Export sustainability: the application of innovation theory in the study of small and medium sized exporters

2017-03-01T02:55:23Z (GMT) by Rees, Murray Cameron
This thesis investigates activities before and subsequent to the initial export by Victorian small to medium enterprises (SMEs) and identifies key organizational roles for the maintenance of that export strategy, arguing that this constitutes a process of innovation. Research by AUSTRADE has revealed that Australian SMEs lack export sustainability, that is, most first-time exporters do not export in the year following their first export, thus they do not fulfill the accepted measure of regular export. If their export activities were to be sustained, this could aid SMEs’ growth and survival. A range of international business theories has been developed to explain the internationalisation of firms, all starting with export initiation. However, the phenomenon of subsequent export, if achieved, is assumed to require no additional explanation. Research has also revealed that regular exporters sustain export through personal contacts, skills and knowledge, that are mainly associated with traits of key decision-makers rather than the firms themselves. Analysis at this level is also central to innovation adoption behaviour. Accordingly, this study uses innovation-decision process theory to examine the issue of export sustainability. Existing theory has identified innovation roles of decision-makers in organisational innovation. However, the categorisation of the roles and associated activities of decision-makers involved in export initiation as an innovation is a new contribution of this study. Hence, innovation roles are used to examine the initiation and maintenance of exporting by decision-makers in SMEs. This concurrent mixed methods longitudinal study is based on case studies in 12 Victorian SMEs that initiated export in 2006-9. The results revealed that activities associated with the roles specified under innovation theory such as “champions”, “gatekeepers”, “sponsors” and “boundary spanners” were evident in the case material. The findings from the case studies were triangulated using non-parametric statistical methods. These methods supported the finding that most of the innovation roles were present in export initiation. Previous studies have revealed that when a decision-maker reacts to an export opportunity, for example, the receipt of an “unsolicited order”, the firm is more likely to be a sporadic exporter. A key finding of this study is that when innovation actors behave proactively the firm is more likely to sustain its exporting. This study also found some overlap between roles and interdependencies not identified previously. Specifically, owner-managers were found to perform activities associated with all four innovation roles, a unique finding. Conversely, middle managers performed championing, gatekeeping and boundary spanning activities but then deferred to owner-managers who performed sponsoring activities. Other novel findings identified that: i) innovation roles are more likely in knowledge-based rather than traditional manufacturing SMEs in regular export ii) perceptions of a stimulus to export, are important to export initiation and its sustainability and iii) a subsequent export to a new customer or market in the following year can be a surrogate term for regular export. Finally, focusing on the innovation roles located in the decision to export offers new insights into how the export initiation decision takes place, how export begins and how it is sustained.