The thesis title The Achievement of Export Performance of Small and Medium Enterprises (SMV's) in Thailand. Yet, there are few practical research works on achieving export performance for small and medium enterprises (SMEs) in Thailand.
INTRODUCTION
- Background and Extent of the Problem
- Research Objectives
- Research Questions
- Scope of Study
- Limitations of the Study
- Definitions
- Expected Benefits
- Chapter Sorting
Small and medium enterprises in the export sector must adapt to compete and survive in this modern economy. However, there are few practical research works on achieving export performance of small and medium enterprises (SMEs) in Thailand.
THEORY CONCEPT AND RELATED RESEARCH
International Business Theory
- Mercantilism
- Absolute Advantage Theory
- Comparative Advantage Theory
- Heckscher-Ohlin Theory
- Product Life-Cycle Theory
- National Competitive Advantage
David Ricardo indicates that countries should only offer goods that they can produce at relatively lower costs. This theory is based on the assumption that there are only two countries and two products in the world.
Organizational Performance Theory
Financial ratios also contribute to the understanding of the organization's background, current situation and future trends. Satisfaction helps fulfill an organization's key performance evaluation because it leads to profitability and greater performance of the organization (Abdeldayem and Khanfar Barsky.
Entrepreneurial Orientation Theory (EO)
However, experts in the field of the concept of entrepreneurship still debate the term "entrepreneur" due to the lack of a universally accepted specific definition. Economic theory on the concept of entrepreneurship focuses on innovation and new production, while most explain that entrepreneurs act rationally.
Leadership Theory
The other proposes a transformational leader that emphasizes a leader who has the ability to recognize the capacity, needs of followers, as well as the factors that drive motivation and satisfaction. In entrepreneurial leadership, inspiration, motivation, and influence ensure followers' confidence in working with the organization, approval of the leaders' vision, and willingness to follow the leaders.
Strategic Management Theory
Studies of a firm's performance in small industries on operational factors such as strategic management in entrepreneurship, organic structure or mechanistic organization, competitive environment (such as friendly and unfriendly competition) reveal that a. Zahra and Covin (1995) conclude that managers and researchers believe that strategic management in entrepreneurship is the factor that contributes to a company's financial performance improvement.
Resource-Based View Theory (RBV)
Dynamic capabilities consist of three capabilities: retention (an organization possesses unique or exclusive resources), utilization (a matter of resource allocation), and augmentation (nonstop learning). However, the dynamic capability and the effect of competitive advantage depend on an organization's ability to recognize and adapt to changes in the market.
Concept and Theory about Dependent Variable-Export Performance
Casson argued that resources are essential for entrepreneurs to seize an opportunity and that the opportunity seized produces resources, which is the beginning of the work linking RBV theory and the entrepreneurial concept. Daily and Dollinger stated in 1992 that assessing export performance from the feelings of entrepreneurs, who are executives, is sometimes more accurate than using financial figures.
- Innovativeness
- Proactiveness
- Risk Taking
Risk taking - The will to. management to devote significant resources to opportunities in the face of uncertainty. Although SMEs may have innovativeness and creativity in developing new products and processes, or proactivity in the pursuit of new business opportunities, risk-taking is also an important factor needed to participate in entrepreneurial activities such as exporting.
- Informational Barriers
- Functional Barriers
- Marketing Barriers
- External Export Barriers
- Procedural Barriers
- Governmental Barriers
- Task Barriers
- Environmental Barriers
Export barriers refer to factors that inhibit SMEs from starting up, expanding and surviving in foreign markets (Leonidou et al., 2007). As a result, small and medium-sized enterprises in the export industry have to bear high costs of human capital, i.e.
- Entrepreneurial Orientation and Export Performance
- Main Characteristics of Entrepreneurship
The relationship between various factors affecting export performance, a company's characteristics (such as export behavior and experience) benefit the company in the creation and adaptation of a company's competencies. So the economy plays no role in the entrepreneur's obligation to provide a different return from the market. The study of entrepreneurship or entrepreneurial roles in the last two to three decades has been a multi-aspect research.
However, this research only focuses on entrepreneurship in the context of entrepreneurs' strategic decisions, which include innovation, proactivity and risk taking.
Capabilities/Competencies -Perceived Export Barriers -Overall Export Strategy -Use of Market Research -Product Customization -Product Strengths Kaynak,. ML Survey Regression company - Sales measures - Product fit - Product strength - Promotion fit - Type of distribution channel. Marketing Director - Export Manager Lee (1998) Australia 105 Multi-Industry Research SM SEM Company 42 - Chief Executive Officer.
A review of the literature shows that most of the research on the factors influencing export performance is research in the US and Australia that is conducted at the organizational level.
Concepts, Theories, and Related Research on the Relationship between Entrepreneurial Orientation, Export Barriers and Export
- Innovativeness and Functional Barriers
- Innovativeness and Marketing Barriers
- Proactiveness and Functional Barriers
- Proactiveness and Marketing Barriers
- Risk Taking and Functional Barriers
- Risk Taking and Market Barriers
Innovation can help SMEs revise their marketing mix and exceed customer expectations (Robertson and Gatignon, 1986). This researcher is interested in how proactiveness helps SMEs reduce their functional barriers. Small and medium enterprises need distribution channels or factory outlets for successful export marketing.
For a successful marketing mix design, small and medium enterprises need to collect and use data effectively.
Research Framework
Research Hypotheses
- Hypotheses on Direct Effect
- Hypotheses on Indirect Effect
RESEARCH METHODOLOGY
Research Design
Unit of Analysis
Operational Definition, Indicator, and Measurement/Method
- Small and Medium Enterprises Export Performance as Dependent Variable
- Export barriers, as a Dependent Variable
- As an Independent Variable, Entrepreneurial Orientation
Satisfaction refers to the assessment of customer satisfaction with an organization's products and services (Kaplan and Nortan, 1991). List the factors that hinder SMEs from establishing, expanding and surviving in foreign markets (Leonidou et al., 2007). Functional barriers to exporting refer to limitations in reconfiguring the internal processes of SMEs to meet the demands of export markets (Vozikis et al., 1985).
Many researchers suggest that ineffective marketing is the major obstacle for small and medium enterprise export businesses (Groke and Kreidle, 1967; Kedia and Chhokar 1986).
Population and Sampling
- Sample Size
- Sampling Technique
Source: Ministerial Regulation on the Classification of Employment and Fixed Assets of Small and Medium-sized Enterprises, 2002. The revival of world trade during the saturation of the domestic market has significantly contributed to boosting the export performance of small and medium-sized enterprises to the national economy. Thai SMEs in the export sector must adapt to compete and survive in this modern economy.
Findings from The Achievement of Export Performance of Small and Medium Enterprises (SMEs) in Thailand can be used to guide both public and private policy making regarding entrepreneurship development.
Research Instruments
Test of Research Instruments
- Content Validity
- Reliability
- Construct Validity
Results from the confirmatory factor analysis of internal export barriers indicate that the measurement model of internal export barriers is consistent with the empirical data at a statistical significance level of 0.01, which is determined by a value of 1.85 chi-square, 0.173 probability (p), and 1 degree of freedom. The significance of standard components (B) for each observed variable in the internal export barriers measurement model gives a positive value for all factor loadings, which range from 0.46 to 0.77, with a statistical significance level of 0.01 for all. Results from the confirmatory factor analysis of external export barriers indicate that the measurement model of external export barriers is consistent with the empirical data at a statistical significance level of 0.01 as determined by a chi-square value of 5.82, 0.121 probability (p), and 3 degrees of freedom.
The significance of the standard components (B) of each observed variable in the external export barriers measurement model gives a positive value for all factor loadings ranging from 0.45 to 0.78 with a statistical significance level of 0.01 for all.
Data Sources and Data Collection
- Primary Data
- Secondary Data
The remaining 224 samples were valid because they came from small and medium-sized enterprises and were aged two years and older.
Data Processing
Data Analysis
However, after receiving the questionnaires back, the researcher found that some questionnaires did not meet the specified criteria.
RESEARCH FINDINGS
Results of the Fundamental Statistics on Organization General Information
Research results and data analysis. 1) The respondent's general information (organizational level) is classified by gender, age, business status, permanent employees, fixed assets (excluding land), company age, industry group, current export situation, export marketing and export country, as shown in Tables 4.1 to 4.10 below. The majority, 154 people or 68.80 percent, are senior managers responsible for export and organizational policy making, followed by 44 people or 19.60 percent who are sole export company owners, 25 people or 11.20 percent who are partners or executive committees of export companies , and at least 1 person or 0.40 percent who is a successor of an export company. The majority, 126 people or 56.20 percent, are with agricultural products, processed agricultural products and the food group; followed by 71 people or 31.70 percent who are with auto parts, chemicals, plastics and rubber; 15 people or 6.70 percent who are in the textile, leather, clothing and jewelry group; and the smallest, 12 people or 5.40 percent, who are in the group furniture, interior design, crafts and souvenirs.
The most, 107 persons or 47.80 percent, have more than 2 markets, followed by 101 persons or 45.10 percent who have a single main market of which more than 80 percent is for export, and the least, 16 persons or 7.10 percent who do not know the share of their exports.
Results on Analysis of Fundamental Statistics on Observed Variables Used in the Study
This shows low dispersion, which means that most of the samples have similar innovativeness, proactivity and riskiness as the distribution is not very different. This indicates low dispersion, which means that most of the samples have similar information barriers, resource barriers and marketing barriers as the distribution is not very different. This indicates that the average of the organizations' overall external export barriers in relation to procedural barriers, domestic government barriers, customer and competitor barriers, and external environmental barriers is high.
This indicates low dispersion, which means that most of the samples have similar procedural barriers, domestic government barriers, customer and competitor barriers, and external environmental barriers, as the dispersion does not vary much.
Results of Data Analysis Answering Research Objectives
- Correlation Analysis Outcome
- Results of Causal Relationship Model of The Achievement of Export Performance of Small and Medium Enterprises (SMEs) in
Internal export barriers obtained a direct effect, with a statistical significance of 0.01, from the entrepreneurial orientation variables with an effect size of 0.69. Export performance obtained an indirect effect, with a statistical significance of 0.01, from entrepreneurial orientation through the internal export barriers variable with an effect size of 0.18. The total effect on export performance shows a statistical significance of 0.01 from the variables of entrepreneurial orientation and internal export barriers with effect sizes of 0.66 and 0.35 respectively.
Export performance has an indirect effect size of 0.18 from entrepreneurial orientation through the reduction of domestic export barriers with a statistical significance of 0.01.
CONCLUSION, DISCUSSION AND RECOMMENDATIONS
Conclusion and Discussion
- Organization Export Performance Factor is Directly Affected by the Entrepreneurial Orientation Variable
- Export Performance Factor is Indirectly Affected by the Entrepreneurial Orientation Variable Through Internal Export
- Organization Export Performance Factor is Directly Affected by the Internal Export Barriers Variable
Research results show that if SMEs in Thailand with entrepreneurial focus on proactivity, risk-taking and innovation ability, internal environmental barriers (information barriers, resource barriers and marketing barriers) will be reduced. D'Souza (2009) who suggested that entrepreneurial orientation involving proactivity and risk taking helps to reduce internal environmental barriers and increase the organization's export performance. Research results show that if SMEs in Thailand achieve a reduction in internal environmental barriers (marketing barriers, resource barriers and information barriers), the organization's export performance will be improved.
Such a circumstance has resulted in entrepreneurial orientation immediately playing a key role in promoting export performance opportunities for the organization by reducing the three internal organizational challenges.
Policy Recommendations for Public and Private Sectors Management Integration
- Export SMEs Efficiency Development Policy
- Reducing Internal Export Barriers Policy
- Short-Term, Medium-Term, and Long-Term Development Plans for Export SMEs
In addition to advertising, promotional barriers also include effective product and packaging changes (Terpstra and Sarathy, 2000), offering more competitive prices to consumers (Doole and Lowe, 2001), as well as the availability of products and services in the market with extensive distribution networks. The findings of the research show that the export performance of SMEs in the export business mostly depends on the effective skills of entrepreneurs. Therefore, the results of this study can be formulated as an SME development policy approach as shown in Figure 5.1 below.
This will enable small and medium enterprises in the export business to set competitive prices with their rivals.
Practical Recommendations for the Small and Medium Enterprises Export Sector in Thailand
This is because government agencies responsible for small and medium enterprises today only serve knowledge transfer. Therefore, small and medium enterprises should focus on reducing internal export barriers through the following. The four recommendations given above are important factors that have a great influence on small and medium enterprises' export performance development.
SMEs should try to integrate such factors into the practical applications of their organizations.
Suggestions for Future Research
An empirical investigation of the effect of the alignment of market and entrepreneurial orientation on product innovation. The impact of the export orientation of companies on the export performance of high-tech small and medium-sized companies. An Empirical Test of Resource-Based Theory: Strategic Arrangement in the Dutch Audit Industry.
An empirical analysis of the effect of entrepreneurial orientation on firm performance of automotive tradesmen in the Cape Coast metropolis.
