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This research was funded in part by the Center for International Business Research, University of South Carolina.

Internationalizing new firms face the dual challenge of overcoming the liabilities of newness and liabilities of foreignness (Stinchcombe, 1965; Dunning, 1981; Zaheer, 1995). Because of their newness, new firms are constrained in their ability to access external resources required for survival and growth. Because of their foreignness relative to the foreign target market, internationalizing firms are disadvantaged relative to domestic firms when establishing business relationships. These disadvantages are exacerbated by the additional knowledge inputs required by the internationalization process itself: internationalizing firms face the dual challenge of both learning how to do business in a new national and institutional environment while also learning to manage the inherently complex international business organization (Johanson & Vahlne, 1990).

Take the image of the entrepreneur as a driven accepter of risk, an individual (or set of individuals) hungry to amass a fortune as quickly as possible. This image is consistent with the traditional finance theory view of entrepreneurial startups, one that assumes that profit maximization is the firm’s sole motivation (Chaganti, DeCarolis & Deeds, 1995). Myers’s (1994) cost explanation of the pecking order hypothesis (i.e. entrepreneurs prefer internally generated funds first, debt next, and external equity last) incorporates this economically rational view of entrepreneurs’ financing preferences. According to this view, information asymmetry and uncertainty make the availability of external financing very limited and the cost of it prohibitively high. To compensate, entrepreneurs must give up greater and greater control in order to “buy” funds needed to achieve the desired growth and profitability. Indeed, Brophy and Shulman (1992, p. 65) state, “Those entrepreneurs willing to relinquish absolute independence in order to maximize expected shareholder wealth through corporate growth are deemed rational investors in the finance literature.” Undoubtedly, cost and availability explanations of financing choices are valid for many new and small businesses. However, many entrepreneurship researchers have long been dissatisfied with the incompleteness of this perspective.

In this study we examine how resource-constrained organizations can maneuver for competitive advantage in highly institutionalized fields. Unlike studies of institutional entrepreneurship, we investigate competitive maneuvering by an organization that is unable to alter either the regulative or normative institutions that characterize its field. Using the “Moneyball” phenomenon and recent changes in Major League Baseball as the basis for an intensive case study of entrepreneurial actions taken by the Oakland A’s, we found that the A’s were able to maneuver for advantage by using bricolage and refusing to enact baseball’s cognitive institutions, and that they continued succeeding despite ongoing resource constraints and rapid copying of their actions by other teams. These results contribute to our understanding of competitive maneuvering and change in institutionalized fields. Our findings expand the positioning of bricolage beyond its prior characterization as a tool used primarily by peripheral organizations in less institutionalized fields; our study suggests that bricolage may aid resource constrained participants (including the majority of entrepreneurial firms) to survive in a wider range of circumstances than previously believed.

Learning theory suggests that organizations learn when the activities and experiences of individuals become assimilated into the routines, systems, and policies of the organization (Grant, 1996). A premise of study 1 is that the greater the attention a firm devotes to developing new knowledge and to exploiting existing knowledge, the greater its learning. This premise is consistent with prior theory which holds that the amount of information learned and the ease of its retrieval depend upon the intensity of effort expended in its acquisition (Cohen & Levinthal, 1990), and with the notion that a firm's behavior can be envisioned as the pattern of effort and attention devoted to specific activities (Ocasio, 1997). The extent to which firms devote attention to learning in the international as well as domestic marketplace can be considered as critical outcome variables, and an important question pertains to how several factors affect this ‘learning effort.’

Total quality management (TQM) has received considerable attention as a way to increase both the effectiveness and the efficiency of corporations (Bounds et. al., 1994; Grant, Shani and Krisnan 1994; Olian and Rynes 1991; Powell 1995; Ross 1993). Concerned primarily with the delivery of customer satisfaction, the proponents of quality and/or TQM (Deming 1986; Juran 1992; and Crosby 1979) have developed principles and procedures for achieving total quality and meeting multiple corporate goals. Empirical evidence regarding outcomes is mixed; success and failure case studies abound, statistical methodologies are questioned, and more rigorous empirical studies present some positive findings (Powell 1995). Some maintain that the reasons for the failure of TQM systems is incompatibility between existing Western management thought which is grounded in economic models, and the TQM paradigm, which evolved from statistical theory, and has its own set of assumptions (Grant, Shani and Krisnan 1994). Despite such mixed empirical results, TQM continues to be promoted and implemented. This is the beginning point for our examination of TQM. The TQ management paradigm is practiced in economically and culturally diverse environments, including those which embrace an economic perspective, complete with maximisation of shareholder wealth, self‐interest, rational decision makers, separation of ownership, and agency costs (Grant, Shani and Krishnan 1994).