Export Market Orientation Strategy, External Environment, and Export Performance of SMEs in Malaysia
DOI:
https://doi.org/10.17010/pijom/2017/v10i12/119979Keywords:
Export Market Orientation
, SMEs, Export PerformanceM310
, M390, M500Paper Submission Date
, September 7, 2017, Paper sent back for Revision, November 8, Paper Acceptance Date, November 23, 2017.Abstract
Globalization phenomena have changed the trends of business performance all over the world. As a result, many researchers embarked upon different journeys to examine the aftermath of globalization. Many past studies examined the relationship between export market orientation (EMO) and export performance from different parts of the world. Nevertheless, the importance of export market orientation on the firm's export performance is still a hot debate amongst the researchers. The research examined the relationship between export market orientation, external environment, and export performance for manufacturing small and medium enterprises (SMEs) in Malaysia. The survey was done on 779 manufacturing companies listed with the Federation of Malaysian Manufacturers (FMM) involved in the exporting activity and fit the SME criteria. Data was further analyzed using Partial Least Square (PLS) techniques. The research found that EMO had a significant influence on the export performance. However, the research could not support that the external environment moderated the relationship between the EMO and export performance.Downloads
Downloads
Published
How to Cite
Issue
Section
References
Abd Aziz, S., & Mahmood, R. (2011). The relationship between business model and performance of manufacturing small and medium enterprises in Malaysia. African Journal of Business Management, 5 (22), 8918 - 8932.
Abd-Razak, I. S., & Abdul-Talib, A. N. (2009). Explorative study of proactive and responsive export market orientation: An in-depth interview. In, Australian and New Zealand Marketing Academy (ANZMAC) Conference, Melbourne, Australia, November-December, available at: www.duplication.net.au/ANZMAC09/papers/ANZMAC2009-288. pdf
Acs, Z. J., Morck, R., Shaver, J. M., & Yeung, B. (1997). The internationalization of small and medium-sized enterprises: A policy perspective. Small Business Economics, 9(1), 7 - 20.
Adigwe, P. (2012). Project finance for small and medium scale enterprises (SMEs) in Nigeria. African Research Review, 6(1), 91-100.
Adis, A. A. A. (2010). Export performance on the Malaysian wooden furniture industry: An empirical study. Journal of International Food & Agribusiness Marketing, 22(1-2), 52 - 69.
Akyol, A., & Akehurst, G. (2003). An investigation of export performance variations related to corporate export market orientation. European Business Review, 15 (1), 5 - 19.
Alotaibi, M. B. G., & Zhang, Y. (2017). The relationship between export market orientation and export performance: an empirical study. Applied Economics, 49 (23), 2253 - 2258.
Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103 (3), 411- 423.
Appiah-Adu, K. (1998). Market orientation and performance: Empirical tests in a transition economy. Journal of Strategic Marketing, 6(1), 25 - 45.
A-Talib, A-N. (2005). Differences in market-oriented behavior levels across firms’ domestic and export marketing operations: A study of antecedents and consequences (Phd Thesis). Aston University, United Kingdom.
Baber, R., Upadhyay, Y., & Kaurav, R. P. S. (2014). Antecedents and consequences of individual market orientation. Prabandhan: Indian Journal of Management, 7 (4), 37 - 47. doi:10.17010/pijom/2014/v7i4/59310
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Baron, R. M., & Kenny, D. A. (1986). The moderator - mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173 - 1182.
Bennett, J. A. (2000). Focus on research methods-mediator and moderator variables in nursing research: Conceptual and statistical differences. Research in Nursing and Health, 23(5), 415 - 420.
Bunic, Z., 2007. Influence of market orientation on business performance case: Croatian manufacturing companies. 16th EDAMBA Summer Academy, Soreze, France.
Cadogan, J. W., & Cui, C. C. (2004). Chinese export agents’ adoption of export market-oriented behaviours : Measurement and performance relationship. Journal of Asia Pacific Marketing, 3 (2), 21- 37.
Cadogan, J. W., Cui, C. C., & Li, E. K. Y. (2003). Export market-oriented behavior and export performance: The moderating roles of competitive intensity and technological turbulence. International Marketing Review, 20(5), 493 - 513.
Cadogan, J. W., Cui, C. C., Morgan, R. E., & Story, V. M. (2006). Factors facilitating and impeding the development of export market-oriented behavior: A study of Hong Kong manufacturing exporters. Industrial Marketing Management, 35(5), 634 - 647.
Cadogan, J. W., Diamantopoulos, A., & De Mortanges, C. P. (1999). A measure of export market orientation: Scale development and cross-cultural validation. Journal of International Business Studies, 30(4), 689 - 707.
Cadogan, J. W., Diamantopoulos, A., & Siguaw, J. A. (2002). Export market-oriented activities: Their antecedents and performance consequences. Journal of International Business Studies, 33(3), 615 - 626.
Cadogan, J. W., Kuivalainen, O., & Sundqvist, S. (2009). Export market-oriented behavior and export performance: Quadratic and moderating effects under differing degrees of market dynamism and internationalization. Journal of International Marketing, 17(4), 71- 89.
Cadogan, J. W., Paul, N. J., Salminen, R. T., Puumalainen, K., & Sundqvist, S. (2001). Key antecedents to “export†market-oriented behaviors: A cross-national empirical examination. International Journal of Research in Marketing, 18 (3), 261 - 282.
Churchill, G.A. Jr. (1979). A paradigm for developing better measures of marketing ‘constructs’. Journal of Marketing Research, 16(1), 64 - 73.
Coviello, N. E., & McAuley, A. (1999). Internationalization and the smaller firm: A review of contemporary empirical research. MIR: Management International Review, 39 (3),223 - 256.
Czinkota, M. R. (1982). Export development strategies: US promotion policy. New York : Praeger.
Das, K. K., Upadhyay, A. K., & Das, S. (2013). Sales training effectiveness: A review. Prabandhan: Indian Journal of Management, 6 (7), 26 - 32. doi:10.17010/pijom/2013/v6i7/60017
D'Aveni, R. A., & MacMillan, I. C. (1990). Crisis and the content of managerial communications: A study of the focus of attention of top managers in surviving and failing firms. Administrative preliminary evidence on Kohli and Jaworski's framework. Journal of Strategic Marketing, 1 (2), 93 - 121.
Dodd, C. (2005). Export market orientation and performance: An analysis of Australian exporters. Paper presented at the Proceedings of the ANZMAC 2005 Conference: Marketing in International and Cross-cultural Environments, Purchase, S. (ur.), Freemantle, Western Australia.
Federation of Malaysian Manufacturers. (2010). Malaysian industries (41st Ed.). Kuala Lumpur. Malaysia: Okid Publication.
Felton, A. P. (1959). Making the marketing concept work. Harvard Business Review, 37 (4), 55 - 65.
Fornell, C & Cha, J. (1994). Partial least squares. In, R. P. Bagozzi (ed.), Advanced methods of marketing research (pp.52 -78). Cambridge, MA : Blackwell.
Fornell, C., & Larcker, D.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 48(1), 39 -50.
French, M. R. (2006). Export market orientation: Performance, timing, and extent of internationalization (D.B.A. Dissertation). Nova Southeastern University, United States - Florida.
Geisser, S. (1975). A predictive approach to the random effect model. Biometrika, 61 (1), 101 - 107.
Gray, D. B. J., Greenley, P. G. E., Matear, D. S. M., & Matheson, M. P. K. (1999). Thriving on turbulence. Journal of Market-Focused Management, 4(3), 231-257.
Greenley, G. E. (1995). Forms of market orientation in UK companies. Journal of Management Studies, 32(1), 47- 66.
Haar, J., & Ortiz-Buonafina, M. (1995). The internationalization process and marketing activities: The case of Brazilian export firms. Journal of Business Research, 32(2), 175-181.
Habaradas, R. B. (2008). Strengthening the national innovation system (NIS) of the Philippines: Lessons from Malaysia and Thailand. Asian Journal of Technology Innovation, 16(1), 1-22.
Hair, J. F., Celsi, M. W., Money, A. H., Samouel, P., & Page, M. J. (2011). Essentials of business research methods. Armonk, NY : ME Sharpe.
Hair, J.F. Jr., Black, W.C., Babin, B.J., Anderson, R.E. & Tatham, R.L. (2006). Multivariate data analysis (6th ed.). Upper Saddle River, New Jersey, USA : Prentice-Hall, International Inc.
Harris, L. C. (2001). Market orientation and performance: Objective and subjective empirical evidence from UK companies. Journal of Management Studies, 38 (1), 17- 43.
Hashim, M. K., & Hassan, R. (2008). Internationalization of SMEs: Options, incentives, problems and business strategy. Malaysian Management Review, 43(1), 63 - 76.
He, X., Brouthers, K. D., & Filatotchev, I. (2016). Market orientation and export performance: The moderation of channel and institutional distance. International Marketing Review. DOI: 10.1108/IMR-09-2015-0194.
Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In, New challenges to international marketing (pp. 277- 319). Bingley, UK. Emerald Group Publishing Limited.
Hickson, D. J., Hinings, C. R., Lee, C. A., Schneck, R. E., & Pennings, J. M. (1971). A strategic contingencies' theory of intraorganizational power. Administrative Science Quarterly, 16 (2), 216 - 229.
Hilmi, M. F., & Ramayah, T. (2008). Market innovativeness of Malaysian SMEs: Preliminary results from a first wave data collection. Asian Social Science, 4(12), 42 - 49.
Hooley, G., Fahy, J., Greenley, G., Beracs, J., Fonfara, K., & Snoj, B. (2003). Market orientation in the service sector of the transition economies of central Europe. European Journal of Marketing, 37(1/2), 86-106.
Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: Antecedents and consequences. The Journal of Marketing, 37(1/2),53 - 70.
June, S., & Mahmood, R. (2011). The relationship between person-job fit and job performance: A study among the employees of the service sector SMEs in Malaysia. International Journal of Business Humanities and Technology, 1(2), 95-105.
Kim, H., & Kim, W. (2005). The relationship between brand equity and firms’ performance in luxury hotels and chain restaurants. Tourism Management, 26 (4), 49-560.
Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. The Journal of Marketing, 54(2), 1-18.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30 (3), 607- 610.
Kropp, F., Lindsay, N. J., & Shoham, A. (2006). Entrepreneurial, market, and learning orientations and international entrepreneurial business venture performance in South African firms. International Marketing Review, 23(5), 504 - 523.
Kwon, Y. C., & Hu, M. Y. (2000). Market orientation among small Korean exporters. International Business Review, 9(1), 61-75.
Lages, L. F., & Montgomery, D. B. (2004). Export performance as an antecedent of export commitment and marketing strategy adaptation: Evidence from small and medium-sized exporters. European Journal of Marketing, 38(9/10), 1186-1214.
Lages, L. F., Lages, C., & Lages, C. R. (2005). Bringing export performance metrics into annual reports: The APEV scale and the PERFEX scorecard. Journal of International Marketing, 13 (3), 79 - 104.
Lawrence, P. R., & Lorsch, J. W. (1967). Differentiation and integration in complex organizations. Administrative Science Quarterly, 12(1), 1- 47.
Leonidou, L. C., Katsikeas, C. S., & Piercy, N. F. (1998). Identifying managerial influences on exporting: Past research and future directions. Journal of International Marketing, 6 (2), 74-102.
Mandy, M. M. K. (2010). The relationship between distinctive capabilities, strategy types, environment and the export performance of small and medium-sized enterprises of the Malaysian manufacturing sector. Management, 4 (3), 205 - 223.
Matanda, M. J., & Freeman, S. (2009). Effect of perceived environmental uncertainty on exporter - importer inter - organizational relationships and export performance improvement. International Business Review, 18(1), 89-107.
Miocevic, D., & Crnjak - Karanovic, B. (2012). The export market orientation - export performance relationship in emerging markets: The case of Croatian SME exporters. International Journal of Business and Emerging Markets, 4(2), 107-122.
Muhammad, M. Z., Char, A. K., Yasoa, M. R., & Hassan A. (2010). Small and medium enterprises (SMEs) competing in the global business environment: A case of Malaysia. International Business Research, 3(1), 66-75.
Murray, J. Y., Gao, G. Y., & Kotabe, M. (2011). Market orientation and performance of export ventures: The process through marketing capabilities and competitive advantages. Journal of the Academy of Marketing Science, 39(2), 252 - 269.
Murray, J. Y., Gao, G. Y., Kotabe, M., & Zhou, N. (2007). Assessing measurement invariance of export market orientation: A study of Chinese and non-Chinese firms in China. Journal of International Marketing, 15(4), 41- 62.
Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. The Journal of Marketing, 54 (4), 20 - 35.
Osman, I., Ho, T. C. F., & Galang, M. C. (2011). The relationship between human resource practices and firm performance: An empirical assessment of firms in Malaysia. Business Strategy Series, 12 (1), 41- 48.
Pelham, A. M. (2000). Market orientation and other potential influences on performance in small and medium-sized manufacturing firms. Journal of Small Business Management, 38(1), 48 - 67.
Phattarawan, T. (2003). Market orientation and export performance in Thailand: A moderating effect of international marketing strategy (Ph.D. Dissertation). Virginia, United States : Old Dominion University.
Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y., & Podsakoff, N.P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88 (5), 879 - 903.
Roscoe, J. T. (1975). Fundamental research statistics for the behavioral sciences (2nd Ed.). New York: Holt Rinehart & Winston.
Rose, G. M., & Shoham, A. (2002). Export performance and market orientation: Establishing an empirical link. Journal of Business Research, 55 (3), 217- 225.
Ruekert, R. W., Walker Jr, O. C., & Roering, K. J. (1985). The organization of marketing activities: A contingency theory of structure and performance. The Journal of Marketing, 49 (1), 13 - 25.
Saleh, A. S., & Ndubisi, N. O. (2006). An evaluation of SME development in Malaysia. International Review of Business Research Papers, 2 (1), 1-14.
Sefnedi, S. (2007). The relationship between market orientation and export performance: The mediation impact of export marketing management competency and the moderating effect of environmental factors (Phd Thesis). Malaysia : Universiti Sains Malaysia.
Sekaran, U. (2006). Research methods for business: A skill building approach. USA: John Wiley & Sons.
SME Corp. (2011). SME annual report (2010). Retrieved from http:// www.smecorp.gov.my
SME Corp. (2016). Small and medium enterprises (SME) annual report (2010-2015). Retrieved from http://www.smecorp.gov.my/index.php/en/sme-annual-report-2015-16
Sousa, C. M. P., MartÃnez - López, F. J., & Coelho, F. (2008). The determinants of export performance: A review of the research in the literature between 1998 and 2005. International Journal of Management Reviews, 10(4), 343 - 374.
Srivastava, R. K., Shervani, T. A., & Fahey, L. (1998). Market-based assets and shareholder value: A framework for analysis. The Journal of Marketing, 62 (1), 2-18.
Stone, M. (1974). Cross-validatory choice and assessment of statistical predictions. Journal of the Royal Statistical Society, 36 (2), 111 - 147.
Subhash, M. S., & Vijayakumar, A. N. (2011). A glance at evolution of entrepreneurship and scope for entrepreneurship at the BOP (bottom of the pyramid) in India. Prabandhan: Indian Journal of Management, 4 (1), 3-9. doi:10.17010/pijom/2011/v4i1/62078
Van Egeren, M., & O’Connor, S. (1998). Drivers of market orientation and performance in service firms. Journal of Services Marketing, 12(1), 39 - 58.
Wafa, S., Noordin, R., & Kim-Man, M. (2005). Strategy and performance of small and medium-size enterprises in Malaysia. Paper presented at the Proceedings of the International Conference in Economics and Finance (ICEF).
Zou, S., & Stan, S. (1998). The determinants of export performance: A review of the empirical literature between 1987 and 1997. International Marketing Review, 15 (5), 333 - 356.