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Simple word of mouth or complex resource orchestration for overcoming liabilities of foreignness

Stoyanov, Stoyan Petrov and Woodward, Richard (2014) Simple word of mouth or complex resource orchestration for overcoming liabilities of foreignness. Academy of Management Proceedings, 2014 (1). ISSN 0065-0668

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Abstract

The context of transnational entrepreneurs (TEs) in Diaspora communities provides a unique opportunity to explore the process by which business actors form strategies for overcoming the liabilities of foreignness (LOF). We employ an approach based on the resource orchestration process described by Sirmon, Hitt, Ireland and Gilbert (2011) in order to answer the question how participation in Diaspora networks helps TEs diminish the LOF. Based on our analysis of an extensive set of interviews with twelve Bulgarian entrepreneurs based in London, we conclude that the resource orchestration framework, when modified to include a time dimension, helps us to explain their strategies. We find that TEs typically undergo a sequence of processes in which they leverage their Diaspora networks in order to access, acquire, and adapt knowledge and capabilities that allow them to embed themselves in the local environment and thereby reduce the LOF they face.