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International Conference on Leadership, Technology, and Innovation Management
The role of innovation in the effective international expansion of an emerging-country firm: The case of Arçelik Tanses Gülsoya,*, Özlem Özkanlıb, Richard Lyncha,b,a a
Beykent University, Istanbul 34396, Turkey b Ankara University, Ankara, Turkey a,b Middlesex University, London, UK
Abstract Successful international expansion by emerging-country firms is often predicated on technological capability and organizational restructuring that facilitates innovativeness. In the case of Turkey’s leading home appliance manufacturer Arçelik, international expansion appears to have been to a large extent impingent on the development of technological and innovation capabilities. This paper aims to show how this emerging-country firm has utilized technology and innovation management to catapult itself to the ranks of regional players in the global home appliance industry and delineates the specific ways in which it has accomplished this. The paper contributes to international marketing literature by examining the role of organizational and product innovation in the internationalization of an emerging-country firm.
© 2012 2011Published Published by Elsevier Ltd. Selection and/or peer-review under responsibility of International © by Elsevier Ltd. Selection and/or peer review under responsibility of The First International Conference on Leadership, Technology and Innovation Management Conference on Leadership, Technology and Innovation Management.
Keywords: Global strategy; Developing country strategy; Turkey export strategy; Turkish home appliances manufacture; technology; innovation; leadership
1. Introduction Over the last twenty years, Turkey has significantly increased its international trade in manufactured products. It is possible that this has been built on the basis of its lower labour costs compared with those of developed countries and the willingness of both Turkish national companies and multinational enterprises (MNEs) to invest in Turkey. While the basic evidence of Turkish trade development is clear, there has been only limited research on the business logic behind such growth, the reasons for choosing particular forms of expansion and the outcomes of such strategies at the present time for Turkish companies. In order to explore these issues, we have undertaken a study of the Turkish manufacture and export of home appliances companies. This paper argues that effective international expansion of an emerging-
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1877-0428 © 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of The First International Conference on Leadership, Technology and Innovation Management doi:10.1016/j.sbspro.2012.04.016
Tanses Gülsoy et al. / Procedia – Social and Behavioral Sciences 41 (2012) 116 – 129
market company is predicated on technological capabilities and effective innovation management. We have chosen to study Arçelik, the market leader in Turkey’s home appliances industry, because this is a company that has adopted international expansion as a strategy for ten years and, as Turkey’s patent champion for years, made innovation an integral part of that strategy. We hope to make several contributions. First, we investigate the importance of research and development capabilities and innovation in effective international expansion of an emerging-country firm, and second, we examine how a large firm manages innovation so as to minimize the effects of bureaucratization, indicated in the literature as a factor that hinders innovative activities in larger firms (Lewin and Massini, 2003; Penrose, 1959; and Schumpeter, 1942, as cited in [38]). The remainder of the paper is organized as follows: First, we provide a review of the theoretical background and literature on emerging-market internationalization and innovation. Second, we describe the data collection, analysis and results of the study. Third, we discuss the implications of the results, along with limitations of the study and possible future directions for research.
2. Literature review and research framework Although the literature in international business research is extensive and continues to grow [63], Axinn and Matthyssens (2002) [7] have argued that most theories on international strategies focus on explaining the behaviour of large firms from developed countries. They do not provide the same insights into the behaviour of firms from developing nations in the international market place. Given the emergence of companies from new international trading nations like India, China, and Turkey, the authors claim that it is imperative to look at new empirical evidence, rather than rely on existing theories of international trade. Equally, Buckley (2002) [14] commented that the entry of developing countries as major players in the global economy may give new impetus to such research. This is echoed by o