**2. Theoretical development**

which certain new ventures can internationalise [3–10]. However, several authors consider that to be able to advance our understanding of BGs, we need to analyse the factors that can affect their competitiveness after their creation, particularly from a marketing perspective

Traditionally, lack of market knowledge has been regarded as one of the biggest impediments small businesses have to overcome in their internationalisation process [18–20] in that it constitutes a key variable for proactively seeking international opportunities [21, 22]. McNaugthon [23] shows that companies concerned to expand their knowledge of foreign markets have a broader perspective and there is a greater chance that they will seize the

If we attempt to identify the main source of this knowledge, we observe that traditional gradualist models attribute a fundamental role in knowledge generation—and, therefore, in the internationalisation process—to the firm's experience (at home and abroad) [1]. However, in the case of BGs, knowledge based on experience cannot be considered the only source of knowledge about foreign markets that these firms use, as their experience is minimal. For this reason, it becomes necessary to investigate how BGs manage to acquire and interpret information about markets and how they translate it into specific actions that affect the develop-

ment of skills that help them to remain dynamic in international markets [22, 24, 25].

by providing a more valuable offer than that of their rivals.

Many marketing scholars argue that market orientation plays a determining role in the international success of new businesses due to its contribution to effective knowledge management [26–30]. In this line, Knight and Cavusgil [31] point out that the market orientation of new international ventures enhances their understanding of their customers' present and future needs and optimises the development of distinctive actions that can meet these needs

In addition, based on the social perspective, the study of entrepreneurship has also highlighted the importance of the links entrepreneurs develop with members of their networks as they facilitate rapid access to the information and knowledge associated with the latest trends in the new markets, and with certain key resources that are not initially available to

However, although from the theoretical viewpoint there seems to be a strong complementarity between market orientation and membership of business networks, as shown in certain studies [13, 37, 38], little is known about the way these factors combine. In this vein, Loane and Bell [18] highlight the need for research attention to the mechanisms and routines that enable new international ventures to generate and manage knowledge through relationships they establish in networks. In turn, Evanschitzky [38] highlights the importance of studying their influence on competitiveness and firm performance, in light of the scarce knowledge to date.

In this respect, this study covers the mutually complementary nature of both factors in a single construct known as network market orientation (NMO). Thus, although previous studies have emphasised the importance of MO in the context of relationships between firms, they have not analysed it as an inter-business phenomenon in itself, but rather as the sum of the market orientations of the various individual firms [22, 37, 39, 40]. The present work analyses

[11–17].

opportunities that appear in them.

48 Knowledge Management Strategies and Applications

these firms [32–36].

### **2.1. The relevance of NMO for BGs**

The international entrepreneurship literature has increasingly emphasised the role of business networks in the process of learning and knowledge generation in BGs [36, 55–57]. The relationships an entrepreneur builds with the other network members (family members, customers, distributorsand providers) can be crucial in (1) generating more differential and valuable knowledge on new clients' needs and the business environment conditions, (2) knowing how to exploit the positive conditions and avoid the negative ones and (3) accessing the capabilities and resources required to do it [34]. Networks, therefore, offer BGs a way of compensating for their limitations of newness [58], smallness [59] and foreignness [60] by providing the opportunity to access valuable supplementary knowledge on aspects such as technology, distribution channels and customer bases [61] and to improve other knowledge-related aspects such as information exchange and coordination [62] and the speed of know-how and technology transfer [63]. Thus, networks are key for BGs to develop a broader knowledge base beyond what they could achieve alone [64], abandoning the idea that the generation of new knowledge is a purely internal process [19, 25, 56, 65]. This is particularly so if we bear in mind that BGs are characterised by their lack of necessary resources.

The processes that contribute to relational information management in adopting an NMO are presented in the theoretical proposal of Helfert et al. [37]. These authors define four relational knowledge management mechanisms developed jointly by the members of a network: knowledge exchange processes, in order to satisfy clients' requirements; coordination processes, aimed at synchronising the network ties through formal and informal routines; coupling processes, necessary to adapt the particular features of a network member and conflict resolution mechanisms designed to solve unexpected contexts. The work of Helfert et al. [37] represents a significant step forward in the study of this construct. In fact, previous research was limited to considering the sum of market orientations in individual companies [66] or adapting the original market orientation models (behavioural and cultural) to the network setting.

Following the work of Helfert et al. [37], Monferrer et al. [22:p.388] defined NMO as 'a strategic orientation established jointly by the different members in the business relations network. This strategic orientation involves, in a climate of trust, collaboration and commitment, engaging in certain activities and fundamental shared behaviours (adaptation, coordination, conflict resolution and exchange) based on the generation of an extended intellectual capital'. These activities seek to increase the competitiveness of the network and its individual members in an attempt to provide superior value to end customers by satisfying their needs.

### **2.2. NMO and absorptive capability in BGs**

Absorptive dynamic capability is related to the processes developed in the company to seek new information, internalise it and integrate it into the firm's existing knowledge base [49]. Developing this capability is vitally important for BGs' survival, since their business opportunity has not yet been consolidated. Furthermore, given that BGs compete in a global market segment [2, 3], the nature of the factors that influence the conditions of their business environment come from a greater diversity of sources. This variety of sources has the effect of increasing the complexity associated with the mechanisms BGs need to generate in order to manage and internally integrate knowledge from their external markets. For this reason, before developing new knowledge search and integrative mechanisms, firms must stimulate the use of processes that allow original knowledge from different sources to be managed efficiently [22, 48].

BGs are recently created companies and therefore they assume limited resource availability [5, 6, 8, 14, 17, 67]. In these circumstances, networks facilitate the development of absorptive capability in BGs [68]. Nahapiet and Ghoshal [69] indicate that to access the different sources of knowledge from their external markets, firms need to generate communication processes in order to guarantee the capture and integration of real and potential capabilities and resources associated to the relationships an individual unit builds through its network. Similarly, Cohen and Levinthal [49] suggest that absorptive capability is built on communication structures that cross firm boundaries.

Belonging to a market-oriented network will therefore give BGs some relevant advantages, first by improving their capacity to develop an agreed perception of their markets based on multiple agents and sources of knowledge; and second, by incorporating coordination processes to interpret and understand that knowledge and integrate it into the internal firm's knowledge base [22, 37, 40]. In sum, a market-oriented network facilitates the development of BGs' absorptive capability. We therefore posit that:

*H1: Participation of BGs in market-oriented networks stimulates their absorptive capability*.
