Professional Documents
Culture Documents
University of Dar-es-Salaam
November, 2010
ii
By
University of Dar-es-Salaam
November, 2010
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CERTIFICATION
The undersigned certify that they have read and hereby recommend for acceptance by
DECLARATION
AND
COPYRIGHT
I, John Richard Mwakyusa Philemon, declare that this thesis is my own original work
and that it has not been presented and will not be presented to any other university for a
Signature:
This thesis is copyright material protected under the Berne convention, the Copyright
Act 1999 and other international and national enactments, in that behalf, on intellectual
property. It may not be reproduced by any means, in full or in part, except for short
extracts in fair dealing, for research or private study, critical scholarly review or
Postgraduate Studies, on behalf of both the author and the University of Dar-es-Salaam.
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ACKNOWLEDGEMENTS
Writing this thesis, like many others written before, involved an enormous amount of
work that would not have been possible without the assistance, cooperation and the
encouragement from many people. First and certainly most importantly, I thank the
Almighty God for his plenteous blessings, divine strength and love. I have also seen this
project growing in my hands like a baby with the invaluable and priceless counsels of
my understanding supervisors. I owe a lot to them and would like to extend my heartfelt
appreciation and gratitude to Dr. ke Gabrielsson, Dr. Karl Johan Bonnedahl, both of
Ume School of Business (USBE) and Dr. Lufumbi Jonathan Mwaipopo of the
University of Dar-es-Salaam for their incessant intellectual input and patience. Special
gratitude goes to Frances Graham for her punctilious editing, without which this work
would not have been in this shape.
Dr. T.H. Leedy and Dr. L. A.Villaln and all staff of the University of Florida Centre for
African Studies deserve special mention for their support and encouragement at a time
when I just had a nascent idea of what I would like to work on. Dr. Charles Bwenge and
Dr. William Mkanta and their families, who made me feel at home away from home
while I was in USA for a period of four months, deserve a mention in this limited space.
They could not have done better. To the University of Dar-es-Salaam in general,
University of Dar-Es-Salaam Business School (UDBS), Umea School of Business,
(USBE), Swedish Institute (SI) and Sida/SAREC in particular go my fondest thanks and
appreciation for all that these great institutions have done to build the capacity of
University academic staff. I feel privileged to have had the opportunity to benefit from
these programmes. Prof. Per Nilsson, Dr. Jan-Erik Jaensson, Professors Lettice .K.
Rutashobya, Erasmus. S. Kaijage and Dr. Marcellina M. Chijoriga deserve special
gratitude in this respect for being at the epicentre of the superbly coordinated
programme at different stages.
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More profound thanks and heartfelt gratitude are due to Ms. Katarina Pousette (USBE-
Secretary), Mr. Anders Hellquist- (USBE- System Manager), Mr. Anania Kyulule
(UDSM Systems Administrator) and SMEs owners or managers whose names I conceal
for confidentiality reasons. Ms. Jacqueline Mkindi (Executive Director of Tanzania
Horticultural AssociationTAHA) deserves mention for her support in providing
information about the horticulture industry in the country.
A few other people who contributed indirectly to the thesis are Salay (daughter),
Samuel (son), Emmanuel (nephew), Jonathan (nephew), Flossie (sister), and Furaha
(brother). They silently and without lifting their hands, pumped and ignited energy that
sometimes seemed to ebb away from my body, mind and soul. I would also like to thank
my great and true friends Chado Mwakapola, Ephraim Mwasanguti, and Raphael
Mwakagali for being there for me. My uncle Mithali Angundile, Aswile Nkyumu
Mwasilembo and Festo Boaz Mwaipaja families have been incredibly supportive. My
father Philemon Basuke Mwakyusa, Pastor Anyingisye Mwasandube, my dear brothers
and sisters of Magomeni Baptist Church all deserve my warm gratitude for their love,
prayers and encouragement. There is one special person who encouraged me on through
prayers, untiring support and seemingly unlimited belief in me. This is none other than
my beloved wife, Teddy A.C.M. Mwakyusa. Thank you very much Mama Salay.
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To all and anyone that I have not mentioned hitherto, thank you for your kindness and
may God bless you in whatever good things you are doing. My heart rejoices in the fact
that whereas, With men it is impossibleto God all things are possible (Matthew
19:26) and that "Everything is possible for him who believes." (Mark 9:23).
Despite my deliberate and concerted efforts to have no errors in this thesis, I solely
remain responsible for any shortcomings that might have cropped up.
University of Dar-es-Salaam
November, 2010
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DEDICATIONS
I dedicate this thesis to you, my beloved mother, the late Salay Sambogo (SS). Mama, I
am constantly reminded with every step I take that you are watching and inspiring me to
become what a man is capable of becoming. Mama, may your soul rest in eternal
peace-Amen.
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ABSTRACT
The study applies the Resource Based View (RBV) and the Upper Echelons Theory
(UET) to examine the uses of export information and their effects on the performance of
SMEs engaged in exporting horticultural and handicraft products. It was the thesis of
this study that what leads to improved export performance is not merely the possession
of export information but its appropriate use. Descriptive and multivariate Canonical
Correlation Analysis (CCA) and Structural Equation Modeling (SEM) were used to test
the research model using a survey of 158 SMEs in Dar-es-Salaam, Arusha, Kilimanjaro
and Zanzibar.
This study has also presented structural models for explaining uses of export
information and export performance. It has demonstrated the relevance of the Resource
Based View (RBV) and the Upper Echelons Theory (UET) - two of the increasingly
important schools of thought in the business strategy literature. The overriding
recommendation of the study is for owners or managers and other SME development
stakeholders to address issues of uses and perception of quality of export information as
they have ramifications on the export performance of SMEs.
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allocate that attention efficiently among the overabundance of information sources that
TABLE OF CONTENTS
Certification ................................................................................................................ i
Declaration and Copy Right .............................................................................................. ii
Acknowledgements .......................................................................................................... iii
Dedications .............................................................................................................. vi
Abstract ............................................................................................................. vii
Table of Contents .................................................................................................... ix
List of Tables ............................................................................................................. xv
7.4.3 Owners or Managers Entrepreneurial Orientation, Use of Export Information ....... 207
7.4.3.1 Owner-Managers Risk Taking and ICEIU................................................................. 207
7.4.3.2 Owner-Managers Innovation and ICEIU ................................................................... 209
7.4.3.3 Owner-Managers Proactiveness and ICEIU ............................................................. 211
7.4.3.4 Owner- Managers Risk Taking and SEIU ................................................................. 213
7.4.3.5 Owner-Managers Innovation and SEIU ................................................................... 214
7.4.3.6 Owner-Managers Proactiveness and SEIU ................................................................ 215
7.4.4 Uses of export Information and Export performance ................................................ 217
List of Tables
Table 7.10: Multivariate Tests of Significance (OMI and ICEIU) ........................... 209
Table 7.11: Multivariate Tests of Significance (OMP and ICEIU) .......................... 211
Table 7.12: Standardized Regression Weights (Owner or manager Innovation) ...... 212
Table 7.13: Model Fit Summary (Owners or managers EO) ................................. 213
Table 7.14: Multivariate Tests of Significance (ICEIU and EP) .............................. 217
Table 7.15: Multivariate Tests of Significance (SEIU and EP) ................................ 219
Table 7.16: Summary of Hypothesis Testing Results ............................................... 221
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List of Figures
Appendices
List of Abbreviations
1. CHAPTER ONE
2. INTRODUCTION
It seems logical that having more information would lead to more knowledge - but as we all
know the opposite is often true. Anonymous
Enterprises (SMEs) is not new in both developing and developed economies and has
gained ample space within the field of business development. Studied and identified
strategies used by these SMEs to acquire and subsequently disseminate information are
networks (Mbura, Rutashobya, Jaensson and Nilsson, 2005; Phiri, 2003), Information
and Communication Technologies (ICT) (e.g. Mbamba, 2004) and marketing research
(Douglas and Craig, 1983). The first two strategies have, especially, been found to be
suited for SMEs. Phiri (2003) argues that SMEs information acquisition, concerning
foreign markets, is more critical because they lack the financial resources to invest in
There is, however, a dearth of literature on uses of export information and their effects
has mainly focused on domestic information acquisition and foreign markets entry
barriers by the enterprises. Researchers and practitioners alike are now facing new
dimensions of export information use (Diamantopoulos and Souchon, 1999; Low and
Mohr, 2001), export knowledge and their effects on firms export performance
(Katsikeas, Leonidou , and Morgan, 2000; Toften, 2005) among other informational
aspects.
Noted limitations of these empirical studies and guiding theories have been that most are
not altogether impossible to generalize the study findings and theories from one context
to the other. Allan and Rutashobya (2007), cautioned on wholesale adoption of findings
and theories from western world by arguing that their relevance and applicability in the
context of developing economies, especially in Africa, are not well established and
justified. What gives the argument more credence in relation to this study in that access
to and uses of information are all embedded in the culture and the institutional
arrangements of the host society (Erick deMan, 2003; Voerman et al., 1997).
African countries have, of recent, recognized that one of the best strategies for achieving
economic development and growth is to encourage SMEs to export. Again, the majority
of the studies dealing with exporting activities in the literature have predominately been
conducted in the Western economies. This is happening amidst the almost universal
Studies (Leonidou, 1998; Sharpe, 1995) hold that exporting provides economies with
3
social prosperity and development, and generates foreign exchange to support other
economic activities. Besides, exporting advantages over other market entry strategies
such as joint venture, franchising, licesing and foreign direct investment are based on
At the firm level, exporting provides an opportunity for firms in developing countries
with small domestic markets to enlarge their markets (Dijk, 2002) and act as a channel
of technology transfer (Pack, 1993). There is even general agreement that exporting
enhances the performance of individual firms (Terpstra and Sarathy, 1994) and provides
them with sustainable competitive advantage. Worldwide, exporting has been climbing
exponentially. Broadman (2007) notes that world trade has dramatically expanded in the
last 15 years, but the African continents overall trade performance in the global
marketplace has been very disappointing. Enhanced attention given to African SMEs1
SSA) countries declining export share in world exports (Bakunda, 2004; Manduna,
2005).
4
While traditional and conventional assumption that in order to compete globally you
have to be big (Chandler, 1990) may hold, a significant number of researchers have
1993). Knight and Cavusgil (1996) reveal that more and more SMEs are participating
world (Fletcher, 2004). Not only are small firms becoming increasingly international,
they appear to be entering the international arena at an earlier age than had been the case
in previous decades (Andersson, et al., 2004). It is invariably accepted that, despite the
financial allure for SMEs to engage in exporting, foreign markets are strewn with a lot
has argued that information processing is particularly important in SMEs, and that
internationalization theories do not explicitly explain why some SMEs are more
Various scholars (Aaby and Slater, 1989; Miesenbock, 1988) dealing with the
question of what factors explain the differences in SMEs export performance have
studied and identified both external and internal factors. The importance of internal
dominated by SMEs. Drawing on the Resources Based View (RBV), Barney (1991),
Wernefelt (1984), Dhanaraj and Beamish (2003) argue that its resources and capabilities
5
internal factors into informational, functional and marketing barriers. Equally reflecting
on the tenets of the RBV, Leonidou argues that difference in SMEs export performance
information rather than the external environment and industry structure. Additionally,
RBV assumes that firm performance and success is not dependent upon abundant
resources, but rather, as stressed by Hamel and Prahalad (1993), scarce resources are the
The external factors according to Suarez-Ortega and Alamo-Vera (2005) are those that
an individual exporter can only control to a very limited extent. According to Lawrence
and Lorschs (1967) and Mintzbergs (1979) contingency theory, export performance is
determined by the context, in which the company operates. The RBV thus complements
the more traditional Porterian approach which assumes that the industrys external
environment and the firms competitive positioning determine the firms strategy
Information use, rather than its mere possession, has been defined as taking research
findings into account (Weiss and Bucuvalas, 1977), the conversion of data into ultimate
actions (Barabba, 1983), or the extent to which interpreted data influence the user's
Souchon (1996) found that exporters tend to use information in two (2) main ways, that
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is instrumentally-conceptually and symbolically and this has been supported in the SME
refers to the use of information for particular, general and future decision-making
purposes. Symbolic use of information, on the other hand, involves the use of partial or
(Williams, 2003). Perceived quality of information has also been suggested to be one of
the most important factors that explain the use of information, within both the general
market information use literature (Low and Mohr, 2001) and export literature (Souchon
Hansen and Wernerfelt (1989) claim that, whereas external market factors have the
ability to explain the variance in performance, internal factors can explain more than
twice the variance in performance. Furthermore, Rumelt (1991) showed that the unique
skills (internal factors) of a business unit could explain more than six times the variance
it is argued that compared to internal factors, the relationship between external factors
and export performance appear to be weak (Kirpalani and Macintosh, 1980; Madsen,
1989). On that note, Leitner (2001) stresses that important determinants of performance,
competitiveness and growth are based on internal firm- specific resource factors.
Export information is acquired from the external environment though its use is a
Even when considering the internal factors alone, explaining the difference in the export
against this backdrop that numerous studies (Bello and Williamson, 1985; Cavusgil,
1985 and Czinkota and Johnston, 1981) have attempted to focus on export information
is even more crucial in the case of firms transcending national boundaries, due to the
higher risks resulting from the great diversity of foreign business environments, the
multiplicity of the parameters involved in selling abroad, the existence of new variables
not found in the domestic market, and the high intensity of international competition
(Czinkota and Ronkainen, 2001). Jorosi (2006) argues that in a variable and volatile
the turbulent business environment. In using information, top managers of firms are able
Are the studied and identified information acquisition strategies, such as the use of ICT
and networks, the key for SMEs to capture the benefits of export information? Kettinger
et al., (2002) assert that many firms managers originally thought that the solution lay in
investing heftily in the enabling technologies (computers) and networks. In most firms
(ICT), their main concern has been that investments in systems and software have been
8
wasted. Many organizations were content to simply manage their data and information
(Drucker, 1988). The practice led to information storage becoming increasingly more
difficult to interpret, thus rendering them almost useless. Truly, researchers need to
consider the different informational needs and uses by SMEs. In SMEs, it is the owner
internationalization decisions.
Despite the acknowledged fact that export performance lies not only in the possession of
export information but in the capabilities associated with its use, no knowledge exists on
one of the most neglected areas of study and literature on the use of export information
that subject. Mere possession of export information does not automatically ensure that
the acquired information will indeed be put to use (Larsen, 1986). Hart and
Diamantopoulos (1993) argued that what really counts is not mere information
acquisition and possession but how companies use that information. Shapira (1982)
corroborates this by saying that many firms gather information and do not use it. In
2
SMEs owners refer to the surveyed business people who have established exporting businesses and are
themselves engaged in other businesses or are employed in the public or private sector. The extent of
owners engagement in the running of a business differs from one business to the other. SMEs managers
may, on the other hand, either be owners or non-owners of the surveyed SMEs which are engaged in the
exporting business.
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other words, the way and extent to which information is used, as opposed to the mere
big business blunders (Ricks, 1983) and it reduces the decision-making uncertainty
associated with doing business with foreign customers (Crick et al., 1994).
(Kettinger et al., 2002). Therefore, although the relationship between export information
use and export performance is the central research question for this thesis, this
researcher integrates managerial characteristics and their influence on the way and the
extent to which export information is used. This approach is adopted against a backdrop
background as one of the main constructs on which export success depends (Leonidou
et al., 1998; Moini, 1995). The influence of either internal or environmental factors
research model guiding the development of the hypotheses of this study is rooted in the
voluntaristic perspective, specifically; the views of the UET and RBV were adopted.
The quality of information use outcomes depends on management ability and the
processing skills of information users (Barabba and Zaltman, 1991). Whilst various
attempts have been made to study the effects of firm-level factors on export
10
performance and internationalization in SSA, the role that the owners or managers play
in the internationalization of SMEs has largely been ignored. Yet, managerial variables,
particularly the knowledge and attitudes of senior managers, have been associated with
firms export marketing activities and success in exporting in less developed countries
(Das, 1994). Filatotchev et al. (2001) also echo this concern of ignoring the role of
more significant for SMEs than for large firms where the personal characteristics of the
Chief Executive Officer have a lesser effect on overall operations (Olomi, 1999 as
quoted in Mcdade et al., 2005). This standpoint, however, contrasts with other studies
such as those of Aldrich (1979) who concludes that top managers are subject to
environmental constraints and that the performance of big organizations owes little to
deemed important considering the countrys concerted efforts to boost and diversify its
economy.
Focusing on owners or managers characteristics, this thesis hinges upon the principal
assumptions of the UET (Hambrick and Mason, 1984), as the theory provides a
(2002) observes that, faced with the same objective environment, different managers
will make different decisions based on their individual characteristics. The RBV
(Barney, 1991; Wernerfelt, 1984) also guided the construction of the framework for
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assessing export information and its use by the owners or managers. The general
question is, What effects do the various uses of export information have on the export
products? The answer to the question is crucial since the resources associated with
efficiencies in information use are achieved (Deshpand and Zaltman, 1982). A research
The main objective of this thesis was double pronged: To examine the effects that
different uses of export information have on the export performance of SMEs engaged
different developing country context was deemed appropriate. The main thrust of the
study is to examine the export information uses of SMEs operating and exporting from
In order to accomplish the main objective, the study focused on realizing the following
specific objectives:
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ii. To explain the relationship between export information use and export
information use.
On the premise that export information is the key to enhancing export performance of
SMEs, a better understanding of the influence that owners or managers have on the use
This study differentiates itself from previous research efforts in that it considers an
Secondly, for quite a long time, firm performance has been an issue of continuous
concern (Maes, Sels, and Roodhooft, 2004) to researchers and practitioners alike.
are therefore of vital interest to public policy makers, business managers, marketing
(BDS3) providers and in fact SME owners or managers. Additionally, the large number
of studies that have been undertaken over the past decades on information use in
developed countries bear testimony to its importance. This study sought to use RBV and
UET as guides to examine and explain the use made by owners or managers of export
information and SMEs export performance in Tanzania. To the best of the researchers
knowledge, this thesis is the first scholarly work that has culminated in the development
of the model to primarily test the effect of export information use on the export
The resulting research model on export information use and performance will prove
relevant to many SMEs owners or managers, as Samiee and Walters (1990), noted that
considered as a tool to boost growth, strengthen the competitive edge, and ensure
3BDS refers to non-financial services that are designed to overcome the internal constraints that impede
the survival, growth, and competitiveness of an enterprise (Kyukyu, 2006).
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Export information providers should benefit from knowledge on how and what export
number of information providers (Botten and McManus, 1998). This study will also
enable policymakers and BDS providers to better tailor their offerings and enhance
SMEs export performance. Most significantly the research model can be used to guide
SME owners or managers, BDS and policy makers on the best and most appropriate
range from lower middle and upper middle-income countries to very poor countries.
The nomenclature applies to most African, Latin American, Caribbean, and Asian
countries, as well as some countries in the Middle East and Eastern Europe. According
to the World Bank, country classification is generally based on countrys annual per
capita income and not the availability of skilled resources, expertise or ICT readiness.
Whereas developing countries are often presented as a homogeneous group with similar
problems and similar resources and capabilities, there are differences, including the
level of human development, ICT readiness and priority areas for government funding
Thairu (1999) acknowledges that African societies have built up a wealth of indigenous
foregoing assertion therefore necessitates considering this knowledge when one is trying
to improve the way SSA enterprises are managed and structured, and how decisions are
made. Ronen and Shenkar (1985) point out that managerial attitudes, values and beliefs
are functions of national culture and are linked to different strategic choices.
Woldesenbet, Storey and Salaman (2007), for instance, likewise carried out their study
context specific and subject to change and re-interpretation because of shifting roles,
several factors that differentiate the environment in these nations from western
industrialized countries. These factors (which are also to be found in Tanzania) include
collect needed data, highly unstable political and economic environments, the presence
absence of the legal and social infrastructure necessary for carrying out business-
Over the past two decades, Tanzania has evolved from a centrally planned economy to a
market- oriented system through a wide range of economic and public policy reforms
that have included trade liberalization. The country has continued implementing
concerted measures for macroeconomic stabilization and structural reforms that have
enabled it to transform its economy into a higher degree of openness and export
orientation.
SMEs used to operate in Tanzania which had a strong socialisttype ideology before it
adopted market economy policies in the mid 1980s, and are still shrouded in socialistic
orientation. According to Temu and Jean (2000), Tanzania was a strongly centrally
planned African economy with minute involvement by the private sector. As Heilman
and Lucas (1997) put it, Tanzania became an economy whose entrepreneurial class had
been stunted by decades of anti-business policies. The scholars found that business
get licences and permits which became the prerequisite skills for doing business in the
country.
Since the mid- 1980s, there has been gradual liberalization of the economy in general
and the international trade sector in particular, through the relaxing of foreign
Ordinance (Cap. 294) by the Foreign Exchange Act of 1992. The requirements for
exporters to register with the Bank of Tanzania (BOT) and to obtain a licence from the
Board of External Trade were eliminated. The list of goods subject to export permits by
individual ministries was sharply cut to only those that the government wished to
control for preserving Tanzania's national heritage. Coming from such a political and
economic situation and, despite the opening up and encouragement by the government
of the private sector, SMEs will still take a while before they operate in full adherence
For quite a long time, Tanzanian firms have had a general inward focus typified by a
investors delegation to Tanzania noted that although as the country had begun its
transition from a socialist economic regime less than two decades ago, the effect is still
clearly felt in both public management and the private sector. Studying the use of
export information and the characteristics of the owners or managers operating these
firms in Tanzania will help to give fresh insights into the phenomenon.
On the ICT front, the Government of Tanzania first used a computer, ICT 1500, in 1965
for basic accounting functions (Mbamba, 2004) and ICL 1900 computer in 1974.
However, Mgaya (1994) and Mbamba (2004) note that the computers and others that
were later introduced did not achieve the desired outcomes. After the failure to fully
18
computerize the government accounting system and the consequent heavy financial loss,
the government then took the drastic measure of banning the importation of computers
in 1974 through the Government Gazette, until when the ban was lifted in 1993. The
failure is attributed to, among other factors, the lack of qualified indigenous personnel,
attributes failure and success of ICT projects in developing countries to gaps arising
detached from the developing countries contexts in respect of the implementation and
use of ICT. This happens, as was the case with the Tanzania failed experiment with ICT,
increase, there needs to be either a change in local realities to make them closer to
The use of ICT is inevitably important in the easing of information acquisition and use.
The ban and delayed adoption of ICT in the Tanzanian business environment may have
export information, export information use and the consequences of all these for export
performance.
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Mfaume and Wilhelm (2004) contend that the privatization of State Owned Enterprises
and the restructuring that were introduced in the country in the mid-1980s led to
retrenched workers and retirees starting businesses that were before mainly started and
managed by less educated entrepreneurs. The new crop of entrepreneurs came with less
business experience but relatively higher education, greater access to information and
better social and professional networks. This however is not necessarily representative
of the small business sector in the country as some SMEs are still owned and managed
by people who do not have adequate management skills and experience and some are
school dropouts. These business owners and managers may be encumbered in many
ways in acquiring and using export information and other technical matters relating to
inhibits access to and acquisition of export information. It is noted, for instance that
Africa has:
i. Some 280 million telephone subscribers, of whom some 260 million (over 85 %)
are mobile cellular subscribers, meaning that the continent has the highest ratio
ii. Fourteen percent (14 %) of the world's population, but only around 7 % of all
iii. Some 50 million Internet users, with Internet penetration of just 5 %. Europe's
Tanzania, where this study was conducted, presents a different context from the
developed world context in terms of level of ICT connectivity. The situation has a
bearing on the way and the extent to which export information is accessed and acquired
and on the use of export information and the perceived quality of export information. As
tele-density and number of computers in use are still among the lowest in the world
hampered by diverse barriers. First, the country is yet to fully utilize ICT services due to
poor and inadequate infrastructure, weak or lack of ICT- related policies, and limited
problems, the Government of Tanzania through its National ICT policy of Tanzania
(2003) has put in place institutional structures and frameworks to enhance Internet
access and use. The policy covers such aspects as deregulation of the
computer software and hardware. Having these policy instruments on paper has not
not all gloom and doom. According to Gorp and Maitland (2007), Tanzania has recently
made great strides forward in its telecommunications and ICT deployment and over the
last few years, Tanzania has seen its tele-density grow exponentially from a meager
0.4% in 1998 to over 17% in 2006. However, an uninspiring statistic is that by 2008, the
connectivity ushered in by the Government of Tanzania that the researcher studied the
The preceding discussion was intended to picture the contexts of SSA countries
generally, and Tanzania in particular, to form the basis for explaining the relationship
between Tanzania and both developing and developed countries export markets.
According to Adedeji (2002), trade relations between developing SSA countries and
doubt that the relationship is equally noted for African countries with almost all
indicates aggregate trade volumes, export information flow, and the directions of which
exporting is a part.
developed and developing countries have not dissuaded African SMEs from
and culturally closer is equally notable. Even with the allure, the key feature of the
arrangement is that trade between the developed and the former to the detriment of the
latter (Adedeji, 2002), naturally dominates developing countries. Under the current
22
trade arrangements, Luximon (2003) notes that the countries that will benefit more are
the developed ones because of the preference they get from developing countries. This
is argued as the developing countries compete amongst themselves for a market share in
the developed world. The researcher notes that a developing country would face
discrimination in the export market if the developed country negotiates more favourable
bilateral trade terms with new developing countries. The importance, therefore, of
grounded on that reasoning, as again trading partners in the developed countries have
This study focuses on SMEs exporting from Tanzania -a developing SSA country - to
developed countries in USA, Europe, the transitional economies of Asia as well as other
developing countries in the SSA. The developed and developing regions reflect quite
different economic, political and cultural scenarios. Developed countries have modern
and state- of- the- art infrastructure, largely urban populations, an educated workforce,
access to quality export information and other facilities. Besides, developed countries
have for a long time been manufacturers and exporters of technology based industrial
i. Have achieved relatively high levels of per capita GDP (between US$ 13,000
US$ 80,000).
ii. Possess advanced productive sectors (including service and high technology
industries).
iii. Enjoy high quality infrastructure and social services (the most appropriate,
iv. Undertake relatively high levels of research and innovation which focuses on the
aspects which include quality of life and the management of living resources;
developed Western countries and developing Sub-Saharan African countries reveal the
challenges that SMEs are up against. For SMEs from Africa to carry out export business
in developed countries, they are faced with tortuous challenges, which are the result of
factors in the developing countries which may prevent the acquisition of information for
Wiedersheim- Paul (1973), are differences between the home market and foreign
language, cultural differences, and ICT among others. Developed countries have
24
adequate and quality export information for SMEs to access and deploy in their
managerial constraints bar them from enjoying the richness of the information. In
addition, it is important to note that SMEs export information needs differ from one
sector to another.
25
Chapter one has hitherto focused on the informational needs of handicraft and
determinants of export performance, are among other issues addressed by the chapter.
The chapter has also focused on the stating the statement of the problem, research
objectives, and significance of the study and a discussion of the contexts of developed,
Chapter two presents part one (I) of the literature review. The chapter dwells on a
perspectives guided the choice of the theories adopted for explaining the use of export
information and the SMEs subsequent export performance. A review of theoretical and
View (RBV), and the Upper Echelons Theory (UET) are also presented.
Chapter three constitutes part two (II) of the literature review covering different types of
presented and discussed. Empirical studies are reviewed and presented, setting the
Chapter four presents the research model and hypotheses formulation. Reviews and
discussion from the preceding chapters are integrated into the research model that acted
as the guide for the rest of the study. Chapter five is devoted to a presentation of the
research philosophy, research approach and justification for the research strategy and
other choices made for the thesis. The chapter details the research design, sampling
procedures and size, operationalization of the variables, data quality and analysis. It also
describes the treatment and management of missing data and outliers. The sixth chapter
starts with a discussion on data coding, cleaning and management of non-responses. The
Characteristics of both owners or managers and the SMEs surveyed are presented and
discussed.
Assumptions of multivariate analysis used in this study are presented in chapter seven.
The chapter also presents various measures of model fit and the results of hypotheses
Discussion of the findings and conclusions are presented in chapter eight. Lastly,
chapter nine provides the summary of the major theoretical contributions, implications,
3. CHAPTER TWO
Why is it that with all the information available today on how to be successful in small
business, so few people really are? Michael Gerber
2.1 Introduction
This chapter discusses the Deterministic and Voluntaristic perspectives, the Uppsala
Internationalization Model (UIM), and the two theories of Resource Based View (RBV)
and Upper Echelons Theory (UET) that have guided the study throughout. Subsequent
to the theoretical discussion is the presentation of relevant empirical studies from both
Two theoretical perspectives are used to explain the performance of firms in general and
external viewpoint) and Voluntaristic (firm internal-view point) (Astley and Van de
Ven, 1983), which are said to be diametrically opposed. Referring to the deterministic
autonomous process, to which firms must adjust or risk being selected out. The
voluntaristic perspective, on the other hand, has it that the industrial context can be
perspectives are discussed here and the rationale for choosing the Voluntaristic
perspective over the other for this study is provided. The discussion helps the researcher
the Industrial Organization model focuses on the functional and structural properties of
a system, and regards managers and their actions as being completely determined or
governed by their environments (Avital, 2003). Four assumptions of this model are: (1)
the external environment is assumed to impose pressures and constraints that determine
the strategies that would result in above-average returns. (2) Most firms competing
similar strategically relevant resources and to pursue similar strategies in the light of
those resources. (3) Resources used to implement strategies are assumed to be highly
mobile across firms. (4) Organizational decision makers are assumed to be rational and
committed to acting in the firms best interests, as shown by their profit maximizing
behaviours.
The model suggests that above-average returns for any firm are largely determined by
attractiveness of the external environment to the industry structure rather than the firms
internal characteristics. Stern and Reve (1980) define the environment as a set of
adherent to the RBV, has also made a notable contribution to the industrial organization
29
industrial organization theory. First, the scholar noted, was that firms within an industry
or a strategic group are identical in terms of the strategic resources they control (Porter,
strategic group, this heterogeneity would be short-lived because the resources which
firms use are highly mobile. This assumes are that the role of internal organizational
factors is less relevant when firms make strategic choices which influence their
performance.
force that determines the long term survival of a firm (e.g. Friedman, 1953). In this
with the overriding objective of allocating scarce resources to alternative ends in such a
way as to maximize profits. Lado, Boyd and Wright (1992) argue that, from the
Similarly, the Industrial Organizations model has typically assumed that the firm can
influence neither industry conditions nor its own performance (Lado et al., 1992). By
Within the Industrial Organization model, the most influential theories are: Neo
and the Transaction Cost Economics. Despite these many theories, the elaborate
One of the major revolutions in the history of the management disciplines was
maintains that industry structure determines performance, and one could ignore conduct
and look directly at industry structure in trying to explain performance. Porter identifies
five environmental forces in ascertaining industry attractiveness. These forces are entry
barriers, suppliers bargaining power, buyers bargaining power, substitution threat and
intensity of rivalry. A firm's profit potential (and by extension export performance) are,
Porter argues, determined by the sum total of these five forces. Porter (1980) however
notes that a firm operating in an industry can flexibly choose between three generic
competitive strategies , which are differentiation, cost leadership, and focus (cost focus
By creating customer loyalty and price inelasticity, the differentiation strategy erects
competitive barriers to entry, provides higher margins, and reduces the power of buyers
as they feel they cannot afford to go for substitute products (Porter, 1980). On the other
hand, a firm devoting its efforts to controlling costs so that above- average returns are
forthcoming even when prices are falling adopts cost leadership. Focus strategy caters
for a circumscribed and specialized segment of the market resting on the premise that
the firm is able to serve the niche market more effectively and efficiently than
competitors serving broad markets (Porter, 1980). A firm that did not develop one of the
three strategies was termed to be stuck in the middle, relegating itself to low
profitability (Porter, 1980). Trying to be all things to all people, firms are only setting
The deterministic approach, which the Porters model follows, has its main weakness in
that it puts most emphasis on external factors. Adopting the deterministic approach
would then mean taking factors in the business environment as units of analysis and
presuming that all firms are homogeneous. This is the point of departure for this thesis.
searching for answers. The researchers later came up with the suggestion that the
strategic and idiosyncratic resources of the firm are greater determiners of the success or
failure of the firm than industry factors. Given the greater importance of firm effects in
under which the RBV and UET fall in explaining the effect of export information use
theories are integrated with the UIM to explain export information uses and their effect
exhibit human agency the capacity of human beings to make choices, as opposed to
acting out scripts determined for them by their social, cultural and economic
33
environment (Astley and Van de Ven, 1983). This perspective focuses on the motivation
and abilities of owners or managers to create strategic pathways for their business
associated with a dominant individual the owner or manager (ibid.). The approach
explanations as to why some SMEs, operating in more or less the same environment
perform better than others do. Proponents of this perspective argue that good
performance by SMEs does not just come from a good fit with industry or
deliberate choices and actions of the firms strategic leaders (Bourgeois, 1984; Child,
As noted earlier, the thesis views that internal factors are more predominant than
external factors in influencing export information use and determining SMEs export
performance. Within this context and in sharp contrast to the Deterministic perspective,
importance of the owner or manager and the resources at the disposal of SMEs.
can respond by selecting strategies that redirect resources in an attempt to improve their
firms competitive position. Because of this, an understanding of the role of the owner
or manager and how export information is used will be important in enhancing the
drawn panoply of scholars to define the process in many ways. These scholars have
accepted definition of the term remains elusive (Welch and Luostarinen, 1988).
their awareness of the direct and indirect influence of international transactions on their
future, and establish and conduct transactions with other countries. Welch and
state that developing networks in business relationships with other countries through
All definitions referred to above connote the fact that internationalization is a dynamic
process, and not a static event. In the same vein, available models concerning small firm
internationalization are considered to reflect four perspectives. These are Learning and
perspectives. At the core of the learning and innovation, adoption perspective is the
UIM, which is based on the work by Johanson and Wiedersheim-Paul (1975) and
Johanson and Vahlne (1990). On the other hand, the latter perspective supports the RBV
which contends that a firm with competitive advantage in the ownership and
linear process described by Johanson and Wiedersheim-Paul (1975). Based on the thrust
and focus of this study, the RBV constitutes one of the theories guiding this study.
availability and interest in capability development. Thus, for the purpose of this thesis
and with reference to the RBV, an internationalizing firm can be viewed as mobilizing
unique, interdependent resource stocks that enable and contribute to the firms
However, notable is the fact that mere internationalization, or just exporting, and
resources accumulation per se are not a panacea for the export performance problems
continuing growth in the number and the magnitude of foreign direct investments
for SMEs.
(Reid, 1983). The internationalization literature dates back to the time when the
contribution by SMEs was insignificant. Over time, the business environment and
understanding of the phenomena. Oviatt and McDougall (1997) argue that changes in
technological, economic, and social conditions have led to different research questions
and alternative explanations for how firms internationalize. Most of these theories have
orientation.
The internationalization of SMEs differs from that of large enterprises. Several theories
(2004) categorize traditional theories into (i) behavioural theories and (ii) Economic
theories. Behavioural theories are such the Transaction Cost Economics approach, the
UIM, the Innovation-Diffusion Model, the Eclectic Model, and RBV (Rutashobya et al.,
2004). Behavioural theories have their roots in business administration, and they focus
on the managerial decisions of the individual firm or the owner or manager (ibid.).
Saarenketo et al., (2004) note that economics theories, on the other hand, are the
Axinn (2002) argues that, one of the stages theory, the UIM, built on observations of
Nordic multinationals have been applied successfully to explain the behaviour of SMEs
in many other regions and countries as well. Besides, the theory rests on the RBV that
is rooted in the neo-classical economics theory of the firm (Penrose, 1959; Andersen,
the global economy, there is a need to pose a question: What is the role of export
performance? We address this question by reviewing UIM upon whose foundation the
two primary theories guiding this study, RBV of the firm and the UET are discussed.
The UIM assumes that internationalization is a gradual process through which firms
accumulate information (knowledge) over time. It is this information then that would
subsequently influence both the direction and pace of internationalization and firms
export performance (Hsu and Pereira, 2006). The UIM focuses on studying the how
this model, firms prefer to initiate an internationalization process that requires low
In the first stage, companies do no regular export activities. The only international
activity is in the processing of unsolicited orders. A more advanced foreign entry mode
the second stage. The third stage comprises establishing a foreign sales subsidiary and
foreign production and manufacturing is the last stage. Supporting stages model of
entry into foreign markets, Bilkey and Tesar (1977) stated that SMEs can export
successfully and that exporting is not limited to large firms. The model used is that the
Stage One: Management is not interested in exporting; would not even fill an
Stage Two: Management would fill an unsolicited export order, but makes no
close country.
Stage Five: The firm is an experienced exporter to that country and adjusts
Later, despite the stages, Johanson and Wiedersheim (1990) refined their earlier
findings by bringing out exceptions, because not all firms would go through the four
sequential stages. Two exceptions were later identified. First, firms with a large amount
of resources could take larger steps. Market knowledge can be gained in ways other
than through experience, especially when market conditions are homogeneous and
stable. Second, it might be possible to generalize the experience of markets that are
similar to a specific market if the company has considerable experience of markets that
According to Dervillee, Rieche and Zieske (2004), the main structure of the model is the
distinction between state and agent aspects of internationalization variables. The change
aspects, according to the authors, are decisions to commit resources and the
performance of current business activities. The state aspects, on the other hand, are
market commitment and knowledge about foreign markets and their operations.
The UIM has however been criticized on many different fronts. Reid (1983) and
Andersen (1997) have challenged the model for being too deterministic and too limited,
neglecting other managerial attributes. They contend that there is an option for strategic
choice when it comes to selecting national markets and modes of entry. Yet, Axinn
(2002) asserts that, with flatter hierarchies, and business unit structures and more
40
the owner or manager through the prism of the UET. Within SMEs, the task of making
decisions on internationalization usually falls within the sphere of activity of the owner
or manager. In many cases, the decision makers dominant managerial logic is based on
his or her previous experiences and personal traits and so it is particularly important to
know about the key decision-makers who are involved in the process. Among other
factors, the amount of information and knowledge a decision maker has about
and Kujawa 1974), foreign market experience, ability to speak a foreign language
(Langston and Teas, 1976), and whether he or she was born abroad or not (Simmonds
Furthermore, Autio et al. (2000) highlight the fact that the Uppsala Internationalization
Model (UIM) stresses the inertial and reactive character of business organizations,
neglecting the entrepreneurial strategic choice opportunities. The choice of this study to
integrate entrepreneurial orientation is geared towards, among other reasons, filling this
activities that lead to new entry (Lumpkin and Dess, 1996), and has three core
A third criticism of the model relates to the limited range of validity. Forsgren (1989)
argues that Uppsala Internationalization Model (UIM) is only applicable at the early
internationalization process for most firms. It is at this stage, the researcher claims,
where the lack of market knowledge and resources is still a constraining force. It is
instead argued that at later stages of internationalisation a firm can react immeadiately
to changing market conditions , thus making the concept of market knowledge not very
Furthermore, Forsgren (1989) states that in the later stages of the internationalization
process, the local networks of which the foreign subsidiaries are a part become the most
(2000) states that the internationalization process is reduced to a question of the firms'
internal resources (market knowledge and experience of foreign activities), while the
Despite these criticisms, Uppsala Internationalization Model (UIM) remains one of the
and Brock (2004), is based on the assumption that firms are growth-seeking and risk-
foreign markets. This lack of knowledge and uncertainty is directly related to costly,
foreign market information (Johanson and Vahlne, 1977). Too much empirical work has
corroborated the validity of the UIM in different countries for the model to be ignored
(Cavusgil, 1980). Related to export information use, which is the focus of our thesis, it
is noted that as firms internationalize they acquire and use information for current and
potential decision-making processes. Cohen and Levinthal (1990) use the term
absorptive capacity when they refer to a firms ability to recognize the value of new,
external information, assimilate it and apply it to commercial ends. Lastly and most
appropriately, for our thesis is that the Uppsala Internationalization Model (UIM)
1996).
According to Andersen and Strandskov (1998), one of the key decisions in the
about that market and then committing resources in accordance with the degree of
Vahlne, 1990).This brings us to the concept of Psychic Distance. The term first came
43
into the parlance of international research through the work of Beckerman (1956). The
that, a special problem is posed by the existence of psychic distance. The concept was
later popularized by Vahlne and Wiedersheim Paul (1975), who defined psychic
distance as the sum of factors preventing or disturbing the flow of information between
potential and actual suppliers and customers. Examples of such factors, they noted, were
development, etc. Two decades or so later Nordstrom and Vahlne (1994) redefined the
psychic distance concept as constituting factors that prevent or disturb a firms learning
about and understanding a foreign environment. The redefinition, Evans, Treadgold and
Mavondo (2000) note, was justified on the basis that learning and understanding rather
operating strategies in foreign markets. This notion is running through the thesis as it
has invariably been noted that it is the use of the accessed export information that is
(1998) is that firms are less likely to take up or continue business relations with
countries that are perceived to be dissimilar (i.e. show a high psychic distance).
Furthermore, despite the lack of strong empirical evidence, psychic distance has been
internationalization literature implies that psychically close countries are more similar
44
and, because similarities are easier to manage than differences, it is expected that
businesses will achieve greater success in similar markets (Johanson and Vahlne, 1990,
1992). Evans, et al. (2000) have however noted that psychic distance alone cannot
and Lane (1996) found that operating in a psychically close country does not necessarily
noticing subtle, but critical, differences in the foreign market. We will return to this
relationship in chapter five while explaining the variable of relationship in the research
model.
Conceptualizing psychic distance has for quite a long time been a challenge. Various
authors have been attracted by the perceived simplicity and theoretical appeal of the
language, religion, education and political systems. Hassel and Cunningham (2004)
Another researcher, Swift (1999) refers to the concept as the combination of cultural
distance plus mistrust and social distance. Brewer (2007) notes that researchers have, on
a regular basis, and quite erroneously used cultural distance and psychic distance
interchangeably. Dow and Karunaratna, (2006) provide a strong case for not using
cultural distance in lieu of psychic distance, by stating that the most commonly used
45
accounts for less than half of the total variance explained by a comprehensive set of
indicators.
Conceptualizing psychic distance as the differences between home market and export
markets does not adequately capture the meaning that was envisaged by Vahlne and
were meant to explain the flow of information from the export markets to the exporting
firm. To the researchers, the flow of information could come from familiarity of the
firm with the export market and not based on the differences that exist between the
home and export markets. However, factors that were originally thought to be just
examples of factors of psychic distance have unwittingly been used as surrogates for
psychic distance.
Researchers have noted problems associated with the use of the psychic distance
concept. Brewer (2007) has for instance stated that researchers have replaced firm
familiarity with export markets with familiarity and /or differences between countries.
Besides, the author notes that no agreement exists among researchers and scholars as to
the connection between information flow, psychic distance and international market
selection. Reid (1984) also reveals that psychic distance is much too deterministic and
that instead firms respond in their own idiosyncratic ways to the challenges of
46
internationalization. With these problems and more, there has been a call to improve
conceptualization of the concept while acknowledging that at the heart of the concept is
the essence of information flow. Brewer (2007)s psychic distance index comprises of
seven primary indicators, which are commercial, political, historic, geographic and
There are at least three reasons why Brewers index is considered suitable. First is the
proponents acknowledgement that the index builds on the items directly responsible for
the easy flow of information between country and firm. The Second reason, also
distance must be improved through measuring more rather than less of its elements.
Lastly, the particular perceptions of the firm managers are considered, as Petersen and
Pedersen (1996) state that it is the managers, not nations who perceive psychic distance.
Cuervo Cazurra and Ramos (2002) argue that when considered from the point of view
of the RBV, firms internationalize for reasons related to the resources set, in an attempt
to create value. Kogut and Zander (1993) argue that to realize the value creation
rigorous framework of export information use and export performance, the researcher
drew on the RBV of the firm. Resource Based View (RBV) is an important and relevant
47
theory of firm performance which traces its intellectual root from Marshall (1890),
Coase (1937), and Penrose (1959) to Barney (1991). Resource Based View (RBV)
unique/heterogeneous bundle of resources at the core of the firm (Conner and Prahalad,
1996). Resource asymmetries, thus, become a veritable linchpin for explaining firm
(Barney, 1991; Dhanaraj and Beamish, 2003; Ibeh, 2005; Wernerfelt, 1984).
RBV, rather than emphasizing market structures, highlights firm heterogeneity and
proposes that the unique assets and capabilities of firms are important factors that give
rise to imperfect competition and the attainment of supernormal profits (Fahy, 2000).
Researchers and scholars advocating this view argue that, to evaluate which firms will
entrepreneurs), since they are the real sources of competitive advantage. Essential
elements of the RBV are: (1) SCA and superior performance (2) the characteristics and
(Fahy, 2000).
There has been a sense of ambivalence with regard to the position of the Resource
continuum. It is the contention of this study, with empirical and theoretical support from
different authors and scholars that RBV falls under the Voluntaristic perspective of
48
management. With its roots in neo-classical and Chamberlinian economics, the view
stresses the importance of the heterogeneity of firms resources, (Caroll, 1993) which is
the result of managerial action (Lockstrom, 2007). According to the Astley and Van de
Ven (1983) management theory matrix, the RBV is at the Voluntaristic micro-level
(bottom right hand) corner. The matrix outlines the classifications of the major schools
of thought of organization and management theory into four basic views: natural
selection view, system structural view, collective action view and strategic choice view
Fahy (2001) asserts that Resource Based View (RBV) emphasizes strategic choice,
charging the firms management with the important tasks of identifying, developing and
deploying key resources to maximize returns. In this study, these actions are captured
under the export information uses and help to de-emphasize a simple resources
performance link which, obviously, as Ketchen, Ghult, and Slater (2007) note, lacks
face validity. Recent studies (e.g. Edelman, Brush, and Manolova, 2005; Frynas,
Mellahi, and Pigman, 2006) that have adopted Resource Based View (RBV) as a guide
have moved away from the simplicity of the link by capturing the view by assessing the
Wernefelt (1984) defined resources to mean anything that can be thought of as strength
or a weakness of the firm. Daft (1983) stated that firm resources include all assets,
improve its efficiency , effectiveness and subsequent performance. Whereas the list of
resources in any given firm is likely to be long, one of the principal insights of the
Resource Based View (RBV) is that not all resources are of equal importance or that all
For resources to have the potential to contribute to firm performance, they need to
exhibit certain attributes. Different researchers have outlined the various attributes. Fahy
and Smithee (1999) are of the opinion that for resources to be able to create competitive
advantages they need to has value, barriers to duplication and appropriability. The value
attribute is explained in the same way that Barney (1991) defined it to mean a resource
that enables a firm to conceive or implement strategies that improve its efficiency and
relationship with advantage is poorly understood and/or they possess the characteristics
Lastly, the issue of appropriability (who takes the created value?) needs to be
considered when viewing the resources of the firm. Coff (1999) aptly asks the question,
value added and so appropriability is the ability to turn value into profit (Kay, 1993).
the father of modern RBV of the firm argues that the attributes that give a resource
the firm vis--vis the raw material suppliers (Nord, 2005). Causal ambiguity
comes from the notion that the link between the firms resources and its
advantage is poorly understood. Imitating firms do not know what actions are to
be taken to utilize the specific resources in order to build strategies creating SCA
related to, for example, the long-term relationship between a firm and its
strategically equivalent valuable resources that are themselves either not rare or
imitable.
Priem and Butler, (2001) however contend that the above-mentioned attributes are
individually necessary, but not sufficient conditions for SCA. This poses challenges to
researchers and practitioners alike as to which resources might have the mentioned
attributes, how to acquire them and to how deploy those firms resources. The challenge
is further compounded when dealing with SMEs which are known to be resource
A resource is not one thing but is many things. Resources acquired by a firm come in
different forms, shapes and types. The great variation in the classification and
typologies of resources are placing a lot of burdens on the shoulders of SME owners or
managers and on further development of the theory. Different researchers have come up
with various classifications of firm resources. Amit and Schoemaker (1993) identify
three types of potential strategic resources as: (1) physical resources, such as geographic
locations and other fixed assets (Barney, 1991); (2) structural resources, which is the
knowledge that has been captured by the firm and embedded in the organization through
(Amit and Schoemaker, 1993); and (3) human capital, which includes employee
52
knowledge and skills (Amit and Schoemaker, 1993 and Barney, 1991). Besides, Amit
and Schoemaker (1993) also noted that the all-encompassing constructs previously
called resources can be split into resources and capabilities. In this respect, new
resources refer to tradable and non-firm specific resources, while capabilities are firm-
specific resources that are used within the firm, such as the transfer knowledge within
the firm (Makadok, 2001). This classification is crucial for this studys model
construction in view of the fact that the thesis addresses both export information use and
the owners or managers characteristics that would influence the use of export
(2003). Following submissions by Penrose (1959), they both identify three sets of
resources that encompass the resource domain of the firm as being: (1) Managerial or
resources. Penrose (1959) noted then that managerial resources refer to a measure of
managerial slack indicated by the financial and physical resources at the disposal of the
firm. Entrepreneurial resources on the other hand refer to the risk and drive of the
managers, who are primarily responsible for the growth of the firm. Lastly,
technological resources refer to the tangible and intangible technical assets of the firm.
A further review of the plethora of literature on strategic management reveals that there
is a further classification of resources. Fahy and Smithee (1999), for instance, classify
53
resources into tangible assets, intangible assets and capabilities. Table 2.3 designates
Tangible assets refer to fixed and current assets which have long-term capacity
(Wernerfelt, 1989), their value is relatively easy to measure (Hall, 1989), that are
transparent (Grant, 1991) and weak in resisting duplication efforts. Examples of these
kinds of resources include plant, equipment, land, and other capital goods. Intangible
assets, according to Hall (1992) include intellectual property such as trademarks and
patents, brands, reputation, company networks and databases. These resources are
inherently resistant to imitability and substitutability at least in the short run (Fahy and
Smithee, 1999). Export information fall under the intangible assets classification. SMEs
with adequate information about foreign markets at their disposal would be expected to
set themselves apart from competition. However, it should be noted that idle export
information resources, however, rare, valuable, inimitable and non- substitutable they
54
may be, cannot ensure that a firm will be able to attain competitive advantage.
and improving SMEs performance. This brings us to the last type of resources under
activities and make use of their resources (Amit and Schoemaker, 1993; Day, 1994).
Individual skills may be highly tacit and, thus, inimitable and non-substitutable and
though they can be hired or bought by competitors, they are difficult to duplicate due to
causal ambiguity (Fahy, Farrelly and Quester, 2004). Capabilities are the most likely
source of SCA compared to other resources (Collis, 1994). Capabilities differ from
other firm resources in the sense that they are enhanced by use (Nelson, 1991).
Menguc and Auh (2006) pose an important question. Why are some firms despite their
relative superior resources possession, not able to sustain their competitive advantage
over time, especially in dynamic markets? The answer, they argue, lies in their ability to
transform their resources into dynamic capabilities. According to the RBV, export
performance can be obtained if the firm effectively deploys these resources in its
product markets. Fahy (2000) notes that firms management are charged with the task of
capabilities resource is essential for this thesis, as the research model not only
55
incorporates export information but also the way and the extent to which export
information is used.
Resources and capabilities that meet the four criteria become the source of core
competencies. The competencies are the basis for a firms competitive advantage, value
creation and its ability to earn above-average returns. Calcagno (1996) acknowledges
that competencies result from the way the firm uses its resources to create knowledge
and skills. Export information can be acquired in the market; competencies to use the
following firm- specific knowledge patterns and, once developed; they affect the export
information from which they have been generated. The export information resources are
then transformed into something different from what the firm originally acquired.
Resource Identification
Resource Development/Protection
Resource Deployment
Figure 2 shows the essential components of the RBV and the role that the managers
performance of firms. According to Fahy and Smithee (1999), the model highlights the
notion that not all resources are equal in terms of achieving SCA, and successful
performance of the firm, and that management plays an important role in the process of
attainment of SCA.
Despite the RBVs great contribution to the strategy management literature, it has met
strong criticisms from various researchers and scholars. For instance, Foss and
Knudsen (2000), while acknowledging that RBV is one of the dominant contemporary
approaches to the analysis of SCA, raise strong criticisms against the view. Most potent
of the criticisms raised is that much RBV research rests on partial and/or implicit
assumptions are necessary for producing certain results. Some of the identified implicit
bargaining powers of the various stakeholders among others. To clarify this issue
further, Foss et al (2000) stated that, while RBV proponents only discuss performance
distribution in an industry is not just a function of firm -specific resources but also of
the form that competition takes in that industry. On the competition, Foss et al (2002)
conclude that by not stating these assumptions explicitly, this shows the limitations of
the theory.
The second criticism is that the view is characterized by a confusion of necessary and
additional conditions in the analysis of the SCA. Based on their analysis on the works of
Barney (1991) and Peteraf (1993), Foss and Knudsen (2000) drew attention to the
attributes of resources that are claimed to be necessary and sufficient conditions for the
existence of SCA. They argue that there is a need to separate necessary and sufficient
conditions for SCA to exist. This supports Hicks (1979) argument that conditions, in
this case attributes, that regardless of their particular expression, do not alter the
conclude, the researchers suggest that only two attributes (uncertainty and immobility)
are necessary to produce SCA and that all other attributes are additional as they are just
Other notable criticisms of the RBV are its neglect of a firms environment in its
entirety and over- emphasis on the uniqueness of resources and strategies (Porter, 1994;
Pedersen, 1999). The resources and competencies are taken into account without
considering industrial factors which might influence a firms strategy (Calcagno, 1996)
58
and performance. Priem and Butler (2001) and Powell (2001) also raise concerns that all
RBV propositions are tautologies in that they are true by definition and therefore cannot
be empirically tested. The authors also claim that RBV neglects the demand side of
resources, failing to identify the cause mechanisms responsible for creating a SCA is
noted. Calcagno (1996) claims that the relationship between resources and
competencies on the one hand and competitive advantage and success on the other is not
explained.
Resource Based View (RBV) has again come under recent criticism as much of the
literature takes resource stocks as given and pays little or no attention to the process of
resource development. Thus, it is argued, the view is somewhat static in nature and
because it does not give due importance to the influence of past decisions on the actual
behaviour of the firm. Ghemawat (1991) argued that the view has failed to adequately
account for the constraints imposed by past decisions on current ones and by current
Managers play an important role in the process by which resources lead to SCA (Fahy
and Smithee, 1999) as resources, in and of themselves, do not confer SCA. Teece,
Pisano and Shuen (1997) introduced the concept of dynamic capability, arguing that
simply having access to resources that fulfill the resources requirements of Value,
Rarity, Imitability and Organization (VRIO) is insufficient to base SCA on. More
59
relevant for this thesis is how SMEs use the export information resources at their
1993) and creates value for the customer or other stakeholders. Penrose (1959),
Wernerfelt (1984), and Fahy and Smithee (1999) conclude that more important for
resources into returns for the firm. Notwithstanding the significant role played by
managers in the strategic process, this has not been sufficiently studied in the sphere of
RBV (Molina, Pino and Rodriguez, 2004). Therefore, the asymmetries of performance
between heterogeneous firms are very much driven by managers who, according to
Despite the criticisms raised, Resource Based View (RBV) remains an attractive theory
to researchers because of its theoretical utility in explicating the link between resources,
the capabilities required to develop and apply them, and the competitive success of
enterprises (Mata, Fuerst, and Barney, 1995). Resource Based View (RBV) gives a
examined.
60
theoretical framework for studying export venture performance. Despite the extant
literature on a RBV, few studies have empirically been conducted in the context of
export and in developing countries to verify the veracity of its assumptions. This is
demonstrated by the sampled studies which are discussed below. All of these studies
Dhanaraj and Beamish (2003) undertook a comparative study of the export performance
parsimonious model on the RBV of the firm, with three sets of resources, namely firm
size, enterprise, and technological intensity. These key resources were found to be good
internationalization, and its effect on overall firm performance was studied using firm-
Equation Modeling technique- to test the model. The results confirmed the validity of
Morgan, Vorhies and Schlegelmilch (2006), drawing on the Resource Based View
(RBV) and insights from qualitative fieldwork4 conducted, examined the resource
drivers of export venture performance in industry firms using primary data from UK
4
The fieldwork involved 17 interviews with export managers, international business development
managers, CEOs, and account development managers.
61
and German industrial goods manufacturers. A random sample of 862 firms in Germany
and 411 firms in the UK were utilized. Data analysis was performed using Structural
Equation Modeling (SEM) on each of the data sets. Neither set indicated a significant
relationship between the individual export venture resources available and export
performance than might have been previously believed (e.g. Aaby and Slater, 1989).
The results instead support the Resource Based View (RBV) predictions concerning
performance in export ventures. Morgan and others argue that the insignificant
reasoning of Morgan et al, the lack of relationship could be attributed to the lack of or
improper use of the available resources. The Morgan et al (2006) study is limited in two
important ways. First, the study is cross-sectional, thus making it hard to empirically
problems when collecting primary data, making it difficult to control for differences
between export ventures in terms of other firm-specific phenomena such as the specific
capabilities used to select and deploy export venture resources(c.f. Teece et al ., 1997).
62
key determinant of export performance. The researcher adopted the ordinary least
squares regression analysis to test and examine the hypothesized relationships and
The results show that teamwork, organizational learning, and entrepreneurial orientation
have significant positive effects on export performance. Three conclusions can thus be
drawn pertaining to the results of the study. Firstly, according to the research findings,
firms with greater teamwork are likely to have stronger competitive advantage and to
Secondly, firms with higher organizational learning tend to perform very well in
performance and success, and are strongly viable. While the researcher did not mention
nor did he acknowledge that he was using the RBV, the study typically adopted the
view.
63
Likewise, Graves and Thomas (2003) drawing on the tenets and the spirit of RBV,
their degree of internationalization. Graves and Thomas noted that mere possession of
firm specific VRIO resources does not guarantee competitive advantage. The
as they are distribution free and robust when using non-normal data (Hair, Anderson,
Tatham, and Black (1998). Using the most recently available longitudinal database of
Australian SMEs, the results of this study indicated that the managerial capabilities of
family firms lag behind those of their non-family counterparts as they expand
Two notable limitations of the study, however, were that, first of all, it ignored other
variables that have been used in previous studies to identify the scope and complexity of
firm internationalization. The study instead just used export intensity as the only
the total sales of a particular firm. Notwithstanding the limitation, export intensity is by
far the most widely used indicator in empirical international business research.
does not suffer from the problem of manager resistance concerning confidentiality.
Secondly, the broad definition of family business includes varying levels of family
influence. To this end, the effects of family influence on managerial capabilities were or
performance of firms in Russia drawing on both the Upper Echelons Theory (UET) and
Resource Based View (RBV) of the firm. The study comprising face- to -face
interviews with 75 entrepreneurs in 1995 and 56 entrepreneurs in 1999 found out that
Entrepreneurial versatility was found to be more strongly related than other general
humanbased resources, such as social capital and human capital. Supporting the
relevance and the importance of managers and human resources, Venter, Eeden, and
King (2004) investigated the competencies required by managers for small business
success. The objective of this study was to identify the management competencies
the positivistic paradigm involving a sample of 242 small businesses, found that
managers competencies that are evident in successful small businesses are planning
Ngowi, Lwisi and Mushi (2002), using ten construction firms in Botswana which have
been in operation for a period of over ten years, carried out a pilot study on competitive
strategy in the context of limited financial resources. The study examined the types of
resources acquired by these firms and whether there were any firm-specific capabilities
used to deploy them. The researchers found that in the context of limited financial
resources in construction, firms can still build and sustain competitive advantage by
construction firms. Two of the ten construction firms studied had built core firm
for quality workmanship respectively. The authors thence recommend that instead of
building and then defending competitive advantage, firms should create temporary
(dynamic) competitive advantage, which they should upgrade frequently to avoid the
necessity of defending it and thus keep competitors off balance by forcing them to
respond.
A notable weakness of this pilot study is that it was limited to only ten citizen-owned
construction firms in Botswana. Further work involving a representative sample from all
representation. Its strength in relation to the current study is that it was conducted in a
developing country context that has some of the characteristics typical of such
countries.
Carmeli and Cohen (2001) studied the role of reputation in 263 Local Governments
Authorities in Israel, these being 62 municipalities, 148 local councils (with two
industrial local councils excluded as their function is very different), and 53 regional
LISREL VIII and found to be robust. The effects of demographic and environmental
variables on financial performance were also examined. Strong support was found for
acquire SCA, which is dependent upon the core resources they possess.
The researchers acknowledge several limitations of this research. First, as this study
ventured into somewhat new ground, the data must be interpreted cautiously. Second,
the empirical model proposed here is a preliminary one and it should be further tested.
Third, the financial performance measure must also be further tested to determine its
criterion validity. Finally, as the model was employed for the public sector and local
authorities, future research should be conducted in order to extend its base to other
research populations, from both business and public sectors. An important contribution
of this study however is the call for identification of core resources, such as
organizational resources, which follow the SCA tests, and the need to test their
predictive power of variance in performance. This study examined some of the basic
theoretical insights of the RBV in relation to local authorities, and extended the theory
to areas of organizational research that had not previously been addressed. This is
strength of the study in the sense that it gives RBV greater empirical and theoretical
validity.
strategic factors that explain the competitive position reached by firms in the service
sector. A survey carried out on 173 executives identified the factors that distinguish the
focused on the capabilities of managers due to the significant role played by them in the
strategic decision- making process. McGee, Love and Rubach (1999) conducted an
exploratory study on 270 small businesses on the source of competitive advantage for
analysis, cluster analysis and analysis of variance (ANOVA) were then used to develop
the typology and assess the differences performance among identified retailing types.
The results of the study suggested that it is quite possible to develop and maintain
distinctive competencies. However at odds with other prior research was that
developing only one or just a few distinctive competencies is not significantly better
Valuable or value- creating resources are important for creating competitive advantage
for a firm. A resource needs, therefore, to permit the firm to conceive strategies that
improve its efficiency and effectiveness by meeting the needs of customers (Barney,
1991). This implies that, though the resources may meet other conditions, they become
a potential source of advantage only if they enable the firm to create value. In an
information economy, information is the critical resource and basis for competition in
From the above discussion, it is evident that internal resources and managers
shortcomings of the studies should however be noted. Some of the studies (e.g.
Batjargal 2000, Ngowi et al., 2002) reviewed comprised small samples or focused on a
single sector thus limiting generalization. Whereas firm performance may be measured
in various ways (March and Sutton, 1997, Meyer 1994), in some studies (Batjargal
2000) performance was measured using average revenue growth only. Above all this,
Carmeli and Cohen (2001) aptly noted limitations of their study in that it focused on the
public sector and local authorities. The researchers are calling for the modeling of the
In the context of SMEs, owner managers are regarded as the resource carriers (Bamford,
Dean and McDogall, 2000, Mosakowski, 1998). This view is supported by Daily et al.,
(2002) who assert that an owner or manager tends to occupy a position of unique
influence, serving as the locus of control and decision-making (pp.391). The focus for
this thesis is therefore on the SME owner or manager, whose personal resources and
characteristics are hypothesized to influence the use of export information and SMEs
presentation of the UET whose proponents acknowledged as early as 1938 the role of
export performance is based on UET as proposed by Hambrick and Mason (1984). The
UET sheds light on the strategic management literature as follows: first, the theory puts
more focus on the behaviour of Top Management Teams rather than on a single
decision maker such as the CEO. Second, the cognitive ability of the Top Management
Teams is related to strategic choices, and is the predictor for the strategic choice. With
respect to SMEs, one of the main factors is the decision -making abilities of the key
personnel involved in the firm (Fillis, 2001). Das (1994), for instance, contends that the
export success of a firm may be related to the quality, attitudes and characteristics of its
managers. The relative importance of managers and the environment for the success
and failure of organizations has been a source of considerable debate in the strategic
management and organization theory literature (Daily, 1994). Advocates of the strategic
choice paradigm (Child, 1972) suggest that managers are the main arbiters of
Proponents of the Upper Echelons Theory (UET) are Hambrick and Mason (1984), who
claimed that complex decisions are largely the result of behavioural factors of the
outcomes, the scholars argue, are expected to reflect the characteristics of these leaders.
Outcomes that have been studied in relation to the demographic attributes include
performance (Smith et al., 1994). According to Maes et al., (2004) the theory links
observable characteristics such as the age of the owner or manager , functional track
since individual cognition is shaped by individual experiences and since these in turn
The relationship between top managers and organizational performance has been a
contentious one for a long time. In their ground -breaking study, Lieberson and
company (size, location, facilities and reputation) and persons in top management roles.
findings were as well supported by Pfeffer and Salancik (1978) who commented that
studies estimating the effect of administrators have found them to account for a mere ten
These findings by Pfeffer and Salancik (1978) and Lieberson and OConnor (1972),
though seemingly based on sound statistical analysis, drew a lot of attention and
71
criticism. Aldrich (1979) noted that generalizing from Lieberson and OConnor (1972)
findings is risky. This, he noted, was because of definitional dependence on their three
performance variables (profit, sales and profit margins) and the lack of organizational
control variables. Aldrich noted that it is inconceivable and implausible that leaders
who have failed to have an impact on sales or net earnings could nevertheless have an
impact on profits.
Hambrick and Mason (1984) , in building the case for the theory, claimed that the
dependent variables and statistical analysis that made it impossible for the leadership
variable to take a major role, rendering the results almost tautological. It is also noted
that the percentages of performance variance accounted for by the independent variables
are highly sensitive to the order in which they are treated. Thomas (1988) noted that the
Thomas (1988) urges researchers to ask themselves two distinct questions: (i) what is
the extent to which leader differences account for performance variations within each
firm over time? (ii) what is the extent to which leader differences account for the total
variation displayed by the whole set of organizations , which includes both within and
between firm variance , in comparison with that accounted for by the contextual
variables?
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In summarizing the UET, Carpenter et al., (2004) and Pansiri (2005) argue that the
1. The strategic choices made in firms are a reflection of the values and
al., 2004);
2. The values and cognitive bases of such actors are a function of their
influence strategic choices and in turn organizational performance. Thus, in line with
the orientation of the strategy, firm performance is the primary dependent variable
(Meyer, 1991).
The connection between managers choices and outcomes was made in the early 70s,
when strategic choice theorists (e.g. Child, 1972) developed and successfully tested the
context of small businesses, due to the assumption that small businesses are built around
strategic choices and outcomes have followed two main streams. The less popular
approach is that of assessing managers mindsets and links their psychological profiles
to subjects of interests (Miller and Toulouse, 1986). The other stream that has borrowed
a lot from Child (1974) and Hambrick and Mason (1984) assesses the relationship
74
latter researchers claim that at the core of the UET are the managers cognitions, values
and perceptions and their influence on the process of strategic choice and resultant
performance outcomes. Smith et al have articulated two reasons for not researching on
the top managers cognitive styles, values and dispositions have been articulated. One is
the problem of access to private information and the other is that it is often considered
(1992) corroborate the reasons by arguing that managers cognitions are unobservable
in archives and guarantee to a large-extent rigorous, large scale and longitudinal studies
(Markoczy, 2001).
Although research on managerial demography has yielded valuable insights into top
managers, it has not escaped criticism and skepticism. Several researchers and scholars
have argued that relying solely on the demographic characteristics of top managers
without directly studying the unobserved psychological processes may lead to spurious
results (Lawrence, 1997). Others have pointed out that most upper echelon researches
have been static, failing to consider the stability of the hypothesized associations
between managerial demography and various outcomes over time (Finkelstein and
Hambrick, 1996).
75
Markoczy (1997), himself an early ardent follower of the UET, noted that, without
actions. He contends that the claimed relationship between managers cognitive bases
and characteristics is equivocal at best. Markoczy (1997) uses the words of Hambrick
direct contact with top managers (Pettigrew, 1992); (2) produces research without
emotion, drama or action (Reger, 1997: 804); (3) assumes that the demographic
predictors are correlated with presumed intervening processes which remain in a black
box (Lawrence, 1997); and (4) uses proxies that may be related to organizational
Indeed, Pfeffer (1983) has argued that measurement accuracy is a major benefit of
constructs, for the reason that many of the intervening constructs are mental processes
that are more difficult to access and reliably measure. In sum, the demographics
toward top managers and in showing that top managers are important to firm
performance.
To date, research that has examined the relationship between top management team
characteristics and organizational outcomes has followed two main directions. One is to
examine top management team demographics such as age, education, work experience,
and tenure. Another, direction has been to assess the mindsets of the team and link their
results have resulted from both kinds of studies, though the extent demographic and
psychological attributes do not generate common effects. Kitchell (1997) argued that
either approach in isolation will give rise to only partial results. The study by Kitchell
(1997) integrates these two approaches and examines both the demographic and the
In recognition of the noted weaknesses, this study takes into account other
characteristics. These characteristics are proactiveness, risk taking and innovation. The
1993, Covin and Slevin, 1986, Miles, Arnold and Thompson, 1993) who have adopted
terms of measurability, they can be measured directly using already developed tools,
77
and they help to closely capture what has been missed by the demographic
characteristics.
Most studies on the UET have been conducted in the developed world. Presentation
Halikias and Panayotopoulou (2003) studied the influence of CEO personality on the
country of Greece. Regression analysis was applied in order to determine which of the
personality characteristics studied could explain the export performance of the firms.
The results showed that there are several personality traits of the decision maker that
can be related to export involvement, supporting the UET that contends that firm
performance is a reflection of its top managers. Moreover, the effect of the CEOs
than in larger ones. Limitations noted from this study are as noted elsewhere in similar
studies. One pertains to the cross -sectional and exploratory nature of the study that
involved a small sample size thus constraining the researcher from making
Lohrke, Franklin, McClure, Vinay and Austin (1999) undertook to study the
Performance adopting the UET. The researchers noted that recent advances in
technology and transportation have allowed even the SMEs to globalize. Although these
SMEs have limited resources, many have been able to successfully increase sales
overseas through exporting. This trend has prompted increased interest in the key
Data for this study were collected employing a mail questionnaire sent to 1000
randomly selected firms from a Dun and Bradstreet database of US small business
exporters. From the initial sample, 156 questionnaires were returned and deemed usable,
yielding an actual response rate of 17 %. Regression analysis was conducted to test the
three study hypotheses to establish the causal effect relationship between the
The results generally supported the hypothesis that market and industry factors
moderate the relationship between top management international orientation and small
business exporting performance. The specific key findings of the study were that: (1)
will be more positively associated with export performance for firms exporting to
79
(3) Management's international orientation will be more positively associated with the
competing in global industries. Though the authors did not bring out the psychic
distance concept in their research, they were in fact making strong comments on it. This
attributed to the fact that psychically close countries are easier to learn about and
performance, are rather inconclusive (Ali, 1995; O'Grady and Lane, 1996). In fact,
organizational performance and argued that in fact foreign markets that are perceived to
Similarly, even without acknowledging the theory guiding the study, Axinn (1988) finds
in her 1984 study that export performance is more highly correlated with international
experience and the perceptions of exporting possessed by managers than it is with the
firms' size, technology, or goals. This conclusion and argument are in favour of the
assumptions of the UET and Voluntaristic perspective. The researcher collected data
through mail questionnaires form Chief Executive Officers of 78 machine tool firms in
Ontario and 305 for Michigan with a response rate of 31 and 26.5 per cents,
respectively. The data collected were regressed to ascertain the relationship between the
80
The findings of Axinns study are also corroborated by other researchers (e.g. Kirpalani
and MacIntosh 1980; Schlegelmich and Ross, 1987; Kirpalani and Robinson, 1989; and
Becker and Lenberg, 1990), who invariably noted that the better export performing
It has been observed that, if companies are to survive in the global environment,
companies in the machinery and metalworking industry in Ontario. Data were collected
psychological profile respectively. Demographic variables captured for this study are
CEO age, education background, immigrant status, international work experience and
tenure. Psychological variables measured on a seven -point Likert Scale are flexibility,
The data were analyzed in two stages using linear regression. The results suggested that
the model was statistically highly significant and explained a substantial amount of
variance. The results confirmed that CEO characteristics have a significant impact on
This study is relevant in our study in two ways. First in this thesis we have taken
independent variables. To the contrary though, the study by Kitchell (1997) took
characteristics. The importance of this contradiction will help in building the research
model by realizing the aspect of Multicollinearity, which means that three or more
variables are correlated. However, Multicollinearity does not impact the reliability of
the forecast, but rather impacts the interpretation of the explanatory variables.
Secondly, the study was conducted in a developed country, Canada, about technological
Developing countries such as Tanzania have very limited and constricted computerized
process affect organizational success. Researchers used data collected from a sample of
233 companies, whose size ranged between five and 500 employees operating in a
Spanish territory. The questionnaire for the study was divided into three blocks. The
first two blocks covered the way in which managers make decisions, and managers
psychological profile. The final block drew together questions concerning the success of
82
the company. The managers psychological profile consisted of need for achievement,
internal locus of control and tolerance of ambiguity. Students t- test and variance
analysis were used to analyze the data. This study concluded that the managers traits
indirectly affect success through process and that this process has a direct influence on
Although the results from the study did not give conclusive findings on the direct
least three reasons for taking this stance. First is that the study took a very
heterogeneous group of industries. With some having five employees only and others
having a maximum of 500 employees, the influence of firm size should have been taken
into account when explaining the significance of the variance. That was not the case.
The influence of the manager in such a diverse selection of companies is equally diverse
with managers having a bigger influence in small companies than is the case in big
companies. The second reason as, we have argued early, is the issue that the study was
conducted in a developed country with its peculiar and unique characteristics. Lastly,
the psychological constructs used for the study (locus of control, need for achievement
and tolerance of ambiguity) are not necessarily the only variables that can be used to
Herrmann and Datta (2005) drawing on the executive demography and the upper-
sample of 112 relatively large and internationally diversified US-based firms in the
The findings indicate that firms with higher levels of international diversification are
In addition, the findings indicate that relationships between team characteristics and
performing firms.
This study is relevant to our thesis in the sense that the findings are predicated on the
executives characteristics and international strategy. Ten years ago Lohrke and Bruton
(1997), noted that studies on the relationships between the characteristics of top
international business favours top management teams who are flexible, open to change,
exhibit greater tolerance for ambiguity and who possess superior information-
processing abilities. According to Lohrke and Bruton (1997) then, these tend to be firms
whose managers are younger, have shorter organizational tenures and possess higher
agency and upper echelons theory. Data was collected through a mail questionnaire
were deemed fit for analysis. Logistical regression (logit) model was selected and used
because the dependent variable is discrete (binomial) and logit analysis avoids some of
analysis. The findings of the study revealed that management ownership structure, board
composition and the age of the CEO affected the performance of information
technology than their older counterparts. Older managers are expected to be more risk
Empirical studies reveal some issues that need to be addressed when one is using the
theory in the developing country context. Issues like firm size and developed versus
developing context differences have already been discussed. A Google search on studies
using the UET in SSA countries revealed no hits on the theory. Even Glunk et al (2001)
85
note that research on UET is predominantly US- based and that little is known about the
way top management is structured and how it functions in other countries. This was
asserted over five years ago, but to date other researchers has been conducted in other
developed western countries. This bears testimony to the scanty attention given to
studies of this nature in the developing SSA countries. Other issues relate to the
technological sophistication of the studied firms when contrasted with those targeted for
the subsequent study following this research model. Likewise, a plethora of methods of
analysis such as correlation, regression, logit and structural equation modeling call for
The assumptions of the UET, according to Batjargal (2000), are relevant to the context
of new entrepreneurial ventures because founding entrepreneurs are often the firm`,
especially at the early stages of venture formation. This augurs well for exporting SMEs
in Tanzania which were mostly started in the early 1990s following the governments
adoption of free market economy policies. Even at the growth stage, firms have birth
marks of the characteristics of the owners or managers because of the path dependence
(Batjargal, 2000) .The decisions as to whether or not SMEs will use, ignore or misuse
the collected export information and the emphasis put on its acquisition will ultimately
rest on the owner or manager. It is in this light that we consider that the RBV and UET
are significant for this study. The two theories are however built upon the foundations
resources or factors of production that are just like the traditional ones such as land,
2.7 Conclusion
(RBV) and Upper Echelons Theory (UET) has now set the platform for a detailed and
specific discussion and presentation of their specific variables. The relationships of the
variables, with their connections to the appropriate theories (see table 3.1) are thereafter
To explain the value of owners or managers in relation to the use of export information
in the decision-making process and SMEs export performance, this researcher drew on
Upper Echelons Theory (UET), Resources Based View (RBV) and Uppsala
Internationalization Model (UIM). The researcher is of the view that the theories are
important for explaining how export informational resources are used by exporting
SMEs. From the Resources Based View (RBV), SME owners or managers are
considered entrepreneurial resources in their own right, which affect firm performance
(Penrose, 1959). The Resources Based View (RBV) of the firm focuses on the idea of
costly-to-copy attributes of the firm as a source of business returns and the means to
achieve superior performance and competitive advantage (Barney, 1991; Rumelt, 1987;
Conner, 1991; Prahalad and Hamel, 1990). This complements the Upper Echelons
87
Theory (UET) (Hambrick and Mason, 1984), which states that owners or managers (a
reflection of the firms they own or manage) are crucial for identifying, developing,
deploying, and preserving resources (export information), and thus creating SCA and
subsequently affecting firm performance. In this regard, Hambrick and Mason argued
influence on the decisions and actions that they make and take. The owners or
managers export decision- making is facilitated by the use of export information that a
firm acquires from various sources. Additionally, this researcher argues for the
importance that perceived quality of export information plays in determining the use of
export information.
In the light of the VRIO attributes of strategic resources as stated under the Resources
Based View (RBV), the SME owner is a valuable resource when he/she is able to
1995). If firms resources (Barney, 1996) are to generate competitive advantage, the
manager likewise will have to build and use them effectively (Castanias and Helfat,
1991). In this study, the rarity and non-substitutability of the owner or manager is
relevant as managers will, in most cases, have firm -specific knowledge at the individual
level (Carmeli and Tishler, 2006). The owner or manager is equally imperfectly imitable
(inimitable) due to unique historical conditions, causal ambiguity, and social complexity
As many young and small private SMEs need to address liabilities relating to
handicrafts and horticultural products adopt exporting entry modes that constitute less
internationalization mode for SMEs because of the lack of resources (Dalli, 1995) and
limited market knowledge and inexperience (Root, 1994). In support of the RBV,
Leonidou (1995) states that resource endowment and other factors can pull or push
This augurs well for the Uppsala Internationalization Model (UIM) (Johanson and
discrete stages. Accordingly, Vasilescu, Goagara, and Girboveanu, (2008) note that each
markets. As firms move through these sequential stages the knowledge and information
base expands and the "psychic distance" between themselves and the overseas markets
involved contracts making progression to the next stage that much easier (Vasilescu, et
al., 2008).
In the case of SMEs, the researcher makes the case for further consideration of the
good proxies for underlying traits and cognitive processes (Hambrick and Mason, 1984),
are considered the most important resource that help owners or managers to acquire ,
89
combine and deploy the resources necessary (RBV) for the realization of the SMEs
5. CHAPTER THREE
CHARACTERISTICS
``Good management consists in showing average people how to do the work of superior people
`` John D. Rockefeller
3.1 Introduction
This chapter is divided into two main parts. The first part dwells on information
generally and export information in particular as important and strategic resources that
can be deployed and used aptly to improve the export performance of a firm. Reflecting
upon the Upper Echelons Theory (UET), the second part of the presentation covers
level, age, gender, international experience, and export experience. Important to note
according to the Upper Echelons Theory (UET), the demographics are used just as
rough proxies for managers cognitive base. It is in this vein that the researcher thought
Whereas it has been discussed elsewhere in this thesis, it is important to restate here that
understand the business owners or managers since they represent the main influence on
Information has always been considered a critical component in making effective and
information can be used to ( a) understand better the major actors in the marketplace
where the firm intends to operate (b) monitor changes in a business environment
increasing globalization (c) design reliable marketing plans and strategies by shedding
light on the desirability of the various marketing alternatives (d) offer sound solutions
setting up distribution channels and choosing promotional methods and (e) improve
more accurate assessment of company performance (Churchill , 2001, Tull and Hawkins
Resource-based theorists argue that firms enable themselves to improve their efficiency
and effectiveness by using their resources (Peteraf, 1993; Barney, 1991). Kotler (2003)
contended that in order for firms to be able to plan effectively, they should dedicate
92
understand market needs. Foreign operations are different from domestic ones, and the
difference is very much related to the problem of knowledge and the cost of information
(Carlson, 1975).
Various researchers have come up with diverging and sometimes overlapping views
with regard to what the use of information really entails. Jais (2007) studied the
and managerial performance. The researcher noted difficulty in understanding the term
use is better for understanding the content of the construct. Over a half a century ago
Simon et al., (1954) identified three different forms in which information can be used.
These are score carding, which refers to performance evaluation; attention directing
which is the use of information in which managers focus attention on critical business
issues of their organization; problem solving that connotes the use of information in
assessing various courses of action that an organization ought to take in pursuance of its
objectives.
Pelz (1978) brought to the fore the various forms of information use which stand out as
being those that have been the popularly adopted classifications in contemporary
marketing, exporting and management studies. According to Pelz, whose research focus
was on public policy, the various forms of information use are instrumental, conceptual
93
and symbolic. Pelz (1978) however, pointed out that the demarcation between these
forms of information use is not always sharp. Beyer (1997) explains that instrumental
use involves applying research results in specific, direct ways. Conceptual use involves
using research results for general enlightenment. Symbolic use involves using research
results to legitimate and sustain predetermined positions. Symbolic use may involve
Burchell et al (1980) conducted a case study and operationalized the use of information
The form of information use depends on the degrees of certainty of objectives and
cause- effect. The last two forms are inimical to conceptual and symbolic use of
information respectively.
One of the most elaborate studies on the use of accounting information was conducted
by Ansari and Euske (1987). The researchers took 22 years to longitudinally study the
Analyzing the longitudinal data guided by the institutional theory, the researchers noted
that there is strong evidence of socio-political and institutional pressures shaping the use
In their study, Menon and Varadarajan (1992) found that market research findings are
understanding) and affective (good feeling) modes. Drawing on the previous forms of
uses of information, the researchers established that action oriented use of information
can be broken down into instrumental and symbolic uses, and knowledge enhancing can
also be broken down into product- based and process-based knowledge enhancement
use. Likewise, two subtypes of the affective use are product and process based affective
use of information.
The research question posed in this study will be examined using the improved version
concluded that instrumental and conceptual information uses were two facets of the
information use, Dunn (1980) also concluded that the two dimensions cannot be
dissociated from each other. The taxonomy of information use is adopted owing to its
Additionally, the taxonomy is adopted while the researcher is cognizant of the cultural
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differences between developing and developed countries that may have a moderating
Research on the firm's export performance can be traced back to the early 1960s when
Tookey (1964) made an early attempt at identifying factors associated with export
performance, while two decades later, Porter (1985) propounded and popularized the
important to follow the footsteps of strategy researchers and scholars cited earlier by
asking the question, Why do some SMEs succeed while others fail and what determines
presented together as they are often used interchangeably. It was Porter (1985, xv) who
competitive markets. And this can as well be stated for SMEs operating in international
above average for the industry. The most explicit attempt to define CA has come from
Barney (1991). He states, "a firm is said to have a competitive advantage when it is
Flint (1999) noted that the term competitive advantage might possibly win the prize for
the most overworked and least understood catch- phrase of the field. Not surprisingly,
Katsikeas et al., (2000) assert that export performance is equally one of the most
widely researched but least understood and most contentious areas of international
marketing. Prior to 1985, Penrose (1959) had referred to CA while Ansoff (1965) also
used the term in such a way as to describe what a firm needed to compete effectively.
Two researchers (Spence, 1984; Caves, 1984) had also scantly discussed CA without
defining it. Like Porter, both Spence and Caves held the view that an industry's structure
is the determinant of firms performance within the industry, with the former focusing
on the use of subsidies and government restrictions to give domestic firms protection
a question that has eluded scholars, policy makers and practitioners alike. Simply put,
CA is related to export performance in the sense that it constitutes the ability gained
through attributes and resources to perform at a higher level than others in the same
to outperform current or potential players (Passemard and Calantone, 2000). The above
markets ensures that market leadership and right business strategies have a profound
Barneys (1999) definition does not link competitive advantange (CA) to the
corroborates Coyne's (1986) assertion that competitive advantage may actually reduce
shareholder wealth and hence firm performance. This study takes the position of such
authors as Reed and DeFillippi (1990) or Porter (1985), who argue that superior or
Export information plays a crucial role in expanding activities beyond the domestic
market (Katsikeas, 1994; Leonidou, 1995). Information, ties with information sources
and competences are strategic resources giving competitive advantage (CA) to a firm
(Barney and Zajac, 1994; Porter and Millar, 1991). According to Porter (1980), the
and sustaining their success (Porter, 1985). Despite all this, there is a growing consensus
in the export market literature that underlying the decision to acquire export information
is a process that gives expression to the relative value of the information and its costs
(Douglas and Craig, 2001; Brownlie, 1991). There are three ways which are generally
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information acquisition mode in which governmental bodies and banks are involved.
It is the thesis of this study that export information can only be a source of compettitive
advantage (CA) when a firm is organized to exploit its potential. Effective use of
information is essential in gaining SCA as then the firm can better understand its foreign
markets and in this way create heightened customer value (Diamantopoulos and
Souchon, 1999). It is further argued that while ignorance is a severe threat to successful
exporting activities, the mere acquisition of information does not guarantee high export
SCA is thus to be found increasingly not on the possession of information but in what is
done with the information (Zaltman and Moorman, 1988). For example, entering a
foreign market without prior knowledge about the unfamiliar environment can often
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cause business blunders, with the ultimate result of sales and/or profit losses (Ricks,
1983). Besides, information use helps reduce the uncertainty surrounding the business
environment (Lee et al., 1987). In the light of the unfamiliarity of the foreign
environments which exporting firms face (McAuley, 1993), the use of different forms of
Diamantopoulos, 1997).
As noted earlier, Diamantopoulos and Souchon (1996) revealed that exporters tend to
Separately, instrumental use is knowledge for purposeful action (Rich as cited in Pelz,
1978) and deals with specific decisions or actions that can be clearly designated. With
this type of use, Weiss (1979) argued that a decision drives the application of
decision-making process (Albaek, 1995). This conception of information use has also
been called the problem-solving model (Weiss, 1979). Conceptual use on the other
hand, refers to thinking about an issue without putting information to any specific,
documentable use (Rich as cited in Pelz, 1978). For emphasis, it refers to the indirect
managers knowledge base without serving any one specific decision or action
conceptual use of export information as the rational application of information for the
already made (Feldman and March, 1981), to keep information providers happy (Menon
and Varadarajan, 1992), or is distorted beyond the correct intent in order to support the
decision-makers opinion (Goodman, 1993). Symbolic use is used more for political
reasons than for direct application to any decision-making activity. For example, export
information can be used to justify a decision made previously based on, for example,
instinct or intuition (Hart et al., 1994). Symbolic use of research is linked to the
Knorr (1977) identified three manifestations of symbolic information use. The first
the eyes of his/her subordinates, colleagues and superiors (e.g. Goodman, 1993). This
(OReilly, 1978). The second manifestation of symbolic use is when information is used
to justify a previously made decision (e.g. Feldman and March, 1981); this can occur
because people have a tendency to retain information selectively in accord with their
1987). The third manifestation of symbolic use occurs when information is applied
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always have equal or the same effects on the quality decision making and hence are not
expectations of the goods or services offered by a firm (Heizer and Render, 1999).
Kotler et al., (1999), likewise, have defined quality as being the totality of features and
characteristics of a product or service that have the ability to satisfy stated or implied
customer needs. More specifically, Kahn, Strong and Wang (2002) define quality of
information in terms of fitness for use or the extent to which information successfully
However, any appropriate discussion on the quality of information should start with a
Generally, information has intrigued many scholars and researchers alike on whether it
is to be regarded as a physical good or a service. Detailed and in-depth insights into the
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problem caused Toften and Rustad (2004) to conclude that export information is both a
In an attempt to define and measure the quality of services, Parasuraman et al., (1988)
SERVQUAL have been that (a) the five dimensions the SERVQUAL measures are not
universal and may thus vary from one product to another (Stevens et al., 1995).
Supporting the argument, Lapierre et al., (1999) note that perception of quality is
industry and context-specific. (b) The SERVQUAL instrument focuses only on the
process attributes of quality (Richard and Allaway, 1982), whilst quality evaluation
Toften and Rustad (2004) developed, through an exploratory study, a model that
encompasses both process and outcome attributes. The model is referred to as the
managers. Export managers of twelve Norwegian SMEs with strong export dependency
engaged in exporting seafood were the target interviewees. According to the model, the
(rapid feedback and good communication flow), assurance (credibility and honesty) and
empathy (able and willing to serve individual needs). Six outcome attributes are: form
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quotas and availability) and regulatory framework (customs, market access and
regulations). Only four process attributes of quality were found to be relevant. The
exclusion of tangibles from the model was explained by the researchers that it was not
considered important by the informants because most of them received the information
providers.
Bovee, Srivastava and Mak (2003) proposed that quality is comprised of integrity,
accessibility, interpretability and relevance. Bailey and Person (1983) identify nine more
information quality, there are four attributes (or dimensions) of information quality,
which are: (a) perceived usefulness (b) perceived ease of use (c) perceived accessibility
and (d) attitude of the information users. Fox, Levitin and Redman (1994) note the
constitutes not only information quality attributes but also the meaning of the concept
itself. Researchers have not found information quality attributes which are essentially
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mutually exclusive and collectively exhaustive. Wang, Storey and Firth (1995) have
dimensions.
Adding complexity to the debate on the quality of export information is the fact that
quality can be construed as actual or perceived. Perceived quality, the dimension that
guides this study, is according to Aaker (1991), the customers perception of the overall
quality or superiority of the product or service (export information in this case) with
states that perceived quality refer to the judgment of a consumer about a products
overall excellence or superiority. The author emphasized that perceived quality is (i)
different from objective or actual quality, (ii) a higher level abstraction rather that a
specific attribute of a product, (iii) a global assessment that in some cases resembles
attitude,(iv) a judgment usually made within a consumers evoked set. With that in mind
different.
the view that information is a valuable asset (Owens et al., 1997). The gathering,
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the threats and opportunities in export markets, thus enhancing the firms
found that country-of-origin, sector and size influence both the number of information
sources consulted, and the type of information providers consulted. Voerman and others
found that the relationship between the amount of export market information and export
performance is not straightforward, but needs to be corrected for these three firm
characteristics.
Lybaert (1998) conducted a study on what were the main elements of influence of
information use by SMEs that influences performance by surveying 208 SMEs owners
or managers. The main objective of the study was to gain some insights into the
importance of information use for the success of SMEs. Lybaert (1998) examined some
characteristics of the owner or manager and the firm, which determine the extent of
information use. A model was developed and tested using SEM. Her findings suggest
that there is a positive relationship between the extent of information use and SMEs
performance. The researcher further found that SME owners or managers with (i)
greater strategic awareness, (ii) less eperience in the firm prior to the present position
and (iii) greater desire for growth, use more information. The model used by Lybaert
While Lybaerts (1998) study is commended for its contribution to the study of
information, it is noted for two weaknesses. The study operationalized information use
multidimensional construct. The second limitation of the study, related to the first, is
that the performance of the SMEs was based on objective measures. Objective
have inherent weaknesses. An aspect that has drawn a lot of interest in the studies of
Riddle and Gillespie (2003) examined how the owner-operators of new ventures in the
Turkish clothing export industry utilize their informal and formal social networks to
acquire the information they need to export successfully. A survey of 250 Turkish
clothing firm owners was conducted to explore the networks phenomenon. The findings
indicated that informal social ties are key sources of information for new venture firm
Williams (2003) used exploratory and mail surveys to study export information use in
in-depth interviews and the information obtained was used to develop a survey in which
376 managers were studied. The study provided great insights into the measurement and
application of the export information use scales, more specifically in the context of
SMEs exporters. Williams (2003) appropriately recommends that future research could
usefully investigate the relationship between such export information use and SMEs
performance. This study adopts the suggestion and in addition investigates the
Souchon et al., (1999) found that information utilization is crucial for effective export
evidence exists on the topic of export information use as most of the literature focuses
concerning the effect of culture on different types of export information use, based on
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Hofstedes (1980) cultural dimensions. The results indicate that the effects of cultural
dimensions on export information use differ, depending on both the type of information
Nguyen, Barrett and Fletcher (2006) carried out a study targeting 144 Vietnamese
antecedents were market orientation and learning orientation, and the outcomes were
international orientation and foreign sales intensity. A survey was conducted to test the
model in conjunction with its two competing models by means of a two-step approach
to SEM. The study found that information internalization had both direct and indirect
effects on foreign sales intensity. Further, it was found that market orientation and
Conclusively, studies on export information acquisition, and more importantly its use,
have received heightened attention in the recent past in the developed world. As noted
elsewhere in this thesis, studies on the use of export information in the context of
developing countries are still wanting. This brings about the importance studying the
cultural and economic environments. Besides, most of the studies cited here used
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Countries
information that have been conducted in the context of developing countries. SMEs
as their contextual similarities rest on the fact that they are all operating in developing
countries. The exception is the study by Viviers and Calof (2002) reviewed below.
Viviers and Calof carried out a study whose primary objective was to establish how
small and medium-sized South African firms gather exporting information. The Pretoria
Metropolitan Council (South Africa) sent a survey to their members in 1999 asking
receiving information. The study respondents indicated that the information relating to
potential buyers was regarded as the most important followed by price quotations and
customers and suppliers. Another finding was that acquiring information was difficult as
Jorosi (2006) studied the information needs and information seeking behaviours of 217
frequencies, mean and standard deviation) Jorosi found, among other findings, that
that they spend time seeking customer and competition information. In terms of sources
of information, the researcher noted that SMEs managers use both personal (e.g.
and government publications). SMEs managers were also found to be selecting sources
of information based on accessibility and ease of use. The information was being used
for making important decisions and performing other routine activities. The author
purposely excluded exporting SMEs on the ground that they may introduce bias to the
sample.
and behaviour of SMEs operating in the northern Uganda. The researcher used simple
statistics (frequencies and percentages) to survey 219 SMEs owner-managers. The study
findings were that SMEs owner-managers are lagging behind in using ICTs due to: (1)
Lack of familiarity with changing technologies such as the Internet. (2) Lack of trained
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government devotion to proving relevant information to the business community and (6)
information by business enterprises. Despite the barriers, SMEs managers rely on the
radio (82.7%), personal contacts (72.2%), and newspapers (62%) as their important
sources of the business information they need. Interestingly, the study findings indicated
that SMEs do not consider printed sources, private sector consultants, government
departments, TV stations, banks and other financial institutions, Internet sources and
behaviour of the informal sector entrepreneurs in the same country, using qualitative
in the informal sector. The researchers found that modern and exotic models of
information transfer, based on the media and ICT have less impact on the
entrepreneurs information needs and use because of poverty, illiteracy and poor
recommendations to enhance information access and use: (1) Models for information
behaviour need to be grounded on oral traditions and indigenous knowledge. (2) The
(3) There is a need for information repackaging and (4) the use of appropriate media for
information provision.
Chiware and Dick (2008) studied the business information needs of 308 Small, Micro
and Medium Enterprises (SMMEs) in Namibia. They also studied 60 business service
providers which were established to provide business information and other support
services to the SMMEs sector. Quantitative and qualitative techniques were used in
collecting and analyzing the data. The study revealed three important findings relevant
largely informal with limited use of formal business information services. (2) Utilization
of ICTs, by the SMMEs was equally found to be limited to word processing, book-
keeping packages and spreadsheets. (3) There was limited use of the Internet, as a
source of business information among the SMMEs. In summary, the researcher noted
that, while information is an important resource, the demand by SMMEs for information
A few conclusions can be drawn regarding information- seeking behaviours and sources
in the developing countries of SSA. From the reviewed studies, the inadequacy of
information infrastructure, the lower demand for information due to illiteracy and
poverty and unfamiliarity with various sources of information seem to be the factors
hampering access and use. The other conclusion which is universal (not context
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(Internet, electronic databases, computer networks, Radio, TV) and printed sources are
less popular and are considered less important by entrepreneurs in both developing and
developed countries than the informal sources of information such as personal contacts
and networks . Vaughans (1998) study on business information use in Canada and the
study by Kinnell, Feather and Matthews (1994) on Chinese and British managers
Conventionally, the UET focuses on Top Management Team traits and their
heterogeneity rather than the top managers demographics in understanding the teams
White, 1987; Guthrie and Datta, 1998; Finkelstein and Hambrick, 1996) have however
demonstrated the justification for studying the CEOs influence on firm strategies and
(Fama and Jensen, 1983; Pfeffer, 1981; Herrmann and Datta, 2002, 2005). Focus on the
top manager/CEO is further accentuated in the SMEs where owners or managers are
determiners of the destiny of their firms. It is against this background that the
There is a great chasm separating visionary business strategies and the reality of SMEs
performance that can be associated with strong managers. Owners or managers are
critical because they link day-to-day activities to exporting SMEs goals, provide
context, focus priorities, ensure quality, encourage accountability and inspire results.
Entrialgo (2002) argues that, when faced with the same objective environment, different
Voerman (2003) likewise attests to the special place of owners or managers in SMEs
and their influence on export performance. It is accepted that the SME owner or
manager plays an essential role as the searcher and user of export information. Rothwell
and Zegveld (1982) contend that key decisions in smaller, international companies often
tend to be concentrated in one person, frequently the owner or manager. This could be
reasoned since the owner or manager does not always have subordinates at her/his
In SMEs, as earlier noted, the role of the owner or manager is often decisive, because
evidence Bilkey, (1978) strongly noted that the quality of management probably is the
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under the former typology include language proficiency, age, gender, educational level,
dynamism and flexibility. As noted earlier, this thesis has limited itself to three (3)
According to Covin and Slevin (1989) and Miller (1983), entrepreneurial orientation
(EO) indicates the willingness of firms to display proactive and innovative firm
behaviours and to take calculated risks in an effort to create and exploit environmental
opportunities. The choice of the three EO dimensions is based on their wide application
in a number of studies (e.g. Miller, 1983; Covin and Slevin, 1989; and Wiklund, 1999).
Besides, EO is considered multidimensional (Lumpkin and Dess, 1996) and the three
independently (Kreiser, Marino, and Weaver, 2002). The next section provides a
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Swift (1991) has argued that decision-makers international and linguistic experience is
likely to facilitate speedier access to, and a deeper understanding of, information on
overseas markets. Various research findings (e.g. Cunningham and Spigel, 1971,
Turnbull and Welham, 1985) have also explored the linkage between linguistic ability
and export performance with mixed results. It is argued that linguistic ability enables
verbal and written communication, facilitates more cultural sensitivity and contributes
important for smaller companies in the early stages of internationalization, including the
stage preceding the first foreign sale, wherein the background, including language, of
proficiency is important in that it helps to establish social and business contacts abroad,
it assists in understanding foreign business practices and facilitates planning and control
ability and preparedness to initiate exchanges with those in a foreign market using their
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language, in contrast to the relative ease of going into a foreign market where a familiar
While each ethnic group in Tanzania speaks its own local language, almost all
Tanzanians are also fluent in the national language, Swahili, a coastal Bantu language
strongly influenced by Arabic. Soon after Tanzania independence in 1961, English was
seen as a colonial language, whose importance should be reduced, while the status of
Kiswahili was raised as a national as well as the official language in the country.
Because of that, almost all Tanzanians speak Kiswahili proficiently and are unified by
it. Making Kiswahili the national language of Tanzania deepened a sense of Tanzania's
national consciousness and cultural pride (Mazrui, 1999), facilitated cross ethnic
language of English (Khalid5, 1977). However, Tanzanians fluency and affinity with
Kiswahili has meant that most of them, especially businesspeople, fail to integrate in
global markets easily citing foreign language inhibitions. The situation is corroborated
by Kadeghe (2003), who argues that the support for the proposal to use Kiswahili in
5
Khalid comment was made with reference to Kenya.
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and Mason 1984). Bettman and Park (1980) however suggested that highly
knowledgeable people might have less need to search for more information. This may
contradict what has been proposed by McInnis and Jawornski (1991) that the more
knowledgeable the individual, the easier they would find it to encode information.
minded and have an international outlook with an interest in international affairs and is
able to objectively analyze the benefits and disadvantages of exporting (Garnier, 1982).
Managers with higher levels of education may also be more exhaustive in their
strategic decisions (Hambrick and Mason, 1984; Entrialgo, 2002; Dollinger, 1985).
Both claim that the highest levels of formal education are associated with greater ability
to process information and tolerate ambiguity, respectively. It is thus asserted that the
more educated the manager is, the more the managers skills and ability to use
a tool to prepare its young to take their administrative place in African society. The
African education experience was strictly set up to prepare the young for society in the
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African community and not necessarily for life outside of Africa. Even with the advent
would allow Africans to work as civil servants in administration and clerical work. Only
the lucky few were able to be educated in the western world and would compete with
the best in their field. It is against this background that it is contended that education in
Africa is still less developed than in other parts of the world, and many African
countries have high illiteracy levels. Often times, schools lack many basic teaching and
learning facilities. African universities suffer from overcrowding and staff being lured
away to Western countries in search of greener pastures. This has made a very low base
basic education and trying to cope with the challenges of export business the hard way.
3.10.3 Age
Old age of the top decision-maker in an organization is negatively related to risk- taking
(Wroom and Pahl, 1971). Younger executives, Carlsson and Karlsson (1970) argue,
have consistently been found to be associated with innovativeness and risk taking. Also
Child (1972) found that youthfulness is related to risk propensity. It can be assumed
that younger people tend to be more willing to take risks than older ones, possibly
because older individuals may have diminished physical and mental abilities (Child,
1972) or, as Entrialgo (2002) states, may be less able to generate new ideas and learn
new behaviours.
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Taylor, (1975) likewise concludes that ones ability to possess and process information
is related to age. Other researchers have asserted that age has different effects at
influence export activity during the initial stages, rather than advanced stages of
internationalization, where elders experience and patience can be called into play. So
it has been stated that age is a predictor of export behaviour on the assumption that
younger managers tend to be more internationally minded and cosmopolitan than older
ones (Moon and Lee, 1990; Jaffe, Nebenzahl and Pasternak, 1988). Older executives,
on the other hand, tend to be more conservative and less likely to initiate strategic
change (Stevens, Beyer and Trice, 1978; Wiersema and Bantel, 1992). If youth is
foster firm performance and growth, we might expect younger managers to seek,
acquire and use more export market information than their older counterparts.
It is worth noting that the concept of age is perceived differently in different countries.
According to Hofstede (1996) most SSA societies exhibit high power distance or
respect for power (Kiggundu, 1988). Concuring, Grzeda and Assogbavi (1999) argue
that African cultures are most accurately described as high power distance, with
authority being assigned on the basis of age and experience. In these societies, children,
even adult children, are expected to obey their parents and respect elders
children are encouraged to become independent and status is independent of age but is
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attached to age may have a bearing on how owners or managers from developing
countries search for and use export information from sources within and outside the
country.
influencing export information use and export performance. A number of studies (e.g.
Leonidou et al., 1998; Brooks and Rosson, 1982; Oviatt and McDougall, 1994; Reuber
and Fischer, 1997) have found that international experience involves managers
(1975) as quoted in Muranda (1999), export marketing theory postulates that living
psychic distance.
There are two noted reasons as to the way international experience may have a
learning have a profound impact on how the firm is seen to approach foreign markets.
According to Fischer and Reuber (2001), more experienced owners or managers direct
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the international activities of their firms in a more proactive and strategic manner than
would owners or managers with limited experience. Two years prior to their above-
cited study , both researchers noted that internationally experienced owners or managers
scan more proactively for the information required to export effectively and are more
likely to know what they do not know (Reuber and Fischer, 1999).
internationalization process is the formation of what Bettis and Prahalad (1986) termed
the firms dominant logic- an information funnel through which managers attention
is filtered. According to Bettis and Prahalad, the dominant logic, is the way in
which managers conceptualize the business and make critical resources allocation
decisions. Different authors and researchers have over the years given different names
to the concept. These are Frame of Reference (March and Simon, 1958), Mindsets
(Kedia and Mukherji, 1999), States of Mind (Perlmutter, 1969); and Cognitive Maps
(Axelrod, 1976). It has been acknowledged that these dominant logics of managers are
selecting strategies that will in turn affect the performance of an organization (Hambrick
and Mason, 1984). Lampel and Shamsie, (2000) argue that the dominant logic impacts
How does one develop a dominant logic? Although the need of dominant logic is
recognized by researchers (e.g. Kedia and Mukherji, 1999), the process by which top
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managers evolve it is not clear. However, Kedia and Mukherji came up with a number
of ways that managers may adopt in building up dominant logic(s). The four (4)
suggested ways are foreign travel, establishing teams with diverse backgrounds and
phrases are at times used interchangeably. It has been suggested that information may
However, Cadogan and Paul (1999) state that as export experience increases so will the
firms familiarity with available sources of export information and its knowledge.
Furthermore, since more experienced companies have better knowledge of their foreign
markets (Johanson and Vahlne, 1977) and are better equipped to identify accurate and
relevant information, they are also able to prevent information overload by purifying,
1996).
acquire, disseminate and then, through a transformation process, give meaning to the
3.10.6 Gender
Over a decade ago Rutashobya (1998), noted the paucity of studies focusing on
entrepreneurship in African business. The researcher noted that the studies are few and
far between and have taken gender differences in entrepreneurship for granted. The
situation has since then taken a new direction with many studies being conducted
(2007) note that among export-oriented SMEs an increasing number are women owned.
To achieve a better understanding of export information use and export performance the
role of gender needs to be considered. Broadly, there are two different views regarding
feminism. One of the views, liberal feminism, contends that the disparity in
presented to men versus women (Johnsen and McMahon, 2005). The disparity is
therefore not the result of gender differences per se. Liberal feminism assumes that
women and men will be equal if they are given identical opportunities (Lowe and
Bentson, 1984). The other view, social feminism, posits that men and women are
subject to different socialization processes relating to their sex, and that this will
al., 1993).
Gender- based studies conducted in developed and developing economies have come
up with conflicting results regarding the role of gender in business. For instance, among
the sample of seven women exporters in the developed world, none reported that being
maintaining work/life balance (Reavley, Lituchy and McClelland, 2005). Orser et al.
(2004) also noted that twenty four (24) percent of women exporters and export planners
cited no gender challenges. Likewise, Keyser, de Kruif and Frese (2000) found no
significant differences in success due to age or gender among Zambian small business
owners. To the contrary, Henning and Jardin (1977) found differences between women
and men, stating that women view risk as negative. According to the researchers,
women and men also differ in their perspectives on the consequences of risk taking.
Equally Orser et als (2007) findings lend support to social feminist arguments that the
developing countries and Tanzania in particular, have also revealed the constraining
Namaki (1990) and Rutashobya (1998), women's early socialization has significantly
affected their level of self-confidence, achievement, motivation and even their ability to
take risks. The research model relates gender to entrepreneurial orientation, export
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information use. Whereas most of the studies have followed the environmental
approach (Rutashobya, 1998), this thesis has taken the voluntaristic perspective.
Hambrick and Mason (1984) acknowledge that studying only observable demographics
might not be enough. Priem et al (1999) collaborate this by stating that, in addition to
may be a key to enhancing performance (Brown, 1996; Covin and Slevin, 1991).
conceptual arguments are in favour of such a relationship (Zahra and Covin, 1995).
performance may also be particularly strong among SMEs, and which may have an
influence on the way and the extent to which owners or managers use export
information.
EO mainly represents the response of firms to future or potential market needs and has
many definitions from diverse perspectives. Table 3.2 provides some of the commonly
used definitions of the concept and perspectives and their corresponding authors.
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A common thread running through all the definitions is the inclusion of risk, innovation
and-or proactiveness. It is not surprising then that numerous researchers (e.g., Covin and
Slevin, 1989; Morris and Paul, 1987; and Naman and Slevin, 1993) have used these
Various other scholars and researchers have conceptualized EO with more variables.
operationalization for the construction of the research model is informed by the fact
that the three constructs have shown high levels of reliability and validity in a panoply
of studies (e.g., Barringer and Bluedorn, 1999; Becherer and Maurer, 1997; Naman and
Slevin, 1993). Another reason for its selection was that the dimension was used by
Covin et al (1989) to study small manufacturing firms. This research model is also
risk behaviour of the owner or manager. Firms whose decision-makers are risk-averse
and inward looking are very likely to perceive export obstacles in a more intense and
severe manner than firms with risk-taking, and foreign-oriented managers (Dichtl,
3.11.2 Proactiveness
Prior studies report that the motivation to export measured by proactiveness versus
Exporting researchers have analyzed the level to which firms take initiative and actively
solicit sales as an indicator of proactiveness (June and Collins-Dodd, 2000). The most
successful firms are those that adopt a more proactive approach in terms of firms sales-
Johnston and Czinkota (1982), proactive exporters perform better than reactive firms.
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3.11.3 Innovation
Empirical studies support the existence of the relationship between the innovative
behaviour of SMEs and their performance (Gunasekaran, Forker and Kobu, 2000).
According to Mahemba and Bruijn (2003), innovation practices of SMEs are defined as
the activities that SMEs undertake in order to provide new solutions for their products,
production, marketing and administration to cope with the dynamics of the markets.
innovation means listening to the environment that requires implicit or fairly well
resources of SMEs are embedded in the owner or manager, and then the innovative
attributes of the SMEs in this context will definitely be identified by focusing on the
7. CHAPTER FOUR
Satisfaction does not come with achievement, but with effort. Full effort is full victory
Mahatma Gandhi
4.1 Introduction
Drawing from empirical and theoretical literature, this chapter is aimed at constructing a
research model that would guide the study. The model is primarily constructed to
also illustrates the antecedents of export information uses being: first, the perceived
characteristics and their Entrepreneurial Orientation (EO). Chapter 3 of this thesis laid
foundation for the conceptual and empirical relationships between variables. What are
presented here are but a deeper and specific elucidation of the relationship of variables.
A research model is described as a set of ideas and principles taken from relevant fields
of inquiry and used to structure subsequent studies (Reichel and Ramey, 1987).
model for this study help explain owners or managers uses of export information and
performances. The model is also constructed in recognition of the findings that, todate,
the key motivation in uses of information in the marketing field have not changed as
companies are still bedeviled by the tendency to fail to utilize information that they have
already acquired (Maltz and Kohli, 1996). The model embraces two central theories of
(1) Resource Based View (RBV), which holds that a pool of firm resources that satisfy
performance, and (2) the Upper Echelons Theory (UET) that holds that organizational
outcomes, such as strategies and performance, are expected to reflect the characteristics
of their managers.
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The Resource Based View (RBV) has been reviewed to identify resources that when put
to good use can ultimately lead to improved export performance of the exporting SMEs.
Three categories of resources are identified and examined and used in formulation of
hypotheses for this study. These resources are: (i) Export information (ii) owners or
competitive advantage and hence subsequent enterprise performance if they are used to
do something (Ray, Barney, Muhanna, 2004) as Porter (1991) has equally noted that
resources are not valuable in and of themselves, but they are valuable because they
orientations (EO) typify intangible resources that are socially complex and embedded in
human capital. It is along these lines that the Upper Echelons Theory (UET) was also
adopted to guide this formulation of the research model, hypotheses and the study in
general. Later sections draws on various literature suggesting that owners or managers
experience, and education which are likely to be valuable, rare and inimitable resources.
Miesenbock (1988) and Crick and Chaundry (1997) have argued that any analysis of
export oriented decision making processes is focused on the individual decision maker
While various scholars (e.g. Diamantoplous and Souchon, 1996) have identified export
study by Diamantoplous and Souchon (1996), have concluded that the first two uses are
The focus is on both the extent to which owners or managers uses the acquired export
information to make and implement decisions as they pursue foreign markets business
good quality is used properly and otherwise it is not used at all or used symbolically
(Weiss and Bucuvalas, 1980). In a nutshell, the causal research model on the use of
determined by the level of perceived quality of the export information as well as the
theoretical literature review resulted into the research model which is visually presented
in Figure 4.
All variables that inform the constructions of research model are as presented and
started with the dependent variable (export performance) and subsequently followed by
characteristics.
Export Information
Perceived Quality of Export
Use
Markets
Export
Information
(Reliability, Responsiveness, Empathy,
Assurance)
Symbolic Use of
Export Information
Export
Performance
Managerial Demographic
Characteristics
(Age, Gender, Education, Export
Domestic Market
Export Information
Owner or manager
Entrepreneurial Orientation
(Risk taking, Innovativeness,
Proactivesness)
Model
Relationships of variables are built on the premise that the exporting SMEs are from a
Europe, and the rest of Africa. The dotted line with an arrow pointing upward represents
the flow of handicrafts and horticultural product exports, while the other dotted line
with an arrow pointing downward represents the flow of export information (See Figure
4). Export information from the export markets does not necessarily flow directly to
SMEs, but rather to other relevant organizations and government organs charged with
supporting the growth and development of SMEs in the country. The essence of
distinguishing Tanzania from its export markets is grounded on the premise that the
theories that guided this study were mostly developed in western countries.
Given the promising foundations of the early studies discussed in the foregoing
literature review, the section below outlines the relationships of various variables and
hypotheses. The presentation is divided into four (4) main sections. The first section
export information use (eiu). The second section relates to the perceived quality of
export information (PQEI) with the use of export information. The third section
information (eiu) and export performance (ep). The fourth section that bears the weight
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of the study presents the relationship between both uses of export information (i.e.
Use
Christy (1975), for owner- manager who operates as the key management decision
successfully with burgeoning information are dependent upon his/her ability to utilize
information with a view to optimization of his business. Building upon the Upper
Echelons Theory (UET), it is the thesis of this study that SMEs owners or managers
orientations (EO) are proposed to be related to different uses of export information. The
Upper Echelons Theory (UET) suggests that organizational outcomes and strategic
further elaboration of the importance of the managers, Miles and Snow (1978) contend
that a strategy to be successful should fit with the psychological characteristics and
argued earlier, various demographic characteristics and experiences of the owners and
managers that are proposed to have a bearing on the extent and type of uses of export
137
information are foreign language proficiency, gender, age, export and international
proficiency is considered not only as the tool for communication but more importantly is
distance (Williams and Chaston, 2004). Despite the importance of language proficiency
(2006) on the UK SMEs, found little direct relationship between the possession and use
lingua franca can inhibit their export information acquisition and processing, and
manner not directly linked to the problem at hand. The relationship between
information overload and linguistic ability has been found to exist in situations where
making. Dolinsky and Feinberg (1986) found that second language processing leads to
information overload and sub-optimal decisions more easily than first language
processing.
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Gender: Kempf, Laczniak and Smith (2006) states that there is ample evidence
(1989). The theory states that females tend to engage in detailed, elaborative, and
that is readily available. It thus follows from the above that, males are classified as
Levy, 1989). Complementing the Selectivity Model while also acknowledging gender
females are relationship-oriented, communal and are more likely to consider all aspects
of the information they receive. Males, it is further argued, are more likely to engage in
those key attributes that have the greatest personal impact while women are interested in
the global impact of information processing. It is the contention of this thesis that item-
does not however predict gender superiority over one another in terms of information
processing but it suggests only that males and females use different information
processing ability in that it contributes to both the manner in which decisions are
reached (Kirchner, 1958) and to the quality of decisions (Weir, 1964; Birren, 1964). Age
changes that accompany aging (Phillips and Sternthal, 1977) and not necessarily to the
older adults relative inability to ignore irrelevant information and not necessarily on
their inability to process pertinent information. Birren (1974) further interprets the
information processing deficit of the older individual under conditions of rapid stimulus
pacing as evidence for an age-related decline in the speed with which the central
nervous system processes information. Much as studies on age of the entrepreneur and
study that older owners managers will be associated more with instrumental-
can be gained to this pertinent question. While age may be indicative of owners or
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managers international or export experiences, it is not necessarily the case as one may
start exporting at an advanced age. However, it is invariably noted that the experience
actual exporting can compensate for elderly individuals diminished speed in processing
information. Phillips and Sternthal (1977) noted that experience is used as a basis for
abstracting the stimulus input (read export information). It is thus assumed that
Sternthal, 1977). Some researchers have thus found that experience acquired with age
enables older individuals to process information with increased efficiency (Birren, 1969;
bits can become chunks , if you like so that while one grows
older , one may process fewer units of information per unit of time , but
the chunks become larger , and thereby effectiveness may stay the
The preceding elaboration leads us to conclude that, younger individuals are more likely
to process export information more efficiently than older individuals in situations where
both the elderly and the younger ones do not have prior export or international
owners or managers would, on the other hand, be inclined to using export information
more symbolically.
relate not only to the expertise and experience of the decision-maker but also to his/her
educational level (Bruggen, Smidts and Wierenga, 2001). Educated managers are more
inclined to have better managerial knowledge and capabilities and perceive exporting to
be less risky (Moini, 1995). Cooper et al (1995) note that higher levels of education
orient managers to be more aware of information needs and to be more cognizant of the
Garnier (1982) had also argued that better educated decision makers are more open
minded and interested in foreign affairs and inclined to evaluate the benefits and
demerits of exporting from an objective point of view. The foregoing discussion affords
us the opportunity to conclude that high education level is positively associated with
Given the promising foundations of the preceding discussions, the section below
demographics and both international and export experiences with both instrumental--
2005). It is however not the absolute quality of export information that guides decision
makers owners or managers as they normally tend to rely on their own accumulated
experiences and personal sources that are rich, informal and accessible instead of formal
sources such as academic journals, industry and government reports (DeMartin and
Whitbeck, 1987). While the latter can relatively be considered to be of higher quality,
looked through the owners or managers perception, the former sources provides more
quality and influences. It is argued in this study that owners or managers positive
perception of the quality of export information informs the way and the extent to which
acquired export information is used. It is on this basis that it is argued that the perceived
export information will vary across the two- uses dimension. Maltz, Souder and Kumar
(2001) state that information that is perceived to be of high quality will be used in a
hypothesize thus:
Performance
drawing upon Hambrick and Masons (1984) UET. This study examines owners or
Keh, Nguyen and Ng (2006) have noted that firms with high levels of EO tend to
constantly scan and monitor their operating environment and thus EO could be a
attempts to shape environmental conditions (Frese, Kring, Soose and Zempel, 1996).
measures (Covin and Slevin, 1989). Personal initiative in particular has been shown to
Uganda (Koop et al., 2000). A proactive firm seizes new opportunities through (a)
scanning the environment to seek opportunities (Venkatraman, 1989) and (b) taking
preemptive action in response to the perceived opportunity (Lumpkin and Dess, 1996).
According to Miller and Friesen, (1983) proactive firms do not react to the environment
but rather introduce new products, technologies, administrative techniques to shape their
environment.
An innovation orientation implies that one has a positive mindset towards new ideas
Frese, Friedrich and Unger, 2005). New ideas are not necessarily absolute novelties, but
could be new to the relevant group, market, or environment (West and Farr, 1990). The
the basic characteristics of successful entrepreneurial firm activity (Covin and Slevin,
1991). Hurley and Hult (1998) define innovativeness as the notion of openness to new
the owner or manager to learn about and adopt innovations. Therefore, the managers
(1986) concludes that if a firm has pro-innovation bias, information is more likely to be
Engaging in exporting involves venturing into new areas with a lot of uncertainties and
risks. Schumpeter (1934) noted that venturing into new fields involves errors and a
certain degree of risk. Besides, risk taking is assumed to be related to success (Lumpkin
and Dess, 1996). While taking calculated risks reduces the probability of failure, a
risks are inevitable. Frese (2000), in a carefully designed series of studies of five
African countries (Tanzania, Uganda, Zambia, Zimbabwe and (the Republic of South
Africa), found that EO among other factors, differentiates successful from less
successful enterprises- and it is the thesis of this study that success is predetermined by
the appropriate use of export information. On this note, the framework links the three
export information.
markets, and satisfy customer needs (Hart and Tzokas, 1999). The epicenter of the study
focused on the way and extent to which SMEs owners or managers in Tanzania use
acquired export information, whatever its level of quality, has little effect on export
performance unless it is put to good use in decision-making processes. Hart and Tzokas
(1999) report a significant relationship between the use of information and export
performance for SMEs, where the information usage patterns were shown to be strongly
related to higher export profits. The two dimensional view of export information uses
adopted for this study consist of instrumental conceptual and symbolic uses.
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Toften (2005), refers to use of export information for a particular, general or future
decision making purposes. Various studies (e.g. Hart and Tzokas, 1999), have shown
significant relationships between export market information use and SMEs export
performance. Such findings are not isolated and in many ways provide exporters with
great impetus to not only search and assimilate export information but also to
unequivocally use them for the prosperity of their enterprises. Early information use
Zaltman, 1982; 1987), which refers to using acquired information to problem at hand
directly. Today it is acknowledged that there are many ways and forms of information
uses. Not all uses of information are good and have the same relationship with
(2005) findings that the strong relationship between uses of export information and
associated with ignoring it, distorting research findings, oversimplifying and in general
using information in ways inconsistent with its intended purpose (Menon and
Varadarajan, 1992). Menon and Varadarajan note that symbolic use of information is
148
intended to make decision makers feel good about the decision already made and thus
essentially affirming them whereas Souchon et al (2004) argue that the use entails the
more political ways in which information can be applied. Distorted information is such
1981) and it is therefore reasonable to believe that such use of information will have
negative effect on firm performance (Souchon and Diamantoplous, 1996). The symbolic
Two major problems potentially limit the potency of the research model. First is the fact
that from its inception, the thesis focused on the internal factors as the major
researcher does not, by any stretch of the imagination, pretend to undermine the
unstable SSA business environment. Researchers using the research model may deem it
capturing the influence. Olomi (2001) justifies the focus on the internal factors based on
149
background that this study considered only those variables with strong theoretical and
empirical justification.
The second shortcoming relates to the different contexts of developed and developing
countries such as Tanzania. All the theories used in the construction of the model, as has
been noted elsewhere, were derived from studies conducted in developed or transitional
economies. In any case, while this researcher argues that there are differences between
developed and developing countries, he does not ever claim that all developing
Despite the shortcomings, the research model, other than scaffolding subsequent
research, helped in keeping the research on track by providing clear links from the
literature to the research goals and questions and informing the research design. The
research model also provided reference points for discussion of the literature,
methodology and analysis of data and thus contributing to the trustfulness of the study
(Goetz and LeCompte, 1984). Given the shortcomings, it is considered important that
9. CHAPTER FIVE
5.1 Introduction
The purpose of this chapter is to present the positivistic research philosophy, deductive
research approach and the survey research strategy used in this study. Motivation for
choices and their justifications are made to reflect and address adequately the research
Developments in the strategic management field have over time shifted the emphasis
from qualitative and inductive research to positivistic and deductive research thus
elevating the discipline to more rigorous scientific analysis (Hoskisson et al., 1999). It
is on that basis that this researcher used positivism which, according to Saunders et al
behaviour in order to discover and confirm a set of probabilistic causal laws that could
conducting this study, the researcher sought to quantitatively capture and measure
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export information use, the quality of export information, export performance and the
managers characteristics.
According to Henwood and Pidgeon (1993), the deductive approach logically follows
from positivistic philosophy and emphasizes universal laws of cause and effect on an
established theory and seeks to confirm whether the theory applies to specific instances
falsification of the hypothesis through empirical tests (Kirkeby, 1990). It is against this
background that the researcher proposes a number of causal relationships in the building
was used to estimate the relationship between an outcome of interest and population
variables as they exist at one particular time. Mbura (2004) asserts that the cross -
sectional approach is suited for deductive studies as it allow greater flexibility in terms
of money and time, as well as avoiding the hardships of hunting for respondents more
than once to produce a high reponse rate as opposed to the longitudinal approach.
Choice of a research strategy is determined by, among other things, the type of research
questions, the required degree of control over behavioural events and whether focus is
Survey research was thus chosen to guide this study, as it provides a systematic and
structured method for acquiring information on the same topic from a large group of
people in a relatively short amount of time (Gerhardt, 2004). Survey research is one of
the commonest research strategies used in business studies and it offers the researcher
The overall approach to the research process, from the theoretical underpinnings to the
collection and analysis of the data is presented here. Research design was used to
structure the research and to show how all of the major parts of the research project
work together to address the central research objectives and questions. This section thus
addresses such issues as study areas, sampling plan, sampling procedures, sample size,
data collection methods and instruments, sources of data, validity and reliability and
data analysis.
and handicraft products from three regions in Tanzania mainland and one from
Tanzania Island (Zanzibar). The regions identified for the study were Zanzibar, Dar-es-
Salaam, Arusha, and Kilimanjaro. Zanzibar comprises the islands of Unguja and Pemba
off the east coast of Tanzania mainland. Zanzibars economy is based primarily on the
production of cloves, the principal foreign exchange earner. Kilimanjaro region located
153
on the north of the country is endowed with natural beauty and has a temperate climate,
Arusha is a region located in the north of Tanzania and has Kilimanjaro International
Airport that provides easy access to the region from abroad, as several international
airlines operate there and have regular flights to the airport. There are 29 airstrips across
Formerly referred to as Mzizima, Dar-es-Salaam is the largest city in the country and
the economic centre and former capital of Tanzania. Like Arusha, the region also has an
international airport, the Mwalimu Julius Nyerere International Airport. The four
regions are selected based on their having active and vibrant commercial horticultural
A sample was used in undertaking this study. By using a sample, it was expected that
the study would be less costly and more manageable. Other key reasons for being
concerned with sampling are that of validity- the extent to which the interpretation of
the results of the study follows from the study itself and the extent to which the results
may be generalized to other situations with other people (Shavelson, 1988). Considering
the complexity and difficulty in establishing the true population of the SMEs engaged in
so valid generalizations could be made about the population. As Malhotra (1996) states,
the basic principle of sampling is that, by selecting some of the elements of the
A comprehensive sampling frame was generated by combining data from the Tanzania
Industry and Trade and Marketing (MITM) and National Bureau of Statistics Tanzania
(NBS). These databases provided information regarding firms and the contact details of
business the SMEs exporters were engaged in. The study focused on the SMEs that
have been exporting horticultural products and handicrafts for at least one year.
horticultural products was initially established from the various mentioned sources.
Upon screening by deleting those which failed to meet the established criteria, 890
SMEs were identified, thus forming the final more refined sampling frame. The choice
criteria were regularity of export, a more than one year exporting experience and having
less or equal to 100 employees. SMEs meeting the criteria for each region were as
Zanzibar (81). Proportionate sampling and then simple random sampling within each of
the four regions were conducted. As the target population was not large, a simple
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random sampling was considered appropriate (Hair, et al., 2003). The number of owners
or managers that were recruited from each region was approximately equal to their
The issue of sample size in research has for quite a long time caused a lot of debate and
has thus remained contentious. Hussey and Hussey (1997), for instance, contend that
there is no ideal or prescribed sample size as it all depends on the discipline, the level of
confidence expected in the answers and the anticipated response rate. However, Lewis
(2000) contends that an adequate sample size helps ensure that the study yields reliable
information.
One rule -of- thumb found in the multiple regression analysis literature is that sample
size for a study should be at least 50, and more than 8 times the number of variables in
thus the minimum sample size would be (N) greater or equal to 50+8(12) = 146.
Schumaker and Lomax (2004) state that reasonable sample size for SEM is at least 100
cases. While no consensus has been reached on the appropriate sample size, Ding et al
(1995) also specify 100 to 150 cases as adequate. It is worth noting the various
researchers who have adopted SEM as their data analysis technique and have used
156
varying sizes of samples ranging from 99 responses upwards. For example, Mavondo
and Farrell (2003) used a sample size of 176 in a study conducted in Zimbabwe on
cultural orientation. Pesamaa, Hair and Haahti (2008) used 99 SMEs to study inter-
Ouwerkerk and Bakker (1991) studied 163 firms in Netherlands and using LISREL and
found that export success did not vary with the size of the company but with the type of
industry.
Allowing for non-response and errors in responses, 300 questionnaires were prepared
from the four regions of Tanzania. One hundred and eighty (180) questionnaires were
collected from the field. One hundred and fifty eight (158) of the 180 questionnaires
collected were found to be substantially complete and usable. The twenty two (22)
questionnaires discarded were from firms which are either not exporting, have over a
response rate of 45.1%. The total sample size of 158 exceeded the required 100-150
sample size (Hair et al., 1998). Moreover, Aina (2002) notes that if the population is less
than 1000, then a 30 percent sampling ratio will be adequate. The return rate of rate of
45.1% for this study can thus be considered an adequate representation of the population
For the purpose of this study, owners or managers of SMEs exporting handcrafts and
the handicraft firms, besides their export orientation, fall within the category of SMEs
For the purpose of this study, primary data were collected through survey questionnaires
administered to the owners or managers of the sampled SMEs. Various documents from
government departments, university libraries, public and private institutions, and the
sampled SMEs were used as sources of secondary data to substantiate and enrich the
For this study, considering the various validations of the measurements used, budgetary
questionnaire, first written in English was translated into Kiswahili6 and subsequently
the Kiswahili version was translated back to English using a different translator to
6
Kiswahili is a Tanzania national language spoken by the majority of the population.
158
subject to validation using Scale- Content Validity Index (S- CVI)7. Back translation is
also advocated to avoid ending up with a pseudoetic questionnaire that occurs when
translators are not aware of idiomatic expressions and colloquialisms in one of the
languages. The two versions of the English questionnaire were compared. A few
semantic differences were noted and rectified. The refined questionnaire that was
deemed to be the proper and correct translation of the Swahili version was the one
Four research assistants who are business graduates of the then Faculty of Commerce
collection. The research assistants had a two -day briefing on the study, research ethical
considerations and the management of the whole process of data collection. Before
7
Computation of Content Validity Index (CVI) is discussed under section 5.14
159
launching the main data collection exercise, the research assistants were involved in
Two research assistants were selected for the rehearsal in which one acted as an
interviewer, and the other played the role of a respondent. During the exercise wording
problems, ambiguity and unclear questions were noted and corrected. This rehearsal
was expected to bring up areas for improvements that could be made to the
questionnaire before the pilot study. When these improvements had been made after the
rehearsal, the next stage was to carry out a pilot test in Dar-es-Salaam using real
respondents. The research assistants were assigned to carry out two interviews for a
day. Thereafter, the researcher took a week to carry out questionnaire corrections and
proof reading. The research assistants were then respectively assigned for the main
Ways that the various study variables were operationalized in this study are described in
Export performance of the surveyed SMEs constituted the dependent variable for the
most resistant variables to conceptualize, define and apply (Bonoma and Clark, 1988).
researchers to compare and contrast research findings from different settings. Attempts
to measure export performance have led to researchers coming up with many subjective
and objective measures of the construct. Zou and Stan (1998) support that another
narrow view of export performance, such as export sales, while others have used non-
Haber and Reichel (2005) state two broad approaches to measuring performance. One
is the goal approach and the other is the systems resource approach. The goal approach,
which is adopted in this study, measures the extent to which organizational goals have
been attained, and reflects the point of view of the owner or manager (Pfeffer and
Salancik, 1978). Haber and Reichel (2005) argue that the approach is most relevant to
(b) Short vs. Long-term performance measures. Objective measures include sales,
earnings and net worth, whilst subjective measures include perceived growth in market
share, perceived change in cash flow and growth in sales (Chandler and Hanks, 1993).
On the other hand, the systems resource approach assesses the ability of the
Seashore, 1967).
Objective financial measures for SMEs may seem to be the simplest way to assess
performance, but these data are often confidential and difficult to obtain (Sapienza and
Grimm, 1997). It is widely acknowledged that small firms are known for their inability
and unwillingness to provide the desired financial information (Haber and Reichel,
2005). Besides, assessing performance solely based on financial measures neglects other
such as market share and number of employees (Bouchikhi, 1993). Covin and Slevin
(1989), for instance, argue that subjective and non- financial measures are more flexible
and useful measures than objectivefinancial measures. Although the precision of these
have both content - validity and reliability (Chandler and Hanks, 1993).
162
been well thought out in various studies. Barney (1997), for example, noted that
financial measures reflect the business situation in the short- term though they can serve
to accumulate resources for future use and subsequent growth in market share. Based on
conjunction with other non-financial measures that indicate both performance in the
short run and the ability of the business to thrive in the long- run (Haber and Reichel,
2005).
Notwithstanding the arguments for and against the use of objective or subjective
performance measures, this study adopted subjective measures. The reasons for this are
that, in developing countries, SMEs owners or managers are not willing to disclose
financial measures because of the perceived unfair follow up by both central and local
not usually keep proper records that would allow performance evaluation using
objective measures. Besides, several studies (e.g. Venkatraman and Ramanujam, 1987;
Dawes, 1999) that have adopted both types of measures have reported a strong
association between subjective and objective measures of performance (Pont and Shaw,
2003). Dawes (1999) further argues that subjective measures are even more appropriate
managers can take the relative performance of other industries into account when
8In 2001, Tanzania had a taxation system that was said to be complex, unpredictable and unfair (Olomi,
2001).
163
providing responses. Table 5.1 illustrates the strength of association between subjective
and objective measures of performance. All five of these studies found significant
for the Hart and Banbury (1994) study, the strength of associations rose to r=0.99 when
Subjective export performance measures for this current study included satisfaction
performance objectives was measured on a 5-point Likert scale (Cavusgil and Zou,
1994; Evangelista 1994). Likewise, a 5-point scale was used to capture export
assessment of export success was measured by asking respondents to rate their firms
overall export performance on a 5-point scale (Evangelista, 1994; Jaworski and Kohli,
1993).
164
Export information use is the main independent variable. As explained earlier, two types
of export information use used have been in the construction and validation of the
research model. These categories are the instrumental-conceptual and symbolic use of
export information. Besides, the type and extent of export information use is
The owners or managers characteristics are also organized into two categories. The
first category consists of demographic characteristics. Mead and Liedholm (1998) note
that various personal demographic variables appear to differentiate successful from less
over time, especially when studied in isolation. It is against this backdrop that this
study adopts the second category of managers psychological characteristics that relate
to how owners or managers make decisions. More specifically, the items under this
category are captured using the EO characteristics innovation, risk taking and
proactiveness.
Export information use was measured using a modified Diamantopoulos and Souchon
(1999) scale that captures the Instrumental-conceptual and symbolic use of export
165
information on a five-point Likert scale. The uses were measured using a five point
The quality of export information was measured using items adopted and modified from
the SERVQUAL scale consisting of four dimensions instead of five. The dimensions
are reliability, responsiveness, assurance and empathy. The SERVQUAL scale was
adopted to assess the quality of export information on three grounds: (1) the scale has
Kettinger and Lee (1994). (2) Jiang, Klein and Crampton (2000) and Kettinger and Lee
(1997) noted that the revised SERVQUAL, after deleting the tangibles dimension, has a
high level of reliability and validity. The dimensions were measured using a 4- item
five- point Likert scale (5= Strongly Agree to 1= Strongly Disagree). The respondents
were asked to express their perceptions with regard to the quality of export information
they acquire and use in the decision making process. It has been noted by ONeill et al.,
(2003) that the perceptions only measure of quality has marginally higher validity than
The following characteristics were measured; education, age, gender, foreign language
international experience, respondents were asked whether they have ever lived or
166
studied abroad for a period of at least six months. In addition, they were asked about the
frequency of their foreign travels during the period of three years prior to the time of the
survey. With regard to foreign language skills, respondents were asked to state whether
they can communicate in any foreign language. Besides, they were also asked to
mention the languages in which they could communicate fairly and fluently. Export
experience of the respondents was captured by asking them the length of time that they
have been involved in export activities. Youthfulness and gender were measured by
asking respondents directly. Age was captured in a range of years from 20-29, 30-39,
40-49, 50-59, and 60 plus years while gender was captured with a dichotomy of
The instrument used to measure EO was a modified version of the one used by Covin
taking) were measured using a 4-item five- point Likert scale (innovativeness), 5- item
five- point Likert scale (risk taking) and 2- item five- point Likert scale (proactiveness).
construct. However, other researchers (e.g. Lumpkin and Dess, 1996; Kreiser et al.,
2002) claimed that the dimensions of EO can vary independently of each other. Further,
Zahra and Neubaum (1998) suggest that the sub-dimensions of EO would interact
adopted the latter view of acknowledging the independent contributions of these sub-
Warwick and Linninger (1975) mention two basic goals of questionnaire design as
being to obtain information relevant to the purpose of the study and to collect
information with maximal validity. Scales validity for these studies was assessed using
Scale- Content Validity Index (S-CVI). The Index was used to assess the relevancy of
the questions used to measure the study variables of EO, instrumental conceptual use
information and export performance. Polit, Beck and Owen (2007) note that S-CVI is
Whereas the literature on scale validation is diverse with respect to the number of
experts needed for validation, this researcher used four experts. Lynn (1986)
recommended a minimum of three. The researcher used the four point scale of relevant,
quite relevant, somewhat relevant and not relevant and collected responses from four
experts (See appendix 3). A proportion of relevant and quite relevant was computed to
get the S-CVIs from the four experts which were computed as 0.84, 0.92, 1.00 and
0.92. Averaging the 26 items on the various export variables used in the study yielded a
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(1999).
To test the reliability of the measurement scales and scale items, the researcher
undertook the following procedures (1) the questionnaire was subjected to a pretest by
from the pretesting exercise was used in adjusting the questionnaire. The final refined
and modified questionnaire was then developed for fully- fledged data collection. (3)
The reliability of the composite variables was then tested with the aid of the Cronbach
alpha which measured the internal consistency of the items. Cronbach alpha coefficients
vary from 0 to 1.0 with an alpha coefficient of 0.7 or above being judged reliable
(Nunnaly, 1978). Hair et al (1998) note that the Cronbach alpha remains one of the
items which were primarily drawn from the literature. All the variables were measured
using multiple items and respondents were asked to indicate responses on a 5- point
Likert type scale that ranged from 1-Strongly Disagree 2- Disagree 3-Undecided
4 Agree to 5-Strongly agree. The measures have reported high reliability with
Cronbach alpha ranging between 0.67 and 0.8 inclusive, indicating high internal
consistency and reliability (see table 5.2). The only exception was export performance
Data collected through the survey questionnaire were edited, coded and entered into the
SPSS computer program for data analysis. Initial descriptive statistical analysis was
carried out to obtain frequencies, means, and percentages. The second level of analysis
was a SEM that tested export performance in relation to export information uses,
combines the measurement model (confirmatory factor analysis) and the structural
model (path analysis) (Garver and Mentzer, 1999). The researcher decided to use SEM
in this study for a number of reasons as stipulated by Soonhong and Mentzer (2004): (1)
and (3) SEM is able to assess the relationships comprehensively and provides a
methods and the nature of the thesis problem all afford the researcher an opportunity to
opt for the choices made as shown in table 5.3. The choices are also informed by the
tradition in the export marketing research. Grounded on this tradition it is then argued
that, unless a suitable case can be made for a new methodological approach, then the
peeling the onion layers draws us to the summary of the choices made. The presence
6.1 Introduction
considered important to prepare the data collected from the field. The main objective of
this section is to therefore provide a brief account of how data collected from the field
were coded, entered, and cleaned. The chapter also addresses the issue of the way
missing data and outliers were treated. The data preparation process is so important that
Hair, Anderson, Tatham and Black (1998) refer to the time and energy spent on data
After collecting data from the field, all items in the questionnaire were coded to
facilitate entry into SPSS. Data were then cleaned for entry errors and the removal of
invalid responses. Non-response analysis was also carried out and it was found to be
Researchers are almost always faced with the problem of missing data. Before testing
study models and checking for model fit, the researcher checked for missing data in the
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dataset using the SPSS statistical data analysis package. Following suggestions by Hair
et al (1998), the researcher sought to answer the following questions with regard to
missing data. (1) Are the missing data scattered randomly throughout the observations
or are distinct patterns identifiable? (2) How prevalent are the missing data? Important
to note is that not dealing with missing data may have a great and detrimental impact on
the analysis through both hidden bias and sample size (Hair et al., 1998). There are
many techniques for remedying missing data abnormalities. Popular among them are
Considering the limited sample size of 158, Listwise Deletion was at first considered
but a decision was made not to use it as it led to further sample reduction to an
In this study the researcher instead used Series Mean Substitution, which, according to
Afifi and Elashoff (1966) is a technique in which Variable Means are used to replace
values in SEM and it is a conservative technique in that it makes the data less reactive.
distinctly different from the other observations (Hair et al., 1998). The presence of
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outliers is considered an abnormal situation and it is left to the researcher to decide what
outliers are based on any one of the following conditions: (a) errors in data entry and
characteristics.
For the purpose of managing the outliers, the researcher adopted a strategy of replacing
outliers with either a MIN or a MAX. In adopting this strategy, any outlier less than the
minimum value (i.e. 1, though none was found in this study) was replaced with the
minimum value and any outlier greater than the maximum value (i.e. 5) was replaced
with the maximum value. In other cases where a double equal integer was identified
(e.g. 22, 33, 44, 55), the researcher logically replaced the values with the corresponding
2, 3, 4 or 5. Other researchers, considering the nature of the study and the research
instrument used, have tended to treat outliers as missing values. Attempts were made to
manage outliers, cognizant of the assertion that there is still no standard strategy for
locating, and more importantly for dealing with outliers (Hayduk, 1996).
This section presents a profile, characteristics and brief description of the owners or
managers and a sample of the surveyed horticultural and handicrafts SMEs in Tanzania.
The importance of the presentation lies in the fact that these characteristics will also
174
pertaining to SMEs are their size, age, and regional distribution and export markets.
Frequencies and valid percentages are used in reporting and providing descriptive
statistics for the owners or managers and SMEs characteristics. The first part of the
6.5.1 Age
The descriptive analysis findings show that the majority (44.7%) of owners or managers
surveyed are aged between 30 and 39. In fact, in integrating two age groups (30-39 and
40-49), respondents aged between 30 and 49 constitute nearly 80% of all those
surveyed. This combined age group constitutes the main productive and reproductive
age group of the population. Likewise, the results reveal delayed entry into exporting,
with just 8.6% of all owners or managers aged between 20 and 29. Respondents aged
6.5.2 Gender
countries (Brooksbank, 2000). Consistent with this, the study results show that 62.4% of
the surveyed owners or managers were males and only 37.6% were females. This is not
surprising given that the dominance of male entrepreneurs in business and other spheres
of human economic life are reported by other studies in Tanzania. Rustashobya (2000),
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Olomi (2001), Nchimbi (2003) and Mbura (2007) carried out studies in Tanzania and all
acknowledged that Tanzanian women's entry into business is constrained by, among
other factors, lack of access to capital, especially institutional capital, raw materials
problems, lack of skills and appropriate technology, lack of markets and low
profitability (Malambugi, 1991; Mbise, 1992; Mbughuni, 1994). The findings also
reveal that womens entry barriers are even higher when it comes to exporting, as
women are known to be hampered by their dual roles of reproduction and production.
The cultural environment of Tanzania makes it even more difficult for women to start
and run enterprises due to the expectations and demands of their traditional reproductive
roles (UDEC, 2002). A policy message that is relevant in the situation is to continue to
pay greater attention to and address traditional and cultural practices that discriminate
against women by denying them schooling and business opportunities. The scenario
changes when it comes to most developed economies. The other reason that would
The majority (86.1%) of the surveyed SMEs owners or managers have either primary or
secondary education only. About 10.6% of the owners or managers have obtained either
ordinary or advanced diplomas. This reveals that business, including exporting business,
176
important also to note that 13.9% had post secondary education. This percentage is
relatively large compared with Nchimbis (2003) study which revealed that those with
post- secondary education were below 5%. This goes to show that the exporting
business has a relatively higher education entry bar. An interesting finding in respect of
education was that none of the surveyed owners or managers had acquired a Masters
International experience was captured in this study by asking respondents about the
frequency of their international travels over the last one year. Of the 158 respondents
who responded to the question, 23.4% noted that they have no such international
experience while 59.5% indicated that they have travelled abroad frequently. Owners or
managers who claimed to have travelled abroad between once and five times a year
were 17.0%. Those with less or no international travel argued that they use indirect
Of the 141 owners or managers who responded to the question regarding exporting
experience, the majority (47.5%) revealed that they have had experience of between 3
and 5 years. Over 17.7 % had exporting experience of between 6 and 8 years, 9.2% had
exporting experience of between 9 and 11 years, while only 8.5 % indicated exporting
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experience of over twelve years. The results suggest that 91.5% of the owners or
managers started exporting in the last 11 or so years. This goes to explain that it is only
recently that exporting has been given the position it deserves in the countrys
development agenda.
One hundred and fifty eight (158) owners or managers responded to the question
regarding the number of foreign languages (other than Kiswahili and/or their vernacular
languages) they have a fair fluency communicating in. Owners or managers who
expressed that they can communicate in more than just Kiswahili and their local
languages were 96.2 %. The commonly spoken foreign language was English with 84.8
% claiming the ability to speak the language. Around 3.8% acknowledged that they can
only communicate in Kiswahili and their native languages. Other than English, the other
languages that were mentioned were Spanish, German, Italian, Russian, French, Arabic
and Chinese. Consistent with findings in the developed world, it is argued in this study
that fluency and a good command of foreign languages improves export performance
directly and indirectly by increasing the firms competitive position, foreign orientation
and the psychic stress tolerance (Kaynak and Kuan 1993; Holzmller and Stttinger,
1996).
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As noted above, there were more male owners or managers than female ones and male
dominance is quite consistent with other research findings. Owners or managers with
primary education were evenly divided between male and female owners or managers at
8%. Thereafter, the dominance of males at all levels of education is reported. While
males who had ordinary level secondary education were 34%, slightly over half of these
(17.3% only) were females. Ten percent (10%) of male owners or managers and 8% of
diplomas were held by 6.7% and 2.7 % male owners or managers and female owners or
undergraduate degree, masters or PhD was engaged in the business. These findings can
professional qualification. These findings are also consistent with findings by Mpango
and Mushi (2000) and Rutashobya (1995), who found that the number of women in
Tanzania engaged in further and higher education is low. These findings also go to
show that upon attaining higher education qualifications few women opt to engage in
businesses which are generally considered more risky than employment in the public or
private sectors.
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Table 12.2: Highest Educational Level and Gender of the Owner or Manager
Gender of the owner or manager
Highest educational level Male Female Total
No formal education N 1 0 1
% 0.7 0.0 0.7
Primary N 12 12 24
% 8.0 8.0 16.0
Ordinary level secondary N 51 26 77
% 34.0 17.3 51.3
Advance level secondary N 15 12 27
% 10.0 8.0 18.0
Diploma N 10 4 14
% 6.7 2.7 9.3
Advanced diploma N 2 0 2
% 1.3 0.0 1.3
Undergraduate N 4 0 4
% 2.7 0.0 2.7
Masters N 0 0 0
% 0.0 0.0 0.0
PhD N 1 0 1
% 0.7 0.0 0.7
Total N 96 54 150
% 64.0 36.0 100.0
The majority (30.8%) of the surveyed owners or managers, aged between 30 and 39,
have either ordinary or advanced level of secondary education. The only male owner or
manager with a PhD was aged between 50 and 59, while those with undergraduate
degrees were aged between 20 and 39. Whereas this may be consistent with national
education averages, it portends poorly for the performance of exporting enterprises that
could be attributed to education. The results are revealing a trend where the lower the
level of education the more the spread of owners or managers across the whole age
Table 12.3: Highest Educational Level and Age of the SMEs Owner or Manager
Owners or managers age (Years)
Highest formal educational level 20-29 30-39 40-49 50-59 60+ Total
No formal Education N 0 0 0 1 0 1
% 0.0 0.0 0.0 0.7 0.0 0.7
Primary N 1 7 10 5 0 23
% 0.7 4.8 6.8 3.4 .0 15.8
Ordinary level secondary N 5 38 26 7 0 76
% 3.4 26.0 17.8 4.8 .0 52.1
Advanced level secondary N 4 16 5 1 1 27
% 2.7 11.0 3.4 0.7 0.7 18.5
Diploma education N 1 5 6 1 0 13
% 0.7 3.4 4.1 0.7 0.0 8.9
Advanced diploma N 0 0 2 0 0 2
% 0.0 0.0 1.4 0.0 0.0 1.4
Undergraduate N 2 1 0 0 0 3
% 1.4 0.7 0.0 0.0 0.0 2.1
PhD N 0 0 0 1 0 1
% 0.0 0.0 0.0 0.7 0.0 0.7
Total N 13 67 49 16 1 146
% 8.9 45.9 33.6 11.0 0.7 100
SMEs are generally exporting their handicrafts and horticultural products to more than
one export market. However, the owners or managers were asked to indicate what they
consider to be their primary export market which constitutes more than 50% of each
enterprises annual export value. SMEs exporting to the East African countries of
Burundi, Kenya, Rwanda and Uganda (in alphabetical order) take the lions share (50.0
%) of the handicrafts and horticultural exports. Table 6.4 reveals the relationship
between education level of the owners or managers and their choice of export markets.
Exporters to Europe and America are relatively and generally more educated that those
exporting to either Africa or Asia, whose maximum level of education is just ordinary
improves with ones level of education; it is not therefore surprising that the trend is
such that the owners or managers choice of distant export markets increases with his
America
Europe
Rest of
Africa
Africa
Total
Asia
Highest educational level East
No formal Education N 0 0 0 1 0 1
% 0.0 0.0 0.0 0.7 0.0 0.7
Primary N 11 3 4 2 3 23
% 7.9 2.1 2.9 1.4 2.1 16.4
Ordinary level secondary N 40 8 8 7 7 70
% 28.6 5.7 5.7 5.0 5.0 50.0
Advanced Level Secondary N 11 5 4 5 1 26
% 7.9 3.6 2.9 3.6 .7 18.6
Diploma N 8 1 0 3 2 14
% 5.7 0.7 0.0 2.1 1.4 10.0
Advanced Diploma N 0 0 0 1 0 1
% 0.0 0.0 0.0 0.7 0.0 0.7
Undergraduate N 0 0 1 3 0 4
% 0.0 0.0 0.7 2.1 0.0 2.9
PhD N 0 0 0 1 0 1
% 0.0 0.0 0.0 0.7 0.0 0.7
Total N 70 17 17 23 13 140
% 100.
50.0 12.1 12.1 16.4 9.3
0
Out of 90 male SMEs owners or managers who responded to the question on export
markets, 25.5% indicated that they export to East Africa, 9.7 % export to Europe, 12.4
% export to America, 7.6 % export to Asia and 6.9 % export to the Rest of Africa
(Table 6.5). On the other hand, of the 55 female owners or managers who responded to
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the question on export markets, 26.2% indicated that they export to East Africa, 2.1 %
export to Europe, 4.1 % export to America, 0.7 % export to Asia and 4.8 % export to the
Rest of Africa.
A gender comparison reveals a trend where the percentage of males and females
exporting to East Africa are almost even at 25.5 % and 26.2 respectively. In all other
distant export markets such as Europe, Asia, America and the Rest of Africa, the
Explanations for this could be the long held arguments of women having dual
reproductive and productive roles, low levels of education and hence lack of foreign
language fluency, and female general risk averseness. For instance, Watson (2002)
argues that females, on average, will devote fewer resources to their business ventures,
thereby reducing their exposure (risk) should things go wrong. Direct exporting to
distant markets entails more risks, and longer stays away from home. These gender
differences are further corroborated by Orser, Spence and Riding (2008), who argue that
there are gendered differences in business and that the noted gender differences can also
Besides, research results support the social feminist theory that male and female
exporters are different, thus providing evidence that supports anecdotal findings about
Subsequent to the profile of the SMEs owners or managers surveyed a general account
of the profile of the SMEs that were surveyed is provided. Factors used in
characterizing the SMEs are sector type, enterprise size measured in terms of number of
employees; age of the SMEs measured in years, geographical dispersion and their
tables.
185
Out of 300 questionnaires distributed to owners or managers, 180 were duly filled out
and returned. However, 22 horticultural enterprises based in Arusha and one based in
Kilimanjaro were omitted from the study, during the data screening process, as they did
not meet the SMEs definitional criteria by having more than 100 employees. Their
enterprises. Handicraft enterprises, which were mainly dealing in exporting leather bags
and belts, batik, baskets, beads, hardwood carvings, Zanzibar doors and chairs, and
enterprises a mere 5.1%. Horticultural enterprises were mainly exporting flowers, herbs
and seaweed. The dominance of handicrafts SMEs in the sample signifies that caution
needs to be exercised when interpreting the results of this study. However, it is worth
noting that the main focus of this study was not so much on the studied sector
differences but rather on the owners or managers of the enterprises engaged in exporting
Of the 155 owners or managers who responded to the question regarding number of
employees, 65.8% were managing micro enterprises with the number of employees
ranging from 1 to 4. Those managing small enterprises (5-49 employees) were 32.3%
and medium enterprises (50-99 employees) were 1.9%. These results are consistent with
those of Spring and McDade (1998) who, ten years ago, found that only 2% of all
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African businesses have 10 or more employees, with the majority being micro and
small-scale enterprises that consist of one to three employees (Daniels et al., 1995). The
growth aspirations. It is widely noted that a small, large-scale sector and a large, small-
scale sector characterize most African economies (Spring and McDade, 1998) and in
fact most other developed countries. For instance , according to the Observatory of
European SMEs (2003), out of 19.3 million enterprises in the European Economic Area
and Switzerland, 92% of these enterprises were micro (0-9 employees), 7 % were small
This survey of 158 SMEs was conducted in four regions of Tanzania. The percentages
of SMEs surveyed in each region are Dar-es-Salaam (54%), Kilimanjaro (22%), Arusha
(15%) and Zanzibar (9%). (See table 6.6). The regional distribution was considered
adequate, as Mbura (2007) notes that, when the primary objective of the research is not
comprehensive sampling frame limits the proportionate selection of SMEs per region.
Zanzibar.
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Disaggregated frequencies with respect to export markets are shown and discussed with
reference to table 6.6. It is notable that 51.4% of the owners or managers exported their
products to the East African Community (EAC) countries .The fact that the majority are
exporting to the EAC that constitutes Burundi, Kenya, Rwanda, and Uganda (in
alphabetical order) correlates to the traditional and narrow definition of the stage theory.
Geographic distances have long been thought to have a favourable effect on commercial
exchanges between countries (Beckerman, 1956). This is so argued in the sense that it is
expected that the transfer and flow of information is expected to be enhanced with
The percentage of exporters to the Rest of Africa and Europe is even at 10.8% of all the
surveyed SMEs, while America comes second after East Africa with 15.2 % of SMEs
exporting their handicrafts and horticultural products to the continent. America in this
study was taken to constitute both US and Canada. In spite of the long geographical
distance between Tanzania and the European continent compared with the distance
between Tanzania and the Rest of Africa, four reasons could be given to explain the
propensity of SMEs to export to Europe. One reason is that Tanzania had colonial ties,
first with Germany (1885-1918) and later with Britain (1919-1961), which explains the
independence Tanzania has been one of the biggest recipients of aid and grants from
Europe with Scandinavian countries topping the list of donors. The third is the
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agreement between African, Carribean and Pacific countries (ACP) and the EU with its
new guidelines for inter-regional trade between them. The EU offers duty free access to
ACP countries for products including flowers and vegetables. The fourth and last
linking Tanzania and the Rest of Africa. It is incredible that one would take a shorter
time flying from Tanzania to say German, the United Kingdom or France than to a
neighbouring African country such as Mozambique, owing to the lack of direct flights
The fact that America comes second after the EAC countries as the preferred destination
for SMEs handicrafts and horticultural products could also be because: First, the basis
of the conducive environment that the governments of both Canada and US have
opportunities. In 2000, US, for instance, passed the African Growth and Opportunity
Act (AGOA) intended to enhance 39 SSA countries access to the US market. The act
that was originally meant to end in 2008 has been extended to 2015. Secondly,
increased Foreign Direct Investments (FDI) to Tanzania from the US, Canada, and the
Republic of South Africa (following the end of apartheid in 1994) has retrospectively
dependency on oil imports from Arabic countries and the growing interest of the
significance has opened up business opportunities for the handicrafts business among
One hundred and fifty four (154) respondents responded to the question regarding the
age of the enterprise and gender of the owner or manager. The findings indicate that
just 5.2% of the male -owned enterprises and 3.2% of the female-owned enterprises
were 1-3 years old. Thereafter both male and female owned enterprises reveals an
190
interesting trend. The male-owned enterprisesthat have been running for 4-6 years
(14.3%), for 7-9 years (17.5%) and for 10+ years (26.0%). Contrast this with the age
of female owned enterprises, from 4-6 years (16.2%), from 7-9 years (9.7%) and from
10+ years (7.8%). The results show that up until recently female owners or managers
while male owners or managers participation had been decreasing. Maintaining the
and most especially in handicrafts will go a long way to addressing the male-female
imbalance.
6.6.5 Size (Total Number of Employees) and Gender of the owner or manager
The percentage of male owned micro-enterprises was 39.0% while 27.3% were owned
by females (see table 6.8). Small enterprises were owned by 22.1 % and 9.7% of the
surveyed males and females respectively. None of the surveyed females owned medium
191
enterprises. Males who owned medium enterprises comprised 1.9% of the respondents.
These findings are consistent with those of Olomi (2001), who found that as the size of
the enterprise increases, the proportion of female owned enterprises decreases faster
than those owned by males. This trend is universal in character and is not confined to
developing countries only. Carter and Shaw (2006, pp. 73), in full acknowledgement of
following;
policy frameworks that provide support and encouragement, while minimizing external
constraints to womens entry into both domestic and international business. While the
measures are bearing fruit, it will take a while before gains and objectives are realized.
192
The majority of the enterprises in all the age groups except the 10+ age group are micro
in size. (See table 6.8). The only exception is where 18.3% of the surveyed SMEs are
aged more than ten years, which is greater than 14.4% of the microenterprises within
the same age group. The results underline take-off inertia in terms of upward mobility
from micro, small to medium enterprises. These results are however not typical of only
Tanzania or developing countries. The pattern of enterprise size distribution is the same.
According to Lukacs (2005) , out of 19.3 million enterprises in the European Economic
Area and Switzerland, 92 % are micro(1-9 employees), 7 % are small (10-49), less than
1 % are medium-sized (50-249), with only 0.2 % being large enterprises (250+).
are micro enterprises and the governments have vastly reduced red tape to ensure
Barring minor exceptions, the descriptive statistics of the enterprises surveyed reflect
enterprises surveyed are not out of the ordinary. Equally expected results were the over-
representation of micro enterprises with less than five employees. The findings embody
many factors , such as the differences in malefemale socialization in the country that
exacerbate male domination and impinge on the rights of women, the governments
shift from the Ujamaa (African Socialism ) path to a free market economy and the new
world economic order, to mention a few. As noted earlier, in part, the findings in this
section form the basis, for the subsequent multivariate analysis in the next chapter.
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The study of many subjects brings enlightenment but statistics brings significance. Confucius
(551 BC to 479 BC)
7.1 Introduction
Based on the foundation developed in the preceding chapters, the first section of the
hypotheses tests are conducted using both Canonical Correlation Analysis (CCA) and
SEM. The last section of the chapter covers conclusions to the study and hypotheses
testing.
This section presents the assumptions of multivariate analysis. Testing the assumptions
assumptions may produce significant distortions and biases in the research findings.
Secondly, Hair et al., contend that complexity of the multivariate analyses and of the
results may mask the signs of assumption violations apparent in the simpler univariate
analysis.
Many CCA and SEM estimation procedures assume multivariate normal distributions.
One of the characteristics is that a normal distribution has (Pearson's) skewness and
procedures apply to normally distributed data. There are generally two types of tests for
normality: Graphical analysis and statistical tests. In this study, normality was tested by
indices of skewness and kurtosis. Observed variables were examined and verified using
graphical and statistical methods and were found to be normally distributed. The
skewness and kurtosis statistics for variables were less than 1.0, indicating that the
distribution does not differ significantly from a normal distribution (Miles and Shelvin,
2003).
equal levels of variance across the range of independent variable(s) (Hair et al., 1998),
was checked. Variables that were found to be heterodaestic were transformed to meet
plots (with an overlaid trendline) to identify non-linear patterns in the data. Identified
independent variables.
The output from the computer program AMOS 4 gives various statistics to determine
the overall fit of the proposed models with the field data. Various fit indices were used
to test the data fit of the hypothesized models. Fit refers to the ability of a model to
reproduce the data or, as Byrne (1994) notes it measures how the model adequately
(CMIN/df), Goodness of Fit Index (GFI), Adjusted Goodness of Fit Index (AGFI),
Comparative Fit Index (CFI), and Root Mean Square Error of Approximation (RMSEA)
were used in this study to test the goodness of fit of the models as they are the
commonly used indices in these types of studies. Structural equation models were at
times modified in order to improve the fit, thereby estimating the most likely
Chi-square is the most common fit test. The test examines whether an unconstrained
model fits the covariance as well as the given model. Williams (2003) notes that most
model fit indices are influenced by sample size. In particular Hair et al. (1998) note that
for a larger sample (n 400) the measure is almost always statistically significant and
may result in a satisfactory model appearing as a poor fit on the basis of trivial
discrepancies. According to Kenny (2008), for models with about n = 75 to 200 cases,
chi-square is a reasonable measure of fit. Chi-square for this studys models was
relatively small and within acceptable ranges, as large values of the measure would
indicate a poor fit of the model with the data. According to Ame (2005), a non-
significant chi- square (smaller value of chi-square) is desired, as the goal of SEM is to
develop a model that fits the data. Despite the fact that our model is made up of 158
cases (an acceptable size for SEM), and appreciating the measure sensitivity to sample
size, the researcher used alternative ways to test the model fit.
197
Chi- Square to df (2/df) ratio has no consistent standards for what is considered an
acceptable model. However, Carmines and McIver, (1981) note that a fitted model is
often acceptable when the ratio of chi-square to degree of freedom (CMIN/df) is less
than 3. It is widely argued by various authors that models that do not achieve less value
The GFI varies from 0 to 1, though it can yield meaningless negative values.
Conventionally a GFI equal or greater than 0.90 indicates a good fit of a model. The
AGFI is a variant of GFI, which uses mean squares instead of total sums of squares in
the numerator and denominator of 1-GFI. Bollen (1990) notes that the index tends to
underestimate model fit for sample size. AGFI varies between 0 and 1.0, with values
The CFI which compares a hypothesized model with the independent model takes into
account the sample size and is noted for not being influenced by the non-normality
distribution (Reisinger and Mavondo, 2001). The CFI values range from 0 to 1. A
revised cutoff of 0.95 has recently been advised for CFI. However, Hu and Bentler
(1999) note that CFI values greater than 0.90 still indicate a reasonably good fit of the
model.
The RMSEA is a measure of the population discrepancy that is adjusted for the DF for
model testing (McKone, Schroeder and Cua, 2001). According to Chen et al., (2008),
198
RMSEA ranges from zero to positive infinity, with a value of zero indicating exact
model fit, and larger values reflecting poorer model fit. Values of less than 0.05 for the
RMSEA are considered evidence of a good fit; values between 0.05 and 0.08 indicate a
fair fit, and values greater than 0.10 represent a poor fit (Browne and Cudeck, 1993;
good fit with the data with the RMSEA less than the recommended maximum of 0.08
(Newcomb, 1994; Marsh and Hau, 1996). Widaman and Thompson, (2003) state that
Eight hypotheses developed for this study were tested using CCA and SEM. The CCA
between sets of multiple dependent and independent variables (Hair, Anderson, Tatham,
and Black, 1998). This study used multiple dependent and independent variables, thus
necessitating adoption of the CCA. Hair et al (1998) note that in situations where
multiple dependent and independent variables are used, CCA is the most appropriate
A range of plausible alternative models was developed and tested using the computer
statistical package Amos 4. The threshold value at p =0.05 of the Critical Ratio (CR) is
1.96, with values higher than 1.96 or values lower than -1.96 corresponding to
The results of hypotheses testing are categorized into five parts. The first part addresses
the two hypotheses (H1 and H2) that relate owners or managers demographic
The second part constitutes two hypotheses testing results (H3 and H4) relating
perceived quality of export information to use of export information. The third part
relates the three dimensions of EO to both uses of export information (H5 and H6).
Fourthly, the relationship of the uses of export information with export performance is
again elaborately described using earlier models and analyses (H7 and H8).The fifth part
Drawing from UET, the researcher set out to assess the relationship and structurally test
the effect of owners or managers demographics on the use of export information. The
language, international and export experience. The Structural Equation Model (see
200
export information.
res3
iceiu
res1 qs25_1 e18
,36 ,67
e7 qs31_1
,56 e17
qs26_1
e6 qs32_1 ,72
-,61
-,13
ep ,65
qs28_1 e14
e1 qs33_1
,37 -,27
res2
e3
-,32
qs34_1
omd
-,26
-,13
e2 qs35_1
seiu
,40 ,59 ,99
Note: (1) Small circles with e-values -stands for associated errors with measured
variables (2) Rectangles represent measured, observed variables (3)Oval shapes
represents latent , unmeasured variables.
of ICEIU variables to evaluate the shared relationship between the two variable sets.
The full model across all functions was not statistically significant using Wilks =.82 F
(20, 495) =1.53., p > 0.05(See table 7.1). Because Wilks represents the variance
unexplained by the model, 1- yields the full model effect size in an r2 metric. Thus for
the set of canonical functions, the r2 type effect size was 0.18, which indicates that the
201
full model explained about 18% of the variance shared between the demographic
variables and ICEIU. The relationship between owners or managers education, gender,
age, language, international and export experience and ICEIU is thus found to be
insignificant.
The same hypothesis one (H1) was tested using SEM. The testing was preceded by an
assessment of the overall model fit indices which indicated that all minimum or
maximum thresholds had either been met or exceeded with 2 = 67.7, CMIN/df=1.612,
GFI=0.93, AGFI=0.90. CFI=0.88 and RMSEA=0.06 (Recall that while RMSEA values
less than or equal to 0.05 are considered indicators of a close fit, values between 0.05
and 0.08 are indicators of acceptable fit.) .The model fit indices summary and cut- off
points are shown in table 7.2. Given that all fit indices were inside conventional cut-off
9
NPAR is the number of parameters being estimated in the model and is not a measure of model fit.
202
relationship between OMDC and ICEIU. The CR was -0.090 and p 0.05.
Standardized regression weight between the two variables was -0.011, signifying that
the demographics have no explanatory power over ICEIU. These SEM tests support and
give credence to the earlier results. It can thus be stated conclusively that Hypothesis 1
is not supported and that the demographics of the owners or managers have neither a
CCA was conducted using OMDC as predictors of symbolic export information use
(SEIU) variables to evaluate the shared relationship between the two variable sets. The
full model across all functions was not statistically significant using Wilks = .87 F
(15, 414) =1.41, p > 0.05. (See table 7.3). Because Wilks represents the variance
unexplained by the model, 1- yields the full model effect size in an r2 metric. Thus for
the set of canonical functions, the r2 type effect size was 0.13, which indicates that the
full model explained about 13% of the variance shared between the demographic
variables and SEIU. Likewise, the analysis shows that there is no relationship between
OMDC (education, gender, age, language, international and export experience) and
SEIU.
203
The same hypothesis 2 (H2) was tested using SEM. The hypothesis results indicated
that the relationship between OMDC and SEIU is insignificant with CR = 1.669,
Standardized Regression Weight =0.255 at p 0.05. These results signify further that
the OMDC have no relationship with SEIU. With these results, it is thus concluded that
have neither a relationship nor an effect on the symbolic use of export information.
In testing Hypothesis 3 (H3) and Hypothesis 4 (H4), the perceived quality of export
information (PQEI) was first tested using CCA and later structurally tested with both
Equation Model (see figure 6.) is presented to illustrate the relationship between
res3
,90 res2
e4 qs23_1 pqei
-,40
,51
seiu
e3 qs24_1
,45 ,68 ,85
CCA was conducted using PQEI variables as predictors of ICEIU variables to evaluate
the shared relationship between the two variable sets. The full model across all functions
was statistically significant using Wilks = 0.78 F (12, 399.80) =3.21, P<.001(see table
7.3). Because Wilks represents the variance unexplained by the model, 1- yields
the full model effect size in an r2 metric. Thus for the set of canonical functions, the r2
type effect size was 0.22, which indicates that the full model explained about 22%, of
the variance shared between PQEI and ICEIU. Hypothesis 3 (H3) is thus supported.
205
The hypothesis 3 (H3) was again tested using SEM and as expected, the relationship
between PQEI and ICEIU was found to be significant and positive (CR=3.799, p0.01).
Standardized regression weight between the two variables was 0.47, signifying the
strong explanatory power of PQEI on ICEIU (See table 7.8, and figure 6). With these
of export information.
CCA was conducted using PQEI variables as predictors of SEIU variables to evaluate
the shared relationship between the two variable sets. The full model across all functions
was statistically significant using the Wilks = 0.85 F (9, 370.08) =2.82, p< 005 (see
table 7.4). Because Wilks represents the variance unexplained by the model, 1-
yields the full model effect size in an r2 metric. Thus for the set of canonical functions,
the r2 type effect size was 0.15, which indicates that the full model explained about
15%, of the variance shared between PQEI and SEIU. Hypothesis 4 (H4) is supported.
206
Likewise, analysis using SEM found the overall model fit indices meeting or exceeding
all minimum or maximum thresholds. Chi- square (2) =73, CMIN/df=1.22, GFI= 0.93,
AGFI=0.89, CFI= 0.97 and RMSEA=0.04. The model fit indices summary is shown in
table 7.5. Given that all the fit indices were inside the conventional cut-off values, the
Analysis using SEM found that the hypothesized relationship between PQEI and SEIU
was significant and negative (CR= -3.95, p 0.01). Just like it was with H3, here the
Standardized regression weight =-0.40, signifying the negative but strong explanatory
power of PQEI on SEIU (See table 7.8, and figure 6). These results suggest that
information.
207
Information
information uses were tested. In testing hypotheses 6, 7 and 8 (H6, H7and H8), EO was
unpacked into its three dimensions (risk taking, innovation and proactiveness) and
tested with of the two types of export information uses (instrumental-conceptual and
symbolic).
Conducting CCA, using owners or managers risk taking (OMR) variables as predictors
of ICEIU variables to evaluate the shared relationship between the two variable sets,
revealed that the full model across all functions was not statistically significant. Wilks
= 0.85 F (20, 495.13) =1.18, p=.269 and as Wilks represents the variance
unexplained by the model, 1- yields the full model effect size in an r2 metric. Thus for
the set of canonical functions , the r2 type effect size was 0.15 , which indicates that the
208
full model explained about 15%, of the variance shared between owners or managers
Analysis using SEM found that the overall risk-taking model fit indices indicated that
all minimum thresholds had been met or exceeded with 2 =98.2, CMIN/df=1.364,
GFI= 0.918, AGFI=0.880, CFI= 0.952 and RMSEA=0.049. The model fit indices
summary is shown in Table 7.11. Given that all the fit indices were inside conventional
cut-off values, the model was thus deemed acceptable. The Structural Equation Model
(see figure 7) is presented to illustrate the relationship between risk -taking and uses of
export information.
res3
iceiu
res1 qs25_1 e18
,35 ,67
e7 qs40_1
,56 e17
qs26_1
, 11
e6 qs41_1
,26
-,16
ep ,65
qs28_1 e14
qs42_1 ,38
e5 -,27
res2
e4
,81
qs43_1
omr
-,13
,73
e3 qs44_1
seiu
,43 ,63 ,91
Contrary to the hypothesized relationship between risk taking and ICEIU, the CR= -
3.95, at p > 0.05 indicates that there is no relationship between the variable sets. The
path from OMR to ICEIU is not statistically significant though positive with the
standardized regression weight = 0.107. These results suggest that perception of risk of
ICEIU variables to evaluate the shared relationship between the two variable sets. The
full model across all functions was not statistically significant using Wilks = 0.90 F
(16, 458.90) =.93, p=.532. Because Wilks represents the variance unexplained by the
model, 1- yields the full model effect size in an r2 metric. Thus for the set of canonical
functions, the r2 type effect size was 0.10, which indicates that the full model explained
The overall innovation -model fit indices indicated that all minimum model fits
AGFI=0.90, CFI= 0.96 and RMSEA=0.03. The model fit indices summary is shown in
Table 7.11. The model was thus deemed acceptable provided that all fit indices were
inside conventional cut-off values. The Structural Equation Model (see figure 8) is
information.
res3
iceiu
res1 qs25_1 e18
,32 ,68
,56 e17
e7 qs36_1 ,11
qs26_1
,75
ep ,65
e6 qs37_1 qs28_1 e14
,83
-,10
,85 res2
e5 qs38_1 omi -,45
,59
e4 qs39_1 seiu
,46 ,65 ,87
Using SEM revealed that, contrary to the the hypothesized relationship between
innovation and ICEIU, there is no relationship between the variable sets with CR= -
1.113, at p > 0.05. The Standardized regression weight =0.109. The results cause the
of ICEIU variables to evaluate the shared relationship between the two variable sets.
The full model across all functions was not statistically significant using Wilks = 0.96
F (8, 304.00) =.67, p=712. Because Wilks represents the variance unexplained by the
model, 1- yields the full model effect size in an r2 metric. Thus for the set of canonical
functions , the r2 type effect size was 0.04 , which indicates that the full model explained
about 4%, of the variance shared between owner-managers proactiveness and ICEIU.
Using SEM it was found that the overall (proactiveness, uses of export information)
model fit indices indicated that all minimum thresholds had been met or exceeded with
2 =65.5, CMIN/df=1.34, GFI= 0.94, AGFI=0.89, CFI= 0.95 and RMSEA=0.05. The
model fit indices summary is shown in Table 7.11. Given that all fit indices were inside
conventional cut-off values, the model was thus deemed acceptable. The Structural
Equation Model (see figure 9) is presented to illustrate the relationship between risk -
res3
res2
,71 omp
-,07
e6 qs46_1
seiu
,44 ,65 ,89
Contrary to the hypothesized relationship between proactiveness and ICEIU, the CR=
1.613, at p>0.05 indicates that there is no relationship between the variable sets. The
Standardized regression weight =0.196. These results suggest that proactiveness of the
Supported by both CCA and SEM, and contrary to the hypothesis, the relationships
and (ICEIU) was found to be positive but statistically insignificant thus partially
CCA was conducted using OMR variables as predictors of SEIU variables to evaluate
the shared relationship between the two variable sets. The full model across all functions
was not statistically significant using Wilks = 0.95 F (15, 414.49) =.49, P=.945.
Because Wilks represents the variance unexplained by the model, 1- yields the full
model effect size in an r2 metric. Thus for the set of canonical functions , the r2 type
effect size was 0.05 , which indicates that the full model explained about 5%, of the
SEM showed that minimum or maximum thresholds for model fit indices had either
been met or exceeded (see table 7.11).The path between symbolic use of export
information and risk-taking have CR= -1.146 at p 0.05. The standardized regression
weight between risk-taking and SEIU is -0.126, signifying insignificant (weak), albeit
CCA was conducted using OMI variables as predictors of SEIU variables to evaluate the
shared relationship between the two variable sets. The full model across all functions
was statistically significant using Wilks = 0.79 F (12, 399.80) =.3.02, p<.001. Because
Wilks represents the variance unexplained by the model, 1- yields the full model
effect size in an r2 metric. Thus for the set of canonical functions, the r2 type effect size
was 0.21, which indicates that the full model explained about 21%, of the variance
SEM of the innovation Model indicated that all minimum or maximum thresholds had
either been met or exceeded (see table 7.11). The path between symbolic use of export
information and innovation have CR= -4.607 at p 0.01. The standardized regression
weight between innovation and SEIU is -0.445, signifying the strong explanatory power
predictors of SEIU variables to evaluate the shared relationship between the two
variable sets. The full model across all functions was not statistically significant using
Wilks = 0.93 F (6, 306.00) =.1.79, p=.10. Because Wilks represents the variance
unexplained by the model, 1- yields the full model effect size in an r2 metric. Thus for
the set of canonical functions, the r2 type effect size was 0.7 , which indicates that the
full model explained about 7%, of the variance shared between Owner-managers
The proativeness model was analyzed using SEM and its model fit indices indicated that
all minimum or maximum thresholds had either been met or exceeded (see table 7.11).
216
The path between symbolic use of export information and proactiveness have CR= -
0.676 at p 0.05. The standardized regression weight between proactiveness and SEIU
is -0.069. This result shows that while the relationship is negative as hypothesized it
signifies the weak explanatory power of the proactiveness on SEIU (see table 7.20).
Supported by both CCA and SEM, and contrary to hypothesis, the relationship between
export information use (SEIU) were found to be insignificant. The only exception was
the relationship between innovation and SEIU-which was found to be negative and
significant as hypothesized. The results allow the researcher to thus conclude that
hypothesis 6 (H6) is partially supported- that is, the more innovative that owners or
managers become, the less they will use the export information symbolically, while
This is one of the two hypotheses which constitute the central thrust of the study-
measuring export information uses and their influence on export performance. CCA
evaluate the shared relationship between the two variable sets. The full model across all
functions was found to be statistically significant using Wilks = 0.82 F (12, 399.80)
=2.46, P<.001(See table 7.20). Because Wilks represents the variance unexplained by
the model, 1- yields the full model effect size in an r2 metric. Thus for the set of
canonical functions , the r2 type effect size was 0.18 , which indicates that the full model
explained about 18%, of the variance shared between ICEIU and export Performance.
No new Structural Equation Model was constructed for testing hypothesis 7 because
when testing hypotheses 5, 6 and (H5, H6), the relationship between the instrumental-
conceptual use of export information and export performance was equally tested. The
218
findings from the previous models (model-innovation, model-risk taking and model-
and export performance is +0.32 with critical ratio (CR) of +2.939 at p 0.05. In the
second model (model-risk taking), the standardized regression weight between the two
variables is +0.35 and the CR=+2.924 at p 0.05. In the third model (model-
proactiveness), the standardized regression weight between the two variables is +0.27
and the critical ratio CR=+2.418 at p 0.05. These results demonstrate strong support
for the hypothesis that ICEIU has a significant and positive association with export
performance.
This is the second hypothesis which constitutes the thrust of the study. CCA was
evaluate the shared relationship between the two variable sets. The full model across all
functions was statistically significant using Wilks = 0.89 F (9, 370.08) =1.86, P=.05.
Because Wilks represents the variance unexplained by the model, 1- yields the full
model effect size in an r2 metric. Thus for the set of canonical functions , the r2 type
219
effect size was 0.11, which indicates that the full model explained about 11%, of the
As it was argued in testing hypothesis 7, models that were developed for testing
hypotheses 5, 6 were also used for testing hypothesis 8. In the first model (model-
innovation), the standardized regression weight between SEIU and export performance
variables was -0.10 with CR = -0.873 at p 0.05. Contrary to expectation, this model
demonstrates weak, albeit negative association between SEIU and export performance.
In the second model (model-risk taking), A standardized regression weight between the
variables is -0.27. The hypothesis is further supported with CR= -2.326 at p 0.05. In
the third model (model-proactiveness), the standardized regression weight between the
variables is -0.26. The hypothesis is further supported with CR= -2.401 at p 0.05. The
model demonstrates that SEIU is negatively associated with export performance, thus
information use (ICEIU) to export performance (EP) indicated a positive and significant
relationship. Direct paths from owners or managers EO (omeo) dimensions and export
performance (EP) reveal differing relationships. To test this mediating role and effect,
220
the researcher re-specified the models. In all three models, the direct path from each of
the three dimensions of EO to export performance was removed. Chi-square value for
the model-innovation without the direct path is 2=98.204, while the one with the direct
path is 2=109.315. For model-risk taking, the chi-square value increased from 2=97.6
results show that there are lower values of Chi-Square for the models with the direct
path, indicating that innovation and proactiveness influence export performance directly
taking was however found to have an insignificant, though positive, relationship with
export performance.
Out of all eight (8) hypotheses, four (4) hypotheses were supported fully, two (2)
hypotheses were partially supported and two (2) others were not supported at all.
Hypotheses that were not supported were those that linked owners or managers
demographics with either uses of export information. Hypotheses that examined the
relationship between EO and export information uses were partially supported. All
Where is the knowledge that is lost in information? Where is the wisdom that is lost in
knowledge? - T.S.Eliot
8.1 Introduction
(i). To develop a relevant research model for studying the effect of export
(Tanzania) context.
(ii) To explain the relationship between export information use and export
(iv). To explain the relationship between perceived quality of export information and
To achieve these objectives, eight (8) hypotheses were tested. Some results of
hypotheses testing were consistent with the guiding theories while some were
inconsistent and therefore not supported. The results made it possible for the researcher
to reconfigure the earlier research model into a revised research model with empirical
support.
223
Developing a research model that would be relevant to studying the effect of export
information use on SMEs export performance was one of the objectives that the
researcher set out to attain. A theoretical and empirical literature review guided the
researcher into coming up with the earlier constructed integrated research model
(Figure 5). Upon data analysis and interpretations of the study findings the researcher
Perceived Quality of
Export Markets
Export Information
1. Reliability
2. Responsiveness Export
3. Assurance Information
Use
Symbolic Use
of Export
Information
Export
Domestic Market (Tanzania)
Performance
Instrumental-
Conceptual Use
Owner - Manager of Export
Entrepreneurial Information
Orientation
1. Risk Taking
2. Innovativeness
3. Proactivesnes
224
8.3 Export Information Use and Export Performance among Exporting SMEs.
export performance was strongly supported. There was significant support in all three
structural models where the relationships were tested. The results thus underscored the
relevancy and appropriateness of using export information in a manner that has a strong
and positive effect on SMEs export performance. In addition, the results indicate that
managers need to eschew using export information in ways that are inconsequential
(symbolic). These results are similar to the findings of Lybaert, (1998); Hart and
Tzokas (1999); and Toften (2005) among others, whose studies were conducted in
developed countries. This study finding in a developing country helps to confirm the
All hypotheses relating perceived quality of export information to both uses of export
information have been stressed previously by, among other researchers, Menon and
Varadarajan, (1992), Low and Mohr (2001) and Toften (2005). In this study perceived
responsiveness of the information providers. These are three of the five dimensions of
SERVQUAL. The removal of the empathy path from the model is attributed to the
225
failure of the proposed model to fit the data. So it was decided to remove the empathy
path to achieve a better fit, as recommended by, among other, scholars, Anderson and
Gerbing (1988).
It can be concluded that SMEs owners or managers first need providers of export
information who fulfil the following three quality criteria. The first of these quality
providers with adequate skills to provide the information as needed. The second is
managers make inquiries concerning various aspects of their exporting activities. The
last one is reliability, referring to delivery of export information within agreed deadlines
and in the form and format as per the expectations of the exporter. A snail paced and
charged with the role of supporting exporting enterprises, frustrates the owners or
Likewise, the perception that export information is of low quality was statistically found
more and more. This type of export information use means that managers distort the
acquired information to suit their own pre-conceived ideas, or pretend to use the
Horticultural Association.
quality will use the information instrumentally- conceptually that will eventually,
perceived quality of export information and export performance. This is so argued as,
from the beginning, the reasoning has been that export information, of good or poor
quality left unused or abused will not translate into improved SME export performance.
In that case, SMEs with quality export information and a moderate entrepreneur who
The EO dimensions of risk taking, innovation and proactiveness were all tested
structurally and separately with uses of export information. Each dimension indicated
different results thus, revealing that, whereas these dimensions are poised to be
measuring one construct- entrepreneurial orientation, they had different effects on the
uses of export information. The subsequent discussion presents conclusions for each of
the three EO dimensions, starting with innovation followed by risk taking and
proactiveness.
227
symbolic use of export information was supported. The relationship was found to be
significant and negative. This implies that highly innovative managers neither distort the
acquired export information nor do they use export information politically to suit the
between innovation and the instrumental-conceptual use of export information was not
supported, as it was found to be insignificant though positive. This result directs the
researcher to some aspects of entrepreneurship that were not the focus of this study.
According to Atuahene Gima and Ko (2001), high market orientation and high
entrepreneurship orientation is optimal, whereas Bhuian, Menguc, and Bell (2003) note
that optimal positioning is attained when a firm adopts high market and moderate
entrepreneurship orientations. This, Bhuian and others argue, is because: For highly
may be done out of obligation or habit rather than as a prudent and meaningful business
From the preceding discussion, it then follows that innovative SMEs that are exporting
handicrafts and horticultural products may not necessarily be using the acquired export
Owners or managers risk taking behaviour that was hypothesized to have a negative
relationship with symbolic use of export information was not supported. The
relationship was however negative though insignificant. This implied that risk -taking
politically to suit the interests of the information providers. Not supported also was the
use of export information. Equally, the relationship was positive but insignificant thus
being partially supported. This implies that owners or managers who are risk takers do
explained on the basis of Hoftedes cultural dimensions as they relate to risk taking
(or our case SMEs owners or managers) from cultures with low uncertainty avoidance,
such as Tanzania, show more willingness to take risks and are open to ambiguity.
229
SMEs owners or managers in Tanzania who are engaged in exporting are said to be
great risk takers as they operate in a country with an unstable economic environment.
managers risk taking behaviour needs to be tamed with the instrumental-conceptual use
of export information. The availability and perceived quality of export information has
been noted to be one of the challenges facing Tanzanian exporting SMEs. Equally
challenging has been the aforementioned lack of capacity to use information in a manner
relationship with the symbolic use of export information was not supported fully. The
relationship was however found to be negative though insignificant. There was equally
relationship, much as it was not supported fully, was positive but insignificant. Given
the turbulence and uncertainty in the export markets, proactive owners or managers
enhance their response speed, identify appropriate strategies and reap the advantage of
being the first movers. The results intimate that the surveyed SMEs owners or managers
that are venturing into new markets are grasping new market opportunities and are
230
destined to have more success in their exporting venture than those who are
The fact that owners or managers proactiveness had an insignificant relationship with
both types of export information uses was surprising. Francis and Collins-Dodd (2000)
note that owners or managers proactiveness helps firms proactively seek information
firms, Czinkota and Johnston (1981) state that proactive firms perform more sales-
seeking and information-seeking activities than non-proactive firms. Does the mere
seeking of information translate into success in exporting? Certainly it does not. Huber
(1991) and Sinkula et al (1997) assert that proactiveness enhances the learning
capability to acquire, disseminate, unlearn and integrate market information. Recall that
the thesis of this study is that the ultimate value of export information rests on its proper
use and not on mere informationseeking activities. These results, shows that
proactiveness is not being tamed by the use of information but it is the dissemination,
learning and unlearning, and integration of export information that leads to improved
export performance.
Adoption of the UET in this study was based on the theoretical base that owners or
managers are determiners of firm outcomes and that their characteristics have a bearing
231
on the decision making process (read export information use). The results of the
managers and the use of export information showed that they were not supported. This
is reflected in hypotheses H1 and H2. Despite the increasing number of studies that
various firm outcomes, there has been little consistency and no consensus among the
findings of these studies (Shrader and Siegel, 2007). For instance, the findings have led
performance to the extent that Gartner (1988) advocated abandoning of this line of
inquiry. Other researchers such as Boal and Hooijberg (2001), Markczy (1997) and
Priem et al., (1999) have also argued for a moratorium on the use of demographic
In summary, this study has provided a refined research model of export information use
uses of export information and export performance. As this study has underlined the
has helped to highlight the importance that the perceived quality of export information
and its proper use, and owners or managers EO have on export performance.
232
CHAPTER NINE
If your contribution has been vital there will always be somebody to pick up where you left off,
and that will be your claim to immortality. Walter Gropius (1883-1969)
9.1 Introduction
customary, plethora of studies are conducted with researchers being cognizant of the
fact that study limitations are inevitable. The second section, thus presents three main
limitations regarding the cross- sectional nature of the study, the problem of Common
Method Variance (CMV), and the sectoral scope. Some of these limitations should be
taken to be appropriate avenues for carrying out future research under the same theme in
the context of developing countries. On that note, the third section of the chapter thus
The theoretical contributions focus on intergration of the RBV and UET into a model
revised research model. This model identifies perceived quality of export information
and entrepreneurial orientation (EO) as causes of the uses of export information in the
233
Tanzanian context. The model thus diverges from normative models which fail to take
into account the different contexts in which export information is used. The
contingency model, such as the one developed, recognizes that there are situation-
specific factors for each information system that will determine success or failure, and
This hybrid research model integrates RBV and UET in explaining export information
use and export performance with specific relevance to Tanzanias Small and Medium
the enormous distinct influences of the RBV and UET, neither on its own provides an
adequate account of export information use. The RBV is necessary and helpful but
delivers limited value without a coherent framework. Integrating the two perspectives
within a model tends to be far more powerful and realistic. Situated in the international
entrepreneurship realm, integration of UET in this study has thus some theoretical merit
as it helps explain how SMEs owners or managers can exploit opportunities in foreign
and innovation) as noted earlier was however meant to manage the shortcomings of the
The RBV suggests that firms can create a CA through the development and intelligent
application of core resources and capabilities (Wernerfelt, 1984; Hamel and Prahalad,
1990; Barney, 1991; Peteraf, 1993). It was stated earlier, that it is not the mere
234
possession of resources that will ensure that an enterprise is successful in the exporting
business, but rather the instrumental conceptual use of export information was found to
have a strong and positive link with export performance. The conclusion support
established theories and corroborates Penrose (1959) and Chandler (1977) , who state
that neither the existence of resources nor their random use is enough, since only by
Furthermore, Ibeh and Wheeler (2005) also assert that in order to utilise export market
markets, which tends to equip firms with the knowledge and insight to develop and offer
suitable products and services, with significant competitive benefits. While the RBV
1989), the latter encapsulated that management resource is of particular importance, but
managers are most often in charge of combining and recombining firms resources
The research model may serve as a road map for owners or managers to examine and
analyze a variety of uses of export information. For researchers, the model may be
useful for generating new ideas or uncovering relevant research issues relating to
increasingly internationalizing SMEs and how they use export information. The revised
model has been and can be used to examine (1) The relationship between export
information uses and export performance. (2) The relationship between EO and export
235
information use. (3) The relationship between perceived quality of export information
and both export information uses. All these relationships were assessed in the Tanzania
context.
whose relationships with both uses of export information were found insignificant. This
study did not set out to seek the validity of demographics in explaining uses of export
horticultural products and their use of export information. An explanation for the
exclusion and for the insignificant relationship is provided in the next section, and
Regarding managers age, Hambrick and Mason (1984) argue that advanced age could
grasping new ideas and behaviours. The second reason is that, as the environment is
changing, managers tend to rely more on past experience and the information they have
acquired over time and thus potentially working to the organizations detriment (Katz,
1982). This is so because older managers are at a point in their lives when they are
unwilling to take risks. That age was found to be unrelated to the use of export
236
developed and developing countries. As noted early, the concept of age is perceived
(including Tanzania) exhibit high power distance or power respect (Kiggundu, 1988)
and authority is assigned based on age. Young managers may thus find it more difficult
to access and use export information instrumentally and conceptually and thus instead
resort to the symbolic use of information intended to politically appease the information
providers, who, if they are older and the status attached to their age are held in high
qualities and behaviour of men and women, was considered in the testing of the
information. The UET does not specifically address gender issues with possible
this study is because a deeper understanding of women's way of knowing has great
potential for information behaviour research and 'highlights the value of gender as a
potentially significant variable (Julien, 2005, pp 390). Slightly less than two- thirds
(62.4%) of the surveyed respondents were male. The insignificant relationship of the
owner or managers gender and use of export information also warrants a brief
explanation and argumentation. It was the contention of the study that women and men
the dynamism that are involved in the decision. They place more
value on time and money; they are more concerned about the
whether these affect them or other people. Women are more aware
of the constraints that the setting and close persons put on them,
motivated during the process and also feel more intensely the
Women, it was contended, are inclined to using information more symbolically than
males, who are more inclined to use information in an instrumental- conceptual way.
This insignificant relationship led the researcher to conclude that in the handicraft and
horticultural export business, males and females use export information in the same way
(1990), who also found no gendered differences regarding rational and intuitive styles.
238
with the instrumental-conceptual use of export information and negatively related to the
symbolic use of export information, the insignificant relationships found were both
baffling and unexpected. Higher educational levels have been linked to greater use of
processing capacity (Hambrick and Mason, 1984). One would have thought that the
exporting business that is shrouded in great uncertainties would call for more
educated businesspeople. This, as was found, was not the case, as the majority (86.1%)
of the surveyed owners or managers has either primary or secondary education only.
Their responses regarding uses of export information could therefore have influenced
Slightly over 91% of the owners or managers stated that they started exporting in the
last 11 years with 23.4% noting that they have had no international experience. The
hypothesis was that owners managers who are internationally and export experienced
owners or managers in the international markets could help to explain the insignificant
relationships.
239
certain foreign countries and may thus be positively linked to the instrumental
language proficiency has been positively associated with export development since this
skill may help to establish social and business contacts abroad, improve communication
practices, and facilitate effective planning and control in overseas markets. The failure
of these last three demographic variables, foreign language proficiency and export and
what Hambrick and Mason (1984) noted that, despite the greatest a priori interest they
These findings have helped to explain that exporting SMEs owners or managers are not
demographics have no explanatory power over the extent to which and the way
managers use the acquired export information. Despite these results, the researcher is
cautious not to call for the cessation of pursuing this line inquiry on the use of owners
argued because a stand -alone, comprehensive and qualitative study may reveal different
results and help to bring to the fore some of the theoretical and methodological aspects
This study contributed to the body of knowledge that has empirically shown the role
that the perception of the quality of export information plays in positively influencing
the uses of export information. The importance of the quality of export information as a
determinant of its proper use is corroborated by Wang and Olsen, (2002) and Doole,
Grimes and Demack (2006) who assert that the collection of high quality, timely, and
relevant information, its dissemination in the organization and its proper use contribute
to the success of exporting companies in the long-term. In fact, Jais (2007) contends that
the relationship between information use and performance is negative for information of
poor quality. In most previous studies what was considered was the mere acquisition
and subsequent use of information; whereas this study has demonstrated that the
This study is, to the researchers understanding and knowledge, one of the very few
empirical studies, if not the first on the use of export information in Africa generally and
Tanzania in particular. Since the cross-cultural use of constructs has sometimes led to
between export information use and performance had already been empirically studied
in the developed world or postulated by anecdotal evidence, this study has brought to
The results of this study provide some implications for SMEs owners or managers.
Their perception of the quality of export information and their EO are important in
explaining the uses of export information. SMEs owners or managers need to always
seek to acquire and use the information that they truly believe is of the prerequisite
quality. It is uneconomical and in fact should not be encouraged for SMEs owners or
managers to spend a lot of their scarce resources on collecting data that go unused or are
used improperly.
The study findings are also consistent with the extant literature that argues that EO can
managers need, therefore, to appreciate the empirical- based evidence that investing in
One of the major challenges facing the Government of Tanzania in the recent past has
activities and operations in order to increase their long-term competitiveness. While the
drive is made against the inadequacy of export information, finance and other structural
constraints hindering international market operations, SMEs in the country also lack the
242
their disposal. So while a lot of efforts have been geared towards affording SMEs
engaged in international markets ease access to export information and finances, there is
appropriately utilize the export information acquired. Drawing upon the RBV of
the firm (Barney, 1991) and UET (Hambrick and Mason, 1984), the researcher
confidently states that it is of great importance for SMEs not only to acquire
information but also to put it to proper use so that they can contribute more
b) Improving the quality of export information in ways that may enhance its use
and hence helping the enterprises to realize their bottom-line. The research
findings and extant literature support the strong and positive association between
perceived quality of export information and proper use. BDS providers and
information to SMEs need to acknowledge the fact that they need to be aware of
international trade fairs and trade missions as this will improve their acquisition
of export information that may be put to proper use. Equally important is for the
demographics such as age and gender that were found to have insignificant
linkage with the various uses of export information are beyond government
control.
resource for exporting SMEs and thus the government needs to focus on (i)
support. (ii) Selecting criteria for supporting exporting SMEs with EO. This
while realizing its objectives. Similarly, to remedy the failure rate of most SMEs
the exporting SMEs. This may include the formulation of an innovation policy
that will guide and protect innovative ideas, services, goods and technologies.
e) Lastly, the developed and tested research model can be used as a tool by relevant
and secondly use it as a basis for formulating SMEs intervention policies and
To be able to realize all these, the government, BDS organizations and other
development partners need to primarily translate the findings of this study and
others of this kind into intervention policies and practical intervention programmes
aimed at SMEs.
This study, like many of its kind, has limitations that need to be taken into account when
researchers (Cichy, Cha, Kim, 2008; Bozionelos, 2003), a cross-section survey such as
for future studies, which can provide a more rigorous scientific basis for effective
interpretations.
Related to the first limitation is the second potential problem of Common Method
widely accepted that correlations between variables measured using the same method,
245
usually self-report surveys, are inflated due to common method variance. In this study,
such variance might arise since all the information about SEIU, ICEIU and PQEI,
OMEO and EP were obtained from owners or managers self report surveys (Cichy,
Cha, Kim, 2008; Spector, 2006). Various sources of bias due to common method
variance have been noted and the three major ones are social desirability, negative
(ibid.). Future research could benefit by adopting, whenever possible, enterprise and
Besides, Nchimbi (2003) also notes that data obtained in a survey directly from owners
Thirdly, the respondents of the study are mainly from the handicraft sector and a few
from the horticultural sector, both of which are however inherently inclined towards
exporting. It is thus being suggested that caution needs to be exercised when attempts
are made to generalize the findings to the Tanzanian context. Future studies on the area
may be expanded to include enterprises serving the domestic market and may benefit if
Despite the noted limitations, it is envisaged that subsequent researchers will hopefully
use the study findings to delve further to gain a deeper understanding of the studied
There are issues in this study that need further research. These issues include diversity
of the symbolic use of export information and performance measures, longitudinal study
instead of a cross-sectional survey and coverage. These are issues which could not be
covered for the described reasons. A brief account of these issues is given.
Given the multidimensional nature of the constructs used in building the research model,
exists between export information uses, owners or managers characteristics and export
performance. It is against that background then that the research model constructed will
research directions. One of the pertinent research issues that need further delving into is
information in particular. Whereas this study, for instance, treated the symbolic use of
symbolic uses of information which might have different effects on export performance.
According Vyas and Souchon (2003) to symbolic use of information may take any of
247
the following forms: social, power seeking, non-use, affective, and legitimizing. Others
Export performance is another area that has been problematic to study. This study had
earlier sought to use both objective and subjective performance measures, however due
to the reasons noted; the researcher resorted to using subjective measures. The
researcher noted and argued for the importance of objective financial measures and calls
for researchers to build trust and create good rapport with SMEs owners or managers
over time. This will help the SMEs owners to willingly disclose quantitative and
To be able to carry out a similar study in future, researchers could adopt the longitudinal
approach. The longitudinal approach would also help in addressing the shortcomings of
cross -sectional studies such as this. Through repeated observations of the owners or
As this study confined itself to two sectors of the economy (horticultural and
further studies that covers more sectors and a wider geographical areas would be
recommended to afford generalizations beyond the two sectors studied. The role and
sectors. It is argued that information is power but the potency of information resides in
Lastly, future researchers may look into the possibility of carrying out comparative
studies on the use of export information between (a) SMEs from a developing country
exporting to another developing country and (b) SMEs from a developing country
development of export marketing theory and validation purposes of the research model.
It has sometimes been stated, sometimes wrongly, that all developing countries are
similar in context. Whereas there are quite a number of similarities, these similarities
belie other contextual differences. The same can be said that the amplified differences
between developed and developing countries may sometimes belie certain similarities
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6. How many years was your company in operation at the time of your first export
sale?.........................................................................................................................
A: Yes ( ) B: No ( )
11. Who is in charge of export activities in your company?
(Position)
12. How do you acquire export information you need fro business decision making?
.....
.................................................................................................................................
.....................................................................................................................
13. Who are the providers of export information you need for business decision
making?
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
SN Statements
14 No export decision would be made without information 1 2 3 4 5
collected.
15 Information collected is translated into significant 1 2 3 4 5
practical action.
16 Information collected is often used to keep the company 1 2 3 4 5
knowledge base updated.
17 Information gathered is often not considered in the making 1 2 3 4 5
of decisions for which it was initially requested.
18 Information is often collected to justify a decision already 1 2 3 4 5
made.
19 Information gathered and used to justify an export 1 2 3 4 5
decisions is often collected/interpreted after the decision
has been made.
20 Information acquired is sometimes manipulated in order to 1 2 3 4 5
justify decisions really made based on instinct.
How would you rate the firms financial performance in as far as the following
statements are concerned?
25 Our export business has been very profitable 1 2 3 4 5
26 Our export business has generated a high volume of sales 1 2 3 4 5
How would you rate the level of satisfaction with your export business in as far as the
following statements are concerned?
27 Our export business has fully met our expectations. 1 2 3 4 5
28 Our export business performance has been very satisfactory. 1 2 3 4 5
29. What has been your approximate export sales growth over the past three years?
Negative 0-10% 11-20% 21-30% 31-40% 40+ %
Ordinary level
Advanced level
secondary school
Undergraduate
PhD education
Postgraduate
secondary
Advanced
education
education
education
education
education
education
education
education
education
Diploma
diploma
diploma
Primary
No
312
31. Have the owner-manager lived abroad for at least six months? A: Yes( ) B:No( )
32. How many languages can the owner manager communicate fluently?.........................
33. For how long has the owner manager been involved in export activities?....................
Email:Website: ....
Name:.Signature:.Date:.