Export Improvisation and Performance

In contrast to the normative approach to studying decision-making, the descriptive approach focuses on how decisions are made in reality (Tamura, 2008). Scholars argue that managers often satisfy rather than optimise their options and make more spontaneous and creative decisions, which in turn are associated with improvisation (e.g. Brown and Eisenhardt, 1998; Hmieleski, Corbett and Baron, 2013). Following Vera and Crossan’s (2004) definition, improvisation is ‘the spontaneous and creative process of attempting to achieve an objective in a new way’ (p.733). In other words, improvisation involves making quick and innovative decisions (Moorman and Miner, 1998a). In spite of the fact that improvisation research is still in its infancy, scholars recognise that improvisation may result in superior performance in a domestic context (Crossan et al., 2005; Kyriakopoulos, 2011). However, its importance in exporting and to export performance is yet to be established.

4.4.1 Improvisation-Customer Performance Relationship

As explained in Chapter 2 (see section 2.3.2 for more details), the concept of organisational improvisation is based on Jazz music and theatrical improvisation (e.g. Barrett, 1998; Dennis and Macaulay, 2003). These metaphors, especially

theatrical improvisation, can serve as a suitable starting point in explaining the relationship between export improvisation and export customer performance. In theatrical improvisation, actors continuously work with the audience, process the information from the audience and react accordingly; they see the audience’s feedback and amend their performance. As a result, viewers’ immediate reactions replace the coordinating function of a detailed plot (Barrett and Peplowski, 1998). When the theatrical improvisation metaphor is mapped onto an organisational context, similar logic applies. ‘In business, customers are like the audience.

Improvisational processes can affect customer satisfaction when work teams deal with customers’ requirements and handle unexpected problems or unreasonable requests’ (Vera and Crossan, 2004 p. 739). The speed with which the decisions are made is a result of the spontaneous nature of improvisation (Moorman and Miner, 1998b). Spontaneity allows actions to be undertaken quickly or even immediately which can be crucial when handling customer requests (Barrett 1998). The results of the qualitative study support this proposition. ‘You have to have that [decision-

making] flexibility to meet what customer’s needs are really, if you don’t do that, then you lose the business, because you need to be able to close the deal, so you have to think on your feet’ (Company 11).

On the other hand, the creativity dimension of improvisation (‘out of the box’

approach) enables an export function to come up with solutions to unusual customer problems (c.f. Brown and Eisenhardt, 1998). For instance, the manager from

Company 4 suggested an ‘out of the box’ approach to a product delivery in order to fulfill customers’ needs: ‘If our customer had a breakdown, and wanted something urgently, we can take it out of here, get on the plane and take it out to him.’ That is an example of a creative decision regarding a product delivery compared to a standard shipment solution.

Finally, action-orientation is related to being persistent and not being distracted from making a decision (Diefendorf et al., 2000; Jaramillo and Spector, 2004; Hmieleski and Corbett, 2006). For example, the manager from Company 3 explained that their export function is very focused on the task of market expansion (‘looking for a new market’); they believe that in this task customer-focus is the most important in

achieving customer satisfaction. Moreover, action-orientation enables the export function to focus on handling customer requests (Company 2).

Thus, it can be stated that:

H3a: Spontaneity is positively related to export customer performance. H3b: Creativity is positively related to export customer performance.

H3c: Action-orientation is positively related to export customer performance.

4.4.2 Improvisation-Financial Performance Relationship

There is currently limited evidence of the financial outcomes of improvisation. For example, Moorman and Miner (1998b) introduce a famous Honda case when the company changed their strategy in the USA market by selling smaller motorcycles compared to the original plan of selling the larger ones. That improvisational shift in strategy led to great financial success. Moreover, Moorman and Miner (1998a) argue that improvisation tend to improve new product effectiveness. The spontaneous nature of improvisation allows firms to introduce new products in a timely manner, while its creativity (experimentation) enables their success. Brown and Eisenhardt (1998) state that improvisational businesses often create products and services that are unpredictable and their strategies are usually more diverse because they can change their tactics quickly. This allows the firm to outperform competitors and to achieve better financial outcomes.

Yet, the majority of authors (e.g. Moorman and Miner, 1998b; Vera and Crossan, 2005; Kyriakopoulos 2011) believe that the relationship between improvisation and performance is contingent upon external (e.g. environmental turbulence) and internal (e.g. real-time information flow and organisational memory) conditions. In prior

research, improvisation was examined as an aggregate (unidimensional construct). However the current study is interested in whether there is a direct relationship between the dimensions of improvisation (spontaneity, creativity and action- orientation) and export financial performance. Disaggregating the components of improvisation may well reveal underlying performance relationships that may

(a) otherwise be missed or (b) given rise to confounding results if improvisation was treated unidimensionally.

The results of the current exploratory study confirm that the dimensions of export improvisation are able to positively influence financial performance.

Some respondents (e.g. Company 5) viewed spontaneous decision-making as one of the key drivers of their sales growth as it helps them to capitalise on market opportunities. They unexpectedly bought one of their export competitors when the opportunity arose, which helped to increase their export sales. Confirmation of the positive relationship between fast decision-making (spontaneity) and financial performance can be found in the literature (Bourgeois and Eisenhardt, 1988; Baum and Wally, 2003) with some authors arguing that very often being first in the market can give a firm competitive advantage and positively influences its performance (Fiegenbaum and Karnani, 1991; Crossan et al., 2005).

The manager from Company 8 explained that creativity allows for cost reduction when compared to planning. Planning requires a certain amount of information whereas creativity (e.g. brainstorming) can substitute for a lack of information and save the export function from spending additional financial resources

(c.f. Cunha, 2007). Indeed, in tight cost control situations, creativity may well reveal opportunities for financial growth that may otherwise be missed.

Action-orientation enables the export function to focus on financial objectives and achieve them better. For instance, Company 10 view export success strictly from a financial perspective (as bottom line sales and operating income). They believe that in order to achieve that, they need to be focused while making decisions and follow the decisions through.

Based on the above, it is proposed that:

H4a: Spontaneity is positively related to export financial performance. H4b: Creativity is positively related to export financial performance.