Faculdade de Economia –

Universidade Nova de Lisboa

Fall Semester 2009/2010

Summary of the article:

Relationship Capabilities, Quality, and Innovation as Determinants of Export

Performance

By Luis Filipe Lages, Graça Silva and Chris Styles

Forthcoming at the Special Issue on “The Performance Implications of International

Marketing Strategy

Mónica Marques n.514

Index

Page

• Executive Summary
3

• Introduction
4

• Theoretical Justification of the Relationships 5

• Methodology
6

• Discussion of the Results of the Exploratory Interviews / Summary of the

Interviews 8

• Conclusion
9

2
 Executive Summary

The analyzed article pretends to explain the connection between Organizational

Learning, Relationship, Quality Capabilities, Product Strategy and Export Performance,
and the influence of the first mentioned company capabilities in the last two topics.
After the realization of interviews, the authors concluded that the managers should give
importance to the relationship management capabilities to influence positively product
innovation as well as product quality.
The way how the article authors develop it is the following:
• Analysis of the importance Organizational Learning, Relationship
Capabilities and Quality Capabilities in the Product Strategy;
• Verification of the connections between Product Innovation and Product
Quality;
• Utilization of interviews when the relevance of the questioned people is
high in the export activities of the company.

3
Introduction

The analyzed document has the objective to explain, in a better way, the
relationship between the firm capabilities and product strategy.
To achieve the necessary explanations, the article interviews focused mainly the
Portuguese exporting companies, in the manufacturing area, excluding the services
companies as well as the ones in the primary industries.

4
Theoretical Justification of the Relationships

The article mentions a high theoretical support to achieve the main findings of the
study. Some examples are following illustrated:
• When Wolf and Pett compared the size of the companies, the large ones showed
a higher potential to have a better resource base than the smaller ones, but was not
detected an important difference in the export intensities.
• Burton and Schlegelmilch defended that the exported companies presented better
capabilities to product innovation and product quality.

To justify the presented hypothesis of the study, the theoretical support was also used.
For each one, were presented some references, however, in this summary is showed one
of it to illustrate the justification structure:

H1: There is a positive association between organizational learning capabilities and

product innovation.
• Morgan, Kaleka, and Katsikeas (2004) defended the positive effect of product
development capabilities on the market position of the firms.

H2: There is a positive association between relationship capabilities and product

innovation, product quality, and relationship performance.
• According to the Krasnikov and Jayachandran reference of 2008, the
relationship capabilities have a essential connection with the customer
relationships.

H3: There is a positive association between relationship performance and economic

performance.
• Both studies of Johanson and Vahlne, in1977 and Ling-yee and Ogunmokun, in
2001, defend that when the relations between the company and its exporters are
strong, the markets knowledge improve, increasing the possibility to be successful
economically.

H4: There is a positive association between quality capabilities and product quality.

5
• Golhar Ahire and Waller, in 1996, said that quality capabilities have an important
influence on the advantage sustentation of the company.

H5: There is a positive association between product innovation and relationship

performance and product quality and relationship performance.
• In 2002, Katsikeas Leonidou and Samiee confirmed the positive relationship
product quality on export performance.

H6: There is a positive association between (a) product innovation and economic
performance and (b) product quality and economic performance.
• Di Benedetto Zhang and Hoenig, in 2009 discovered that the product innovation
can help to improve the innovation performance.

6
Methodology

• The interviews used to write the summarized article, were paper-and-pencil

interviews to export managers, quality managers and managing directors, in 2006,
in an anonymous form.
• Initially, the random sample was constructed by 1332 exporting manufacturing
firms in Portugal.
• After to ask for companies’ availability of the companies, the company
reminded the potential interviews 3 weeks after the interviews and in the 8th week
too.
• The initial sample size was reduced to 524 companies. The authors did more 100
contacts with companies. In the end, only were considered 419 interviews.
• The interviews didn’t know what was the conceptual model of the article
authors.
• The Harman single-factor test was used to control the bias.
• The authors defined in the article some of the main measures used in this study
to help to clarify some reasoning showed in the document: economic performance,
relationship performance, product innovation strategy, product quality strategy,
organizational learning capabilities for innovation, commitment to learning, shared
vision, open-mindedness to innovation, relationship capabilities, communication
quality of the relationships, amount of information sharing, importer involvement,
quality capabilities, top management commitment, employee involvement,
employee quality, employee empowerment, customer focus.
• With these clarifications, the authors explain also the importance of each one in
the development of the company performance.

7
Discussion of the Results of the Exploratory Interviews / Summary of the
Interviews

• First of all, it is important to refer that the authors utilized theoretical support
and linked it with the data of the interviews. To take some conclusions, as to test
the hypothesis, they made use of: Partial Least Squares with Smart PLS 2.0, the
Average Variance Extracted.
• The interviewed companies revealed a considerable experience, around 22 years,
in the international market, when the main relationships with the importers happen
inside the European continent with duration of 11 years. The transactions volume is
€500,000 to €1.6 million with the companies’ importers.
• The people who answered to the questionnaires were working for 11 years and
with a function’s experience of 9 years inside the company.

8
Conclusion

The main conclusions of this article are:

• The economic performance is affected mainly for the relationship performance.
The product innovation strategy has not so much influence as the relationship
performance, and finally, with a small effect on it is mentioned the product
quality strategy.
• The product quality presented a medium effect and, product innovation and
relationship capabilities have a small influence on relationship performance.
• The product quality is extensively influenced by quality capabilities as well as
relationship capabilities.
• However, the organizational learning capabilities don’t demonstrate a large
impact on product innovation and as well as the relationship capabilities on
product innovation.
• Organizational learning and relationship capabilities have a helpful impact on
product innovation, product quality and relationship performance.
• The relationship performance influences positively the economic performance,
as well as the quality capabilities and the product quality, and also the case
between relationship performance, product innovation and product quality.
• Another good relationship is verified with the connection of the economic
performance with the product innovation and product quality.
• Finally, the product innovation presents a notorious influence on economic
performance.

Concluding, when the companies presented strong relations with their importers, the
possibility to be successful outside to the national market is high. However the product
quality is not enough to guarantee a positive economic performance in the international
market. So, the companies should pay attention to their areas of product innovation and
relationship management capabilities.