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EXPORT SALE MANAGEMENT & EXPORT DEVELOPMENT: EXPORT SALES
CONTROL, ORGANIZATION DESIGN, MANAGERIAL CHARACTERISTICS AND
BEHAVIORAL ATTRIBUTES
Evangelia Katsikea and Robert E Morgan
Research Paper No 2001-9
EXPORT SALES MANAGEMENT & EXPORT DEVELOPMENT: EXPORT SALES CONTROL, ORGANIZATION DESIGN, MANAGERIAL
CHARACTERISTICS, AND BEHAVIORAL ATTRIBUTES
Evangelia Katsikea and Robert E Morgan1 Abstract
The international marketing literature is replete with conceptual, theoretical, and empirical insights from studies that have contributed to the export development thesis. However, one noticeable feature of extant knowledge is the marked absence of sales management as a research topic, an applied setting, or as an addendum construct to other strategy-related studies of export development. This study reports the findings from a survey among industrial export manufacturers concerning this critical lacuna in our understanding of the mechanisms underlying export growth. We investigate key sales management aspects in relation to the export development stage of the firm. Specifically, an attempt is made to examine the presence of significant differences in export sales management control strategy, export sales organization design, and export sales management characteristics and behavioral attributes among distinct exporter categories in terms of level of export development: �experimental�, �active�, and �committed� exporting firms. We identify several differences among these exporter groups with the main conclusion being that the sales management function is more effectively organized and managed at advanced levels of export development. These findings are discussed in the light of existing knowledge, and various conclusions and research implications are also derived. Address for Correspondence: School of Management and Business, Aberystwyth University of Wales, Aberystwyth Aberystwyth SY23 3DD Wales, UK e-mail: [email protected] Key-words: export development; export growth; sales management; personal selling; export sales. Note: SMB Research Papers Copyright 2000 are prepared for circulation to interested readers. They often represent reports on work in progress and should therefore not be referred to in published work without the consent of the authors.
1 The authors would like to gratefully acknowledge the support and advice provided by Dr Nigel F Piercy and Dr Constantine S Katsikeas during the development of this research program.
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Introduction As a result of increasing globalization, international commercial opportunities have
become vital routes to corporate growth and development (McDougall and Oviatt
2000), with an increasing number of firms entering the global arena (Hult 2000). A
frequently employed mode of internationalization and one of the most common
approaches adopted by firms in their endeavor to enter foreign markets is exporting
(Paliwoda 1999). This can be ascribed to the fact that this particular foreign market
entry and expansion vehicle is regarded as a less resource-laden and, thus, less risky
strategy in comparison with other alternatives of international engagement such as
joint ventures or channel integration (Katsikeas and Kaleka 1999).
An examination of the international marketing literature reveals a plethora of
conceptual and empirical studies that focus on firms� export behavior management
and success (Javalgi et al. 1997; Katsikeas, Leonidou, and Morgan 2000). However,
an area which has received scant research attention in the international marketing field
concerns those personal selling and sales management activities that firms adopt to
enter, penetrate, and expand in export markets (Ferrell, Ingram, and LaForge 2000).
Indeed, in a recent review of international marketing serials by Hyman and Yang
(2001), forty topics were identified in journals between 1985-1998 and sales issues
were not ranked as a topic that had been studied explicitly within this period in any
systematic manner2. This caveat in the body of existing knowledge is not
commensurate with other comparable marketing settings such as services marketing
and business-to-business marketing where personal selling and sales management are
considered central to research within these contexts. Further, it is surprising that
2 This review considered 669 articles between 1985-1998 published in �leading international marketing journals�. Although sales considerations might arguably be included within what Hyman and Yang (2001) refer to under �Negotiations and Tactics� as an explicit theme, this topic accounted for the interests of less than one percent of the total journal articles reviewed.
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personal selling and sales management activities have been overshadowed by other
perceived research priorities in international marketing especially given that sales
activities are considered crucial to the survival, growth, and profitability of the firm
(cf., Hyman and Yang 2001). This is due to the critical role which the sales function
plays in the implementation of effective marketing strategies in the vast majority of
business organizations (Churchill, Ford, and Walker 1997).
In appreciating this critical gap in the international marketing literature, a
survey among industrial export manufacturers is reported here that investigates key
sales management aspects in relation to firms� export development. Specifically, an
attempt was made to examine the presence of significant differences in export sales
management behavioral control strategy, export organization design, and export-
related managerial characteristics and behaviors among distinct exporter categories in
terms of level of export development-�experimental�, �active�, and �committed�. The
focus of this research is on firms involved in export trading activities with industrial
customers. From a theoretical perspective this is the first systematic effort, which
empirically investigates issues pertaining to export sales management activities and
managerial factors in relation to the export development process of the firm.
This paper continues with the presentation of the conceptual framework
underlying study. The research method employed is then discussed, which is
followed by the presentation of the results. Finally, interpretation of these results is
given and several conclusions are drawn in addition to the suggestion of avenues for
future research.
5
Conceptual Framework Level of Export Development
The internationalization process of the firm has been subject to widespread research
attention and empirical investigation (Leonidou and Katsikeas 1996). An array of
approaches and perspectives has contributed to the contemporary understanding of
firm internationalization (Anderson 1993). For example, economic, econometric,
organizational, marketing, and managerial models have been formulated which help
to explain the structural and behavioral issues underlying internationalization theory
(Dalli 1994). However, despite such a profusion of interest from marketing,
international business, and management scholars, certain approaches have developed
a significant body of literature on the subject of internationalization: innovation-based
taxonomies of export development.
Given that export activities of the firm perpetually change the mode of export
behavior, quite naturally, tends to be development (Albaum, Strandskov, and Duerr
1998) and a large number of studies have adopted this frame of reference in studying
firms� dynamic and evolutionary process of export development. It has been
contended that the literature concerned with internationalization, from an export
development perspective, is probably one of the most advanced and mature areas of
international marketing (Haar and Ortiz-Buonafina 1995). This is primarily because
these studies synthesize many of the disaggregated concepts in this area of knowledge
and devote their attention to challenging questions such as: what factors determine the
advancement of the firm along the path of internationalization; what are the phases
which characterize the exporting process; and what are the ingredients of a typical
export behavior pattern.
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Many researchers have examined the way in which firms progress along the
export development continuum and suggest that a sequence of discrete stages exist
which proxy the �stop and go� (Dalli 1994, p. 92) stepwise process which
characterize the evolution of international involvement. Implicit between each set of
stages is the notion that fairly stable periods exist in which firms consolidate their
activities and generate an appropriate resource base to respond to fortuitous
environmental conditions that allow them to proceed to the next internationalization
stage. For example, Johanson and Wiedersheim-Paul (1975) proposed a model that
emphasized three distinct stages: no regular export activity, exporting to
psychologically close countries via foreign representatives, and exporting to more
psychologically distant countries through a sales subsidiary. Likewise, Moon and Lee
(1990) attempted to explain the dynamics of the export development process by
advancing a model where three stages of export expansion were suggested, which
were referred to as lower, middle, and higher stages. Additionally, Rao and Naidu
(1992) identified four groups of firms with respect to their level of export activity:
non-exporters; export intenders; sporadic exporters; and regular exporters. These
innovation-related models have all been operationalized in different ways, but
Czinkota (1982, p. 35) has postulated that although “...each research group has
different stages of the export development process of the firm, they all portray one
common view, namely, that the decision of a firm to go international is a gradual
process that can be subdivided”.
It should be understood, however, that certain writers have highlighted stages
of internationalization while others have adopted the concept of profile analyses. In
essence, the profile approach describes groups of firms at different stages of
internationalization. Therefore, each profile describes homogeneous firms, which
7
exhibit the same characteristics and are seeking the appropriate opportunity to move
to the next stage of internationalization. Given this interpretation, it can be argued that
stages and profiles are synonymous (Dalli 1994).
Focusing exclusively on firms currently engaged in exporting activities,
Çavuşgil (1984) suggested three different exporter categories according to firms� level
of export development: (1) experimental involvement, where the firm initiates
restricted export marketing activity; (2) active involvement, where the firm
systematically explores a range of export market opportunities; and (3) committed
involvement, where the firm allocates its resources on the basis of international
marketing opportunities. The significance of this taxonomy lies in that particular
profiles of export sales management activities and managerial factors can be
identified that, based on existing theoretical knowledge (cf., Czinkota and Johnston
1981; Katsikeas, Deng, and Wortzel 1997), are likely to differ from one exporter
group to another. Given that the degree of internationalization is the exporter
segmentation criterion most commonly utilized by exporting researchers and
governmental export promotion agencies (Czinkota and Ronkainen 2000), the
examination of such differences is the primary issue addressed here. Subsequently,
we discuss the conceptualization of export sales management control, organization
design, and managerial characteristics and behaviors and how they are likely to be
associated with different exporter categories.
Export Sales Management Behavioral Control
Controls are an intrinsic element of organizational processes (Agarwal 1996).
Management should ensure the effective design and implementation of an export
control strategy in such a way that is beneficial for both the exporting company per se
(e.g., in terms of export profit ability) and the export sales personnel (e.g., in terms of
8
utility) (Krafft 1999). Two alternative export sales management strategies for
attaining this are outcome control and behavioral control (Oliver and Anderson 1994).
In this formulation, an outcome oriented control strategy is characterized by relatively
limited managerial involvement with those responsible for export sales, reliance on
objective measures to assess outcomes (e.g., sales), and use of incentive rewards (e.g.,
commission and bonus) to compensate export sales personnel efforts and results
(Anderson and Oliver 1987). In contrast, when an export sales unit implements
behavioral control strategies, top management devotes its attention to four main
activities: monitoring those personnel responsible for export sales by closely
observing their export sales performance and reviewing progress; directing them in
terms of help and encouragement to develop their potential; evaluating the quality of
their work as well as their results; and rewarding them by providing feedback on a
regular basis with respect to their performance. Here we concentrate on the use and
impact of a behavioral control strategy in exporting operations, considering that the
vast majority of exporting firms implement behavioral-based control strategies, as
opposed to outcome oriented forms of control (Katsikea 2000).
Cybernetic systems provide an ideal comparison for many of the dynamics at
work within this form of behavior-based control (Morgan and Hunt 2001). Quite
simply, cybernetics can be considered to be an engineering notion of control. An
example of such a system might be a domestic central heating system, composed of
an appliance and a regulator. A regulator detects changes in temperature within a
room, which in turn connects to the appliance to engage more heat or less according
to the setting of the regulator. The system constantly assesses the temperature within
the room and the response of the appliance, where necessary, ensures a consistent
temperature setting over time. A key principle at work here is negative feedback; the
9
automatic regulation of temperature is a result of negative feedback provided by the
regulator, which results in the system achieving its predetermined goal�in this case,
a consistent temperature (Ashby 1945). There are many forms of such cycles but the
one that interests us in this paper is the dynamic form. Dynamic cycles describe the
state where a cybernetic system (the firm) constantly adapts to changing
environmental (sales) conditions in the pursuit of a predetermined goal that, for
present purposes, can be considered to be superior performance via the market
development strategy of exporting. In strategy and organization research much of
extant theory is founded upon this conceptualization of organizational responses to
dynamic environments (Beer 1967).
Control systems of this form involve processes that inform managers of the
specific ingredients and extent of sales activities, which are then interpreted by the
senior managers who act as regulators within the organizational system; inducing a
response in the form of strategic adaptation which modifies sales procedures, training,
and other such activities that form the basis of sales practice (Aulakh and Genturk
2000). By and large, behavior-based control has been reported as a key driver in sales
organization effectiveness terms considered by way of customer satisfaction but also
in market development such as market share, sales turnover, and the achievement of
sales objectives (Baldauf and Cravens 1999; Cravens et al. 1993; Piercy, Cravens, and
Morgan 1997).
Miles and Snow (1978) classified firms according to how they responded to
three key elements of what they referred to as �an adaptive cycle�. They suggested
that firms could be associated with a strategy-type depending on how they tackled
their strategic management of product-markets (�the entrepreneurial problem�),
systems for producing and distributing products (�the engineering problem�), and the
10
development of organizational structures and processes to support the entrepreneurial
and engineering decisions (�the administrative problem�). Personal selling and sales
management are issues that fit neatly into the administrative problem (Miles and
Snow 1978). One of their firm strategy-types are referred to as �prospectors� which
adopt a proactive stance to their competitive environment and endeavor to exploit new
opportunities in both product and market development growth vectors�such strategy
characteristics have been found to be associated with export development among
firms (Morgan and Ambler 2001). Further, effective prospecting-type firms,
characteristically pursuing sales expansion possibly by the exporting mode, have been
found to maintain tight control procedures (Simons 1987, 1990), which gives rise to
Kald, Nilsson, and Rapp�s (2000, p. 202) claim that these firms emphasize �forecasts,
strict budget targets, frequent reporting, and careful monitoring of revenues�. Also,
Slater and Olson (2000) reported a positive relationship between the salesperson
control system and prospecting sales behavior. Given these findings it appears that
this form of control is associated with export sales effectiveness, which will be
evident in sales expansion terms measured by export development. Moreover, the
rigor and structure that behavior-based control provides means that sales activities are
targeted, specific, and focused. Based on these arguments and the evidence from the
prestudy interviews with managers in exporting firms which supported the existence
of potential differences in the implementation of behavioral control practices among
experimental, active, and committed exporters, the following hypothesis is advanced.
H1: ‘Committed’ exporting firms will display greater levels of behavior-based control strategies than ‘active’ exporting firms, which will, in turn, display greater levels of behavior-based control strategies than ‘experimental’ exporting firms.
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Export Organization Design
The importance of properly designed sales territories is widely recognized by
researchers in the area of sales management (Bailey 1989; Babakus et al. 1996;
Piercy, Cravens, and Morgan 1999). The use of territories by the sales organization is
a way to certify that the selling effort is used most effectively (Ingram, LaForge, and
Schwepker 1997). It has been suggested that changes in the international business
environment require continuous adjustment of sales management strategies pertaining
to sales territory designs (Corcoran et al. 1995). Within the domain of exporting,
sales territories are designed to simplify effective export sales operations. This can be
achieved by assigning a number of present and potential export customers within a
given region (e.g., Middle East States) to a specific export manager. The benefits of
right sized foreign sales territories for the export unit are deeper coverage of the
international marketplace, reduction of overseas selling expenses, improved job
clarity for the export manager, better identification of existing and prospecting
customers overseas, better fit between export sales resources and foreign customer
requirements, maintenance and improvement of export customer relationships, and
more accurate export performance evaluation (cf., Donaldson 1990).
It is likely that senior management using behavior-based control strategies will
be more concerned with the design of export territories. The rationale underlying this
lies in the contention that the design of export territories determines the potential for
export managers to perform the behaviors desired (Piercy et al. 1999). Slater and
Olson (2000) also suggest that the extent of relationship building is more apparent
among prospecting-type firms, which can be sourced to the structuring of the sales
organization. That is, where sales managers are able to work closely with lead users
and identify problem areas with products and create improved solutions, improved
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sales pay-offs are likely to be realized in the export market inducing greater levels of
export development (cf., Heide and Miner 1992). Additionally, export managers paid
mainly by fixed salary represent substantial investments for the exporting firm and
their productivity is directly affected by the organization of its export territories
(Babakus et al. 1996). Further, the prestudy interviews indicated differences in the
design of export territories among experimental, active, and committed exporters.
Specifically, firms involved in advanced stages of export development appeared to
attach greater importance to territory design issues for a more effective export market
coverage. Therefore, we suggest that,
H2: �Committed’ exporting firms will display greater levels of satisfaction with their export sales organization design than ‘active’ exporting firms, which will, in turn, display greater levels of satisfaction with their export sales organization design than ‘experimental’ exporting firms.
Export Manager Characteristics
A particularly important issue in the field of personal selling and sales management
concerns the identification of those elements that characterize a successful
salesperson. According to Cravens et al. (1993), sales manager characteristics can be
considered to reflect the personal qualities that the sales manager exhibits which
therefore exclude behavioral considerations. Hence, it might be suggested that
particular export manager characteristics are distinct from, but likely to be drivers of,
specific export manager behaviors. It should be recognized, nonetheless, that
behaviors and characteristics are related but different constructs.
In a conceptual study, Anderson and Oliver (1987) consider several
characteristics and develop propositions that focus on certain cognitions and
capabilities, affects and attitudes, motivation, and behavioral strategies. Based on the
extant sales management literature (e.g., Baldauf and Cravens 1999; Cravens et al.
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1993; Tyagi 1985), in conjunction with both the literature on managerial aspects on
exporting (Leonidou, Katsikeas, and Piercy 1998) and exploratory interviews with
export managers, a number of export manager attributes were identified as potentially
relevant to the context of this research inquiry. These attributes are related to export
manager�s competence, motivation, and customer orientation.
In terms of the sales manager characteristics connoted in Miles and Snow�s
(1978) research, the following issues outline some of the factors that reflect the
competency, motivation, and customer orientation characteristics demanded of export
sales managers in securing export growth: product-market domain is broad and
continuously expanding; surveillance approach is market and customer
oriented/aggressive search; growth considerations are founded on enacting product-
market development and diversification; marketing and sales planning is focused on
problem and opportunity finding; and strategic control is centered on market
performance with a specific emphasis on sales volumes. Given that firms� export
development strategies are akin to these prospector-type activities, which are likened
to being entrepreneurial in sales terms (Dess, Lumpkin, and Covin 1997), strategically
innovative in customer seeking behavior (Markides 1998), or simply attempting to
exploit the benefits of being a first-mover to satisfy customer needs (Kerin,
Varadarajan, and Peterson 1992), it can be suggested that firms involved in advanced
stages of export development are likely to be more motivated, professionally
competent, and customer-oriented than those exhibiting limited engagement in
exporting activities. Weitz�s (1981) review of sales force traits reported many of
these individual characteristics, which he reported maintain an influential role in
determining the effectiveness of personal selling units. Hence, the following
hypothesis is advanced:
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H3: Export managers in ‘committed’ exporting firms will display greater levels of motivation, professionally competence, and customer orientation than those in ‘active’ exporting firms, which will, in turn, display greater levels of motivation, professionally competence, and customer orientation than export managers in ‘experimental’ exporting firms.
Export Manager Behavioral Attributes
Export managers usually spend much of their time on activities directly or indirectly
related to generating sales in overseas markets (Leonidou et al. 1998). The export
manager behavioral attributes construct refers to the capabilities export managers
possess and what they do in order to attain the desired sales outcomes. In their
seminal conceptual work, Anderson and Oliver (1987) identified sales planning (e.g.,
developing sales strategies around customers and effectively day to day activity
planning) and sales support (e.g., providing after the sales service) as fundamental
sales behaviors. Additional behavioral attributes include: technical knowledge (e.g.,
knowing the design and applications of the export venture product); adaptive selling
(e.g., varying sales style from situation to situation); sales presentations (e.g.,
communicating export sales presentations clearly and concisely); and teamwork (e.g.,
discussing export sales strategies with people from various company departments)
(Babakus et al. 1996).
In exporting firms with extensive overseas sales activities, it is likely that
export managers will have reasonably extensive export experience (Figueiredo and
Almeida 1988) which will be reflected in the sales skill-set (behavioral attributes) that
they will have developed over time. Also, the international orientation of these
managers is typically greater among firms with high levels of export/total sales in
view of their greater exposure to multiple cultures (Holzmüller and Kasper, 1990;
Andersen and Rynning, 1994). This consequently can improve their ability to
15
customize presentations, adapt sales cues, and design message platforms that appeal
to local market conditions rather than employ generic sales tactics that lack the
bespoke qualities of market adaptation sales strategies. Moreover, there is a de facto
association between the level of export development and the perceived success of the
export sales manager�s behaviors. That is, a best practice model of effective export
sales behaviors includes adaptive selling capabilities, effective delivery of sales
presentations, planning successful sales strategies, coordinating with other company
employees to handle post-sales problems and service, and keeping abreast of their
firms� production and technological developments. In order to remain committed
exporters, companies must ensure that the behaviors exhibited by their export
managers are commensurate with professional and effective sales management
behaviors, as ascribed above. Consistent with the evidence found in our prestudy
interviews, we can suggest that,
H4: Export managers in ‘committed’ exporting firms will display greater capabilities in practicing adaptive selling, making effective sales presentations, planning successful sales strategies, coordinating with other company employees to handle post-sales problems and service, and keeping abreast of their firms’ production and technological developments than ‘active’ exporting firms, which will, in turn, display greater capabilities in practicing adaptive selling, making effective sales presentations, planning successful sales strategies, coordinating with other company employees to handle post-sales problems and service, and keeping abreast of their firms’ production and technological developments than export managers in ‘experimental’ exporting firms.
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Methodology Unit of Analysis
The export venture level was determined as the unit of analysis for this study.
Consistent with the recommendation of Çavuşgil and Zou (1994), we asked
participants to complete the survey questionnaire concentrating on a specific export
venture, defined as exporting a single product or product line to a specific foreign
market. The reason underlying the selection of a specific export venture is associated
with the fact that considerable variations in sales management practices are likely to
exist across various export product�market ventures of the same firm (Cavusgil and
Zou 1994). Hence, the use of the individual export venture as the unit of analysis can
provide a more precise assessment of the relationships examined in this study.
Respondents were requested to choose a venture that they were familiar with and had
responsibility for relevant export policy decision-making (Butaney and Wortzel
1998). Moreover, it was a condition of inclusion that the selected export venture had
to be operational for a minimum of three years.
Sample and Data Collection
The sample consisted of 1,000 exporting firms randomly selected from the Dun and
Bradstreet (1997) commercial database of Key British Enterprises. Specifically, the
data used in this study were collected in a cross-national study of small and medium
sized U.K. firms (employing no more than 500 personnel) involved in exporting
activities. A large-scale mail survey was undertaken following Dillman�s (1978)
Total Design Method guidelines. After three mailings, each followed by a reminder,
234 usable questionnaires were collected. Of all exporters targeted, 107 were not
included in the analysis: 29 reported that they were part of a multinational company;
44 stated that they were not involved in exporting activities any more; and 34 were
17
not accessible due to incorrect contact details. Therefore, a response rate of 26.2%
(234 of 893 eligible firms) was attained. Of the 234 participant firms, 171 satisfied
this research design requirement exporting directly industrial products. The
remainder (63 firms), were either involved in the exportation of consumer goods or
they did not declare their level of export development in the research instrument and
were thus excluded from the analysis.
To test for the possibility of nonresponse bias, a formal procedure was
performed to compare early with late respondents as suggested by Armstrong and
Overton (1977). Using a series t-tests, no significant differences appeared to exist
between early and late respondents regarding specific company demographics (i.e.,
number of employees, age of the company, number of employees engaged in
exporting activities, export ratio, and number of countries the firm exports) at
conventional levels (p<0.05). Therefore, nonresponse bias does not appear to be an
issue of concern in this study.
Questionnaire and Measures
The research instrument was developed and refined in three stages. First, to
efficiently measure the study constructs, a thorough review of the sales management
and international marketing literatures was conducted, along with exploratory
interviews with export executives. Second, several researchers with knowledge in the
areas of personal selling and sales management and international marketing reviewed
the survey instrument to examine the content validity of the items selected. Third, the
survey questionnaire was extensively pretested and refined through personal
interviews with managers in exporting firms to assure effective semantic design and
instrument format.
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Level of Export Development. The nature of export development was determined
by a priori classification of exporting firms. Following Cavusgil�s (1980)
conceptualization of the extent of export involvement, and in accordance with the
operationalization approach employed by Cavusgil (1984), Haar and Ortiz-Buona-fina
(1995) and Katsikeas et al. (1997), respondents were requested to select a statement
that best described the level of their firm�s export involvement. Specifically,
respondents were asked to identify which of the following three statements most
closely explained the extent of their company�s export involvement: (1) Exporting for
your firm is a marginal business activity, which is primarily conducted on the basis of
filling unsolicited orders from abroad; (2) Your firm is involved in a systematic
exploration of market opportunities overseas and commits some resources to serve
export markets on a ‘regular’ basis; (3) Your firm searches for business opportunities
in the global marketplace, and designs and implements world-wide export marketing
strategies.
Accordingly, twenty-five of the participant firms fell into the group of (1)
�experimental� exporters, (2) eighty-three firms were classified as �active� exporters,
and (3) sixty-three were identified as �committed� exporters. A similar exporter
classification approach has been adopted by other major export marketing studies
(Naidu and Rao 1993; Rao and Naidu 1992; Samiee and Walters 1991).
Export Sales Management Behavioral Control. Export sales management
behavioral control was conceptualized as a formative scale. According to Bagozzi
and Fornell (1982), the export management control construct is defined as the sum of
the items, which technically determines its formative scale properties. Respondents
were asked to assess behavioral control on the basis of four elements, those being
19
monitoring, directing, evaluating, and rewarding, using a seven-point Likert type
scale, ranging from �needs improvement� (1) to �outstanding� (7).
Export Organization Design. The export sales organization design was
operationalized on the basis of an eight-item scale, adapted from Babakus et al.
(1996) in conjunction with exploratory interviews with export executives.
Respondents were asked to indicate the extent to which they were satisfied with the
structure of their firm�s export regions, using a seven-point scale ranging from �not at
all satisfied� (1) to �very satisfied� (7).
Export Manager Characteristics. Multi-item scales were utilized to
operationalize the three types of export manager characteristics, motivation,
professional competence, and customer orientation, adapted from Cravens et al.
(1993). The existence of a particular element was assessed using a seven-point scale
ranging from �not at all� (1) to �a great extent� (7).
Export Manager Behavioral Attributes. Export manager behaviors were
measured using multiple-item scales. Respondents were asked to assess the extent to
which he/she practices specific behaviors, using a seven-point scale ranging from
�needs improvement� (1) to �outstanding� (7), adapted from Babakus et al. (1996).
Analysis & Results
Principal Components Analysis and Scale Construction
Following the use of scatter diagrams and bivariate correlation analysis, a series of
principal components analyses was performed with respect to export organization
design, and manager characteristics and behaviors to examine the dimensions
underlying each of these constructs. Factor selection was based on eigenvalues of one
or greater in conjunction with the scree test. In all three models the solution was
characterized by strong individual loadings on each factor enabling conceptual
20
interpretation. As depicted in Table 1, export sales unit design is a unidimensional
construct�a single factor solution emerged that explains 52.90 of the variance. The
results in Table 2 indicate the existence of three factors underlying export manager
characteristics; the resulting factors, explaining 40.44 of the variance, have been
labeled professional competence, motivation, and customer orientation. As exhibited
in Table 3, six dimensions were found to underlie the export manager behavioral
attributes construct; these dimensions, explaining 39.12 of the variance, have been
labeled sales presentation, sales planning, adaptive selling, teamwork, sales support,
and technical knowledge.
Composite measures were constructed for each factor by calculating the mean
score of the items loading heavily on each factor. Scale validation of the composite
measures was performed into two distinct steps. Firstly, the Cronbach alpha score for
each scale was calculated. Tables 1, 2, and 3 indicate that all scales satisfy
Nunnally�s (1978) threshold level of acceptance reliability with an alpha value of .70
or greater. Secondly, following Churchill (1979), the validation of each scale was
gauged by item-total correlation analyses. All correlation coefficients were found to
be high, in the anticipated direction, and statistically significant (p<.001), suggesting
that no scale item had to eliminated. Therefore, these scales can be used for
investigating relationships among different stages of firms� export development.
Findings
Post hoc comparisons using one-way analysis variance, in conjunction with the
Scheffé test were used to investigate the presence of significant differences among the
groups of experimental, active, and committed exporters in relation to certain
organizational elements and export manager behaviors and characteristics. Table 4
presents several significant differences that were identified.
21
Specifically, the findings indicate that significant differences exist among
experimental, active, and committed exporters regarding the behavioral control
construct. Similar findings were also evident for the export sales organization design,
where committed exporters were more concerned with the design of their export
territories as contrasted with experimental exporters. As regards the export manager
characteristics the dimensions of professional competence, motivation, and customer
orientation, were found to distinguish among the three stages. Further, specific export
manager behaviors were found to differ among experimental, active, and committed
exporters. Contrary to initial expectations, no significant differences were found to
exist among the three groups of firms with respect to sales support behavioral
attribute dimension.
Discussion & Conclusions
This study set out to investigate key sales management considerations, among
industrial export manufacturers, in relation to the export development stage of the
firm. Specifically, an attempt was made to examine the presence of significant
differences in export sales management behavioral control strategy, export
organization design, and export-related managerial characteristics and behaviors
among distinct exporter categories in terms of level of export development
(�experimental�, �active�, and �committed� exporters). These data reveal that both
organizational activities and managerial elements play a significant role in
distinguishing among all three firm groups and support has been found to uphold all
the study hypotheses3.
3 Apart, that is, from the �sales support� characteristic in export managers� behavioral attributes (H4), which specified no significant differences across the firm groups (Table 4).
22
As compared with those firms engaged in experimental exporting, committed
exporters were found to attach greater importance in monitoring, directing,
evaluating, and, rewarding control activities; and the same difference was also found
where active exporters emphasized such behavioral control more than experimental
exporters (cf., Piercy and Cravens 1997). It appears that senior management in firms
which are involved in advanced stages of export development, review export
managers� progress regularly which enables them to: develop their export managers�
potential; evaluate the quality of export managers� work; provide regular feedback on
export managers� performance; and take corrective actions when export managers�
performance deviates from predetermined objectives. Although there are statistically
significant differences between all three groups, it has to be recognized that the
assessment of control procedures was considered to be only marginally above the
mid-point of 4.00 (Table 4: means ranged from 4.06 to 4.50 where the scale was
anchored by 1.00 (�needs improvement�) to 7.00 (�outstanding�). This is an
interesting finding, which requires further elaboration. It appears that behavioral
control procedures are required in order to mount a coordinated and sophisticated
export sales strategy (supporting export development) but beyond a certain level, the
extent of control may prove to be problematic. For instance, the sales supervision
literature suggests that control can appear intrusive to successful sales people, which
can induce problems for those successful individuals who do not require such close
scrutiny and prefer to work with the benefit of greater flexibility (Anderson and Weitz
1986). For instance, it has been suggested that:
�The extent of supervision required is concerned with the degree to which sales people are monitored and directed. Low supervision requirements imply that sales people are knowledgeable and are best able to determine the appropriate activities to achieve the firm’s goals and/or that the importance of retaining an individual account is relatively low. High supervision implies that sales people require
23
substantial guidance to select activities that will lead to the accomplishment of their goals and/or that the retention of a specific account is of high importance” (Slater and Olson 2000, p. 816).
The study findings also highlight that committed exporters place greater
emphasis on the design of right-sized territories than experimental exporters (Table 4:
export organization design). More precisely, firms engaged in committed exporting
are critically concerned with optimal organizational structures which provide export
managers with high performance situations to exploit, whereas firms characterized by
relatively low levels of involvement in, and commitment to, exporting pay less
attention to the development and deployment of sound export regions. From a
contrary standpoint, faulty export territory designs may substantially constrain
competent export managers from performing well, even though they receive extensive
direction and feedback from their superiors, they have relevant skills and experience,
and high levels of motivation. This may cause dissatisfaction, which has detrimental
consequences for the exporting firm (Ingram et al. 1997). The difference between
experimental exporters and both active and committed exporters for export
organization design is striking.
The strategy and structure thesis is able to articulate an additional basis for
export organization design interpretation here. Chandler (1962) suggested that a firm
first expands its activities in a series of stages following strategic adjustment (stage 1:
�expansion by volume�), which thereby induces certain administrative and process-
based obstacles (Chakravarty and Doz 1992) for the firm because there is a lack of fit
between the structure and the revised strategy (strategyn+1 ≠ structuren). Thus,
following the strategic change there is a progressive lag effect until the structural and
administrative responses have been made to realign the strategy�structure fit
(strategyn+1 = structuren+1). This sequence has been framed in a number of other
24
strategy evolution models, most recently in Lovas and Ghoshal (2000). Therefore, in
the case of export organization design it is not sufficient to attempt to service sales in
overseas markets by delimiting the existing design structures in the anticipation that
they will operate effectively. Thus, in order to advance through progressive stages of
export development, firms need to consider the accommodation that needs to be
engaged between strategy and structural alignment.
The findings for export manager characteristics reveal that: in all cases export
managers in active exporting firms exhibit greater professional competence,
motivation, and customer orientation than those in experimental exporting firms; and
export managers in committed exporting firms exhibit greater levels of motivation
and customer orientation than those export managers in experimental exporting firms.
These results distinguish themselves as being the highest ranked by export managers
in all three exporter groups which is perhaps not surprising given the self-select
responses made by survey participants. While professional competence and
motivation reflect personal standards and experience, customer orientation concerns
the direction in which the export manager�s effort is engaged. In considering
customer orientation, Narver and Slater (1990) argue that this dimension refers to the
firm�s ability to understand the needs and wants of its target market so as to enable the
continual creation of improved levels of performance across the entire value-chain.
The principle of customer orientation, ��advocates a continuous, proactive
disposition toward meeting customers’ exigencies� (Han et al. 1998, p. 33). Central
to Slater and Narver�s (1994) thesis is the declaration that firms continually strive to
maintain and promote a sustainable competitive advantage from which superior
customer value is derived. This desire then drives the business to create a culture that
supports the necessary behaviors in meeting this objective (Desphandè, Farley, and
25
Webster 1993; Kumar, Subramanian, and Yauger 1998) and in this respect customer
orientation is an important ingredient of effective sales activities (Saxe and Weitz
1982; Slater and Narver 1998); customer orientation pursues the objective of
satisfying customers� expressed wants via processes that interpret, structure, and
prioritize the nature of identified needs (Weitz, Sujan, and Sujan 1986).
Within our context, customer contact personnel, such as export managers,
assume a vital conduit between the customer and the firm (Doney and Cannon 1997).
It has been found that differences can exist between what senior managers believe
their customers value and what customers actually value (Sharma and Lambert 1994).
The consequence of this is that such gaps �create the potential for mistakes in an
organization’s efforts to deliver value to customers. Customer learning processes
should be aimed at reducing such gaps� (Woodruff 1997, p. 143). Export managers
also provide an opportunity for firms to provide feedback to other functional groups
in order to harness the skills and knowledge generated by customer contact personnel
(Hartline, Maxham, and McKee 2000). Therefore, effective export sales managers in
firms at advanced stages of export development appear to be well motivated with
clear role requirements combined with sales competence, and imbuing the values of
customer orientation.
Turning to export manager behavioral attributes, there is overwhelming
evidence to claim that the export managers of firms at advanced stages of export
development maintain greater skills and effectiveness in sales-based considerations
concerning their technical knowledge, adaptive selling, teamwork, and sales
presentation�indeed these attribute dimensions were significantly different across all
three groups. In addition, export managers in committed exporting firms appear to
26
exhibit greater skills in sales planning than their counterparts in experimental
exporting firms (Table 4).
It has to be appreciated that the export manager�s job is multifaceted requiring
multiple skills (Singh and Rhoads 1991). Demands are made of personal qualities
(teamwork and sales presentation), intellectual flexibility (technical knowledge and
adaptive selling), and coordination (sales planning and sales support). Overlaid on
these issues are the international complexities and nuances of country/regional
markets. Consequently, the firm pursuing an export development strategy must
ensure that the export manager(s) is equipped to deal with the challenging array of
tasks that the role requires (Behrman and Perreault Jr., 1984). In addition,
consideration should be given to performance of the export managers in this role
(Behrman and Perreault Jr., 1982) and this factor is made all the more intricate in the
light of the multiple markets and customer groups that the export manager encounters.
Moreover, acknowledgement must be made by senior managers in exporting firms
that a multitude of factors determine the nature and extent of sales performance
(Singh 2000)�not least of which is: the product offering and value-based
proposition; innovation, time-to-market, and roll-out; limitations on export trade (such
as export controls, import restrictions, exchange rate positions, and such like);
competitor reaction; multi-market competition; bases of value (ratio of potential
purchase sacrifices against potential purchase gains); and in the industrial market
considered in this study, the dynamics within the buying center and the complex
purchase decision criteria that they employ.
Research Implications
There are a number of research implications that can be derived from this study.
First, this study concentrated on a particular international business setting, namely
27
U.K. exporting firms engaged in the exportation of industrial products. It is important
that international marketing researchers should undertake replication studies within
other countries in order to test the external validity of these findings. Recent interest
in the value and importance of replication and extension has been raised within the
business management literatures (Easley, Madden, Dunn 2000). Given the novel
topic studied here and the nature of findings discovered, replicability plays a
fundamental role in scrutinizing the research conclusions and we make such a
recommendation. Thus, future extension studies may serve to determine the scope
and parameters of these preliminary empirical findings by testing whether they can be
generalized to other reference comparisons (e.g., ��other populations, time periods,
organizations, geographical areas, measurement instruments, contexts and so on�
Hubbard, Vetter, and Little 1998, p. 244).
Second, a natural extension of this research would be to include companies
with no experience in export activities. Based on Cavusgil (1984), future research
efforts can contribute to existing knowledge by examining potential differences
among distinct groups of firms: pre-involvement with no export intentions, reactive
involvement, experimental, active, and committed exporters (cf., Morgan and
Katsikeas 1997). In addition to their importance for business practitioners in
exporting firms, these research findings also inform and would prove valuable from
the perspective of national policy administrators developing export promotion
programs.
Third, the present study is operationalized the export sales organization design
construct as a multi-item scale which does not consider factors such as export product
and market specialization, major account and team sales approaches overseas, and
vertical organization structure. Nevertheless, the items included in the export sales
28
organization design scale represent important aspects for investigating a wide range of
international selling environments and situations. Furthermore, deficiencies in export
product or market specialization and other design problems are likely to be reflected
in the responses to several of the design scale items utilized for the purposes of this
study. Future research efforts should incorporate the aforementioned factors in the
export sales organization design construct and its associated operationalization and
measurement.
Finally, the emerging view of organizations as aggregations of �processes�
instead of �functions� provides an alternative view of business that has particular
relevance to this area of study (Workman, Homburg, and Gruner 1998). The
distinction is an appropriate one here in that processes tend to transcend functional
boundaries and more accurately represent workflows in organizations. For instance,
order cycles can require inputs from multiple functions such as sales for order
transmission, information systems for order processing, warehousing for order
selection, and logistics for transportation and delivery with marketing providing after-
sales service. Such processes can be highly structured which lends itself to process-
based analysis (Murphy and Poist 1996). Insights derived from this stream of
research may help to improve understanding of functional coordination and facilitate
a more holistic view of sales effectiveness based upon discrete information flows.
This process-based view of sales is likely to have a significant influence upon the
strategic role of the sales function, in whatever form, and researchers have to be aware
of these developments and their implications. Thus, sales management processes and
activities may be conceptualized in a manner that is more consistent with processes
from sales lead through to customer service; thus overcoming potentially myopic
29
considerations of the sales function and ensuring that the contribution of other
organizational constituencies is taken into account.
30
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37
Table 1: Principal Components Analysis of Export Organization Design and Scale Statistics
Factor Loadinga
Export Organization Design Item
Communality
Number of accounts in the venture market .68 .47 Number of sales/visits made in the venture market
.81
.66
Amount of overseas travel required in relation to the venture market
.78
.61
Sales potential of the venture market
.54 .30
Assignment of personnel to support sales activities in the venture market
.78 .62
Eigenvalue 2.65 % of the variance explained 52.90 Mean 23.63 Standard Deviation 5.23 Cronbach�s alpha .77
a Principal components analysis with a single factor extracted.
38
Table 2: Principal Components Analysis of Managerial Characteristics and Scale Statistics
Factor Loadingsa
Managerial Characteritic Itemb
Motivation
Professional Competence
Customer Orientation
Communality
Obtain a sense of accomplishment from work
.79
.23
.09
.69
Feel a sense of personal growth and development in the work
.85
.18
.08
.76
Get a feeling of stimulation and sense of challenging involvement in the work
.86
.25
.14
.81
Have high respect from managers .67 -.13 .18 .50 Have respect from fellow workers .57 -.13 .44 .53 Possess export selling skills .17 .72 .32 .65 Have general sales experience .20 .86 .08 .79 Possess specific export selling experience -.07 .78 .26 .68 Focus on satisfying foreign customer requirements .17 .12 .83 .73 Customize overseas customer selling approaches .15 .34 .72 .66 Seek repeat export business through follow up and maintenance
.17
.31
.75
.69
Eigenvalues 4.45 1.92 1.12 % of the variance explained 40.44 17.48 10.18 Mean 27.65 15.87 16.91 Standard Deviation 4.47 3.33 2.99 Cronbach�s alpha .84 .79 .78 a Principal components analysis with varimax rotation, converging in six iterations b �Possess detailed product knowledge,� �demonstrate foreign language proficiency,� and �have respect from overseas customers� are excluded from this analysis
39
Table 3: Principal Components Analysis of Behavioral Attributes and Scale Statistics
Factor Loadingsa
Behavioral Attributes Itemb Sales Presentation
Sales Planning
Adaptive Selling
Teamwork
Sales Support
Technical Knowledge
Communality
Listening attentively to identify and understand the real concerns of overseas customers
.66
-.02
.33
.26
.35
.17
.76
Convincing overseas that you understand their unique problems and concerns
.70
.23
.29
.17
.28
.14
.75
Using established contacts to develop new customers overseas
.72
.29
.12
.18
.07
.17
.68
Communicating export sales presentations clearly and concisely
.64
.24
.08
.17
.24
.19
.59
Working out solutions to a foreign customer�s questions and objections
.65
.28
.29
.06
.25
.25
.73
Planning each overseas sales/visit call .28 .68 .29 -.04 .14 .14 .66 Planning export sales strategies for each foreign customer .23 .77 .26 .15 .16 .11 .77 Planning coverage for assigned area(s) of export responsibility/foreign customer responsibility
.26
.79
.16
.22
.06
.02
.76
Planning daily activities concerned with exporting .11 .64 .19 .24 .26 28 .66 Experimenting with different selling approaches .18 .40 .65 .29 .05 .07 .71 Being flexible in the export selling approaches used .07 .17 .85 .15 .06 .14 .80 Adapting selling approaches from one foreign customer to another
.33
.12
.77
.05
.01
.13
.74
Varying selling style from situation to situation .17 .29 69 .24 .09 .08 .66 Generating considerable export sales volume from team sales
.21
.36
.15
.54
-.22
.07
.55
Building strong working relationships with other people in the company
.02
.12
.09
.86
-.03
.13
.78
Closely coordinating with other company employees to handle post-sales problems and service
.29
.06
.25
.73
.25
-.04
.75
40
Discussing export selling strategies with people from various company departments
.20
.10
.15
.76
.20
.04
.69
Providing after sales service for foreign customers .14 .31 .03 .16 .51 .41 .57 Checking on product delivery overseas .05 .02 .12 .11 .82 .14 .71 Handling overseas customer complaints .21 .12 -.01 -.01 .83 .11 .75 Follow up on a foreign customer�s product use .36 .20 .08 .07 .57 .06 .51 Knowing the design and specifications of the export venture product
.16
.16
.03
.05
.19
.86
.84
Knowing the applications and functions of the export venture product
.18
.10
.14
.03
.03
.90
.88
Keeping abreast of the company�s production and technological developments
.24
.07
.31
.10
.27
.61
.61
Eigenvalues 9.39 2.26 1.62 1.37 1.22 1.04 % of the variance explained 39.12 9.42 6.76 5.70 5.10 4.35 Mean 24.24 17.81 17.95 16.99 18.75 15.38 Standard Deviation 5.67 4.93 4.70 4.83 4.41 3.60 Cronbach�s alpha .87 .87 .86 .79 .79 .84
a Principal components analysis with varimax rotation, converging in seven iterations b �Troubleshooting application problems in the venture market� and �analyzing export product use experience to identify new product service
ideas� are excluded from this analysis
41
Table 4: Differences among Experimental, Active, and Committed Exporters
Firm Group Means
Experimental exporters
Active exporters
Committed exporters
Univariate F-valuee
Scheffé�s multiple range testf
(p<0.05)
Behavioral control strategya 4.06 4.48 4.50 7.81 G2>G1; G3>G1 Export organization designb 3.88 4.43 4.68 4.60 G3>G1 Export manager characteristic dimensionsc
Motivation 5.02 5.54 5.71 5.29 G2>G1; G3>G1 Professional competence 4.79 5.22 5.49 4.10 G2>G1 Customer orientation 4.92 5.71 5.80 8.17 G2>G1; G3>G1 Export manager behavioral attribute dimensionsd
Sales presentation 4.19 4.92 5.00 5.15 G2>G1; G3>G1 Sales planning 3.81 4.47 4.68 4.67 G3>G1 Adaptive selling 3.66 4.53 4.72 8.26 G2>G1; G3>G1 Teamwork 3.59 4.18 4.69 8.99 G3>G1; G3>G2 Sales support 4.24 4.53 4.71 1.63 NS Technical knowledge 4.33 5.14 5.35 7.39 G2>G1; G3>G1
a Seven-point scale ranging from (1) �Needs Improvement� to (7) �Outstanding� in relation to behavioral control strategy elements. b Seven-point scale anchored from (1) �Not at all Satisfied� to (7) �Very Satisfied� with respect to export sales organization design
dimensions. c Seven-point scale ranging from (1) �Not at All� to (7) �A Great Extent� regarding export manager characteristics. d Seven-point scale ranging from (1) �Needs Improvement� to (7) �Outstanding� concerning export manager behavioral attributes. e F-value is significant (p<0.05) in all cases except for sales support. f Abbreviations: G1=Experimental exporters; G2=Active exporters; G3=Committed exporters.-
SMBA Research Papers 2000-1 Money, Stock Prices and Deregulation of Financial Markets - Bruce
Morley. 2000-2 Stock Prices and the Monetary Model of the Exchange Rate: An Empirical
Investigation - Simon Broome and Bruce Morley.
2000-3 Team Performance 2: Production And Efficiency In English Premiership
Football - Fiona Carmichael, Dennis Thomas and Robert Ward. 2000-4 If Not Computers Then What? Returns To Computer Use In The UK
Revisited - G. Reza Arabsheibani and Alan Marin. 2000-5 Non-Linearities In Returns To Education In Libya - G. Reza Arabsheibani
and Lamine Manfor.
2000-6 Public Service Employment and the Public-Private Wage Differential in
British Regions - Andrew Henley and Dennis Thomas. 2000-7 Self-Employment Choice: State Dependence, Initial Conditions And
Unobserved Heterogeneity - Andrew Henley. 2000-8 Self-selectivity Bias with a Continuous Variable: Potential Pitall in a
Common Procedure � G R Arabsheibani and A Marin. 2000-9 Reforming the WTO to Defuse Potential Trade Conflicts in Genetically
Modified Goods - Nicholas Perdikis, William A Kerr and Jill E Hobbs. 2000-10 Auditor Communication In An Evolving Environment: Going Beyond
SAS 600 Auditors' Reports On Financial Statements - Stuart Manson and Mahbub Zaman.
2000-11 The Relationship Between Categories Of Non-Audit Services And Audit
Fees: Evidence From UK Companies - M Ezzamel, D R Gwilliam and K M Holland.
2000-12 Opening Up Of Investment Funds: The Case Of The Czech Republic -
Irena Jindrichovska and Huw Rhys. 2000-13 Uncertainty And Wicksell's Average Period of Investment - Huw Rhys and
Mark Tippett. 2000-14 Drivers of Superior Performance in Export Sales Organizations: An
Empirical Investigation - Eva S. Katsikea and Dionisis A. Skarmeas. 2000-15 Industrial Export Sales Management Activities, Behaviors, and
Characteristics: Distinctions between �Experimental�, �Active�, and �Committed� Exporting Firms � Eva S Katsikea.
2001-1 Earnings Response Coefficients in the Czech Market � Irena Jindrichovska, pp 23.
2001-2 Habit and Long Memory in Attendance Demand: The Case of Football
Support � J D Byers, D A Peel and D A Thomas, (forthcoming). 2001-3 Subsequence Incidence Analysis Within A Series Of Bernoulli Trials:
Application in Characterisation of Time Series Dynamics � R H G Jackson, (forthcoming).
2001-4 Profit Cycles: The Dynamics of Corporate Earnings Revisited � J R
Cable, R H G Jackson and H Rhys, pp 34. 2001-5 Union Membership and the Union Wage Gap in the U.K. � G Reza
Arabsheibani and Alan Marin, pp 15. 2001-6 Agency Costs and the Value of the Firm: Jensen and Meckling Revisited
� Susan Charles and John Cable, (forthcoming) 2001-7 Capital Gains and Labour Supply: British Evidence - Andrew Henley, pp
26. 2001-8 Explanations from the Marketing/HR Dyad for Market Competitiveness: A
Perspective on Marketing Strategy Implementation Effectiveness and Market Performance in Service Firms � Jacqueline Chimhanzi and Robert E Morgan, pp 34.
2001-9 Export Sale Management & Export Development: Export Sales Control,
Organization Design, Managerial Characteristics and Behavioral Attributes � Evangelia Katsikea and Robert E Morgan, pp 41.
