Guest editorial

Citation

Pehrsson, A. and Torres, R. (2020), "Guest editorial", European Business Review, Vol. 32 No. 1, pp. 1-3. https://doi.org/10.1108/EBR-01-2020-243

This special issue of European Business Review presents five interesting articles that extend the current understanding of international firms’ strategic orientations in foreign markets. In particular, extended knowledge of firms’ entrepreneurial orientation (EO) and market orientation (MO) is crucial, as these orientations represent ways to achieve high performance in foreign markets (Pehrsson, 2016; Torres-Ortega et al., 2015).

Essentially, a firm that applies EO would be able to build and drive a market, while MO generally manifests adaptation and a market-driven behavior. Thus, EO and MO are complementary strategic orientations (Montiel-Campos, 2018). Analyses of EO commonly involve the components of innovativeness, risk-taking and pro-activeness (Miller, 1983). MO analyses often concern market intelligence generation and dissemination, and responsiveness (Kohli and Jaworski, 1990), or customer orientation, competitor orientation and inter-functional coordination (Narver and Slater, 1990).

Following the seminal works of, for example, Kohli and Jaworski (1990), Miller (1983) and Narver and Slater (1990), an extensive body of knowledge has been built regarding direct relationships between EO/MO and performance on the firm level. However, there is still a need for knowledge of EO and MO in international contexts. This is particularly underscored by the literature review presented by Pehrsson (2016). It shows that just a few studies capture direct relationships between EO/MO and performance of foreign units.

In regard to the impact of market context, for example, Sundqvist et al. (2012) found that effects of market dynamism in a foreign market that a firm redefines through its EO activities differ from effects in a stable market. In a redefined market, there is a positive moderation effect, while the effect is negative in a stable market, as risky innovations often do not yield any positive outcome in this context. Zahra and Garvis (2000) contribute by establishing a curvilinear relationship between EO and performance when the international environment is hostile. The positive relationship becomes temporarily weaker if EO is stressed too much, as this requires initial and costly re-organization of firm’s resources. When it comes to contextual moderations of the relationship between MO and foreign performance, Cadogan et al. (2003) found that competitive intensity strengthens the positive relationship, while Qu and Zhang (2015) established the same effect for market heterogeneity.

The articles of this issue in various ways extend the current understanding of EO and MO in international contexts. Fellipe Silva Martins, Wagner Cezar Lucato, Leonardo Vils and Fernando Antonio Ribeiro Serra are the authors of the first article. The study analyses a sample from Brazil, and it was found that crises affect strategic orientations of multinational companies’ subsidiaries in emerging economies. In such circumstances, the subsidiaries take EO and MO paths as ways to gather information about the environment and the subsidiaries react accordingly. Some subsidiaries choose just one orientation, while others choose both at the same time. The latter case is named “ambiorientation” by the authors.

The second article by Tobias Pehrsson examines combinations of components’ strategic orientations. Thus, drawing on resource-advantage theory, this study identifies underlying patterns of orientations. Empirical data from Swedish multinational companies were analyzed using different multi-variate techniques. The results show that what matters is not just degrees of strategic orientations but also types consisting of combinations of components of EO and MO. Four types were distinguished and they impact performance in different ways, as they imply different synergetic effects between involved resources.

The third article is written by Vahid Jafari Sadeghi, Salman Kimiagari and Paolo Pietro Biancone and focuses on drivers of international EO. The study captures the role of human capital in terms of level of education and foresight competencies of entrepreneurs who establish international businesses. The authors analyzed activities in European countries and found that increased business creation in a country positively affects internationalization intensity of the ventures. Also, it was found that a higher education level makes entrepreneurship more effective and reinforces the abilities of managers to foresee environmental occurrences and consequences of actions.

The fourth article by Soniya Billore and Gautam Billore contributes by exploring impacts of three antecedents of MO, namely, customer knowledge, networking and cultural knowledge. Four Swedish small- and medium-sized firms operating in India were studied in-depth. The study shows that attention to the antecedents improves firms’ sensing of the target market. Furthermore, the study explores effects of market orientation in initial stages of firms’ internationalization. The study results in propositions regarding relationships among the antecedents, market orientation and firms’ internationalization.

The fifth article is written by Gamal Mohamed Shehata. The study builds on organizational learning theory and contributes to the closing of an essential gap in literature by an in-depth examination of a four-step learning cycle of General Motors in Egypt. Thus, the study advances current understanding of the role of MO and organizational learning by means of analyzing alignment between MO and collective learning and resulting competitive advantages. The study provides scholars and practitioners with an example on how to design the learning cycle in an effort to achieve advantages in the marketplace.

Finally, we would like to express our gratitude for the contributions of the authors and the extensive work of the reviewers.