A influence of internal organizational capabilities and external environmental factors on the international expansion intentions of small venture companies : Focusing on the moderating effect of overseas network orientation
Authors:   The Korean Career·Entrepreneurship & Business Association, Jeong Hyunchul , Lee Soyoung 
Published: October 2024

The international expansion of small venture companies is regarded as a crucial strategy for the survival and growth of these firms, particularly as it serves as a motivation for companies with limited resources and capabilities to enter foreign markets. In light of the increasing emphasis on the significance of internationalization for small venture companies within the current business environment, this study aims to identify the key factors influencing the intention to pursue international expansion among domestic small venture companiess. To this end, a research model was established, wherein internal organizational capabilities and external environmental dynamism were treated as independent variables, while international network orientation was considered a moderating variable. A survey was conducted with a total of 264 executives and managerial personnel (CEOs, executives, and department heads) from small venture companies to test the proposed hypotheses. The study first examined the causal relationship between internal organizational capabilities and external environmental dynamism (including market dynamism and technological dynamism) on the intention to engage in international expansion. Secondly, it assessed the moderating effect of international network orientation on the relationship between internal organizational capabilities, external environmental dynamism, and the intention to expand internationally. The findings of this research are as follows: First, internal organizational capabilities (including CEO global orientation, technological capabilities, market information utilization, and investment attraction capabilities) and market dynamism positively influence the intention to pursue international expansion, while technological dynamism was found to have a negative impact. Second, the study demonstrated the importance of international network orientation in moderating the relationship between internal organizational capabilities and the intention to expand internationally, thereby contributing new insights to the existing literature. Based on the results of this study, several implications for enhancing international expansion are proposed. First, the global orientation of the CEO emerges as the most critical factor in the decision-making process for international expansion, highlighting the need for dedicated programs to support CEOs in this endeavor. Second, small venture companies should focus on strengthening their internal organizational capabilities—specifically in terms of human resources, technology, market knowledge, and investment capabilities—while also developing strategies to expand their external networks for successful internationalization. Finally, it is essential for relevant institutions to collaborate in establishing training programs for market experts that are suitable for a knowledge-based society, thereby facilitating the international expansion of small venture companies.