STRATEGY

PRE-EXPORT PLANNING AND START-UP EXPORT
PERFORMANCE FOR SMALL ELECTRONICS

MANUFACTURERS

Philip D. Olson
University of Idaho

Newell Cough
Boise State University

Donald W. Bokor
Business Consultant

ABSTRACT

An increasing number ofsmall businesses are seeking customers in foreign countries. At this
time, however, out knowledge of small business successful export practices is limited. To
increase our export understanding, ii has been suggested that research should examine in
more depth the relationship between export planning and performance. Based on a'sample
ofeighteen small firms in the electronics industry, weak suppom was found for the hypothesis
ihat the level offormal export planningis positivelyrelated to export performance. Areas for
future research and limitations of the study are also discussed.

INTRODUCTION

A growing number ofbusinesses are becoming involved in the international area. That
is, firms today are increasingly seeking customers in foreign countries rather than just domestic
ones. This is true even for small businesses. A recent survey conducted for the Small Business
Administration "revealed that 37 percent of U.S, firms with less than 500 employees are
engaged in exporting, and that roughly 25 percent of all exporters, or more than 16000 firms
employ fewer than 100 people" (Agmon & Drobnick, 1994, p. 9). Thus, a significant
proportion of small businesses export and a significant proportion of exporters are small
businesses.

The fact that small businesses have been exporting has stimulated researchers over the
years to conduct studies in this area. Our understanding of small business exporting, and
exporting in general, however, is still limited (Aaby & Slater, 1989; Kamath, Rosson, Patton
& Brooks, 1987; Miesenbock, 1988). Indeed, aRer over twenty-five years of research, our
knowledge and explanation of successful export practices is still rather fragmented and unclear.

I



To increase our export understanding, research on the export planning-performance
relationshipwould appear to be important. Past studies on this topic are limited because early

export research found that export pre-planning was rare (Bilkey, 1987). Some researchers

(Aaby & Slater, 1989;Ayal & Raban, 1987; Bijmolt & Zwart, 1994), however, have suggested
that planning is an important factor for success in exporting and that additional studies are

needed. The purpose of the current study is to examine, from a strategic management
perspective, the export planning-performance relationship for a set of small electronics
manufacturers.

BACKGROUND

A number of studies have been published on the planning-performance relationship in
the strategic management Iield. Most of this research has focused on large firms and their
domestic rather than international operations. Consequently, in the current study planning-

performance research of large firms is reviewed first before turning attention to small business
strategic managementstudies and export studies. Also included in this section is information

about formal export planning conceptual and methodological issues.

Plannin -Performance Research

Lar e business tudies. Among the schools of thought on strategic management
(Mintzberg, 1990), there is general agreement about the difference between strategic content

and process. Content research has focused on specific decisions: choices of entry and exit;
product and market differentiation; and degrees of vertical integration, diversification, and
interfirm cooperation. In contrast, process research has dealt with the development

(formulation) and use (implementation) of strategies (Pettigrew, 1992). Noting the logical
framework that relates formulation, strategic content (choice), and implementation to

performance, it is clear that the role of process activities in strategic management is substantial

Of primary interest in this study is the relationship between export strategy process
activities and export performance. Strategy process research can be divided into a number of
major divisions. Huff and Reger (1987), in their review of the literature, discuss eight classes,
one of which is planning practices. Early work in this area has focused on whether certain
planning methods enhance firm performance, and a significant issue in this stream of research
has been the impact of "formal" planning on firms'erformance (Robinson and Pearce, 1984;
Shrader, Taylor & Dalton, 1984). Formal is defined in different ways by researchers.
Armstrong(1982) mentionsthe use ofan explicitgoal achievementprocess,while Fredrickscn

(1984) emphasizes the use of a comprehensive planning process. Although a number of
empirical studies support the positive effect of formal planning on performance (Fredrickson,
1984; Karger & Mal ik, 1975; Pearce, Robbins & Robinson, 1987; Rhyne, 1986),some strategy
researchers have called attention to the pitfalls of formal planning.

Findings of negative relationships between formal planning and perfonnance are
attributed to the dysfunctions of over-formalization, inertia, and institutionalized responses.
Bresser and Bishop (1983)proposed that a high degree of formal planning may cause conflict
within the organization, impeding successful performance. Mintzberg (1994) warned of the
"fallacy of formalization," maintaining that formal strategic planning is not identical to

2



strategic thinking. The former can process more information, but cannot adapt or learn; its
rigidity may adversely affect performance. It may be preferable to "loosen up the process of
strategy making rather than trying to seal it off by arbitrary formalization" (Mintzberg, 1994,
p. 114).

Small business studie . The themes found in studies of large businesses are also
observed in small and entrepreneurial businesses. For instance, Covin and Slevin (1991)have
proposed a model of the relationship between a firm's entrepreneurial strategy process and its
performance. Further, Lyles, Baird, Orris and Kuratko(1993) have provided a review of work
supporting the positive relationshipbetween planning activities and the performance of small
businesses. And in limited corroboration of Mintzberg's warning, small business researchers
have found contradictory results on the effect of formalized planning. Hand, Sineath, and
Howle (1987), in an empirical study, determined that formal prior planning had a negative
eITect on the performance of retail service outlets.

~E* d .R h h *p pl g-p f I I hpf II d,
in particular, small firms is limited. Early export research showed that random events-
unsolicited export orders —played a major role in the initiation of exporting by firms (Bilkey,
1987) and that export pre-planning was relatively rare (Brasch & Lee, 1978). More recent,
however, are works that suggest planning is an important prerequisite for success in exporting.
Ayal and Raban (1987) state that, for firms developing high technology products with short
life cycles, waiting for unsolicited export orders is not feasible. That is, in the context of
dynamic industries or environments, selecting foreign markets, adapting products to these
markets and determining ways to enter foreign markets have to be planned before a product
is developed. Further, Aaby and Slater (1989) and Bijmolt and Zwart (1994) suggest that
planning in a systematic way appears to be an important discriminatorbetween successful and
unsuccessful exporting Iirms. Other researchers, however, have not found a positive
relationship (Miesenbock, 1988).
Ex ort Plannin Conce tual Issues

One issue that can lead to variability in research results is the use of diIYerent definitiom
of the formal planning concept. Hence, in each planning-performance study it is important to
define the concept. It has also been proposed in the strategic management field (Bracker, Keats
& Pearson, 1988)that formal planning be conceptualizedon a continuum, ranging from a low
to a high level. This suggestion is consistent with a position taken by Suzman and Wortzel
(1984) in their study of export marketing (i.e., planning) strategies. These authors proposed
that firms can adopt, from a continuum that closely corresponds to a strategic management
formal planning continuum, any one of three export marketing strategies.

Ex ort Plannin Methodolo ical issues

Given the early stage of research that links exporting with strategic management issues,
not only are. there conceptual and theoretical modeling concerns (i.e., concerns about
definitions and which export strategic management issues/concepts should be studied as well
as how these issues/conceptsare related) but there are also methodological issues that impact
study results. Two such research methodological issues are: the operationalization of the

3



export formal planningconcept(measuring levels of formal planning); and timing periods for
the variables (appropriate measurement lags).

0 erationalization of formal lannin . One way to gauge the formality of planning is
to measure the degree to which the planning process generates written documentation. This

formalitymeasurecan be tracedto Weber's(1947) concept ofbureaucracy. Basically, Weber

proposed written documentation as a bureaucratic tool to help large organizations become

rational and efficient. Most small business researchers have continued this convention of using
written documentation(e.g., the completeness of a business plan) to measure formal planning
(e g., Bracker Keats & Pearson, 1988; Gilmore, 1971;Robinson & Pearce, 1983; Still, 1974).
In these instances, planning is often measured either as a dichotomy referring to the absence

or presence of a written plan, or as a planning corn prehens iveness cont in uum where such levels
as no written plan, partial written plan, and complete written plan are included (Pearce,

Freeman & Robinson, 1987). Some researchers, however, question whether large firms
prescriptions are relevant to small firms (Robinson, 1982). In this vein, data exists which

suggests that written business plans are not being used as extensively by small businesses as

business experts might believe (Parks, Olson & Bokor, 1991; Shuman, Shaw & Sussman,

1985). For example, Parks, Olson and Bokor found in a survey of 120 INC. 500 firms that only
17.5%had a complete written plan, 32.5% had a partial written plan, and 50% had no written

plan at start-up.

Another way to operationalize the formality of planning is to measure the degree to
which external and/or internal counsel is relied upon in the strategic planning process.

Robinson (1982) has proposed that "outsider" involvement in planning indicates a serious
commitment to a formal strategic planning orientation in small firms. Outsider involvement

refers to both boards of directors and management consultants —people who would appear to
be able to supplement a small firm leader's lack of skills in, and time for, formal planning.
Robinson found that profitability and improvement in effectiveness were higher for small firms

which engaged in outsider-based strategic planning than for firms which did not.

Timin ofmeasurement. Buildingon past planning-performancestudies(e.g., Schwenk

& Shrader, 1993;Shrader, Taylor & Dalton, 1984), as well as on past export studies (e g., Aaby
& Sister, 1989; Madsen, 1987), one caveat in the export planning-performance research area
concerns the use of cross-sectional data where a firm's values for its dependent variable
(perfonnance) and its independent variable (planning) are from the same point in time. This

practice is questionable because the results or outcomes associated with a plan that is, for

example, developed in period one may not be observed until period two or even later.

Instead, studies relating data about past events to more recent outcomes require a

longitudinal design. Impleinenting a longitudinal design to collect information often means

a choice between using a panel survey (administering a questionnaire at different points in

time) or a retrospective questionnaire. Limitations of panel surveys include: additional
planning and patience on the part of researchers; a longer delay until data are available for
analysis; higher research costs; and participants being less willing to commit themselves and

their organizations to multiple data gathering points in time.

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These limitations may be avoided by using a retrospective survey. However, objections
have been raised concerning the construct validity of variables measured by recall responses
(Brockner, Grover, Reed, & DeWitt, 1992). Several issues impact the accuracy of recalled
in formation and hence, its validity (Auriat, 1993;Howard & Dai Icy, 1979; Van de Ven, 1992).
Factual information is more likely to be recalled accurately and without biases. The saliency
of a past event —its importance as a turning point or landmark, the degree to which it provokes
emotion, and its financial impact-is positively associated with recall accuracy. Also, a
questionnaire constructed in chronological order affects positively participants'ccurate
retrieval of past information.

d~Hhhh

Two contextual factors that can influence the effectiveness of export formal planning
strategies are a firm's environment and its goals. Contextual issues have become an important
strategic management research area in recent years because of inconsistencies in past study
results. Pearce, Freeman and Robinson (1987) suggest that researchers conducting strategic
planning studies should include information about environmental and flrm contextual issues.
Of interest in this study are those firms that operate in a dynamic environment and that have
growth as a goal. Given this context and the prior export formal planning-performance
information, the following hypothesis is proposed:

HI: Level of formal export planning is positively related to export performance for
small Iirms that operate in a dynamic environment and that have growth as a
goal.

METHODOLOGY

~Sam le

A sample of firms was obtained by surveying small, exporting, manufacturing firms (less
than 100 employees at export initiation) in the electronics industry (standard industrial
classification(SIC) code 36). The firms were located in Idaho and eastern Washington. Four
trade directories were used to obtain a list of 55 firms: the Idaho Manufacturin Direct
(19933, h Id h I «I I d lh 3993-l9 4319933, h ~ld h
Tr de Direct 1994-1 5 (1994), and the S okane Washin t n rea Ex orters Directo
~194- I 5 (1994).

Information for the study was gathered through a structured telephone interview with
each firm's CEO or some other knowledgeable seniorexecutive during the last part of 1993 or
early part of 1994. The interview was structured in the sense that each interviewee was asked
to respond to a set of pre-determined questions. There were two time periods of interest for
the current study: the year immediately preceding export initiation (pre-export), and the year
following export initiation (export start-up). Of interest during the pre-export year was
in formation about level of formal planning, and of interest at the end of the export start-up year
was export performance. Hence, a time lag existed between export planning and performance
measures to allow for implementation of export plans.

5



In this study, one contextual condition that firms needed to satisfy was to exist in a

dynamic external environment at export start-up. Although many exporting firms in the

electronics industry were thought to exist in dynamic environments, some firms may have been

part of an industry sub-category that was considered stable at their export initiation. In like
manner, not all exporting electronics firms would necessarily have growth as a key goal during

export start-up, the other contextual condition for the study. Accordingly, inforination was

gathered from surveyed firms about these two factors, and seven of the firms did not meet one
or both of these contextual conditions. On that account, they were excluded from the study.

Eighteen of the 55 firms met both contextual conditions and also agreed to participate
in the study for a response rate of 33%. In terms of age and size characteristicsof the 18 firms,
they were on average 13 years old and they had an average of 29 employees when they were
interviewed. Note, however, that most firms had began exporting earlier than the year in which

the interviewtook place. In fact, during their first year of exporting the firms were on average
eight years old and they had an average of 14 employees. Thus, the typical firm in the sample
started exporting five years before the interview was conducted and doubled in work force size.

To detenninethe representativenessof the 18 lirms in the sample, when compared to the
remaining 35 firms that did not participate in the study. one test was performed. In particular,

a t-test was conducted to determine if a difference existed between the two groups in employee
mean size. No statistical difference was observed. A test to determine if a difference existed
between the tsvo groups regarding mean age was not conducted because the ages for some of
the 35 firms that were not in the sample were not available in the trade directories.

Measures

Building on Armstrong(1982), formal planning is defined in the current study to be the

use of an explicitgoal achievement process. Further, it is proposed along the lines of Bracker,
Keats and Pearson(1988) that formal planning be conceptualized on continuum ranging from

a low to a high level of explicitness.

Given this definition of formal planning and the accompanying notion of a continuum.
it is suggested here that the continuum be sub-divided into three export planning levels:

reactor, followerand explorer. The rationale for these levels builds on Suzman and Wortzel's

(1984) export marketing strategies.

Firms adopting the reactor stance undertake limited or little formal export planning.

Another way to characterize these firms is to state that they are "reactive" exporters because

their foreign business arises from unsolicited orders. As such, these firms begin with very little

investment in exporting.

The reactor stance or planning strategy is not likely to be highly effective for firms

pursuing growth as a goal. Suzman and Wortzel (1984) state that this stance should usually
be viewed as a first step leading to a higher level of export involvement by a Iirm's leaders.
Unsolicited orders are unpredictable and uncertain; all of a firm's foreign orders may originate
from one country, or they may be diversi fied geographically. Although growth is possible with

6



this strategy, investing time in a higher level of formal planning (i.e., spending time gathering
information about and analyzing different foreign markets, in a more explicit, systematic
manner) would offer a better chance for growth.

The follower stance is one where some or moderate formal planning takes place before
export decisions are made. In this case foreign business is likely to result from both planned
and unplanned (unsolicited) orders. Firms employing this strategy, when compared to the
reactor stance, can be characterized as "active" exporters. Planning in this situation frequently
revolves around pursuing foreign opportunities that a firm's domestic competitors are
exploiting. Implementing this strategy requires more investment in time than the reactor
strategy.

The explorer planning level is opposite the reactor class. In this case extensive formal
planning is undertaken prior to important export decisions and, like the follower strategy,
foreign business will probably result from both planned and unsolicited orders. While the
reactor strategy is reactive and the follower is active, the explorer strategy is "proactive" in the
sense that leaders in a firm employing this strategy pioneer the search for new foreign
customers. Because of the pioneering nature of this strategy, a considerable investment in time
isoRennecessary. This investment, however, could lead to significant foreign sales in a new
market which would not have to be shared with other exporters for some time. Firms with
growth goals in dynamic industries probably find this strategy etTective. That is, dynamic
industries often mean short product life cycles; hence, selecting foreign markets, adapting
products to these markets and deciding how to enter the foreign markets have to be planned
early, if a firm desires to maximize its products'ales (Ayal Ec Raban, 1987).

Information used to measure each firm's level of export formal planning was obtained
by asking each survey participant to respond to two questions. The first question asked if, in
the decision to first export, counsel had been sought from advisors (e.g., stakeholders, trusted
experts, consultants,or members from a firm's board ofdirectors). The responseswere: I) no,
and 2) yes. The second question asked if a business plan —a written document summarizing
strategic information about the firm including an industry analysis, a marketing plan, etc.-that
included exporting had been developed prior to export initiation. The responses were: I) no
business plan that included exporting was developed, 2) a partial business plan that included
exporting was developed, and 3) a complete business plan that included exporting was
developed.

Using these two questions, it was decided that the reactor level of formal planning would
be evident if firms did not seek counsel from advisors and they had no or just a partial business
plan that included exporting prior to exporting. Further, the follower level of formal planning
would exist if firms did not seek counsel and they had a complete business plan; or if firms did
seek counsel and they had no business plan. Finally, the explorer level of formal planning
would be evident if firms did seek counsel and they had a partial or a complete business plan.

The performance measure used for the firms was the percentage of export sales to total
sales (export intensity) at the end of the first year of exporting. Export intensity is a frequently
used performance measure in the export Iield (Aaby & Stater, 1989).

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Survey participantswere also given the opportunity to ofTer additional details about their

initial export experiences. In particular, another survey question asked them to respond with

any other information they deemed important about their export start-up planning-per formame

relationship.

RESULTS

In Table I, frequencies, export intensity means, and export intensity standard deviations

are presented for the three formal export planning levels. Observe that there is an increasing

trend in the export intensity mean values from reactors to explorers. However, a test of
significance concerning these mean values (ANOVA) was not conducted for two reasons.

First, only two of the 18 firms were at the explorer level. Second, a test was conducted
concerning equality among the three variances (an ANOVA test assumption), and it was

rejected at the .05 level of significance.

Table I
Reactor Follower and Ex lorer Plannin Level Results

Planning Export intensity Export intensity

level n Mean Standard deviation

Reactor 9 6.93 7.71
Fo I I ower 7 14.43 11.68
Explorer 2 19.15 20.01

The next step in the analysis was to combine the explorer and follower levels into a

single formal planning level. This classification scheme is consistent with Macharzina and

Engelhard's(1991) comparison of reactive (reactor) and active (follower/explorer) exporters.
In Table 2, frequencies, export intensity means, and export intensity standard deviations are

presented for the adjustedclassificationscheme. The dilTerence between the means, based on

a t-test, was significantat the .IO level. Hence, there was weak support for the hypothesis that
the level of export formal planning is positively related to export performance.

Table 2
Reactive and Active Plannin Level Results

Planning Export intensity Export intensity

level n Mean'tandard deviation
Reactive 9 6.93 7.71
Active 9 15.48 12.38

'ifference between means is significant at less than the .10 level.

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A final study result concerned the open-ended responses that survey participants
provided about their salient export start-up planning-performance experiences. Most
respondents did not comment on this question. Of those who did respond, one CEO stated that
it was not written plans that contributed to this firm's high export intensity but "attentiveness
to customers'needsP "carefully following our noses," and "communicating with customers in
order to change designs and tactics." Two other surveyed individuals replied that
collaborationswith other exporting firms were extremely helpful during their export start-up
period. Another participant commented that his initial export plan changed after he found that
resourcesdid not exist to implement the plan. He mentioned further that this change in plans,
in turn, influenced his export performance. Hence, his position was that planned or "intended"
ideas should not always be viewed as being "implemented" or carried out.

DISCUSSION

Plannin Level Pre uencies

Consider first the number of firms at different planning levels in Table I and, in
particular, the finding that only two of the 18 electronics firms were at the explorer level. It
was originally believed that more firms would be classified at this level, given that these
businesses operated in dynamic environments and that they had growth as a goal. It may be,
however, that other contextual factors not considered in this study might have an impact on the
frequency of firms at difTerent levels of formal planning. for example, Keats and Bracker
(1988)have proposed a contingency model of small firm performance within which the effect
of planning (behavioral strategic sophistication) on performance is moderated by managerial
traits (cognitive strategic sophistication) and by environmental characteristics (task
environment factors). Maybe future export research should also control for managerial traits
in addition to environmental and organizational traits.

Plannin -Performance Relationshi

~Md II I F *«hl dy'yp h I d h I«h ly k
support was found for the proposed positive relationship between export formal planning and
performance. Perhaps, as was mentioned when discussing the frequency data, the model
employed in this study was not properly specified, and more complex models are needed when
studying the export planning-performance relationship. Again, other contingencies, such as
managerial traits and forms of rivalry, might be explored in future export studies.

.A h p lhl *pl lhl dy'yp h I I ( d
also the frequency findings) concerns the measurement of formal export planning. Building
on prior background information, the existing convention of using written documentation(e g „
a written business plan) to measure export formal planning may not be appropriate for some
or even many small firms. If this is true, using it to measure formal planning would not
provide meaningful information.

In a post hoc sense, this suggestion was empirically explored by first separating the two
survey questions used to measure formal planning and then examining each question with

9



respect to its relationshipwith perfonnance. The results of the relationship between levels of
written business plans and export sales intensity are presented in Table 3. The results were not
significant.

Table 3
Written Plan Results

Planning Export intensity Export intensity

level n Mean'tandard deviation
No wrinen plan 14 10.89 11.09
Partial or complete

written plan 4 12.33 14.13

'ifference between means is not significant at less than the .10 level.
'wo of the firms had partial written plans and two had complete written plans.

The results of the relationship between the use of advisors (the other formal planning
measure) and export sales intensity are presented in Table 4. The findings here were
significant. Given these analyses, it is suggested that formal planning measures for small firms

also be a topic of additional study.

Table 4
Advisor Results

Planning Export intensity Export intensity

level n Mean'tandard deviation
Did not use

advisors II 6.67 8.01
Used advisors 7 18.33 12.41

'ifTerence between means is significant at less than the .05 level.

To further document concerns about the measurement of formal export planning and.
in particular, the use of written plans, consider Robinson and Pearce's (1983) study. They
found that written plans may be de-emphasized in small firms for reasons other than that the

firms did not have time to plan, or that they viewed planning as unimportant. Interestingly,

they found some firms de-emphasized written plans to "deformalize" planning. Perhaps the

use of written documentation to measure planning in small firms does not measure the true
intent ol'planning.

ther Plannin -Performance I ue

In this section the open-ended responses that were presented in the results section

concerning survey participants'nitial export experiences are discussed.

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Customer focus. The insight by one CEO in the study that it was not written plans that
contributed to his high export performance but rather "attentiveness to customers'eeds,"
corroborates a recent management literature focus. Peters and Waterman (1982), for example,
list "staying close to customers" as an attribute of excellent firms.

A customer focus is also consistent with recent advances in total quality management
(TQM) that suggest meeting or exceeding customer needs is the centerpiece of successful
businesses(Gouillart & Sturdivant, 1994). Naumann and Shannon (1992) extend this concept
by identifying customer-driven marketing as the most important management innovation for
competing in the 1990s and beyond. This innovation is based on total customer integration
(TCI) and it includes the involvement of representatives from key customers in a firm's product
design process. The goal of using both TQM and TCI concepts within firms is to help them
meet or exceed their customer needs and expectations.

TQM and TCI concepts suggest that a high level of formal planning, in the traditional
sense, may not lead to improved performance when a Iirm does not both acquire accurate
in formation about and achieve active involvement with its customers. On the other hand, a low
level of formal (written) planning may exhibit above average performanceas long as firms stay
close to their customers. Because of the potential relationships between TQM, TCI and export
formal planning, future studies might also explore these linkages. Researchers who decide to
move in this direction, however, face the fact that staying close to foreign customers is likely
to be more diflicult than domestic ones. Some research suggestions here are: at the conceptual
level, include as part of the formal planning concept the notion of staying close to customers;
and concerning measurement issues, examine ways to gauge the notion of staying close to
foreign customers.

~CHb id .A h t hy b i f * f t
about their experiences was that their initial export orders were linked to past collaborations
with other exporting firms. One executive reported instances where foreign customers had
become acquainted with his firm's product while it was being used by another American firm.

Another executive stated that his Iirm's product complemented a product being exported
by a larger Iirm with extensive export experience. Here, an agreement or alliance was
established that allowed the small firm to include its promotional material in the export
packaging of the larger firm-whose ultimate customers did respond by ordering products from
the small Iirm. This "piggybacking,"then, was an innovative way to overcome entry barriers
in foreign markets as well as being effective at sales generation. Because of these two
examples, one recommendation for small firms that are active (fol lower or explorer) pre-export
planners is to encourage them to seek linkages with firms exporting complementary products
or with businesses which use their products overseas.

Intended versus emer ent trate ies Also important, when discussing the planning-
performance relationship, is the idea that classifying firms by their initial export planning
strategy may imply that exporters become locked into or tied to a particular strategy. In the
case of firms using a reactive(or reactor) planning process it would mean the CEOs "intended"
and "carried out" a strategy to let export opportunities come to them before expending

ll



resources. In the case of active (follower or explorer) firms it would mean they intended and
carried out a strategy that committed resources before foreign orders existed.

Interestingly, the actual behavior of the sample firms during the investigated time
periods (i e., pre export to the end of the first year of exporting) revealed that not all strategic
intentions were realized or carried out, an issue which could have had an impact on this study's

results. The pertinent point in this discussion is that strategy implementation, in addition to

formulation, can influence performance.

This point was mentioned by one executive when he commented on his experiences.

He not only had developed a business plan that included exporting, but had invested signiflcarx

effort in the pre-export period (1991) by: filing two world-wide patents, registering with
Barclay's Bank as an exporter to European markets, and engaging in extensive counseling on

export markets for his electronic product. Such behavior clearly signalled the intentions of an
explorer strategy. But faced with dissonance within his firm, due to lack of resources and
organizational control (the export window of opportunity had not changed), the firm's

emerging export position quickly became that of a reactor —just accepting unsolicited orders
during the first year of exporting. A further twist in this saga, although it is outside the
investigated time periods of this study, is that the CEO is currently realigning resources so that
the explorer export strategy can again be employed.

Of further interest here is that this firm's changes can be linked to current strategic
management research. Mintzberg (1990) argues that intentions and planning can lead to
inflexible implementation, He proposes that, in reality, adaptive or emergent strategies may

be more successful. Adaptive behavior occurs when firms are beyond intentions and in the

midst of directing resources toward markets. Although the performances of firms with highly
vacillatingexport strategies are likely to be mediocre or weak over time, the performances of
firms with flexible export strategies that match internal resource strengths with export

opportunities are likely to be strong.

CONCLUSION

Study limitations, in addition to those mentioned in the discussion section, include

generalizability of the findings, contextual variable measurement issues, and retrospective
survey biases. Because the sample contained only 18 firms, and further because it was

restricted geographicallyand industrially, the current results may have limited applicability to

other firms. Also, single-rather than multiple-ittm measures were used to obtain information

about the environmentaland the goal contextual variables. Further, retrospective surveys can

be vulnerable to inaccurate and biased recall responses and, hence, cause problems with

construct validity.

In summary, this study was designed to empirically explore the hypothesis that the level

of formal export planning will be positively related to export performance for small firms that
operate in a dynamic environment and that have growth as a goal. Based on the results from

eighteen firms in the electronics industry, weak support was found for the hypothesis. Possible

reasons why a stronger result was not found include modeling, measurement, and sample size

12



issues. Additional export planning and performance research that builds on this study's
findings, and the discussed future research suggestions, is encouraged for the purpose of
developing a clearer understanding of successful export behavior patterns.

13



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