take some time. Moreover, in many cases, knowledge that has not been sought may never be assimilated, as its value will not be appreciated. On the other hand, intentional search for knowledge is most often associated with the existence of a specific need, which promotes greater openness and faster assimilation of knowledge.

Summing up, unintentional knowledge gathering is reactive in the sense that the company does not search for the knowledge; however, it is able to recognize its value and respond. In contrast, intentional knowledge gathering is proactive, as the company creates the possibility to gather the knowledge and – to a given extent – controls it.

The main characteristics of unintentional and intentional knowledge gathering are presented in Table 1.

Main characteristics of unintentional and intentional learning

FeaturesUnintentional knowledge gatheringIntentional knowledge gathering
Learning dimensionTypical for noticing; common also in case of vicarious learning and experiential learningTypical for searching; common also in case of vicarious learning and experiential learning
Newness of knowledge gatheredBoth new knowledge and knowledge similar to the existing oneRather knowledge similar to the existing one
PrerequisitesDepending on the entrepreneur's prior habits, beliefs, and willingness to make sense of unexpected knowledgeDepending on prior knowledge
Procedures of learningInformalBoth formal and informal
SpeedRelatively slowRelatively fast
Approach to learningReactiveProactive

Source: Own elaboration.

The network partners are important in both unintentional and intentional learning. In the first case, network relationships trigger the discovery of new knowledge, or knowledge similar to existing knowledge. In the second case, INVs intentionally use their networks as information channels to help learn about international markets and opportunities.

Relationship abusing in network knowledge gathering

In his study, Uzzi [1997] found that information exchange in embedded relationships was more tacit and proprietary than the data exchanged in “arm's-length” contracts. The information received through embedded networks was more detailed and rather holistic. Receiving such data through arm's-length ties would be difficult. As the network partners are crucial for knowledge gathering and, therefore, also for the whole internationalization process, taking care of close, embedded, meaningful relationships based on trust seems to be conductive to INVs’ success. However, even close relationships may fail, as the parties may put less effort into the relationship over time [Anderson and Jap, 2005] or even abuse the other party.

Such issues, especially the problems of relationship abuse, which may be defined as violation of rules, norms, and expectations regulating the relationship [cf., Leonidou et al., 2019] are rarely addressed in studies devoted to INVs’ learning. However, some conclusions can be drawn from studies on opportunism and the abuse of power in relations and the reasons for breaking off business relationships.

According to Pfeffer and Salancik [2003], the control of resources that are critical for one party results in power over the partner; on the other hand, it results in the partner's dependence on the former. Knowledge of the foreign market can give a local firm power over its partner; in many cases, cooperation with such a local company is the only gateway to that market [Danik, 2017, p. 152]. As indicated by Inkpen and Beamish [1997], however, the company may acquire knowledge that it lacked at the beginning of the relationship. Knowledge acquisition may shift the balance of power between partners and make the relationship more vulnerable or even enable the company to operate autonomously on the foreign market. The authors argue that if the firm attaches a high value to the acquisition of local knowledge and is able to gather it, instability in the relationship increases unless the local partner is providing other valuable and inimitable resources. Such an approach of the INVs toward their network partners was observed by Sepulveda and Gabrielsson [2013]. Some of the companies they have studied were looking for new relationships and resources after acquiring basic business knowledge from their ties. Infidelity is very common in business relationships. Such violation of the basic ethical norms of the working relationship leads to a great loss of physical, financial, emotional, and other investments in the relationship; moreover, it has negative repercussions on the future prosperity and continuation of the business relationship, as well as involving high opportunity costs [Leonidou et al., 2019].

If the company learns from the business partner with the intention to end the relationship after the partner is not needed anymore and misleads the other party as to the intended use of the knowledge gained from it, such a behavior may be classified as opportunistic, i.e., “self-interest seeking with guile” [Williamson, 1975, p. 255]. The probability of such behavior increases in case of the short-term relationship approach, when the short-run benefits outweigh the intangible and uncertain long-run benefits [Yaqub, 2011], e.g., when the stronger party overuses its power. In long-term relationships, such behavior causes conflicts and reduces trust [Raven and Kruglanski, 1970; Munson et al., 1999]. In such a case, the weaker party may leave the relationship if an exit option exists [Chiambaretto, 2015]. Under this circumstance, the weaker party may feel justified in collecting as much valuable information before parting as possible from the partner in an abusive way.

In their study, Leonidou et al. [2019] argue that infidelity is more likely to take place in international business relationships. Their arguments also fit the abusing of relationships in the knowledge-gathering process. First of all, it is very difficult to monitor the partner's actions because of the geographical and psychological distance. Secondly, the existence of an information asymmetry between the international business partners makes it more difficult to predict and detect such behaviors. Moreover, the high profitability of the foreign market's opportunities may tempt to abuse the partner. The high uncertainty, complexity, and volatility of the foreign environment may also provide fertile ground for breaking relational norms. Finally, the existence of numerous barriers when operating in foreign markets may increase the probability of loosening the relationships between the foreign network partners. To all these arguments, it is worth to add the cultural distance, which may provoke mistrust and conflicts, leading to relationship abuse.

Opportunistic behavior toward business partners may vary from aggressive (i.e., stealing) to passive and almost undetectable (i.e., withholding information) [Gould et al., 2016]. Knowledge acquisition can be opportunistic from the very beginning, i.e., companies may learn from their business partners by taking only their self-interest into consideration and trying to get access to knowledge without revealing their true intentions. Approaches toward network partners, however, are mostly not set in stone and can evolve because of internal or external factors [Kale et al., 2002], from abusing an opportunistic relationship to profiting from a well-wishing relationship, and vice versa. Moreover, companies may behave opportunistically toward some partners and be well-wishing toward other ones.

Methodology
Sample

Due to the exploratory nature of our study aiming to propose associations between constructs that can be tested in the future [Welch et al., 2011] and being a part of a wider research project covering many aspects of INV marketing, we have applied purposive sampling to select the respondents. The population has been chosen based on whether they fulfilled the study's goals [Silverman, 2007, p. 272]. To facilitate theory building, we have aimed to achieve saturation, i.e., “to have a sufficient number of cases to identify recurrent patterns and the contrasting circumstances in which such patterns were evident” [Narooz and Child, 2017, p. 687]. As we wanted to check whether the company's age influences the knowledge-gathering approach, we have studied two older companies (A and B) and two younger ones (C and D). Moreover, we have chosen the INVs differing in the share of exports in the total turnover, starting from >25% (Company B) to >90% (Company A). The sample included four INVs of Polish origin, fulfilling the criteria of Knight et al. [2004]: small- and medium-sized companies, generating at least 25% of total sales abroad, internationalizing on average within 3 years from founding, and engaged in outward internationalization. Taking into consideration Sepulveda and Gabrielsson's [2013] argument that studying business-to-business (B2B) network relationships offers the opportunity to investigate more observable, and longer, relationships than in business-to-consumer companies, we decided to limit our study to B2B firms. In order to increase sample consistency, we investigated medium-tech firms. Three of the companies under study were export start-ups, and one was a multinational trader firm, according to the Madsen [2013] classification. The sample description is presented in Table 2.

Characteristics of the studied INVs

Company(A)(B)(C)(D)
RespondentsR1-Vice PresidentR2-MarketingSpecialistR1-PresidentR2-Marketing SpecialistR1-Sales DirectorR2-Marketing SpecialistR1-PresidentR2-Sales Specialist
IndustryManufacturingManufacturingManufacturingManufacturing
Year of founding1991200020102007
Internationalization beginning - years after founding32–31–22–3
% of export in total turnoverMore than 90%More than 25%50%–70%More than 30%
INV typeExport start-upExport start-upExport start-upMultinational trader
Company sizeMediumMediumMediumSmall

Source: Own elaboration.

Data collection

We applied the individual expert interviews and the card-based game method [Müthel and Saunders, 2008], and the transcripts were later analyzed with specialized software, implementing the content analysis guidelines [Miles et al., 2014].

To collect data, we conducted semistructured individual interviews, as they are suitable for encouraging well-informed practitioners to give an account of their attitudes, experiences, knowledge, and perceptions of work practices and processes [Rowley et al., 2012]; therefore, they are perceived to be one of the most powerful tools for exploring topics in depth and gaining an understanding of different behaviors (Fontana and Frey, 2000). Expert interviews are perceived to have significant advantages over other methods of data collection [Libakova and Sertakova, 2015]. As the respondents are highly qualified, it is not necessary to use additional screening and clarifying questions aimed at revealing true trends, and the obtained data are very reliable [Dorussen et al., 2005]. In addition, we have talked to the company founders or their families (three firms) and in one case – to a close collaborator of the company founder, who has been with the company from its start. This enabled to talk about processes and relationships that evolved from the firms’ beginnings.

Aside from its advantages, such as two-way communication allowing the interviewees to ask questions, the freedom to express the views of respondents, and the possibility to create an atmosphere of trust to allow the respondents to talk about sensitive issues, this method of collecting data also has its shortcomings. It can only provide indirect information that is filtered through the views of the interviewees, and it cannot guarantee honesty. Moreover, the researcher's presence may bias the interviewees. Not all the respondents may be equally articulate and perceptive, and the information may not be collected in a natural field setting [Creswell, 2014]. It is also difficult to compare the results of interviews because each of them is unique. For the sake of avoiding most of the above-mentioned shortcomings, as well as to best capture the views and experiences of different representatives of the same firm, we decided to triangulate the data and to interview two respondents from each company. One of the respondents was the owner, chief executive officer (CEO), or Sales Director; the second one was a person responsible for marketing (marketing specialist) or sales (depending on the firm's organizational structure). The owners and CEOs were asked additional questions regarding their companies’ origins and beginnings. The interview guide included mostly open questions; however, some closed questions regarding financial results and the company's marketing strategies were also applied. One part of the interview was a card game (for the discussion of the card game method applied in this research project, see: Kowalik and Danik [2019]).

The interviews were conducted between December 2016 and April 2017 by two interviewers experienced in conducting semistructured interviews and who were experts on the topic of the study. They asked open-ended questions and then reworded and reordered them, if necessary. The interviews lasted for a duration ranging from 30 minutes (interviews with sales/marketing staff) to more than an hour (interviews with CEOs). The interview with the Vice President of Company A was conducted in two parts. The interviews were recorded and transcribed verbatim. As a result, 105 pages of transcript were obtained (Times New Roman, 12-point font, single-line spacing). In one case, some financial data were provided by the respondent after the interview via e-mail.

Method of analysis

The interviews were analyzed using the computer-assisted qualitative data analysis software (CAQDAS) MAXQDA. Quantitative content analysis was used to analyze the obtained transcripts. The first step of the analysis was coding the data, which is perceived to be the most crucial step in the process because it involves ongoing interpretation and examination of textual data from different perspectives [Sinkovics et al., 2008]. We began with a priori categorization, creating categories based on the literature. We applied a deductive approach to coding. The data were coded by two independent coders experienced in the field of international marketing. To evaluate the importance of categories and subcategories, the frequency of their occurrence (citations) was calculated, and later, an intercoder consistency matrix was prepared, showing the discrepancies among coders and helping to define categories more precisely [Auern-Srnka and Koeszegi, 2007; Danik and Kowalik, 2013]. This procedure allowed us to conduct investigator triangulation. After the first round of coding, the a posteriori categorization was based on the collected data set. Some additional codes were assigned to transcripts to give a broader view of the experiences and perceptions of the interviewees. Finally, 17 superior categories, representing main topics (e.g., “Learning”), 44 main categories representing questions (e.g., “Learning sources”), and 103 subcategories, corresponding with the smallest coding units (e.g. “Information from network partners”), were obtained.

Furthermore, the frequency of occurrence of specific codes was calculated for each company to evaluate the importance of the categories. This approach is based on the assumption that the repetition of words or expressions reveals centers of interest and the preoccupations of the actors [Thiétart, 2014].

The following analysis refers only to the main category, “Learning”, which consists of the answers to the question: “What information sources are used for foreign expansion?” and, partially, the answers to questions regarding the company's innovations and knowledge infrastructure (the results regarding other categories studied will be presented in subsequent papers).

Because the content analysis of the statements regarding the “Learning” category revealed differences in approaches toward knowledge gathering from network partners, we moved from directed to conventional content analysis [Hsieh and Shannon, 2005] and created one new additional subcategory: “L4 Network knowledge-gathering approach” (as the social and business relationships permeate each other in INV networks, no separate codes have been created for social and business networks). We also added six new lower coding units: “L4.1 Relationship approach”, “L4.1.1 Relationship abusing” (statements referring to opportunistic behaviors or power abuse in knowledge gathering), “L4.1.2 Relationship profiting” (statements referring to profiting from the relationships without abusing the network partner), “L4.2 Intentionality”, “L4.2.1 Unintentional” (statements referring to stumbling across new valuable knowledge by accident, when the company is not aware that it can learn from a given source at the beginning but is able to recognize the value of this knowledge and to process it), and “L4.2.2 Intentional” (statements referring to purposive, planned, and organized knowledge-gathering, when the companies are mindful of what they are looking for and what the value of the knowledge they gather is). The code hierarchy in the category “Learning” is presented in Table 3.

Code matrix – main category “Learning”

CodesCompanyTotal
ABCD
R1R1R2R1R2R1R2R1R2
L Learning0001000001
  L1 Learning sources0000000000
    L1.1 Information from network partners25117022020
    L1.2 Information from clients20016212014
    L1.3 Information from competitors0001200104
    L1.4 Internal research-and-development1000220229
    L1.5 Formalized information13211221013
    L1.6 Others11033313015
  L2 Knowledge types used in strategic decisions0001010002
  L3 Learning role1130000106
  L4 Network knowledge-gathering approach0000000000
    L4.1 Relationship approach0000000000
      L4.1.1 Relationship abuse0701000008
      L4.1.2 Relationship profiting22127312020
    L4.2 Intentionality0000000000
      L4.2.1 Unintentional34224000015
      L4.2.2 Intentional29014222022
Total153291536159162149

Source: Own elaboration.

The next step of the study was the code co-occurrence analysis to identify the relationships between the codes. It was conducted with the use of the MAXQDA software, which reveals whether the respondents perceive any relationships between the mentioned topics. This type of analysis has an exploratory character and is applied to investigate whether some concepts are interrelated.

Results

For the category “Learning”, a final set of 149 quotations was obtained. Most of the quotations (n = 75) referred to learning sources, with 38 quotations referring to learning from network partners (three units were assigned to learning from network partners: L1.1, L1.2, and L1.3). The quotations in Unit L1.1 referred to network partners that were not clients or competitors, or to network partners that were not precisely described by the respondents. L1.2 was related to learning from clients, and L1.3 was related to learning from competitors. The second-largest subcategory was “Network knowledge-gathering approach”, with 65 quotations. All the companies under study were gathering knowledge from their network partners. Except Company B, the respondents with a higher position in the company could reveal more information about the company's learning approach (see Table 3 presenting the frequency of mentioning given categories).

As shown in Table 3, the companies under study represented various approaches to gathering knowledge from their network partners. Companies A and B were learning both intentionally and unintentionally and they were both using and abusing relationships, while companies C and D did not mention unintentional learning or relationship abuse.

Intentional learning approach

The intentional learning approach is connected to the deliberate search for information of a given type. The marketing specialist from Company C states as follows:

It is very important with the dealers because they should be independent. They know the market best, they know best, what sells best there (…). The example is corn now. We are working on the corn because we have such a client. There will not be the same interest in corn everywhere. And now there is a question, whether we should lose time on this program (…) or better search for something else, that will (work) in other markets…

As the interviews were conducted in Polish, all the quotes were translated verbatim into English by the authors.

Intentional learning can be associated with intentionally using all available opportunities to gather knowledge. For example, Company B's marketing specialist states as follows:

We are watching this market thanks to the distributor network, thanks to talking to clients and as a matter of fact, also to competitors. I saw my boss in such a situation at the trade fair (…) and admired that he is so much oriented on the cooperation with the competitors. Because he was simply talking with the companies from those markets, bigger than we are, simply asking them for advice. And it is a very, very valuable or awesome knowledge. And it is an awesome way to learn something about that market.

A company that gathers knowledge intentionally is eager to invest a lot of time and energy to plan meetings with their network partners, as is Company C, whose Sales Director states as follows:

(…) trade fairs, exhibitions. We invest a lot in being at our industry trade fairs. We are present at the industry trade fairs for years. Sometimes I am laughing, that I am going to live at these trade fairs. As I said, the main industrial trade fairs in a given country – we go there. We are in Russia, we are in Ukraine, we are… we were also in Kazakhstan

Unintentional learning approach

Unintentional learning is an activity that is not planned, wherein companies come across information by accident. The marketing specialist from Company A states as follows:

… (Interviewers question: So there is no regular scanning, looking for opportunities?) I would say, there isn’t absolutely. It works like that that there is a kind of network, an acquaintance arrives and says: “Listen, I’ve heard, that you can… There is a market for it now. There are big margins, you could do this…”.

An important characteristic of these companies is that they are open to new ideas from different network partners. Sometimes, being open to unexpected ideas and implementing them becomes their policy. For example, the Vice President of Company A states:

We are famous in Europe for listening to the construction companies, who say “Listen, I have such a stupid idea.” And the second thing: as soon as possible…, it means 1. We do not close the discussion; 2. If yes, then we introduce a change as soon as possible.

Unintended learning may refer to all types of knowledge needed in the internationalization process. For example, Respondent R1 from Company B, when he talks about the need for introducing long-term planning to meet the Western standards, says:

A Danish guy came and said that he was planning an investment in 3 years. And I remember it after many years! It hit me so hard then.

Relationship profiting

All of the companies were using their relationships to gather information. Using the relationships to learn is based simply on the willingness to share information among network partners. The President of Company D states:

in the decisions regarding foreign expansions – information about clients received through recommendations, through ‘word of mouth marketing’, sometimes from competitors, who have not enough capacity.

To be able to take advantage of relationships to gather knowledge, they have to be characterized by trust and mutual well-wishing. The Vice President of Company A expressed the following:

It means, without trust and positive attitude toward the partners, nobody tells me: ‘Listen, according to me it would be awesome if you did it otherwise’. Without trust and such an attitude, nobody spends 15 minutes or 4 hours, giving me advice or suggesting solutions. It starts with a contact, later an attitude develops, and finally, real help is given. Or ‘handing over,’ which works on the principle ‘I will not help you, but go and talk to a given person.’ It is also very important.

The other prerequisite for taking advantage of networks in the learning process seems to be good knowledge about the network partners. The Marketing Specialist in Company C states:

Because the boss knows the growers himself… He has been repairing these machines before, so he got to know them, and he knew the region and the neighborhood. And then from one grower to the other one. It is a ‘closed circle’, so they knew each other well.

Sharing knowledge becomes self-evident in such a situation, as stated by the President of Company B:

If our intermediary (…) has visited a client, he tells us about the competitors. He has a good relationship with the client, so he knows the prices and knows whether we enter or not. He informs us how the offer on the market looks like and we have to… Such a feedback from the partners is normal, isn’t it? In every company (…), I cannot imagine to do it otherwise (On the B2B market - I stress).

Relationship abuse

The difference between relationship profiting and relationship abusing is that companies who abuse relationships act on self-interested, sometimes even opportunistic, basis, including the incomplete or distorted disclosure of information, especially the “calculated efforts to mislead, distort, disguise, obfuscate, or otherwise confuse” [Williamson, 1985, p. 47]. A good example of relationship abuse is by Company A, whose Vice President attached great importance to trust and kindness, as mentioned above; however, when referring to the other network partners, stated as follows:

No, I will not build a company with well-wishing, but with the knowledge – yes;

and later added when talking about intermediaries:

So we use them to collect the marketing information: which information do we need in a given country, which should be underlined on the websites (…). Only one of them (…) realized what we are doing with his hands. It is: we use him as a pathfinder. And he says: “If I tell you everything, you will not need me anymore after three years.” A clever man (…) We’ve built our market knowledge based on such a trade network. We’ve built brand visibility. We’ve increased our margin. Now we are collecting more detailed market data and saving it. So our colleague is right that we are not going to need him anymore at some point. But he was the only one who realized.

Company B also gathered knowledge in a rather sneaky way. Its President stated:

In the case of large companies, it is also somehow easy to gather this information. It's enough to join a mailing list. They inform everybody.

The relationship-abusing practices were mostly mentioned by the oldest company in our sample (Company A), having a very strong market position and being able to afford abusing the partner after having collected all the necessary knowledge from him.

Network knowledge gathering – code co-occurrence

Analysis of the relationships among the codes that referred to the network knowledge-gathering approach revealed that they are strongly interconnected. Intentional and unintentional learning modes from network partners overlap. The units “Relationship approach” and “Intentionality” are also connected, with most links observed between “Relationship profiting” and “Unintentional” approaches (n=19). There were only two links revealed in “Unintentional relationship abusing” (Table 4).

Relationships among the codes in the “Network knowledge-gathering approach” category

Code treeL4.1.1 Relationship abuseL4.1.2 Relationship profitingL4.2.1 Unintentional
L4.1.2 Relationship profiting0
L4.2.1 Unintentional219
L4.2.2 Intentional10178

Note: The table indicates both co-occurrences and neighboring codes.

Source: Own elaboration.

Discussion and conclusions

The research method we have applied allowed us to conduct an in-depth exploratory study of knowledge gathering by the INVs through their network partners. The participants of the study openly shared their expertise with the interviewers. They did not hide details about whether a part of their knowledge was collected by accident or without revealing all their intentions to their network partners.

Network partners were the most important learning sources for the Polish INVs under study. Based on content analysis, we propose a classification of network knowledge-gathering approaches, which can be presented as a matrix with two dimensions: relationship approach and intentionality. Depending on the intentionality in gathering information from network partners and on the attitude toward the relationship, the network knowledge-gathering approach can be classified as ruthless smartie or accidental smartie, and intentional or unintentional network payee – see Figure 1.

Figure 1

Classification of network knowledge gathering approaches.

Source: Own elaboration.

The “Ruthless smartie” approach is characterized by an intentional gathering of information from the network partners regardless of the partners’ needs. The search for information is carefully planned and organized; however, the company does not inform its partner of its true intentions about the future of the relationship. If the company does not need the partner anymore, the relationship can be terminated, leaving the partner unsatisfied with the results of the cooperation. In some cases, however, the partner can be unaware that he was used as the information source. In our sample, Company A presented such an approach most frequently, carefully acquiring the information from some of its network partners and planning to end the business relationship afterward.

The “Accidental smartie” approach is connected with unplanned knowledge gathering without taking into consideration the network partner's needs. In this case, the network partner reveals some information, either out of goodwill or merely accidentally. Although the company did not look for this information and did not plan to learn, it is “smart” enough to see the value of the information and to use it. The partner is usually not informed of how the information will be applied. In some cases, the partners may also be unconscious that they have already shared some knowledge. Both ruthless and accidental smarties represent a rather short-time relationship approach or at least take into consideration the fact that the relationship quality will decrease in the future. Such an approach was shown by Company B, which used the information revealed unintentionally by one of its business partners. This approach to knowledge gathering does not always end in making the relationship worse, as the partner may not be aware of the abusement.

The “Intentional network payee” approach can be defined as a deliberate, intentional search for knowledge of a given type. To take advantage of relationships, the company invests in relationship quality, especially in trust. The company is aware of the importance of knowledge-exchange platforms; therefore, it also invests in arranging formal and informal meetings that offer opportunities to share knowledge. The network partners are approached with good intentions. This knowledge-gathering approach is similar to the “vicarious learning” described by Pellegrino and McNaughton [2015]. They have proved it was popular, especially in the early stages of internationalization of INVs. As such, a result of this approach could be that INVs exceed the speed of foreign market entry compared to gradual exporters. This approach could be treated as especially useful and be promoted among start-ups and other types of ventures. The example of this approach is Company C, which invests a lot in the relationships with dealers in order to be able to collect market knowledge through them.

The “Unintentional network payee” (network beneficiary) is also well-wishing and open to its network partners; however, this approach does not include the relationship as a source of information of a given type. Therefore, receiving advice, hints, or other valuable information from a given partner is often a surprise. The relationship is based on trust, while the company is open to new knowledge and is also able to recognize its value, so the company can take advantage of the knowledge. In our sample, such an approach was observed in the case of Company A, which was very sensitive to clients’ ideas.

As shown in the literature study, there are many factors explaining and influencing network knowledge-gathering approaches. If these factors change, INVs may adjust their approach. The most important determinants of choosing the particular network knowledge-gathering approach are as follows:

Availability of foreign market and internationalization knowledge – companies with such knowledge will likely tend to gather new knowledge more actively and intentionally, as they already know what they need to learn; however, part of their knowledge gathering will still be unintentional;

Power divisions within the network – companies with power over the partner may tend to abuse the relationship;

Networking experience, including experience in cooperating with a given partner – this influences the ability to create network relationships and to learn from the partner (both intentionally and unintentionally). It may also, however, be a reason for more opportunistic behavior if experience shows that such behavior pays off;

Long- or short-term approach to the relationship with a given partner – the short-term approach may trigger more opportunistic behavior;

Geographical and cultural distance – long distances can be conducive to relationship abuse.

An important contribution of our research to the business network theory is the demonstration of relationship abuse in the knowledge-gathering approach. Emphasizing that the intentional approach to network knowledge gathering may lead to a calculative approach toward network management itself is worth further study. In this case, the firm proactively looks for, develops, or diminishes the relationships [Sepulveda and Gabrielsson, 2013] to get access to the partner's knowledge. The calculative network involves a larger and more diverse set of ties than the identity-based network. Its management is rather egocentric and motivated by economic benefits [Hite and Hesterly, 2001].

One can hardly say whether it is possible to prevent relationship abuse in the knowledge-gathering processes. First of all, the choice of a business partner with good networking reputation makes the probability of being abused lower. Secondly, creating strong, committed long-term ties may also prevent the partner's opportunistic behavior. A certain amount of mistrust and monitoring in relationships can also be helpful, although this solution may not allow the smooth flow of knowledge, which will reduce the benefits of cooperation.

The network knowledge-gathering approach of INVs can change over time, leading to relationship instability. The main reason for the change seems to be the shift of bargaining power as a result of acquiring local market knowledge from the foreign company, as discussed by Inkpen and Beamish [1997] in reference to international joint ventures. The other reason may be simply gaining experience with knowledge gathering through networking. Both the companies representing the “smart” approach toward some of their business partners were the oldest companies in our sample, and they could afford to abuse some of their partners because of their strong market position on the one hand and because they were able to recognize the value of the knowledge acquired in a “smart” way on the other.

Moreover, one company can present different approaches to different partners. The same companies can simultaneously act selfishly or be kind toward different network actors [Uzzi, 1997]. This was also observed in our study. For example, Company A was investing a lot in the relationships with its clients, while it was abusing the relationships with some of the dealers at the same time.

The presented results should also be further discussed, taking the Polish business context into particular consideration. One of its idiosyncrasies is a very low trust level [Centrum Badania Opinii Społecznej (CBOS), 2016], a rather confrontational attitude toward business partners, and a lower interest in long-term strategic business partnerships [Światowiec, 2006, pp. 166–167]. The unethical behavior of local partners was one of the reasons why Polish companies decided to internationalize [Danik et al., 2016]. The opportunistic behavior toward network business partners identified in our study can, to some extent, be explained by experience in the domestic market, but only to a certain degree. First of all, some studies cited above, conducted in other countries, also indicate possible self-interested behavior. Secondly, recent research on the quality of the relationship between Polish companies and their foreign partners shows that Polish companies are focusing on good relationships with their foreign partners and are able to maintain relationships characterized by high trust, commitment, and satisfaction [Danik, 2017]. As such, hostile business relationships in the domestic market are not necessarily the triggers for opportunistic behavior toward all business partners.

The study has some practical implications. Being part of the network does not guarantee access to knowledge, as network partners can block the flow of information to gain a better market position [Sepulveda and Gabrielsson, 2013], or because the fear of a partner's possible hidden intentions can be a barrier to knowledge exchange. INVs trying to gain knowledge through their network partners from countries with low cultures of trust or with hostile business environments should be especially prepared for partners who may be less willing to share their knowledge. On the other hand, firms that share their knowledge with foreign partners should take into consideration that the relationship can end with unexpected results. Ways to reduce the probability of opportunistic behavior may be social interactions, identification-based trust, or shared values [Wang et al., 2013].

The other implication of our study is that unexpected and unsearched-for knowledge can be valuable for companies. Managers should, therefore, be vigilant to make their companies both open to new unexpected knowledge and familiar with mechanisms for transferring unexpected knowledge into company advantages.

Study limitations and future research directions

Although the study presented above has reached its goals, it has some unavoidable limitations. First of all, we are not able to generalize its results due to purposive sampling, which was necessary in our case. Second, the study refers only to Polish companies. The results are therefore limited to this particular country's context, and caution should be exercised in trying to draw generalizations to be applied to other countries. Moreover, the companies we studied were rather “mature” INVs. The results obtained at earlier stages of the internationalization process could be different. Unfortunately, conducting studies on such INVs is extremely difficult, as they cannot easily be tracked by researchers. Nevertheless, in future studies, the results should be validated using younger INVs and INVs from other countries, and necessary comparisons should be made.

We also cannot exclude the fact that the companies under study were more willing to talk about their conciliatory and intentional approaches to network knowledge gathering than they were on talking about relationship abuse (only two companies under study indicated such). Therefore, the numbers representing relationship abuse may be underestimated. Future studies should take into consideration not only the presence of self-interested behavior but also its triggers and the measures taken to prevent it.

Further research should be aimed at generating longitudinal data to capture the dynamics of the network knowledge-gathering processes. A large-scale quantitative study would help to determine the extent to which the observed approaches are common among INVs. As some problems discussed in the study are of sensitive nature (opportunistic behavior), acute attention should be paid when formulating the questions. An interesting subject of future studies could also be the determinants of unplanned learning processes, which are still unexplored.