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Chapter 5: The Born Global Dilemma: Trade-off Between Rapid Growth and Control
5 The born global dilemma: trade-off between rapid growth and control Carl Arthur Solberg INTRODUCTION Conventional wisdom advocates a stepwise approach to international markets: the firm should learn how to ‘creep before it runs’. The theoretical underpinnings for such advice are provided by writers in the incremental internationalization tradition (for example, Johanson and Vahlne 1977, 1990, 2009; Luostarinen 1979; Bilkey and Tesar 1977; Cavusgil 1984). However, the description of the ‘traditional’ pathway to international markets through a gradual process of building experience, starting in neighboring markets and progressively expanding to markets further away and increasingly engaging in more committing operation modes, was challenged by many writers. Reid (1983), Rosson (1987) and Turnbull (1987), all challenged the traditional pathway for being too deterministic. Benito and Gripsrud (1992) and Nordström (1990) challenged the lack of empirical support concerning the geographical dimension of the model. Furthermore, other explanations to international market involvement such as ‘follow-thy-customer’, oligopolistic behavior, networks or supply orientation have been observed (Engwall and Wallenstål 1988; and Johanson and Mattsson 1988; see Terpstra and Yu 1988). Welch and Luostarinen (1988) suggested that leapfrogging stages in the internationalization process was possible given certain resources. But most of all, the incremental internationalization model was challenged by the emerging literature on international new ventures and born globals (Rennie 1993). The incremental internationalization model was, however, mainly developed at a time when firms operated in multi-domestic markets (Porter 1985) where they could slowly and confidently develop their international operations taking one step at...
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