Antecedents to the Export Market Orientation of Hungarian Higher...

Gábor NAGY PhD INSEEC Business School Paris

Prof. József BERÁCS Kecskemét College, Corvinus University of Budapest

2nd Central European Higher Education Cooperation (CEHEC) Conference

Corvinus University of Budapest, 16th - 17th June, 2016

Antecedents to the Export Market Orientation of Hungarian Higher Education Institutions and Their

Performance Consequences: The Role of Managers in Fostering Export

Market Orientation in the Organization

Agenda

• Introduction • Research questions • Theoretical background • Hypotheses development • Conceptual framework • Scales • Data and analysis • Results • Limitations and further research

Gábor NAGY PhD, Prof. József BERÁCS 2nd Central European Higher Education Cooperation (CEHEC) Conference Corvinus University of Budapest, 16th -17th June, 2016 2

Introduction

• International markets far more complex than those of domestic markets: complexity of markets, increased need for information, difficulties related to information acquisition, diverse nature of products/services.

• Export orientation: proactiveness and risk taking in business and operational decisions (Kazem & Van der Heijden, 2006).

• Proactive approach to exporting success on export markets (Wood & Robertson, 1997).

• Universities: success on international markets requires managerial support and organizational systems that foster the process of internationalization.

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Gábor NAGY, Prof. József BERÁCS 2nd Central European Higher Education Cooperation (CEHEC) Conference Corvinus University of Budapest, 16th -17th June, 2016

Research questions

1) Will managements’ commitment and emphasis on export orientation increase export market orientation of a university?

2) Will export market oriented reward systems and export market oriented training systems boost export market oriented behavior of a university?

3) Will increased export market orientation of a university boost export market performance?

4


Theoretical background & hypotheses development – main effects

• Favorable managerial attitudes towards exporting means greater allocation of time and resources to export activities (Gencturk et al., 1995), and also an increased need for export intelligence generation (Diamantopoulos & Cadogan, 1996).

• Management’s emphasis on export market orientation is a signal about the importance of being responsive to export customer needs and the broader export environment (Cadogan et al., 2001).

• EMO = superior value for export customers (Day, 1999), positional advantage and long-term export performance (Day & Wensley, 1988; Hunt & Morgan 1995).

• EMO can also be employed in the higher education sector (Webster et al., 2006; Hammond et al., 2006; Kara et al., 2004; Küster & Avilés & Valenzuela, 2010).

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Main effects hypotheses

Hypotheses H1 The higher the management commitment’s to exporting

the higher the export market orientation of a university.

H2 The higher the top management’s emphasis on export market orientation the higher the export market orientation of a university.

H3 The higher the export market orientation the higher the export performance of a university.

6


Moderation effects hypotheses

Hypotheses

H4a The greater the export market oriented rewards systems the stronger the relationship between management’s commitment to exporting and export market orientation of a university.

H4b The greater the export market oriented rewards systems the stronger the relationship between top management’s emphasis on export market orientation and export market orientation of a university.

H5a The greater the export market oriented training system the stronger the relationship between management’s commitment to exporting and export market orientation of a university.

H5b The greater the export market oriented training system the stronger the relationship between top management’s emphasis on export market orientation and export market orientation of a university.

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Conceptual model

H1+

Management’s Commitment to Exporting

H3+

Export Performance

Export Market

Orientation H2

+

Top Management’s Emphasis on Export Market

Orientation

H5a,b H4a,b

Export Market-Oriented Training

Systems

Export Market-Oriented Reward

Systems

8


Data and method

• 700 on-line and paper-based questionnaires sent out 156 responses (22% total response rate).

• Confirmatory factor analysis (CFA) was applied (χ2/df=1.668-2.698, CFI=0.856-0.938, RMSEA=0.068-0.108).

• By assessing discriminant validity the procedure outlined by Fornell and Larker (1981) was applied.

• Measurement scales: EMO (Cadogan et al., 2009); MCE (Gencturk et al., 1995); TMEEMO, EMORS and EMOTS (Jaworski & Kohli, 1993); EP (items from international marketing literature).

• Relationships in the conceptual model were analyzed with SmartPLS 2.0 (Ringle et al., 2005), moderation effects were assessed by product indicators approach (Hair et al., 2014).

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Sample characteristics

0,00

1,00

2,00

3,00

0,00 1,00 2,00 3,00

Ma

rke

t d

ire

ctio

ns

(1 =

<1

78

, 2

= 1

792

10

, 3

= >

21

1)

Size (1 = <1,894, 2 = 1,8959,856, 3 = >9,857)

BME LFZE, SZF

NYF

KE

MOME, PTK

OE

KRF, MKE

EJF

DF

SE

PE

NYME ME

EKF

SZIE BCE

ELTE

PTE

DE

BGF

SZTE

SZE

Size Market directions

University Mean std Mean std

BCE 1.85 0.66 1.85 0.69

BGF 2.00 0.00 1.50 0.55

BME 2.67 0.47 2.83 0.41

DE 2.17 0.90 2.63 0.74

DF 1.33 0.47 3.00 0.00

EJF 1.00 0.00 0.58 0.58

EKF 1.60 0.45 2.00 0.71

ELTE 1.86 0.99 2.00 0.76

KE 1.00 0.00 2.38 0.92

KRF 1.00 n.a. 1.00 n.a.

LFZE 1.00 n.a. 3.00 n.a.

ME 1.33 0.47 1.33 0.50

MKE 1.00 n.a. 1.00 n.a.

MOME 1.00 n.a. 2.00 n.a.

NYF 2.00 0.00 1.00 0.00

NYME 1.14 0.35 1.50 0.53

OE 1.00 0.00 1.83 0.75

PE 1.33 0.47 2.33 1.15

PTE 1.89 0.99 2.11 0.60

PTK 1.00 n.a. 2.00 n.a.

SE 1.50 0.50 2.67 0.58

SZE 2.17 0.37 1.83 0.98

SZF 1.00 n.a. 3.00 n.a.

SZIE 1.60 0.49 1.83 0.75

SZTE 2.11 0.87 1.73 0.75

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N = 131

Note:

a) Market directions: ‘Foreign students come from the following groups of countries (please distribute 100 points among the following options): 1) neighboring countries, 2) Europe, 3) outside Europe’. Market direction = 1 x neighboring countries + 2 x Europe + 3 x outside Europe (min. = 54.00, max. = 295, 33.33 perc. = 178, 66.66 perc. = 210)

b) Size: ‘How many full-time students are studying at your institution in the 2011/2012 school year?’ (min. = 100, max. = 30,000, 33.33 perc. = 1,894, 66.66 perc. = 9,856)

Main effects results

Hypo-thesis Relationships β (t-value)

Hypothesis supported

H1(+) Management’s Commitment to Exporting (MCE) Export Market Orientation (EMO) +0.404 (3.355)** Yes

H2(+) Top Management’s Emphasis on Export Market Orientation (TMEEMO) Export Market Orientation (EMO)

−0.030 (0.255) No

H3(+) Export Market Orientation (EMO) Export Performance (EP) +0.433 (3.967)** Yes

**p<0.05

Table 1 Results of the single effects analysis

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Moderation effects results

Hypo-thesis Single effects β (t-value) Interactions β (t-value)

Hypothesis supported

H4a Management’s Commitment to Exporting (MCE) Export Market Orientation (EMO)

+0.404 (3.355)**

Export Market-Oriented Reward Systems (EMORS) x Management’s Commitment to Exporting (MCE)

−0.221 (0.964)

No

H4b Top Management’s Emphasis on Export Market Orientation (TMEEMO) Export Market Orientation (EMO)

−0.030 (0.255)

Export Market-Oriented Reward Systems (EMORS) x Top Management’s Emphasis on Export Market Orientation (TMEEMO)

−0.085 (0.380)

No

H5a Management’s Commitment to Exporting (MCE) Export Market Orientation (EMO)

+0.404 (3.355)**

Export Market-Oriented Training Systems (EMOTS) x Management’s Commitment to Exporting (MCE)

+0.178 (0.898)

No

H5b Top Management’s Emphasis on Export Market Orientation (TMEEMO) Export Market Orientation (EMO)

−0.030 (0.255)

Export Market-Oriented Training Systems (EMOTS) x Top Management’s Emphasis on Export Market Orientation (TMEEMO)

−0.102 (0.512)

No

Table 2 Results of the moderation effects analysis

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Moderation effects results: Interactions

Hypothesis Interactions β (t-value) Hypothesis supported

H4a Export Market-Oriented Reward Systems (EMORS) x Management’s Commitment to Exporting (MCE)

−0.221 (0.964) No

H4b Export Market-Oriented Reward Systems (EMORS) x Top Management’s Emphasis on Export Market Orientation (TMEEMO)

−0.085 (0.380) No

H5a Export Market-Oriented Training Systems (EMOTS) x Management’s Commitment to Exporting (MCE)

+0.178 (0.898) No

H5b Export Market-Oriented Training Systems (EMOTS) x Top Management’s Emphasis on Export Market Orientation (TMEEMO)

−0.102 (0.512) No

Table 3 Results of the moderation effects analysis

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Summary results of the hypotheses testing

• There is a positive relationship between management’s commitment to exporting (MCE) and export market orientation (EMO).

• Top management’s emphasis on export market orientation (TMEEMO) does not eventuate in higher export market orientation (EMO).

• Putting more emphasis on export market orientation (EMO) increases export performance (EP) of universities.

• No moderation by export market-oriented reward systems (EMORS) and export market-oriented training systems (EMOTS).

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Conceptual model nr. 2

Control variable: •Market directions (neighboring countries, Europe, outside Europe)

H5(+) Export Performance

Export Market

Orientation

Export Market-Oriented Reward

Systems

Export Market-Oriented Training

Systems

H1a(+)

H2a(+)

H2b(+)

H1b(+)

H3(+) Management

’s Commitment to Exporting

Top Management’s Emphasis on Export Market

Orientation

H4(+)

Export Centralization

Export Coordination

Export Formalization

H6 H8 H7

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Data and method – model nr. 2

• 700 on-line and paper-based questionnaires sent out 156 responses (22% total response rate).

• Confirmatory factor analysis (CFA) was applied (χ2/df=1.668-2.698, CFI=0.856-0.938, RMSEA=0.068-0.108).

• By assessing discriminant validity the procedure outlined by Fornell and Larker (1981) was applied.

• Measurement scales: EMO (Cadogan et al., 2009); MCE (Gencturk et al., 1995); TMEEMO, EMORS and EMOTS (Jaworski & Kohli, 1993); ECR, EF and ECN (Cadogan et al., 1999 and Jaworski & Kohli, 1993); EP (items from international marketing literature).

• Relationships in the conceptual model were analyzed with SmartPLS 2.0 (Ringle et al., 2005), moderation effects were assessed by product indicators approach (Hair et al., 2014).

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Hypo-thesis Relationships

Market directions β (t-value)

Hypoth. supported

H1a(+) Export Market-Oriented Reward Systems (EMORS) Management’s Commitment to Exporting (MCE)

Neighb. count. Europe Outside Europe

0.124 (1.293) 0.042 (0.408)

+0.192 (2.089)**

Yes

H1b(+) Export Market-Oriented Reward Systems (EMORS) Top Management’s Emphasis on Export Market Orientation (TMEEMO)


0.408 (3.750)** 0.137 (1.647) +0.106 (1.218)

No

H2a(+) Export Market-Oriented Training Systems (EMOTS) Top Management’s Emphasis on Export Market Orientation (TMEEMO)


0.210 (1.925) +0.683

(11.836)** +0.510 (7.157)**

Yes

H2b(+) Export Market-Oriented Training Systems (EMOTS) Management’s Commitment to Exporting (MCE)


0.511 (6.221)** +0.526 (6.127)** +0.426 (4.312)**

Yes

**p<0.05

Table 4 Results of the single effects analysis (market directions)

Main effects results control variable: market directions (model nr. 2)

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Hypo-thesis Relationships

Market directions β (t-value)

Hypoth. supported

H3(+) Management’s Commitment to Exporting (MCE) Export Market Orientation (EMO)


0.309 (1.694) +0.420

(4.782)** +0.418

(4.525)**

Yes

H4(+) Top Management’s Emphasis on Export Market Orientation (TMEEMO) Export Market Orientation (EMO)


0.242 (1.290) +0.155 (1.401) +0.204 (1.812)

No

H5(+) Export Market Orientation (EMO) Export Performance (EP)


0.198 (1.026) +0.348

(2.532)** +0.708

(8.117)**

Yes

**p<0.05

Table 5 Results of the single effects analysis (market directions)

Main effects results control variable: market directions (model nr. 2)

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Moderation effects results control variable: market directions (model nr. 2)

Hypo-thesis

Market directions Single effects β (t-value) Interactions β (t-value)

Hypoth. supported

H6 Neighb. count. Europe Outside Europe

Export Market Orientation (EMO) Export Performance (EP)

+0.198 (1.026) +0.348 (2.532)** +0.708 (8.117)**

Export Coordination (ECR) x Export Market Orientation (EMO)

0.715 (3.236)** +0.372 (2.503)** +0.361 (3.552)**

Yes



+0.103 (0.615) +0.348 (2.532)** +0.708 (8.117)**

Export Formalization (EF) x Export Market Orientation (EMO)

0.520 (1.044) +0.199 (0.949) 0.412 (1.289)

No



+0.064 (0.489) +0.348 (2.532)** +0.708 (8.117)**

Export Centralization (ECN) x Export Market Orientation (EMO)

0.571 (1.284) 0.404 (2.576)** +0.225 (1.160)

No

**p<0.05

Table 6 Results of the moderation effects analysis (market directions)

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Summary results of the hypotheses testing (model nr. 2) – I.

• When universities focus more on international markets export market-oriented rewards systems motivate managers to commit to exporting, but they don’t boost top management’s emphasis on exporting.

• Export training systems positively affect management’s commitment to exporting, and top management’s emphasis on EMO when the universities take an incentive to go to international markets.

• Commitment to exporting enforces management’s willingness to enhance organization’s international objectives, while top management’s emphasis on EMO may not eventuate in increased EMO behavior.

20


Summary results of the hypotheses testing (model nr. 2) – II.

• Reinforcing EMO in the organization eventuates in increased export performance when universities orient more towards international markets.

• Only export coordination moderates the EMO-export performance relationship.

21


Study limitations

• Relatively low sample size.

• Constraints stemming from cross sectional data.

• Lack of objective measures to track/assess universities’ export market activities/performance.

• Asymmetric data analysis (focusing on net effects) (Woodside, 2016).

Size Total

Small Medium Large

Export Market Orientation

2 1 0 0 1 3 3 4 1 8 4 33 24 11 68 5 27 14 7 48 6 2 2 2 6

Total 66 44 21 131

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Future research

• Relying on multiple respondents from one organization (Cheng et al., 2013): Rector or deputy rector: 16 (12.31%),

Dean or deputy dean: 86 (66.15%),

Head of international office: 28 (21.54%).

• Using symmetric modeling (set-theoretic approach, fsQCA) for studying complex organizational configurations (Ragin, 2008; Fiss, 2007).

• Multiple sources of information (collecting/reporting real-life contextual data) (Woodside, 2016).

• Studying organizational behavior dynamically (longitudinal data).

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Symmetric modeling for studying complex organizational configurations


Export performance

Organizational demographics configuration

Organizational systems configuration

Management systems configuration

Export market orientation configuration size

Size

ee

Export experience

dint

Degree of internationa

-lization

ecr

Export coordination

ef

Export formalization

ecn

Export centralization

emors

Export market-oriented training

systems

mce

Management’s commitment to

exporting

emors

Export market-oriented reward

systems

eig

Export information generation

eid

Export information

dissemination cr

Concentrated response

24

tmeemo

Top management’s emphasis on export market

orientation

Thank you for your attention! [email protected]

[email protected], [email protected]

25


APPENDIX I. – scales

Gábor NAGY, Prof. József BERÁCS 2nd Central European Higher Education Cooperation (CEHEC) Conference Corvinus University of Budapest, 16th -17th June, 2016 26

Scales Items Cr. Alpha

Export Market-Oriented Training Systems

1) Our management supports training courses that help employees to become more oriented towards foreign students. 2) We tell to our new colleagues that serving international students is a top priority. 3) New member of our staff will learn the importance of exploring the needs of foreign students.

0.853

Export Market-Oriented Reward Systems

4) The performance of crew commissioned with foreign student recruitment is measured on how strong connections they build with foreign students. 5) Our crew commissioned with foreign student recruitment is evaluated on the bases of surveys among foreign students. 6) With our reward systems we encourage our employees to step up their efforts to meet the needs of foreign students.

0.756

Management’s Commitment to Exporting

7) The management of our higher education institution considers efforts related to the recruitment of foreign students important. 8) The management of our higher education institution considers an important goal to increase the activity related to the recruitment of foreign students. 9) The management of our higher education institution is actively seeking international market opportunities.

0.850

APPENDIX II. – scales



Top Management’s Emphasis on Export Market Orientation

10) It is essential to adjust to observed changes in foreign markets. 11) Our employees must react to the steps of our main competitors in foreign markets sensitively. 12) All our employees should seek to meet the emerging needs of our international students.

0.874


13) In our higher education institution we generate a lot of information concerning trends (e.g., regulations, technological developments, political, economic) in our export markets. 14) We constantly monitor our level of commitment and orientation to serving foreign student needs. 15) We slowly perceive changes taking place in foreign markets (e.g., regulatory, technological, and economic changes). 16) We regularly evaluate the effects of foreign market changes (e.g., regulatory, technological, and economic changes). 17) We collect a lot of information to understand the factors influencing foreign students' needs and expectations.

0.874

APPENDIX III. – scales




18) Too much information concerning our foreign competitors is discarded before it reaches decision makers. (R) 19) Information which can influence the way we serve our foreign students takes forever to reach the staff that deals with foreign student issues. (R) 20) Important information about our foreign students is often “lost in the system.” (R) 21) Information about our foreign competitors’ activities often reaches relevant personnel too late to be of any use. (R) 22) Important information concerning export market trends (regulation, technology) is often discarded as it makes its way along the communication chain. (R) 23) Our export business strategies are driven by our beliefs about how we can create greater value for foreign students. 24) Our export strategy for competitive advantage is based on our understanding of foreign students’ needs. 25) Our export business objectives are driven primarily by student satisfaction.

0.874

APPENDIX IV. – scales



Export Centralization

26) The staff dealing with foreign students should seek the approval of superiors even in seemingly most insignificant questions. 27) The staff dealing with foreign students must request permission from superiors before every action. 28) The staff dealing with foreign students must obtain the approval of superiors in the first round before initiation any action.

0.830

Export Formalization

29) The staff dealing with foreign students decides themselves on most issues. 30) The staff dealing with foreign students is free to make decisions without having to consult with any one in the organization. 31) The way things are going with foreign students are left on the staff dealing with foreign students.

0.836

Export Coordination

32) In our higher education institution the international office and other functional units (e.g., economic directorate, departments, institutes, faculties etc.) help each other. 33) In our higher education institution faith in a team spirit is observed throughout the whole organization.

0.895

APPENDIX V. – scales



Export Coordination

34) Strong cooperation is observed among the international office and the functional units responsible for ’production’. 35) In our higher education institution the different functional units (e.g., economic directorate, departments, institutes, faculties etc.) are driven by the same goal. 36) In our higher education institution the different functional units (e.g., economic directorate, departments, institutes, faculties etc.) are integrated to serve one purpose. 37) Conflicts in our organization are dissolved through communication and group problem solving methods.

0.895

Export Performance

38) To what extend are you satisfied with the tuition fee foreign students are paying for their education? 39) To what extent are you satisfied with the pace of entering the most important foreign markets in terms of student recruitment? 40) To what extent are you satisfied with the pace of entering new markets for student recruitment? 41) To what extent are you satisfied with the pace of entering new markets for student recruitment compared to main competitors?

0.745

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