the international conference on entrepreneurship iec ...

THE INTERNATIONAL CONFERENCE ON ENTREPRENEURSHIP IEC 2014

CONFERENCE PROCEEDINGS

15 – 16 May, 2014 ISTANBUL

THE INTERNATIONAL CONFERENCE ON ENTREPRENEURSHIP IEC 2014 Conference Chair Prof. Dr. Ahmet Metin GER Conference Co-chair Prof. Dr. Alev KATRINLI

Comittee Members Asst. Prof. Zeynep ILTUZER Res. Asst. Alev Dilek AYDIN Res Asst. Burcin KAPLAN Res. Asst. Gonca Yılmaz ELBASI Cover Design Nabi SARIBAS İpek GOZGEC Layout İpek GOZGEC

Place and Year of Publication İstanbul / MAY-2014

Print Location and Skin VİP DİJİTAL Baskı Hizmetleri Ltd. Şti. Certificate No 27229

ISBN 9-786054-303342

Copyright © 2014 by İstanbul Aydin University, İstanbul. All rights reserved. Printed in Turkey. This publication is protected Copyright and permisson should be obtained from the Publisher prior to any prohibited reproduction, storage in a retrieval system, or tranmisson in any form or by any means, electronic, mechanical, photocopying recording likewise.

PRESIDENT In recent decades, the importance of entrepreneurship has increased and seated in a significant position in business life. In this atmosphere, hosting an event that purposes to reach students with the academic studies in order to educate and teach them for establishing a successful business is an honor to our University.

From past till today, entrepreneurship has been emerging as an important concept that determines the level of economic prosperity of the countries. Entrepreneurs, who create new working environments for themselves, also serve for the whole country by providing benefits to every citizen. In countries where the level of entrepreneurship is high, employment, education level and welfare of the society also increase significantly. Therefore, entrepreneurship is a concept that governmental bodies and universities require to work in cooperation for the overall success of the whole country. As Universities, our prior mission is to teach our students to review their usual life with different perspectives in order to realize opportunities in business lives. It should be remembered that it has been 115 years since the President of the U.S. Patent Office, Charles Duell said "Now there is nothing new. Everything that can be invented has been invented.” In the last 115 years, humanity experienced the most rapid and severe changes in technology. With today's rapidly evolving technology and improved living conditions, we will need more and more young brains to produce and invent. Lastly, I would like to thank everyone who contributed to the organization of this conference, in which many reseachers from Turkey and from many different countries take part. Dr. Mustafa AYDIN President of Board of Trustees Istanbul Aydın University

RECTOR The changes experienced in the information and communication technologies as a result of the process of globalization have greatly impacted the universities. Higher education gained significant importance in the 21th century, as a consequence of the knowledge economy and the role it played in raising the educated people for the said new economy. Universities have gone through thre main stages since their establishments. Universities, which were mainly concentrated on the "education" at first, have later had the mission of "researcher" university in paralell with the the needs brought by the industrial societies. Today, universities have adopted in principle to directly contribute to the economical and social development. As a result of this process, the cooperation of university-Industry, which we consider as one of the most important tools of converting this know-how to production, has gained increasingly significant importance. The entrepreneurial university in the context of university-industry cooperation provides the basis to the new formations such as company universities and gives rise to new types of partnerships among different higher education institutions. In this context, entreprenurial university constitutes one of the foundations of the concept of entrepreneurship, which is shaped on innovation, creativity and change. Entrrpreneurship is the ability of a person to transform his/her ideas into action. The most important aim of the entrepreneurial university is to develop the entrepreneurial talents and their way of thinking.

Today, it is obvious that the educational institutions of a country, particularly universities have an important role in the commercialization of ideas. For this reason, increase in the production of value-added products and a strong University-indsutry cooperation for the national and international development is crucial. Researchers, academical institutions, enterprises and industrial entrepreneurs should be promoted to meet on a common ground within the context of university-industry cooperation. I would like to thank everyone, who has a role in the preparation of this conference that we realized with valuable speakers and participants from all around the world and present my best regards. Prof. Dr. Yadigâr IZMIRLI Rector Istanbul Aydin University

PREFACE In today’s world, economies worldwide are witnessing the emergence of new business models within entrepreneurial realms, new funding mechanisms and platforms, new international scopes of activities, new ways of organizing ventures, as well as greater varieties of venture types spanning both commercial and socially driven initiatives. Entrepreneurship in the 21st century has an important place in ensuring social welfare and balanced development between different regions. Entrepreneurs who have strong characteristics of decision-making, innovative, creative and risk-taking in uncertain environmental conditions are loaded on an important mission in the development of modern civilization.

In this very important and contemporary topic, International Conference on Entrepreneurship will include multiple tracks welcoming studies from a variety of business and management disciplines after double blind, peer review process. In the conference, the harmony of many topics including entrepreneurship and marketing, women entrepreneurs, social entrepreneurship, entrepreneurial finance, corporate entrepreneurship, entrepreneur leadership, strategies, business models and processes for entrepreneurship, entrepreneurship in health sector, risk analysis in entrepreneurship and entrepreneurship and the recent financial crisis will be presented. The conference also will host different perspectives from different countries such as Denmark, Albania, Lithuania, Russia, Poland, Indonesia, Algeria, India, Spain and Pakistan. The opening keynote speech will be given by Prof. Dr. Daniel Hjorth, who is the Academic Director of Department of Management, Politics and Philosophy in Copenhagen Business School. I hope that you have an enjoyable conference.

Prof. Dr. Alev KATRINLI Dean Faculty of Economics and Administrative Science Istanbul Aydın University, Turkey May, 2014

KEYNOTE SPEAKER AND PANELISTS Keynote Speaker Prof. Dr. Daniel Hjorth - Copenhagen Business School, Academic Director, Department of Management - Politics and Philosophy,

Panelists Prof. Dr. Erol Sayın – Rector of Alanya Hamdullah Emin Paşa (AHEP) University

Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin University

Ahmet Mete Çakmakçı – General Secretary of Technology Development Foundation of Turkey (TTGV) Prof. Dr. Hasan Saygın - Senior Advisor of Board of Trustees, Istanbul Aydin University Selahattin Kaya – President of KOSGEB İkitelli Center Ufuk Batum – Vice President of ODTÜ Teknopark

Berkay Eskinazi – President of Creative Leaders and Contributors Association (LIYAKAT)

Gülçin Güloğlu – Vice President of Creative Leaders and Contributors Association (LIYAKAT)

Nilgün Dağgeçen – Vice President of Creative Leaders and Contributors Association (LIYAKAT)

Asst. Prof. Engin Deniz Eriş – Dokuz Eylul University, İzmir Vocational College – President of Project Commission of Creative Leaders and Contributors Association. (LIYAKAT)

CONFERENCE SCHEDULE / 1. DAY 08:30 – 09:00

Registration

09:00 – 10:30

Opening Speeches: Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin University Prof. Dr. Yadigar İzmirli – Rector; Istanbul Aydın University Dr. Mustafa Aydın – President of the Board of Trustees, Istanbul Aydin University Keynote Speeches: “Entrepreneurship, Organisations, and Creativity” Prof. Dr. Daniel Hjorth – Keynote Speaker / Academic Director of Copenhagen Business School

10:30 – 10:45 10:45 – 12:00

12:00 – 13:00 13:00 – 14:00

Coffee Break

“The Role of Corporate Entrepreneurship in Business” Head of the Session: Assoc. Prof. H. Sinem Ergun – Faculty Member, Faculty of Business Administration, Marmara University Presentations: 1. Mindaugas Samuolaitis, Entrepreneurship in E-commerce Supply Chain Management 2. Jullimursyida Ganto & Amru Usman & Mariyudi, Acehnese Immigrants’ Small Businesses in Malaysia: Constraints and Strategies for Survival 3. Aysu Kurtuldu & Dilaver Tengilimoğlu, Corporate Entrepreneurship in Healthcare Institutions and the Impact to Performance 4. Ahmet Hakan Özkan, White Collars and Pink Collars for Entrepreneurs: The Case of Turkish Banking Industry Lunch

Panel: Entrepreneurship in Universities Panelists: Prof. Dr. Erol Sayın – Rector; Alanya Hamdullah Emin Paşa (AHEP) University Prof. Dr. Ahmet Metin Ger – Senior Advisor of Board of Trustees, Istanbul Aydin University Ahmet Mete Çakmakçı – General Secretary of Technology Development Foundation of Turkey

14:00 – 14:15

Coffee Break

14:15 – 15:45

“Entrepreneurial Universities and Education” Head of the Session: Assoc. Prof. Figen Yıldırım –Vice Dean of Faculty of Commercial Sciences, İstanbul Commerce University, Presentations: 1. Victoria Balieva, Multicultural Merging and Acquisition: Flagman of International Entrepreneurship and Education 2. Robertas Sunokas, Improvisation Method as Entrepreneurial Engine for Students 3. Mahmoudi Elhouari, University Students and Their Sense of Entrepreneurship 4. Amru Usman & Naufal Bachri & Iskandarsyah Madjid, Acehnese Students Entrepreneurs: Problems and Determinant Factors of Students 5. Gizem Akıncı & Dinçer Atlı & Fırat Bayır, A Study of the The Relation Between Entrepreneurship Education and Students’ Future Entrepreneurial Inclination.

15:45 – 16:00 16:00 –17:15

Coffee Break

“Social Entrepreneurship” Head of the Session: Prof. Dr. Sevda Alankuş – Dean of Faculty of Communications, Kadir Has University Presentations: 1. Eva Cipi & Iris Cekani, Regional Development Centers –A Big Opportunity to Develop the Third Mission in Albanian Universities 2. Duygu Türker & Gökay Özerim & Ayselin Yıldız, Social Enterprises in a Developing Country Context: Analysis of Social Entrepreneurship Models in Turkey 3. Ivan Hilliard & Tiziana Priede & Cristina López-Cózar Navarro, The Responsible Company and The Social Enterprise: Differences and Similarities. 4. Mouloud Madoun, Social entrepreneurship: Rethinking the Relationship Between Corporations and the Society. An Indian Perspective

CONFERENCE SCHEDULE / 2. DAY 08:30 – 09:00

Registration

09:00 – 10:00

Panel: Corporate Entrepreneurship and Innovation Panelists: Prof. Dr. Hasan Saygın - Senior Advisor of Board of Trustees, Istanbul Aydin University Selahattin Kaya – President of KOSGEB İkitelli Center Ufuk Batum – Vice President of ODTÜ Teknopark

10:00 – 10:15 10:15 – 11:45

12:00 – 13:00 13:00 – 14:00

Coffee Break

“Innovation Technology and Creativeness as part of Entrepreneurship” Head of the Session: Prof. Dr. Kemal Kurtuluş – Faculty Member, Zirve University Presentations: 1. Mimoza Zeneli & Almarin Frakulli, Innovation and Techonology Development For Albania Sme-Ve 2. Bharat Chalise, Development of Entrepreneurship Culture; Great Challenge for Developing Countries, Experience from Nepal 3. Julejda Gërxhi, Social Enterprises in Albania as Instrument in Function of Social Welfare 4. Aamar Ilyas, The Impact of Human, Social, Cultural And Financial Capital on Nascent Entrepreneurs’ in Pakistan 5. Jurate Cerneviciute & Rolandas Strazdas, Collective Creativity Management Model for Creative Enterprises Lunch

Panel: Social Entrepreneurship Panelists: Berkay Eskinazı – President of Creative Leaders and Contributors Association (LİYAKAT) Gülçin Güloğlu – Vice President of Creative Leaders and Contributors Association (LİYAKAT) Nilgün Dağgeçen – Vice President of Creative Leaders and Contributors Association (LİYAKAT) Ass. Prof. Engin Deniz Eriş – President of Project Commission of Creative Leaders and Contributors Association (LİYAKAT) & Dokuz Eylül University, İzmir Vocational Collage

14:00 – 14:15

Coffee Break

14:15 – 15:30

“Women Entrepreneurship and Entrepreneurship Among Disabled People” Head of the Session: Prof. Dr. Celal Nazım Irem – Vice Dean of The Faculty of Economics and Administrative Sciences, Istanbul Aydın University Presentations: 1. Manzoor Ali Isran, Problems for Women Entrepreneurs: Pakistan Needs Pro-Women Entrepreneurial Public Policy 2. Boufeldja Ghıat, Women Entrepreneurship in Algeria 3. Elda Dollıja & Manjola Çollaku, The Worldwide Gender Imbalance on Corporate Boards 4. Dorota Kobus-Ostrowska, Entrepreneurship Disabled People in Poland in Times of Economic Slowdown. Myth or Reality?

15:45 – 16:00 16:00 –17:00

Coffee Break

“Entrepreneurship in Business Organizations” Head of the Session: Prof. Dr. Alev Katrinli – Dean of The Faculty of Economics and Administrative Sciences, Istanbul Aydın University Presentations: 1. Burçin Kaplan & Gonca Yılmaz Elbaşı, As a New International Entrepreneurship Pathway: Born-Global Content 2. Gülay Bakar Tamer, Creativity in Entrepreneurship 3. Alba Kruja, Entrepreneurial Orientation as a Performance Promoter of Business Organizations

TABLE OF CONTENTS

Page No

Entrepreneurial Orientation as a Performance Promoter of Business Organizations Alba Kruja

15

Entrepreneurship in E-commerce Supply Chain Management Mindaugas Samuolaitis

29

As a New International Entrepreneurship Pathway: Born-Global Content Burçin Kaplan & Gonca Yılmaz Elbaşı

37

A Study of the Relation Between Entrepreneurship Education and Students’ Future Entrepreneurial Inclination Gizem Akıncı & Dinçer Atlı & Fırat Bayır

53

Multicultural Merging and Acquisition: Flagman of International Entrepreneurship and Education Victoria Balieva

67

Improvisation Method as Entrepreneurial Engine for Students Robertas Sunokas

77

University Students and Their Sense of Entrepreneurship Mahmoudi Elhouari

87

Acehnese Students Entrepreneurs: Problems and Determinant Factors of Students Amru Usman & Naufal Bachri & Iskandarsyah Madjid

95

Regional Development Centers –A Big Opportunity to Develop the Third Mission in Albanian Universities Eva Cipi & Iris Cekani

107

Social Enterprises in a Developing Country Context: Analysis of Social Entrepreneurship Models in Turkey Duygu Türker & Gökay Özerim & Ayselin Yıldız

117

The Responsible Company and The Social Enterprise: Differences and Similarities. Ivan Hilliard & Tiziana Priede & Cristina López-Cózar Navarro

131

Social Entrepreneurship: Rethinking the Relationship Between Corporations and the Society. An Indian Perspective Mouloud Madoun

145

Innovation and Techonology Development For Albania Sme-Ve Mimoza Zeneli & Almarin Frakulli

167

Acehnese Immigrants’ Small Businesses in Malaysia: Constraints and Strategies for Survival Jullimursyida Ganto & Amru Usman & Mariyudi

175

Corporate Entrepreneurship in Healthcare Institutions and the Impact to Performance Aysu Kurtuldu & Dilaver Tengilimoğlu

195

Development of Entrepreneurship Culture; Great Challenge for Developing Countries, Experience from Nepal Bharat Chalise

209

Social Enterprises in Albania as Instrument in Function of Social Welfare Julejda Gërxhi

221

The Impact of Human, Social, Cultural And Financial Capital on Nascent Entrepreneurs’ in Pakistan Aamar Ilyas

231

Problems for Women Entrepreneurs: Pakistan Needs Pro-Women Entrepreneurial Public Policy Manzoor Ali Isran

247

Women Entrepreneurship in Algeria Boufeldja Ghıat

261

The Worldwide Gender Imbalance on Corporate Boards Elda Dollıja & Manjola Çollaku

277

Creativity in Entrepreneurship Gülay Bakar Tamer

289

Entrepreneurship Disabled People in Poland in Times of Economic Slowdown. Myth or Reality? Dorota Kobus-Ostrowska

305

Collective Creativity Management Model for Creative Enterprises Jurate Cerneviciute & Rolandas Strazdas

317

White Collars and Pink Collars for Entrepreneurs: The Case of Turkish Banking Industry Ahmet Hakan Özkan

327

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ENTREPRENEURIAL ORIENTATION AS A PERFORMANCE PROMOTER OF BUSINESS ORGANIZATIONS Alba Kruja Department of Business Administration, Epoka University Km. 12, Rruga Rinas, 1039 Tirana, Albania Tel: +355 4 2232 086 E-mail: [email protected]

ABSTRACT The first concept use of the term “entrepreneurship” relates to the seventeenth century in France, while the research on it has its beginnings with Schumpeter linking it with the innovativeness of business organizations. Entrepreneurial orientation as a concept is related with business organizations performing entrepreneurial actions and activities. Nowadays importance of entrepreneurial orientation research has increased due to its recognition as a critical success factor of business organizations. This study aims to provide a literature review on the relations between entrepreneurial orientation and business organizations and the impact that this orientation has as a performance promoter. Keywords: Entrepreneurial Orientation, Business Organizations, Performance

1. INTRODUCTION During the first half of the 20th century the main objective during the development of the entrepreneurship theory was to determine the role that entrepreneurship have on the country development (see Schumpeter, 1911/34; Marshall 1930; Burns & Stalker 1961; McClelland 1961). But the second half`s focus would be moved on identifying the factors that promote entrepreneurship and it will be only after the 1980s that the identification of Entrepreneurial Orientation dimensions from the research occur. The difference between entrepreneurial orientation and entrepreneurship lies on the fact that while entrepreneurship is focused on new entries entrepreneurial orientation is engaged on the way entrepreneurs implement entrepreneurship. New entry can be accomplished by entering new or established markets with new or existing goods or services (Lumpkin & Dess, 1996, p. 136). Entrepreneurial orientation has become a central concept in the domain of entrepreneurship that has received a substantial amount of theoretical and empirical attention (Covin, Green, & Slevin, 2006). The number of researches studying the relationship between EO and business organizations’ performance is increasing every year, leading to a wide acceptance and relevance of the concept. This paper has as objective to provide a literature review on the concept of EO, its dimensions and its impact on business performance. After the introduction part, chapter International Conference on Entrepreneurship IEC 2014 - 15 -

2 relates with the EO concept and its study models in the literature. Chapter 3 analyses in details the five dimensions of EO, while chapter 4 deepens on performance measures in business organizations. The discussion about the EO-performance relationship takes part in chapter 5 and next chapter emphasizes the role of moderators. The paper ends with the conclusion part. 2. ENTREPRENEURIAL ORIENTATION Miller (1983) views the entrepreneurial orientation “as a characteristic of organizations, which can be measured by looking at top management`s entrepreneurial style, as evidenced by the firms` strategic decisions and operating management philosophy.

According to Covin & Slevin (1988), an organization`s EO is the summation of the extent to which top managers are inclined to take business related risks, to favor change and innovation in order to obtain a competitive advantage for their firm and to compete aggressively with other firms. The organizations performing in high levels of risk-taking, innovative and proactive activities would be entrepreneurially oriented, while those performing in low levels of those activities would be conservative oriented. Lumpkin & Dess (1996) as well as Wiklund & Shepherd (2003) emphasize that EO refers to the strategy making processes that provide organizations with a basis for entrepreneurial decisions and actions.

Rauch, Johan, Lumpkin, & Frese (2009, p. 766) view EO as the entrepreneurial strategy-making processes that key decision makers use to enact their firm`s organizational purpose, sustain its vision and create competitive advantage(s).

Vij & Bedi (2012, p. 19) identified three types of study models have been undertaken such as: (i) the construct model, in which EO is the dependent variable and the researchers focus is on its antecedents; (ii) the EO-strategy model, which aligns the level of EO with different strategies; and (iii) the performance model, which explores the EO-performance linkage. In table 1 below is presented a short description of each study model and the main authors dealing with.

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Table 1. Study Models of the EO Literature Study Model

Model Description

Authors

Construct Model

Dependent Variable: EO Independent Variable: EO Antecedents

(Lachman 1980); (Miller & Toulouse 1986); (Stevenson dhe Jaillo 1990); (Zahra 1991); (Zahra, Jennings & Kuratko 1999); (Littunen 2000); (Poon, Ainuddin & Junit 2006); (Holt, Rutherford & Clohessy 2007).

EO-Strategy Model

EO level is arranged in line with the strategies.

(Mintzberg 1973); (Khandwalla 1977); (Miller & Friesen 1982); (Burgelman 1983); (Galbraith & Kazanjian 1986); (Covin & Slevin 1988); (Zahra 1993); (Covin, Slevin & Schultz 1994); (Lumpkin & Dess 1996); (Dess, Lumpkin & Covin 1997); (Frese, Brantjes & Hoorn 2002); (Ireland, Covin & Kuratko 2009).

Performance Model

EO-Performance relation is studied, by considering also the moderating and mediating variables of the internal & external environment.

(Covin & Slevin 1989); (Zahra 1991); (Wiklund 1999); (Zahra & Garvis 2000); (Lee, Lee & Pennings 2001); (Yusaf 2002); (Dimitratos, Lioukas & Carter 2004); (Kraus, Harms & Schwarz 2005); (Wiklund & Shepherd 2005); (Stam & Elfring 2008); (Ireland, Covin & Kuratko 2009); (Kreiser & Davis 2010); (Grande, Madsen & Borch 2011);

3. DIMENSIONS OF ENTREPRENEURIAL ORIENTATION Beginning from 1983, Miller has identified three dimensions of EO to measure entrepreneurship such as: innovation; proaktiveness; and risk-taking. These three dimensions have been used from many researchers (Covin & Slevin, 1989; Lumpkin & Dess, 1996; Wiklund & Sheperd, 2005, etc.). Meanwhile Lumpkin & Dess (1996) determine EO dimensions as five, by adding two other dimension to the previous study of Miller (1983) as: autonomy; and competitive aggressiveness.

3.1 Innovativeness Schumpeter (1911/34) has classified the entrepreneur as someone who identifies and captures an option, offering a new product to market, improves the production process, or offers a new contribution to the economy. The event was called “innovation”, which leads to a new production function, such as: 1. The introduction of a new good 2. The introduction of new method of production 3. The opening of a new market 4. The conquest of a new source of supply of a raw material 5. The carrying out of a new organization of an industry

International Conference on Entrepreneurship IEC 2014 - 17 -

According to the Oslo Manual definition innovation is defined as “... the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (OECD, 2005, p. 45)”. Miller & Friesen (1982) identified innovativeness of entrepreneurs as their propensity to innovate the business.

Khandwalla (1977) viewed innovativeness as the willingness to try the ways which are different from the existing, the enthusiasm to adopt new ideas or new methods to do their business operation and the eagerness to implement the innovation strategy in their business. Drucker (1985) defines innovation as the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or service Lumpkin & Dess (1996) argues that innovativeness reflects a firm`s tendency to engage in and support new ideas, novelty, experimentation, and creative processes.

Lewrick, Omar, Raeside, & Saier (2010, p. 1) emphasize that innovation is the production, diffusion and use of new and economically useful knowledge, a key factor for competitiveness and growth. 3.2 Risk-Taking One of the earliest uses of the term “entrepreneur”, appears to have been introduced by Richard Cantillon, an Irish economist of French descent, in the 1700s. Cantillon (1755) viewed the entrepreneur is a specialist in taking risk.

Mill (1984) emphasized that risk taking is the paramount attribute of entrepreneurship. 3.3 Proactiveness Proactiveness is an indicator of a firm`s behavior against its competitors, willingness and desire to compete.

Lumpkin & Dess (2001) view proactiveness to suggest “a forward-looking perspective characteristic of a marketplace leader that has the foresight to act in anticipation of future demand and shape the environment” (p. 433). Miller & Friesen (1978) define proactiveness as changing the environment by introducing new products and technologies. - 18 - International Conference on Entrepreneurship IEC 2014

3.4 Autonomy Autonomy as a concept refers to the independent action of an individual or group working to develop an idea or vision. According to Lumpkin & Dess (1996) autonomy refers to the ability to work independently, make decisions, and take actions aimed at bringing forth a business concept or vision and carrying it through to completion. As a consequence of delegating authority to operating units in entrepreneurial organizations, the impetus for new initiatives stems from the lowest level of the hierarchy. Autonomy can be possessed by either individuals or groups and can exist from either lower-level employees or among more senior decision makers (Langfred, 2000).

Although Lumpkin & Dess (1996) refer to autonomy as one of the key dimensions of entrepreneurial orientation, there are few studies that have included it as such. (Lumpkin, Cogliser, & Schneider (2009, p. 48) believe that this lack of engagement has occurred for two reasons : i. autonomy is not a dimension of “original” EO identified by Miller (1983) and developed by Covi and Slevin (1986 , 1989 ) - innovation , proactive , and risk taking . ii. the adoption of the autonomy dimension has been impeded by the lack of a valid firm-level scale that measures autonomy from the EO perspective.

3.5 Competitive Aggressiveness Competitive aggressiveness refers to the intensity of the efforts of a firm to perform better than its rivals in the same industry. It is characterized by strong offensive posture directed at overcoming competitors and may also be quite reactive as when a firm defends its market position or aggressively enters a market that a rival has identified (Lumpkin & Dess, 2001, p. 433).

3.6 Dependence versus Independence of EO Dimensions Regarding the relations between dimensions, Miller (1983) along with Covin and Slevin (1989) have applied the OS as a multidimensional construct, combining in a single scale of three dimensions. While, Lumpkin and Dess (1996) together with Kreiser, Marino and Weaver (2002), claimed that the dimensions of the OS interact independently of each other. Other studies, Lumpkin & Dess (2001) as well as Covin, Green, & Slevin (2006), concluded that dimensions of EO may occur in different combinations. George (2006) argues that each dimension represents a different and independent aspect of the multidimensionality concept of EO. Stetz, Howell, Stewart, Blair, & Fottler (2000) emphasize that the dimensions of EO may relate differently to firm performance. 4. PERFORMANCE MEASURES OF BUSINESS ORGANIZATIONS Performance is a multidimensional concept and the relationship between EO and performance may depend upon the indicators used to assess performance (Lumpkin & International Conference on Entrepreneurship IEC 2014 - 19 -

Dess, 1996). There exist many indicators that can be used to measure the performance of business organizations. Different researchers have used different performance measures such as objective or subjective and financial or non-financial measures. Smith (1976) determines the non-financial measures to include goals such as satisfaction and global success ratings made by owners or business managers and financial measures to include assessments of factors such as sales growth and ROI. Covin & Slevin (1989) in their study have measured performance based on subjective perceptions of the respondents on the importance and satisfaction of various performance indicators.

The increase in sales is an indicator widely used in empirical analysis of entrepreneurial growth (Delmar, Davidsson and Gartner, 2003). This indicator also serves as one of the most important when it comes to small and medium enterprises (SMEs), which have less than 250 employees (Delmar, 1997). At the same time a good part of new business organizations in the market can operate in the early years with a small profit or loss, while increasing sales is the most suitable indicator of the development and performance in the market.

Return on invested capital (ROI) can be used to compare the performance of a business organization with another or to compare its performance over a period of time. When calculated over a period of a year, it is a convenient measure of the effectiveness of the organization’s leader. 5. LINKING ENTREPRENEURIAL ORIENTATION WITH BUSINESS PERFORMANCE Business organizations that have high OS willingness to present innovations, assuming risks, examination of new products and services and unsecured, and are more active than competitors against market opportunities (Covin & Slevin, 1991; Wiklund and Shepherd, 2005).

From the 1980s up to nowadays, the EO studies has increased and spread around the world. The research began with studies from North America and in 1990s studies from USA, Europe and Australia were conducted. After 2000s the studies will be also conducted in Asia, Africa and other developing countries. As EO research has continued spreading, so have the variants for measuring the construct (Rauch, Johan, Lumpkin, & Frese, 2009). The studies conducted in different regions revealed about the positive impact of EO on performance, independent of the EO construct used and independent of the measurement scale items. Table 2 provides main empirical studies on EO construct and their results.

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Table 2. Main Empirical Studies on EO Dimensions Author and Year

Study Place

Firm Size

Economic Activity

Statistical Analysis

EO Dimensions

Sample Size

Results

(Khandwalla 1977)

Canada

-

Public organization

-

Risk taking Flexibility Centralization

103

Entrepreneurial organizations take more risks than other organizations

(Miller & Friesen, 1982)

Canada

-

Heterogeneous

Correlation analysis, regression analysis Testim

Innovativeness Risk-taking

52

Entrepreneurial firms will exhibit higher levels of product innovation than conservative firms

(D. Miller 1983)

Canada

-

Heterogeneous

Hipoteze, Analiza të Variancës

Innovativeness Proactiveness Risk-taking

52

Determinants of entrepreneurship are influenced by the type of organization.

(Miller & Friesen, 1983)

Canada/ USA

-

Heterogeneous

Correlation analysis, regress analysis

Innovativeness Analysis

86

Determinants of entrepreneurship are influenced by the type of organization.

(Covin & Slevin, 1988)

USA

large

Production & Services

Moderated regression analysis

Innovativeness Proactiveness Risk-taking

80

Entrepreneurial orientation and structure of the organization interact to determine firm performance

(Covin & Slevin 1989)  

USA

small

Production

Moderated regression analysis

Innovativeness Proactiveness Risk-taking

161

Performance depends on the adaptability between EO, structure and environment.

(Lumpkin & Dess 1996)

USA

medium large

Heterogeneous

-

Innovativeness Proactiveness Risk-taking Autonomy Competitive Agressiveness

131

EO dimensions may vary independently of each other

International Conference on Entrepreneurship IEC 2014 - 21 -

Author and Year

Study Place

Firm Size

Economic Activity

Statistical Analysis

EO Dimensions

Sample Size

Results

(J. Wiklund, 1999)

Sweden, Australia, Finland,

medium large

Heterogeneous

Regression analysis

Innovativeness Proactiveness Risk-taking

132

Positive relationship between the EO and performance varies with time

(Kreiser, Marino & Weaver 2002)

Mexico, Netherlands Norway, Sweden

SME

Heterogeneous

Factorial analysis Correlation analysis

Innovativeness Proactiveness Risk-taking

1437

Generalized the validity of the EO measurement scale developed by Covin and Slevin (1989).

Rauch, Johan, Lumpkin, & Frese (2009, p. 766) argued that the effect of EO on performance is likely dependent on moderator variables, such as type of industry, business size, and cross national contexts. 6. THE EFFECT OF MODERATOR VARIABLES OF THE INTERNAL/EXTERNAL ENVIRONMENT Naman & Slevin (1993) viewed that research indicates that performance can be improved when key variables are correctly aligned. Miller & Toulouse (1986) argued that if the relationship between EO and performance varies across samples that differ on a given attribute, such findings suggest that the attribute may be a moderator.

Rauch, Johan, Lumpkin, & Frese (2009) investigated potential moderators of the relationship between EO and performance. From the meta-analysis study conducted, they identified and coded some contextual moderators which were also theoretically justifiable, such as: 1. Business Size: The smaller the organization the greater the direct influence to be exerted by top management. Smaller organizations are more flexible, allowing quickly changing and taking advantage of new opportunities appearing in the environment. 2. Industry: Businesses operating in dynamic industries where technology and/ or customer preferences change rapidly are more likely to benefit from entrepreneurial initiatives. 3. National Culture: The differences in these effect sizes were not significant, suggesting that relationships with performance seem to be relatively similar in magnitude across countries However researchers like Knight (1997) as well as Thomas & Mueller (2000) have emphasized that EO or its certain dimensions may differ across countries. - 22 - International Conference on Entrepreneurship IEC 2014

7. CONCLUSIONS EO has its roots in the strategy making process literature since 1970` and it is viewed as the strategy making processes that provide organizations with a basis for entrepreneurial decisions and actions. Beginning from 1980’ entrepreneurial orientation as a concept has received the main attention from the researchers of entrepreneurship in theoretical or empirical studies. As the number of researches studying the relationship between EO and business organizations’ performance has increased every year, leading to a wide acceptance and relevance of the concept. The studies conducted in different regions revealed about the positive impact of EO on performance, independent of the EO construct used and independent of the measurement scale items. The differences relying on the impact degree on performance show that the EO-performance relationship is dependent on moderator variables, such as type of industry, business size, and cross national contexts. EO dimensions may relate differently to firm performance and EO can be conceptualized as a unique or multi dimensional construct. REFERENCES Burgelman, R. A. (1983). A Process Model of Internal Corporate Venturing in the Diversified Major Firm. Administrative Science Quarterly , 28, 223-244. Burns, T., & Stalker, G. M. (1961). The Management of Innovation. London: Tavistock. Cantillon, R. (1755). Essai Sur la Nature du Commerce en General. London. Covin, J. G., & Slevin, D. P. (1991). A Conceptual Model of Entrepreneurship as Firm Behaviour. Entrepreneruship Theory & Practice , 16 (1), 7-25. Covin, J. G., & Slevin, D. P. (1989). Strategic Management of Small Firms in Hostile and Bening Environments. Strategic Management Journal , 75-87. Covin, J. G., & Slevin, D. P. (1986). The Development and Testing of an Organizational-level Entrepreneurship Scale. in R. Ronstadt, J. A. Hornaday, R. Peterson, & K. H. Vesper (Red.), Frontiers of Entrepreneurship Research (fv. 628-639). Babson College, Wellesley, MA. Covin, J. G., & Slevin, D. P. (1988). The Influence of Organization Structure on the Utility of an Entrepreneurial Top Management Style. Journal of Management Studies , 25 (3), 217259. Covin, J. G., Green, K. M., & Slevin, D. P. (2006). Strategic Process Effects on the Entrepreneurial Orientation - Sales Growth Rate Relationships. Entrepreneurship Theory and Practice , 30 (1), 57-81.

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Covin, J. G., Slevin, D. P., & Schultz, R. L. (1994). Implementing Strategic Missions: Effective Strategic, structural, and Tactical Choices. Journal of Management Studies , 31 (4), 481503. Delmar, F. (1997). Measuring Growth: Methodological Considerations and Empirical Results. in R. Donckels, & A. Miettinen, Entrepreneurship and SME Research: On its Way to the next Millenium (fv. 190-216). Aldershot, UK dhe Brookfield, VA, USA: Ashgate. Delmar, F., Davidsson, P., & Gartner, W. (2003). Arriving at the High-Growth Firm. Journal of Business Venturing , 18 (2), 189-216. Dess, G. G., Lumpkin, G. T., & Covin, J. G. (1997). Entrepreneurial Strategy Making and Firm Performance: Tests of Contingency and Configurational Models. Strategic Management Journal , 18 (9), 677-695. Dimitratos, P., Lioukas, S., & Carter, S. (2004). The Relationship between Entrepreneurship and International Performance: The Importance of Domestic Environment. International Business Review , 13, 19-41. Drucker, P. F. (1985). Innovation and Entrepreneurship. New York: Harper & Row. Fagerberg, J. (2005). Innovation: A Guide to the Literature. Në J. Fagerberg, D. C. Mowery, & R. R. Nelson, The Oxford Handbook of Innovation. Oxford: Oxford University Press. Frese, M., Brantjes, A., & Hoorn, R. (2002). Psychological Success Factors of Small Scale Business in Nimibia: The Roles of Strategy Process, Entrepreneurial Orientation and the Environment. Journal of Developmental Entrepreneurship , 7 (3), 259-282. Galbraith, J., & Kazanjian, R. (1986). Strategy Implementation: Structure, Systems, and Process (bot. i 2nd). ST. Paul: MN: West. George, B. A. (2006). Entrepreneurial Orientation: A Theoretical and Empirical Examination of the Consequences of Differing Construct Representations. Entrepreneurship Research Conference. Bloomington, Indiana: Babson College . Grande, J., Madsen, E. L., & Borch, O. J. (2011). The Relationship Between Resources, Entrepreneurial Orientation and Performance in Farm-Based Ventures. Entrepreneurship & Regional Development , 23 (3), 89-111. Holt, D. T., Rutherford, M. W., & Clohessy, G. R. (2007). Corporate Entrepreneurship: An Em- 24 - International Conference on Entrepreneurship IEC 2014

pirical Look at Individual Characteristics, Context and Process. Journal of Leadership and Organizational Studies , 13 (4), 40-54. Ireland, R. D., Covin, J. G., & Kuratko, D. F. (2009). Conceptualizing Corporate Entrepreneurship Strategy. Entrepreneurship Theory and Practice , 33 (1), 19-46. Khandwalla, P. N. (1977). Some Top Management Styles, their Context and Performance. Organization & Administratice Sciences , 7 (4), 21-51. Knight, G. A. (1997). Cross-Cultural Reliability and Validity of a Scale to Measure Firm Entrepreneurial Orientation. Journal of Business Venturing , 12, 213-225. Kraus, S., Harms, R., & Schwarz, E. (2005). Entrepreneurial Orientation: A Psychological Model of Success among Southern African Small Business Owners. European Journal of Work and Organizational Psychology , 14 (3), 315-344. Kreiser, P. M., & Davis, J. (2010). Entrepreneurial Orientation and Firm Performance: The Unique Impact of Innovativeness, Proactiveness, and Risk-Taking. Journal of Small Business and Entrepreneurship , 23 (1), 56-71. Kreiser, P. M., Marino, L. D., & Weaver, K. M. (2002). Assessing the Psychometric Properties of the Entrepreneurial Orientation Scale: A Multi-Country Analysis. Entrepreneurship, Theory and Practice , 71-92. Kreiser, P. M., Marino, L. D., & Weaver, K. M. (2002). Assessing the Relationaship between Entrepreneurial Orientation, the External Environment and the Firm Performance Scale: A Multi-Country Analysis . Frontiers of Entrepreneurship Research . Lachman, R. (1980). Toward Measurement of Entrepreneurial Tendencies. Management International Review , 20 (2), 108-116. Langfred, C. W. (2000). The Paradox of Self-Management: Individual and Group Autonomy in Work Groups. Journal of Organizational Behavior , 21, 563-585. Lee, C., Lee, K., & Pennings, J. M. (2001). Internal Capabilities, external Networks, and Performance: A Study of Technology Bases Ventures. Strategic Management Journal , 22, 615640. Lewrick, M., Omar, M., Raeside, R., & Saier, K. (2010). Education for Entrepreneurship and Innovation: Management Capabilities for Sustainable Growth Success. World Journal of International Conference on Entrepreneurship IEC 2014 - 25 -

Entrepreneurship, Management and Sustainable Development , 6, 1-18. Littunen, H. (2000). Entrepreneurship and the Characteristics of the Entrepreneurial Personality. International Journal of Entrepreneurial Behavior and Research , 6, 295-309. Lumpkin, G. T., & Dess, G. G. (1996). Clarifying Entrepreneurial Orientation Construct and Linking it to Performance. Academy of Management Review , 21 (1), 135-172. Lumpkin, G. T., & Dess, G. G. (2001). Linking Two Dimensions of Entrepreneurial Orientation to Firm Performance: The Moderating Role of Environment and Industry Life Cycle. Journal of Business Venturing , 16 (5), 429-451. Lumpkin, G. T., Cogliser, C. C., & Schneider, D. R. (2009). Understanding and Measuring Autonomy: An Entrepreneurial Orientation Perspective. Entrepreneurship, Theory, and Practice , 47-67. Marshall, A. (1930). Principles of Economics. London: Macmillan (first edition 1890). McClelland, D. C. (1961). The Achieving Society. Princeton, NJ: Van Nostrand. Mill, J. S. (1984). Principlesof Political Economy with Some Applications to Social Philosophy. London: John W. Parker, 32. Miller, D. (1983). The Correlates of Entrepreneurship in Three Types of Firms. Management Science , 29 (7), 770-791. Miller, D., & Friesen, P. (1978). Archetypes of Strategy Formulation. Menegement Science , 24, 921-933. Miller, D., & Friesen, P. H. (1982). Innovation in Conservative and Entrepreneurial Firms: Two Models of Strategic Momentum. Strategic Management Journal , 3, 1-25. Miller, D., & Toulouse, J. M. (1986). Chief Executive Personality and Corporate Strategy and Structure in Small Firms. Management Science , 32 (11), 1409-1389. Mintzberg, H. (1973). Strategy-Making in Three Modes. California Management Review , 16 (2), 44-53. Naman, J. L., & Slevin, D. P. (1993). Entrepreneurship and the Concept of Fit: A Model and Empirical Tests. Strategic Management Journal , 14, 137-153.

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OECD. (2005). Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data (Third ed.). Paris: OECD. Poon, M. L., Ainuddin, R. A., & Junit, S. H. (2006). Effects of Self-Concept Traits and Entrepreneurial Orientation on Firm Performance. International Small Busienss Journal , 24, 61-82. Rauch, A., Johan, W., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial Orientation and Business Performance: An Assessment of Past Research and Sugestions for the Future. Entrepreneurship Theory and Practice , 33 (3), 761-787. Say, J.-B. (1803). A Treatise on Political Economy. Edison, NJ. Schumpeter, J. (1911/34). The Theory of Economic Development. Cambridge, Ma.: Harvard University Press. Smith, P. C. (1976). Behavior, Results, and Organizational Effectiveness: The Problem of Criteria. in M. D. Dunette, Handbook of Industrial and Organizational Psycology (fv. 745-775). Stam, W., & Elfring, T. (2008). Entrepreneurial Orientation and New Venture Performance: The Mediating Role of Intra and Extra Industry Social Capital. Academy of Management Journal , 51 (1), 97-111. Stetz, P. E., Howell, R., Stewart, A., Blair, J. D., & Fottler, M. D. (2000). Multidimensionality of Entrepreneurial Firm-Level Processes: Do the Dimensions Covary? Frontiers of Entrepreneurship Research . Stevenson, H., & Jaillo, J. (1990). A Paradigm of Entrepreneurship: Entrepreneurial Management. Strategic Management Journal , 11, 17-27. Thomas, A. S., & Mueller, S. L. (2000). A Case for Comparative Entrepreneurship: Assessing the Relevance of Culture. Journal of International Business Studies , 31 (2), 287-302. Venkatraman, N. (1989). Strategic Orientation of Business Enterprises: The Construct, Dimensionality, and Measurement. Management Science , 35 (8), 942-962. Vij, S., & Bedi, H. S. (2012). Relationship Between Entrepreneurial Orientation and Business Performance: A Review of Literature. IUP Journal of Business Strategy , 9 (3), 17-31. Wiklund, J. (1999). The Sustainability of The Entrepreneurial Orientation-Performance Relationship. Entrepreneurship Theory & Practice , 24 (1), 37-48. International Conference on Entrepreneurship IEC 2014 - 27 -

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ENTREPRENEURSHIP IN E-COMMENCE SUPPLY CHAIN MANAGEMENT Mindaugas Samuolaitis Kauno kolegija/ University of Applied Sciences Faculty of Management and Economy Pramones pr. 20, Kaunas LT-50468 Lithuania [email protected]

ABSTRACT In the article there are analysed the factors that lead to the formation of entrepreneurship of Lithuanian e-commerce enterprises. Too little attention is appointed to Entrepreneurship development, although this process is very important in nowadays, when changes take place in the economy and companies must respond quickly if they are willing to survive. The process of globalization and increasing competition in the company become a major factor in the development of perspective and the appropriate supply chain management.

Today business environment changes rapidly and companies that do not use entrepreneurial activity, reduce their chances of successful competition in the market. In order to develop entrepreneurial company it requires managers to do certain decisions and actions. Entrepreneurship is related with innovations, ability to make, to bring and to sustain innovation from external factors. Entrepreneurship involves changes, taking the responsibility for own actions, setting goals, the implementation and success motivation. Seeking to survive in nowadays world the company has to become entrepreneurial.

As the result, in the article, it is discussed the concept of entrepreneurship and business value in Lithuania. It also analyzes Entrepreneurial supply chain and the applicability of e - commerce companies. It provides main information about research results of entrepreneurship steps in Lithuanian e-commerce companies of the supply chain management processes. Entrepreneurial supply chain management gives the company flexibility and greater opportunity in the market. Keywords: Entrepreneurship, supply chain management, innovation.

INTRODUCTION In now a day, the importance of e-commerce has been increased. Today’s businesses need information technology, because if a company wants to survive and establish them in the market they have to implement new technologies and to be entrepreneurial International Conference on Entrepreneurship IEC 2014 - 29 -

or will fail. New technology allows connection and possibilities through internet to exchange information and collaborate while working in different geographical locations.

Internet connection not only allows you to change the information, but to use other services. This work is related to inter-organizational co-operation and accounting system in a virtual space, and occurs due to electronic business. This article analyzes the e-commerce and the development of a service or product purchase of virtual space and entrepreneurial solutions in order to remain competitive in the business. E-commerce benefits consumers because it offers a wider range of products, creating price competition and of course - new markets. It also poses new challenges for consumers, business and consumer protection.

Businesses need to become involved in e-business, because it helps with innovation methods to get more profit. Most importantly, e-business can increase sales and reduce price for selling products and services. These criteria are easily measurable, but there must be immeasurable and criteria, such as user satisfaction or quality ( Schneider , 2007). E-business is becoming an integral part for traditional business. For the development of e- businesses companies can reach potential customers worldwide. It creates a competitive advantage over other companies ( Luqman , Abdullah , 2011). The objective of this paper is to find best solutions how to improve e-business situation in Lithuania. To discuss what is e-business in theoretical aspects, what problems in this area are the most important and how to do changes and entrepreneur decisions in Lithuanian e-business market.

I. E-Business And Main Problematic In Theoretical Aspect E- business - is a business which, in order to benefit themselves and customers using information management and business infrastructure , develop, distribute or facilitate the use of products and services , primarily through the electronic communication and other tools (Schneider G., 2007) E- business describes the goods , services and information of purchases and sales , customer service, communication with partners , the transactions electronically and other business support networks, telecommunications (Luqman A. , Abdullah N. K., 2011)

The first definition of e-business is more oriented to the user, which in a virtual space through electronic communication and other tools is using products and services, while the second definition is presented in a broader sense , the emphasis is not only the user but also the same company that operates in cyberspace . Both the first and the second - 30 - International Conference on Entrepreneurship IEC 2014

definition are correct. For long time, consumer products have been distributed to retail stores in bulk, for that was used pallet loads and cases. Now, when e-commerce becoming more and more popular and there appliers many online orders, traditional supply chain is changing. Traditional logistic chain for traditional orders fulfillment encompassing receiving, put away/storage, picking, transport through the DC, sortation, packing and shipping is a poor option for handling the needs of e-commerce (William B. Lee, 2012). To compete in this virtual area, pick, pack and ship of single items and to bring small value orders to consumers is the main question in this business. Orders require delivery to customers, not weekly, but with increasing frequency and at least within 24 to 48 hours. From the moment the online order is placed to when it is picked, packed and shipped, every step in the process must be handled efficiently, consistently and cost-effectively. In e-commerce, it is the distribution center that provides much of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfillment center. One of the main thinks which must be decided in e-business area is to answer 3 questions: What? How? Where? If some business would like to growth in these days it is necessary to answer it, to get decisions and actions. Only then it will be possibility to do something entrepreneur and become one step ahead from others. Figure 1. E-business new growth platform

Source: William B. Lee, 2012, International Conference on Entrepreneurship IEC 2014 - 31 -

Customer satisfaction must become to be a critical priority. E-commerce consumer expects a wide selection of SKU offerings, a mobile site ordering capability, order accuracy and one of most important -fast and free delivery and free returns.

Understanding how online consumers shop and purchase across channels is critical to the success of online fulfillment. More and more consumers are browsing the Internet for features and selection, testing products, acquiring discounts through social media, and then purchasing the product online through the convenience of their mobile devices. Some retailers, however, including those that also sell through catalogs, have been in the direct-to-consumer marketplace for some time. These companies have fulfillment facilities established and information technologies in place to manage orders with speed and efficiency, doing it well and profitably. But to many distribution executives, online fulfillment poses a significant challenge to their existing knowledge, experience and resources Table 1 : 10 trends which will affect e-business in the future

1.

Collective Intelligence

When a user comes to the site, his personality has been identified in several steps.

2.

Integration in Social networking

The “share” will share the contents of the social network.

3.

Mobile Website

Required to operate a mobile phone service.

4.

The proposals, based on the location

Exploited GPS capabilities will open new opportunities for the promotion of consumer era.

5.

Experiential user interface

In just ease of use of innovative corporate e. Business websites can be experiential and inclusive.

6.

Contextual visualization

Users will be able to see how the product will benefit them in life and style.

7.

The dynamic development of the grid and liquid layouts

Use liquid layouts automatically user’s screen size.

8.

Minimize navigation systems

Users of the site goes down to see the product, rather than sophisticated navigation systems.

9.

Speed

Instead, the page should reload every time a user clicks on something, technology will enable interaction in an instant.

10.

Text

The new font technologies, web designers palette is broad as never before.

Source: Balaraman, Kosalram, 2012, - 32 - International Conference on Entrepreneurship IEC 2014

Various authors often talk about e-business quality. In summary, the most frequently mentioned criteria relating to e-business are the quality of customer orientation; information, data quality; creativity. As well it’s very important hot it will be done to improve speed of production delivery in e-business area.

II. E-business in Lithuania E-business is speeding up in Lithuania. According to the data of Lithuanian department of statistics, in 2008 only around 5,8 percent of Lithuanian enterprises used the e-commerce to buy products or services. In 6 years this number has increase till 25,5. Numbers of Lithuanian who are using internet connection in 6 years has changed from 50.9 to 65,9 percentage. E-business becomes more and more popular in Lithuania. Recent data shows that e-business getting the speed and becoming commonly used function among the enterprises. This can be explained by different reasons: the applications of e-business overcame the conservative attitudes because it is showing the real benefits, increased efficiency and profits; as well big place in it appears from social network. Effectiveness of performance is understood as the complex indicator meaning competitiveness, efficiency, time and labor force savings, etc. Figure 2. E-business development in Lithuania in 2008-2013, in percent out of total number of enterprises

Source: Lithuanian Department of Statistic, 2012,

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The main problem in Lithuania E-commerce area still appears problems that most of e-shops can be used only for local market. About 70 percent e-business pages don’t have translations to another language and it became problem to sel something in international market. Talking about e-business situation in Lithuania must be done steps to improve this area. The best solution is not to stay in local but to go to global market. III. What must be done?

For this paper was done small research. Questionnaire was sent to 50 Lithuanian companies which have own pages and it is possible to buy productions from them. 28 companies gave answers and numbers will be given in percentage forms. Figure 3. E-business development in Lithuania problems (Companies vision)

Lithuanian companies mention 2 main problems in e-business. It is problems with electronically protection, because exactly companies are responsible for information and payment security.

Second most problematic area is logistic. How to improve it and to create delivery in 24 or 48 hours? Most of productions delivery now is from 3 days till 60 days. This problem easy solved by companies which has warehouses and own transport park. Next questionnaire was send by social network to get answers from people who are buying products through internet. The main goal was to get answer where they buy - 34 - International Conference on Entrepreneurship IEC 2014

products or services and why. How it would be possible to use for other companies? Figure 4. The most popular place to buy production (customers vision)

In figure 4 we can see that most popular way of buying productions in Lithuania is buying through group-shopping sites. The most reasons why it happening was mention: • Many different productions and services in one place; • More reliable; • easy to find goods at a discount; • Quicker delivery; • More popular and etc. Recommendations what could do companies to improve selling through internet customer’s advice: to improve quality of pages, to show prices, to give better delivery time, to do pages in other languages, to use social network.

In summary it can be stated that with problems in e-business area facing both leaders in the field, and just starting e-business companies. If they want to stay in market they must do quick entrepreneur decisions and take action. One of the best ways to do it is to improve logistic system and began to use other pages and social network services.

IV. CONCLUSIONS AND RECOMMENDATIONS Analysis shows that e-business development in Lithuania has high potential and it is future for all business in Lithuania. The question is what can be done to facilitate the development? The recommendations can be grouped into the three categories: development of information infrastructure of e-business (quality of web pages, security of information and payment), increase investment in company logistic, cooperate with others web pages. Regarding development of the information infrastructure it is recommended International Conference on Entrepreneurship IEC 2014 - 35 -

to improve web pages with better quality, to create other languages versions, to make sure information and payment security. Talking about logistic system it is necessary to give bigger investment to make sure that production will reach customer in minimum time. Cooperating with group-shopping sites will increase popularity of production and profit for company The best way to be at least one step ahead in e-business market is not to be afraid and to try different entrepreneur decisions. REFERENCES Schneider G. Electronic Commerce: Seventh Annual Edition. Thomson Course Technology, 2007. Luqman A. , Abdullah N. K. E-business Adoption amongst SMEs: A Structural Equation Modeling Approach. Journal of Internet Banking and Commerce,2011, Vol. 16, No.2. Balaraman P., Kosalram K. E-Commerce Evaluation and E Business Trends. Information Engineering and Electronic Business, 2012, Vol. 5. William B. Lee Creating Entrepreneurial Supply Chain. ISBN-13:978-1-60427-062-4. J.Ross Publishing, 2012. Waghmare G. T. E-commerce: A Business Review And Future Prospects In Indian Business. Indian streams research journal, 2012, Vol. 2, No. 4. Lithuanian Department of Statistic, http://www.stat.gov.lt/lt/ , 2012,

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AS A NEW INTERNATIONAL ENTREPRENEURSHIP PATHWAY: BORN-GLOBAL CONTENT Burçin Kaplan Department of Civil Aviation Management, Faculty of Economics and Administrative Sciences Istanbul Aydın University Istanbul, Turkey [email protected] Gonca Yılmaz Elbaşı Department of Business Management in English, Faculty of Economics and Administrative Sciences Istanbul Aydın University Istanbul, Turkey [email protected] ABSTRACT Major changes in the macro-environment and the advances in technology have led to exploit new internalization pathways in recent decades. Globalization and the internet revolution have resulted with more hungry consumers for the knowledgeintensive products/services. As an outcome of these major changes, a new content of internationalization have arisen; born-global which refers to the companies that within 3 years of their establishment enter international markets and %25 of total revenue of the company is originated from international marketing activities (Cavusgil et al., 2011). The purpose of this study is to research the characteristics of born-global companies and analyze the circumstances of the emergence of this novel phenomenon. Keywords: Born-global, Internationalization, International Entrepreneurship, The Characteristics of Born-Global Companies.

1. INTRODUCTION In a few decades, globalization has been a new ascending trend of business that generates numerous novel phenomenons. As causes as well as consequences of the globalization, changes in technology are affecting the buying habits of the consumers. With the help of cheaper and wider communication channels including internet revolution, globalization leads bringing every product to the consumer’s sight. Movies and television series standing on a common life style, has led homogeneous consumer preferences. The exploitation of new global conditions and the reduction of trade barriers have made entrepreneurs see the world as an open market and attracted entrepreneurs to the inInternational Conference on Entrepreneurship IEC 2014 - 37 -

ternational untouched markets and businesses. The entrepreneurs’ desire of marketing unique products/services to the new markets cause exclusive internationalization pathways of companies which differ from traditional internationalizing companies as being not emergent or incremental, but rather initially intended (Dlugoborskyte & Petraite, 2013).

As a new pathway of internationalization, major changes in the world macro-environment have forced new researches to study and brought a new phenomenon known as “born-global” (Falay et al. 2007) or ‘‘International New Ventures’’. (Gleason & Wiggenhorn, 2007) Born-global companies successfully make market offerings on a global basis from the very inception of the company, despite the fact that resources and competences may be quite limited at that early stage. Recent technological innovations, globalization of consumer tastes and lower communication and transportation costs favour global marketing in an unprecedented way include the emergence and integration of ever larger trading blocs. Today, sustainable progress in macro-environment allows young small-medium size companies be oriented towards a high degree of internationalization in their offerings and markets more or less immediately after their establishment. So, the content of “born-global” refers to the companies that within 3 years of their establishment enter international markets and %25 of total revenue of the company is originated from international marketing activities (Cavusgil et al., 2011). Born-global companies are also known as the companies which cannot enter the domestic market with a competitive advantage and seek growth opportunity abroad with the advantage of open economies and the size of world market. According to the some researchers, the distinguishing feature of born-global companies is that their origins are international, as demonstrated by management’s global focus and the commitment of specific resources to international activities. (Knight & Cavusgil, 2004)

The major factor driving a born-global entrepreneurial company is linked to market opportunities, explored globally for unique research and development intensive solutions. Economic fluctuations in domestic market, sophisticated multinational customers against narrow size of domestic customers and the formation of niche markets have been suggested to be the core market based factors, influencing the formation of a born-global company. The changing demand of customers also changes the nature of competitive environment of the company and motivates the need to scale returns from international markets in order to remain competitive also in conventional markets. As an advantage of born globally, the internal structure of the company which encompass the product, management, knowledge, resource acquisition and management, and networking capabilities of the company, is designed to fit the international businesses. Unique and value added products with significant first mover advantages or network effects allows born-global companies to enter the international niche markets and gain competitive - 38 - International Conference on Entrepreneurship IEC 2014

advantage compared to its transportation and other logistics costs, and low global trade barriers (Dlugoborskyte & Petraite, 2013).

As an additional characteristic of a born global company, born-globals are newly emerged companies with shortage of tangible and intangible resources, including the crucial resource of experience (Falay et al. 2007). Furthermore, in their early phases, born-global companies have to face risks and uncertainties associated with the foreignness of their target markets with lacking of experience and resources needed for internationalization (Efrat & Shoham, 2012) On the other hand, some researchers suggest that earlier the company internationalizes, the better its performance in foreign markets. Because when the company gets older, the managerial institutions have been rooted. The new information and the new culture of the foreign country have become hard to adopt and might include some conflicts with the company’s heritage (Knight & Cavusgil, 2004). 2. BORN-GLOBAL COMPANIES 2.1 Literature Review Studies and discussions about factors that affect a company’s decision to export, have been ongoing for decades, theoretical and practical knowledge of exporting remains limited and offers few insights for managers who are responsible for internationalization decisions. (Yi & Wang, 2012) In global literature, a lot of different perspectives have been used to explain the behavior of companies in internationalization. The Uppsala Model which is quoted by Johanson & Vahlne in 1997 and Innovation Model which is quoted by Bilkey & Tesar in 1977 are two famous traditional schools of research that elaborate on internationalization as an incremental process. The Uppsala Model basically emphasized that a company starts international activities from geographically close markets, which have similarities in language, culture, policies and political systems. Additionally, the Uppsala Model of internationalization explains not only why and how companies internationalize in a gradual and linear fashion but also why companies export and the role of exporting in the internationalization process. (Yi & Wang, 2012) The Innovation Model which is similar to Uppsala Model emphasizes on gradual stages and the slowness of learning on acquisition of relevant knowledge, experience and resources. In both Uppsala and Innovation Models companies need to go through the incremental stages to gain market knowledge and commitment to go for internationalization. (Falahat et al., 2013) On the other hand, these two well-known models are insufficient to describe the growing number of companies that are providing goods and services globally from birth. (Kuivalainen et al., 2012)

The concept of global-born companies has emerged in 1993 with the study conducted in Australia by McKinsey & Company. The study stated that there were two types of International Conference on Entrepreneurship IEC 2014 - 39 -

emerging exporters which are born-global and domestic-based. In the research, around 700 exporters which operate in a variety of industries in Australia were used to differentiate two types of internationalization. %25 of those exporters was referred to be global born that average two years after their establishment, they had started to export and approximately %76 of their total sales was coming from exportation. %75 of the exporters –the rest- consisted of domestic-based companies which started to export for the first time after on average twenty-seven years and exporting approximately 20% of total sales. The importance of the research conducted by McKinsey & Company is the first concept study about emerging born-global internalization which differentiates from traditional one and for the first time to be stated on the definition with characteristics. (Kalyoncuoglu & Uner, 2010)

The researches about born-global companies have up trended since 1990s. (Petersen & Tobiassen, 2012) A new challenged appeared in the global literature on stream of research challenging conventional wisdom in international entrepreneurship and born-global companies by being primarily, but not only, focused on studying the early and accelerated internationalization process of some new or young and highly entrepreneurial small ventures (Rialp-Criado et al., 2010) which have conducted a global strategy from their inception that is not consistent with the traditional expectations. In 1996, Knight and Cavusgil have defined the content born-global companies as “the new phenomenon presents an important new challenge to traditional internationalization theory.” (Knight & Cavusgil, 1996) The findings of these researches have also contradicted the conventional view presented in knowledge-based internationalization process theory, which suggests that companies experience an incremental development in the internationalization modes used during their internationalization processes. Over the years, although the concept of born-global companies did not have been changed too much, they have been named as born-globals, global start-ups, high technology startups, infant multinationals, instant internationals and international new ventures by many different researchers interested about this subject. (Melen & Nordman, 2009) According the study conducted by Cavusgil and Knight in 2004, born-global companies acquire a different character by reliance on advanced technology and found market advantage through product or process innovations. Born-global companies give little or no attention to their home market and operate in knowledge-intensive environments. Eventually, all resources are devoted to the international marketplace since building a sizable home market advantage is not a part of the company’s strategy. The company’s first aim and the biggest motivation is a globally committed management and their desire to serve small, dispersed niche markets; the development of more and more dispersed niche markets is expected to grow. The company’s pace of expansion and expansion patterns are both fast and multidirectional and commonly penetration of multiple - 40 - International Conference on Entrepreneurship IEC 2014

markets simultaneously occurs. (Persinger et al., 2007)

In global literature, there are a lot of studies conducted to understand the internationalization characteristics and decision making process of born-globals in near past. Aspelund & Moen have studied on the main characteristics of born-globals and differences in governance structures between different types of international companies (Aspelund & Moen, 2012) Furthermore, in 2012 Gonzalez Menorca et al. have stated the resources and capabilities of born-global companies with the evidence from the Spanish wine producing sector. The results have showed that the human-based capabilities and resources (personal development and sustainable learning process of individuals) of a born-global company have a significant importance, in comparison of traditional and born-global companies (Gonzalez Menorca et al., 2012). In 2014, Cannone & Ughetto have studied in which level of decision making process; born-global internationalization is accepted by examining the determinants of early internationalization in a cross-country context. The result has suggested that limited quantity of sale in small domestic markets and entrepreneur’s knowledge about foreign markets result in early internationalization. (Cannone & Ughetto, 2014) To mention just one more, in 2013, Sekliuckiene & Maciulskaite have reported that the external an internal conditions of the company, decision making of internalization, market research, selection of targeted market and company’s previous outcomes are major strategic decision steps of a born-global company (Sekliuckiene & Maciulskaite, 2013). In earlier studies, Hewerdine & Welch also have investigated the inception process of born-global companies and the international activities in this process. In the conclusion, their study initially suggests that once organizational emergence is factored in, a new perspective on company internalization can be gained. Additionally, Hewerdine & Welch also mentions that the pre-incorporation or gestational phase of born-global companies has to be involved into the study of emergence of born-globals. (Hewerdine & Welch, 2013) To understand a born-global company’s success in internationalization, its’ life cycle has to be analyzed. A born-global company has different phases which provide propositions backed up by empirical evidence regarding the reasons for the life cycle. Progression of a born-global company includes three phases. In phase 1, the introduction and initiation occurs. Despite the limited resources and an underdeveloped organizational structure, born-globals’ principal resources consist of the founder’s unique entrepreneurial skills in order to develop unique products with global market potential. In this phase, the initial important decisions like the financial institution and marketing channel are made that determines the growth of the company. Phase 2 starts with growth and resource accumulation. A born-global company has to face the decisions of relevant marketing channels and network relationships (Gabrielsson et al., 2008). The obstacles associated to enter a new market can be handled relying routinely on network relaInternational Conference on Entrepreneurship IEC 2014 - 41 -

tionships. (Musteen et al., 2010) Some researchers also mentioned that the born-global needs to position itself in relevant channels in order to compensate for its resource shortfalls. The success in this phase hides behind a large extent on the product/services themselves and the ability of the born-global to place it on the market. Finally, in phase 3, the break-out happens which has significant importance because as the steps of the growth weak the born-global will plunge into a conventional slow-growing international entrepreneurial small-medium size enterprises. On the breaking point of phase 3, the company can elect to live through break-out onto a new path and/or new market. They also can adopt break-out strategy leverage on the organizational learning effort they have deployed and the experience accumulated from demanding global customers. This helps them to organize a global market positioning of their own, which can be totally or partially independent of the original key customers (Gabrielsson et al., 2008). Born-global phenomenon is getting more and more important in internationalization, because some researchers support that born-global phenomenon first emerged in countries with small domestic markets, but is now appearing in markedly large numbers throughout the world and reports on the widespread emergence of born-globals in numerous nations (Knight & Cavusgil, 2004). As Knight and Cavusgil have mentioned in their study, born-globals are emerging substantial numbers worldwide, and likely reflect an emergent paradigm, with the potential to become a leading species in the ecosystem of international trade. Oviatt and McDougall also implied that in a near future, more and more non-manufacturing companies will fit the definition of born-global. Persinger et al. suggested that even in the emerging countries, the opportunities for born-global companies will grow in the next 10 or 15 years because the born-global phenomenon is encouraging and it implies the emergence of an international exchange system in which any company can be an active international business participant regardless of age, experience, and tangible resources. According to Persinger et. al, the most important emerging countries including Turkey, are expected to be poised to capture most of that growth because they have done the difficult and, at times controversial, economic structural changes and reforms in order to take advantage of the global marketplace (Persinger et al., 2007).

2.2 Key Factors in Emergence of Born-Global Companies The increasing number of born-globals may be identified by changing conditions of global market which many industries have been exposed to during the recent decades. Hence domestic market demand is too small even in large countries; companies have started to produce very specific materials and components which they can sell in the international marketplace. (Madsen & Servais, 1997) With the rise of the niche markets, the global and domestic changes in the economy, technology and socio-economy in human lives have brought a new phenomenon named born-global. (Falay et al. 2007) - 42 - International Conference on Entrepreneurship IEC 2014

Drivers for the rapid internationalization of ‘born-global’ companies are numerous. Researchers indicated different factors facilitating the born-global expansion. The increasing role of niche markets and greater demand for specialized or customized products are the leading factors of born-globally internalization. In today’s markets, a lot of product lines have shorter life cycles and this factor is causing born-global companies to adopt an international perspective regardless of their age and size. (Persinger et al., 2007) Knight and Cavusgil also reported that in macroeconomic environment, two key trends which have substantially reduced the transactions costs of foreign market expansion drive early adoption of internationalization. First trend is the globalization of markets that serves companies countless sourcing, production, marketing and numerous cross-border alliances for product development and distribution. Second trend is associated with the technology advances which have made widespread diffusion of e-mail, the Internet, and related communication technologies. (Knight & Cavusgil, 2004)

The key external and internal drivers of born-global companies can be explained as the topics below: • Advances in information and communications technologies have enabled SMEs inexpensive way to access information via telephone, fax, voice mail, e-mail, internet and computer technology. • The concept of globalization allows businesses to reach knowledge of the whole sectors and opportunities in all over the world. Additionally, companies have become able to access high technologies and tools in the overseas countries. • With the advantage of being small-scale businesses SMEs can take faster decisions, respond customer requests and needs more easily and adapt the standards of the international market appeal to. • Advances in production technologies in many industries have enabled SMEs to produce low-scale batches in a more economical way. The ability to produce in small amounts for each party has narrowed the market segments and almost started manufacturing personalized items. (Kalyoncuoglu & Uner, 2010) • Transportation channels have become cheaper with the advances in the technology and specialized product/service has become more profitable relative to its logistic costs. • As an effect of globalization trade barriers have become simplified and easy to handle. • Born-global companies have key managers who have experience in international markets (Cannone et al., 2012), international business vision and enough knowledge in order to get ability to recognize opportunities in foreign markets. Additionally, their personal characteristics are more likely to be more proactive, innovative and risk-tolerated. (Kalyoncuoglu & Uner, 2010) The entrepreneur’s desire to be involved in international markets also is a key driver of the exploitation of born-global companies. (Cavusgil & Knight, 2009) International Conference on Entrepreneurship IEC 2014 - 43 -

• International marketing activities with buyers, sellers, foreign distributors, trading companies, strategic business partners, etc. has become easier to make with the growing importance of the global network connections. • The niche markets has enabled SMEs -which are doomed to have limited resources and capabilities- to offer personalized service and specialize in the specific product lines, in order to compete with the large-scale enterprises. (Kalyoncuoglu & Uner, 2010) • Customer tastes and needs have become international. With the rise of internet and other communication channels that follow internet revolution, the products/services have become more marketable in all over the world. • The major competitors of a company that operates in a domestic market have already internationalized or will be very soon. In order to involve in the competitions the conditions force companies to become internationalized (Kudina et al., 2008). • Human being is living in a technological era and technology companies producing cell phones, computers and other accessories are rising. Innovative products/services also are easy to be involved in multinational markets. Nowadays, consumers are looking for knowledge-intensive and high technology products and services (Cavusgil & Knight, 2009) The studies about the factors driving born-global exploitation are conducted by many different researchers. In the study conducted by Laanti et al. (2007), the globalization process of B2B born global companies, the roles of founders and managers, the networks, the financial resources of the companies and the innovations behind the companies are discussed. Based on earlier researches that claim a narrow segment would bring out the relevant differences of globalization, a specified business segment –wireless technology- is used in order to generate a richer data. In this research, Laanti et al. uses multiple-case study methodology and interviews with four wireless technology born-global companies in Finland. In the conclusion of the study, Laanti et al. supports the earlier researches on born-globals. Resources and capabilities, complementarities of the experiences, skills of founding team, the role of domestic network partner and global network are stated as important causes of global expansion (Laanti et al. 2007)

2.3 The Characteristics of Born-Global Companies Multinational companies are generally seen as big cooperation with a lot of financial and institutional advantages and experiences, but with the rise of technology era and the decrease of the transportation and communication activities has been lead small and medium size companies challenge in the global markets. Despite the born-global companies are much smaller in the cooperate size from the multinational companies, they are similar in targeting international markets and value added products/services. However, born-global companies have some specific characteristics that apart these two kind of multinational companies. First of all, bigger multinational companies have been - 44 - International Conference on Entrepreneurship IEC 2014

using traditional way of internationalization that requires a satisfying success in domestic market. (Ural & Kucukaslan, 2008) Traditional internationalization theories suggest that companies build a domestic market before gradually starting to export to neighboring or culturally close markets, thereby reducing risk and uncertainty. The exploitation of new global conditions, consequently, cause exclusive internationalization pathways of born-global companies which differ from traditional internationalizing companies as being not emergent or incremental, but rather initially intended. (Dlugoborskyte & Petraite, 2013) In the following growth steps, they start considering engagement in markets that are culturally or/and geographically distant. Secondly, the born-globals are much younger in the terms of establishment and managerial teams and require an entrepreneurial perspective.

Based on the study conducted by Ural and Kucukaslan, the characteristics of born-global companies can be classified as follows; • The managers of born-global companies see the world an open market, not a additional market to the domestic one. (Ural & Kucukaslan, 2008) • Generally, they start exportation in three years after their establishment. (Knight & Cavusgil, 2004) • The tangible resources -such as financial and human resources - of born-global companies are limited, but the expertise knowledge of the product/services leads them to reach success. (Sekliuckiene & Maciulskaite, 2013) • They are entrepreneurial. Company’s entrepreneurial orientation contributes to its ability to create processes, practices, and decision making activities that brings succes in the entrance into foreign markets • They produce a unique product/service with the help of high technology. • They sell value added products/services which differentiate high quality or special design. • They produce unique and complementary materials in medical, scientific and environmental sectors and computer units. (Ural & Kucukaslan, 2008) They reduce the competitive advantage of big multinational companies in niche markets and target a narrow customer segment which might be geographically distributed. Offering new and distinctive products to niche markets contributes to superior international performance of these born-globals. (Sekliuckiene & Maciulskaite, 2013) • They are known as learning companies. They get the information and implement very quickly in order to gain competitive advantage. • Their organizational culture has 6 different dimensions.

i. They are market-oriented and closely look after the international advantages. ii. They are open to the new information and learning-oriented. They gather information about international markets and seek advantages. (Ural & Kucukaslan, 2008) International Conference on Entrepreneurship IEC 2014 - 45 -

Some researchers apply that the development of dynamic capabilities has been closely linked to the ability of a company to constantly adapt to changes via internal organizational processes. Organizational learning covers the processes involved in assimilating new knowledge into company’s knowledge base. Hence pursuing international opportunities involves learning about a range of conditions and phenomena, often not present in the domestic market. Competitive advantages here arise from the knowledge obtained from company’s exposure to a variety of conditions that exist abroad. (Dlugoborskyte & Petraite, 2013) iii. They are innovative. As a leading characteristic of an international entrepreneur they instantly follow the innovations. iv. They can take risks and reserve a considerable amount of resources for international markets that they do not operate in. v. They can merge with other institutions. According to past studies about born-globals, merging with local agents and multinational vi. They reward their staffs who come with an advantageous and innovative idea. As a result, one of the most important dissimilarities of born-global companies is that they are much more global-oriented and take the risk of reserving their resources for the different international markets. (Ural & Kucukaslan, 2008) Another key dimension of born-global companies is that they do not have deeply rooted administrative heritage of long-established businesses. They easily adapt to the routines of the new market and the country. In opposition to born-global companies, long-established companies must live an unlearning process which is more difficult as firms get older, because new knowledge that leads to new routines tends to conflict with existing operations and management’s embedded mental models. (Knight & Cavusgil, 2004) 3. ENTREPRENEURIAL ABILITIES FOR A SUCCESSFUL BORN-GLOBAL COMPANY Abilities are important resources to born-global companies which are poor in tangible resources, because they deal with diverse environments across numerous foreign markets. The level of abilities helps companies to reduce their liabilities of foreignness and newness. Foreignness can lead the unfamiliarity and strangeness. Newness is a also a characteristic for a born-global company in terms of being a young/new company and entering of new markets. A born-global company has to bring out its’ abilities and consistently replicate them across numerous and varied markets produces value in order to reach success with the lack of tangible resources. (Knight & Cavusgil, 2004) 3.1 Opportunity Identification Opportunity identification for value creation lies at the center of entrepreneurship, because if an entrepreneur cannot add value for a particular product or create a new product with a measurable value to satisfy for a specific need, there won’t be any successful marketable product. Some researchers suggest that in order to identify opportu- 46 - International Conference on Entrepreneurship IEC 2014

nities, an entrepreneur has three ways; active search, passive search and creativity and imagination. As an important part of entrepreneurship, international entrepreneurship and born-global companies are the using field of these three elements. First of all, active search refers using searching skill for gaps in the market. (Karra et al. 2008) Because some researchers applied that before a company can be global it must think global and global vision exists from the beginning that is easily communicated to others in the company. (Persinger et al., 2007)Secondly, passive search or fortuitous discovery means that finding an opportunity in the course of other activities, or by virtue of their particular experiences and existing stocks of knowledge. Finally, creativity and imagination lead entrepreneur to find an opportunity through a set of cognitive processes that allows a given entrepreneur to envision new resource combinations that could lead to the development of new products and services. Some researchers also suggest that sustaining the uniqueness of the product or service, usually through special knowledge or knowhow, is important (Persinger et al., 2007). In real life, opportunity identification requires combination of these three factors, but the extent to which each is important will vary according to the entrepreneur and their environment. An entrepreneur has to know that international opportunity recognition which is a much more complicated activity differs from domestic opportunity recognition. In domestic area, opportunity recognition does not require a degree of international awareness and understanding (Karra et al. 2008). 3.2 Recognition of Institutional Distance The second ability for a successful born-global company is the recognition of institutional distance which is based upon the differences in business environments that companies face moving from a home to a host country and the assumption that they encounter greater risk as the institutional arrangements of the two contexts become increasingly diverse. In order to reduce the effects of institutional distance, a born-global has to convert business concepts and opportunities between national contexts, and articulate and make them relevant to people in different countries.

Some researchers suggest that a successful translation of business concepts and opportunities between countries or continents is upon three components. First of all, an entrepreneur has to understand new customers by developing detailed social and cultural knowledge about the markets they wish to enter. Buying behavior of customers, local specialized needs, knowledge about cultural norms and legal and regulatory environment have to be learned and experienced. Additionally, top managers should have prior international experience and the ability of understanding of letters of credit, exchange rate risks and communication and cultural difficulties. (Persinger et al., 2007) Secondly, the development of networks of key actors in the entrepreneur’s target markets is a must in a successful international entrepreneurship activity. Born-global companies as international entrepreneurs operating in a foreign country or a continent are liable to International Conference on Entrepreneurship IEC 2014 - 47 -

suffer from problems of credibility, and alliances with local actors can confer a degree of legitimacy. Finally, a born-global company may face to foster human capital in each country where they are active, although it is difficult to understand the host country’s institutional environment and adopt practices and ways of working that are consistent with local traditions. In such times, an international entrepreneur has to significantly alter their practices and/or business models to align their operations with host country conditions. (Karra et al. 2008)

3.3 Collaboration with Local Agents One of the important issues for a successful international business is to build complex cross-cultural social relationships with partners across different parts of the supply chain. For example, for positioning in a strong distribution network, instead of establishing new ventures in a foreign country, an international entrepreneur may choose to collaborate with cross-culturally. Additionally, an international entrepreneur has to be able to identify suitable partners, and to build and maintain relations with them. A successful collaboration across cultures involves two key components: the ability to identify and select competent partners. (Karra et al. 2008) Strong international business networks help to identify opportunities, give advices and assists in negotiations. (Persinger et al., 2007)

4. THE ROLE OF KNOWLEDGE IN INTERNATIONALIZATION Industries are becoming increasingly knowledge-intensive and high knowledge intensity is associated with high levels of internationalization. Some researchers imply that Multinational Enterprises (MNEs) are found in industries in which knowledge capital and knowledge-intensive production are important. Among the characteristics of MNEs are associated with high ratios of research and development relative to sales and tend to have high levels of intangible assets. Additionally, there are numerous studies to support the view that research and development intensity tends to be positively associated with the propensity to engage in foreign production. Furthermore, while there are high initial costs of research and development, subsequent products can be supplied at low cost. Key characteristics of knowledge in internationalization; a) The knowledge about company’s market-specific is a must. b) Knowledge requires experience and is acquired in a learning-by-doing process. c) Knowledge is grown into the individuals. d) Market liability increases proportionally with acquisition of market knowledge. The knowledge about international markets and the efficiency, by which the knowledge is learned, are important determinants of international growth for entrepreneurial companies. Some researchers have extensively suggested different aspects of interna- 48 - International Conference on Entrepreneurship IEC 2014

tionalization knowledge accumulation—the effect of variation on knowledge accumulation in the internationalization process, experiential knowledge and cost in the internationalization process, the perceived usefulness of network experiential knowledge in the internationalizing company, and path dependence and knowledge development in the internationalization process. The defined three types of international knowledge as follows: i. Internationalization knowledge: a company’s capability and resources to engage in international operations. ii. Business knowledge: information about competitive situations in specific markets (Brennan & Garvey, 2009), customers and market conditions in foreign market (Zhou, 2007) iii. Institutional knowledge: information about foreign culture (Brennan & Garvey, 2009), institutions, legal processes and regulations.

A company’s interaction with these knowledge forms has to be a continuous, durable and ascending. As well as the number of countries, duration that a company operates in a foreign country can affect the knowledge accumulation of internalization. Research made by Zhou in 2007, the role of foreign market knowledge is quested. The main examination of the research is that whether or not foreign market knowledge may lead to early and rapid internalization. A large number of born-global companies in China are surveyed, because China companies have been expanding all over the world in the last years. As a result of the research, global literature about foreign market knowledge is approved and it is found that foreign market knowledge leads to early and rapid internalization. Furthermore, the results also indicate that entrepreneurial market knowledge is not a naturally learned process which can be affected by cultural diversity of the countries that a company operates in (Zhou, 2007). REFERENCES Aspelund, Arild; Moen, Carina Flaam. International new ventures and governance structures—are international entrepreneurs strategic or entrepreneurial?. Journal of Management & Governance, 2012, 16.1: 125-146. Brennan, L.; Garvey, D. The role of knowledge in internationalization. Research in International Business and Finance, 2009, 23.2: 120-133. Cannone, Giusy, et al. Drivers of international development for born global companies founded by Italian entrepreneurs. Università degli Studi dell’Insubria, 2012. Cannone, Giusy; Ughetto, Elisa. Born globals: a cross-country survey on high-tech start-ups. International Business Review, 2014, 23.1: 272-283. International Conference on Entrepreneurship IEC 2014 - 49 -

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the Case of Information Technology Companies. Social Sciences (1392-0758), 2013, 80.2. Ural, Tulin; Kucukaslan, Asli. Yeni Tip Işletmeler: Global Doğan Işletmelerin Oluşum Nedenleri ve Özellikleri. 2008 Yeşil, Salih. Küreselleşme ve İşletmelerin Küreselleşme Süreçleri: Karşılaşılan Fırsatlar ve Tehditler. AİBÜ-İİBF Ekonomik ve Sosyal Araştırmalar Dergisi, 2010. Yi, Jingtao; Wang, Chengqi. The decision to export: Company heterogeneity, sunk costs, and spatial concentration. International Business Review, 2012, 21.5: 766-781. Zhou, Lianxi. The effects of entrepreneurial proclivity and foreign market knowledge on early internationalization. Journal of World Business, 2007, 42.3: 281-293.

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A STUDY OF THE THE RELATION BETWEEN ENTREPRENEURSHIP EDUCATION AND STUDENTS’ FUTURE ENTREPRENEURIAL INCLINATION Dr. Gizem AKINCI Faculty of Economics and Administrative Sciences, Istanbul Aydin University [email protected] Dr. Dinçer ATLI Faculty of Communication, Uskudar University [email protected] Dr. Fırat BAYIR Faculty of Economics and Administrative Sciences, Istanbul Aydin University [email protected] ABSTRACT Entrepreneurial characteristics predispose entrepreneurs towards entrepreneurial activities and these characteristics make them different from non-entrepreneurs. The main aim of this study is to make a comparison between the students who are entrepreneurially inclined and those who are not on the basis of entrepreneurial characteristics. The personal characteristics and the entrepreneurial inclination of the students was examined before and after taking the entrepreneurship class. In this study, six traits, namely need for achievement, locus of control, risk taking propensity, tolerance for ambiguity, innovativeness and self-confidence, were used to define the entrepreneurial inclination of students. This study was conducted on a sample of 298 students in İstanbul Aydın University. Findings from such a study will help universities and other institutions to develop suitable educational programs and policy implications to promote entrepreneurship. Keywords: Enterpreneurship, education, Turkey

INTRODUCTION The new venture formation has become an increasingly relevant and interesting area for research with the globalization of the business world. In developed and less developed countries increased entrepreneurial activity is seen as a means for economic growth. Furthermore, entrepreneurship, has been seen as a potential catalyst for technological progress in the Schumpeterian tradition. Ely (1912) was one of the first to explain the term, “entrepreneur”.(Carland and Carland, 1997).Cantillon also described an entrepreneur as a rational decision maker who bears the risk and manages the firm. (Carland and Carland, 1997) Schumpeter (1934) defined entrepreneurship as doing International Conference on Entrepreneurship IEC 2014 - 53 -

things that are not generally done in the ordinary course of business routine. McClelland (1961)focused on the personal characteristics and cultural values of those who engage in entrepreneurial role. Drucker (1985) pointed to that the most important aspect of entrepreneurship is innovation in a business setting. According Kuratko and Hodgets (2004), entrepreneurship is a dynamic process of vision, change and creation. To Kuratko (2005), an entrepreneurial perspective can be developed in individuals. Drucker thought that the entrepreneurial was not mystique and had nothing to do with genes. He pointed that it was a discipline and, like any discipline it could be learned (Drucker,1985).Although prior research has debated whether entrepreneurial characteristics are innate, recent findings support the idea that psychological attributes associated with entrepreneurship can be culturally and experientially acquired (Vesper, 1990; Gorman et al., 1997). Besides the very rapid growth of entrepreneurship literature and entrepreneurial ventures worldwide, perhaps the most obvious evidence is the emergence of entrepreneurship education in university courses. Entrepreneurship education has positive effects both on the individual and the enterprises level and as well as on the macro level which is very important. Entrepreneurship education, provides a positive contribution to a career on entrepreneurship and healthy development of small businesses (Robertson Henderson, 2000). Entrepreneurship plays an important role in the economic development of the countries, which is one of the priority policies of the European Union. According to the Global Entrepreneurship Monitor (2008) there is wide agreement on the importance of entrepreneurship for economic development. Entrepreneurs drive innovation, they speed up structural changes in the economy and force companies to shape up the old incumbent making an indirect contribution to productivity.

Due to the influence that education could have some effects on the attitudes of youth, there is a need to understand how to develop entrepreneurs. Some entrepreneurial characteristics (traits) are likely to shape their inclination to start their own businesses in the future. The main aim of this study is to make a comparison between the students who are entrepreneurially inclined and those who are not on the basis of entrepreneurial characteristics. In this study, six traits, namely need for achievement, locus of control, risk taking propensity, tolerance for ambiguity, innovativeness and self-confidence, are used to define the entrepreneurial inclination of students. Findings from such a study will help universities and other institutions to develop suitable educational programs and policy implications to promote entrepreneurship. In the first section of this paper, we propose a literature survey focusing on the entrepreneurial characteristics. The second section discusses the methodology. In the third section we present the results and finally, the fourth section we discuss and summarize the results. - 54 - International Conference on Entrepreneurship IEC 2014

LITERATURE REVIEW Beginning with McClelland (1961), the personal characteristics of the entrepreneur has become a popular research subject. McClelland offered a similar set of defining traits to explain entrepreneurial behavior. These traits were high need for achievement, risk-taking propensity, preference for energetic and/or novel activity, and assuming personal responsibility for successes or failure (McClelland 1961). Brockhaus also reviewed a number of trait studies and identified three consistent traits associated with entrepreneurial behavior: need for achievement, internal locus of control, and a risk-taking propensity (Brockhaus 1982). Begley and Boyd found that entrepreneurs (founders) scored significantly higher than small business managers (non-founders) in need for achievement, risk-taking propensity, and tolerance of ambiguity (Begley and Boyd 1987). Bygrave (1989) presented a model that includes need for achievement, internal locus of control, tolerance for ambiguity and risk-taking propensity as vital components of entrepreneurial behavior. In addition, Robinson et al. (1991) listed achievement, innovativeness, control and self-confidence as entrepreneurial traits. According to Koh (1996) compared to non-entrepreneurs, entrepreneurs had greater need for achievement, more internal locus of control, higher propensity to take risk, greater tolerance of ambiguity, more self-confidence and greater innovativeness. Rotter (1966) made a significant contribution to the development of “locus of control”. According to Rotter, those with a high internal score perceive that they are in control of their world and that luck and fate do not really determine what happens to them. They control their environment by the action they take. Brockhaus found that business students with entrepreneurial intentions tended to have a higher internal locus of control than those who did not have such intentions (Brockhaus 1975). Cromie, (1987) found significantly higher locus of control scores for entrepreneurs compared to experienced managers. Classic economic theory suggests that entrepreneurs are risk-takers. Cromie and O’Donoghue (1992) reported that entrepreneurs are more likely to take calculated risks than managers, teachers, and civil servants and Chen et al. (1998) found that risk taking is a key determinant entrepreneurial self-efficacy. Koh (1996) found that entrepreneurially inclined individuals have significantly higher risk scores than the non-entrepreneurially inclined. However Brockhaus (1980) found no significant difference in the risk-taking propensity of new entrepreneurs. Risk and uncertainty are part of the entrepreneurial World. This lack of clarity creates ambiguity and Koh (1996) cited Schere (1982), Sexton and Bowman (1985) and Mitton (1989), in suggesting that entrepreneurs must have considerable tolerance for ambiguity.

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Koh (1996) also considered that self-confidence was a prerequisite for successful entrepreneurship. However, his research failed to confirm that the entrepreneurs were more self confident than others. McClelland (1965) argued that a person with a high need for achievement “is more self-confident, enjoys taking carefully calculated risks, researches his environment actively, and is very much interested in concrete measures of how well he is doing”

Innovative activity is explicit in Schumpeter’s and Drucker’s description of the entrepreneur as mentioned before. Carland and Carland (1991) found that both male and female entrepreneurs have significantly higher levels of innovative preference than their managerial counterparts.

Previous literature also has suggested that entrepreneurial training will improve attitudes toward entrepreneurship. Various studies have examined the entrepreneurial tendencies and investigated the effects of entrepreneur training on the psychological attributes of undergraduate and graduate students and administrators. These findings suggest that entrepreneurship education and teaching programs are influencing student entrepreneurial intentions and behaviors.

Hansemark (1998) found that young adults participating in an entrepreneurship program developed a more internal locus of control had a significant increase in their need for achievement scores. Lüthje and Franke (2003) showed that engineering students’ personality traits have a strong impact on the attitude towards self-employment and their entrepreneurial intent is directly affected by perceived barriers and support factors in the entrepreneurship-related context. Berglund and Wennberg (2006) found that both engineering and business school students got high creativity scores on the personality test as a result of the entrepreneur educational programmes. In a research including Turkish university students, Gurol and Atsan (2006) found except for tolerance for ambiguity and self-confidence, all entrepreneurial traits were higher in entrepreneurially inclined students, as compared to entrepreneurially non-inclined students. These students were found to have higher risk taking propensity, internal locus of control, higher need for achievement and higher innovativeness. RESEARCH DESIGN & DATA COLLECTION As mentioned before previous literature also has suggested that entrepreneurial training will improve attitudes toward entrepreneurship. The model suggests that certain entrepreneurial characteristics predispose entrepreneurs towards entrepreneurial activities and these characteristics make them different from non-entrepreneurs. The purpose of this study is to examine the personal characteristics and the entrepreneurial - 56 - International Conference on Entrepreneurship IEC 2014

inclination of the students before and after taking the Entrepreneurship class. The independent variables included in the study are the need for achievement, locus of control, propensity to take risk, tolerance for ambiguity, self-confidence and innovativeness. The dependent variable in the study is entrepreneurial inclination. Students were evaluated in two groups: those who had and those who had not taken the Entrepreneurship class.

SAMPLE The study included 298 students in the Human Resources Management Program, Logistics Program, Customs Management Program, Real Estate & Estate Management Program, Jewellery & Jewellery Design Program, Computer Programming & Technology Program, Printing & Press Technologies Program, Marketing Program, Office Management & Executive Assistantship Program, Health Institutions Management Program, Tourism & Hotel Management Program and Hospitality Service Program at Istanbul Aydin University’s Anadolu Bil Vocational College. This college provides a two-year program where the Entrepreneurship class is provided in the second year. The sample is including both first-year and second-year students in order to distinguish between those who have and have not taken the entrepreneurship class. A survey was utilized to collect data for this study. The survey was conducted at the end of the spring semester of the academic year 2011-2012. The number of students who participated in the survey was 172, indicating a participation rate of 57%.The research framework used in the study is adapted from the entrepreneurship model proposed by Koh. The survey comprises two major sections. The first section measures demographic and personal variables .The second section measures the six psychological characteristics which are need for achievement (containing six items), locus of control (containing seven items), propensity to take risk (containing six items), tolerance of ambiguity (containing six items), self-confidence (containing six items), and innovativeness (containing five items) .(Table 1) All opinions regarding these statements were collected in a manner consistent with the five-point Likert scale. The legend for the psychological characteristics are as follows: LC = Locus of control, NA = Need for achievement, PR = Propensity to take risk, TA = Tolerance of ambiguity , SC = Self-confidence, IN = Innovation .

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CONTROL VARIABLES NEED FOR ACHIEVEMENT VARIABLES

V2. I take pleasure in responding to challenges,so competition makes me work harder. V8. I do not like a well-paid job if I cannot derive a sense of achievement and satisfaction from it. V14. I want to earn only as much as possible to attain a comfortable way of life. V20. I do not mind routine, unchallenging work if the pay is good V26. When I do something, I see to it that it does not only get done but is done with excellence. V32. I hire people on the basis of friendship and other relations (for their loyalty) rather than on the basis of competence.

V3. I do not care if the profit is small so long as it is assured and constant. V9. I am willing to take high risks for high returns. V15. I do not mind working under conditions of uncertainty as long as there is a reasonable probability of gains from it for me. V21. I do not fear investing my money on a venture whose dividends I have calculated. V27. I will consider a risk worth taking only if the probability for success is 60% or more. V33. I fear moving into a new undertaking I know nothing about.

SELF CONFIDENCE VARIABLES

AMBIGUITY VARIABLES

V1. People’s misfortunes result from the mistakes they make. V7. Many of the unhappy things in people’s lives are partly due to bad luck. V13. I do not enjoy outcomes, no matter how favourable, if they do not stem from my own efforts. V19. I am willing to accept both positive and negative consequences of my decisions and actions. V25. It is I, not luck nor fate, which influence the outcome of events in my life. V31. I cannot wait and watch things happen; I prefer to make things happen. V36. I believe success is a product of luck and fate rather than personal effort

PROPENSITY TO TAKE RISK VARIABLES

Table 1 Variables FINDINGS

V4. Job security is extremely important to me. V10. A good job is one with clear instructions as to what is to be done and how it is to be done. V16. I enjoy working in unstructured situations. V28. It bothers me when several people have over-lapping responsibilities. V35. In unclear situations, I like to make decisions and take the “lead”. V22. I have a work schedule which I try to follow very carefully.

V5. I accomplish most when I am alone, under no direct supervision of anyone. V11. I have confidence in my ability to achieve V17. I have weaknesses and fears that are far from being resolved. V23. I doubt my ability to cope under new, untested conditions. V29. I find difficulty in asserting myself against the opinion of majority. V34. Even if I am capable, hardworking and ambitious, if I do not have the money, I cannot start a business.

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INNOVATION VARIABLES

V6. I avoid changing the way things are done. V12. While others see nothing unusual in the surroundings, I am able to perceive in it opportunities for business. V18. I am able to beat around difficulties through strokes of ingenuity and resourcefulness V24. I believe there are always new and beter ways of doing things. V30. I find it difficult to come up with new, wild or even crazy ideas.

To understand what kind of structure was formed by these statements, an exploratory factor analysis was first conducted. We were interested in how the statements in the survey were grouped in a statistically significant manner. Table 2 contains the reliability analysis results with each separate factor and the Cronbach-Alpha values for all of the variables. The Principal Component Analysis was used in the exploratory factor analysis. However, the reliability value of 8 variables (V1, V3, V4, V5, V9, V13, V22, V27) were unacceptably low. These variables were left out of the analysis. Table 2 Reliability Statistics

Cronbach’s Alpha

N of Items

738

36



Investigating the entrepreneurial characteristics more detailed in a multivariate setting, factor analysis method was applied. Before using factor analysis, the data adequacy was tested. Data adequacy is provided with KMO (Kaiser-Meyer-Olkin) and Bartlett’s Test of Sphericity as shown in Table 3. The Kaiser-Meyer-Olkin (KMO) test value in the analysis was 0.751. Also Bartlett‘s Test of Sphericity shows significance P0,05). There is significant correlation between aggressive competition and hospital status (p