Exports and Market Commitment in Managerial SMEs: Do Pioneers Do It Better?

Exports and Market Commitmentin Managerial SMEs: Do PioneersDo It Better? ERNESTO TAPIA MOORE

How do the market commitment variables in theinternationalization process model interact? Doesthat interaction affect how and why export man-agers implement their activities the way they do?Empirical research focusing on French managerialsmall and medium-sized enterprises (SMEs) identi-fied two groups of export leaders—“pioneers” and“managers”—and examined their beliefs concerningmarket commitment, risk, and uncertainty. The in-ternationalization process model was then used todetermine which type of export director performsmost effectively. Results showed that the “pioneer’sway,” although limited to smaller SMEs, was moreproficient and could be extended to larger SMEs.○C 2013 Wiley Periodicals, Inc.

Most western government agencies and institutionsspecialized in international trade make their aid tosmall and medium sized enterprises (SMEs) condi-tional on the employment of at least one personqualified in exports. It is believed that export man-agers, even those who are new to the business or in-dustry, are a determining factor of success in foreignmarkets. Is this belief well founded? Does success de-pend on the ability to read a market and the capac-ity to seize opportunities? Can market commitmentsuccessfully offset export management proficiencyin SMEs? Here are some answers to these questions.

What are Managerial SMEs?

Broadly defined, an SME is a company that employsup to 250 people. This is the main criterion usedby the European Union’s institutions for statisticalpurposes, along with other economic criteria such aslimits on turnover and assets (“The New SME Defi-

nition,” 2005). SME shareholders can be persons orbusinesses, or a mix of both. Managerial SMEs arethose in which at least one of the shareholders is an-other business.

France’s SME population is close to three millionbusinesses, of which about 5 percent are involved inexports (150,000). Managerial SMEs make up 5 per-cent of all SMEs. Managerial SMEs declaring directforeign sales (exports) represent 10 percent of theFrench SMEs. Comparatively, SMEs of the manage-rial form are more common among SMEs reportingexports than in the general SME population.

Because of French fiscal incentives favoring micro-holding schemes, managerial SMEs are expected toreplace more than half the traditional SMEs over thenext decade in France. Micro-holding groups are ex-pected to replace many family SMEs within the sameperiod.

As fiscal policy in the EU countries evolves towardputting SME equity outside inheritance taxes, thesame changes are likely to occur in other Europeancountries. Furthermore, once an SME is organizedas a micro-holding group, highly specialized busi-nesses will most probably be created. In this way,equity exposure can be earmarked and risk limitedto the mission of each single subsidiary of the micro-holding group.

In a micro-holding group, the shareholders of theholding company are all members of the same fam-ily. The holding company possesses a number ofwholly owned subsidiaries. The sum of personnel,

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turnover, and assets of all of the holding’s sub-sidiaries amount to the size of an SME and are con-sidered as such for statistical purposes. Because ofEU regulations pertaining to autonomy, however,neither the group nor any single one of its sub-sidiaries qualifies as an SME. All these subsidiariesare managerial SMEs.

Understanding how managerial SMEs implementexports is important because they account for one-tenth of French SMEs, and their share among Frenchexport SMEs is expected to grow substantially in thecoming years.

Introducing Pioneers and Managers

What is the difference between people who havebeen with the business at least from the beginningof its export activity, and those who were called into manage exports after the initial moves toward for-eign markets began?

Understanding how managerial SMEs implement ex-ports is important because they account for one-tenth of French SMEs, and their share among Frenchexport SMEs is expected to grow substantially in thecoming years.

The first group can be called “pioneers.” Frequentlythe SME’s key asset, they are usually highly qualifiedtechnicians or engineers, as well as excellent sales-persons. When allowed by their industry, they tendto value arm’s-length agreements and frequent in-terpersonal bargaining. They also are likely to shyaway from tenders, long-term contracts, and coldrisk-compensating operations. They tend to evalu-ate risk through the quality of their personal rela-tionship with the contract’s counterpart rather thanaccording to numbers and facts about the foreignmarket. With a tendency of being risk-neutral, pio-neers “make markets.” For the purposes of this ar-

ticle, pioneers are individuals in charge of exportswho have been with the SME for their entire careeror have experience in a similar business in the sameindustry and joined the SME before international-ization began. In the sample discussed here, most aremembers of the executive committee and board ofdirectors.

“Managers” form the second group. Managers’ pri-mary qualifications are in business administrationwith one specialization, such as finance or market-ing. Their business and industry experience comessecond. Managers tend to opt for rational meth-ods of risk management, as well as the operational-ization of best practices in market development.They feel more at home in finding and implement-ing solutions about product, money, and informa-tion fluxes. They tend to be risk-averse. Managers“handle markets.” For the purposes of this arti-cle, they are persons in charge of exports who pos-sess substantial technical experience and have joinedthe SME for the specific purpose of developing for-eign markets. In the sample presented here, two-thirds of the managers have previously held morethan three positions in at least two different indus-tries. Most are members of the executive committeeonly.

Understanding Market Commitment

Market commitment is one of the central processesof the internationalization process (IP) model, alsoknown as the Uppsala model (Hadjikhani & Johan-son, 1999; Johanson & Vahlne, 1977, 1990, 2003,2006, 2009). The IP model is considered one of thebest models for explaining the internationalizationprocess of SMEs. It is a dynamic process based onlearning by doing, which results in experience beingacquired as the SME discovers and develops foreignmarkets over time.

What is actually done in the process is related torisk: how much risk is perceived and how much riskcan be tolerated. The process works like a recurring

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chain reaction. The more one is actively involved ininternationalization:

• the more familiar one becomes with the marketsat hand,

• the more one understands the situation in thosemarkets,

• the less risk one perceives,• the better one tolerates risk,• the more one tends to commit to those markets,• the more one allocates resources to them, and• the more one gets actively involved in internation-

alization.

This process has a direct impact on the way incom-ing information is handled, making it easier to seg-regate vital information from within the unrelentinginflow. Obviously, the better managers segregate in-formation, the more they understand situations; theless overwhelmed they feel; the less risk they per-ceive; the more tolerance they have toward risk; andso on. But do they actually understand what is hap-pening, or are they simply “pasting” a familiar infor-mation segregation model onto an entirely differentreality?

Let us assume that an exporter suffers a liability of“foreignness”—that is, difficulty understanding sit-uations in foreign markets—as well as a liability of“outsidership,” meaning that he or she does not haveaccess to the required information sources. Beingaware of these two liabilities should have a positiveinfluence in both risk perception and tolerance torisk. This awareness also should lead the managerto seek local commercial partners that could helpbridge both the foreignness and outsidership gaps.In turn, the manager will learn from them, acquireexperiential knowledge, modify any risk perceptionand tolerance, modify market commitment and re-source allocations, and so on.

These information dynamics feed the system, andas time passes, the model suggests, exporting busi-nesses would expand their sales toward markets

where they feel more familiar and comfortable. Thedegree of perceived “familiarity” is called “psychicdistance.” The IP model is not based on psychic dis-tance. Psychic distance is a result of acquiring expe-riential knowledge.

At this point, it might be tempting to think that pi-oneers would perform better when prospecting, andmanagers when developing markets. That may beso. But we are investigating whether pioneers wouldbe better all-around export performers, bearing inmind that the “establishment” is biased in favor ofmanagers. We further posit that whichever categorybest understands a market has an advantage over theother, and that this degree of understanding influ-ences market commitment in the form of decisionalternatives.

Decision alternatives modify the current situation inthe considered market as their implementation takesplace. These alternatives (not the decisions per se)will generally affect the boundaries of export activi-ties as well as the business’s commitment to exports,which evolves in increments. The size of the incre-ments is determined by the export manager’s fore-casts. In turn, these forecasts depend on the quan-tity and the quality of incoming information, as wellas the incoming information-processing schemes, in-cluding the export manager’s uncertainty toward themarkets at hand. Increasing interaction and integra-tion with customers, partners, competitors, and in-stitutions will reduce uncertainty.

The Leverage Effect of the IP Model

In the internationalization process described earlier,experiential knowledge (K ) acts as a lever for over-all export performance and resulting profits. Mar-ket commitment (M), being composed of perceivedand tolerable risk, acts as a fulcrum for the lever (seeExhibit 1).

Most past research has been conducted on theknowledge aspect of the model, for it is considered a

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Exhibit 1. The Leverage Effect of the IP Model

much easier parameter to control and measure thancommitment. Furthermore, knowledge is consideredthe outcome of the commitment process in the IPmodel. Consequently, it was considered that measur-ing the change in knowledge gave sufficient insightinto the process itself.

Because both knowledge and commitment changeover time, however, it was thought that time re-lated them both in a cause/effect manner. It has beenshown that although knowledge and commitmentevolve in similar fashions through time, they arenot related in the expected cause/effect relationship(Eriksson, Johanson, Majkgard, & Sharma, 2001).Consequently, measured changes in knowledge yieldno indication as to changes in commitment. In otherwords, by simply looking at a skinned rabbit, onecannot tell how it was skinned or why it was skinnedthat way.

By focusing on the commitment process, we attemptto understand the causes within the process, not theresults, to try to understand the nuts and bolts of theway that the export process is conducted.

More experiential knowledge will add leverage.More market commitment will make for a biggerfulcrum, allowing for wider cause/effect mechanics,or leeway (see Exhibit 1). In other words, more ex-periential knowledge makes for easier implementa-

tion; bigger market commitment generates greaterexpected results.

The Elements of Perceived Risk

Since our subject is directly related to performanceand, therefore, to market commitment (M) we needto examine both of its components in detail: per-ceived and tolerable risk (see Exhibit 2 on page 70).

Perceived risk (R) contains current export moralcommitment (C ) and export uncertainty (U). Per-ceived risk is related to the “soft” skills, includ-ing feelings, and is usually analyzed qualitativelywith such words as “better”/”worse” and “reward-ing”/”painful” to describe increments of perceivedrisk. Considering that one can only commit as muchas the degree of uncertainty (U) allows, and thatthe degree of uncertainty grows as commitmentincreases, the interdependent relationship betweenthese two variables is quite clear and simple.

The Elements of Tolerable Risk

Tolerable risk (R∗), on the other hand, belongsamong the “hard” skills. It is based on measures andrational calculations related to the present resourceposition and the business’s approach to risk.

The “present resource position” results from thesimple subtraction of present committed resources


Exhibit 2. The IP Model’s Market Commitment Structure

from present available ones, without worryingabout the reasons behind the commitments. The“present approach to risk” reflects the mission andstrategy of the business. It is measured in quanti-tative indexes such as return on investment, returnon equity, and numbers, such as working capitaland cash flow. Boundaries are set according to thesame variables, according to calculated ratios, invery much the same way as stop-loss instructionsare used in stock market trading. Like stock mar-ket stop-loss instructions, tolerable risk is usuallydefined negatively.

The Dynamics of the Relationship Between Perceived

and Tolerable Risk

The relationship between both forms of risk will in-fluence the actions taken, where if perceived riskis considered more important than tolerable risk(R > R∗) in the export market, steps to reduce uncer-tainty will be taken by increasing interactions withthe export market environment, as described earlier.On the other hand, if tolerable risks are consideredto be greater than perceived risks (R < R∗), down-scaling actions will be implemented, by limiting re-source allocations to that export market. These ex-amples are valid when the forecast is negative. The

inverse would result if the forecast were positive.That is, “good” perceived risk under conditions ofR > R∗ would lead to belief in a good outcome inthat export market (increase moral commitment),and “positive” tolerable risk under conditions ofR < R∗ would generate upscaling decisions. Al-beit “risky,” these actions would be consideredworthwhile because of an expected good payback.Nonetheless, these positive and negative postulatesusually occur as a result of comparisons againstother markets.

In exports, the domestic business market usuallyserves as the reference for analysis and decision mak-ing, and could lead to the options in Exhibit 3.One should also understand that tolerable risk isthe more stable of the two variables. Indeed, the re-sources of a correctly managed business do not varysharply from one month to another. In addition, theapproach to risk is tied into the SME’s business plan,mission, and strategy, making this aspect of tolera-ble risk quite stable.

The “soft” side of things, however, will causetrouble because those variables are subject tosharp changes and corrections. This is because of


Exhibit 3. How the Relationship Between Perceived Risk (R)

and Tolerable Risk (R*) Influences Export Options

uncertainty’s (U) dependence on the quality andthe quantity of information, including the recipient’sability to make something new of it instead of force-fitting it to a previous (and reassuring) information-processing model. Force-fitting to reassuring modelsusually happens when export managers have over-committed to foreign markets.

The Influence of Uncertainty and Moral

Commitment on Market Commitment

The two key variables in market commitment arethe “soft” risk perception ones. The present investi-gation concentrates on the influence that both uncer-tainty and moral commitment have on market com-mitment. We also translate our market commitmentconcept into the operational “duration of interna-tionalization” (M’) variable measured in years. Bear-ing in mind that a well-managed SME will not pro-long unprofitable foreign market activities beyond acertain objective threshold, we consider that dura-tion of internationalization is a reliable indicator ofsuccess in foreign markets. We also seek to under-stand the differences, if any, in the way pioneers andmanagers implement export projects in order to findout whether pioneers actually “do a better job of im-plementing exports.” Consequently, our test consistsin verifying:

Do uncertainty (U) and moral commitment (C)explain duration of internationalization (M’)when implemented by pioneers and by man-agers?

To obtain a better picture, and because the elementsof perceived risk (R) are part of the same marketcommitment chain reaction, we include tolerablerisk (R∗) in our test, which also allows us to ver-ify this aspect of the IP model for both pioneer andmanager populations.

We performed a multivariate linear regression,which is a common hypothesis verification tool usedwhen dealing with quantitative data. Our explainingvariables are uncertainty (U), moral commitment(C ), and tolerable risk (R∗). The variable to be ex-plained is duration of internationalization (M′). Pi-oneers and managers are our moderating variables.The control variables are experience as export man-ager (in years) and size of the SME (in employees).Control variables are important because they showwhether the test results are specific to the sample, orwhether the results may have a wider and generalvalue.

We first checked if, for both pioneers and managerstogether, uncertainty, moral commitment, and toler-able risk explained duration of internationalization.We then ran separate tests for pioneers and for man-agers. Finally, we ran one regression for each of thethree explaining variables. Each regression modelwas run with and without control variables. This re-sulted in 18 different sets of data.

Sample Considerations

The data came from an electronic questionnaire ad-ministered to a 6,000-address database containingmanagerial SMEs registered in France. The data fordependent and independent variables came from onemultiple-item question that asked respondents toprovide seven pieces of information on the firm’s in-ternational activity, measured for 14 geographicalzones. Of these seven items, four were retained forthe present article’s needs. These appear in bold inthe list below:

• strategic importance of the zone (independentvariable: tolerable risk),


• years of activity in the zone (dependent variable:duration of internationalization),

• zone percentage of total sales,• zone percentage of total supplies,• zone percentage of total subcontracting,• present stage in zone (independent variable:

moral commitment), and• zone risk evaluation (independent variable: uncer-

tainty).

Directed to the person in charge of international-ization, the questionnaire was initially used for re-search on agency-related costs explaining the choiceof institutionally induced incremental international-ization in managerial SMEs. It is pertinent to notethat:

• The overall focus places internationalization asthe dependent variable.

• Elements (items) of commitment decisions aremeasured in one comprehensive group of ques-tions, including some geographical detail allow-ing for circumstantiated evidence.

• Time is the underlying constant for the selecteditems.

• Information on respondents and respondents’ ca-reers was collected, as well as for their firms andtheir firms’ international history.

We obtained 316 responses, of which 214 werevalid, from which we were compelled to exclude 49noise-generating cases (all stockowner respondents),for a final sample of 165 non-stockowner respon-dents representing as many different SMEs locatedin a fairly even manner throughout France. As ex-pected, many more SMEs reported that managers(135) rather than pioneers (30) were in charge ofmanagement. This sample represents 1 percent ofexport managerial SMEs.

Commentary on the Results

The first result deals with the relationship betweenperceived risk (R) and tolerable risk (R∗). Their rela-

tionship is confirmed, and it is not of a cause/effecttype. Consequently, we are dealing with two distinctand complementing aspects of one phenomenon.

This means that if we were to look at only one, wewould not be getting most of the picture. Inciden-tally, we did not verify if perceived and tolerablerisk were the only aspects of market commitmentbecause this is beyond the scope of the present ar-ticle, and we do not have the data to do so. Thisconstitutes a limit to our results. We do, however,have some interesting results on how tolerable risk,uncertainty, and moral commitment interact:

• When tolerable risk improves, moral commitmentincreases by more than half of the change in tol-erable risk.

• When moral commitment increases, so does un-certainty, but by slightly less than the change inmoral commitment.

• When uncertainty rises, tolerable risk worsens byalmost as much.

These interactions should only be considered inpairs. It is also very interesting to note that the com-ponents of perceived risk act in opposite ways tochanges in tolerable risk, as measured here. There-fore, we were correct in running separate measuresfor these.

The second result is that pioneers definitely standapart from managers. When the two are combined,however, the presence of pioneers does not have anyinfluence on the results, probably because they rep-resent only slightly more than one-twentieth of thesample.

Considering these sub-sample sizes are similar tothose of the population of French SMEs, one canperceive how this category has so far been consid-ered “statistical noise” and not given much impor-tance. Nonetheless, pioneers and managers are defi-nitely different breeds. Another interesting aspect isthat managers’ results can be generalized, whereas


pioneers’ are specific to the sample. This was some-what expected. It appears, however, that if pioneersrecognize perceived and tolerable risk, they do notattribute the same value to these variables as themanagers would.

It is interesting to note that moral commitment islow among managers, and exceptionally low amongmanagers who joined the business after its first sub-stantial push into foreign markets.

The third result (and one of the most interesting) isthat tolerable risk, uncertainty, and moral risk doexplain duration of internationalization, be it for pi-oneers, managers, or both groups together. So, yes,these variables are part of market commitment, re-gardless of the subgroup in the sample. This meansthat we are cleared to try to verify whether pioneersperform more effectively and, if so, how.

Answering the Initial Questions

Explaining the differences, as shown in the study re-sults, between pioneers and managers will help ex-plain each group’s performance.

Managers Are Not a Homogenous Group

It appears that managers favor risk managementtechniques associated with tolerable risk. It is inter-esting to note that moral commitment is low amongmanagers, and exceptionally low among managerswho joined the business after its first substantialpush into foreign markets. Uncertainty tends to fol-low the lines of moral commitment.

We subdivided the manager sample into those thathad joined the business at the time of the initial for-eign market ventures (“initiators”) and those thatcame in later (“latecomers”). We then went back tothe questionnaire and took a close look at the “zonepercentage of total sales” data for each subgroup.We wanted to verify if some trend appeared when

associating the evolution of sales to both variablesof perceived risk. Bear in mind that performance forboth subgroups is comparable. Therefore, we focuson how export management is implemented, and at-tempt to provide some indications as to why it isdone that way.

Latecomer Managers

Latecomers’ sales tended to stagnate in bothturnover and coverage, whereas initiators tended tocompensate for declining turnover in older countryzones by strong turnover in new country zones. Inother words, in keeping with the leverage effect illus-trated in Exhibit 1, latecomers’ market commitmentis “small.” Since latecomers are those with the short-est careers, their experiential knowledge is “short.”Under these circumstances, they are unable to pro-duce much leverage.

Referring to why sales stagnate, it is suggested thatthe person who first initiated exports has retreatedfrom the business’s foreign market scene and thelatecomer has his or her hands full in succeeding tomake things last much longer than expected. Thelatecomer is frequently rewarded for this accom-plishment. Unless quick action is taken, exports ofthe “latecomer”-type businesses will fall dramati-cally, even though the export manager is consideredto be performing well.

We recommend subcontracting market expansionactivities to a specialized contractor in order toprospect and diversify foreign markets rapidly,without hindering the latecomer’s current activitywith prospecting. Entrusting the latecomer withprospecting would only accelerate export demise.Once the latecomer’s experiential knowledge has“lengthened” as a consequence of managing newcustomers in new countries (obtained by the con-tractor), his or her job should then expand to in-clude what the contractor has handled. The late-comer should then be monitored on uncertainty andmoral commitment with the purpose of building upmarket commitment.


Longer experiential knowledge and bigger marketcommitment allow for greater ease of implementa-tion. This transition should be implemented over atleast 18 months to allow all parties to grow andlearn.

Initiator Managers

Initiators have longer experiential knowledge anda greater market commitment. Although the sur-vey shows that they are probably doing an excel-lent job, the IP model suggests they may have de-veloped a standardized information-processing rou-tine. The issue here is that routines tend to lead tohabits or even ruts, so that whenever some bit of in-formation does not fit into the established routine,it is likely to be discarded instead of setting off analert.

This tends to occur when experiential knowledgegrows out of proportion with market commitment,and especially with uncertainty. This state of affairsis also referred to as excessive confidence in out-come. In other words, when an export manager isable to predict changes in foreign markets accuratelyfor some time, management should brace itself be-cause unexplained and unexpected things will beginto occur, diverting the SME from the path of suc-cess. The business’s underestimation of uncertaintyand over-reliance on experiential knowledge must becorrected.

Since foreign market information-processing rou-tines are part of an individual’s rationale, we rec-ommend that individuals be helped in reconsider-ing their mental schemes by having to train some-one with little professional experience and new tothe industry, preferably a foreigner as well. This canbe accomplished through six-month college or en-gineering school trainee programs. Trainees shouldbe chosen for their personal qualities, such as out-spokenness, spontaneity, and capacity to challengeauthority, never take anything for granted, and re-sist pressure. They shouldn’t be selected because oftheir technical expertise alone. The export manager

should also be specifically monitored on perceivedrisk variables during the whole process and for sometime after.

A general recommendation for our manager cate-gory is to help them become aware of the importanceof the “soft” skills in perceived risk. As this involvespersonal change, it is long in the making, and timeis a commodity SMEs often lack. Businesses shouldnot underestimate the advantages that third partiescan provide, nor should they overestimate their op-erational cost, leading to protraction.

Pioneers Thrive Under Limited Circumstances

A first point we should get out of the way is thatbusinesses with pioneer-led exports have the samelevel of success as those led by managers. This is afirst answer to our title question. Perhaps pioneersdo not perform better than managers do; they do aswell as managers.

The real difference comes from the way pioneersmove from one country zone to another. They seemto be continuously seizing opportunities, and thesum of these snowball into quite impressive exportdynamics where an occasional one-shot deal willrepeat itself in time, and as time passes, relation-ships are established, networks are built, and ex-ports flourish. It appears that pioneers invest lit-tle in prospecting long-term clients (the way man-agers would). Pioneers tend to multiply contactswith more of a shotgun approach. This gives the im-pression of opportunism, skimming, and superficialmarket interactions. When examined closely, how-ever, pioneers prefer short lead time, ready-madeproducts or services that provide quick solutions tocustomer needs, instead of tailor-making solutionsthat require adaptation and longer lead time. Thislast approach comes later in the customer relation-ship, once repeated past business leads to addressinglonger-term issues. Until that moment comes, pio-neers are seen to be indulging in spot and short-termactions.


Referring to the IP model, pioneers tend to focus firston the market commitment (not commitment to cus-tomers) and seem intent on reducing the uncertaintyof perceived risks by multiplying transactions in aquantitative manner. Tolerable risk is dealt with like-wise, with a very short-term perspective, excepting alimited number of special, privileged, and very famil-iar customers. Experiential knowledge results fromtheir quantitative marketing efforts. The interestingpoint is that when done this way, market commit-ment and experiential knowledge grow at a relatedand balanced pace. This is seldom the case in themanager subgroup SMEs.

As individual export relationships and business inte-gration grow, uncertainty will decrease, moral com-mitment will increase, resource allocations will in-crease, and the business’s approach to risk will shifttoward a more risk-neutral stance.

The Liability of Foreignness and Outsidership

Another interesting feature of pioneers’ export man-agement is that because they implement export ac-tivities by multiplying the number of customers andcompensating the fairly small individual customerdeliveries by an impressive amount of orders, liabil-ity of foreignness tends to slide toward a countryof origin advantage. The country of origin advan-tage compensates for some slack in the customer’ssatisfaction of objective criteria with more qualita-tive considerations usually based on stereotypes. Forexample, manufactured products made in Germanyare sturdier; French engineering is better, as well asits wine; products made in the United States have thebest price/quality ratio; Italian design is superb; andso on.

As a consequence, liability of outsidership simplyhas no hold on pioneer-led SMEs’ exports. The sit-uation does change slightly once the regular flow ofsmall orders to one export customer grow and are

accompanied by conditions of customization. Onthe condition that customization does occur, liabilityof outsidership tends to disappear on the customer’sside. The export department will suffer strong lia-bility of outsidership within the SME, however, asnon-exporting managers and personnel do not per-ceive the need for making the extra effort associatedwith exports and its “exotic” ways.

This situation can usually be identified by preju-diced comments such as “the German’s purchaseorder,” for example, as well as loaded commentsagainst change initiated by international activitiesmade by production, accounting, and marketing di-vision managers. We recommend face-to-face con-tact between members of these divisions and the for-eign customer. This is best implemented by invitingthe most criticized or commented-upon customer tovisit the factory for a couple of days. Take time toshow him or her around, and answer questions. Givethe customer time to share ideas with productionand logistics personnel. Putting a face, voice, andgestures to a name will personalize things. Personal-ization will rapidly reduce prejudice. The perceptionof exoticism associated with export activities will re-quire more time to change, however. This perceptionmay eventually become an asset, provided that ex-oticism is valued in the SME.

As individual export relationships and business inte-gration grow, uncertainty will decrease, moral com-mitment will increase, resource allocations will in-crease, and the business’s approach to risk will shifttoward a more risk-neutral stance. Within the dense,buzzing cloud of small export customers, some willcatch on and become the SME’s future internationalpartners.

The Downside to Being a Pioneer

The downside to the pioneers’ way is the costsrelated to administering the scores of small or-ders. Eventually, the pioneer will seek an initiator-manager’s help to “rationalize” exports. Given theearlier discussion, one might conclude that pioneers


truly do perform better than managers. One impor-tant detail, however, leads us to refrain from sayingso: business size.

Pioneer-led exports occur in the smaller SMEs. Ini-tiator manager–led exports occur in the midsizeSMEs, and latecomer manager–led exports appearin the much larger SMEs. One could imagine allthree having occurred in the same business: The pi-oneer sought help from an initiator manager whenthe longer-term relationships and more importanttransactions became common trade; the initiatormanager passed the ball on to a latecomer man-ager as higher technical qualifications were neededand he/she accepted a promotion. Does this patternsound familiar? The IP model offers a way to un-derstand the situation and ultimately may suggestcorrective actions similar to the recommendationsabove.

Going Back to the Initial Questions

Having managers take over exports from pioneersdoes deliver results in the sense that the SME knowswhat it is doing. Nonetheless, even if a managerknows how things should be done, he or she mayconfuse priorities, leading to non-pertinent why rea-sons. Thus, the means tend to become the objectives,instead of the objectives determining the means.

Success does depend on an export manager’s abilityto read a market and the capacity to seize oppor-tunities rapidly. That is precisely the pioneer’s ad-vantage. Operations of different size, however, re-quire different forms of management. As the busi-ness grows, challenges shift.

The IP model’s market commitment cannot be sep-arated from export management proficiency, and,therefore, can neither compensate nor offset itself. If“market commitment” were placed outside of the IPmodel and made to signify how committed a busi-ness is to satisfying a customer’s needs, then mar-ket commitment would most probably offset export

management proficiency, as our evidence about ini-tiator managers and latecomer managers suggests. Ifthis were a competition, our champion would be apioneer.

Because pioneers “do it better,” albeit in smallerbusinesses, managers should seek inspiration in han-dling the evolution of perceived risk, tolerable risk,and experiential knowledge in a balanced fashion.To conclude, reducing the impact of foreignness andoutsidership liabilities is a clear indication that theIP model’s leverage effect functions correctly in theSMEs we considered. This is a determining factor ofsuccess: a consequence of the pioneer’s way.

References

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Ernesto Tapia Moore, PhD, LLM, MBA, is an associate pro-fessor in international management at Euromed Managementin Marseille, France. His research deals with explaining con-trol and dependency of management in SME internationaliza-tion from a managerial perspective. He has 30 years’ experi-

ence in the field as both an international business professionaland an academic. Dr. Tapia-Moore holds a doctoral degree inmanagement, as well as master’s degrees in international busi-ness law and international business administration. He can bereached at [email protected].


Documents

Exports and Market Commitment in Managerial SMEs: Do Pioneers Do It Better?