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Previous research on business development considered its role in the success of Information Technology Small Medium Enterprises as well as the commercialisation of disruptive innovations (Giglierano, Vitale, & McClatchy, 2011). However to date limited research has attempted to examine the behavioural influences of market orientation and entrepreneurial orientation on export business development performance.
This study is aimed at providing an empirical investigation of two strategic orientation factors to determine their impact on business development performance in South African export organisations. The objective of the research is to provide executives and business schools with information to make sound recruitment decisions and course content selection. The research also aims to make potential business developers aware of the impact of export market orientation and export entrepreneurial orientation on their success or failure in international markets.
A quantitative research methodology was employed. Measures of the constructs are based on an existing measurement instrument from Boso et al (2012). The research process comprised of two stages constituting a pre-test sample of six experts from the fresh produce export and steel fabrication sectors. The second phase was made up of 61 CEOs, executives, business developers, international sales managers and traders in the mining, fresh produce, electro technical, healthcare, automotive, oil & gas, steel, consulting services and other sectors. The research instrument was an online survey made up of constructs, namely export business development performance, market orientation, entrepreneurial orientation behaviours and export market dynamism of the external environment.
Statistical analysis for reliability and construct correlation showed acceptable results to conclude that the Boso et al measures can be used amongst South African exporters of goods and services. A comparison of the differences of means between the constructs for corpographic variables produced statistically significant differences in owner versus employee respondents as well as SMEs versus large organisations. Practical recommendations are provided for stakeholders to apply in the development of export businesses in international markets.
TABLE OF CONTENTS
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CHAPTER 1: INTRODUCTION TO THE RESEARCH PROBLEM
The role of market orientation and entrepreneurial orientation in business development performance
The international success or failure of companies is a complex phenomenon, which is affected by multiple factors such as business characteristics, strategic orientation, competition, business age, and managers' attitudes (Curci, Mackoy, & Yagi, 2012). This research aims to determine the role of strategic orientation on the international success or failure of South African export companies. It examines how two specific strategic orientations - EMO and EEO - act to drive the performance of business developers in their export markets.
Exporting is particularly important for businesses operating within developing economies as it is a major source of revenue and economic growth (Ibeh, 2003 cited in (Boso, Cadogan, & Story, 2012)). The increasing role played by exports in driving economic growth and prosperity means that there is a pressing need to understand the factors underpinning export success (Acedo and Gelan, 2011; Leonidou et al, 2002)
In appreciation of the role that business developers play in creating growth, and the dearth of literature which examines the influence of EMO and EEO on business development performance, it is necessary to conduct research. This study seeks to understand the relationship between the EMO and EEO on the performance of South African export business developers. It is inferred that external environments affect the success or failure of business developers in international markets. As such, the secondary objective of this study is to understand the impact of market dynamics in enhancing or hindering EBD performance in international markets.
The following sections expound on the research motivation, relevance of studying export BD, EMO and EEO. The relevance of the study population group, the research problem, scope and potential beneficiaries of the outcome of the study are outlined in the following section.
Engagement in export operations is vital in spreading business risks across different markets and ventures; improving technological, quality, and service standards in the firm; generating more revenues and funds for reinvestment and further growth; exploiting idle operating capacity and improving production efficiency; and attracting and rewarding shareholders and employees through the creation of a better profit base (Czinkota and Ronkainen 2001; Terpstra and Sarathy 2000). Reaping these benefits is not a trouble free task but one that is hindered by numerous obstacles pertaining to internal organisational weaknesses, strategic business flaws, home-country deficiencies, or host-market problems (Leonidou, 2004)). These obstacles are responsible for (1) many small indigenous firms viewing exporting with great scepticism and refusing to engage in activities abroad; (2) neophyte exporters developing a negative attitude toward exporting and thinking of withdrawing from overseas operations; and (3) experienced exporters suffering from deteriorating performance, which even threatens their survival in international markets (Leonidou, 2004). In light of the obstacles faced by export companies, this study seeks to determine the factors exporters use to realise profitable opportunities in international markets and focuses on the role two strategic orientations, namely EMO and EEO, have on EBD performance.
Relevance of Study: Exports in South Africa
Exporting is an important economic activity that is critical for the success of business organisations and nations (Morgan, Kaleka, & Katsikeas, 2004). Given its importance in the contemporary world of business, exporting has become a major means for entering international markets, sales expansion and profitability (Morgan et al., 2004). In this respect, export researchers have tried to understand key determinants of export success (Balabanis & Katsikea, 2003; Dimitratos, Lioukas, & Carter, 2004; Katsikeas, Leonidou, & Morgan, 2000; Robertson & Chetty, 2000). Focusing on the determinants of export success, there has been a rise in the number of variables that have been studied in recent years, and among these are EMo and EEO (Cadogan, Kuivalainen, & Sundqvist, 2009; Kuivalainen, Sundqvist, & Servais, 2007; Murray, Gao, & Kotabe, 2011).
South Africa depends on international trade to a high degree and has a fundamental interest in making use of all its export opportunities (Dichtl, Goeglmayr and Mueller, 1990). When South Africa profits from these export opportunities it contributes to the economy's equilibrium by funding the shortage on the balance of payments. Therefore exports are an important tool for the South African economy. According to Aw and Hwang (1995), companies that are exposed to a greater level of international competition are likely to be more efficient in their use of resources. Consequently, it was found that exporting companies act as conduits for the informal inflow of foreign technology and thus could generate higher productivity. Along with higher productivity comes a greater need for employment. In the exporting sectors, employment is likely to increase, whereas employment decreases in sectors where the country imports.
Export assistance programmes designed by governments are intended to provide companies with the resources and capabilities necessary to facilitate success in exporting (Duran & Ubeda, 2001). South Africa is no different. The Department of Trade and Industry (DTI) has many initiatives to assist exporters in the process and provides them with the necessary resources.
The DTI focuses on the development of certain sectors in the economy that lend themselves to domestic mobilisation. The support from these sectors is then extended to export promotion. Valodia, Goode and Macheke (2002) state that the focus is now on the upstream identification of competitive strengths through the DTI's cluster studies and the actions required to overcome identified weaknesses. Therefore, the priority lies with the industries that have been identified as potentially competitive. These include the promotion and formation of industry-based export councils to assist exporters in reaching their targets; market intelligence and advice, for example, identify new products and new markets; trade-lead facilitation; facilitating exports by matching potential exporters with foreign buyers; in-market support and financial assistance. Various industry sectors have organised themselves into export councils to tackle the global marketplace as collective forces. These include the fresh produce, automotive, electronics, wire, stainless steel, aluminium, flower, wine, cosmetics, crafts, ceramics and textiles sectors (DTI, 2012).
The improved growth and diversification of South African manufactured exports during the naughties (the years between 2000 and 2010) lag those of East Asia and a few other resource-based economies. This performance in part reflects relatively low world growth in resource-based products, but factors that affect the profitability of export supply, such as the real effective exchange rate, infrastructure costs, tariff rates and skilled labour, are also shown to be important. Export demand and the ability to compete in the export market on the basis of price are not found to be a major constraint to export growth (Alves & Edwards, 2006).
What factors can exporters use to realise profitable opportunities in international markets? The factors driving the birth of new business in international markets has been identified and the means or mechanisms for developing new business within existing organisations have been ascertained in literature (cite). However the extent to which they cause new business performance within existing organisations is not fully understood - you need to find the gap Chidi, this is not good enough. Clive wants you to elaborate.
Furthermore, rigorous study is needed to provide an operational framework in which the capability to spot value creating opportunities in international markets can generate profitable opportunities. As the development of new business moves out of the realm of the individual and is presented directly within the strategic orientation of the firm, it is hypothesised that factors responsible for market and entrepreneurial orientation of business developers in firms will play an important role and thus result in new EBD performance success or failure based on the extent to which EMO and EEO capabilities are developed.
This research seeks to investigate the relationship between EMO and EEO based on the influence these factors have on export BD performance. The impact of export market dynamism on EBD performance within the South African export context is examined. By understanding the factors driving adoption and the relative importance of EMO and EEO, exporters can adjust the pace with which they generate profit from international opportunities.
Relevance of export BD Construct
Giglierano, Vitale and McClatchy, 2011 assert that EBD focuses on:
Finding new opportunities
Learning about the nature of opportunities and how to address them through direct contact with potential customer
Constructing a business model for addressing an opportunity
Working with partners to address the opportunity
Launching the effort to address the opportunity and learning from the experience.
EBD is especially important as it aims to create growth through expansion or extension of existing product-markets (or their service equivalents) or through development of product-markets or services that are new to the firm (Davis & Sun, 2006). This is of significance especially in many emerging economies as the home market is too small to offer significant growth opportunities to indigenous export companies (Boso, Cadogan, & Story, 2012). Growth-oriented exporters therefore need to develop business linkages with markets outside the home region. The EBD capabilities of such companies are critical growth enablers. This study is motivated by the desire to understand the nature of firm-level EBD capabilities in South African export firms.
Relevance of strategic orientation
Three paradigms have been linked to export research and provide a general theoretical guideline for this study. They are resource-based; contingency-based; relational-based (Francis and Collins-Dodd, 2000).
The resource-based paradigm suggests that a firm's export performance is based on firm-level activities. Research in this vein examined factors such as the effect of firm size, competence, and strategies on export performance. The contingency paradigm suggests that no one strategy can be appropriate in all situations; the effects of various firm characteristics on export performance are dependent on the specific context of the firm. A number of researchers have indicated that certain factors such as industry, market, and environmental conditions are likely to influence various aspects of a firm's characteristics, strategies, and/or competencies on export performance (Cavusgil and Zou, 1994; Yeoh and Jeong, 1995). A third approach to exporting research, described by Francis and Collins-Dodd (2000) is the relational paradigm, which examines the network of business interactions, and views export growth as a step-by-step development of relationships with overseas buyers. This perspective has been highlighted by Styles and Ambler (1994), Ha°kansson (1982), and Johanson and Vahle (1990). The paradigms presented, while not intended to be a complete test of exporting theory, provide a reasonable theoretical examination of the applicability of export orientation and export entry strategy.
The theoretical framework for this study is based on a contingency relationships perspective developed by Yeoh and Jeong (1995). According to Yeoh and Jeong, exporting is considered to be a firm's strategic response to the relationship of internal as well as external factors. They argued that the three major antecedents of performance in the exporting context are export channel structure, strategic orientation, and external environment. Their framework is based on two fundamentals. First, the strategic orientation of an exporting firm is a key determinant of performance, and different types of internal and external contextual situations may exist such that exporting firms manifest different strategic orientations in their export activities. The second premise is that the performance implication of a particular strategic orientation is expected to be contingent on its "fit" with the external environment and the firm's export channel structure.
Relevance of relationship between EMO and EEO
In exploring the strategic orientation of South African export firms as a key determinant of performance, this study will explore a specific field of export research. It will focus on the interactive effect of two orientations on export business development performance. General theoretical guidelines are gleaned from studies concluded by Boso et al who investigated the joint impacts of EMO and EEO on export product performance under differing levels of competitive intensity and financial capital. Their study shows that seeking complementarity between entrepreneurial-oriented and market-oriented behaviours is a useful strategy for export product success, especially when there is a suitably high level of competitive intensity in the export market environment, and when the export unit has greater access to financial capital.
The literature is limited in terms of theory and empirical evidence regarding the impacts of EMO and EEO on export BD success.
Relevance of Unit of Analysis: export business developers in South Africa
South Africa has a predominantly resource-based economy and depends on export-driven growth (The Witness, 2012). Export business developers are the implementers of export-driven growth in firms and can either be the owner, a general manager, a functional manager, a managing director or a president of a firm. Professionals who work in international BD (as distinct from domestic, or intra-national efforts) must acquire specific skills relating to the countries where they operate. This includes understanding the economy, history, culture, laws, business practices and trade patterns of the target country. It also includes a broader understanding of issues common to any international work: global travel, risk mitigation, international contracts and more. Most companies new to international BD, or new to a geography engage the help of third-party consulting firms who specialize in either cross cultural work or in a particular country. Some governments also offer support in this area to firms that seek to create jobs in their country, by promoting exports.
EBD is especially important as it is a specialised field of commerce that penetrates existing markets, and often creates new ones, by introducing new products and services to businesses, individuals, non-profit organizations, and government agencies. It is the intention of this study to understand factors that hinder or enable their success in the penetration of existing export markets or the creation of new ones.
Potential beneficiaries of the study
The potential benefits to stakeholders stated above are:
The outcome of this research will provide the government with information that can be used as input into policy formulation which focuses on the development of new business through the export of South African products
Academic institutions, particularly business schools offering EBD courses, would find knowledge about factors that can be incorporated into the EBD curriculum in order to align themselves with the government and firm's imperative of increasing exports. Additionally the improved curriculum would better prepare EBD graduates for a career in developing new business in exports should they aspire to international markets
As EBD is context specific, this study will also add to a wealth of knowledge about EBD in a developing economy amongst those who select the export mode of entry as well as those scholars who have an interest in export EBD within developing economies.
Business developers will stand to benefit from understanding the factors that promote EBD behaviour in order to become successful performers in their chosen export markets.
Boso et al argue that scholars have yet to determine if there are conditions under which firms should invest in the development of EMO and EEO capabilities, and as such, are not well placed to provide exporters with guidance regarding when investments in these capabilities are most needed.
In acknowledgement of the above, the scope of this study sets out to identify whether there are situations and conditions that increase (or decrease) the value of these two strategic orientations on EBD performance, and so provide guidance to managers about when investments in these capabilities are most likely to lead to export BD success.
The literature cited in this section has provided support for conducting this study in the South African export context. This is important as similar studies increase the understanding of context specific factors that drive or hinder EBD performance. The literature references are discussed in more detail in the subsequent section of this report.
CHAPTER 3: RESEARCH PROPOSITIONS
In line with literature, the primary objective of the research is to study the EMO and EEO of business developers in South African export organisations. This is in order to determine the role these two strategic orientations have on export BD performance. The secondary and complimentary objective of this research is to study the impact of market dynamics on EBD performance. Research propositions were developed in order to explore (Boso, Cadogan, & Story, 2012)'s model empirically in another emerging economy, namely South Africa. Research propositions are defined as statements concerned with the relationships amongst concepts (Zikmund, 2003). In view of the literature that suggests a specific well understood relationship between EMO and EEO, the use of research propositions is appropriate for this study (Zikmund, 2003).
Based on the literature review, particularly based on work by Boso et al, the following propositions are derived and will be researched:
A structured measuring instrument developed by Boso et al was adopted in line with the research objectives. The items included in Boso et al's questionnaire but not relevant for this study were deleted. Additional questions were included pertaining to EBD performance. The following specific questions were addressed:
What are the EMO and EEO behaviours of business developers in South African export organisations?
Can the questionnaire developed by Boso et al be applied to an export services sector?
Does the questionnaire developed by Boso et al have applicability in another emerging economy, namely, South Africa?
To what degree do market dynamics enhance or hinder EBD performance in international markets?
Are there differences between the EMO and EEO behaviours of business developers who:
Own the business as opposed to being employees
Work in a large, medium, small and micro enterprises
Are domicile in Ghana as opposed to South Africa
Athayde (2009a) asserts that the procedures for developing scales indicate that new scales (measure on South African export organisations who export goods or services to international markets) must meet basic criteria including: internal reliability and uni-dimensionality.
Research Proposition 1 (RP1)
The measuring instrument has acceptable construct reliability.
Research Proposition 2 (RP2)
There is a correlation (a relationship) between the constructs of EBD performance, EMO, EEO and export market dynamism.
Research Proposition 3 (RP3)
The combined relationship between EMO and EEO is positively related to export EBD success, when export market dynamism is at higher levels.
The next set of propositions is concerned with differences in response by corpographic groups. For example, UK statistics show ownership differences in business development activities with owners more likely to engage in business development more readily than employees. The other relates to size of the organisation.
Research Proposition 4 (RP4)
There is a difference in the performance of owner and employee business developers with regard to the constructs of EBD performance, EMO, EEO and export market dynamism.
Research Proposition 5 (RP5)
There is a difference in the performance of large, medium, small, micro enterprises with regard to the constructs of EBD performance, EMO, EEO and export market dynamism.
Research Proposition 6 seeks to compare the findings of the study conducted by Boso et al (2012) in the export sector in Ghana compared to other emerging economies, namely South Africa.
Research Proposition 6 (RP6)
There is a difference in the extent to which export organisations in Ghana (Boso et al., 2012) compare to South Africa are able to leverage the full potential of EMO and EEO.
These research propositions will form the basis for statistical testing to reveal whether a correlation exists between EMO and EEO in South African export companies. As alluded to above and based on the literature, it is expected that firstly, these two strategic orientations will have correlation. Secondly, Ghanaian exporters that achieve a balance between their EMO and EEO resources performed better than counterparts that fail to take advantage of the complementarity between these two orientations. This will be tested for general applicability in the South African export context. Thirdly, the more dynamic export customer behaviours and competitor actions are, the greater the synergistic impact of EMO and EEO (Boso et al., 2012). This synergistic impact will be statistically tested to reveal whether EBD performance is enhanced as export EMO and EEO levels increase. Finally, the general applicability of the Boso et al study is assessed for applicability in South Africa
The next section outlines the methodology to be applied in order to achieve these stated research propositions.
CHAPTER 4: RESEARCH METHODOLOGY
The objective of the research was to study the EMO and EEO of business developers in South African export companies. This was in order to determine the role these two orientations have on export EBD performance. The secondary objective was to understand the impact of market dynamics in enhancing or hindering EBD performance in export markets.
The methodology describes the manner in which the research process was conducted and states what the limitations were. This section also provides the rationale for choosing a specific type of research method.
The research methodology chapter has six main components namely, research design, justification of research design, research method, instrument design, data analysis and research limitations.
The research design emanates directly from the research objectives indicated in chapter 1. It also outlines how the research was achieved (Saunders & Lewis., 2012). A descriptive quantitative study was conducted to determine the relationship between the variables that characterise the EMO and EEO of business developers in South African exporter companies. This was in order to determine the individual as well as the combined effect of EMO and EEO on EBD performance. Additionally the impact of the dynamic nature of the export markets in which EBD performance takes place was investigated.
Justification of Research Design
As cited by (Leedy & Ormorod, 2001), descriptive quantitative research is defined as a type of research which involves either identifying the characteristics of observed phenomenon or exploring possible correlations among two or more phenomena. (Zikmund, 2003) further asserts that a quantitative study seeks to determine the quality or extent of some phenomenon in the form of numbers.
In this study, participants were pre-selected and classified according to the extent to which they exhibit EBD behaviour in export markets. This was achieved through filtering their designation through the ISEBD definition indicated in the glossary of terms. Various descriptive statistics such as sample means, standard deviations and frequency distributions were utilised to describe the characteristics of the behaviour of business developers.
As indicated in the literature review, business developers are the firm's agents for product-market expansion or extension by linking the firm to its external environment in the early stages of product and service innovation; the acquisition and management of market and customer knowledge; and guiding the firm in the generation of variety (Davis & Sun, 2006).
Descriptive quantitative research was appropriate to this study as it explored the correlations between the performance of business developers with their EMO and EEO. Boso el at's study discovered that exporters who achieve a balance between their entrepreneurial and market-oriented resources perform better than counterparts that fail to take advantage of the complementarity between the two orientations. This study verified something that is already formulated by combining the scales of two models developed by Boso et al into one model and empirically tested this in the South African export context.
(Zikmund, 2003) also indicates that descriptive studies are to be based on some previous understanding of the nature of the research problem. With reference to this study, the literature review presented in chapter 2 and the research propositions in chapter 3 are based on well researched EBD performance, EMO and EEO dimensions and documented findings. In view of the above, a quantitative study method is an appropriate research method for this research.
A self-administered electronic survey in the form of a questionnaire was distributed to the chosen sample. The study was a cross-sectional study as business developers were sampled during a single period in time. (Zikmund, 2003) advocates that surveys attempt to describe a characteristic in terms of "what", "who", "when", "where", "how" and/or to quantify certain factual information. In view of the above, EBD performance, EMO and EEO and market dynamics quantify factual information.
In order to determine how particular EMO and EEO characteristics changed in relation to EBD performance improvements, the study tested the relationship between the dependent variables EMO and EEO against EBD performance as the independent variable. Homogeneity and heterogeneity describes the extent to which the variables are similar to or different from one another with respect to correlation (Boso, Cadogan, & Story, 2012). The study tested the homogeneity of EMO and EEO. The degree to which EMO and EEO are inter-correlated was determined by computing a specific coefficient. The results were transcribed onto Stats Tools. A regression analysis, scatter plot and the correlation was determined to give the data meaning.
(Zikmund, 2003) defines the target population as "the specific, complete group, relevant to the project". (Cooper & Schindler, 2006) define population as the elements with which to make some inference. The population for this study was all business developers in the South African fresh produce export industry.
Unit of Analysis
The unit of analysis is the individual business developer whose designation was successfully filtered through the ISEBD definition as indicated in chapter 1. This is appropriate because each business developer completed a questionnaire and their individual EBD performance, EMO, EEO and market dynamics information was measured and analysed.
Nature of Sample, Sampling Technique and Sampling Criteria
The Department of Trade and Industry (DTI) promotes the formation of industry-based export councils to assist exporters in reaching their targets, supplying funding for the formation of export councils and certain of their initiatives, including trade missions and exhibitions (DTI, 2012).
Various industry sectors have organised themselves into export councils to tackle the global marketplace as collective forces. These include the automotive, electrotechnics, wire, stainless steel, aluminium, fresh produce, cosmetics, crafts, ceramics and textiles sectors. (DTI, 2012)
The DTI carries a full list, with contact details, of South Africa's export councils, industry associations and joint action groups. A list of exporters was generated using an export directory provided by one of the export councils known as the Fresh Produce Exporter's Forum (FPEF). Members of FPEF were sent electronic mail (e-mail) requesting them to participate in the survey by clicking on a link to a web interface called Survey Monkey. Although this would introduce self-selection bias as this export forum is affiliated on a voluntary basis. It was ostensible that members of FPEF would have had an equal and known chance of participating in this study and hence could be regarded as a probability sample (Nonyane-Mathebula, 2010). The population size was 96 and was made up of members of FPEF.
As a contingency, this study will use non probability sampling which is cited by (Zikmund, 2003) as being a technique in which the probability of any particular member of the population being chosen is unknown. More specifically convenience sampling will be used to obtain those business developers most conveniently available. The benefits of this include selecting those business developers who are easiest to get hold of for the sample (Saunders & Lewis., 2012) as well as the ability to obtain a large number of completed questionnaires quickly and economically (Zikmund, 2003).
The invited participants were monitored for response and those who had not responded within 10 days of being invited to participate were sent reminders. Non response after 10 days of being reminded to participate was an indication to employ a non-probability sampling technique. This non-probability sampling technique called snowball was used as a contingency to increase the number of responses from business developers in the fresh produce export industry in South Africa. (Zikmund, 2003) advocates that snowball is an appropriate sampling technique used to locate members of rare populations. The contingency was an e-mail request with a note in bold letters requesting individuals to send the questionnaire to other individuals in their networks.
The sampling frame consisted of all companies that are members of FPEF and have employees or owners who comply with the definition of the population group.
The measuring instrument for the research is comprised of five sections, namely the firm background information, the EBD dimensions, the EMO dimensions, the EEO dimensions and market dynamics section. The measuring instrument details are discussed below and the actual instrument is attached in Appendix A.
Firm background information
Firm background questions were included for the purpose of understanding the nature of the sample. Additionally an inclusion of questions to determine the size of the firm in terms of number of employees and annual turnover were included. The dominant export market that the respondents export to and number of years the firm has been exporting were included in order to determine the market dynamics in that particular export market. This section comprises of five items.
EBD performance scales were adapted from the literature review. This section comprises of four items. The reliability and dimensionality of these scales are discussed in the data analysis section.
EMO and Export Entrepreneurship Scale
Drawing on (Boso, Cadogan, & Story, 2012), the measures for EMO and EEO are sourced from their empirical study which explored how EEO and EMO act to drive the performance of firms' product innovations in their export markets. Their study attests that EEO behaviour is more likely to be a driver of success when market orientation behaviour is strong (Boso, Cadogan, & Story, 2012). They have further cited that this joint effect is more substantial when export market dynamism is strong. This study has explored the model empirically in the South African context to assess the stability of these research findings and to determine whether they can be generalised onto other emerging economies. This study focused on EBD performance as opposed to product innovations in order to address a gap in literature as indicated in chapter 2.
Export market dynamism and Knowledge of the respondent
Participant knowledge was determined by asking the respondents to indicate the extent to which they were knowledgeable about their firm's overseas export activities on a seven-point Likert scale (Morgan et al., 2003) cited in (Boso, Cadogan, & Story, 2012) Additionally, the literature review revealed that export market dynamism factors are the degree of variation in competitors' product strategies, changes in competitors' market strategies and changes in export customers' buying behaviours (Boso, Cadogan, & Story, 2012). These factors act as enhancers or inhibiters of EBD performance. In order to create a context for interpreting and analysing this study, a pre-tested structured measuring instrument developed by (Boso, Cadogan, & Story, 2012) measuring both of these objectives was adopted. The items included in (Boso, Cadogan, & Story, 2012) questionnaire but not relevant for this study were deleted.
The following describes the data collection analysis process, the statistical tests which were performed and the basis for analysing and presenting the results.
(Zikmund, 2003) advocates that pre-testing a questionnaire using a sub-sample may determine whether the data collection plan for the study is appropriate or not in terms of length of questions, confusing interview instructions and field errors. Pre-testing is particularly important for self-administered surveys like this study because good results are dependent on the clarity of written word rather than on interview skills (Nonyane-Mathebula, 2010).
Four individuals from the population were requested to complete the questionnaire during the pre-testing, they all provided their feedback and the questionnaire was amended prior to sending it to the entire sample.
A self-administered electronic survey in the form of a questionnaire was distributed to the chosen sample. As alluded to in previous sub-section, the questionnaire comprised of five sections namely the firm background information, the EBD dimensions, the EMO dimensions, the EEO dimensions and export market dynamism.
In line with (Zikmund, 2003)'s assertion of coding the questionnaire, each item of the questionnaire was assigned an alphanumeric code for example CDEMO1 (represents code EMO 1) which enabled ease of classification, recording and interpretation of data. The questionnaire is included in Appendix A
The data type collected from the firm background information and knowledge of business sections was categorical data specifically nominal-level data. Furthermore, metric measurement data specifically ratio-level data such as questions relating to dominant export market and number of years the firm has been exporting was collected. Metric measurement data was collected from the EMO and EEO scales as it featured a Likert scale which is considered to be an interval-level measurement which forms part of a metric measurement (Blaikie, 2003; Zikmund, 2003) cited in (Nonyane-Mathebula, 2010).
The survey was self-administered and completed questionnaires were collected electronically through respondents selecting the submit button on the Survey Monkey software tool.
Data Editing Process and Procedure
Each respondent was checked for validity in terms of ascertaining that the respondent forms part of the target population group. The survey participants were not requested to enter personal details to ensure anonymity of the respondents. All valid responses were checked for item non-response, which refers to an item(s) which were not completed on otherwise almost fully completed questionnaire (Zikmund, 2003) cited in (Nonyane-Mathebula, 2010). There were no open ended questions. All completed questionnaires were received via Survey Monkey and were summarised onto a single spreadsheet using the codes referred to in the data collection section. The spreadsheet was then taken through statistical testing
For the accuracy of results, (Blaikie, 2003) advocates that it is essential to select a measure of association that is appropriate for the level of measurement of the variables being analysed. For this study two types of statistical testing namely descriptive statistics and reliability testing were deemed suitable to achieve the study objectives. The tests are describes in detail in the following section.
Descriptive statistics is used to determine the means, standard deviations, distributions and correlation coefficient. These are key to any quantitative study and are used to describe the data characteristics (Zikmund, 2003). Zikmund, 2003 further asserts that these statistics are appropriate for categorical and metric measurement data. Descriptive statistics was appropriate for this purpose because categorical data was collected for the firm background information, metric measurement data for the knowledge of the business developer section and quantitative data in the EMO, EEO and export market dynamism sections.
Results - Reliability Testing
A reliability test was performed to confirm the validity of the 18 item five EBD, EMO, EEO, export market dynamism and knowledge dimensions within a South African context. Reliability refers to the capacity for a measure to produce consistent results (Blaikie, 2003).
A Cronbach's Alpha is a commonly used statistical too to measure scale reliably (Blaikie, 2003) and it ranges from a value of 0 to 1. A Cronbach's Alpha of 0.7 or higher is considered acceptable (Zikmund, 2003). Li, Guo, Liu and Li (2008) cited in (Nonyane-Mathebula, 2010) advocates that permissible values can be lower than 0.7 but higher than 0.6 in case of a newer scale. Considering that the five EEO scales utilised for this research contained two relatively new dimensions which were not part of the original three EEO scale, the five EEO dimension scale is considered to be a new scale in this study and the criteria of Cronbach's Alpha of 0.6 set by Li, Guo, Liu and Li (2008) cited in (Nonyane-Mathebula, 2010) was adopted.
The following aspects were the limitations to this study:-
The survey was sent to the population via electronic mail and therefore individuals who had no access to e-mail at all or during the six week period when the survey was conducted did not have a chance of being included in the responses.
The study was limited to the export of fresh produce. It would also be useful to investigate South African exporters of other commodities as well as companies which adopt other entry modes such as importing in order to determine whether the findings are unique to fresh produce exports, or whether the findings have relevance for the importing modes.
It is important to note that the extent to which a researcher finds statistical correlation between two characteristics depends, in part, on how well those characteristics have been measured (Leedy & Ormorod, 2001). Furthermore, the limitations of a correlation study are that one can never infer a cause-and-effect relationship on the basis of correlation coefficient alone. The correlation coefficient is therefore merely a signpost to further discovery (Leedy & Ormorod, 2001).
This chapter has described the research methodology. The quantitative research was conducted via an online survey tool called Survey Monkey. Existing pre-structured EBD, EMO and EEO scales were used to measure the EMO and EEO of South African fresh produce export companies. This was in order to determine the role these two orientations have on EBD performance in international export markets.
Literature presented in this section revealed that a quantitative descriptive study was appropriate for this study in which EBD performance, EMO and EEO dimensions and export market dynamism are described.
Scale reliability testing was conducted to confirm that the scale was accurate for use in the context of the study.
CHAPTER 5: RESULTS
The results of the EMO and EEO behaviours of business developers in South African export companies are presented below in two stages. Firstly, the results deal with descriptive statistics, summarised in tabular and graphical form. Secondly, the impact of the combined effects of EMO, EEO and export market dynamism on EBD performance in international markets are presented. The presented results are based on the findings of the statistical analysis.
Corpographic profile of the respondents
The corpographic profile of the forty six usable responses from a sample of sixty one respondents appears in Chart 1. The participant status' distribution illustrates that employees of organisations are the most represented in the sample at 67.4 per cent. The distribution of the designation of the participants shows Business Development Managers as the most represented in the sample at 30.4 per cent, followed by Chief Executive Officers (CEOs) at 26.1 per cent and then Executives at 19.6 per cent. The remaining eleven designations represent 23.9 per cent. This comprises an equal number of participants per designation which represents 2.2 per cent per or the equivalent of one manager per designate participant.
Chart 1: Employment status of participants
Chart 2: Designation of participants
Surprisingly, the sample does not reflect the sectors contributing to South Africa's GDP. Table 1 shows that 15 per cent represents fresh produce exporters, followed by electro technical at 13 per cent then mining at 10 per cent, chemical and healthcare each at 8.7 per cent respectively. More participation was expected from the mining subsector as South Africa is a net exporter of minerals (cite)
The question relating to the main export destination was a multiple selection question. Half the participants (50 per cent) selected Africa while Europe and the Far East where the second main export destinations representing 20.9 per cent and 10.4 per cent respectively. There were no exports to the Pacific Islands as none of the participants selected this export destination.
The participants are from large companies as represented by the size of the annual turnover and number of employees. According to (find out how the size of a business is determined in South Africa)
Twenty Four of the organisations represented by the participants have greater than 200 employees. This represents 52.5 per cent, while organisations with employees between 51 to 200 represent 15.2 per cent of the participants. Organisations with 50 employees or less represent 32.6 per cent of the participants. The annual turnover distribution of the participants shows that 47.8 per cent of the participants have annual turnover greater than R250,000,000. The organisation size distribution of the participants reflects the South African export sector population, with the split between large, SMME and Micro organisations at x per cent, u per cent and x per cent respectively (find out the composition of company sizes in the South African export sector)
Table 1: Corpographic Profile of Participants
Distribution of scores on the research instrument
The research instrument comprises four constructs:
Business development performance results achieved in relation to the strategic objectives of the organisation.
Behaviour which demonstrates the gathering, dissemination and response to export market intelligence within the organisation.
Behaviour which demonstrates the propensity to innovate, take risks, be aggressively competitive and autonomous in international export markets.
The nature of the external environment in terms of competitive forces and international customer buying behaviour.
Table 2 shows the number of business developers who commenced the survey but did not complete certain questions within a particular construct. It also shown the score as a percentage of the total responses received (61)
Business development performance questions were mostly answered (95 per cent of responses), followed by export market orientation (92 per cent), while entrepreneurial orientation is at 83 per cent and export market dynamism at a level of 80 per cent.
Table 2: Non-responses per construct
Export BD Performance
Export market dynamism
Total Number of Non Responses
Percentage of non-response
There were 194 active exporters who were eligible for participating in the questionnaire-based study. In general, most of the construct questions were answered. Non-responses were deleted from the sample. This brought down the sample from sixty one responses to fifty one. A secondary filter was applied based on the confidence the participant has in their knowledge. Those who selected from the range 'Strongly disagree = 1' to 'Don't know = 3' were deleted from the sample. This further brought the response rate down from 51 responses to 46, representing a 23 percent response rate. Participant knowledge was determined by asking the respondents to indicate the extent to which they were knowledgeable about their organisation's international export activities on a five-point Likert scale (Morgan et al., 2003) a mean of 4.2 was recorded. In addition, the participants were asked how accurate their answers were, and returned a mean score of 4.15 on a five-point scale, indicating that they believed that their responses were very accurate.
Appendix 3 shows the percentage distribution of the selected rating options. The percentage is calculated from the total number of participants who answered each question. The rating ranged from 'Strongly disagree = 1' to 'strongly agree = 5'.
The business developers scored highly (> 50 percent) on three business development performance questions indicating that in relation to the export business strategic objectives, their business performance was in line with expectation. The business developers agree (> 50 per cent) with five of the questions on EMO except for the question pertaining to 'important information about our customers gets lost in the system'. This implies that business developers are not systematic about disseminating customer important customer information within the organisation as reflected in the 54 per cent rating.
At least 10 percent of business developers strongly agree with five of the variables in the EMO construct. The business developers strongly disagree with 'taking hostile steps to achieve export competition goals', reflected in a 30 per cent rating.
It is required that the research instrument be validated for general applicability in the South African as well as the services context. The variables which make up the EBD performance, EMO, EEO and export market dynamism constructs are sourced from a combination of measures. The measures for EBD performance are variables based on literature. Business development literature by (Davis & Sun, 2006; Burgers, 2008) are adapted and formulated as variables in the EBD performance construct.
The measures for export EMO, EEO and export market dynamism are based on an existing measurement instrument Boso et al. (2012). The same methods and variables are replicated onto this research within the time and budgets constraints as applicable. Boso et al's measurement instruments have been applied to product export organisations in Europe and Ghana. This is the first time it is being applied to export organisations as well as services organisations that have international clients.
Boso et al have measured the strength of the interaction between export EMO and EEO on export product innovation success. They also examined the impact of the moderating effect of export customer needs and competitive actions, which are collectively referred to as export market dynamism. To test the conceptual framework, multiplicative interactions were created for EMO, EEO and export market dynamism. Following this, a covariance matrix was created and entered into the structural equation analysis, and Ping's approach for analysing structural models with multiplicative interactions terms was adopted. The relatively small sample size (164) prohibits the use of a full information structural equation model. As a result, a parsimonious modelling approach was followed and two nested structural models were estimated. In the first model (the constrained model), all paths from the multiplicative interaction terms to the export product innovation success latent variable were forced to be equal to zero. In the second model (the unconstrained model), all the interaction terms' structural paths were freely estimated. For control purposes, in both the constrained and unconstrained models, firm size and an industry dummy were included. They measured these factors using descriptive statistics, correlation and descriptive statistics.
The Boso et al research has three out of the four constructs applicable to this study. This aspect of their study is replicated. The relatively short time and budget available for this study prohibits the use of structural equation analysis and the parsimonious modelling approach.
Reliability of the Research Instrument
Cronbach's Alpha was computed for all the variables in each construct to assess the internal consistency between the items in each construct. Cronbach's Alpha is the most common measure of internal consistency among a set of indicators, variables or questionnaire items to determine the reliability of an ordinal scale. It is most commonly used when a Likert-type scale is used for multiple variables in a questionnaire to verify whether the scale is reliable or not. This measure was constructed in response to research proposition 1.
RP1: The measuring instrument has acceptable construct reliability.
Cronbach's Alpha coefficient ranges in value from 0 to 1, the higher the score, the higher the reliability of the scale. The generally accepted minimum cut off point is 0.7 but lower thresholds may be accepted (cite). The internal consistency of the constructs using Cronbach's Alpha is described as follows:
Table 3: Reliability of Research Instruments
Number of construct variables
Export Business Development Performance
Export Market Orientation
Export Entrepreneurial Orientation
Export market dynamism
Table 3 shows that the EBD performance and EEO constructs are above the Cronbach's Alpha threshold point. This indicates a high rate of internal consistency. Essentially this means that participants who tended to select high scores for one variable also tended to select high scores for the others; similarly, participants who selected a low scores for one item tended to select low scores for the other EBD performance and EEO items respectively. Thus, knowing the score for one EEO item would enable one to predict with some accuracy the possible scores for the other 14 EEO items. Had alpha been low, this ability to predict scores from one item would not be possible.
To determine the Cronbach's Alpha that would result if a given variable were deleted, the Cronbach's Alpha for EMO was calculated using SPSS calculated Cronbach's Alpha if one item were excluded. This information is valuable for determining which items from among a set of items contributes to the total alpha.
Therefore the Cronbach's Alpha 'Information that can influence the way we serve our export customers takes too long to reach export personnel' was deleted would raise the overall total of 0.553 to 0.623. Since alpha would increase with the removal of 'Information that can influence the way we serve our export customers takes too long to reach export personnel', this item appears to be useful and contributes to the overall reliability of EMO. Cronbach's Alpha for the 3-item Export market dynamism construct is 0.507. For a measure with relatively few items, this level provides evidence of internal consistency.
All four constructs have acceptable reliability and are accepted. Therefore, the data shows that the measuring instrument has acceptable reliability and research proposition 1 could therefore be accepted.
Relationship amongst Constructs
Table 6 shows the relationship amongst the four constructs, namely EBD performance, EMO, EEO and export market dynamism, using the Pearson's correlation coefficient. The Pearson's correlation coefficient yields the strength of relationship amongst the four constructs and also indicates the direction of correlation. Preliminary analyses were preformed to ensure no violation of normality, linearity and homoscedasticity. The Pearson's correlation coefficient is appropriate as the sample data follows a normal distribution.
RP2: There is a correlation (a relationship) between the constructs of EBD performance, EMO, EEO and export market dynamism.
The factor scores for each participant were computed as the average of all the items contributing to each construct. Table 6 depicts the results of the relationship between 46 business developer's EBD performance, EMO, EEO and export market dynamism scores.
Table 6: Correlation Matrix depicting relationship between constructs
Export Business Development Performance
Export Market Orientation
Export Entrepreneurial Orientation
Export Market Dynamism
Export Business Development Performance
Export Market Orientation
Export Entrepreneurial Orientation
Export Market Dynamism
**. Correlation is significant at the p <0.01 level (2-tailed).
*. Correlation is significant at the p<0.05 level (2-tailed).
There is a statistically significant relationship among all pairs of constructs at one per cent significance level, since the p-values are 0.01 and below (check your data Chidi and make sure). Although all the correlation coefficients are statistically significant, the strongest correlation is between EBD performance and EMO (rs = .988, P = .000). The correlation between EEO and EBD performance is less strong (rs = .470, P = .001).
Based on the fact that all constructs are statistically significant at one per cent significant level, research proposition 2 could be accepted.
Multiple Linear Regression
Research proposition 3 sought to determine the relationship between a set of independent variables (EMO, EEP and export market dynamism) and the dependent variable (EBD performance). The motivation for the research proposition is that measures of business development performance are not viewed in isolation and that the extent to which business developers are able to perform in line with the strategic goals of the organisation, is determined to the extent to which the EEO, EMO and export market dynamism inter-relate
Table 7 depicts the results of the multiple regression. The coefficient of multiple determination is 0.965. Therefore, approximately 96.5 per cent of the variation in the export business development performance is explained by the export market intelligence gathering, dissemination and responsiveness; the export orientation of business developers in export markets. The regression equation appears to be very useful for making predictions since the value of R2 is close to one.
RP3: The combined relationship between EMO and EEO is positively related to export EBD success, when export market dynamism is at higher levels.
Table 7: Multiple Regression
Adjusted R Square
Std. Error of the Estimate
R Square Change
Sig. F Change
a. Predictors: (Constant), Export Market Dynamism, Export Entrepreneurial Orientation, Export Market Orientation
Table 7 shows the results of the Analysis of Variance (ANOVA). This table indicates that the regression model predicts the dependent variable, EBD performance, significantly well. The statistical significance of the regression model that was applied is less than 0.05, this indicates that, overall, the model applied is significantly good enough in predicting the outcome variable. At the 5% significance level, determine if the model is useful for predicting the response. At the Î± = 0.05 level of significance, there exists enough evidence to conclude that at least one of the predictors is useful for predicting profit margin; therefore the model is useful.
Table 7 provides information which is necessary to predict EBD performance from EMO and EEO. EMO contributes significantly to the model. The constant and EEO have a significant level which is higher than 1 per cent. This indicates that they do not significantly contribute to the model. The regression equation is therefore presented as:
EBD Performance = 0.130 + 0.937(EMO) + 0.24(EEO)
Graph 1 below is the result of a partial plot. It has a curvilinear pattern that is a simple curve; thus, a quadratic regression model will be fit to the data. There is one visible outlier or influential observation. This point is away from the main cluster of points.
Differences in Means between Observations
The one-way analysis of variance (ANOVA) is used to determine whether there are any significant differences between the means of three or more independent or unrelated groups. In the event that the p-value for the ANOVA is found to be less than 0.05 then the difference between two groups will be said to be statistically different.
Differences in Means between Constructs for Business Development Performance
To test research proposition 4, a one-way ANOVA for the differences between owner and employee respondents' means for the four constructs were computed. The results are shown below;
RP4: There is a difference in the performance of owner and employee business developers with regard to the constructs of EBD performance, EMO, EEO and export market dynamism.
Table 8: Differences in means of employment status
Do you own the organisation you work in?
Std. Error Mean
Export EBD Performance
Export market dynamism
Table 8 shows the magnitude of the difference bet