ANALYSIS OF RISK MANAGEMENT FOR INTERNATIONAL NEW VENTURES DURING EARLY STAGES OF EXPANSION (KEY IJP************199)

• Shubhi Bansal

Abstract

ABSTRACTThis thesis aims to conduct a review of the literature and investigate how INVs approach risk management in the early stages of internationalization. The goal of this thesis is to close the knowledge gap regarding INVsor BGsearly internationalization. This thesis fills the knowledge gap on how INVs should manage risk during the early stages of internationalization, as there aren't enough studies in this area.INTRODUCTIONThis thesis seeks to investigate the risk management strategies used by International New Ventures (INV) and Born Global (BG) in connection with early internationalization. In order to accomplish this, I will study the literature and the research done by academics on the risk of early internationalization of BG and INV. A wide range of factors are said to influence risk and early internationalization, and each of these factors has the potential to affect how the internationalization turns out. Although the topic of how INVsBGs manage specific risk situations is vast, many scholars focus on particular types of firms or cases and argue how they address various challenges, including risk. Thus, there is a dearth of research on the particular subject of risk management during the early stages of internationalization. This is a knowledge gap in the literature and calls for additional research on the subject. Thus, the following query is posed: What risk management strategies do International New Ventures and Born Global employ when it comes to early internationalization?Theories have been employed by academics to explain how managers and CEOs handle risky situations and perceive risk. However, there are a number of additional factors to consider when internationalizing a business, such as environmental and economic factors that could influence management behavior or expose the company to unidentified risks brought on by the environment, which could also affect the internationalization's outcome. All of the studies have looked into various research goals, and by putting out various research questions, they have finally arrived at either distinct or comparable conclusions.The theoretical foundation and research results from two years of studying international entrepreneurship will be the main topics of this thesis, along with a chapter that compares and discusses the study's similarities and differences. Finding out how academics employ risk management in their research is the aim of the literature review, which will be compared to a risk management theoretical framework later in the thesis.By highlighting the risk management sections of the INV and BG literature, I will contribute to the body of academic literature. Some of these sections may require more research on risk management, and I will conclude by mentioning crucial risk management decisions that businesses should be aware of when they go global. Because it uses a review of the literature to identify any potential gaps, this thesis is exploratory in nature.The writers of the literature on international new ventures concentrate on the various difficulties that these fledgling companies might encounter; nevertheless, a crucial elementand the subject of this paperis the risk associated with internationalization. Risk is the probability of a bad outcome; it can be defined as either the unpredictability of an event or the unfavorableness of the outcome. Thus, the likelihood and impact of a risk are its defining characteristics. To put it simply, this is simply the odds. While we may be able to calculate the odds and know the main parameters, likelihood and impact are not always quantifiable, which is inherent to the concept of risk. Because we are ignorant of what we do not know.The writers of the literature on international new ventures concentrate on the various difficulties that these fledgling companies might encounter; nevertheless, a crucial elementand the subject of this paperis the risk associated with internationalization. As a result, we are aware that INVs and BGs can prevent or lessen specific risk events, but we are unaware of the decision-making process or the steps that are done in response to particular risks. Merely asserting that leveraging network connections can reduce risk is insufficient; it is also necessary to take into account the likelihood and nature of the loss, as well as the way in which this information influenced the firm's decision to pursue a partnership in order to achieve the best possible outcome.It is also vital to take into account small business performance, which can be evaluated in a variety of ways. While some people define it as complex and multifaceted, others believe it to be quite straightforward. Three viewpoints have been used in previous research to examine small firmsperformance: human, sustainable, and economic. Given that prior research will be the primary source of data for this study and that most researchers concentrate on a firm's financial growth, it stands to reason that financial performance will be given the greatest weight. (Raymond, Stpierre, Cadieux, Marchand, & Labelle, 2013)