Cross Border Business Activities Of Smes Commerce Essay

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Belgian Limburg and Dutch Limburg are two regions that are close together: they share a long border, they share the language, they share their anthem and they share a very long history. Both are part of the Euregion Meuse-Rhine and both are lying on the outskirts of their country. But since their separation in 1839 they grew apart.

Several arguments can be found to create a virtal coopration and cross-border trade. Reallity however shows a different picture. People cross the border for recreative shopping, but firms take hardly any advantage of the position of these regions. Several possible reasons can be found, but in this research the focus is laid on the influence of Cultural sensitivity and Business communication skills on Cross border business/export performance. The results show that there is a real influence but the entrepreneurs in the two regions are different in their opinions about these aspects. But there are no differences in opinions between several branches. Especially in times of crisis and of problematical demographical developments, extra effort is asked by the supporting organizations to help the entrepreneurs to cross the border and deal with the differences.

Keywords: Euregion, culture, cross-border business, cultural sensitivity, business communication skills, branch

Introduction

Europe is permeated with borders between the almost 70 countries. The number of countries changed in the course of history and so did the course of the borders. In the last decades the main developments could be seen in Eastern Europe after the loss of the Iron Curtain. In 1990 West and East Germany were reunited after a separation of 45 years and 1993 the Czech Republic and Slovakia split up peacefully after 75 years. But this development of a certain manifestation of nationalism can also be seen in the struggle for autonomy in some Russian republics and in Catalonia. Since a couple of years the Dutch and Belgian provinces of Limburg are looking for a more closer cooperation. The provinces share a mutual history untill they were separated in 1839, and are now two of the four regions of the Euregion "Meuse-Rhine". But since 1839 their development was influenced by the nations they belonged to. Although they share their language and even their anthem, they have their own though similar culture. In 2009 the provincial governers signed a treaty, in which they described the chances and opportunities for a better cooperation. Since 2004 the provinces conduct an anual survey into ideas of the inhabitants about the society, their concerns and the way the society should be like. The main conclusions from the surveys were that the majority is proud to be from Limburg and that they want a cooperation between the provinces on many subjects. A lot of people like to go to the neighboring province for leasure and shopping, but when it comes to working in the other province or doing business, a different and less positive picture can be seen.

To give an explanation for this, it is necessary to look at regional economics, especially border-regional, and at the cultural sensitivity that is characteristic for each province. For this 2500 Dutch and 1600 Belgian SEMs are invited by mail to participate in this research by filling in a survey. 187 Dutch and 153 Belgian SEMs really participated. Almost 50 other firms from both countries responded that they did not want to participate since cross-border business was no issue for them. The low response rate (7.5, 9.5 percent respectively) and the extra response underlines the lesser interrest in actual cross-border business. One would expect that such regions make a profit of their geographical location. Statistics and observations from Chambers of Commerce show that there is only a limited amount of economic traffic between the regions. This can be understood as missing business opportunities. The focus in this study is on the impact of cultural sensitivity and business communication skills on cross-border business development between the two provinces of Limburg, with a focus on Belgian Limburg and South Limburg in the Netherlands, as some of the possible explanations. The aim of the study is to gain a better understanding of the impact of these aspects on the development of cross-border business and to arrive at some recommendations that can enhance this specific kind of international business.

Empirical research specifically on Euregional business development appears to be limited. Although this counts more generally also for studies on antecedents and consequences of cooperation between exporters and importers, a few studies have been published that shed some light on factors that influence the development of international business. Some studies point at the importance of attitudinal antecedents of cooperation (Johnson & Raven, 1996; Racela, Chaikittisilpa, & Thoumrungroje, 2007). Other studies take exporter economic performance as the outcome of cooperation(Ambler, Styles, & Xiucun, 1999; Mehta, et al., 2001; Racela, Chaikittisilpa, & Thoumrungroje, 2007). One main appraisal from the literature on international business development is the following: Cultural antecedents and consequences of cooperation, the cooperative norms and the impact of past performance must be considered; Contextual moderators should be included in the investigation of cooperation between exporters and importers (Obadia, 2008).

Export to countries far away, to neighboring countries and to neighboring regions has been one of the most important means to increase business profit and economic wealth. The government of the provinces and the Chambers of Commerce developed several trans-border cooperation's. These programs specifically focus on SMEs. In spite of all these efforts on average only 9 % of the overall trade in South-Limburg is generated through Euregional trade. For Belgian Limburg this is 6 % (Chambers of Commerce Euregio Meuse-Rhine, 2005). The researchers indicate that this is less than expected and less than was anticipated according to the possibilities the market offers.

The objectives

The literature on regional development provides several explanations for the fact that cross-regional business does not grow much. Regarding success of cross-border cooperation in Euregions, a lot of differences occur between the Euregions (Perkmann, 2003). In many cases cooperation success depends largely on subsidy that is granted (Cochrane, Peck, & Tickel, 1996). Business management studies show that the personal characteristics of the entrepreneur him/herself also play an important role in the development of cross-border business (Allen Fish, 1999; Alan Fish, Bhanugopan, & Cogin, 2008; Smyrl, 1997). Looking at more general literature, you can see a lot of export barriers, although some of the barriers mentioned are not applicable for the Euregional markets. Hessels (2005) examined the data about export of Dutch firms in 2004. Export is important for the Dutch economy. About 26% of Dutch SMEs imported goods or services, 18% exported goods or services, 2% invested abroad, and 9% cooperated with foreign business partners. For exporting, foreign investing SMEs and SMEs with foreign partners major barriers are high costs, legislation and regulation, the price of products/services, language and cultural differences. For importing firms there are less barriers. Mainly the price can be a problem.

For firms that co-operate with foreign firms other problems that occur are the wish to stay independent and the restraint to share information. Zou & Stan (1998) compared 50 articles about export that were published between 1987 and 1997 in the Journal of International Business Studies, the Journal of Marketing, the International Marketing Review, and Journal of International Marketing, and publications related to exporting. One of the main findings was, that "the field of exporting inquiry is known for autonomous and uncoordinated efforts." A major reason for "the lack of clear conclusions regarding the determinants of export performance, in spite of the large volume of published studies" was, according to Zou & Stan "the lack of synthesis and assimilation of the fragmented knowledge" (1998). They tried to give an impulse for further research on a more structured level, so better theories about export can be developed. They also found that later studies have used conceptual models, what significantly strengthened the theoretical foundation of export performance research, but the researchers didn't use uniform conceptualization and ways of measurement. They identified trade barriers and physical and psychological distance as export barriers and use these in a model of Export Performance as Perceived Export.

Eaton and Kortum (2002) investigated the influence of trade costs, distance, technological level, language, and openness. They researched the data about bilateral trade in manufactures, prices, and geography from 19 OECD countries in 1990. They developed and quantified a Ricardian model of international trade involving geographic barriers as transport costs, tariffs and quotas, delay, and problems with negotiating a deal from afar. They found that the normalized share of import is higher when the distance is greater. Although this was not what they expected, they tried to explain it. "The strong inverse correlation could result from geographic barriers that rise rapidly with distance, overcoming a strong force of comparative advantage. Alternatively, comparative advantage might exert only a very weak force, so that even a mild increase in geographic barriers could cause trade to drop off rapidly with distance."

Taking the export barriers from all these articles, there are several ways to group these barriers: psychological, operational, organizational or product/market oriented; marketing, procedural or cultural oriented; market, human resource, financial, product, industry structural, competition, customer, procedural, direct macro economical or indirect macro economical oriented; financial, managerial, industry specific or firm specific oriented. Next to these export barriers there are also personal factors that can influence the export performance of a firm like the demographical characteristics of the manager, the international orientation of the manager, the international business skills and the environmental perceptions.

In order to determine whether the export activities have reached a level where you can say that the effect of the independent variables was positive or not, one has to determine how to measure it. It is important to look at all the independent variables and not only cultural distance like most of the researchers have done (Harzing, 2004). These expectations can be short-termed, long-termed or a combination. But what these independent variables are is everything but clear. This is logical, since there is no exact way to measure it. Most of the factors for successful Export Performance have to do with the comparison of expected outcomes and realized outcomes. But in addition to this the level of expectation is to a large extent depending on several aspects like experience, size and economical climate. The expectation for instance could also be a calculated loss. Lesser loss then might be a success.

To understand the problems and to find out what needs to be researched one has to look at the facts that are already known. Some of these facts led to the problem, some of these aspects can help us find an explanation, why it came this far, and some of these facts can be part of the solution to this problem. Figures from the Dutch Chambers of Commerce (Chambers of Commerce Euregio Meuse-Rhine, 2005) show that the firms in Dutch Limburg perform below average concerning business, export and import. When you look at the trade between SME's in Belgian Limburg and South Limburg, you can see that it is limited. Belgian Limburg exports 6% of the total trade to South limburg. The other way round it is only 4%. And where Belgian Limburg purchases 13% of their goods and services from South Limburg, South Limburg purchases only 4% from Belgian Limburg. Looking at the buying behaviour of private people, shoppers from Dutch Limburg spent more in Belgian Limburg than the inhabitants of Belgian Limburg themselves, whereas the inhabitants of Belgian Limburg spent almost as much in their own region as they do in Limburg, mainly in South Limburg.

Figure 1: Overview of the import and export in Belgian Limburg and South Limburg

Source: (Chambers of Commerce Euregio Meuse-Rhine, 2005)

Another problem is the decrease of the population in South Limburg. This means that the local market for some branches could become less interesting. But looking at the Euregion as a whole, the population is not decreasing at all. In fact it increases over time:

Figure 2: Population trends (1990 = 100) Partner regions 1990 - 2020

Source: ("Euregio Meuse-Rhine in figures," 2007, 2008)

Size of the population

1/1/1990

1/1/1995

1/1/2000

1/1/2005

1/1/2006

1/1/2007

1/1/2010

1/1/2015

1/1/2020

Dutch Limburg

730,000

745,000

748,000

736,000

732,000

747,000

723,000

709,000

691,000

Belgian Limburg

745,000

772,000

791,000

810,000

815,000

820,000

824,000

835,000

843,000

Table 1: Population in the three parts of the Euregion

Source: ("Euregio Meuse-Rhine in figures," 2007, 2008)

One should wonder why South-Limburg, dealing with these problems, doesn't look at the neighboring countries to try to find a solution to this problem.

The Chambers of Commerce Euregion Meuse-Rhine investigated what drove firms to trade in the Euregion and what obstacles they had met. Attractive aspects were among other things the delivery times, the customer relations, the quality, and the service provision. Obstacles were among other things regulations, tax differences, cultural differences, language differences, sales prices, and the competition ("Chambers of Commerce Euregio Meuse-Rhine," 2005).

The conceptual framework

To develop a conceptual model with a theoretical framework and a theoretical model about the Cross-border business between Belgian Limburg and South Limburg it was necessary to determine the aspects and facets of the export barriers that play a part. Next to that it was also necessary to make a choice from these aspects. This study mainly focuses on the influence of the barrier cultural sensitivity on business/export performance and the aspects of business communication skills. Business communication skills and Cultural sensitivity are considered as independent variables and their impact on Business-Export performance/Cross-border business development will be measured. Both regions use the same language, although there are differences in the used dialects. Should the dialect appear to be a hurdle, it is easy to switch to the common language, which is Dutch. It will be examined how important it is to speak the language of your business partner in a way he appreciates it and how to behave, both on an individual level, so apart from national or regional culture. Concerning culture it will be examined how important it is to be aware of cultural differences between countries and firms and to behave in a appropriate way. Analogous to the cultural sensitivity it is also important to be able to use a language in a suitable way. It can be important to be able to speak or write a language in a grammatically correct way, but in some situations it could be essential (like in an official business letter), in other situations it could be advisable (like in a presentation) or not important at all (like in a conversation). It could be of the upmost importance to be able to distinguish between the different situations and the different levels of language. This is described as Business Communication Skills. Using the improper idiom in a certain linguistic utterance could have a considerable impact on the business performance. Both Cultural sensitivity and Business communication skills could be influenced by the kind of branch in which the business takes place.

Through the literature review the mutual connections of the variables will be clarified, which should lead to a conceptual model in which the relationships between the variables will be perceptible.

Cultural Sensitivity

Cultural Sensitivity is not only the awareness that there are differences and similarities in Language, Religion, and Culture but also the knowledge, skills, and desire to consider these differences and similarities. Rice and Donahue (2002) describe seven dimensions of cultural sensitivity which range from being able to accurately identify what culture(s) a person belongs to, to being able to implement appropriate action in a culturally sensitive manner. One of the key words that occur in most studies is again Trust. In this section the different aspects and dimensions of cultural sensitivity and the influence on the cross-border activities will be described. Alteren developed a concept of cultural sensitivity. Cultural sensitivity has following dimensions: international experience, country experience, open-mindedness, adaptive business style, and ongoing business experience(Alteren, 2007, 2009). He compared several studies of Cultural Sensitivity dividing them into qualitative and quantitative studies.

Source:

Key expressions:

Cultural sensitivity measurement:

Kraft and Chung, 1992

Cultural awareness of the business partner

None

Morgan and Hunt, 1994

Successful relationship marketing requires relationship commitment and trust (commitment and trust as key mediating variables in their model)

One-dimensional construct consisting of 10 items

LaBahn and Harich, 1997

Understanding of and adaptation to a business partner's national business practices

One-dimensional construct consisting of 4 items

Skarmeas, Katsikeas and Schlegelmilch, 2002

Awareness of cultural differences in domestic business practices and the management of these differences

One-dimensional construct consisting of 4 items, adopted from LaBahn and Harich (1997)

Chetty, Eriksson and Lindbergh, 2006

Growing business experience and experience in several countries is more valuable than past business experience in a specific country

One-dimensional construct consisting of 3 items

Johnson, Cullen, Sakano and Takenouchi, 1996

Awareness of cultural differences in business practices and the management of these differences

One-dimensional Construct consisting of 10 items

Table 2: Quantitative studies regarding Cultural Sensitivity

Source:

Key expressions:

Major findings:

Focus of the research:

Harich and LaBahn, 1998

Cultural sensitivity is a customer's perception that the salesperson accommodates the customer's buying process needs

Three dimensions were identified: 1. To establish friendship; 2. To understand and appreciate Mexican culture, 3. To show flexibility

Develop dimensions expressing a salesperson's cultural sensitivity as perceived by the buyer in a specific cross-border context

Shapiro, Ozanne and Saatcioglu, 2008

The paper explores the development and evolution of cultural sensitivity as it interacts with trust and development of international business relationships.

They developed a model a four stage process of cultural sensitivity: from romantic sojourner to partner.

Cultural sensitivity is an ability to monitor the new environment and engage in sense-making using ethic and situated knowledge structures, and these understandings are used to perform enacted procedural knowledge

Chaisrakeo and Speece, 2004

Open-minded, non- judgmental and sensitive to the verbal and non-verbal cues of people from a foreign country (adopted from Akaria 2000)

Key characteristics: A salesperson should have an open-mind, have language skills, have an interest in learning, have a flexible communication style, and possess cross-cultural working experience/knowledge

Explore key characteristics characterizing successful salespeople dealing with customers in the international markets

Table 3: Qualitative studies regarding Cultural Sensitivity

LaBahn and Harich propose a model of Cross-National Channel Relationship Performance (1997):

Figure 3: Model of Cross-National Channel Relationship Performance

Source: (LaBahn & Harich, 1994)

They present this one model for both sides of the relationship because their general proposition holds that the conceptual framework should generalize across national boundaries. They also propose that the influence of cultural sensitivity on relationship performance is mediated by communication and conflict. Generally spoken they state that open communication and commitment are strong predictors of performance. Skarmeas et al. (2002)stress out the importance of commitment in the international customers-suppliers relation, using the same model.

Johnson et al. (1996) researched 101 alliances of Japanes and US organizations. They found out rgar cultural sensitivity was very important, but in a different way for the Japaneze partners and for the US partners. For the Japanese it was important that the alliance partners were similar, the US partners found complementary more important. For their survey they used 5 scopes of measurement: Strategic Integration, Trust, Cultural Sensitivity, Similarity, and Complementarity. This research is engaged with cultural sensitivity and some of their propositions are usable in this research. They indicate to what level the different business partners are willing to cooperate.

Shapiro, Ozanne and Saatcioglu take the development of Cultural Sensitivity as the basic of their ideas(2007). It is a development in monitoring the new environment and understand it, so you can use this to develop trust and relationship. It is also a development of contact. When the contact gets closer and closer, the problems get bigger. One develops from a so called romantic sojourner over foreign worker and skilled worker to a partner. Romantic sojourners miss any knowledge about the differences of culture, thus they take risks and rely on a basic, so called naive trust, which could prove wrong and could sometimes lead to a nightmare. The foreign worker has a more realistic and cognitive understanding of the local culture, leading into a deeper immersion into the business culture as they become hard-working and committed entrepreneurs. As a result, they get a "real cultural taste" and start to feel integrated into the culture. He gets more and more involved and starts to become an active participator.

The skilled worker has developed a deeper understanding of the local culture and engages in a deeper contact with business associates. The relationship with the host culture evolves into a "diplomacy game" aimed at preserving relationships with host country members. Skilled workers become "cautious politicians". Skilled workers give up their longing to be a cultural insider and forge a balanced understanding of the local culture. They open themselves once again to the host culture and are re-enchanted. Partners possess the highest cultural sensitivity and a negotiated business culture based on relational trust. At this stage a form of transcultural understanding based on reflexivity emerges(Thompson, 2002). Reflexivity involves deep reflections on the underlying patterns within different cultures and then the application of these lessons to one's own culture. This cultural reflexivity extends beyond a cognitive understanding and represents the marriage of both cognitive and emotional powers that are critically applied(Shapiro et al., 2007).

Figure 4: Stages of cultural sensitivity

Adapted from: (Shapiro et al., 2007)

In this research it could be important to monitor the stage of development of internationalization of the interviewee, since this has its effects on the intensity of cultural sensitivity. In their explanation they used the explicit/implicit distinctions in the 'iceberg' and 'onion' metaphors for culture in general (national, corporate, professional), as being relevant to effective technical and business communication. Chaisrakeo and Speece (2004) see Cultural Sensitivity as a part of Intercultural Communication Competence, together with Cultural Awareness and Cultural Adroitness. They looked at the influence of salespeople's negotiating styles on different levels - national, organizational, individual. To their opinion, salespeople's negotiating styles are influenced by culture and the ability to adapt to cultures of specific markets and specific customers. So they developed the following conceptual model:

speece.png

Figure 5: Problem Solving Approach/Orientation (PSA/PSO)

Source: (Chaisrakeo & Speece, 2004)

"Cultural awareness refers to characteristics of an individual who is self-aware and tends to be good at predicting the effects of his/her behavior on others. This person is more likely to modify his/her behavior to meet the expectations of a business partner. Cultural sensitivity refers to a person with values such as open-mindedness, an enhanced sense of self, non-judgmental attitudes, and a socially relaxed attitude. Such a person is capable of understanding the value of different cultures and is also sensitive to the verbal and non-verbal cues of people from a foreign culture. Cultural adroitness refers to characteristics of a salesperson that has learned to act effectively when interacting with a partner from a foreign country. This person knows what constitutes appropriate behavior, and will therefore be able to communicate more effectively with the partner. These three dimensions refer to skills, attitudes and traits that a salesperson can make use of to build successful business relationships across national borders"(Chaisrakeo & Speece, 2004). This means that, besides the experience, personal skills and attitude of the interviewee also could play an important role on cultural sensitivity and trust and should be taken into account.

Business communication skills

Having linguistic skills is not enough to communicate. You need more skills than spelling, grammar and vocabulary. You need more skills like work ethic, analytical/problem-solving skills, and interpersonal skills, but also communication skills, the ability to work on a team, analytical skills, accounting knowledge, and business knowledge(Siegel, 2000). Ulijn and Strother (1995) subdivided the verbal communications into four skills. Oral skills refer to listening and speaking, written skills refer to writing and reading.

Modes of Communication

Oral (direct)

Written (indirect)

Receptive (interpreting)

Listening

Reading

Productive (encoding)

Speaking

Writing

Figure 6: Verbal Communication subdivided into Skills

Source: (Ulijn & Strother, 1995)

Spitzberg (1997) developed a model of international communication competence. He looks at competence as "a social evaluation of behavior, composed of the two primary criteria of Appropriateness and Effectiveness". Appropriateness looks at the valued rules, norms, and expectancies of the relationship; Effectiveness is the accomplishment of the goals. He formulated through empirical research a list of skills, abilities, and attitudes that reflect useful guidelines for competent interaction and adaptation. He admits that this list could never be complete and that it is impossible to indict which skills, abilities, and attitudes are decisive in a certain situation. Yet some of the items on this list are also applicable in a situation in a Euregion cross-border situation, such as the ability to adjust to different cultures, the ability to establish interpersonal relationships, the ability to facilitate communication, awareness of implications of cultural differences, Communication competence, Empathy/Efficacy, and Verbal behaviors.

Ulijn & Strother (1995) discussed the concept of a linguistic register, a variety of a language for specific use, such as a business language, a technical language, and a scientific language. The items to be discussed, are if the business language differs from the normal language, and if so, in what way? Are there differences between the Dutch business language and the German business language or are there similarities concerning lexis, syntax and semantics? The business language is closer to the oral common language than to the more written oriented technical and scientific language. The differences between the registers are larger on the vocabulary level (jargon) than on the syntactic level. Through a cognitive model of the listener and reader, combined with the cognitive model of writer and speaker (Figure 7), they give an insight of how among other skills business communication skills can be improved. The basic factors in the reading process are the characteristics of the reader, such as knowledge, the characteristics of the text, such as subject, and the social context.

Although the process of reading and listening is similar, the aspects of time and interactiveness make them different. In this model the language parser plays an important role. It detects the conceptualization underlying each expression. In the text producing part of the model (writing and speaking) the generator is important. This language generator retrieves certain conceptual fragments, appropriate to the situation, from the conceptual system. These fragments are the suitable words with the suitable syntax, and they are used to form the correct sentence. The differences between writing and speaking are the planning and the execution activities. In writing one has more time for planning than in speaking. Yet with both it is very important to analyze the audience. When speaking one deals with the audience, but after something has been said, the expression is out of the hands of the speaker ("verba volant"), whereas a writer can plan and revise until he is satisfied, and then he can let the expression out of his hands ("scripta manent"). Since the same goes for the reader and listener, both writer and speaker need an effective structure to produce a text that is cohesive and coherent. In this research it is necessary to monitor the level of business language the partners use, the means of communication are used most, and the level of language generator and language parser.

Figure 7: Cognitive model of Communication

Source: (Ulijn & Strother, 1995)

Figure 5.16: Cognitive model of Communication, Source: (Ulijn & Strother, 1995)

Christensen and Rees (2002) studied the importance of 32 business communication skills cited in business communication literature (spelling, grammar, and punctuation) and the level of satisfaction with college preparation in those skills. They identified

(a) general language skills: produces correctly spelled documents; uses an effective business vocabulary; uses correct grammar in both spoken and written communication; punctuates documents properly;

(b) written skills: edits and revises documents conscientiously, uses effective techniques in writing reports, uses jargon in appropriate situations, uses proper placement and format for letters and reports, writes naturally and on the reader's level, writes persuasively, writes routine letters - order acknowledgement, inquiry, etc., writes well - clearly, concisely, correctly, completely, composes at the keyboard, creates bibliographies or finds references, organizes information into effective sentences and paragraphs, outlines material before composing techniques, provides effective transition between ideas, uses longhand to create draft of document;

(c) Oral/Interpersonal Skills: analyzes the audience before, during, and after an oral report, asks appropriate questions when talking with customers, asks appropriate questions when talking with supervisors, establishes rapport with the audience, is poised; controls nervousness, listens effectively, maintains eye contact, objectively presents information in oral reports, organizes presentations effectively uses appropriate body actions in interpersonal oral communication, uses appropriate tone of voice -conversational or formal, uses audiovisual aids effectively, uses the telephone and intercom effectively, and uses voice effectively for emphasis (speech, pitch, volume). Maes & Icenogle (1997) mentioned the Oral/Interpersonal Skills as the most important skill in negotiating, whereas the Written Skills are less important, because it is important to be able to communicate quickly and flexible. It is often at the beginning and the end of a negotiating event that most written communication takes place, but the essential communication happens face to face. They also researched the importance of the different aspects of Oral Communication and found the order of importance and use. It is important to identify the more important skills the partners need and use in the cross-border business communication activities. One needs to know what kind of language knowledge is necessary to develop the skills and how this knowledge can be obtained. This can lead to very practical advice for the entrepreneur who needs to develop a certain communication skill and the institute that can develop a teaching method that attune to the needs of the entrepreneur, even on a individual level.

Spiro and Weitz(1990) define the Adaptive business style as the altering of business style during a customer interaction or across customer interactions, based on perceived information about the nature of the business situation. They developed and validated a measure of the degree to which salespeople practice adaptive selling (ADAPTS scale). "They argued that this predisposition should consist of the following six facets: 1. A recognition that different selling approaches are needed in different sales situations; 2. Confidence in the ability to use a variety of different sales approaches; 3. Confidence in the ability to alter the sales approach during a customer interaction; 4. A knowledge structure that facilitates the recognition of different sales situations and access to sales strategies appropriate for each situation; 5. The collection of information about the sales situation to facilitate adaptation; and 6. The actual use of different approaches in different situations" (Alteren, 2007). Robinson et al. altered the ADAPTS scale into an ADAPT-SV scale(2002). These items are adopted as questions 10, 11, 12, 13, 14.

Customer-oriented communication shows the external focus of an organization. This external focus implies the preparedness to adapt to the foreign partner. The items are adopted as questions 40, 41, 42, 43.

Business-export performance/cross-border business development

In order to determine whether the business/export activities have reached a level where one can say that the effect of the independent variables was positive or not, one has to determine how to measure it. In this section several scales of measuring the performance will be compared and the most suitable scale in this study will be determined. It is important to look at all the independent variables and not only cultural distance like most of the researchers have done(Harzing, 2004). These expectations can be short-termed, long-termed or a combination. But what these independent variables are is everything but clear. This is logical, since there is no exact way to measure it. Most of the factors for successful Export Performance have to do with the comparison of expected outcomes and realized outcomes. But in addition to this the level of expectation is to a large extent depending on several aspects like experience, size and economical climate. The expectation for instance could also be a calculated loss. Success then might be a lesser loss.

Lages and Lages (2004) developed a three-dimensional scale (the STEP Scale) to measure short-term export performance. The measures are satisfaction with short-term performance improvement, short-term exporting intensity improvement and expected short-term performance improvement. They define short-term as a period of one year. The satisfaction with short-term performance improvement is measured by looking at the effectiveness of a marketing program. For this they compare sales, profitability, market share, and overall performance because this reflects how well the organization is meeting its exporting goals according the view of the manager. The short-term exporting intensity improvement is measured in terms of sales and profitability. The expected short-term performance improvement shows the anticipated improvement, often in comparison with other organizations as a reference.

The EXPERF Scale (Shoaming Zou, Taylor, & Osland, 1998) uses three dimensions to measure long-term Export Performance. These dimensions are financial export performance, strategic export performance, and satisfaction with export venture. Financial export performance, being a part of the marketing program, can be measured with export sales, export sales growth, export profits, and export intensity (export/sales ratio). Strategic export performance is measured in terms of improved competitiveness, increased market share, strengthened strategic position, and strategic presence in the export market.

Diamantopoulos and Kakkos (2007) use the goal model because they also think that decision makers have certain export objectives in mind when they make their decisions. They describe the actual performance measurement of a particular export objective in a specific context in the Performance Measurement (PM) Matrix. In this matrix the attainment of the objective is described by the frame of reference (your objectives vs. the objectives of others) and by the element of time (static vs. dynamic). At a given moment the actual Export Performance will be compared with the objectives and they will be classified as either success or failure. This is described in a Success/Failure (SF) matrix in which success and failure is described by the relative importance of different export objectives and by the managers' satisfaction with the objectives.

Table 4: The PM Matrix: Export Sales Objectives

Source: (Diamantopoulos & Kakkos, 2007)

Table 5: The SF Matrix: Export Sales Objectives

Source: (Diamantopoulos & Kakkos, 2007)

The Relqual scale (C. Lages, Lages, & Lages, 2005) assesses relationship quality in an exporting context since the international competitiveness is increasing and exporting firms have to invest in relationships with their partners. The quality of the relationship is measured by the (increasing) amount of information sharing, communication quality, long-term orientation, and satisfaction with the relationship. Lages, Lages, and Lages define the amount of information sharing as "the extent to which the exporter openly shares information that may be useful to the relationship". This definition includes three aspects: the frequency of discussion, the sharing of confidential information, and the frequency of conversation about business strategy. Long-term relationships are important because they are likely to evolve cooperation, goal sharing, and risk sharing. Satisfaction is defined as "a positive emotional state resulting from the assessment of the exporter's working relationship with the importer". Here the assumption is made that "a satisfied exporter considers the association with the importer to be successful".

Also the satisfaction with the importer and the degree in which the objectives are achieved play an important role. Zou and Stan (1998) reviewed 50 studies about the determinants of export performance. They met the problem that there was a multiplicity of factors and variables. By using a classification they came to 33 independent variables and 7 factors for export performance. The classification they used as a starting point was external and internal factors. The 7 factors were: Sales, Profit, Growth, Perceived success, Satisfaction, Goal achievement, and Composite scales.

Out of the literature review comes the following conceptual model:

Cultural Sensitivity

Communica-tion Skills

Branch

Cross-border Business Performance

Figure 8: The conceptual model

Through this model the influence of Communication skills and Cultural sensitivity is researched and also whether the branche has a moderating influence: how can the awareness about the cultural differences on regional and organizational level lead to a better understanding of the different ways of doing business and of different ways of communication? To be able to answer this question, this 2500 Dutch and 1600 Belgian SEMs were selected randomly and invited by mail to participate in this research by filling in a survey. 187 Dutch and 153 Belgian SEMs really participated. They had to indicated, on a likert scale from 1 to 5, whether they agreed on a statement or whether it was applicable on them or their organization. They had to react on 9 statements about Cultural sensitivity, 12 statements about Business communication skills and 4 statements about export/business performance.

To be succesfull in cross-border business it is important not only to know that there are cultural differences, it is also very important to know how to deal with them and how to react on them. When the business partner with the highest interest has not a sufficient level of these cultural skills, the cross border business will be less succesfull, depending on the branch.

To be succesfull in cross-border business it is important not only to be able to speak the same language, it is also very important to know how to use this language in certain situations. When the business partner with the highest interest has not a sufficient level of Business communication skills, the cross border business will be less succesfull, depending on the branch.

Outcomes and conclusions

For the quantitative research SmartLPS and SPSS will be used. With SmartLPS causal relations will be tested using the technique of Structural Equation Modeling (SEM). This is a statistical technique for testing and estimating causal relations using a combination of statistical data and qualitative causal assumptions. With SPSS the necessary statistical calculations can be performed.

 

 

 

 

Loadings

T Statistics

p-value

N-valid

Mean

Std. Deviation

Variance

Cultural sensitivity

1

In your firm, you have worked very hard to familiarize yourselves with the foreign legal and economic environment.

<-CS

0.591

10.630

0.000

282

2.710

0.901

0.812

2

In a business relationship, you always try to show your willingness to adapt to the other way of doing things.

<-CS

0.358

3.167

0.002

282

3.462

0.727

0.529

3

You are fully aware and understand that, compared to us, the foreign partner needs to have much more lengthy and detailed discussions before they are comfortable committing to a course of action.

<-CS

0.534

3.840

0.000

282

3.630

0.757

0.573

4

You appreciate the nature of the decision-making and management techniques of the foreign partner.

<-CS

0.711

8.494

0.000

282

3.347

0.686

0.470

5

A number of your representatives and managers speaks the language of your foreign partner or is spending time learning it.

<-CS

0.699

11.959

0.000

282

3.395

0.931

0.867

6

No one in your firm seems to know anything about the foreign culture and way of doing business.

<-CS

0.011

0.059

0.953

282

2.158

0.810

0.657

7

Your managers and representatives are aware that the norms for business communication are different in other countries.

<-CS

0.758

12.475

0.000

282

3.891

0.864

0.746

8

Your managers and representatives know not to press foreign managers for immediate decisions.

<-CS

0.606

3.667

0.000

282

3.294

0.802

0.644

9

Your managers are sensitive to the amount of time it takes foreign managers to decide on an action.

<-CS

0.592

3.521

0.001

282

3.102

0.805

0.648

Business communication skills

1

You are very flexible with regard to which business style you adopt.

<-BCS

0.525

4.827

0.000

282

3.873

0.724

0.524

2

You can use a wide range of different ways of doing business.

<-BCS

0.659

8.135

0.000

282

3.713

0.740

0.548

3

You can easily change to another negotiation style, if you perceive that the style you are using does not work.

<-BCS

0.684

12.383

0.000

282

3.678

0.817

0.667

4

You like testing out different ways of approaching new customers.

<-BCS

0.490

6.368

0.000

282

3.185

0.887

0.788

5

You try to understand how one customer differs from another.

<-BCS

0.683

8.927

0.000

282

4.046

0.612

0.375

6

You use appropriate body actions in interpersonal oral communication.

<-BCS

0.609

7.070

0.000

282

4.012

0.683

0.467

7

You use appropriate tone of voice -conversational or formal.

<-BCS

0.710

8.426

0.000

282

4.083

0.590

0.348

8

You have a clear, understandable pronunciation.

<-BCS

0.624

6.554

0.000

282

4.000

0.660

0.435

9

In your firm it is the practice to respond as soon as possible to the customers' requests.

<-BCS

0.700

9.839

0.000

282

4.104

0.868

0.753

10

In your firm it is the practice to take steps immediately when a customer has a complaint.

<-BCS

0.691

8.248

0.000

282

4.085

0.853

0.728

11

Your firm has a very good understanding of how the customers judge the quality of products and the customer service.

<-BCS

0.701

9.300

0.000

282

3.911

0.787

0.619

12

Your firm regularly evaluates the satisfaction of the customers with regard to quality of the product and the customer service.

<-BCS

0.660

10.183

0.000

282

3.601

0.910

0.828

Business/ export performance

1

The cross-border trade is an important part of your overall trade.

<-BP

0.729

24.247

0.000

282

2.830

1.225

1.500

2

The returns of the cross-border trade of 2009 matched your expectations.

<-BP

0.904

40.392

0.000

282

2.997

0.994

0.988

3

The returns of the cross-border trade of 2010 matched your expectations.

<-BP

0.914

43.098

0.000

282

2.973

1.030

1.061

4

The returns of the cross-border trade of 2011 matched your expectations.

<-BP

0.903

40.317

0.000

282

3.017

0.987

0.974

Branch

1

Branchcode

<-Branch

1.000

0.000

1.000

272

6.695

2.433

5.918

Table 6: Descriptive statistics on item level

Regarding the loadings and the t- and p-value statement CS6 appears to be not reliable and does not significant contribute to the score of Cultural sensitivity. Although the t- and p-value of statement CS2 indicate a significant contribution to the sore of Cultural Sensitivity, the value of the loading, <0.5, shows that this variable is less reliable. Since the Branchcode is the sole, nominal variable of Branch, no information can get extracted from this overview.

 

AVE

Composite Reliability

R Square

Cronbachs Alpha

Correlation

BCS

BP

Branch

CS

BCS

0.4201

0.8958

0.0002

0.8762

BCS

1

-

-

-

BP

0.7500

0.9225

0.2954

0.8854

BP

0.4274

1

-

-

Branch

 

 

0.0000

 

Branch

-0.0146

-0.0461

1

-

CS

0.3388

0.7987

0.0063

0.7442

CS

0.5951

0.5241

-0.0793

1

Table 7: Descriptive statistics on factor level

Again here Branch does not provide a significant contribution to the model. The values of R-square from BCS and CS are extremely low and the correlation between Branch and ather factors are <0.2 and >-0.2. An Independent-Samples-Kruskal-Wallis test should show more about the nature of the scores on the statements from the different branches.

Belgian and Dutsch Limburg got separated in 1839. Since then they had a different, yet similar, development. They were capital-oriented, which means that they had more attention for the political and economical centre of their own countries. This ment in fact, that they stood back to back. Later in both regions coal was discovered and the economy prospered, although most profits were diverted to the polical centre. After the coalmines were closed, other industries came in their place, mainly carfactories. But in both regions nowadays these carfactories were closed or almost disappear. So there were differences and also similarities. How do these aspects relate to the score on the statements. Are there similar scores or are there differences?

H1=There are no significant differences in answers to the statements between the Region Belgian Limburg and Dutch Limburg

Hypothesis Test Summary

Null Hypothesis

Test

Sig.

Decision

The distribution of Cultural Sensitivity 1 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,415

Fail tot reject H1

The distribution of Cultural Sensitivity 2 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,256

Fail tot reject H1

The distribution of Cultural Sensitivity 3 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,223

Fail tot reject H1

The distribution of Cultural Sensitivity 4 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,005

Reject H1

The distribution of Cultural Sensitivity 5 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,969

Fail tot reject H1

The distribution of Cultural Sensitivity 6 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,003

Reject H1

The distribution of Cultural Sensitivity 7 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,000

Reject H1

The distribution of Cultural Sensitivity 8 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,5

Fail tot reject H1

The distribution of Cultural Sensitivity 9 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,438

Fail tot reject H1

The distribution of Business communication skills 1 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,009

Reject H1

The distribution of Business communication skills 2 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,08

Fail tot reject H1

The distribution of Business communication skills 3 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,297

Fail tot reject H1

The distribution of Business communication skills 4 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,883

Fail tot reject H1

The distribution of Business communication skills 5 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,000

Reject H1

The distribution of Business communication skills 6 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,000

Reject H1

The distribution of Business communication skills 7 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,001

Reject H1

The distribution of Business communication skills 8 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,000

Reject H1

The distribution of Business communication skills 9 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,005

Reject H1

The distribution of Business communication skills 10 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,122

Fail tot reject H1

The distribution of Business communication skills 11 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,003

Reject H1

The distribution of Business communication skills 12 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,87

Fail tot reject H1

The distribution of Dependent variable 1 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,111

Fail tot reject H1

The distribution of Dependent variable 2 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,000

Reject H1

The distribution of Dependent variable 3 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,004

Reject H1

The distribution of Dependent variable 4 is the same across categories of region

Independent-Samples-Mann-Whitney U test

0,677

Fail tot reject H1

Asymptotic significances are displayed. The significance level is ,05.

Table 6: overview on the scores of significancy of differences in answers to the statements between the Region Belgian Limburg and Dutch Limburg

To be able to make a comparisson between branches, to see of there are differences between the scores, various branches have been chosen. The choice was motivated by diversity. Technical branches, service oriented branches and manufactoring branches. This lead to the following list of branches: agricultar, chemics, construction, healthcare, ict, industry, marketing, retail, and service. During the analyze of the factors it showed that the scores of the branches did not had a significant contribution to the conceptual model.

H2=There is no significant differences in answers to the statements between the branches

Hypothesis Test Summary

Null Hypothesis

Test

Sig.

Decision

1

The distribution of Cultural Sensitivity 1 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,574

Fail tot reject H2

2

The distribution of Cultural Sensitivity 2 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,377

Fail tot reject H2

3

The distribution of Cultural Sensitivity 3 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,453

Fail tot reject H2

4

The distribution of Cultural Sensitivity 4 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,57

Fail tot reject H2

5

The distribution of Cultural Sensitivity 5 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,541

Fail tot reject H2

6

The distribution of Cultural Sensitivity 6 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,385

Fail tot reject H2

7

The distribution of Cultural Sensitivity 7 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,498

Fail tot reject H2

8

The distribution of Cultural Sensitivity 8 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,599

Fail tot reject H2

9

The distribution of Cultural Sensitivity 9 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,354

Fail tot reject H2

10

The distribution of Business communication skills 1 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,651

Fail tot reject H2

11

The distribution of Business communication skills 2 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,69

Fail tot reject H2

12

The distribution of Business communication skills 3 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,549

Fail tot reject H2

13

The distribution of Business communication skills 4 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,38

Fail tot reject H2

14

The distribution of Business communication skills 5 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,38

Fail tot reject H2

15

The distribution of Business communication skills 6 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,129

Fail tot reject H2

16

The distribution of Business communication skills 7 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,386

Fail tot reject H2

17

The distribution of Business communication skills 8 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,293

Fail tot reject H2

18

The distribution of Business communication skills 9 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,432

Fail tot reject H2

19

The distribution of Business communication skills 10 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,437

Fail tot reject H2

20

The distribution of Business communication skills 11 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,443

Fail tot reject H2

21

The distribution of Business communication skills 12 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,408

Fail tot reject H2

22

The distribution of Dependent variable 1 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,579

Fail tot reject H2

23

The distribution of Dependent variable 2 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,563

Fail tot reject H2

24

The distribution of Dependent variable 3 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,612

Fail tot reject H2

25

The distribution of Dependent variable 4 is the same across categories of branch

Independent-Samples-Kruskal-Wallis test

0,506

Fail tot reject H2

Asymptotic significances are displayed. The significance level is ,05.

Table 8: overview on the scores of significancy of differences in answers to the statements between the branches

From the factor analyse and the Independent-Samples-Kruskal-Wallis test it can be seen that there is no modifying effect from Branch on the relationships Cultural sensitivity with Business performance and Business communication skills and Business performance.

It can be concluded that the factors Business communication skills and Cultural sensitivity have influence on the Business performance of SME's in Belgian and Dutch Limburg. Entrepreneurs who wants to do cross border business need to be aware of the differences that can occur.On Cultural sensitivity the differences appear to be limited on statement 4, 6, and 7 (the nature of the decision-making and management techniques of the foreign partner, present knowledge about the foreign culture and way of doing business, awarness that the norms for business communication are different in other countries). On the factor Business communication skills there are more differences. The differences are significant on the statements 1, 5, 6, 7, 8, 9, 11 (Flexibilty business style, understandment how one customer differs from another, appropriate body actions in interpersonal oral communication, appropriate tone of voice, clear, understandable pronunciation, prompt respond to the customers' requests, understanding of how the customers judge the quality of products and the customer service). On statements CS6, BCS9 and BCS11 the scores of the SME's in Belgian Limburg are siginifacant higher, on the other statement, that show a difference, the scores of the Dutch SME's are significant higher.

Limitations and suggestion for future research

This research exclusively looks at the two barriers Cultural sensitivity and Business communication Skills. But there are more factors that hinder Euregional trade. Some of them could be solved when the cultural problems are elimi

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