Understanding the strategic orientations and continued international success of Indian Born‐Global firms  

Kumar, Nishant PhD Candidate, School of Business, Stockholm University, Sweden

Email: nku@fek.su.se 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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