Entrepreneurial orientation as part of the entry strategy

In this chapter we will assess the entrepreneurial capacity and orientation of our case firms.

According to Alvarez and Busenitz (2001), entrepreneurial opportunities emerge when someone sees value in resources where nobody else does, and acts upon these. Woldesenbet (2011) argue that small firms may compete as suppliers to large production organizations provided that they have developed the entrepreneurial and dynamic capabilities that enable a sustained offering of value-added products and services. The author especially values the managerial resources available to the firm, and the owner’s ability to recognize opportunities.

A high-level human capital is critical for entrepreneurial businesses success and their ability to identify opportunities to differentiate themselves and provide high-value, knowledge-intensive products and services (Woldesenbet, 2011). The owner’s capabilities play a critical part in the success of small firms. Thus, new and smaller entrants to the new market should recognize the importance of entrepreneurial abilities, and take advantages of the dynamism a smaller company might possess.

An example of this dynamic capability is the transition Chriship made from bulk vessels to the offshore market, when they recognized an opportunity. This is the biggest transition we have observed among the companies we are assessing, at least relatively speaking. Even

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though their success can be disputed, the COO argues that they have earned money and also proved to be a contender to the incumbents in the ERRV market.

In the following we will assess the firms and their entrepreneurial orientation, both in general and the tendency towards the Barents Sea. The entrepreneurial orientation of a firm decides to what degree it is entrepreneurial, and how it is able to benefit from new opportunities in the industry. Lumpkin (1996) argues that autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness are central dimensions of the entrepreneurial orientation.

Most of Esvagt’s new vessels are winterized, which could be seen as proactiveness as to the new market. Despite this, they emphasize their general capability of rescuing people as their main competitive advantage, regardless of location. Esvagt stand out as to product innovation, as they produce their own MOB-vessels. In addition to dialogue with customers and suppliers, they benefit from comprehensive training because of the crew exchange routines are

incorporated into the company by regular meetings when the crew reaches ashore. From assessing the fleet, it seems like Esvagt tend to emphasize rescue related innovation more than for example environmental aspects. As for risk taking, they are exposed to the spot market with their smaller ERRV vessels, but with a relatively large fleet, investing in familiar sectors would not be considered especially risky. The fact that they have outcompeted Møkster in the low-cost ERRV market, admitted by Møkster’s operational manager, indicate competitive aggressiveness in the North Sea.

Møkster’s CEO Ann Jorunn Møkster was recognized as an autonomous leader by several of the employees we interviewed, across disciplines. The controller explained that the CEO was a driver for exploring and developing potential relations. In the interview the operations manager emphasized short decision-paths illustrated by open doors at their offices at all times.

As to risk taking, Møkster is moving away from the ERRV spot market, to the contract-based high technology ERRVs. Thus, one could consider them risk averse in this segment, but with two new PSVs built without contract, and still exposure to the spot market in other segments, they are still subjected to risk. Møkster’s innovation is strongly connected to their

proactiveness, through their environmental friendly fleet. The proactiveness is emphasized in their annual report by stating “In many cases the company have been in the forefront of adopting new technology and new solutions before they have become the industry standard”

(Environmental and Annual Report 2012, p. 18). The extraordinary proactiveness is proved by being the first company to introduce a vessel with DNV’s “Clean design”, which have

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become the industry standard of new vessels today. The competitive aggressiveness is harder to assess, but they have a firm stance towards the northern markets.

Møkster clearly state a strategy of aiming northwards instead of the emerging markets in the South. This is coherent with their strategy to go from traditional ERRVs to more advanced multi-purpose vessels. They have built gas-driven vessels for the new market and established an office there, which could be considered proactive behavior. In addition, most of the new builds have winterization classes. The strategy and dedication as to going northwards, combined with new builds indicate competitive aggressiveness in the new market.

Atlantic argues in their interview that they regard innovation a high priority in their organization. They allegedly cooperate with ship designers and oil companies to provide favorable solutions, and emphasized the relationship to ship designers to a higher degree than the others. Atlantic explained in the interview that they were planning an extensive

modernizing of their ERRV fleet to improve competitiveness. Despite most of the new builds meant to phase out the old vessels, the size of the investment arguably both show tendency to risk taking and competitive aggressiveness. Atlantic Offshore has also built an extensive fleet in a short amount of time, which underpins the latter.

Chriship has the smallest onshore office, with the fewest potential decision makers. Despite their limited resources, they participate in innovational projects with government institutions and also put a great emphasis on their managerial system innovation. As to risk taking, relatively severe investment was done recently (2007) when they entered the ERRV market.

An investment in a modern vessel for the high north would constitute a significant investment, which would probably double the accumulated worth of assets in the firm.

Participating in the development of drones, for example, could be an indicator of their dedication to participate in proactive activities. This must be put into the context of a firm with limited resources, which choose to emphasize such efforts.

In general, as to risk taking and the orientation northwards, all the companies express that the only option as to building high technology ERRVs/Multi-purpose vessels for the new market are based on long term contract. Accordingly, investments that constitute risk in this matter would be physical movement toward the market or investments in R&D.

According to this assessment, we can interpret that all the companies that have stated interest in the High North are entrepreneurial, but with slight differences in their orientation.

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