Entrepreneurial Aspiration and Flexibility of Small and Medium-Sized Firms: How Headquarters Facilitate Business Model Innovation at the Subsidiary Level

Yangfeng Cao, Peter Ping Li, Peter Skat-Rørdam

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    Abstract

    Primarily due to the large gaps in economic and institutional contexts between the developed and emerging markets, business model innovation (BMI) at the subsidiary level plays an important role for the success of small and mediumsized firms (SMEs) from the developed markets operating in the emerging markets as top-down venture. While some studies claim that the direct involvement of headquarters (HQ) of SMEs in the activities of their subsidiaries is essential, surprisingly little is known about how HQ specifically facilitates BMI at the subsidiary level, especially in the context of top-down venture. Adopting the method of comparative and longitudinal case study, we tracked the BMI process of six SMEs from Denmark operating in China. The emergent framework indicates that entrepreneurial aspiration and flexibility at the HQ level 2 Asia Research Centre, CBS, Copenhagen Discussion Paper 2013-42 are two primary facilitators of BMI at the subsidiary level via the mechanisms of commitment and cooperation. We also found that BMI performance would influence the two facilitators in a feedback loop. Hence, we can contribute to the literatures on international entrepreneurship and strategic entrepreneurship by integrating the two previously separated research streams via their shared theme of accelerated learning. In particular, this study helps solve the puzzle concerning fast and successful international venture.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherAsia Research Centre. Copenhagen Business School
    Number of pages50
    Publication statusPublished - Feb 2013
    SeriesCopenhagen Discussion Papers
    Number42
    ISSN0904-8626

    Keywords

    • Business Model Innovation
    • International Strategic
    • Entrepreneurship
    • Headquarters-Subsidiary Link
    • Aspiration
    • Flexibility
    • Emerging Markets

    Cite this

    Cao, Y., Li, P. P., & Skat-Rørdam, P. (2013). Entrepreneurial Aspiration and Flexibility of Small and Medium-Sized Firms: How Headquarters Facilitate Business Model Innovation at the Subsidiary Level . Frederiksberg: Asia Research Centre. Copenhagen Business School. Copenhagen Discussion Papers, No. 42