- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: Durham University
- Language: English
- Downloads: 42
The lack of management ability has also received a lot of coverage in the existing literature. This lack could be either due to time constraints (Leonidou, 2004) or qualification (Tesfom and Lutz, 2006). Another manifestation of management as barrier was in the role of management as initiator of exports.
The lack of management commitment to initiating export marketing activities as well as a negative managerial attitude has been identified as barriers to exports (Tesfom and Lutz). Time constraints could conceivably be negated as a constraint by employing a dedicated resource, but unless management has a vision of exporting and commits to this vision, management will remain a barrier.
Non-managerial Personnel Resources Factor
Leonidou (2004) highlighted inadequate or untrained exporting personnel as a barrier to exports. Adequacy and training relates to the ability to perform tasks required to do exports, that are not required when producing only for the local market: special document handling, more elaborate logistical arrangements,communicationwith foreign customers (often in different languages) etc. Lack of training and experience has also been identified by Tesfom and Lutz (2006). They found this factor to blame for export marketing knowledge problems and for the quality of manufactured products remaining at low levels. Lack of experience, adequacy (e.g. language ability) and training among export personnel is thus a barrier in the way of exports.
The shortage of skills is a global phenomenon, but developing countries seem to be net losers of skilled individuals. According to the South African Minister ofFinance, developing countries – including South Africa – were unable to compete with the earnings benefits offered by developed countries. The result was that developing countries fundededucationand training for its citizens. (Manuel,2007).
H2: human resource factor will have a significant positive effect on the export performance sheba leather factory.
Financial Resources Factor
Finance is a constraint in most, if not all, companies. However, the exporting activity brings a host of new costs. It is arguably more expensive to source information on foreign markets, distances and thus transport cost are increased, documentation is increased, bringing about new cost, promotion cost increases etc. It is therefore not surprising that the literature contains many references to lack of financial resources as a barrier to exports.
Leonidou (2004) identified the shortage of working capital as a constraint. Lack of financing also limited the ability to grant credit facilities (Leonidou).
Tesfom and Lutz (2006) identified a number of barriers related to financial resources. It inhibited the ability to conduct market research in overseas markets; it resulted in an inadequate export marketing budget. Leonidou’s finding that lack of financial resources to finance exports was a barrier. Lack of financial resources thus presents many barriers to exporting – more so than when producing only for the local market.
H3: financial factor will have a significant positive effect on the export performance sheba leather factory.
Many barriers to exports revolve around attributes of the product itself. Leonidou (2004) referred to different customer preferences across countries and the need to develop entirely new products for the different needs and wants. The inability to develop these new products acted as a barrier. In line with this was the requirement to adjust the products design or style for different conditions of use, differences in purchasing power etc. Again, not being able to make these changes barred potential exporters from these markets (Leonidou).
Lack of product diversification was also identified as a barrier by Tesfom and Lutz. Both the papers of Leonidou (2004) and Tesfom and Lutz (2006) raised a number of quality issues as barriers. The latter’s paper identified quality as one of the most important conditions for entering and remaining in foreign markets. It was possible that consumers in foreign markets wanted products of a higher quality than those offered by potential exporters in their local market. Some quality standards were legislated by foreign governments.
In line with quality standards were product design and specifications (Tesfom and Lutz), which also differed across countries and may also have been legislated. The lack of resources required to fulfill these standards, especially where exports make up only a small part of production, just not justifying the higher unit cost, also presented a barrier. So too did the lack of knowledge regarding what these standards required. Poor quality control techniques were also blamed for low-quality products and acted as a barrier to exports.