International trade has often been cited as an important means of achieving the developmental goals of the developing nations. Public policy-makers in India have also begun to concentrate on improving India's export performance. In fact, the Planning Commission Working Group on Exports during the Eighth Plan has recommended the adoption of a "broader, more comprehensive, and contemporary approach". The present study examines the role of the managerial, organisational, external, and behavioural factors to help differentiate between successful and unsuccessful exporters from India. For this, managers in charge of exporting from 58 Indian organisations were interviewed. The results indicate that managerial values and expectations will increasingly play a key role in afirm's export behaviour.
As early as in 1837, Adam Smith (1837) described exports as a "vent for surplus" which encourages a nation to "improve its productive powers .... augment its annual produce to the utmost, and thereby increase the real revenue and wealth of the society". Exporting thus is considered to be even more important to the developing nations, such as India due to their high dependence on imports, more frequent fluctuations in their balance of payments, the impact of export instability on growth, and several other factors (Hirschman, 1960; Glazekos, 1973, Wolf, 1982).
Public policy-makers in India have also begun to realise the importance of world trade to the country's economic development and this has resulted in a slow but steady process of trade and industrial liberalisation. This has led to significant improvements in India's export volume, for instance, the country posted a 38 per cent increase in exports during 1989-90. Such figures become even more impressive when viewed against the continued unfavourable trading environment in the world. During the early 80s, for example, while the GNP of most industrialised nations was stagnant and protectionist tendencies were strong, India's export trade increased significantly.
Yet, there is reason to be concerned with the country's export performance. To begin with, while India's export volume might show consistent and impressive gains, its percentage in total world trade has not kept pace with those of several other developing nations; in fact, the share came down from 1.40 per cent in 1955 to 0.60 in 1982 (U N Year Book, 199-). Since then, there has been a slight improvement in its share but the increases have not been significant. Furthermore, the increases seem to come from an increase in the number of firms involved in exporting but not through increases in the export volume of individual firms. The emerging global scenario indicates that the 90s will see a consolidation of other trading blocs in Europe, North America, and in South-East Asia, and the Far East. As Mukherjee (1990) notes, while the benefits of such large markets to India are vague, the risk of exposing the fragile export advantages of such a developing nation to greater competition may be high.
while liberalisation of trade policies and an export friendly approach to industrial development are key factors in improving India's export performance, there might also be other variables to consider. Past research in the field of export marketing has indicated that managerial attitudes and expectations regarding exporting, and some managerial characteristcs seem to play a significant role in the export behaviour of firms. For instance, a study by Simpson (1973) found that managerial apathy was a major impeding factor for not exporting. Several studies have found that managers of exporting firms have more positive attitudes towards exporting and use better management practices than those working in non-exporting firms (Tookey,1964; Cunningham, Spiegel, 1971; Tesar, 1975; Bilkey, Tesar 1975, 1977). Other variables, such as the nature of the relationship between the exporter and importer, external factors (for instance, competition), and organisational factors (such as, size, age) have also been shown to have an effect on export success.
The present study examines the effects of managerial, behavioural, organisational, and external variables on the export success of the Indian exporters. The next section provides a summary of the research findings on the impact of these variables on export success. This will be followed by details of the study, the results, and a discussion of the findings.
Success In Exporting
Several characteristics of the Organisation, such as organisational size, presence of an export department/manager, product type, age of the firm, export experience, and R&D efforts have been linked to export success. Of these, the firm size has been most often associated with a firm's export activities and interest in exporting (Bodur, Cavusgil, 1985; Cavusgil, Nevin, 1981; Denis, Depleteau, 1985; Gottko, McMahon, 1988; Gronhuag, Lorenzen, 1982; Hirsch, 1971; O'Rourke, 1985; Piercy, 1981; Reid, 1982, 1986; Tookey, 1964). Other researchers have either found no significant relationship between size and exporting (Bilkey, Tesar, 1977; Fenwick,, Amine, 1979; Kammath, Rossen, et al, 1989), or found the relationship between size and export success to be significant only within certain ranges (Hirsch, 1971, Cavusgil, 1976; Lall, Kumar, 1981).
Conflicting findings have also emerged in the case of other organisational variables and their impact on success in exporting. Some researchers have found that newer firms tend to be better at exporting (Ursic, Czinkota, 1984), and that age of the firm affects the type of adoption process used while exporting (Lee, Brasch, 1978). Others, notably Reid (1989), and Kammath, Rossen, et a] (1989) found no relationship between age and export success. Another related area of research has been the impact of an organisation's export strategy on export performance. For example, several researchers have noted that an organisation's choice of intermediaries has an important effect on its export performance (Gronhuag, Lorenzen, 1982; Bello, Williamson, 1985; Bilkey, 1985; Rosson Ford, 1982; Yaprak, 1985).
A finn's export marketing activities and its success in exporting may also be related to the quality, attitudes, and characteristics of its managers. For instance, export involvement and success have been found to be associated with the manager's knowledge of foreign languages (Bilkey, Tesar. 1975), and foreign experience (Langston, Teas, 1976; DaRocha, Christensen, et al 1990). Managerial attitudes towards exporting are seen by many researchers as a critical variable in a firm's export involvement and success. Positive managerial attitudes towards exporting have been linked to increased probability of exporting, perception of fewer barriers to exporting (Pavord, Bogart, 1978), and increased exports (Tookey, 1964; Bilkey, Tesar, 1977: 1975). Similar findings have been reported by several other researchers (Gronhuag, Lorenzen, 1982; Bauerschmidt, Sullivan, et al, 1985; Cavusgil, 1984: Johnston, Czinkota, 1982; Keng, Jiuan, 1989: Sullivan, Bauerschmidt, 1987).
In a detailed study of successful Canadian exporters, Kammath, Rossen, et al (1989) found managerial characteristics, such as quality, and skills of top managers to be the key factors in successful exporting. The same study found that some managerial factors, such as international background of company personnel are not crucial for export success. Managerial experience has also cited as a key variable affecting the export activities of Brazilian firms (DaRocha, Christensen, et al, 1990). Similar findings were reported in a study of the Central American firms exporting to the developed nations (Dominguez, Sequeira, 199 1).
A strong association between the levels of conflict and export performance has been found by many researchers (Rosson, Ford, 1980-, Leonidou, 1989; Ford, Djeflat, 1982; Ford, Rosson, 1982; Frazier, 1984), and that importer' and exporters' perceptions of the level of conflict in a relationship often differ (Katsikeas, Piercy, 199 1). While the other relationship variables have not been studied in as much depth, there are indications that the level of perceived distance between the parties and the power dependence balance may affect the nature of the relationship between the buyers and the sellers (Hallen, Johanson, 1985; Leonidou, 1989; Ford, Rosson, 1982), and channel structure (Klein, Roth, 1990).
None of these measures is free from criticism. For example, export intensity can be affected by changes in the denominator (sales) as well as in the numerator. Export market share is often very difficult to measure, especially for smaller firms. Some researchers (Kirpalani, Balcome, 1989; Bilkey, 1982); have suggested using different methods based on fin-n size. Qualitative measures, while providing greater insight into the relationship, suffer from weaknesses associated with measuring perceptions of performance rather than actual performance itself.
To achieve these objectives, a survey of exporters from India was conducted. The depth of infon-nation required, the large number of variables on which information was sought, and the difficulties in gathering infon-nation using mail surveys in a country such as India, led to the selection of in-depth personal interviews as the method of data collection.
The firms included in the sample were predominantly from the private sector (91 per cent),and nearly a third were entirely export-oriented units (with over 90 per cent of their sales coming from exports). Nearly 70 per cent of the firms had over 20 years of business experience, and most (74 per cent) had over 10 years of business experience. Most of the managers interviewed were middle- or senior-level managers (73 per cent); a significant proportion ( 25 per cent) was owner-managers. Over 56 per cent of the fin-ns had an export division or at least a person specifically in charge of exporting. Around 57 per cent of the respondents was over 40 years of age, and most (88 per cent) had at least a bachelor's degree. Very few had any specialised training in exporting and all were males. Table I provides details of the selected sample characteristics.
The managers were asked to consider their relationship with their major importer - the importing firm, that accounted for the most exports in the previous year while responding to the questions during the interview.
of Key Variables
Table 1: Selected Sample Characteristics*
Seven firm characteristics (sales volume, number of employees, domestic market share, total business experience, total export experience, type of product, and type of channel chosen), ten managerial characteristics (age, years of service, years in current position, education, knowledge of foreign languages, past experience in exporting, foreign experience, extent of foreign travel on the present job, training in export management, and attitudes towards exporting), two external variables (industry characteristics, and the country of origin of the buyer), and three relationship variables (mutual dependence, perceived distance from the buyer, and conflict) were examined in this study.
The measures used for characteristics of the firm and the manager are straight forward, the characteristics themselves were chosen, based on the literature surveyed. For certain other variables, such as distance, an dependence, multiple measures were used. These were developed, based on the past research in the field. Appendix 1 provides information regarding the variables included in this study and the scales used to measure them. The scales were developed based on the past research in the field.
Very few of the respondents knew any foreign languages (other than English which is the language used for business communications in India), and hence this variable was dropped from further analysis.
A step-wise discriminant analysis was used in order to identify the variables that differentiate between the successful and the unsuccessful exporters in the study. While one of the measures of export success (ratio of exports to total sales) is interval in nature, the other - export sales trend - was not truly interval in nature. Besides, one of the aims of the present study was to differentiate between the successful and the unsuccessful exporters in order to draw a profile of a successful exporter. For these reasons, discriminant analysis was chosen over linear regression for the present study. The step-wise procedure was chosen over simultaneous discriminant analysis as this is considered to be better suited for studies involving a large number of independent variables (Hair, Anderson, 1987, et al). This method also aids in rank ordering the variables in terms of their discriminating power.
For the purposes of this analysis, firms with constant or decreasing sales were classified as unsuccessful and those with increasing sales (increasing slowly or increasing rapidly) being classified as successful exporters. For export intensity, a cut-off of 20 per cent was used after considering the mean and the median of the sample.
As can be seen from Table 2, the three most important discriminators were product type, destination of exports, and the nature of the industry. These variables had the highest factor loadings. The three managerial variables, while adding to the discriminant function, had lower discriminant loadings and hence are less important discriminators.
Indian Exporter: A Profile
Interestingly, it was found that firms with higher export
intensity were the small privately-owned ' firms, while those with export intensity of 20
per cent or less were more likely to be larger, public limited companies. These
firms were more often structured as separate export units as opposed to being export
departments operating within a large firm. They were also more likely to receive a
higher price for their products in foreign markets than within
Table 2: Results of Stepwise
Discriminant Analysis With Export Intensity as Dependent Variable
India (p< 00 1). As much as 70 per cent of these firms got a higher price for their products abroad than within India as opposed to only 9 per cent of those with lower export intensity (Table 3). Chi-square analyses of firms based on their export sales trend with the same variables did not yield any significant results.
As part of the present study, four export organisations - two successful exporters, and two unsuccessful exporters were studied in greater detail. The findings from these were in line with the results of the survey. For instance, the two successful exporters were both privately-owned family enterprises. One, an industrial products manufacturer producing diesel engines, and other related component parts, faces severe competition from other manufacturers who dominate the industry. This market consists of many large producers, many of whom are well established firms with considerable resources. Some are also subsidiaries of major multinationals or Indian conglomerates. In Madras city alone, where the firm is located, in one of the industrial areas within the city, there are half-a-dozen manufacturers of such items. Unlike most other industrial exporters in the present study, this firm exported 20 per cent of its output and was hoping to increase this further. The firm saw exporting as a primary vehicle for growth due to the highly competitive nature of the domestic market. The owner-manager had taken considerable initiative in developing contacts abroad and was confident of this firm's ability to meet international standards. In spite of being a relatively young firm (under 15 years), the company had managed to gain a foothold in foreign markets due to its emphasis on producing high quality products and providing dependable service. Its competitors (with major shares in the domestic market) were exporting less than 5 per cent of the total sales and were not planning to increase exports any further. The other case studies also yielded results that were in line with the results of the quantitative study.
Table 3: Results of Chi-square Analyses (With Export Intensity)
and Practical Implications
This study also presents certain practical suggestions for the Indian exporters. Firstly, from a firm's point of view, the study indicates that considerable care should be taken while hiring managers. This may be even more important for the Indian firms due to their status as relative newcomers to the field of exporting. Secondly, the firms may also need to give their export managers time to learn the intricacies of the export business - the export managers in successful firms in this study had over nine years' experience on the job. Thirdly, the study suggests that for the Indian exporters to succeed, they may have to look at the destination of their exports more carefully. While exporting to other LDCs may seem safer, and easier, the successful firms appear to be the ones willing to enter more competitive, developed markets.
The study provides some guidance to the governmental policy-makers in India. To begin with, since the nature of the industry was a key discriminating variable, the policy-makers could attempt to focus their export promotion activities on certain industries. it may be worthwhile to focus export promotion activities on industries with high internal competition and overall turbulent internal environments. Opening p domestic industries to foreign competition may also encourage the Indian firms to start looking to foreign markets for growth. Secondly, since the managerial variables seem to play a major part in export success, measures to improve the managerial perceptions of exporting may lead to increased motivation to export on the part of the Indian firms. Third, the results also indicate that policy-makers should concentrate on diversifying the product-mix of the Indian exports. That the successful exporters from India are still concentrated in the low value-added consumer products category should be of concern to policy-makers. Finally, at least in the Indian context, more aggressive measures to. open up the economy may have to be taken. Stable export policies and provision of a good climate for exports may also be required if the Indian firms are to become serious exporters. Most of the exporters with lower export intensities (and a significant number had export intensities of around 5 per cent) were not interested in increasing their efforts at exporting. Unless these firms can compete internationally (and that would require changes in the industrial climate), they will continue to be marginal exporters. This also suggests that while exports volume may be growing, long-term benefits are unlikely to occur until major changes in the economic system are made.
This study was primarily exploratory in nature and hence was limited in the number of industries examined and the size of the sample. Further studies would need to examine exporting from other industries and draw from a larger sample of the Indian exporters. Examining the buyer-seller relationship from both the exporter's and the importer's perspectives would add further insights into the export activities of LDC- based firms.
As part of the present study, two in-depth case studies, each of successful and of unsuccessful firms, were conducted and the results were in line with the survey findings. However, further case studies are needed to provide additional insights and validity to the results found in the present study.
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