Corporate entrepreneurship has been looked at mainly in the field of entrepreneurship and strategy. Although many studies have looked specifically at types of corporate entrepreneurship, recent work has examined internationalization as a type of corporate entrepreneurial behavior.

Guth and Ginsberg (1990) stressed three relevant dimensions of corporate entrepreneurship: innovativeness, new venturing, and strategic renewal, a typology that has been often followed by other researchers (Bierwerth, Schwens, Isidor, & Kabst, 2015). However, other authors work with different categories. For example, while Klammer, Gueldenberg, Kraus, and O'Dwyer (2017) suggest that strategic renewal includes downsizing, outsourcing, corporate venturing, restructuring, and rejuvenation, Schmitt, Raisch, and Volberda (2018, p.85) hold that the concepts of corporate venturing and strategic renewal “clearly differ.” In addition, while some authors look at entrepreneurial attitudes, others look at entrepreneurial activities (Covin & Miller, 2013).

Kuratko, Hornsby, and Hayton (2015) suggest that corporate entrepreneurship comprises two sets of activities: corporate venturing and strategic entrepreneurship. Corporate venturing deals with the internal creation, or the acquisition, of new ventures. Strategic entrepreneurship refers to “a broad array of significant entrepreneurial activities or innovations that are adopted in the firm’s pursuit of competitive advantage which usually do not result in new businesses for the corporation” (Kuratko et al., 2015, p. 248), and comprises several types of innovation: strategic renewal, sustained regeneration, domain redefinition, organizational rejuvenation, and business model redesign. Sustained regeneration (new product in an existing category) and domain reconfiguration (reconfiguration of products/categories) are two forms of product diversification. Strategy renewal has been defined as “the firm’s ability to integrate, build and reconfigure internal and external competences” (Teece, Pisano, & Shuen, 1997, p.516). Schmitt et al. (2018, p.81), in a literature review on strategic renewal, present a similar definition, defining it as “the process that allows organizations to alter their path dependence by transforming their strategic intent and capabilities.” Organizational rejuvenation refers to “the alteration of internal structures, processes and capabilities” (Adenfelt & Lagerström, 2006, p. 94), and business model redesign consists of creating a “fundamentally different business model in an existing business” (Markides, 2006, p.21).

The idea that internationalization is a special case of corporate entrepreneurship is not new. In fact, internationalization has been seen in the international business literature not only as a form of geographic diversification and expansion to new markets, but also as an innovation (e.g. Lim, Sharkey, & Kim, 1991; Samiee, Walters, & Dubois, 1993). Internationalization is a form of entrepreneurial behavior by established firms because these firms internationalize in the pursuit of opportunities not available in the domestic market, and opportunity recognition is “at the heart of contemporary research in entrepreneurship” (Naldi et al., 2015, p.781). These authors define international corporate entrepreneurship as “an international firm’s expansion into new foreign markets or into existing foreign markets by providing new products/services to existing customers.” (p.783). They add that this sort of corporate entrepreneurship often requires innovative, proactive and risk-taking approaches by management.

IE is positioned at the intersection of the fields of entrepreneurship and international business (Oviatt & McDougall, 2000). As such, it combines concepts from both fields. Therefore, in order to gain insight into the internationalization process of mature entrepreneurial firms, we examine the main issues that characterize INVs (and BGs).

Innovativeness seems to be positively associated with early firm internationalization (e.g. Autio, Sapienza, & Almeida, 2000; Dimitratos & Plakoyiannaki, 2003; Kraus, Brem, Schuessler, Schuessler, Niemand, 2017; Knight & Cavusgil, 2004; Zheng & Khavul, 2005). Internationalization is, in and of itself, innovation. Also, internationalization may engender more innovation as a result of knowledge acquisition when a firm crosses borders (Riviere & Suder, 2016), or of the development of dynamic capabilities as the firm strives to reconfigure its resource base (Capron & Mitchell, 2009). Innovativeness is thus both an antecedent and a consequence of internationalization (Zahra, Hayton, Marcel, & O´Neill, 2001). In addition, these firms show proactiveness (e.g. Dimitratos, Plakoyiannaki, Pitsoulaki, & Tüselmann, 2010; Efrat, Gilboa, & Yonatany, 2017; Gabrielsson, Gabrielsson, & Dimitratos, 2014) and risk-taking behavior (e.g. Harveston, Kedia, & Davis, 2000; Knight & Cavusgil, 1996; Madsen & Servais, 1997; Mort & Weerawardena, 2006), and their internationalization process is strongly connected to the use of social capital (networks and partnerships) (e.g. Arenius, 2005; Chetty & Agndal, 2007; Felzensztein, Ciravegna, Robson, & Amorós, 2015; Gabrielsson, 2005; Ngasri & Freeman, 2018; Schwens & Kabst, 2009).

Researchers have also noticed that born globals – BGs (considered a type of INV) – are more market- or customer-oriented than firms that internationalize later or gradually (e.g. Brettel, Engelen, & Heinemann, 2009; Kim, Basu, Naidu, & Cavusgil, 2011; Knight, Madsen, & Servais, 2004), although one study did not find significant results for this variable (Wong & Merrilees, 2012). BGs also tend to deploy niche or focus strategies (e.g. Baronchelli & Cassia, 2014; Chetty & Campbell-Hunt, 2004; Gabrielsson et al., 2004; Moen, 2002; Zuchella, Palamara, & Denicolai, 2007) and differentiation strategies (e.g. Bloodgood, Sapienza, & Almeida, 1996; Evangelista, 2005; Knight et al., 2004; Pla-Barber & Escribá-Esteve, 2006).

Furthermore, the extant literature consistently shows that a number of entrepreneur characteristics (such as an international vision at inception and international experience prior to the firm’s founding) seem to correlate strongly with early internationalization, although a study done in China indicated a different pattern (Naudé & Rossouw, 2010). Several authors uncover that international experience supports rapid internationalization (e.g. Bloodgood et al., 1996; Harveston et al., 2000; McDougall & Oviatt, 1996; Schwens & Kabst, 2009). Nordman and Melén (2008) found differences among born globals in terms of prior international experience of the founder/manager. An international vision seems to be behind the ability to inspire and lead the firm into new international markets, as well as to devise strategies that can take the firm into unexplored terrain (e.g. Harveston et al., 2000; Kundu & Renko, 2005; Mort & Weerawardena, 2006; Oviatt & McDougall, 1995). New opportunities are created or discovered due to external factors that trigger a “vision” and the subsequent pursuit of a way to implement it. The way by which the entrepreneur recognizes the opportunity and deploys resources can either enhance or constrain subsequent steps in international markets (Mathews & Zander, 2007). Table 1 presents selected characteristics of INVs and BGs found in the literature.

Table 1.
Selected characteristics of INVs and BGs

Few IE studies have looked at the characteristics of more mature entrepreneurial firms that internationalize. A mature firm may still be led by the original entrepreneur many years later, or may have created an entrepreneurial culture (Dimitratos, Johnson, Plakoyiannaki, & Young, 2016; Leal-Rodriguez, Albort-Morant, & Martelo-Landroguez, 2017). Gabrielsson et al. (2014) approached the issue of whether an entrepreneurial culture remains intact as an INV ages. They found that entrepreneurial nature and intentions change over time, and certain characteristics that appear in earlier phases are not as important in later stages of the lifecycle.

Why do mature firms already established in the domestic market internationalize? There is no single answer for this question in the literature. The entry into a foreign market by a mature firm can often be associated with the entry of foreign competitors into the domestic market (Oviatt & McDougall, 1995) — either a defensive or a preemptive move. Bell, McNaughton, and Young (2001) note that some firms seem to abruptly start their internationalization process without any discernible motive whatsoever even after having been well established in the domestic market. Sometimes, firms decide to internationalize to increase their participation in already-established networks (Schweizer, Vahlne, & Johanson, 2010). In other cases, firms with strong entrepreneurial characteristics choose to internationalize gradually, during a later stage of their lifecycle (McDonald, Krause, Schmengler, & Tuselmann, 2003). Comparing early- and late-internationalizing firms, Schwens and Kabst (2009) found that late-internationalizing firms have different motives, compared to early internationalizers; mature firms seem to be more motivated by market-seeking and competitor-following than do INVs.

Mature firms combine previous domestic experience with new international experience, and they also tend to use trial-and-error strategies and replicate strategies that proved to be successful in the domestic market. Their international development often culminates in wholly-owned subsidiaries in foreign markets (Schwens & Kabst, 2009). The replication of domestic solutions in foreign markets is seen as an attempt to reduce risks (Zahra et al., 2001). Nevertheless, other studies have found that established firms that internationalize later show behavior that is similar to that of INVs, such as innovativeness, proactiveness and risk-taking (Schueffel, Baldegger, & Amann, 2014).

The software industry was selected because of its dominance in INV and BG research. Three cases were selected based on the following criteria: (i) firms must be large-sized; (ii) their CEOs must be the founding entrepreneurs; (iii) their inception must have been prior to 1990; (iv) they must have started their internationalization at least ten years after inception (thus distinguishing them from BGs); and (iv) they must have reached a leading position in the Brazilian software industry. Three cases were identified (Table 2) that complied with these criteria: Stefanini, Totvs, and Politec. The last case was studied only until 2011, when the company was sold to a multinational firm.

Table 2.
Firms studied

* Until the company was acquired by a Spanish IT multinational

Stefanini IT Solutions was founded in São Paulo in 1987 by entrepreneur Marco Stefanini to train IT personnel. By 1990, however, the firm started to develop business software and to offer outsourcing services. National expansion began in 1995, with the opening of local offices in three large Brazilian cities. International expansion began in 1996. The firm adopted a path of organic growth until 2008, followed by acquisitions of several domestic and foreign companies. In 2016, Stefanini had sales of 2.6 billion reais and around 21,000 employees worldwide (12,000 in Brazil). It remained privately-owned.

Totvs was founded in 1983 by Laércio Cosentino and Ernesto Haberkorn to develop software programs for microcomputers. From its headquarters in São Paulo, the company expanded nationally, setting up local offices in major urban areas, and it franchised operations in smaller regional markets. The first international move was in 1997. In 1998, a venture capital fund acquired a 25% stake in Totvs, enabling the acquisition of the Mexican software developer Sipros. In 2005, the venture capital arm of the Brazilian National Economic and Social Development Bank (BNDES) acquired a 16.7% stake in the firm. In 2006, Totvs went public. Between 2006 and 2013, the company also benefitted from subsidized loans and an investment in debentures (convertible to common stock) from BNDES. By 2016, Totvs had sales of 2.2 billion reais and around 5,500 employees (500 outside Brazil), and another 6,000 people working in franchises.

The study uses Politec as a counterfactual case, since the company failed and was acquired by a Spanish IT multinational at the end of 2011. Politec was founded in 1970 by the entrepreneur Carlos Alberto de Barros. With headquarters in Brasilia, the capital of Brazil, the firm offered software solutions for business and government. The Brazilian government soon became Politec’s largest customer. National expansion started in 1990 and initial attempts to sell abroad began in the mid-1990s. Sales estimates for 2011 were around 400 million reais, and the company had close to 5,000 employees.

The case studies were based on personal interviews with top executives, questionnaires applied to managers, and extensive secondary research (Table 3). Part of the material was available in a research center (including transcriptions of past interviews with firm executives) and part was collected for the study. The amount of data available for this study permitted triangulation. Triangulation was especially useful for constructing the case description. The interviews provided a general guide for reconstructing the events that characterized the international trajectory of each firm. The other materials helped to check inconsistencies and fill in the gaps.

Table 3.
Sources utilized in the study

Book chapter; (**) Politec’s website (pre-2011) is no longer available, since the company was acquired; however, the research center kept data from this website.

The first analytical step after the data were gathered included preparation of comprehensive case reports. The data were then organized into categories based on the literature. Each category was subdivided to serve as a guide for data organization and analysis (Table 4). Some sub-categories used in the analysis emerged from the field; industry recognition (a sub-category of innovation) and the three types of proactiveness (market seeking, preemptive move and follow the customer. The next step was cross-case analysis. Finally, pattern-matching was used to compare the findings with those in the literature.

Table 4.
Categories used in the analysis

The Brazilian software industry emerged in the 1970s under the military rule. However, it only started to prosper under the Information Technology (IT) Law of 1984, which established a market reserve for domestic IT producers. And although software was not directly included under the shield of government protection, it did benefit from this favorable domestic environment. After protection of the domestic market ended in 1992, most hardware manufacturers disappeared. Nevertheless, in the software industry, several firms not only survived but showed substantial growth, such as the three firms selected for this study (Stefanini, Totvs and Politec), which were small at the time of market protection for Brazilian IT firms, and remained so until 1992, when the IT law was abolished. Politec was the largest of the three firms until 2007, when it was surpassed by Totvs, and later (2008) by Stefanini.

Strategies and growth in the domestic market

The three firms followed different strategies in the domestic market. Stefanini focused on large clients, particularly in the financial sector, providing outsourcing and consulting services. In the beginning, taking advantage of Brazil’s competence in IT for the financial sector (due to years of high inflation rates, which required the development of sophisticated software programs), the firm’s main clients had been banks and other financial institutions. Later, the company started to serve other sectors such as retail and manufacturing. Expansion became necessary in order to better serve large clients: first nationally, and shortly thereafter internationally. The mode of entry into other markets, both domestic and foreign, was the opening of firm offices or acquisitions. Markets were selected according to where the clients had their operations.

Totvs followed a very different strategy. During the 1990s, the firm specialized in ERP systems to serve the small and medium-sized segment, which had basically been ignored by large multinationals such as Oracle and SAP. As these smaller firms grew, Totvs soon began to serve large firms, accounting for around 20% of its sales. Nonetheless, its focus remained on the small and medium-sized firm segment, both in the domestic and the international market. Because of the size of its target clients, management believed it did not make sense to open other offices, except in a few locations; franchising to local high-tech entrepreneurs was seen as the best strategy because these entrepreneurs had local market knowledge and access to local firms using their networks.

By contrast, Politec emphasized large government contracts. This strategic choice was consistent with the company’s headquarters being in the capital of Brazil. Indeed, a cluster of software firms flourished in Brasilia, driven by the proximity with government agencies. Politec soon became the largest player, and a preferred supplier to government agencies and state companies. However, the over-reliance on government contracts eventually paved the way for bribery. And, as federal investigations became public, it threatened the continuity of business with other Brazilian government agencies, state companies, and the U.S. State Department. Such circumstances made sale of the firm virtually mandatory.

Firm internationalization

The internationalization of the three firms was markedly different, although their first significant international moves occurred around the same time. Table 5 presents selected characteristics of the firms’ internationalization processes.

Table 5.

Selected aspects of the firms’ internationalization processes

Politec started with the acquisition of a small software firm in the US, with sales of around four million dollars. Until then, the firm had tried unsuccessfully to get contracts in the US. The acquisition legitimized Politec as a US firm. A partnership with Iridian Technologies gave access to the US State Department, and soon the firm had several contracts to develop iris recognition software for American consulates around the world. The international expansion after this promising start was, however, quite modest. In fact, the US operation was not as successful as expected. Acquired in 1998, the company had not yet reached breakeven by 2003. Other foreign initiatives included partnerships with Chinese and Indian firms, but they did not result in the establishment of facilities in those firms’ countries. In 2008, Mitsubishi acquired a minority stake in Politec and the partnership was followed by a joint-venture in Japan. In 2009, the company announced a merger agreement with a Chilean firm, but the agreement later fell through. Although the reasons were not revealed, Politec was at the time under federal investigation because of charges of bribery in government contracts.

On the other hand, both Stefanini and Totvs showed a steady and rapid increase of the scope of their international operations, but Stefanini was more successful in achieving depth. In 2016, Stefanini had sales of 2.6 billion reais, around 50% of that amount from foreign countries, and had 88 offices in 39 countries (seven in the US). In contrast, in 2016, Totvs had operations (owned or franchises) in 41 Latin American countries, the US, Portugal and Angola. The company also had facilities in foreign countries: development centers in the US, Russia, China and Taiwan, and offices in six countries (Argentina, Mexico, China, Colombia, Portugal, and the US) besides Brazil. International sales accounted for 4% of total sales.

Innovation/Innovativeness – All three companies were recognized as highly innovative and had earned several awards and nominations throughout their history from domestic and international organizations, both profit and non-profit. In addition to industry recognition, the three firms had developed software of their own that was competitive with similar offerings by international firms. They had expanded their product portfolio as they advanced to national and international markets, not only by adding new software, but also by entering new market segments with products designed to serve them. They thus achieved both sustained regeneration and domain reconfiguration (Kuratko et al., 2015).

International Corporate Venturing – The three firms acquired other firms as a way to enter new markets, while at the same time accelerating domestic growth and/or acquiring new competencies. Politec acquired Synergy Imaging Systems to gain access to US clients. Stefanini made a series of acquisitions, the most important being the American software firm TechTeam, a large-sized company with 2,300 employees and 16 subsidiaries in several countries. Stefanini also acquired two other companies in the US, two in Colombia and one in Uruguay. According to Stefanini’s founder and CEO, the acquisitions in and outside Brazil had two different purposes: in Brazil, the goal was to add competencies; outside, in contrast, the purpose was to increase the company’s volume by acquiring firms with similar products and services. Totvs’s acquisitions were focused more in Brazil: its most important acquisition was Datasul, its largest domestic competitor. However, Totvs also acquired a Mexican firm (Sipros), and its domestic acquisitions resulted in a subsidiary in Portugal (from RM Sistemas), as well as franchised operations in other countries (from Datasul). After 2012, Totvs acquired a minority stake in the US firm Good Data Corporation. Table 6 presents the foreign acquisitions of each firm by year and by foreign country.

Table 6.
Corporate foreign acquisitions

Proactiveness – The three firms showed proactive internationalization. All the founders considered internationalization a strategic move. Politec’s management saw internationalization as both a preemptive move and an opportunity for growth. Stefanini claimed that while the idea of going abroad came quite early in the firm’s history, the main triggers were the perception that foreign competitors were entering the Brazilian market and going abroad was thus necessary in order to compete effectively. There was also a need to follow large Brazilian firms that were internationalizing. In addition, the firm had partnerships with other global software firms, such as SAP and Oracle, which also demanded services in other parts of the world. Totvs displayed all three types of proactive attitudes, as reflected in top management’s compiled statements (Table 7).

Table 7.
Examples of interview extracts concerning proactiveness

Risk Taking – The firms tended to proceed more carefully than their INV or BG counterparts. Politec initially acquired a small firm and used it as a basis for US operations. The investment was not substantial, and the risk of failure was small. Also, the follow-the-client strategy posed low risk to Stefanini to expand internationally. Totvs’ expansion, based on franchise contracts, was also a low-risk strategy.

Market Strategies – None of the three firms adopted a focus strategy in their internationalization, although Totvs tended to emphasize the small and medium-sized segment of the ERP market. As for differentiation, all firms had developed their own software and were considered innovative, but none used differentiation strategies; they competed on price. They were also customer-oriented. Interestingly, the three companies essentially followed the same strategy in the domestic and international markets, but later Stefanini began operations in India with a different purpose, that is, to have access to the qualified and cheaper human resources available in that country.

Networking – All three showed a strong reliance on the firm’s and the entrepreneur’s social capital. This is not surprising, since, in their survey of the Brazilian software industry, Dib, Da Rocha and Da Silva (2010) found no significant difference in terms of use of social capital between early- and late-internationalizing firms, with substantial use of social capital by both groups. The authors explained that in Brazil “relationships are systematically used in order to foster business with other firms and individuals and are critical to operate successfully…” (p. 246).

Founders’ Vision and International Experience – Despite the lack of an international vision at the firm’s inception, the understanding that internationalization was critical for their firms’ growth came in a later phase of their development. At some point in the firm’s trajectory, Stefanini’s founder decided to transform the firm into a global enterprise. In a similar way, Cosentino, the CEO and founder of Totvs, came to believe that international expansion was an imperative for the firm. Such understanding was the result of the dominant market position of Totvs in the small and medium-sized firm segment of the Brazilian market. As for international experience, none of the founders had work experience or education abroad, nor had they lived abroad.