ELS SERVEIS SOCIALS I ELS EQUIPAMENTS

Nowadays, increased international competition and continuously evolving customer needs put additional pressure on companies to be more responsive to environmental changes (c.f. Geletkanycz and Black, 2001; Martens, Matthyssens and

Vandenbempt, 2012). White, Varadarajan and Dacin (2003) emphasise that in order to survive, companies must respond to external threats and opportunities. In reality, macro environmental influences, including emerging opportunities, competitor threats and evolving customer needs and preferences are beyond the control of managers. As a result, they need to adapt quickly to these conditions in order to stay competitive (Lyus, Rogers and Simms, 2011).

The results of the preliminary qualitative study (see Chapter 3) showed that the relationship between export decision-making (planning and improvisation) and export performance is not necessary direct but is mediated by the ability to quickly adapt to environmental changes. According to Homburg, Grozdanovic and Klarmann (2007), ‘quick adaptation to environmental changes’ is conceptualised as responsiveness. As mentioned in Chapter 2 (see p. 46), the construct of ‘responsiveness’ is closely related to the construct of ‘adaptation’. However, whereas adaptation refers to the maintaining the fit between an organisation and external environment,

responsiveness refers to the adjustment to external changes at high speed.

Responsiveness is often considered to be a key component of the market orientation construct (Souchon et al., 2004) in line with generation and dissemination of

information (Han, Kim and Srivastava, 1998). However, in the market orientation literature, responsiveness is usually considered from a customer-perspective as responsiveness to customer needs and preferences (Cadogan, Kuivalainen and Sundqvist, 2009). Extending this, Homburg, Grozdanovic and Klarmann (2007) argue that responsiveness has two important ‘sides’: responsiveness to customer needs and preferences and responsiveness to competitive actions. Cadogan, Souchon and Procter (2008) go one step further and suggest considering

responsiveness as a response to general environmental changes (e.g. emerging opportunities and threats). The author of the current research accepts the latter (broader) perspective as it is in line with the findings of the exploratory study. The respondents mostly refer to quick adaptation to customer needs (e.g. Company 4),

competitor actions (e.g. Company 2), technological changes in the industry

(e.g. Company 7) or merely general market opportunities and threats (Company 5). It is important to mention that the managers themselves did not use the word ‘responsiveness’ but rather used ‘adaptation’ or the verbs ‘adapt’ and ‘respond’. However, further analysis of the qualitative research revealed that what they meant is actually conceptualised as responsiveness in the academic research and not as adaptation. There is a long tradition in marketing research of focusing on adaptation (e.g. Shoham, 1999). Adaptation relates to the adjustment of the elements of the marketing mix to the needs of local consumers in a foreign or more specifically export market (e.g. Cavusgil, Zou and Naidu, 1993; Leonidou, Katsikeas and Samiee, 2002; Katsikeas, Samiee and Theodosiou, 2006; Schilke, Reimann and Thomas, 2009; Hultman, Katsikeas and Robson, 2011). Although managers talked about ‘adaptation’ during their interviews, they were not really referring to this concept. They mostly referred to quick adaptation and response to changes in the environment. As mentioned above, these are more in line with the conceptual definition of ‘responsiveness’. However, the discrepancy between managerial and academic language cannot be ignored. As a result, measures of responsiveness were altered to the managerial language, and the word ‘respond’ was changed to ‘adapt’ in all the items (see Chapter 5).

Open systems theory (Katz and Kahn, 1978; Homburg, Grozdanovic and Klarmann, 2007) provides the theoretical background for the introduction of the construct of responsiveness into the conceptual model. According to this theory, the long-term success and ultimate existence of a company depends on its ability to quickly adapt to environmental changes. Thus, speed is a key element when responsiveness is operationalised. The same applies to export market responsiveness. However, this focuses on the activities directly related to firms’ export markets (e.g. export

customers, export competitors, broader export environment) and does not include responses within domestic markets (Cadogan et al., 2012).

4.5.1 Improvisation-Responsiveness Relationship

the decision-making process is flexible, it is unlikely that the firm will be able to do this successfully. Flexibility of the decision-making process can be defined as the exploration of new ideas, which is, in turn, associated with improvisation (Vera and Crossan, 2005). That is supported by the findings of the current exploratory study, where managers often refer to flexible decision-making being spontaneous (‘thinking on the feet’) and creative (‘out of the box approach’). Firms with greater flexibility in decision-making have a better ability to recognise and respond to changes in the environment (c.f. Dibrell, Down and Bell, 2007; Cadogan, Souchon and

Procter, 2008) and respond ‘just-in time’ (Weick, 2001).

According to the exploratory research, improvisational decision-making allows for a quicker response. ‘If it (decision-making process) was strict then it obviously will be formalised, which means that takes us a lot longer to react quickly... So I think it works better having something that is informal, very fluid, where you can just get on the table, just have a quick discussion, make a decision and then move on…So I think being flexible and informal, which means we can adapt much quicker’ (Company 2).

Cadogan et al. (2012) introduce the concept of export decision-making flexibility. They argue that in order to be more responsive, managers should be able to make more rapid (spontaneous) decisions. This allows a company ‘to take early advantage of opportunities that arise’ (p. 1425). Low levels of export decision-making flexibility may restrict the ability of export staff to adapt and delay their response to the opportunities.

Improvisational decision-making is not only spontaneous, it is also discovery driven (creative), aiming to explore unexpected opportunities or deal with unforeseen threats (Cunha, Kamoche and Cunha, 2003). To respond to external opportunities and threats, managers are expected to make decisions that are unusual, innovative and different from the norm (Sharfman and Dean, 1997). Nutt (1993) suggests that ‘by opening up the decision process to new possibilities, stakeholders are more apt to recognise the value of new ideas. This opening up allows people to move away from stereotyped responses and traditional ways of activity’ (p. 246). It is claimed that staff that are more open to new ideas are more likely to be able to respond in time (Kohli and Jaworski, 1990).

The ability to focus and not be distracted from making decisions (action-orientation) is essential when a quick response to environmental changes is called for. If the export function is distracted, it can miss market opportunities that require rapid responses (Company 9, Company 10).

To sum up, in order to be more responsive, export managers are expected to be more focused, spontaneous, creative and willing to step aside from existing patterns (e.g. Leonidou, Katsikeas and Peircy, 1998; Sousa, Ruzo and Losada, 2010). Thus, the following can be surmised:

H5a: Spontaneity is positively related to the responsiveness of the export function. H5b: Creativity is positively related to the responsiveness of the export function. H5c: Action-orientation is positively related to the responsiveness of the export function.

4.5.2 Planning-Responsiveness Relationship

Planning seems to be incongruent with responsiveness as the need for a quick response to environmental changes is in conflict with the traditionally established way of doing things (Sousa, Ruzo and Losada, 2010). As it is time-consuming, planning slows down responses to environmental changes (e.g. Fredrickson, 1984). In this case, even if the exporter recognises the need to make amendments to a planning process, it may not be able to do it effectively as there is not enough time (c.f. Wiltbank et al., 2006). A slow response to market changes is likely to result in lost opportunities because the ‘right’ action is implemented at the ‘wrong’ time (Chelariu, Johnston and Young, 2002). Moreover, the planning process creates a degree of inflexibility in adapting and responding to changes in the environment, which decreases responsiveness (c.f. Souchon et al., 2004). The rigidity of the planning process also can lead to the decision-making process becoming routinised. This often restricts variations (Dibrell, Down and Bell, 2007), which are necessary to generate the appropriate environmental response and adjust to novel situations (Kyriakopoulos and Moorman, 2004). Thus, planning is considered to be an ineffective approach to accelerating pace (Eisenhardt and Tabrizi, 1995).

Based on the above, it is proposed that:

H6: Export planning is negatively related to the responsiveness of the export function.

4.5.3 Responsiveness-Performance Relationship

Past marketing research has demonstrated that a timely response to environmental changes leads to positive outcomes for the company (Smith et al, 1989; Smith, Bolton and Wagner, 1999; Jayachandran, Hewett and Kaufman, 2004).

4.5.3.1 Responsiveness-Customer Performance Relationship

It is proposed that export responsiveness is positively related to export customer performance. Customer satisfaction and retention is largely dependent on the effort a company devoting to its customers (Slater and Narver 1995). Companies that are able to respond quickly to environmental changes tend to have a good

understanding of their customers’ preferences and as a result are able to deal better with customer requests (Jayachandran, Hewett and Kaufman, 2004). Firms with a better understanding of export customers are better able to anticipate their future requirements and needs (Cadogan et al., 2012), which in turn increases customer satisfaction (Cadogan et al., 2002) and retention (Martin and Grbac, 2003). In other words, more responsive companies are more likely to achieve a more loyal and sustainable customer base (Sousa, Ruzo and Losada, 2010).

Thus, it follows that:

H7: Export responsiveness is positively related to export customer performance.

4.5.3.2 Responsiveness-Financial Performance Relationship

A similar logic applies to the responsiveness-financial performance relationship. The macro-environment, which includes new market opportunities, competitor threats and changing customer needs, can be argued to be beyond the control of managers, who as a result need to be able to adapt quickly to ensure long-term financial

firms that are able to respond promptly to opportunities and threats are more

successful than those that are not able to do so. For example, the ability to respond quickly to environmental changes can help an export function to outperform

competitors and achieve competitive advantage as more responsive companies can capitalise on fast-moving market opportunities (Jayachandran, Hewett and

Kaufman, 2004; Sousa, Ruzo and Losada, 2010).

Timely responses to environmental challenges and opportunities are often

associated with positive performance outcomes. For example, being responsive to local markets increases a foreign firm’s financial performance (Luo, 2001; Lee 2010). Cadogan et al. (2012) claim that if a company has a high level of export

responsiveness, it can better achieve its short-term and long-term objectives (sales, market share and profit). Even a suboptimal but timely response can be more profitable in the long-term rather than a slow correct response (Smith et al., 1989). Indeed, longer delays in responding to environmental changes in the export market may cause a firm to lose local presence, which results in further financial losses (c.f. Lee, 2010).

Based on the above, the following can be stated:

H8: Export responsiveness is positively related to export financial performance.