Psychic Distance, International Commitment,
Firm Experience, International Marketing Strategy,
and Export Venture Success
An Empirical Study of Austrian SMEs
Manfred Fuchs
Mariella Köstner
University of Graz
Dept. of International Management
[email protected]
Keywords: Export Performance, International Marketing, Exports and Exporting, Psychic Distance,
International Commitment
Electronic copy available at: http://ssrn.com/abstract=1564580
Electronic copy available at: http://ssrn.com/abstract=1564580
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ABSTRACT
This study examines the influence of firm-specific factors, such as international marketing strategy, firm
experience, psychic distance, and international commitment, on export performance in Austrian small and
medium-sized enterprises (SMEs). Using survey data from 220 export ventures, this paper tests causal-effectrelationships in the proposed conceptual model, using structural equation modelling. The results of the study
show that there is a twofold influence of psychic distance, commitment, and firm experience. There is evidence
that this relationship is an inverted u-curve. In addition, we found that competition in foreign target markets
exerts a positive effect on the adaption of marketing strategies. The results confirm that psychic distance has an
impact on all measured dimensions of export success in SMEs. We found evidence that the degree of product
adaptation positively influences the overall success and the profitability of export ventures, whereas the degree
of price adaptation is positively related to sales growth and profitability. Our study indicates that SMEs are
more successful in early stages of exporting and become less successful in later stages.
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Electronic copy available at: http://ssrn.com/abstract=1564580
INTRODUCTION
Exporting is an attractive strategy for entering foreign markets, especially for small and medium-sized
enterprises (SMEs). In contrast, other market entry modes require much more resources and a greater amount of
foreign market expertise (Hultman, Robson, & Katsikeas, 2009; Sousa & Lengler, 2009). This basic insight may
particularly affect exporting performance in SMEs. Restricted by a lack of resources and expertise, SMEs may
have difficulties in understanding foreign countries and successfully managing foreign liability emerging from
these countries. Many small companies are confronted with the fact that, if a limited number of individual
markets are no longer served consistently, management will face greater demands to organize international
activities and to increase resource requirements rapidly.
The purpose of this study, based on the resource-based view and contingency approach, is to analyse
how internal and external factors affect the international marketing strategy in SMEs and how psychic distance,
commitment, foreign experience, and competitive intensity are related to export venture success. All these
questions have been analyzed in our field, but results are still inconclusive. Based on previous research and
measurement concepts, we decided to operationalize export success as a multidimensional variable. The focus
of our analysis is export venture performance. Theodosiou and Leonidou have described an export venture as
“the marketing of a single product/product line in a specific overseas market” (2003:168). In general, it has
been argued that the individual export venture is the primary unit of analysis in order to understand the relation
between export marketing strategy and export success (e.g., Katsikeas, Samiee, & Theodosiou, 2006). Despite
this, most studies have used the overall firm-level as the unit of analysis, which makes it more difficult to
identify and isolate specific antecedents of export success (Morgan, Kaleka, & Katsikeas, 2004).
This study focuses on SMEs in Austria, because approximately 80% of all exports are realized by SMEs
in Austria. In addition, we believe that SMEs, based on their limited access to personal and financial resources,
provide us with a very different picture of how firms internationalize successfully.
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LITERATURE REVIEW AND RESEARCH HYPOTHESES
A number of studies have found that the standardization and/or adaptation of the export marketing strategies
(with respect to product, price, promotion, and distribution) represents a crucial criterion for export success. In
the IB literature, an intensive debate still prevails about whether the home marketing strategy can be transferred
to various foreign markets or should be adapted to the specific conditions in individual countries (e.g., Cavusgil,
Zou, & Naidu, 1993; Hill & Still, 1984; Sousa & Lengler, 2009). Essentially, research on this topic can be
classified into three streams: (a) the effects of standardization, (b) the role of adaptation, and (c) the contingency
approach. Proponents of standardization point to market homogenization due to increasing globalisation and a
cross-national harmonization of customer needs whereby the realization of "economies of scale" is the major
advantage provided by a cross-national, standardized marketing strategy (e.g., Cavusgil et al., 1993; Levitt,
1983). In contrast, proponents of the adaptation approach emphasize the fundamental importance and existence
of country-specific differences (with respect to cultural values, economic development, competitive
environment, political and legal systems, etc.) which make it necessary to focus marketing strategies to
recognize country-specific environments in order to be successful in foreign markets (e.g., Cavusgil et al., 1993;
Hill & Still, 1984).
The contingency approach assumes a so-called ‘middle of the road’ approach, arguing that
standardization and adaptation may be viewed as two extreme positions of one continuum. According to this
approach, the degree of standardization and adaptation of the international marketing strategy depends on
various internal and external factors (Jain, 1989). Contingency theorists assume that a co-alignment or fit
between strategic choice of the firm and its context – whether it is the external environment (e.g., Anderson &
Zeithaml, 1984; Hofer, 1975) or organizational characteristics such as structure (e.g., Chandler, 1962) and
managerial characteristics (e.g., Gupta & Govindarajan, 1984) – positively affects the corporate performance
(Venkatraman & Prescott, 1990). In addition, the resource-based view in our basic argument brings into this
debate the importance of available stocks of resources (firm experience, managerial experience, and market
knowledge) in SMEs to develop or reach a so-called co-alignment in foreign markets.
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Based on our literature review, we have selected international experience, international commitment,
and psychic distance as internal contextual factors (in our understanding fundamental resources and
capabilities), and considered competitive intensity and technology orientation as external environmental factors
that influence export performance.
Since the major contributions by the Uppsala school, the concepts of psychic distance, commitment, and
foreign market experience are essential dimensions that allow us to understand the difficulties and challenges of
internationalization. Johanson and Vahlne (1977) recognized very early that psychic distance from foreign
markets has an essential influence on the course of internationalization. Since this early insight, numerous
studies have analyzed the influence of psychic distance on market entry modes (e.g., Brouthers, 1995; Kogut &
Singh, 1988), the selection of target markets (e.g., Clark & Pugh, 2001; Ellis, 2008), and success in
internationalizing (e.g., Evans & Mavondo, 2002; O`Grady & Lane, 1996). Empirical research, however, has
shown conflicting results. In addition, despite the popularity of the psychic distance construct, there exists no
generally accepted conceptual and operational definition of psychic distance. Furthermore, we believe that one
fundamental problem in using psychic distance in different studies is that researchers make no distinction
between two conflicting but very often conflated terms, namely “cultural distance” and “psychic distance”. We
argue that numerous research studies’ propensity to use them interchangeably is a major problem (e.g., Fletcher
& Bohn, 1998). First, studies should consider that the two concepts are fundamentally different. Once this is
recognized, they should be measured at different levels. Psychic distance always deals with individual
subjective perceptions of the differences between a home country and a foreign country, whereas cultural
distance is based on the different cultural values among countries. Psychic distance is only measured robust at
the individual level. In contrast, cultural distance can appropriately measured on the country level, usually
aggregated as a collective attitude in a country (Sousa & Bradley, 2006).
In this study, following the recommendation of Sousa and Bradley (2005), we examine the influence of
an individually perceived distance by a decision maker on the marketing strategy adaptation and export success
in a venture between a home and foreign country.
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Psychic Distance and Export Marketing Strategy
Despite the great popularity of the concept of psychic distance in the literature, there is still a lack of
empirical studies researching the relationship between psychic distance and the degree of country-specific
adaptation or cross-national standardization of the export marketing strategy (the degree of adaptation of the
marketing mix elements). Based on their research of manufacturing companies from the USA, Japan and South
Korea, Calantone, Kim, Schmidt, and Cavusgil (2006) have questioned how much the subjectively perceived
similarity to an export country affects the degree of country-specific adaptation of the exported products. They
found that the degree of adaptation of exported products is much smaller for countries that are similar to the
home country than for those that are perceived as psychically distant. Sousa and Bradley (2005), for example,
found a positive relationship between the psychic distance and the degree of adaptation on each of the
marketing mix elements specific to the foreign market. This result was also confirmed in a recently published
study by Sousa and Lengler (2009) based on a survey of export-orientated Brazilian companies. In our study,
we assume that the individual perception of psychic distance between the home country and the foreign country
affects the degree of marketing mix adaptation.
Hypothesis 1: The perceived degree of psychic distance between home country and target country has a
positive influence on the (a) product adaptation, (b) promotion adaptation, (c) price
adaptation, and (d) distribution adaptation.
International experience and Export Marketing Strategy
If – as assumed in this paper – psychic distance exerts a considerable influence on market-oriented behaviour
(measured as adaptation of product, price, promotion, and distribution), then it is also important to investigate
the relationship between the international experience of the firm and the adaptation of the export marketing
strategy. Cavusgil et al. (1993) identified a significant positive relationship between the firm´s international
experience and the degree of country-specific product adaptation. Their findings illustrated that the firm´s
international experience exerts a significant, positive effect on the degree of the promotion adaptation as well.
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Hultman et al. (2009) discovered in the example of Swedish companies that the different aspects of a firm`s
exporting experience have a heterogeneous influence on the degree of country-specific product adaptation. In
addition, they found that foreign target-market-specific experience has a significant, positive effect on the
degree of product adaptation, whereas a negative relationship between the scope of firm`s exporting experience
and the degree of product adaptation is verifiable. The assumption is that companies with comprehensive
international market experience learn through foreign markets and develop a larger stock of knowledge about
the idiosyncrasies of foreign markets. It is assumed they are more successful (that is, more likely to succeed
than companies with less foreign experience) in customizing the marketing strategy to specific needs of the
customers in the target market (Cavusgil et al., 1993). In our study, the influence of the various aspects of the
firm´s international experience (duration of international experience and country specific experience) on the
degree of adaptation of the marketing mix elements will, therefore, be examined separately. The following
hypotheses are formulated:
Hypothesis 2: There is a positive relationship between the duration of international experience and the
(a) product adaptation, (b) promotion adaptation, (c) price adaptation, and (d) distribution
adaptation.
Hypothesis 3: There is a positive relationship between the export market experience and the (a) product
adaptation, (b) promotion adaptation, (c) price adaptation, and (d) distribution adaptation.
International Commitment and Export Marketing Strategy
The Uppsala school has already established the idea that the commitment of management plays an important
role in managing foreign markets and that it determines the scope as well as the speed of internationalization
(Johanson & Vahlne, 1977). Empirical evidence confirms the positive influence of the firm´s commitment to
internationalization on the degree of country-specific adaptation of various marketing mix elements (e.g.,
Hultman et al., 2009; Lages, Jap, & Griffith, 2008). Lages et al. has defined the construct of international
commitment as “the degree to which organizational and managerial resources are allocated to an export
venture” (2008:308). It seems plausible to assume a positive relationship between the international commitment
8
of management and the degree of adaptation of the export marketing strategy as managers with a high
international commitment make more resources available to an export venture. This enables more
comprehensive planning and market research activities, which allows for a more precise adaptation of the
marketing mix elements to the particularities of the countries' markets (Lages et al., 2008; O`Cass & Julian,
2003). We formulate the following hypothesis:
Hypothesis 4: There is a positive relationship between the international commitment and the (a) product
adaptation, (b) promotion adaptation, (c) price adaptation, and (d) distribution adaptation.
External Factors and Export Marketing Strategy
The question of adapting an export marketing strategy to better fit foreign markets also depends on factors
external to the firm, such as competition in particular foreign markets and the technological orientation of the
industry. Cavusgil et al. (1993) demonstrated that the intensity of competition in the target market positively
influences product adaptation as well as adaptation of promotion policies. In addition, what is not surprising, a
technology-intensive industry influences the country-specific product adaptation and promotion adaptation
negatively. Consistent with that result is the research of Katsikeas et al. (2006), which reported a positive
relationship between the technological orientation of industry and the standardization of the marketing mix
elements. Other researchers, on the other hand, have emphasized that the intensity of competition in the foreign
target markets leads to a very pronounced marketing strategy adaptation, because companies in competitive
environments make an effort to exploit firm-specific advantages over competitors (e.g., Cavusgil & Zou, 1994;
Jain, 1989). In addition, it has been argued that short product life cycles in typically technologically intensive
industries force companies to standardize their export marketing strategy, because adaptation specifically to the
target market would be too expensive and slow (Katsikeas et al., 2006). Thus, we assume that non-technology
driven companies are forced by highly competitive foreign markets to adapt marketing strategies very quickly
in order to secure or expand market shares. In addition, we hypothesize that technology-intensive companies do
not adapt marketing strategies to foreign markets.
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Hypothesis 5: There is a positive relationship between the intensity of competition and the (a) product
adaptation, (b) promotion adaptation, (c) price adaptation, and (d) distribution adaptation.
Hypothesis 6: There is a negative relationship between the technological orientation and the (a) product
adaptation, (b) promotion adaptation, (c) price adaptation, and (d) distribution adaptation.
Psychic Distance and Export Success
In the relevant literature, a negative relationship is frequently presumed between the psychic distance of
the decision makers to a foreign market and the success in exporting, as according to the prevailing opinion—
countries that are more distant are more difficult for a firm to manage than psychologically close markets. This
fundamental assumption has been explicitly discussed in the first studies of Johanson and Vahlne (1977) on the
process of internationalization. Simply argued, the greater a psychic distance between home and target country,
the more difficult it is to collect relevant market information and to interpret it correctly (Eriksson, Johanson, &
Majgaard, 1997). However, empirical results have also identified a positive impact on export success in the case
of perceived great psychic distances, which appears to contradict the original assumption (e.g., Evans &
Mavondo, 2002; Sousa & Lengler, 2009). We assume that the perceived psychic distance of managers toward
foreign markets and the associated uncertainty increase the risk of making wrong decisions (Lee, 1998; Sousa &
Lengler, 2009). Accordingly, we expect a negative impact of psychic distance on export venture success.
Hypothesis 7: There is a negative relationship between psychic distance and the export success.
International Experience and Export Success
As implicitly established in the Uppsala model, experience in foreign countries and learning within the
company are two central factors determining success. Contradictory findings can be found in the literature on
the influence of a firm`s international experience on export success: while some studies confirm a positive
relationship (e.g., Cavusgil & Zou, 1994; Morgan et al., 2004), other studies perceive that a negative
relationship could be demonstrated (e.g., Brouthers & Nakos, 2005; Contractor, Hsu, & Kundu, 2005). The
majority of empirical studies, however, confirm a positive association between the firm´s international
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experience and export success. The difference may be that success depends on how much a company is able to
learn from foreign markets. In addition, the stock of resources may also be decisive in translating existing
knowledge into effective marketing strategies. Therefore, we argue that a company has acquired knowledge and
skills due to previous activities in foreign countries that can allow the company to adapt the market strategy of
each export venture to the needs of the customers, thereby increasing the success of exporting (Morgan et al.,
2004; Morgan, Zou, Vorhies, & Katsikeas, 2003). In our study, the influence of the firm´s experience with its
various aspects such as the duration of international experience and the export market specific experience are
analyzed separately in terms of their effects on export success. The corresponding hypotheses are as follows:
Hypothesis 8: There is a positive relationship between the duration of international export activities and
the export success.
Hypothesis 9: There is a positive relationship between the export market experience and the export
success.
International Commitment and Export Success
The deployment of resources and knowledge in a firm is always dependent on the commitment with which an
activity is carried out. This includes not only what degree to which management stands by an export activity,
but also how many resources are made available for it. The commitment of management influences therefore
not only the degree of export strategy adaptation to the target market, but it also has a direct effect on the export
success. The majority of empirical findings have confirmed the positive relationship between international
commitment and success (e.g. Lages et al., 2008; Leonidou, Katsikeas, & Piercy, 1998; Nakos, Brouthers, &
Brouthers, 1998). Managers with high international commitment allocate comprehensive financial as well as
personnel resources to the managing of foreign markets which has a positive effect on the export success. Based
on the empirical evidence and theoretical argumentation, we formulate the following hypothesis:
Hypothesis 10: There is a positive relationship between the international commitment and the export
success.
Export Marketing Strategy and Export Success
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Several empirical studies have made visible the direct influence that country-specific adaptation or the
cross-national standardization of marketing strategy exerts on export performance. However, empirical
evidence on the influence of adaptation or standardization strategies on international success are contradictory
(Sousa, Martínez-Lopez, & Coelho, 2008). Numerous studies have revealed that adaptation of price and
product-specific changes to meet target markets directly relate to export success (e.g., Brouthers & Nakos,
2005; Calantone et al., 2006; Cavusgil & Zou, 1994; Lee & Griffith, 2004; Shoham, 1999). However, Lages et
al. (2008), on the other hand, have found that product adaptation to the target market affects the achievement of
short-term export goals of an export venture negatively. This contradicting result may be explained by the costs
of adaption in the early phases of market entry. In turn, Shoham (1996) has pointed out a significant positive
relationship between product adaptation in foreign markets and export success in American companies.
According to Cavusgil and Zou (1994), adapting promotion policy affects export success negatively. Shoham
(1999), on the other hand, confirmed a positive relation between the promotion adaptation and export success.
In a meta-analysis conducted by Leonidou, Katsikeas, and Samiee (2002), the majority of authors identified a
positive influence of target market-induced adaptation of distribution policy on export success. A recent study
by Sousa and Lengler (2009), however, revealed in the case of Brazilian companies that the country-specific
distribution adaptation affects the export success negatively. In this study, it was expected that an adaptation of
marketing mix elements to the target markets would enhance the export success, because the export market
adaption can better take into account the local conditions (culture, way of living, local competitive practise,
etc.). Based on this discussion, we hypothesize:
Hypothesis 11: There is a positive relationship between the (a) product adaptation, (b) promotion
adaptation, (c) price adaptation and (d) distribution adaptation and export success.
Competition in Foreign Markets and Export Success
Partially conflicting results can be found regarding the influence of competitive intensity in the target
country and export success. Beamish, Craig, and McLellan (1993) have reported that highly competitive target
12
markets outside of the USA affect the sales attained by Canadian SMEs negatively. In turn, Morgan et al.
(2004) found no significant association between competitive rivalry in the target market and export
performance. Lages and Montgomery (2004), however, indicated a significantly positive influence of
competitive intensity on the short-term success of export activities. A possible explanation for this evidence
could be that companies, from the beginning of exporting, reveal a greater commitment in competitive foreign
markets (Lages & Montgomery, 2005). Hence, we assume that competitively intensive target markets influence
export success positively, because we assume that firms do prepare their market entry more effectively in those
environments and may be forced to provide existing resources more selectively.
Hypothesis 12: There is a positive relationship between the competitive intensity of the export country and
export success.
CONCEPTUAL MODEL
The hypothesized relations between the variables and the conceptual model of our study are depicted in
Figure 1. Based on previous findings, our model postulates that the degree of export marketing strategy
adaptation in an export venture is influenced by managerial dimensions ( psychic distance, international
commitment) and firm characteristics (years of export experience, export market specific experience) as well as
the external environment (competition in export markets, technology orientation of industry). The success of an
export venture is — as we hypothesize — directly determined by internal firm-specific factors (psychic
distance, commitment, duration of export experience, export market specific experience, and the degree of
adaptation of the marketing mix elements) and the competitive intensity as external characteristic of the export
market.
Insert Figure 1 here
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RESEARCH METHODOLOGY
Sample Selection and Data Collection Procedures
The survey was conducted with a random sample of 800 small and medium-sized Austrian
manufacturing companies. Each company had an export quota of at least 10%. Companies were selected
randomly from the Aurelia data maintained by a large international bank in Austria. We adopted criteria to
select SMEs defined by European Union (Recommendation of the European Commission, 2003/361/EC) which
categorized a firm as a SME when it employs less than 250 workers and shows a yearly turnover no higher than
€50 million.
Our questionnaire was pretested in October and November of 2008 and was slightly modified to increase
understanding. SMEs were contacted by telephone to verify contact information and to notify them about the
goals of our study. The survey was conducted in the first half of the year 2009. The questionnaire was sent to
CEOs or export managers by email. In order to increase the response rate, the CEOs and export managers were
contacted with a personalized letter. Out of 800 mailed questionnaires, 125 were returned, of which 115 were
completely filled out. This is a response rate of 15.63% which, for this kind of study, was fairly good. Detailed
data are available on a total of 220 export ventures. We asked respondents to answer the questionnaire for both
a psychically close country and a psychically distant country in comparison to their home country, in this case
Austria.
On average, SMEs in our sample employ 125 people and export to 24 different countries. The majority of
the companies in our sample (57.4%) are industrial goods producers. Respondents (CEOs or export managers)
are 44 years old on average and 60.9% are university graduates. The data between early response and late
response were tested, and no significant differences were identified.
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MEASURES
Our study used reflective and formative measures. For measuring the reflectively specified constructs,
established scales in the literature were employed or slightly adapted.
Export success: The multidimensional approach of export success has been discussed in previous studies.
Following Styles (1998), we operationalized export success using items to indicate the financial performance,
strategic performance, and overall satisfaction with the export venture. The financial performance was
determined (through the subjective estimation of CEOs or export managers) with respect to (a) the sales growth
and (b) the profitability of an export venture in each year during the period of 2003 to 2007.
Respondents had to evaluate the strategic performance of export ventures (with the subjective estimation
of CEOs or export managers) with regard to the importance of reaching individual goals of an export venture
within the last five years. Then CEOs or export managers assessed to what extent these goals had actually been
achieved within the past five years. Based on the results of the pretest, the individual goals were adapted
especially to the study of SMEs. The operationalization of the overall success of an export venture is measured
by way of (a) estimation of the overall success within the last five years and (b) estimation of the overall
success in comparison to major competitors. The choice of a subjective assessment of success in the study is
fairly justified based on the evidence of a number of studies that identified a strong and robust relation between
objective and subjective measures of success (e.g., Venkatraman & Ramanujam, 1986).
Psychic distance: Concerning the operationalization of the psychic distance construct, the scale used by Sousa
and Bradley (2005) has been used. The choice was based on the objectives of our study, which, among others,
include analyzing the influence of the distance perceived subjectively by CEOs or export managers between
home and target countries on export marketing strategy as well as the association between individually
perceived distances on the success of export activities. This reflectively specified construct was adapted as a
result of the pretest findings and is comprised of seven indicators.
Firm´s international experience: Referring to prior empirical studies (e.g., Erramilli, 1991; O`Cass & Julian,
2003), the different aspects of international experience are determined by the duration of previous export
15
activities (measured in years) and the export country-specific experience (measured in years the company has
been active in the export country).
External environment: This variable is based on the reflective construct developed by Jaworski and Kohli
(1993) and was applied to operationalize competitive intensity in the export country. In accordance with the
empirical research work of Cavusgil and Zou (1994), the industry-specific characteristic of technology
orientation was measured by a single item.
Formative Constructs: In the study, the constructs of product adaptation, promotion adaptation, price
adaptation, distribution adaptation, and commitment are formatively operationalized. In a formative
measurement model, the indicators are viewed as defining dimensions of the construct. Significantly, the
direction of causality is of central importance to the differentiation between reflective and formative
measurement models. In a formative measure, the direction of causality is from the indicators to the latent
construct. In contrast, in a reflective measure, the direction of causality flows from the latent construct to the
indicators (Jarvis, MacKenzie, & Podsakoff, 2003).
Export marketing strategy: Based on our review of the literature and discussions with CEOs and export
venture managers, dimensions of product, promotion, price, and distribution adaptation were identified and
refined in terms of measuring technique. Sousa and Lengler defined the degree of marketing mix adaptation as
“the degree to which the product, promotion, price and distribution strategy differs across countries”
(2009:594). The degree of product adaptation related the target country (in comparison to the home country)
was measured in the study, using established scale items (Lages et al., 2008; Shoham, 1999; Sousa & Bradley,
2005), with five formative indicators, each of which considers different dimensions of product adaptation. In
order to measure the degree of promotion adaptation (in the target country compared to the home country), five
formative indicators were employed modified from Lages et al. (2008), Shoham (1999) and Sousa and Bradley
(2005). To operationalize the degree of price adaptation (in comparison to the home country), a construct
comprised of four indicators was developed on the basis of previous works of Lages et al. (2008), Shoham
(1999) and Sousa and Bradley (2005). To measure the distribution adaptation related to the target country (in
16
comparison to the home country) a formative measuring model with three indicators was specified using
established scale items (Lages et. al, 2008; Shoham, 1999; Sousa & Bradley, 2005) and specially modified to
the requirements of SMEs.
International Commitment: The manager of a company displays international commitment through the
provision of sufficient resources (financial resources, number of involved employees, planning in marketing)
and through personal involvement in an export venture. This construct was operationalized with four indicators
conceptually following Cavusgil and Zou (1994), Lages et al. (2008) and Nakos et al. (1998).
Control Variables
Management experience: The international experience of management has an influence on the adaptation of
the marketing strategy and the export success (e.g., Lages & Montgomery, 2004; Nakos et al., 1998). A
manager with international experience has an international network due to previously collected expertise in
foreign markets and can more accurately assess the chances and risks associated with managing a foreign
market, whereby, in turn, a positive effect on success is expected (e.g., Axinn, 1988; Hutchinson, Quinn, &
Alexander, 2006). To measure management experience, the reflective construct used by Lages et al. (2008) was
applied and also modified on the basis of our pretest.
International scope: Companies with comprehensive experience in foreign countries not only learn through
foreign markets, but they also adopt relevant, country-specific skills in market managing, and, therefore, they
are more successful in customizing a marketing strategy to the specific needs of the customers in the target
market (e.g., Evans et al., 2008; Hultman et al., 2009). The scope of previous export activities was measured by
the number of export countries in which the company is regularly active. Table 1 provides an overview and
shows items used for all our constructs.
Insert Table 1 here
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ANALYSIS AND RESULTS
Reliability and Validity
Content validity of the empirical study was established through a comprehensive research of the literature and
discussions with practitioners and experienced researchers. Prior testing our hypotheses and strict evaluation of
our reflective measurement models was carried out by following Gerbing and Anderson (1988). An exploratory
factor analysis was conducted and followed by confirmatory factor analysis (CFA). The exploratory factor
analysis indicates unidimensionality of all reflective constructs. Here, we applied the recommendation
developed by Nunnally (1978), which is a minimum value of 0.7 for Cronbach's alpha. The values for
Cronbach`s alpha range from 0.66 – 0.95, thus exceeding the required level of 0.7 or 0.4 (construct comprises
only 3 indicators).i The results obtained from the confirmatory factor analysis show a very good fit to our data:
measures are GFI=1, AGFI=0.99, NFI=0.94, CFI=0.97 and RMSEA=0.06. Our findings and results that
indicate the quality of our reflective measurement models is shown in Table 2.
Insert Table 2 here
The PLS outer model indicates that composite reliability and average variance extracted of each
construct exceed the recommended level of 0.6 and 0.5, respectively (Bagozzi & Yi, 1988). Convergent validity
is confirmed in our study by significant factor loadings for each indicator on the respective construct.
Discriminant validity was evidenced by the fact that, for all cases, the average variance extracted was greater
than the correlation of two constructs (Fornell & Larcker, 1981).
In contrast to reflective constructs, indicators can only be eliminated from formative measurement
models when substantial multicollinearity exists (Diamantopoulos & Winklhofer, 2001). To test for
multicollinearity, we used the variance inflation factor (VIF) and the condition index (Diamantopoulos &
Winklhofer, 2001). Only two indicators were eliminated from our measurement models on the grounds of
18
multicollinearity (see Table 1 for the dropped items). In accordance with Bollen and Lennox (1991), in the
present study, no eliminations of formative indicators based on insignificant weights occurred, since such
elimination would lead to the loss of important facets of a construct's content. The results of evaluation of the
formative measurement models are shown in Table 3. Table 4 presents the means, standard deviations, and
correlations among our variables.
Insert Table 3, 4 here
Testing of Hypotheses
We estimated the hypothesized effects among the constructs with structural equation modelling using
SmartPLS2.0. Due to the possibility of integrating formatively specified constructs without restrictions and the
less strict distribution assumptions, the PLS approach was taken to test the causal model. Using the
bootstrapping procedure (n=500), the t-values are calculated for the path-coefficients. Our results are
summarized in Table 5.
Insert Table 5 here
With regard to the assumed positive influence of psychic distance on the degree of country-specific adaptation
of marketing mix elements, no significant relationship can be found for H1a, H1b, H1c and H1d. An
examination of the various aspects of international firm’s experience shows that, contrary to expectations, a
significant negative relationship is confirmed between the duration of previous export activities and the degree
of price adaptation (β=-0.16, p<0.01) and distribution adaptation (β=-0.20, p<0.01). The duration of export
activities has no significant effect on product adaptation and promotion adaptation. Therefore, H2a, H2b, H2c
and H2d are not supported. On the other hand, export market specific experience has a significant positive
19
effect on the degree of price adaptation (β=0.22, p<0.05) and distribution adaptation (β=0.26, p<0.05), thus
supporting H3c and H3d. Specific export market experience is not significantly related to product adaptation
and promotion adaptation, providing no support for H3a and H3b. The international commitment of
management conforms to our expectations with a significant positive impact on the degree of product
adaptation (β=0.24, p<0.10), promotion adaptation (β=0.27, p<0.05), and price adaptation (β=0.25, p<0.10).
H4a, H4b and H4c are supported by the empirical data. There is no significant relationship between
international commitment and distribution adaptation, providing no support for H4d. Competitive intensity in
the export country has a significant positive influence on product adaptation (β=0.48, p<0.01), promotion
adaptation (β=0.25, p<0.05), price adaptation (β=0.44, p<0.01), and distribution adaptation (β=0.39, p<0.01),
thus supporting H5a, H5b, H5c and H5d. Contrary to the expectations in H6, the technological orientation of
the industry has a marginal positive, significant impact on the product adaptation (β=0.07, p<0.01) and no
significant effect on promotion adaptation, price adaptation, and distribution adaptation. Thus, no support is
found for H6a, H6b, H6c and H6d.
Depending on the specific measure of export success, different hypotheses are evidenced.
To increase reliability of the performance measurements of sales growth and profitability, we calculated the
arithmetic means to prevent bias because of possible outliers in time series. For the construct of goal
achievement, we calculated a composite index.ii Consistent with our postulated H7, psychic distance has a
significant negative effect on the overall success (β=0.6, p≤0.01), sales growth (β=0.28; p≤0.10), profitability
(β=0.27, p≤0.10), and goal achievement (β=0.63, p≤0.01). H7 is thereby confirmed.
In the analysis of the various aspects of international firm’s experience and their influence on export
success, it is interesting that contradictory findings are revealed. The duration of international experience has a
significant negative effect on sales growth (β=-0.20, p≤0.01), profitability (β=-0.11, p≤0.05), and the goal
achievement (β=-0.10, p≤0.10) of an export venture. Export market specific experience shows a significant
positive influence on sales growth (β=0.25, p≤0.01), profitability (β=0.14, p≤0.10), and goal achievement
(β=0.18, p≤0.05) of an export venture. We found no significant relationship between the duration of
20
international experience as well as the export market specific experience and the overall export success. H8 is
not supported, and H9 is partially confirmed. The direct positive influence of international commitment on
export success, as presumed in H10, finds no significant confirmation based on the data. H10 is not supported.
The hypothesis concerning the direct positive effect of product adaptation on export success is only confirmed
by the operationalization of export success via the overall export success (β=0.20, p≤0.01) and the profitability
(β=0.20, p≤0.1) of an export venture. Thus, there is partial support for H11a. Promotion adaptation has no
substantial effect on export venture success, neither on overall success nor on sales, profitability, and goal
achievement, providing no support for H11b. A price adaptation specific to a country has a significant positive
impact on both measures of export success—sales growth (β=0.26, p≤0.05) and profitability (β=0.20, p≤0.10).
However, price adaptation is not significantly related to overall success and goal achievement. With this
finding, H11c is partially supported by the empirical data.
As opposed to the original assumption, it was confirmed that distribution adaptation influences goal
achievement (β=-0.18, p≤0.10) and the profitability (β=-0.18, p≤0.05) in a significantly negative way.
Interestingly, no significant relationship to the other measures of success, overall success, and sales growth can
be found. H11d is therefore not supported.
Competitive intensity in the target country has a significant positive effect on the overall success
(β=0.17, p≤0.05) of an export venture. The assumed positive influence of competitive intensity on sales growth,
profitability and goal achievement finds no significant confirmation, providing no support for H12. We
included managerial experience and the scope of export activities as control variables in our analysis.
Managerial experience is not significantly related to the export marketing strategy adaptation and influences the
profitability of an export venture (β=-0.12, p≤0.05) in a significantly negative way. The scope of export
activities has a significant influence neither on the export marketing strategy adaptation nor on the export
market success.
Our model explains a significant proportion of the variance in export venture success: 75% of variance of
overall success, 50% of variance of sales growth, 37% of variance of profitability, and 52% of variance of goal
21
achievement. Our results indicate that the predictors explain a reasonable amount of the variance in marketing
strategy adaptation: 57% of variance of product adaptation, 39% of variance of promotion adaptation, 57% of
variance of price adaptation, and 48% variance of distribution adaptation.
CONCLUSION
The findings of our study confirm that psychic distance exerts a negative influence on export venture
success. A possible reason for this could be, that export activities in psychically distant countries are much more
difficult to manage for SMEs than for larger companies and for resource rich firms. This study exemplifies the
differentiated influence of each marketing mix element on the measured dimensions of export success. A
country-specific product adaptation is positively related to the export success measured in terms of overall
success and profitability of an export venture. A better fit between product specificity and target market,
implying a higher customer satisfaction which results is increasing export venture success. A better product fit
in a foreign target market, once realized, is more likely translated in higher product prices, increasing the overall
success and profitability. However, product fit depends essentially on already existing and/or acquired foreign
market knowledge and existing firm`s resources to implement successfully product adaptation. In general, the
positive relationship between pricing and export performance, measured on two dimensions (sales growth and
profitability) is legitimized by the need adjust to foreign markets, characterized by differences in exporting
costs, market structures etc. (e.g., Lages & Jap, 2002).
However, the surprisingly negative influence of distribution adaptation on profitability and goal
achievement in export markets suggest that SMEs should adhere a home-market distribution policy to prevent
rising costs in distribution that counterbalance potential gains. Our study found support that there is no direct
causal effect relationship between international commitment and export success. However, we identified a
strong significant relation between international commitment and product and price adaption.
Considering in our study the firm's international experience, it is revealing that different causal-effect
relationships can be recognized. The firm’s international experience, measured in years of export business
22
activities, shows a negative effect on sales growth, profitability and goal achievement. Whereas a firm’s specific
export market experience shows a significant effect on all three dimensions, namely sales growth, profitability
and goal achievement. This may suggest a considerable positive effect on utilizing acquired country-specific
knowledge in increasing the fit of measures in the specific target country. However, there seem to exist a
number of difficulties that prevent the transfer of existing and acquired foreign market experience across export
venture market within the SME. In addition, the study found a significant support that the effectiveness of
distribution and price policy adaptation depends on country-specific export experience. Contrary to these
findings we identified a negative effect on price and distribution adaptations strategies by established exporters.
This may indicate a growing rigidity or lacking willingness to adapt to changing foreign market environments,
despite the existing stock of knowledge about those markets. This interpretation is contrasted by our empirical
evidence that indicates that competitive rivalry in export markets exert a high pressure on SMEs to adapt
marketing mix strategies.
Regarding the particularities of the research sample of Austrian SMEs, it is entirely conceivable that
other success-determining factors could be identified with a sample comprised of international companies, and,
therefore, it would be meaningful to conduct further studies in an international context.
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27
FIGURE 1
Conceptual Model
28
TABLE 1
Constructs and Measures
Construct
Item
Scale
Source
Financial performance
Sales growth of the export venture
• Year 2007
• Year 2006
• Year 2005
• Year 2004
• Year 2003
Profitability of the export venture
• Year 2007
• Year 2006
• Year 2005
• Year 2004
• Year 2003
Indicate the importance to management of
the following goals in the last five years of
the export venture:
• Improve the market share
• Increase the profitability
• Increase the sales
• Gain a foothold in the market
• Improve the competitiveness of our
company
• Increase the awareness of our
product/company
6-point scale
Styles (1998)
Achievement of strategic
goals
Overall performance
Psychic distance
Management international
experience
Indicate the extent to which the following
objectives were actually achieved in the last
five years of the export venture
• Improve the market share
• Increase the profitability
• Increase the sales
• Gain a foothold in the market
• Improve the competitiveness of our
company
• Increase the awareness of our
product/company
• Overall, how would you rate the success
of the export venture over its last five
years?
• How would you rate the success of the
export venture in comparison with your
main competitor?
The degree to which the foreign country is
similar or different to the home country:
• Economic development
• Political system
• Level of education
• Consumer preferences
• Business practices
• Cultural values, beliefs, attitudes and
traditions
• Legal system
• My professional exporting experience is
very extensive.
• I have many years of work experience
abroad.
• I have broad private international
experience.
• I regularly attend training in
international business, for example,
formal courses and export seminars.
(dropped)
(strong decreasing
sales - strong
increasing sales)
6-point scale
Styles (1998)
(not at all profitable very profitable)
6-point scale
Styles (1998)
(no importance at all –
very high importance)
6-point scale
(not achieved at all –
completely achieved)
6-point scale
Styles (1998)
(unsuccessful – very
successful)
6-point scale
(very different - very
similar)
6-point scale
Sousa & Bradley
(2005)
Lages et al. (2008)
(strongly disagree –
strongly agree)
29
Duration of international
experience
Scope of international
experience
Export market experience
•
Competitive intensity
•
•
•
•
•
•
•
•
Technology orientation
Product adaptation
Promotion adaptation
Price adaptation
Distribution adaptation
Commitment
•
Number of years, the firm has been
involved in international business
Number of foreign markets the firm has
operations in
Number of years the firm has been
exporting to the export venture market
Competition in the exporting country is
cutthroat.
There are many "promotion wars" in the
exporting country. (dropped)
Price competition is a hallmark of our
industry in the exporting country.
Anything that one competitor can offer,
others can match readily.
Our competitors are relatively weak in
the exporting country. (dropped)
One hears of a new competitive move
almost every day in the exporting
country. (dropped)
Our firm operates in a technologyintensive industry.
O’Cass & Julian
(2003)
Erramilli (1991)
6-point scale
(strongly disagree –
strongly agree)
6-point scale
(strongly disagree –
strongly agree)
6-point scale
•
•
•
•
•
•
•
•
•
•
Product brand name
Product design
Product labeling
Variety of the main exporting product
line
Product-related services
Advertising theme/message
Advertising and promotion budget size
Advertising material (dropped)
Advertising media
Sales promotion tools
Determination of pricing strategy
Price discounts policy (dropped)
Conditions of payment
Margins
•
•
•
Budget for distribution
Channels of distribution
Transportation strategy
6-point scale
•
There was substantial planning for this
export venture.
There was a significant amount of
human resources involved in the
exporting activity.
There was a significant degree of
management commitment to exporting.
There were more financial resources for
exporting than those used for the
domestic market.
6-point scale
•
•
•
•
•
•
•
(no adaptation extensive adaptation)
6-point scale
(no adaptation extensive adaptation)
6-point scale
(no adaptation extensive adaptation)
(no adaptation extensive adaptation)
(strongly disagree –
strongly agree)
Jaworski & Kohli
(1993)
Cavusgil & Zou
(1994)
Conceptually
following Lages et al.
(2008), Shoham
(1999), Sousa &
Bradley (2005)
Conceptually
following Lages et al.
(2008), Shoham
(1999), Sousa &
Bradley (2005)
Conceptually
following Lages et al.
(2008), Shoham
(1999), Sousa &
Bradley (2005)
Conceptually
following Lages et al.
(2008), Shoham
(1999), Sousa &
Bradley (2005)
Conceptually
following Lages et al.
(2008), Nakos et al.
(1998), Cavusgil &
Zou (1994)
30
TABLE 2
Reflective Measurement Models ѣ
Constructs/items
Competitive intensity
Competition is cutthroat
Price competition is a hallmark
Anything others can match readily
IR
0.46
0.80
0.22
Confirmatory factor analysis
λ
z-value
CR
0.73
0.68
0.89
5.46
0.46
5.90
Psychic distance
Economic development
Political system
Level of education
Consumer preferences
Business practices
Cultural values, beliefs, attitudes and traditions
Legal system
0.75
0.79
0.67
0.58
0.85
0.74
0.83
0.87
0.89
0.82
0.76
0.92
0.86
0.91
18.59
15.64
13.73
19.81
16.96
19.33
Management international experience
Export experience
Work experience abroad
Private international experience
0.25
0.71
0.34
0.50
0.84
0.58
4.89
5.60
-
-
-
Overall performance
Success of the export venture
Success in comparison with the main competitor
0.96
0.71
-
AVE
0.49
0.76
0.49
GM
GFI:
1.00
AGFI:
0.99
NFI:
0.94
CFI:
0.97
RMR:
0.09
RMSEA:
0.06
chi/df:
1.87
PLS - outer model
λ
t-value
AVE
0.75
0.84
21.12
0.91
26.63
0.85
17.21
0.85
0.84
0.82
0.74
0.86
0.88
0.82
14.03
12.05
10.29
8.67
16.77
18.13
13.15
0.99
0.98
0.98
6.98
19.28
76.08
0.92
0.76
52.20
14.96
-
α
0.72
0.69
0.95
0.99
0.66
0.71
0.73
ѣ IR Item reliability, λ Loading, CR Composite reliability, AVE Average variance extracted, GM Global measures
α Cronbachs alpha, GFI Goodness-of-Fit Index, AGFI Adjusted-Goodness-of-Fit Index, NFI Normed Fit Index, CFI Comparative Fit Index, RMR Root Mean Residual, RMSEA Root Mean Square Error of Approximation
31
TABLE 3
Formative Measurement Models †
Constructs/items
Commitment
Substantial planning
Human resources
Management commitment
Financial resources
Multicollinearity
VIF
CI
13.90
1.12
1.31
1.09
1.22
Product adaptation
Product brand name
Product design
Product labeling
Product line
Product-related services
1.78
2.24
2.09
2.12
1.30
Promotion adaptation
Advertising theme/message
Advertising and promotion budget size
Advertising media
Sales promotion tools
1.65
1.90
1.96
1.79
Price adaptation
Determination of pricing strategy
Conditions of payment
Margins
2.08
2.11
2.33
Distribution adaptation
Budget for distribution
Channels of distribution
Transportation strategy
1.40
1.05
1.35
PLS - outer model
Weight
t-value
0.11
0.27
0.50
0.20
0.99
1.82
2.95
1.35
0.24
0.56
0.05
0.11
0.12
0.85
1.99
0.31
0.52
1.72
0.18
-0.04
0.28
0.69
2.31
0.36
0.71
6.15
0.49
0.21
0.39
2.72
1.56
1.99
0.41
0.43
0.25
1.88
1.02
1.96
6.94
6.33
6.79
4.87
† VIF Variance Inflation Factor, KI Konditionsindex
32
TABLE 4
Correlations of Latent Variables and Descriptive Statisticsa
Mean
SD
1
2
3
4
5
3.72
29.75
18.89
4.42
4.41
3.20
3.27
4.16
4.29
4.27
1.14
28.32
18.79
0.92
7.38
1.65
2.19
0.94
1.65
0.82
1.00
-0.03
0,48***
0,70***
0,60***
0,68***
0,67***
0,49***
-0.04
0,54***
1.00
0,50***
-0.01
-0.02
-0.07
-0.06
-0.04
-0.06
-0.07
1.00
0,40***
0,33***
0,42***
0,35***
0,34***
-0.05
0,44***
1.00
0,53***
0,63***
0,70***
0,59***
0.10
0,64***
1.00
0,73***
0,73***
0,36***
-0.05
0,45***
11 Distribution adaptation
2.90
2.15
12 Competitive intensity
13 Goal achievement
14 Psychic distance
3.68
3.73
4.09
1.18
1.51
1.50
1
2
3
4
5
6
7
8
9
10
a
Commitment
Duration of experience
Export market experience
Overall success
Promotion adaptation
Price adaptation
Product adaptation
Profitability
Technology orientation
Sales Growth
6
7
8
1.00
0,80***
0,48***
0.02
0,61***
1.00
0,50***
0.08
0,54***
1.00
0.09
0,83***
0,62*** -0.09
0,40*** 0,61*** 0,73*** 0,87***
0,82***
0,43***
0,75*** -0.07
0,57*** -0.01
0,81*** -0.05
0,36*** 0,73*** 0,57*** 0,71***
0,40*** 0,68*** 0,41*** 0,44***
0,45*** 0,83*** 0,55*** 0,61***
0,72***
0,46***
0,66***
0,50***
0,54***
0,55***
9
1.00
0.02
0.01
0.05
0.05
0.01
10
11
12
13
1.00
0,59*** 1.00
0,50*** 0,64*** 1.00
0,58*** 0,39*** 0,55*** 1.00
0,59*** 0,58*** 0,76*** 0,71***
S.D., standard deviation.
*** p < 0.001.
33
Table 5
PLS – Structural Model
tpvalue value
0,45 0,33
Hypothesis
β H1a
+ 
0,08
H2a
+ 
-0,05 1,28
0,10
Export market experience
H3a
+ 
0,05
0,69
0,24
Commitment
H4a
+ 
0,24
1,40
0,08†
H5a
+ 
0,48
4,09
0,00***
H6a
- 
0,07
2,55
0,01*
H1b
+ 
0,10
0,92
0,18
H2b
+ 
-0,05 0,69
0,25
Export market experience
H3b
+ 
0,08
0,93
0,18
Commitment
H4b
+ 
0,27
1,85
0,03*
Competitive intensity
H5b
+ 
0,25
1,66
0,05†
H6b
- 
-0,06 1,08
0,14
H1c
+ 
-0,02 0,28
0,39
H2c
+ 
-0,16 2,26
0,01*
Export market experience
H3 c
+ 
0,22
2,12
0,02*
Commitment
H4c
+ 
0,25
1,55
0,06†
H5c
+ 
0,44
2,50
0,01*
H6c
- 
0,01
0,11
0,46
H1d
+ 
0,01
0,22
0,41
H2d
+ 
-0,20 2,53
0,01*
Export market experience
H3d
+ 
0,26
1,94
0,03*
Commitment
H4d
+ 
0,19
1,27
0,10
Competitive intensity
H5d
+ 
0,39
2,58
0,01*
H6d
- 
-0,03 0,38
0,35
Psychic distance
H7
- 
0,60
4,91
0,00***
Duration of experience
H8
+ 
0,03
0,84
0,20
H9
+ 
-0,02 0,40
0,35
Commitment
H10
+ 
-0,04 0,27
0,39
Product adaptation
H11a + 
0,20
0,00***
Promotion adaptation
H11b + 
-0,05 1,52
0,06*
Price adaptation
H11c + 
0,04
0,26
0,40
Distribution adaptation
H11d + 
0,03
0,41
0,34
H12
+ 
0,17
1,77
0,04*
Psychic distance
H7
- 
0,28
1,38
0,08†
Duration of experience
H8
+ 
-0,20 2,96
Independent variable
Dependent variable
Psychic distance
Duration of experience
Competitive intensity
Technology orientation
Product adaptation
(R2=0,57)
Psychic distance
Duration of experience
Technology orientation
Promotion adaptation
(R2=0,39)
Psychic distance
Duration of experience
Competitive intensity
Technology orientation
2
Price adaptation (R =0,57)
Psychic distance
Duration of experience
Technology orientation
Export market experience
Competitive intensity
Distribution adaptation
(R2=0,48)
Overall performance
(R2=0,75)
34
2,96
0,00***
H9
+ 
0,25
Commitment
H10
+ 
-0,01 0,04
0,48
Product adaptation
H11a + 
-0,03 0,07
0,47
Promotion adaptation
H11b + 
0,01
0,56
0,29
Price adaptation
H11c + 
0,26
2,12
0,02*
H11d + 
0,14
0,98
0,16
Export market experience
Distribution adaptation
2
2,43
0,01*
H12
+ 
-0,04 0,44
0,33
Psychic distance
H7
- 
0,27
1,43
0,08†
Duration of experience
H8
+ 
-0,11 1,84
0,03*
H9
+ 
0,14
0,08†
Commitment
H10
+ 
-0,02 0,07
0,47
Product adaptation
H11a + 
0,20
1,34
0,09†
Promotion adaptation
H11b + 
0,01
0,63
0,27
Price adaptation
H11c + 
0,20
1,34
0,09†
H11d + 
-0,18 1,82
0,03*
Competitive intensity
Export market experience
Sales (R =0,50)
Distribution adaptation
2
1,39
H12
+ 
0,11
0,79
0,22
Psychic distance
H7
- 
0,63
3,15
0,00***
Duration of experience
H8
- 
-0,10 1,47
0,07†
H9
+ 
0,18
0,05†
Commitment
H10
+ 
-0,06 0,25
0,40
Product adaptation
H11a + 
0,02
0,20
0,42
Promotion adaptation
H11b + 
0,09
0,62
0,27
Price adaptation
H11c + 
0,05
0,27
0,39
H11d + 
-0,18 1,56
0,06†
0,08
0,23
Competitive intensity
Export market experience
Profitability (R =0,37)
Distribution adaptation
Competitive intensity
Achievement of goals
(R2=0,52)
H12
+ 
1,64
0,75
† p < 0,10, * p < 0,05, ** p < 0,01, *** p < 0.001
i
Should a construct consist of only 2 or 3 indicators, then a value of 0.4 for Cronbach's alpha is considered thoroughly
appropriate. To improve Cronbach’s Alpha we eliminated 3 indicators from the measurement models on the basis of their
lowest Item-to Total correlation and 1 indicator due to its too low indicator reliability (see table 1 for the dropped items).
ii
Therefore each degree of sub-goal achievement was weighted by its relative importance. The so weighted sub-goal
dimensions were then summarized to an overall goal achievement index.
35