understanding the strategic orientations and continued of ... fileunderstanding the strategic...
TRANSCRIPT
Understanding the strategic orientations and continued international success of Indian Born‐Global firms
Kumar, Nishant PhD Candidate, School of Business, Stockholm University, Sweden
Email: [email protected] Abstract Although there are several studies on Born-Global firms, less research has concerned itself with how a Born-Global firm is able to act upon the intimate knowledge of its customer, translating (this customer knowledge) into unique capabilities to meet current and future customer service requirements, and to lock customers into a long-term sustainable relationship. The aim of this paper is to examine what accounts for the successful sustenance of Born-Globals and continued expansion beyond the initial internationalization phase. Based on extant literature, a tentative frame of customer relationship management is suggested and then used to analyze empirical material gleaned from a single-case study of an Indian Born-Global firm. The study shows that it is the entrepreneurial orientation of Born-Global firms that explains their continued expansion. Entrepreneurial orientation focuses on knowing the customers’ present and latent needs so as to cater for them in a proactive, innovative and unique way. Their focus on knowing the customer intimately helps the firms to lock in their customers and to retain them over long periods of time, thereby insuring their sustenance and continued development. In these terms, this paper contributes to scholarly discussion on the internationalization success of Born-Global firms by highlighting their unique customer relationship capabilities through an illustration of an Indian Born-Global firm. This is important as Indian firms have not received significant research attention in the literature although they differ from other Born-Global firms in other emerging markets. The paper has also practical relevance to international entrepreneurs and managers operating in an international context. Keywords- Born-Global firms; customer relationship quality management; customer orientation; entrepreneurial orientation; internationalization of emerging market firms.
Proceedings of the 28th Annual Euro-Asia Management Studies Association Conference
“The Changing Competitive Landscape in Euro-Asia Business Relations” School of Business, Economics and Law, University of Gothenburg
Gothenburg, Sweden 23rd - 26th November, 2011
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1. Introduction
Born-Global firms, as an emerging organizational form in the international market place, are
increasingly receiving attention from researchers and managers. Born-Global firms are
regarded as companies that view the world as their arena of operations, availing themselves of
the opportunities presented in many markets, irrespective of the psychic or geographic
distances involved (Oviatt and McDougall, 1994; Knight and Cavusgil, 2004; McDougall and
Oviatt, 2000), and it is believed to be necessary because the global market would permit rapid
growth as the potential customers are global (Knight and Cavusgil, 1996). As such they pose a
challenge to the conventional models of internationalization within which firms are assumed
to become international in a slow, incremental manner, due to lack of knowledge about
foreign markets, high risk aversion, perceived high uncertainty, or similar factors (Oviatt and
McDougall, 1994; Madsen & Servais, 1997; Zahra, Ireland, &Hitt, 2000; Knight and
Cavusgil, 2004; Knight and Kim, 2009).
Researchers suggest that Born-Global firms approach the market with
innovative product offerings, being regarded as a key factor in their success (Knight, 1997;
Madsen &Servais, 1997; Moen and Servais, 2002). To these ends, they try to remain
innovative through building intimate knowledge of their customers (Kim et al. 2010). While
intimate knowledge of the customer was found to be a key contributing factor to the success
of Born-Globals, how Born-Globals build the necessary skills to cater to their customers’
needs and meet the expectations of the customers has not yet received sufficient attention
from researchers. This study aims to fill this relative gap in the literature by showing how a
Born-Global firm is able to act upon this intimate knowledge of its customers, translating it
(this customer knowledge) into capabilities that enable it to meet current and future (latent)
customer service requirements, and to lock those customers into a long-term sustainable
relationship. In illustrating this ability to achieve an intimate customer knowledge that is
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translated into a long-term relationship the paper draws on information gleaned from an
Indian Born-Global firm. Indian firms have not received significant research attention in the
literature, although they differ from other Born-Global firms in other emerging markets (Kim
et al., 2010). Most studies on Born-Global firms have focused on the exporting activities of
technology-based firms; while Indian Born-Global firms are mostly engaged in knowledge-
based services that include knowledge processing services and IT services (Zaheer et al.
2009). Thus, it is hoped that using an Indian Born-Global firm as the study context would
offer additional insights into Born-Global firms from the service industry.
The present study contributes to extant theories on Born-Global firms in the
following ways. It maps out the service delivery capabilities that Born-Global firms develop
in order to cater for customers’ present needs and pro-actively enact and anticipate their future
ones. An intimate knowledge of their customers allows them to detect customers’ future
strategic thrust, placing them in a better position to shape and serve their customers’ future
needs. Such relationships are valuable, rare, in-imitable, and non-substitutable (Barney 1990).
The remainder of the study is organized as follows. In the next section, a
literature review on Born-Global is presented. On the basis of this review, a theoretical
framework is developed. Next, the methodology is presented, followed by the findings of the
study. Finally, a discussion of the findings is provided along with the conclusions,
implications and limitations of the study.
2. Literature review:
Research on Born-Global firms suggests that firms’ early internationalizing phase faces
several challenges related to liabilities of newness, liability of foreignness, liability of
outsider-ship, and market uncertainty (Zaheer, 1995; Cuervo-Cazurra, Maloney and
Manrakhan, 2007; Johanson and Vahlne, 1977, 2009). Unlike well-established firms, Born-
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Global firms suffer from lack resources and capabilities (Oviatt and McDougall, 1994; Knight
and Cavusgil, 2004; Zahra, Ireland, & Hitt, 2000). And therefore Born-Global firms face high
risk of failing at the early stage of internationalization (Sapienza, Autio and Zahra, 2006).
Despite the scarce financial, and other resources, and the high risk of failure, Born-Global
firms participate substantially in international business from a very early stage
(Weerawardena, Mort, Liesch and knight, 2007; Gabrielsson and Kirpalani, 2004). Such
expansion allows Born-Global firms to achieve growth (Zahra, et al, 2000). Researchers have
found that Born-Global firms make the leap into the international market because of unique
entrepreneurial competence and global outlook of their founders (Oviatt, McDougall, 1994;
Autio et al 2000; Zhou, 2007; Kocak, and Abimbola, 2009). According to the current
literature on Born-Global firms, rapidly internationalizing small high-tech companies are
typically formed by active entrepreneurs who have an international vision, as well as the
commitment to searching for international opportunities (Oviatt and McDougall, 1995; Moen,
2002; Autio, et al. 200). Such distinctive entrepreneurial orientation when combined with
other resources and capabilities, such as marketing capability, seems to allow them to see and
exploit opportunities in foreign markets (Jantunen et al., 2008; Kocak, &Abimbola, 2009).
International entrepreneurial orientation reflects the firm’s overall innovativeness and
proactiveness in the pursuit of international market opportunities (Knight and Cavulgil, 2004).
In addition, researchers posit that Born-Global firms’ customer orientation
serves as a driver of growth (Knight and Cavusgil, 2004; Knight and Kim, 2008; Kim et al.
2010). The customer orientation is defined as the extent to which a Born-Global firm focuses
its efforts on serving its customers’ needs and cultivates long term-relationships (Deshpande
et al. 1993, Luo et al. 2008). Customer orientation has been examined in various contexts and
is thought to be a source of competitive advantage (Lafferty et al. 2001; Knight and Servais,
2004; Luo, et al. 2008). But the literature is not clear on the nature of customer focus. Most
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often, customer orientation has been considered as a way of obtaining information from
customers about their needs and preferences and then serving those needs. This study argues
that such type of customer orientations is non-sustainable and thus cannot be considered as
the competitive advantage of Born-Global firms. For example, if the customer requirements
change in such a way that the servicing firm is no more capable of delivering the required
services, then the customer will logically change to other firms for obtaining its supply of
services, resulting in customer defection to other competing firms. Thus the logic of customer
orientation needs to be extended to include pro-activeness and anticipation of customer future
needs. This is important because of the changes in environment, both in technology and
competition. This study further argues that the pro-activeness in the customer orientation is a
feature of the high entrepreneurial orientation of the Born-Global firms.
As the customer relationship marketing literature brings to our attention
(Jaworski and Kohili, 1993; Narver et al. 2004; Salter, 2001), the benefits of developing long-
term partnerships, trust, commitment, and satisfaction are the parameters of relationship
quality and long-term orientation in the customer relationships (Macintosh, 2007; Skarmeas et
al. 2008). Within the Born-Global literature, the concern is not only to have ongoing
relationships with the customers, but mostly to anticipate future needs and invest in those
relationships accordingly. Anticipating customer future needs requires intimate knowledge of
the strategic thrust of customers.
3. Conceptual framework
Building on these initial theoretical considerations, this paper suggests three important
strategies that explain why Born-Global firms can endure over time after the initial phase of
internationalization. These are: Customer relationship quality management (Jaychandran et al.
2005; Payne and Frow, 2005; Kim et al, 2010), Customer relationship pro-activeness
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(Johannessen et al., 1999; Slater and Narver, 1998), and customer focused innovativeness
(Lumpkin and Dess, 1996; Zahra et al. 2000).
3.1 Customer relationships quality management
Customer relationships are usually unique and develop over time (Barney, 1986). Customer
relationship may serve as a resource hard for competitors to imitate or purchase. Building a
level of cooperation, trust and long-term partnerships with the customers defines relationship
quality (Lahiri and Kedia, 2011). In the context of business-to-business relationships,
relationship quality has been suggested to bind partnering firms such that their relationship
goes beyond mere exchange of goods, services, or capital. Resulting benefits include
customer satisfaction, enhanced perception of fairness and justice, customer loyalty,
relationship satisfaction, positive word-of-mouth, repeat transaction and business continuity
(Kale and Singh, 2009; Wu and Cavusgil, 2006).
Although researchers differ in their conceptualization of relationship quality and its
dimensions, there is general consensus that, first, it is a higher order construct, and second, it
is manifested in different but related constructs, such as, trust, commitment and satisfaction
(Bejour et al. 1996). ‘Trust’ refers to partners’ belief that each would act in the best interest of
the other, and not resort to opportunism, ‘Commitment’ refers to partners’ motivation to stay
with the existing relationships. And “Satisfaction” signifies partners’ perception of fulfillment
based on the matching of the relationship-based outcomes with expectations.
In the case of Born-Global firms, the relationship with their customers can be defined as a
form of business-to-business relationships, as Born-Global firms’ customers are mainly
another business firm, which makes this construct even more relevant. Research on Born-
Global firms suggests that Born-Global firms are smaller in size, and thus may face a power
imbalance in dealing with their relationships with their customers. Thus, given that Born-
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Global firms suffer from lack of history, newness, poor brand image, the kind of relationship
quality required for the sustenance of Born-Global’s relationships with its customer may
differ from the previous understanding (such as Kim et a. 2010), in which customer focus has
been at the center of the relationship, being dealt with mainly as reactive and problem-centric.
Hence the level and the nature of effort required for building and maintaining such
relationships may be different from other types of business firms, where the cooperation is
mainly transaction-based, and where size has not such significant impact on the quality of the
relationship of the partners.
3.2 Customer relationship pro-activeness
Another key issue in customer relationship management is the strategic response of the firm
towards its customers in terms of reactive or proactive behavior. Customer needs can be
defined as a divergence between the existing and the desired situations (Kärkkäinen, 2002),
which may exist today or materialize in the future (Holt et al. 1984). Existing needs can be
further divided into articulated and latent needs. Latent needs are not apparent to customers,
but still exist and are unmet within the market (Jaworski et al. 2000). Thus, they do not
emerge into the conscious level before the new product or service in presented (Holt, 1976).
As long as these needs are not met, customers cannot be dissatisfied because they are still
unaware of them (de Heer et al., 2002, p.9).
A customer-related reactive behavior implies that the firm concentrates on understanding
and satisfying the needs of present customers (Salter and Narver, 1998). This is often
accomplished through learning and developing or modifying the offerings based on the new
knowledge (Salter, 2001). However, sometimes, such as in the case of the knowledge -
intensive service providing Born-Global firms, where customers’ need specifications are
rather ambiguous and inexact, the Born-Global firm may have to anticipate what kind of
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solution may satisfy the customers’ need.Thus anticipation seems to be more relevant and
particularly important in recognizing latent needs (Salter and Narver, 1998). Although
knowledge-based Born-Global firms also focus on developing new technological solutions for
the future needs, the needs of the customer seem to develop in a rather evolutionary manner.
And, therefore, customer relationships pro-activeness seems to be manifested in various ways.
For instance, when the customer decides to engage the Born-Global firm, the Born-Global’s
customer focus approach should be more problem-centric, as the trust level at this stage is
low. Pro-activeness can be in the form of deployment of resources and expression of
commitment. Based on the initial success of the early stage, of the relationships and the
subsequent increase in the level of trust and intimate customer knowledge, the Born-global
firm can adopt a more proactive approach, suggesting and suggest new solutions to the
customer, thereby looking them into their systems and methods. In this context, the Born-
Global firm acts more like a business partner than an arms’ length supplier of services.
3.3. Customer focused innovativeness
Innovativeness reflects a firm’s tendency to engage in and support new ideas, novelty,
experimentation, and creativity processes that may result in new product, services, or
technological processes (Lumpkin and Dess, 1996). It represents a basic willingness to depart
from existing technologies or practices and venture beyond the current state of the art
(Kimberly, 1981). Innovativeness represents an important means by which firm pursue new
opportunities. Pro-activeness refers to processes aimed at anticipating and acting on future
needs by seeking new opportunities, which may or may not be related to the present line of
operations, such as introduction of new products and brands ahead of competition
(Venkatraman 1989; Lumpkin and Dess, 1996). Pro-activeness puts an emphasis on initiating
activities that are innovative in nature. Thus a proactive firm is a leader rather than a follower,
because it has the will and foresight to seize new opportunities, even if it is not always the
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first to do so (Lumpkin and Dess, 1996). Being proactive on technological innovations may
be important for Born-Global firms as this may have an impact on retaining the customer
through anticipating the future changes in the technological environment, shaping the
customer’s business, as well as changes in the needs of these customers, and therefore
supplying the matching services in time. This may help customer keep ahead of competition.
Based on the above discussion a conceptual framework is presented (see figure 1), which
shows that an entrepreneurial orientation towards customers requires a judicious relationship
management, relationship pro-activeness and technological innovativeness. These three
factors are assumed to impact Born-Globals’ sustenance and future growth.
Fig- 1 conceptual framework: Factors impacting Born-Globals’ sustenance over time
4. Research method
As noted above, I have chosen case study methodology relying on a single-case – MindTree
Limited (henceforth MTL) – in order to understand the dynamics that explain the success and
Relationship
quality
management
Relationship
Proactiveness
Customer
focussed
innovativeness
Born-Global’s
Sustainance over
long period
Entrepreneurial
orientation
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continued growth of a Born-Global. Single-case study method is considered to offer a
potentially rich and valuable source of data (Eisenhardt 1989), suited to exploratory studies
and allowing organisational processes to be examined closely (Benbasat et al., 1987),
especially when it represents a critical case (Yin 1994). Because I wanted to understand the
factors that lie behind Born-Globals’ continued thriving I have selected carefully the case
from a list of top 25 high performing knowledge intensive firms1 from India which had gone
international immediately after their inception, with the majority of their revenue coming
from international sales. MTL was founded in 1999 by 10 industry professionals who came
from three different nations and had already scripted successful careers. MTL is an
international Information Technology (“IT”) consulting and implementation company that
delivers business solutions through global software development. MTL is structured into two
business units that focus on software development – R&D Services and IT Services. R&D
Services enable product realization by leveraging the expertise in the areas of design,
development, and testing through MTL’s own Intellectual Property (IP) building blocks. IT
Services offer consulting and implementation and post production support for customers in
manufacturing, financial services, travel and leisure, and other industries. IT services
contribute around two-thirds of the company's total revenues, followed by R&D services,
which contributes around one-third of the revenues. MTL is co-headquartered in the U.S. and
India and has offices in India, United States of America, United Kingdom, Japan, Singapore,
Australia, Germany, Switzerland and UAE. Today, MT makes more than 93%2 revenues from
international markets, and within less than 11 years of its existence it has started operating in
22 countries across Asia-Pacific, Europe, USA and Middle East. Its growth has been
phenomenal and rapid, making it a suitable choice for this study, all the more so as MTL has
been able to retain its customers over time through an astute relationship management
1 The list of prepared from the data published by NASSCOM
2Figure from year 2010.
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approach. The average age of the customer relationships ranges between 8 and 10 years,
which is nearly equivalent to the period of its existence. The above factors make MTL a right
choice for the study.
Thus adopting a theoretical sampling (Eisenhardt 1989), MTL was selected for
the study question. The study builds on secondary material such as internal project analysis
reports, and customer feedbacks, generated during the different phases of evolution of the
firm and reported through the company’s repository and website. An analysis of over 25
project summary reports, accompanied by an analysis of 5 annual reports, provided a solid
basis for examining the early and post internationalization periods. Retrieving these events
and records provided a viable way to go back in time in the firms' historical trajectory.
Through this process the research focus was on how the firm has managed to sustain its
relationship over the years, assuming that customer relationship is one of the most important
pillars for Born-Global firms’ continued expansion beyond the initial phase of
internationalization
The second source of data generation involves a set of fifteen (15) face-to-face
and four (4) mediated (over the telephone/Skype) interviews. All interviews were conducted
in the period spanning between the middle of 2009 and the mid of 2011. The informants were
from the various levels of the organization (one of the co-founder of the MTL, Chief
Operation Manager, Chief Technology Architect, Vice-president learning and leadership
development, Program Manager, Project Manager, Country Managers, Software developers,
Vice-President Product engineering services), and three customers, (one in Sweden, one in
Belgium, and one in India). The interviews lasted between one to six hours, taking place in
Bangalore, Stockholm and Brussels. The interviews were guided by a semi-structured
questionnaire which allows the informants to tell their own stories regarding how they were
coping with managing their relationships with their clients, such as: how they developed their
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relationships with their customers, how they manage these relationships with their customers,
how they anticipated and projected the future needs of the customer, and how they innovate to
meet the future needs of the customers. Subsequently, the information elicited was transcribed
and sent back to the informants, giving them the chance to comment on the accuracy of our
interpretations. Wherever there were ambiguities or significant differences follow-up short
interviews were conducted in order to resolve possible misunderstandings.
5. Customer relationships at MTL
When MTL started its business operation, it did not have all the resources and capabilities
in place, it lacked the deep rooted routines and processes and leverage for international
growth that old and large firms enjoyed. But MTL had the potential to develop
capabilities and achieve success. A large auto manufacture in Sweden entered into
business relationship with MTL in 1999 regarding the supply of knowledge-based
services marked the beginning of a long and determining relationship for MTL. A
representative of the Swedish car maker explained the reason for choosing MTL in the
following way: “we have chosen MTL not for what they have done but what they are
capable of doing.” After getting the first contract in Sweden, the firm started
accumulating the knowledge and experience it gained from this new contract. Most of the
service delivery capabilities evolved through this business. As the program director of
MTL in Scandinavia explains: “We were small and did not have all those processes and
practices and services in place, we started with what we had, and the Swedish client also
went quite slowly, it did not want us to do this rapidly, they also needed to set up the
structure of the collaboration in place in order to insure the smooth management of the
relationship. Gradually, they asked us to do more and more critical assignments, as the
relationship became more and more based on mutual trust. They were very encouraging,
allowing us to experiment with new solutions and technologies. The result was the
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building a solid common ground between us, leading to knowing our customer intimately
and to involve them in our processes. Once both of us were locked in each other’s
processes and systems, the risks of exit became high. Since our first project nine years
ago, our business relationship has been extending to new areas, bearing mutual fruit for
both of us. In these terms, the process of establishing relationships with customers was
also a learning process for both parties. This two-way learning entailed mutual
investment in each other’s practices, leading to mutual trust, commitment, and high
satisfaction. In other terms, the relationship is not an arm’s length client-supplier one, but
rather partnership.
Relationship quality management at MTL:
In the present scenario where a large number of IT service companies have emerged and
simultaneously competing globally, differentiation is very important for the success and
winning customers. And one way to differentiate itself is by developing a good relationship
with customers. MTL program director reflects on this as follows:“ Whatever we are doing
can also be done by other competitors in the market, we are not the only one who has good
people and processes, so we go beyond the technical capabilities, we look at the closeness or
the familiarity of the organization, if you look from a customer point of view, the first question
arises, should I give the project to this vendor or to the other vendor, assume both are
capable for the job, how will you differentiate; in our case, what differentiate us from others
is that if things go wrong, customers have access to the CEO or chairman of MTL, our
relationship goes right to the top, so there is tremendous amount of attention on each and
every account and we don’t need to tell them, they can see that on regular basis, and if there
is any problem, we do everything and whatsoever it takes to correct that, this is the level of
trust and support our customers get from us, that trust helps us in retaining the client, and we
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do so because of the strong relationship we have with our customers”. Thus it is evident that
high customer responsiveness is the key factor in the relationship quality management.
Pro-activeness in the customer relationships:
The change in environment not only does it bring new competition but also drives MTL to
embrace those changes, upgrade, and develop new set of capabilities on continuous basis.
MTL has experienced changes in technology from mainframe to mid frame, to client server,
and now to the cloud computing, the industry adopted it, and so the MTL. MTL ensures that
by the time customer starts adopting new technology it should be ready with the capabilities,
necessary for service delivery. This is important for the success of MTL, as described by the
MTL director: “Competition is there, and it keeps changing, it’s not the same in every market,
it’s not the same in every account, and it is not the same every time, it continuously changes.
Few years back we did not have any expertise in financial services industry and now we have
this reflects how we embrace change. Finding the first customer is always difficult in any new
industry or market, because you don’t have prior experience to show, but once you have
acquired that, it is easy to anticipate future developments. For us to gain new customers we
have to entice them with new and pro-active services and solutions”.
MTL has realized that most of the time the relationships with the clients are
problem-centric, but to sustain its relationship with customers and remain competitive in the
market, it goes beyond present problems and foresee problems not yet articulated by
customers or by competitors. The CTO of MTL describes the situation as follows: “What you
discuss with your customer on a daily basis is basically the on-going projects and the
commitments, but for us, it is more important to discuss the customer’s next projects and
future opportunities, indicating where the next technological edge comes from and what
business opportunities it is associated with. Now in this situation you are not a vendor
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producing something for the customer but you are acting as a guide to the customer, just like
the relationship of a person with his doctor. When you go to a doctor you are basically a
‘customer’ to the doctor, but the doctor does not treat you like a customer, he reviews your
health, keeps a close eye on your health, makes recommendations, or warns you against
potential health problems and suggest you some precautionary measures to avoid that
situation. One has to get into that level of relationship with its clients. It is in this way that we
adopt the doctor-patient metaphor to frame our relationship with our customers. Therefore,
we need to know the customer’s business, what are the problems of the customer, who are the
competitors, where the technology is shifting, and provide timely advice to the customer. This
does not only strengthen the customer’s relationship with the firm but also drives us to
become more actively vigilant and explore new capabilities to keep in the front of what is
going on in the environment”.
Customer focused innovativeness as the response to the change in the environment and
customer requirements:
MTL is in a technology-service business characterized by constant breakthroughs. MTL has
to respond to such dynamics flexibly by developing new capabilities. MTL has to
continuously search for new avenues of growth, both in technology and in business.
Adaptation and innovation is also the way to survive and retain customers in this business.
The VP of MTL highlights the significance of new innovative capability development as
follows: “We have a CTO in each business; the CTO assisted by an experienced team is
continuously scanning the current and future scenario and suggesting the direction for future
capability building.” The biggest challenge that has emerged in recent years is cloud
computing, which casts a doubt over the old idea of IT-based business. The advent of ‘cloud
computing’ has been used by MTL advantageously. Cloud computing is set to make most of
the IT businesses irrelevant, implying serious consequences for the existence of firms such as
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MTL. However, MTL is taking advantage of this situation, as described by the CTO of MTL:
“Cloud computing is a challenge as well as an opportunity. The concept of “cloud
computing” is not new, it is a necessary development. To take an example, you are carrying
your computer and all the computing power and data with you, does it make sense to carry
everything with you; what you need is the service and not the computing device. If you want to
create a document using Microsoft word, why should you buy Microsoft office software for
that, so you should go to the cloud, prepare a document and pay per document, which is what
you are doing for telephone calls, and for the uses of electricity. So you don’t have to bother
to buy the various software you need today. On the other hand, if everything is inside your
laptop, it is most secured, but when everything is in the cloud then comes the issue of security.
Apart from that, a whole lot of things people have not thought about, for instance if
everything is on cloud and everybody is out there working on it, the potential for
collaboration will be huge, which probably is unexplored and people need to explore. So the
question is how to turn these concerns into clear advantages that companies can profit
from?” The CTO of MTL explains the MTL’s approach to cloud computing: “We have the
technical knowledge required for this kind of work, so that has never been an issue in
strategic decision making. Sometimes new initiatives can come from customers, but in the
case of cloud computing, the driver for change comes from the technological environment in
which we live. The cloud computing group is working in one particular area and creating
cloud computing solutions in that specific area. This we are doing on our own on proactive
basis once we have developed, it will imply several benefits to customers and we will offer
them new solutions. The firm’s pro-activeness in the technological innovation helps MTL
keep ahead of its competitors and maintain a long term relationships with its customers.
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6. Discussion and Conclusion
The aim of this study was to examine what accounts for the successful sustenance of Born-
Globals and for their ability to continue growing beyond their initial internationalization
phase. Based on the case study, it is suggested that that customer relationship plays a
significant role in this process and Born-Global firms adopt a proactive and innovative
approach to manage their relationship with their customers. In line with earlier studies (Kim et
al. 2010; Knight and Servais, 2004), the findings tends to emphasize the importance of
developing long-term relationships with customers, but at the same time it sheds light on the
nature of relationships that puts Indian Born-Global firms in an advantageous position.
Consistent with the views of Knight and Cavusgil, (2004), Ruokonen and Saarenketo, (2009),
and Zhou et al. (2010), the findings suggest that relationship with customers is collaborative
in nature, as defined by Prahalad and Ramaswami, (2004), and customers also play active role
in developing the intimate relationships and the transfer of intimate knowledge. This is mainly
because of the high cost associated with the replacement of the knowledge that the partners
have developed of each other’s and the mutual trust and commitment the partners invest in.
Customers understand this risk and cost of replacement and thus are careful in the selection of
service providers. Therefore, the relationship normally begins with small projects that do not
have serious cost and risk implications. As the relationship solidifies, and as each party learns
more about the other party’s systems and processes, trust between the partners’ increases.
MTL makes sure that trust is established between top managers as well as between people on
an operative level, thereby making relationship building the responsibility and concern of
every body in the company. This intimate knowledge of the customer provides ample
opportunity to the Born-Global service firms to develop the required capabilities for current
and future customers. To the extent that the relationship is a long-term commitment, the case
under consideration witnesses how, in order to keep its clients, it has to proactively anticipate
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its clients’ needs, as these are always changing. Being pro-active helps the firm to keep
abreast of their clients’ business thrust. Furthermore, being proactive means that the firm has
to be innovation-driven, in the look out for new technological trends. Leveraging its unique
knowledge of its customers, MTL is more able than competitors to identify what future
solutions would be relevant to the businesses of the clients. Both suppliers and clients are
locked in in a virtuous relationship of reciprocal dependency. In this way, the entrepreneurial
orientation of the Born-global firms also influences the technological innovativeness towards
their customers, through both sensing and scanning the environment, on the one hand, and
watching the customer’s evolving requirements, on the other. This place them in a privileged
position compared to their competitors as customers are more reluctent to change suppliers
(Kocak, and Abimbola, 2009).
In summary, earlier studies have indicated that intimate knowledge of customers and good
relationship are critical to market success; the findings of this study provide additional
insights into the factors underlying customer intimacy, such as customer relationship quality,
a proactive approach and the pursuit of innovativeness. In this sense, the current study
answers Knight and Servais’ (2004) call to understand the relationship between customer
focus and the success of Born-Globals, and how customer intimate knowledge is translated in
superior performance. This study sheds more light on the nature of entrepreneurial
orientation and its underlying capabilities that lie at the heart of customer lock-in though
serving current and future needs of customers.
7. Limitations of the study
This study like any study, suffers from some limitations. It is based on a single firm and
single service industry with its own peculiar characteristics. However, due care has been taken
in selecting the case, as it is selected from a list of 25 high performing IT firms from India,
19
and it is a representative case of the Indian IT industry, as it shares a number of common
characteristics such as early internationalization, global expansion, long client relationships,
engaged in IT based knowledge services, a major part of the revenue generating from sales
aboard and from the same clients etc. while it also differs in terms of client base, area of
expertise, number of employees, and years of existence. Thus the findings can be generalized
to a certain degree across the Indian IT services industry. In spite of these and other
limitations, I believe this paper provides some unique and insightful data into intimate
customer in knowledge intensive-services industry and makes an attempt to uncover the
micro-foundations of customer-oriented capabilities and how they affect the performance. I
hope the spirit of this paper in advocating the importance of contextually grounded studies of
a Born-Global firm’s customer orientation will spur further research interest along these lines.
Thus, preliminary though the findings may be, they can be taken as a springboard for future
investigation.
20
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