Organizational entrainment captures the temporal fit in the activity cycles between exchange partners. We argue that organizational entrainment between international new ventures (INVs) and their most important international customers positively moderates the relationship between the degree, scope, and speed of internationalization and performance of INVs. We test our hypotheses on INVs from China, India and South Africa. The results support the contingent role of entrainment for degree and scope of internationalization but not for speed. Findings suggest that, when INVs attain temporal fit with their most important international customers, they can implement their strategic goals in international markets more effectively.
Time is the “invisible language” of international business, yet cultures differ in their treatment of time. As a result, one of the most important challenges for international new ventures (INVs) involves the synchronization of their activity cycles with those of their most important customers based abroad. Such synchronization, known as organizational entrainment, captures the temporal fit between firms and their environments. In this paper, we bring organizational entrainment to the center stage of the international entrepreneurship literature. We argue that organizational entrainment is a neglected but critical contingency that moderates the relationship between the degree, scope, and speed of internationalization and the performance of INVs. Although researchers have offered numerous contingencies to tease out heterogeneity among internationalizers, no one has directly considered how the level of organizational entrainment with international customers alters the internationalization-performance equation. Internationalization is a growth strategy that managers of INVs undertake to improve performance. As such, we hypothesize that as INVs increase their degree, scope, and speed of internationalization, their performance should improve. In addition, we argue that entrainment with their most important international customers will create positive synergies as INVs internationalize extensively, broadly, and rapidly.
Although entrainment is relevant in many contexts, we argue that entraining with international customers represents a particularly important and challenging issue for INVs from emerging markets. When they cross international boundaries, new ventures change their task environments, and challenge their previously established routines, including those that determine their level of synchronization with customers. Where timing is concerned, INVs from emerging markets often face substantial disconnects between the accepted norms at home and abroad; hence, entrainment with international customers requires greater effort but also assumes greater importance.
We test our hypotheses on a multi-country sample of independent INVs from China, India, and South Africa. The firms in our sample are on average 4.9 years old and derive approximately half of their revenues from international sales. We selected China, India, and South Africa because each country has undergone economic reforms over the last decade that have spurred an ever-increasing number of new ventures to enter international markets. We operationalize entrainment in terms of four indicators that capture temporal fit and find support for our theoretical arguments. As INVs increase the degree and scope of internationalization, performance improves, and organizational entrainment enhances these effects. However, neither the speed of internationalization nor its interaction with entrainment appear related to new venture performance. Although our results do show the positive synergistic effect between organizational entrainment, degree, and scope of internationalization, they also suggest that entrainment is not costless. INVs realize the synergistic effects between internationalization and entrainment as the degree and scope of their involvement in international markets increase.
Our study extends the boundaries of organizational entrainment to the international entrepreneurship literature, and supports theoretical arguments that advocate a temporal fit between exchange partners. As future studies in international entrepreneurship consider how to explain differences in performance between new ventures when they enter the global economy, the moderating role of organizational entrainment should be viewed as an important contingency. A more complete understanding of the internationalization process should include measures of how well INVs are synchronized with their most important international customers. Likewise, the role of organizational entrainment has implications for entrepreneurs and managers of INVs as they consider to what degree and how broadly to internationalize. Our results should provoke a managerial discussion about the level of entrainment that the firm can be expected to achieve relative to its strategic goals in international markets. Finally, the pace of internationalization from emerging markets is increasing, yet the nexus of international entrepreneurship and emerging markets research remains sparsely addressed. We use multi-country data because we believe it affords us a broader exploration of international entrepreneurship phenomena.
In this paper, we argue that a more complete understanding of the internationalization process should consider how well INVs synchronize their activities with those of their most important international customers. We show that organizational entrainment is a critical contingency in the relationship between degree and scope of internationalization and performance for new ventures that are internationalizers. Indeed, increasing involvement with internationalization allows INVs to realize maximum synergistic effects between internationalization and entrainment. Our results should provoke a managerial discussion about the level of entrainment that the INV can be expected to achieve relative to its strategic goals in international markets. Although much work remains to be done in understanding how entrainment with international customers influences the success of INVs, we believe such research is timely particularly as the pace of internationalization from emerging markets accelerates. Moreover, we are motivated by our vision that organizational entrainment will bring a fresh theoretical perspective to entrepreneurship and open new avenues of inquiry.
