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BJM
5,1 Management orientation and
export performance: the case
of Norwegian ICT companies
28
Carl Arthur Solberg and Ulf H. Olsson
BI Norwegian School of Management, Oslo, Norway
Received March 2009
Revised June 2009
Accepted June 2009
Abstract
Purpose – The purpose of this paper is to contrast three management orientations relevant for
exporters: export, technology and customer orientations. The general hypothesis is that all
orientations covariate positively with export performance. However, an alternative hypothesis
regarding customer relations is propounded (negative impact on performance).
Design/methodology/approach – Regression-based techniques are used.
Findings – The results support the hypotheses that export performance increases with export
commitment. Technology orientation correlates positively with export performance. On the other
hand, the much venerated customer orientation shows negative correlation with export performance.
Originality/value – This paper argues that customer orientation may turn into what might be called
customer obsession, without due attention to cost consequences and strategic orientation. Also, too
much customer orientation may lead the firm away from its ability to innovate, leaving the company
behind its competitors in the longer term. The interaction between customer and technology
orientation gave no effect.
Keywords Norway, Communication technologies, Companies, Exports, Customer relations,
Management strategy
Paper type Research paper

Baltic Journal of Management
Vol. 5 No. 1, 2010
pp. 28-50
q Emerald Group Publishing Limited
1746-5265
DOI 10.1108/17465261011016540
Introduction
Over the years, a number of articles have discussed the concept of successful exporting
(Aaby and Slater, 1989; Cavusgil and Zou, 1994). The main conclusion of this strand of
literature is that success in exporting hinges first and foremost on organisational
variables such as proactive attitudes and management commitment, much more than
on operational variables (such as, different aspects of marketing mix or market choice).
Taking this discussion somewhat further, this paper discusses the impact of different
management orientations on export performance. Levitt (1960) was among the first to
discuss management attitudes and orientations, contrasting the product-oriented firm
with the customer- and market-oriented one. Only 30 years later, the concept of market
orientation was subject to scientific investigation (Kohli and Jaworski, 1990; Narver
and Slater, 1990). After these seminal articles, a string of research has followed on
different aspects of market orientation, testing its effect on performance. As far as we
know, no one to this day has attempted to see the emerging literature on market
orientation in an export context. Indeed, Breman and Dalgic (1998) have examined the
learning effects on market orientation in exporting firms, whereas the relations with
performance remain unexplored.
The present study focuses on three management orientations: technology, customer
and export orientations and explores their respective impact on export performance.
In principle, one could allege that success in exporting would not present any Management
difference than business success in general, and that one, therefore, does not need orientation
specific studies in the subject matter. Yet, the specifics of the exporting situation
involving new dimensions such as an unknown cultural environment, unknown risks,
both commercial and political, and unknown strategic challenges would warrant the
phenomenon per se to be studied.
We have chosen the information and communication technology (ICT) industry as 29
the context of our study. This relatively young branch of modern industry is facing a
number of critical challenges over the next decades. The pace of technological
innovation, which is one of the specific features of this industry, together with the need
for swift market penetration in an increasingly globally competitive environment in a
globalising market, put tremendous requirements on the shoulders of top management
of ICT firms. The technological and innovation aspects justify a study of export
performance of this specific industry, emphasizing the role of the technology
orientation of the firm. Customer orientation is one of the components of Narver and
Slater’s (1990) market orientation construct and has been shown to correlate positively
with performance (Kirca et al., 2005), and expected export performance. Customer
orientation may possibly be considered the antonym of technology orientation in that
firms with the former orientation in its purest form seek information primarily from
customers in order to adapt their products and services to customer preferences and
demands, whereas the latter, first and foremost, emphasize the research and
development (R&D) and product innovation rather than customer satisfaction. Export
orientation or export commitment (Aaby and Slater, 1989) is introduced as a third
independent variable in order to explore its relative importance to the other two
constructs in an international marketing setting.
The paper is structured as follows: a literature review summarises the relevant
literature and presents the hypotheses to be tested. In “Methodology” section, the
constructs are discussed and defined, and the method is presented. The findings of the
survey are presented in the following section. Finally, the paper concludes with
implications for management and research.

Literature review and hypotheses

This section will discuss contributions on the three management orientations in order
to develop hypotheses to be tested in the study.

Export commitment and performance

Export orientation or export commitment, in terms of commitment of resources
deployed to carry out export activities, has been suggested as one of the main factors
leading to export performance (Aaby and Slater, 1989). This was already recognised as
critical by Hunt et al. (1967). Later in the 1970s and the 1980s, this relationship has been
explored from different angles. The seminal work in the field of internationalisation
was made by the “Uppsala School” with contributions from a long range of writers,
among them Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977).
They suggest that there is a loop process between the market and the firm whereby
market knowledge leads to commitment decisions in the firm, the ensuing marketing
activities in their turn leading to increased market commitment and knowledge,
and so on. The theory posits that the learning process comes about primarily through
BJM experience in the market: “Experiential knowledge generates business opportunities
5,1 and is consequently a driving force in the internationalisation process” (Johanson and
Vahlne, 1990, p. 12). The theory of incremental international involvement has received
substantial support by a host of researchers (Bilkey and Tesar, 1977; Cavusgil, 1983;
Czinkota and Johnston, 1983), particularly in the early stages of the process (Forsgren,
1989; Solberg and Askeland, 2006).
30 For instance, Kirpilani and Macintosh (1980) note that organisational variables of
the company play a much larger part than do situational, product and manufacturing
policies. Factors like information for control reporting, top management effort, and the
degree of structuring and maturity of the firm are all significantly linked to export
success. Furthermore, they note that it is possible to penetrate world markets with
“commonplace” products (Kirpilani and Macintosh, 1980, p. 90). We may, therefore,
conclude that success hinges more on organisation than on products. Solberg (1988)
supports this view and suggests a model of “beneficial export circle” of three factors:
attitudes, skills and embodiment. Analysing 114 Norwegian exporters, he suggests
that attitude factors, for instance, marketing orientation, empathy and delegation of
authority; skill factors such as how to deal with representatives abroad, quality and
price, use of market information; and management commitment and the role of the
board of directors (embodiment) were key determinants for export success.
In their comprehensive review of the literature on export performance, Aaby and
Slater (1989) conclude that export success is strongly related to top management
commitment in some form or another. This commitment is necessary in order to build
the distribution network and information channels indispensable for the firm to engage
in the export-learning process (Johanson and Wiedersheim-Paul, 1975; Johanson and
Vahlne, 1977). They also refute the generally accepted belief that larger firms are more
successful than smaller ones (Czinkota and Johnston, 1985). Interestingly, Kamath et al.
(1987) conclude, in a study of Canadian exporters, that it is hard to find any clear
relationship between export success and a number of marketing strategy variables
such as marketing mix, shot gun or rifle approach to international markets, product
development expenditures (except in high-technology industries), planned or ad hoc
approaches to international markets. Cavusgil and Zou (1994) develop a model of
export marketing performance involving the four traditional marketing mix factors:
product adaptation, promotion adaptation, and support to distributors/sales subsidiary
and price competitiveness. Product adaptation and distributor support were found to
be positively linked with export performance, whereas promotion adaptation correlates
negatively, and price competitiveness did not show any significant correlation. Two
other factors, the firm’s international competence and its commitment to the export
venture were found to have both a direct and indirect positive impact on performance,
lending support to the review presented by Aaby and Slater (1989).
The above discussion leads us to the following hypothesis:
H1. The more committed the firm is toward exporting, the better its export
performance.

Customer orientation and export performance

Customer orientation is an integral part of the marketing orientation construct, as
defined by Narver and Slater (1990), and reflects the firm’s ability to understand and
respond to customer demand. Seringhaus and Rosson (1990, pp. 154-5) indirectly link it Management
to exporting, arguing that: orientation
The company that is knowledgeable about exporting will be able to determine what
information to collect and how to use it, to a greater extent than their less knowledgeable
counterparts. While based on information then, knowledge is clearly a much broader concept,
guiding the company in all its endeavours. In a sense knowledge is a special resource that is
present to varying degrees in companies. Like other resources, we should recognize that, 31
without husbanding and replenishment, export knowledge will be depleted over time.
Thus, they make indirectly the link between the internationalisation process (Johanson
and Vahlne, 1977, 1990), market information/market knowledge and market orientation.
Kotler and Keller (2006, pp. 15-17) discuss different management orientations in their
standard textbook on marketing management, where market orientation departs from
the more sales-, product- and production-oriented management styles in its emphasis on
customer value and customer satisfaction. Kohli and Jaworski (1990) suggest a model of
market orientation, with the underlying hypothesis that the more market-oriented firms
will perform better than product-oriented firms. Their definition of market orientation,
including elements like information gathering, dissemination and response, was among
the first attempts to identify a measure of this construct. Narver and Slater (1990) define
market orientation by three behavioural ingredients (customer, competitor and
inter-functional orientations) and by two decision variables (long-term perspective and
profitability). Whereas, market orientation has been shown to generate positive
outcomes (Kirca et al., 2005), customer orientation alone has, to a lesser extent, been
subject to investigation. However, close contact with customers is deemed to be
necessary in order to obtain information on and insights into customer needs so as to
be able to understand how to best adapt products and services to customer needs.
In business-to-business (B2B) markets, this is of particular importance. In fact, research
from Norway indicates that the fewer customers and (by implication) the closer
the contact the firm maintains with those customers, the more likely the firm is to be
classified as successful (Biong and Selnes, 1996). Thus, customer orientation
may be defined as a dedication of the firm to bring about customer satisfaction. The
close overlap between the customer and market orientation concepts leads us to
conclude that:
H2a. The more customer oriented the firm, the better its export performance.
Customer orientation is distinct from market orientation in that it does not take into
account the profitability and long-term aspects suggested by Narver and Slater (1990).
Their contention that market-oriented firms perform better than other firms (Slater and
Narver, 1994) may not necessarily be true for firms that are more “narrowly” customer
oriented. Therefore, one could maintain that firms focussing zealously on customer
needs, not necessarily paying attention to the two decision variables introduced by
Narver and Slater (1990) – long-term focus and profitability – will not perform well.
The argument here is that customer orientation may turn into what we might call
customer obsession without due attention to cost consequences and strategic
orientation. One risks, therefore, ending up pleasing a lot of different customers with
different kinds of requirements having dramatic repercussions on the profitability of
the operations. Or in other words, the risk of too much customer adaptation is that
“every product will be a new product development project” as one Norwegian
BJM managing director of an ICT firm puts it. Also, concentration on customer orientation
5,1 may lead the firm away from its ability to innovate (Hayes and Abernathy, 1980;
Bennett and Cooper, 1981; Christensen and Bower, 1996; Frosch, 1996; Meridith, 2002)
and may, therefore, in the longer term, leave the company behind its competitors.
Furthermore, customers focus on their short-term requirements and are not abreast of
the latest innovations in the industry or do not always know what their future needs
32 are (von Hippel, 1988). This is of course particularly critical in a high-technology
environment, as is the case of the ICT industry. Should the industry be customer
oriented in its product-development process, it is questionable that products like the PC
would ever have seen daylight. Finally, the ICT industry, still being in its infancy,
it is conceivable that the industry has not yet reached the stage where marketing and
customer orientation is called for in order to operate profitably. Rather, the focus
should be on product innovations. Therefore, alternatively:
H2b. The more customer oriented the ICT firm, the poorer its performance.

Technology orientation
Technology orientation may be defined as the degree to which firms emphasize
product development using state-of-the-art technology (Hubert and Xuereb, 1997). The
ICT industry is living through a period of extremely rapid pace of innovation, with
product cycle times shorter than ever before (Gabrielsson and Gabrielsson, 2003;
Ferus-Comelo, 2008). We believe that this competitive environment calls for technology
orientation of the firm, encompassing continuous R&D activities and development of
relations and active collaboration with state-of-the-art external technological milieux
such as leading universities and research institutes.
Does then technology orientation pay-off? This question has been investigated from
several angles. Many studies have, for instance, sought to establish a positive relation
between “first mover” and “advantage”. One of these, Buzzell and Ferris (1977) found
that late entrants have to spend almost 50 per cent (relative to sales) more to promote
their products than pioneers. First mover advantage may be linked to the concept of
technology orientation of the firm in that first movers are the first ones to introduce
technological innovations to the market.
Innovative firms have been described as extremely R&D oriented and take a
proactive stance to acquiring new technologies (Cooper, 1994; Kanter, 1988). One may,
therefore, assert that successful exporters embed characteristics technology-oriented
management. In addition, several studies have found that product advantage and
quality are the number one factors impacting on innovation performance (Cooper, 1979;
Cooper and Kleinschmidt, 1987; Calantone and di Benedetto, 1988). Zheng Zhou et al.
(2005) investigate the impact of strategic orientations of firms on technology- and
market-based innovations. Their findings indicate that technology orientation strongly
correlates with technology-based innovation, which in turn positively and significantly
impacts firm performance. Its impact on market-based innovations is more
questionable[1]. However, technology orientation has received only scant attention in
the export marketing literature. Yet, for many products, technological innovations are
paramount to secure competitiveness (Kamath et al., 1987; Hubert and Xuereb, 1997).
From this, we may infer that:
H3. The more technology oriented the ICT firm, the better its performance.
Combined effect of customer and technology orientation on export performance Management
The two constructs, customer and technology orientations, are not necessarily mutually orientation
exclusive. On the contrary, one may claim with Drucker (1954) that marketing and
innovation are the two basic functions of the firm, and that the management culture
ensuing from the one might reinforce the other. Kohli and Jaworski (1990) maintain that
elements of innovation should be included in the definition of market orientation.
Deshpandé et al. (1993) allege that market orientation leads to successful innovation and 33
higher performance. Also, Zheng Zhou et al. (2005) find that the combined effects of
market and technology orientations enhance organizational learning. Nevertheless,
Lawton and Parasuraman (1980) found no significant relationship between the two
dimensions (market orientation and innovation activities). Atuahene-Gima (1996, p. 93)
observed that “market orientation makes a significant contribution to the innovation
project’s impact performance, as measured by intermediate benefits for the firm”, but
“that has little impact on its market success, as measured by sales and profit
performance”. However, he did not analyse the two constructs, market orientation and
technology (innovation) orientation as two independent variables at the same level.
In this paper, we argue that the two constructs, customer and technology orientations
represent two independent dimensions at the same level of analysis and that they,
therefore, should be treated separately.
Hubert and Xuereb (1997) define technology-oriented firms as those:
[. . .] with the ability and will to acquire substantial technological background and use it in the
development of new products. Technology orientation also means that the company can use
its technical knowledge to build a new technical solution to answer and meet new needs of the
users.
This definition overlaps partly the definition of customer orientation in that the
technology orientation is directed toward the needs of the customers. Indeed, Hubert
and Xuereb (1997) find that when demand is relatively uncertain (as may be the case of
ICT products), firms should be both customer and technology oriented.
Moreover, we have seen that customer-oriented firms may deviate their attention
from technological innovations so important in high-technology industries, rather
concentrating their resources on product adaptations and adjustments (Bennett and
Cooper, 1981; Hayes and Abernathy, 1980). On the other hand, one may also
hypothesise that technology orientation alone, without any corrections from the
market place, risks leading the company into interesting technological gains, but
without any real demand from potential customers. It is, therefore, suggested that:
H4. The combined effect of customer and technology orientation will yield better
performance than either of them separately.
The model in Figure 1 shows the proposed relationships between the different variables.

Methodology
Sample
Based on a list of 207 potential respondents[2], a total of 132 marketing managers were
telephoned in order to announce the forthcoming dispatch of a questionnaire relating to
export issues, and to ascertain the name of the key informant (in most cases, the
marketing manager). The remaining 75 were not considered relevant for an export
BJM
5,1 Technology
orientation
+

++
34
Customer ? Export
orientation performance

+
Figure 1.
Export performance and Export
antecedents in the ICT commitment
industry

survey, as they were not registered as exporters. In total, 80 usable questionnaires

were returned, a response rate of 61 per cent. These companies should be quite
representative for the total population of Norwegian ICT exporters (Table I).
One can observe that the respondent firms are slightly smaller and have a slightly
higher profitability than the total sample frame. Table II shows the composition of the
respondent firms.
The figures indicate that the propensity to export increases with size, except for the
largest firms that tend to export less than the average. One reason for reduced export
dependence of large firms may be ascribed to the fact that some notorious among them

Adjusted sample frame (n ¼ 132) Responses (n ¼ 80)

Average sales (million NOK) 207 164

Average number of employeesa 174 148
Table I. Average return on salesa (%) 2.8 3.0
Size and profitability
of sample frame Source: aBrønnøysundregisteret – a public register of company annual reports in Norway

Sales Number of Average sales Export Return on Export

(million NOK) firms (million NOK)a shareb (%) salesa (%) performancec

, 10 10 7 36 4.4 11.4
10-19.9 18 15 34 0.2 12.8
20-49.9 18 32 48 10.2 13.7
50-99.9 13 71 58 1.3 14.0
100-199.9 10 142 61 7.8 14.3
. 200 11 1,128 38 0.2 12.5
Average 80 208 41 2.8 13.2
Table II.
Main features of firms Note: cExport performance: 3 – very poor; 21 – very high
in the survey Sources: aBrønnøysundregisteret (public register of company annual reports in Norway); bsurvey data
(for instance, Alcatel and Siemens), by and large, cater to the Norwegian market – Management
mostly as local units of multinational firms. It is also interesting to note that generally orientation
speaking large firms seem to perform worse than the average.

Operationalisation of variables
This section discusses the four variables in Figure 1.
35
Export commitment
We have seen that most of the export literature corroborates the view that
organisational commitment is among the most important predictors of export
performance (Aaby and Slater, 1989; Cavusgil and Zou, 1994). This variable has been
defined in many different ways (Aaby and Slater, 1989; Cavusgil and Zou, 1994; Singer
and Czinkota, 1994; Walters and Samie, 1990; Axinn et al., 1998). In the present
research, three items have been used to identify export commitment among firms:
(1) the competence of key personnel in international marketing;
(2) the number of employees involved in export activities; and
(3) investments by the firm in overseas markets (for instance, sales offices).

Defined in this way, the construct captures the resource commitment to exporting,
rather than the more attitudinal variables suggested by, for instance, Axinn et al.
(1998). These variables embody Cavusgil and Zou’s (1994) constructs on export
commitment, which correlated positively with performance.

Customer orientation
Based on the market orientation literature, this construct is somewhat narrower
and encapsulates only certain of the elements contained in the market orientation
definition (Narver and Slater, 1990). Hubert and Xuereb (1997) define customer
orientation as the capability to identify, analyse, understand and meet customer
requirements. Deshpandé et al. (1993, p. 27) define customer orientation as “the set of
beliefs that puts the customer interest first”. In the present context, customer
orientation reflects the dedication of the organisation to fulfil customer satisfaction,
including information seeking, knowledge of customer needs and top management
involvement with customers. This interpretation is similar in its tenet to that of the
marketing concept, as it has been defined by Kotler and Keller (2006) and King (1965),
the latter writing that the marketing concept is:
[. . .] a managerial philosophy concerned with the mobilisation, utilisation, and control of total
corporate effort for the purpose of helping consumers solve selected problems in ways
compatible with planned enhancement of the profit position of the firm (King, 1965, p. 85).
It involves not only the sales and marketing department but also the whole
organisation – starting with top management. Customer orientation is, therefore,
measured in three different ways:
(1) the degree to which relevant departments are well known with customer
demands;
(2) top management involvement in customer relations; and
(3) personal relations of key personnel between the firm and customer.
BJM Kohli and Jaworski’s (1990) elements have partly been included, but also other
5,1 dimensions are introduced. One may claim that many of the constructs described in the
literature on networks and supplier-buyer interaction (Håkansson, 1982; Ford et al.,
1998) and relationship marketing (Dwyer et al., 1987; Morgan and Hunt, 1994) are
paraphrasing the basic disposition of a customer-oriented company. Since the study is
carried out in the context of Norwegian ICT industries consisting of mostly small- and
36 medium-sized firms operating in the B2B market, the items have been adapted to
capture elements of relationships and understanding of customer needs.

Technology orientation
Hubert and Xuereb (1997) define technology-oriented firms as those “with the ability
and will to acquire substantial technological background and use it in the development
of new products”. In addition, they maintain that the company must organise its
capacity to exploit the technological background acquired. Also, technology
orientation is characterised by a concern with product features (Kotler and Keller,
2006), contrasting the customer-oriented firm’s inclination to satisfy customer
demands. Finally, technology-oriented firms will seek to emphasize technological
advance and development. We have, therefore, measured technology orientation using
three variables, the extent to which:
(1) product features are the firm’s most important competitive advantage;
(2) new products are based on new technological development; and
(3) the company has a technological edge on its competitors.

Export performance
In a review of the literature, Cavusgil and Zou (1994) identify 11 factors indicating export
performance: export sales level; export sales growth; export profits; ratio of export sales
to total sales; ratio of export profits to total profits; growth in export ratio; overcoming
barriers to export; acceptance of product by foreign distributors; export involvement;
internationalisation; and attitudes toward exports. The problem with many of these
measures of export performance is that they reflect only part of the story. Many
reservations to these measures may be put forth: is export sales growth a performance
measure if it is achieved at the expense of profitability? How does the growth compare
with the industry in general? Is a large firm with a high-export ratio more successful than
a small firm with a low-export ratio? In their own study, involving 202 export ventures of
76 firms, Cavusgil and Zou (1994) retain the following elements of export marketing
performance: goal achievement, perceived success, and average sales growth of the
export venture and overall average profitability over the first five years of the venture.
In the present study, we have defined export success as the:
.
general perception by top management of export success;
.
profitability of the export markets as compared with the domestic market; and
.
market share of the exporter in its most important overseas market.

The general perception of export success captures probably the essence of export
performance the best, in that it not only translates the perceived degree of economic
success, but also includes the respondents’ opinion of strategic elements of success,
such as market expansion, competitive response, market penetration, etc. It is akin to
Cavusgil and Zou’s (1994) goal achievement and perceived success. The other two Management
measures have been included for their somewhat more concrete expression of export orientation
performance.
Measurements. The variables were measured on a seven-point Likert scale. The
measurement model for the independent latent variables was tested by a confirmatory
factor analysis (CFA) model with three correlated factors, as shown in Table III. Only
export commitment and technology orientation show a significant correlation. 37
The model was estimated with maximum likelihood (ML), the standardised factor
loadings, estimated correlations, error variances and reliability measures are depicted in
Table IV. The x 2 measuring overall fit is 24.10 (df ¼ 24) with a p-value equal to 0.46
indicating that the model is valid. Because of the small sample (n ¼ 80), the “chi-square”
test may lack power, so we interpret the x 2-measure only as indication of acceptable fit.
In Table IV, we see that the factor loadings vary from 0.46 to 0.73, which is
considered to be practically significant for this sample size (Dillon and Goldstein, 1984,
p. 69). The average variance extracted rVC is 0.36, 0.46 and 0.49 for the three constructs,
denoting that the variance due to measurement error is larger than the variance
captured by the constructs. This is furthermore confirmed by the relatively low
coefficient of a (0.61, 0.67 and 0.74). The validity of the individual indicators can,
therefore, be subject to discussion. This is particularly true for the customer orientation
construct, implying that the three items defining this construct only capture part of it.
Model. Based on these findings, two different estimation approaches have been
tested out: ordinary least squares (OLS)-regression and structural equation modelling
(SEM). Given the limited number of respondents (80 valid answers), it was decided to

j1 j2 j3

j1 1.0
j2 2 0.07 1.0 Table III.
j3 0.10 0.32 * 1.0 Correlations between
latent independent
Note: *Significant at the 1 per cent level variables

Latent variables
Factor loadings
Observed variables j1 j2 j3 Error variance

Top management customer involvement 0.73 0.46

Personal relations with customer 0.49 0.76
Knowledge of customer needs 0.55 0.70
Number of export employees 0.58 0.66
Investments in export markets 0.91 0.18
Competence in exporting 0.46 0.79
Product features ¼ competitive advantage 0.73 0.47
Technological edge 0.73 0.47
Investments in new technology 0.64 0.59 Table IV.
rVC 0.36 0.46 0.49 Factor loadings and
a 0.61 0.67 0.74 reliability estimates
BJM focus on the OLS results, knowing that the ML estimator in linear structural relations
(LISREL) needs a relative big sample to give precise parameter estimates. On the other
5,1 hand, the confirmatory approach in LISREL is considered so important and interesting
that the estimates are presented in the Appendix. The notational conventions
established by Jøreskog and Sørbom (1989) are used both for the OLS and the LISREL
models. The constructs will have the same meaning in the two approaches although
38 the operationalisations will be quite different. The OLS-regression will be based on
summed scales and the LISREL model on CFA models. The two approaches represent
two different philosophical ideas: the formative- and reflective-measurement models.
Therefore, we find it interesting to compare the estimates given by the two techniques.
The theoretical model was run in two variants: without and with the interaction
term:
(1) h ¼ a þ g1 j1 þ g2 j2 þ g3 j3 þ 6:
(2) h ¼ a þ g1 j1 þ g2 j2 þ g3 j3 þ g4 j1 j3 þ 6:

where:
h ¼ export performance;
j1 ¼ customer orientation;
j2 ¼ export commitment; and
j3 ¼ technology orientation.

Results
Two different models were tested: with and without interaction effect between
customer and technology orientations. The rationale for the interaction model is
investigated by a two-group approach recommended by Johnsson (1998) using the
LISREL method. The sample was split in two subgroups. The first subgroup consisted
of those, which were strongly customer oriented (mean value above 5 – on a
seven-point scale); the other subgroup was those, which were less-customer oriented
(mean value below 5). The effect parameter from technology orientation on export
performance for high- and low-customer orientation was tested, finding no significant
difference between the two groups. This indicates that there is no evidence of
interaction between technology and customer orientations. This is outlined in more
detail in the Appendix.
Table V shows that H1, H2b and H3 are supported in the model without the
interaction effect. Also, accepting H2b implies rejecting the alternative hypothesis, H2a.
Furthermore, the predicted model explains 49.2 per cent of the variance in export
performance.

Model 1. Without interaction effect h^ ¼ 20:202j1 þ 0:607j2 þ 0:206j3

t-ratio 2 2.44 7.27 2.44
R 2 ¼ 0.492
Model 2. With interaction effect h^ ¼ 20:0086j1 þ 0:608j2 þ 0:511j3 2 0:391j1 j3
Table V. t-ratio 2 0.0282 7.26 1.088 2 0.66
OLS-regression analysis R 2 ¼ 0.495
Including the interaction effect does not seem to add much to the explanatory power of Management
the model (R 2 ¼ 0.495). Moreover, the t-values of the variables in Model 2 are orientation
considerably reduced in the case of customer and technology orientation, these two not
being statistically significant any more. It is, therefore, concluded that Model 1 gives a
better picture of the impacting variables than Model 2.
It is also interesting to note that the two estimation techniques OLS and SEM (ML)
support the same model (see the Appendix). Deviation of parameter estimates should 39
be expected, since the different estimation approaches only will converge in the rare
situation when models are correct in the population (Olsson et al., 1999).

Discussion
The model explains 49 per cent of the variance in export performance, underscoring
the importance of different management orientations. On the other hand, the results
contradict previous research on market orientation (Kirca et al., 2005). Admittedly,
customer orientation – and not market orientation – has been investigated.
Still, customer orientation – in terms of market (and customer) knowledge is an
important ingredient in the market orientation construct (Kohli and Jaworski, 1990;
Narver and Slater, 1990). However, it corroborates some other research (Christensen and
Bower, 1996). Furthermore, customer focus and orientation are being embraced by
management as the standard solution to reach profitability, with expressions such as
“close to the customer” having survived ever since it was first coined by Peters and
Waterman (1982). In exports of ICT products, this seems not to be the case. Reviewing
the data base in more detail, at least two sets of behaviours that correlate negatively
with export success have been identified: the firm’s propensity to accommodate
dissatisfied customers (regardless of the loss effects on the particular sales contract), and
the pre-disposition to yield in contract negotiations. Furthermore, customer orientation
may also entail a willingness to over-state the supply of service to customers who really
do not need it, and who will not reward the exporter by being loyal or paying the costs of
the service (Jackson, 1985). Interestingly, customer orientation in our study does not
appear to lead to “over-adapted” product strategy; in fact there is no difference between
high and low performers on this measure in the present survey.
The relatively strong negative impact of customer relations indicates that the
alternative hypothesis should be seriously considered in development of the firm
strategy. The results indicate that top management involvement with customers,
together with close relationships at several levels in the buying and selling firms, may
lead to a customer bias at the expense of the exporter’s own operations. The
consequences of such bias may be as follows.
First, in the long-term, innovation is paramount to staying competitive in high-tech
markets. Too much attention to customer demands may reduce the firm’s capacity to
innovate (Bennett and Cooper, 1981; Hayes and Abernathy, 1980; Christensen and
Bower, 1996). Second, dedication to customer needs may also involve too much product
adaptation, resulting in interrupted or reduced production series. In other words,
“over-focusing” on customer needs leads to poor economies of scale, which in
globalising markets are deemed to be of great importance (Levitt, 1983). In Muskin’s
(1998, p. 33) word: “business customers generally expect adaptations, efforts, and costs
to be borne by the supplier rather than seeking the optimal outcomes that might result
from mutual accommodations”. Third, caring too much for customer demands may
BJM lead the exporter catering to a host of different customer segments, the final outcome
5,1 being a lack of strategic focus and dwindling profitability. Finally, letting customers
have too much influence on one’s products and services risks suppliers ending up with
“me too products”, wiping out whatever differences that might exist to competitors
(Meredith, 2002).
The other main finding is that technology orientation correlates positively and
40 significantly with export performance, corroborating other research on technology and
innovation orientation effects on performance in general (Hubert and Xuereb, 1997;
Han et al., 1998; Zheng Zhou et al., 2005; Salavou, 2005) and on export performance in
particular (Guan and Ma, 2003; DiPietro and Anoruo, 2006; Kirbach and Schmiedeberg,
2008).
Also, the findings indicate that commitment to the export venture – in terms of
dedicating resources (both people and money) – seems to override the other two
management orientations in explaining export success. This may imply that a company
with a somewhat more mundane technological base may still yield good results if it
devotes its resources to the export venture, supporting the findings by Kamath et al.
(1987). How should these resources be spent, if not on the negatively correlated customer
relations, which constitute an important element of the negatively loaded customer
orientation construct? The study gives us limited insight into this dilemma. On the one
hand, a certain level of direct customer contact may be desirable in order to secure access
to a wider information base than the one stemming from the partner only (Gripsrud et al.,
2006). Also, direct customer contact fosters customer loyalty to suppliers through
economic, non-economic and social benefits (Biong et al., 1996). On the other hand, the
present study indicates that too much of a “good thing” (customer relations) tends to
deviate the attention of the exporter from other critical aspects of strategy (such as
technology and profitability). One may also hypothesise that many contact points with
customers increase the complexity of the relations, thereby giving the company
contradictory signals as to the direction of product development, or adjustments, etc.
The question then remains to define the optimal allocation of resources on customer
contact between the exporter and its local representatives. One possible avenue is to
strengthen the relations with the local representative, without spending excessive
resources on direct customer relations. In fact, it has been found that, support to
distributors and agents, is positively correlated with export performance (Cavusgil and
Zou, 1994; Koh and Robichaux, 1988; Solberg, 2006). Another strategy may be to
constrain the customer relations to a limited number of people in the company, so as
to economise its resources.
Finally, the interaction effect between customer and technology orientations was
minimal, implying that the two constructs seem to live independently of one another.
In other words, technology orientation in the Norwegian ICT industry does not offset
the negative impact of customer orientation.

Implications for research

The present study has investigated relationships between performance and three
different management orientations. One of these, customer orientation, is not well
explored in the literature. Rather, most writings have concentrated on the concept of
market orientation, which is a broader concept. Our finding that customer focus leads
to negative export performance contradicts most of the conventional wisdom in
marketing and calls for further exploration. Yet, some studies caution against Management
“Customer is King” attitudes in business organisations (Muskin, 1998). Both the orientation
construct and its theoretical underpinnings should, therefore, be re-examined in future
research projects. Also, the relatively low a shown for customer orientation suggests
further exploration of this measure. The setting (Norwegian ICT exporters) may be
special, in that they are mostly small and are more driven by low-scale production and
customer adaptation in specific niches unlike other “mainstream” manufacturers of 41
ICT products. A replica in another setting (country) would, therefore, cast light on the
generalisability of the conclusions from the present study. Also, a study involving a
number of distinctly different industries will reveal if industry or stage on product
life-cycle matter. The unexplored issue of allocation of resources between the exporter
and its representatives should be included in such a follow-up study. Such a study
should also investigate the effects of the somewhat broader concept of market
orientation (Kohli and Jaworski, 1990; Narver and Slater, 1990). The partial overlap
between the two concepts (customer and market orientations) calls for particular
attention when the constructs are to be (re)defined.
Furthermore, export commitment stands out as a determining element in
explaining export performance. The many ways in which this factor has been defined
in the literature (including the present paper) (Aaby and Slater, 1989; Walters and
Samie, 1990; Cavusgil and Zou, 1994; Singer and Czinkota, 1994; Axinn et al., 1998)
and the support it receives as a factor explaining export performance, suggests that
the commitment construct may reflect a host of different phenomena inside the firm –
both attitudinal (such as proactive attitudes towards exporting) and more tangible
variables (such as investments or number of people involved in exporting). On the
other hand, it would be of interest to find a definition of export commitment, which
could be embraced by most researchers, so that the robustness of the relationship
between this construct and performance could be tested in different settings and
countries.
Finally, technology orientation has not been much debated in the export literature.
The increasing importance of technology, the reduced time lags between innovation
and market penetration, and the demands placed upon firms by an increasingly
globalised market call for this factor to be explored further in the so-called hi-tech
industries, but also in more traditional industries. It is time to integrate contributions
on innovation and product development (Siguaw et al., 2006) and export performance.

Conclusion
The present research has shown that export commitment plays a powerful role in
explaining export performance of ICT firms. It has also questioned the conventional
wisdom that customer orientation leads to higher performance. On the other hand, it
has been shown that technology orientation covariates positively with performance,
whereas the interaction between customer and technology orientations gave no effect.
These results give reason to rethink the generally accepted dogma of the importance of
customer relations, at least in an export and ICT context: in exporting, customer
relations may be better catered to by the local representative. A follow-up study is
suggested where this element is included, as well as the somewhat broader customer
orientation construct.
BJM Notes
5,1 1. Technology-based innovations are defined as typically state-of-the-art advances, whereas
market-based innovations often use simpler new technology, sometimes also new business
models (Zheng Zhou et al., 2005, p. 43).
2. Manufacturers of information technology products and services in Norway received from
Informasjons-teknologi-næringens Forening – the Norwegian Federation of Information
42 Technology Industry. The list also included non-members registered by the federation.

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Appendix
In this Appendix, we will outline the details of the OLS-regression analysis and the linear
structural model analysis, and those of the interaction models in both LISREL and OLS-regression.

Estimating the regression model with OLS

The formative measurement models for the dependent and independent variables are as follows:

h ¼ var 28 þ var 32 þ var 31

j1 ¼ var 12 þ var 13 þ var 16

BJM j2 ¼ var 6 þ var 24 þ var 25
5,1
j3 ¼ var 2 þ var 10 þ var 26

Legend:
Variable 12 Top management customer involvement.
46
Variable 13 Personal relations with customer.
Variable 16 Knowledge of customer needs.
Variable 6 Number of export employees.
Variable 24 Investments in export markets.
Variable 25 Competence in exporting.
Variable 2 Product features ¼ competitive advantage.
Variable 10 Technological edge.
Variable 26 Investments in new technology.
Since the scale has no metric meaning, we measure the variables in deviation scores. This will
imply that the intercept term in the regression equation will be zero.
Results. The estimated OLS model with the interaction term:

h^ ¼ 20:0086j1 þ 0:6082 j2 þ 0:5113 j33 2 0:391j1 j3

t-ratio : 20:0282 7:26 1:088 2 0:66
R 2 ¼ 0:495

The linear OLS model without the interaction term:

h^ ¼ 20:202j1 þ 0:607j2 þ 0:206j3

t-ratio : 22:44 7:27 2:44
2
R ¼ 0:492

Testing for interaction effect between technology and customer orientations

Two subgroups were formed by splitting the mean of CO at 5. High CO $ 5 and low CO , 5.
The models for the two subgroups are given by EP ¼ g1 TO þ j and EP ¼ g2 TO þ j. We want
to test the hypothesis that g1 ¼ g2 . This is done by a two-group analysis in LISREL. In the first
run, we fix the g-parameter to be invariant across the two groups. The results are g^ ¼ 0:52 with
a t-value of 2.82 and a x 2 ¼ 3.22 with seven degrees of freedom. In the second run, the
g-parameter was estimated for the two groups. This gives g^1 ¼ 0:50 (t ¼ 2.27) and g^2 ¼ 0:56
(t ¼ 1.84) and a x 2 ¼ 3.19 with six degrees of freedom. The difference x 2 ¼ 0.03 with one degree
of freedom. This gives support to the hypothesis that the two g’s are equal. The implication of
this is that the interaction effect is not present. This test for interaction effect is not a rigorous
statistical test, but it does give some indications. An obvious problem is the threshold values of
TO, the low sample size and that the grouping is based on the observed variables and not on the
latent variable. All of these will reduce the power of the test.
Modelling interaction with LISREL Management
For curiosity, we modelled the LISREL interaction model using a full information approach due
to Jøreskog and Fan (1996) where they formulate the “Kenny and Judd” model with only one orientation
product variable and also adding a constant term.
The theoretical model with interaction term for this study is given in the structural and the
measurement equations:
(1) The structural equation:
47
h ¼ a þ g1 j1 þ g2 j2 þ g3 j3 þ g4 j1 j3 þ 6

(2) The measurement equations:

.
Endogenous variables:
! 0 1 ! !
y1 t1y 1 11
¼@ Aþ hþ
y2 t2y
ly2 12

.
Exogenous variables:
0 1 0 10 1 0 1
x1 t1 1 0 0 0 d1
B C B CB C B C
B x2 C B t2 CB l21 0 0 0C B d2 C
B C B CB C B C
B C B CB C B C
B x3 C B t3 CB l31 0 0 0C B d3 C
B C B CB C0 1 B C
B x C B t CB 0 1 0 0C Bd C
B 4 C B 4 CB C j1 B 4C
B C B CB CB C B C
B x C B t CB 0 0C j2 C B C
B 5 C B 5 CB l52 0 CB
B C B d5 C
B C B CB CB C þ B C
B x6 C ¼ B t6 CB 0 0C j3 C B C
B C B CB l62 0 CB
@ A B d6 C
B C B CB C B C
B x7 C B t7 CB 0 0 1 0C B d7 C
B C B CB C jj B C
B C B CB C B C
B x8 C B t8 CB 0 0 l83 0C B d8 C
B C B CB C B C
B C B CB C B C
B x9 C B t9 CB 0 0 l93 0C B d9 C
@ A @ A@ A @ A
x10 t10 t7 0 t1 1 d10

The observed variable x10 is the product term x1x7, which is the “observed” product variable for
the interaction term j1j3, i.e.:
x1 x7 ¼ ðt1 þ j1 þ d1 Þðt7 þ j7 þ d7 Þ ¼. d10 ¼ t1 d7 þ j1 d7 þ t7 d1 þ d1 j3 þ d1 d7

Variable explanation:
j1 ¼ customer orientation;
j2 ¼ export commitment;
j3 ¼ technology orientation; and
j1j3 ¼ the interaction term between customer and technology orientations.
The dependent variable h is export performance.
In our situation, we will maintain that ML is the optimal estimation method. Jøreskog and Fan
(1996) argue that the WLSA method is the optimal estimation method for estimating models with
interaction terms. Taking the small sample size (N ¼ 80) into consideration is ML probably the
BJM best method as it does not require a weight matrix. This is also consistent with Jøreskog and Fan
(1996). Olsson et al. (1999) find in a recent study that the ML gives unbiased fit statistics and
5,1 parameter estimates for models that are both misspecified with respect to the data (the data were
highly non-normal) and the model structure. However, in this study ML was not able to converge.
The results below are GLS-estimates and they should be interpreted with caution (Olsson et al.,
1999). Given the small sample and the convergence problems with ML, fit statistics, standard
errors and t-values should not be taken as formal test statistics, but rather as guidelines.
48 Results. The estimated structure model:
h^ ¼ 20:2j1 þ 0:412 j2 þ 0:423 j3 2 0:124 j1 j3
s:t: error : ð0:09Þ ð0:08Þ ð0:13Þ ð0:10Þ
t 2 ratio : 22:26 5:10 3:36 2 1:31
Fit statistics and parameter estimates and t-values for the measurement model are shown in
Tables AI-AIII.

Estimating the linear structural model with LISREL

Based on the results from the interaction model, we re-specified the model. In the re-specified
model, the interaction term was excluded, while the other parts of the model were left unchanged.
The estimation method here was ML. We, therefore, have more confidence in these results.
The structural model is given by the following equation:
h ¼ g1 j1 þ g2 j2 þ g3 j3 þ 6

Parameter Estimate t-ratio Significant at 0.05

lyð1;1Þ Fixed to 1 – –
lyð2;1Þ 1.35 5.85 Yes
lxð1;1Þ Fixed to 1 – –
lxð2;1Þ 0.49 2.81 Yes
lxð3;1Þ 0.34 2.62 Yes
lxð4;2Þ Fixed to 1 – –
lxð5;2Þ 0.65 5.17 Yes
lxð6;2Þ 0.33 2.82 Yes
lxð7;3Þ Fixed to 1 – –
lxð8;3Þ 1.00 5.34 Yes
lxð9;3Þ 1.17 5.05
lxð10;1Þ 5.66 56.96 Yes
lxð10;3Þ 5.49 43.14 Yes
Table AI.
Factor loadings Note: Not standardized

j1 j2 j3

j1 1.0
j2 2 0.04 1.0
Table AII. j3 0.23 0.58 * 1.0
Correlations between
latent independent Notes: *Significant at the 5 per cent level; the correlations between j1j3 and the other j-variables are
variables fixed to zero
The constant intercept term was included in the interaction model for estimation reasons Management
(Jøreskog and Fan, 1996). For the linear model, this is not necessary since there are no theoretical
reasons for estimating the intercept. orientation
Results. The estimated structure model:
h^ ¼ 20:29j1 þ 0:87j2 þ 0:43j3
s:t: errors : ð0:139Þ ð0:282Þ ð0:185Þ
t-values : 22:08 3:08 2:32
49
Fit statistics and parameter estimates and t-values for the measurement model are shown in
Tables AIV-AVI. The variance of the constructs was fixed to 1.0 for scaling purposes.
The fit statistics all except the CN indicate acceptable fit. Even though we attach more
confidence to the ML-estimates than to the GLS-estimates above, we still have to look upon these
as guidelines and descriptive measures rather than formal test statistics. The reason for this is

Fit statistic Values

x2 55.94a
RMSEA 0.039
CFI 0.99
CN 108.54
Table AIII.
Note: adf ¼ 50 Selected fit statistics

Parameter Estimate t-ratio Significant at 0.05

lxð1;1Þ 1.09 5.03 Yes

lxð2;1Þ 0.46 3.15 Yes
lxð3;1Þ 0.65 3.57 Yes
lxð4;2Þ 1.84 8.31 Yes
lxð5;2Þ 1.29 5.47 Yes
lxð6;2Þ 0.70 2.94 Yes
lxð7;3Þ 0.90 6.76 Yes
lxð8;3Þ 0.95 6.18 Yes
lxð9;3Þ 1.11 5.56 Yes
lyð1;1Þ 0.93 2.86 Yes
lyð2;1Þ 1.29 2.93 Yes
Table AIV.
Note: Not standardized Factor loadings

j1 j2 j3

j1 1.0
j2 2 0.07 1.0 Table AV.
j3 0.10 0.32 * 1.0 Correlations between
latent independent
Note: *Significant at 1 per cent level variables
BJM
Fit
5,1 statistic Values

x2 45.984a
RMSEA 0.051
CFI 0.96
50 CN 106.41
Table AVI. Notes: Selected fit statistics; adf ¼ 38

the small sample size, which is below the recommended lower limit of 100 (Boomsma, 1988).
Again, the alternative proposition on customer orientation is the one being confirmed. The main
difference between the results of the two runs is that export commitment now shows a much
greater strength in the model.

About the authors

Carl Arthur Solberg is a Professor of Marketing at BI Norwegian School of Management.
Ulf H. Olsson is Professor of Statistics at BI Norwegian School of Management. Ulf H. Olsson
is the corresponding author and can be contacted at: Ulf.H.Olsson@bi.no

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