Globalisation and decline of UK manufacturing

Abstract

This paper discusses the impact of globalization process of manufacturing born globals in a rapidly growing industry, the wireless technology industry. Deviations in these patterns in regards to the mainstream pattern of internationalization and earlier born global literature are discussed. Furthermore, the roles of the founders and managers, the networks, the financial resources of the companies, and the innovations behind the companies under consideration are analyzed. A conceptual framework and propositions explaining the product, operation and market strategies of born globals are developed. The results suggest that born globals in the wireless sector do in fact deviate from the traditional internationalization process in many areas. Their expansion even to distant markets is rapid and they apply advanced product strategies at an early stage. However, their business operations are found to proceed at a more conventional pace and the notable difference from traditional firms is the rapid establishment of sales and marketing subsidiaries. Results emphasize the key role of the resources and capabilities of born globals in influencing the advancement of product categories, operation strategies, and global market presence. Born global firms were found to lack the resources and capabilities accumulated by traditionally internationalizing firms, and they therefore need to acquire them either through the earlier experience of the founding team, which should be complementary in nature, or from external domestic and international network actors.

Globalisation and decline of UK manufacturing

Chapter I: Introduction

Rapid change in the global business environment during the last few decades has had a strong impact on the internationalization processes of most companies in the world. During the 1990s a new phenomenon, 'born global' firms, emerged as many small and medium-sized companies started a impact of globalization process that deviated from the mainstream of traditional internationalization processes ([Knight and Cavusgil, 1996], [Luostarinen and Gabrielsson, 2004], [McDougall and Oviatt, 2000] and [Rennie, 1993]). These born global firms started their globalization immediately after establishment without any prior domestic operations or simultaneously with domestic business operations (Luostarinen & Gabrielsson, 2004). For this study, we define born globals, in line with Oviatt and McDougall (1994, p. 49), as companies that “from inception, seek to derive significant competitive advantage from the use of the resources and sales of outputs to multiple countries”.

Buckley (2002), and Jones and Coviello (2005) have called for new research in international business to compare and link the results with the traditional theories, but also for a more interdisciplinary approach. Also, Knight and Cavusgil (2004) believe that there is still a need for future research to deepen our understanding of born globals. Rialp, Rialp, and Knight (2005) in their review of the first decade of born global research argue that the phenomenon still needs further investigation of the process of internationalization, and especially of the factors behind it. It has been argued that the time-based process of born globals should be understood more thoroughly (Jones & Coviello, 2005). Recent research has highlighted the importance of studying the role of resources and capabilities of the born global firms ...