DSpace at VNU: Learning to build quality business relationships in export markets: evidence from Vietnamese exporters

DSpace at VNU: Learning to build quality business relationships in export markets: evidence from Vietnamese exporters tà...

This article was downloaded by: [Universidad Autonoma de Barcelona] On: 29 October 2014, At: 03:18 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Asia Pacific Business Review Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/fapb20 Learning to build quality business relationships in export markets: evidence from Vietnamese exporters a Trang T.M Nguyen & Tho D Nguyen a b Vietnam National University , Ho Chi Minh City, Vietnam b University of Economics , HCM City, Vietnamand University of Technology, Sydney, Australia Published online: 24 Mar 2010 To cite this article: Trang T.M Nguyen & Tho D Nguyen (2010) Learning to build quality business relationships in export markets: evidence from Vietnamese exporters, Asia Pacific Business Review, 16:1-2, 203-220, DOI: 10.1080/13602380802280009 To link to this article: http://dx.doi.org/10.1080/13602380802280009 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content This article may be used for research, teaching, and private study purposes Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/termsand-conditions Asia Pacific Business Review Vol 16, Nos – 2, January– April 2010, 203–220 Learning to build quality business relationships in export markets: evidence from Vietnamese exporters Trang T.M Nguyena and Tho D Nguyenb* Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 a Vietnam National University, Ho Chi Minh City, Vietnam; bUniversity of Economics, HCM City, Vietnam and University of Technology, Sydney, Australia A firm’s competitive advantage can be created through keeping long-term relationships with customers To achieve successful long-term relationships, partners have to develop and maintain quality relationships with each other, especially in international markets In this study, we examine the role of learning orientation in relationship quality between exporters in a transition economy, Vietnam, and their foreign importers We also investigate the mediating role of exporter ethnocentrism A test based on a random sample of 297 exporters in Vietnam indicates that learning orientation is a key factor that assists exporters in building quality relationships with their importers In addition, learning orientation lessens the degree of exporter ethnocentrism, a behaviour which prohibits exporters to build quality relationships with their importers Keywords: exporter ethnocentrism; learning orientation; relationship quality; Vietnam Introduction It is impossible for firms not to have relationships with other firms, as they cannot operate in isolation (see Hakansson 1982, Blois 1997) Research has shown that a firm’s competitive advantage can be created through keeping long-term relationships with customers and that many firms are moving from transactional discrete exchanges to relational ones (Ganesan 1994, Nguyen et al 2007, Ulaga and Eggert 2006) This is because loyal customers will bring more profits to firms than the price-sensitive and dealprone switcher (Reicheld 1996) In addition, committed relationships are among the most durable advantages because they are difficult for competitors to understand, to copy, or to displace (Day 2000) The emergence of this trend indicates that several firms are beginning to formally realize the importance of relationship quality between them and their customers Understanding how to initiate, develop, and maintain high quality business relationships in international markets, is critical to successful export involvement (Styles and Ambler 1994, Nguyen et al 2004) Consequently, the role of business relationships has emerged as a top priority for most business firms around the world This has attracted researchers to investigate factors that contribute to the quality of business relationships However, such studies have been conducted mainly in the developed world Less attention has been paid to transition economies whereas the future economic growth of several economies in transition depends heavily on exports On the other hand, importers in *Corresponding author Email: ndtho@ueh.edu.vn ISSN 1360-2381 print/ISSN 1743-792X online q 2010 Taylor & Francis DOI: 10.1080/13602380802280009 http://www.informaworld.com 204 T.T.M Nguyen and T.D Nguyen Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 developed economies, due to competitive pressure, continually seek out more competitive sources of supply, which can be found in transition economies However, doing business with such economies is often viewed as entailing greater risk (Tsang 2005) Therefore, improving quality business relationships with exporters in transition economies is likely to reduce such risk To bridge this gap, this research makes an attempt to investigate the role of learning orientation in building high quality business relationships between exporters in Vietnam and their foreign importers The following section provides a short overview of Vietnam and Vietnamese exporters Next, we present the literature review and hypotheses Subsequently, we provide the method and data analysis Finally, we discuss the results and implications, and draw conclusions Vietnam and Vietnamese exporters Vietnam represents an under-investigated transition economy (Tsang 2005), especially in terms of business relationships In 1986 the Vietnamese government initiated a new economic reform programme, aiming to transform the economy from a centrally planned economy to a market-oriented economy under socialist guidance (Nguyen et al 2006) The movement toward a market economy, together with the adoption of an export promotion strategy, has pushed Vietnamese firms to change their traditional ways of doing business, especially exporting Prior to the transformation, export activities of Vietnamese firms had been arranged by the Vietnamese government with other socialist governments within the Soviet trading block The break-up of the Soviet trading block led to the liberalization of foreign trade by the Vietnamese government in 1989, creating an open economy in Vietnam This necessitates Vietnamese firms to find new exporters for their products because the Soviet trading block could no longer provide outlets for exports (Griffin 1998), resulting in a dramatic change in exporting habits by Vietnamese firms Instead of focusing on production and relying primarily on the government, Vietnamese firms are now required to find their own foreign markets for their products These efforts have resulted in an annual growth rate of exports of 20%, on average, during the years 1990 –2005 (Xuan and Xing 2008) Literature review and hypotheses Relationship quality in export markets Relationship quality is an important aspect in maintaining and evaluating business relationships Smith (1998, p 78) defines it as ‘an overall assessment of the strength of a relationship and the extent to which it meets the needs or expectations of the parties based on a history of successful or unsuccessful events’ Several conceptualizations of relationship quality have been proposed such as trust, commitment, and satisfaction (see Smith 1998), willingness to invest, conflict, expectation of continuity (e.g Kumar et al 1995), and minimal opportunism (see Dwyer and Oh 1987) Among these conceptualizations, trust, commitment, minimal opportunism, and satisfaction are widely accepted as the dimensions of relationship quality because they have received strong empirical support (Dorsch et al 1998, Dwyer and Oh 1987, Nguyen et al 2004) In export markets, trust can be defined as the willingness of an exporter to be vulnerable to the actions of an importer based on the expectations that the importer will behave in a right (good) way towards the exporter (Kumar et al 1995) This definition of trust reflects two essential dimensions – honesty and benevolence Honesty is based on the belief that the exporter stands by its words (Anderson and Narus 1990), fulfils promised Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Asia Pacific Business Review 205 role obligations, and is sincere (Dwyer and Oh 1987) Benevolence is the belief that the exporter is interested in its partner’s welfare, and will not take unexpected actions that would have a negative impact on the partner (Anderson and Narus 1990) Trust plays a central role in business relationships and is essential for the development of enduring partnerships (Morgan and Hunt 1994) because it facilitates constructive dialogue and cooperative problem solving, enabling the exporter not only to work together with its importers more effectively but, to reduce perceived uncertainty and complexity in the future Commitment is another dimension of relationship quality It is central to successful business relationships because it enables independent members to work together to achieve a higher level of performance (Morgan and Hunt 1994) Commitment to a business relationship entails a desire to develop a stable relationship, and a willingness to sacrifice short-term benefits to maintain stability in a long-term relationship (Anderson and Weitz 1992) Three main types of commitment have been found in the literature: continuance commitment, behavioural commitment and, affective commitment (Kim and Frazier 1997) Continuance commitment is reflected in the stability of a relationship and is defined as an exporter’s desire to continue the relationship with its importer, which brings the exchange partners closer together (Anderson and Weitz 1992) Any exporters interested in ongoing exchange relationships with their importers would have a propensity for relation continuity Behavioural commitment is reflected in the actual behaviour of an exporter towards an importer It is defined as the extent to which the exporter provides special help to its importer in times of need A high level of behavioural commitment is indicated by the exporter’s expressive behaviour that shows it cares about the importer The exporter not only performs its pre-agreed roles but, also provides extra helps for its importer as required under various situations Behavioural commitment is realized in the concrete behaviour through which the partners become committed Affective commitment is the attitudinal aspect of the exporter’s business ties to its foreign importer Affective commitment refers to the sense of unity binding the exporter to its importer (Kim and Frazier 1997) Highly affective commitment means that the exporter feels a strong unity of interests and goals with the importer and can work with the importer in harmony (Anderson and Narus 1990) The third dimension of relationship quality is satisfaction It can be defined as the extent of a business partner’s overall affective evaluation of the relationship (Anderson and Narus 1990) Satisfaction is also a key aspect of successful business relationships as it motivates satisfied parties to commit more to beneficial exchange relationships (Leuthesser 1997) Satisfaction is considered to be an indicator of how an exporter assesses some of the other costs and benefits of its relationship beyond economic performance and conflict levels (Cullen et al 1995) The final dimension of relationship quality is minimal opportunism Opportunism is defined, in general terms, as ‘self-interest seeking with guile’ (Williamson 1975, p 6) Opportunistic behaviour refers to the taking of unexpected actions that will generate negative outcomes for a business partner that is involved in a transaction or relationship Successful business relationships provide enhanced efficiencies for both partners (Kalwani and Narayandas 1995) In spite of such benefits, it has been revealed that business relationships between partners have a high failure rate (Parkhe 1993) Though divergent long-term goals can be used for explaining these failures, a primary reason for the ‘failure of many alliances is the inability to check opportunism by the alliance partners’ (Bucklin and Sengupta 1993, p 33) This means that opportunistic behaviour decreases the possibility of achieving common goals The consequences of opportunistic behaviour includes the failure of exchange partners Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 206 T.T.M Nguyen and T.D Nguyen to fulfill promises and obligations, and the possible termination of the relationship In export markets, an exporter works with its importer in a far distance in terms of geography and culture, creating opportunities for the foreign partner to easily engage in opportunistic behaviour (Cavusgil et al 2004) Therefore, the development of satisfying relational exchange also requires minimal opportunism (Dwyer and Oh 1987) Rapidly increasing competitive environments are forcing business firms to seek more creative and flexible means for coping with competitors Building collaborative relationships with customers is a means for lessening such severe competition (Doney and Cannon 1997) Such collaborative relationships are likely to rely on the quality of relationships A high quality relationship enables an exporter and its importer to enjoy the long-term benefits of the relationship, ultimately leading to strengthened competitiveness and reduced transaction costs (Noordewier et al 1990) This makes it easier for the exporter to satisfy importers than its competitors, leading to an increase in partner loyalty Therefore, the exporter may have better opportunities for improved performance in terms of sales and profitability in the long-run (Crosby et al 1990) Relationship quality is considered to be the essence of business relationships (Jap et al 1999) and serves as an indicator of the health and future wellbeing of long-term relationships (Crosby et al 1990) Accordingly, several researchers have attempted to investigate possible predictors of relationship quality For example, salesperson’s expertise and relational selling behaviour have been found to have positive impacts on relationship quality between salespersons and customers in the life insurance industry (Crosby et al 1990) Dwyer and Oh (1987) found that the quality of channel relationships is affected adversely by the degree of partners’ bureaucratization Procedural fairness has been examined to have a positive impact on relationship quality, while environmental uncertainty has a negative effect on relationship quality (Kumar et al 1995) Smith (1998) found that relational bonds have a positive effect on relationship quality Following the same light of this stream of research, we examine the role of learning orientation in building business relationship quality between exporters in a transition economy, Vietnam and their importers The authors also investigate the mediating role of exporter ethnocentrism in the relationship between learning orientation and export-import relationship quality A conceptual model is depicted graphically in Figure Learning orientation The emergence of organizational learning as a critical strategy to achieve a competitive advantage is evident in the marketing and international business literature (Slater and Narver 1995, Baker and Sinkula 1999) Organizational learning can be single-loop or Figure A conceptual model of learning to build quality relationships Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Asia Pacific Business Review 207 adaptive learning and double-loop or generative learning (Argyris and Schon 1978, Senge 1990) Adaptive learning is the most basic form of organizational learning, focusing on issues or opportunities that are within the traditional scope of the organization’s activities (Baker and Sinkula 1999, Slater and Narver 1995) This type of learning enables the organization to apply existing methods to complete the tasks more efficiently, that is, to better than the organization is currently doing (Argyris and Schon 1978) Generative learning involves not only changes in rules but, changes in insights It requires a renewal of insights within the existing principles of the organization (Swieringa and Wierdsma 1992) Generative learning occurs when an organization is ‘willing to question its long-held assumptions about mission, customers, capabilities or strategies’ (Slater and Narver 1995, p 64) This means that it helps the organization think of opportunities and threats in the future It has been posited that learning orientation is different from organizational learning Organizational learning does not create a learning orientation because it concerns staff training and the mechanisms of knowledge and skill acquisition, whereas learning orientation is a wider concept that embraces many aspects of adaptation and change (Bennett 1998) Sinkula et al (1997, p 309) argue that learning orientation causes a set of organizational values that influence the propensity of an organization to create and use knowledge They postulate that ‘learning orientation influences the degree to which an organization is satisfied with its theory in use and, hence, the degree to which proactive learning occurs’ Calantone et al (2002, p 516) argue that learning orientation is ‘organization-wide activity of creating and using knowledge to enhance competitiveness’ In the context of this study, we view learning orientation as the degree to which an exporter stresses the value of learning for the long-term benefits of exporter-importer relationships An exporter with strong learning orientation will encourage, or even require, its employees to constantly question the organizational norms that guide the exporter’s actions (Sinkula 1994, Sinkula et al 1997, Baker and Sinkula 1999) Sinkula et al (1997) propose three components of learning orientation: commitment to learning; shared vision; and openmindedness Commitment to learning is the fundamental value of organizational learning This value influences whether the exporter is likely to promote a learning culture Learning orientation plays an important role in the creation of knowledge and the learning-oriented exporter is better equipped to manage its organizational knowledge than exporters who have not yet learned to learn Therefore, if the exporter places little value on learning, little learning is likely to occur When the exporter is committed to learning, it is committed to continuing to develop marketing skills and industry knowledge (Nguyen et al 2006) Shaw and Perkins (1991) maintain that learning-efficient organizations are reflective That is, they value the need to understand the causes and effects of their actions Open-mindedness is linked to the notion of unlearning which refers to the process through which organizations eliminate knowledge (Hedberg 1981) Open-mindedness advocates that organizations reassess their long-held routines, assumptions, and beliefs Finally, shared visions ‘provides a focus for learning that fosters energy, commitment, and purpose among organizational members’ (Sinkula et al 1997, p 309) Commitment to learning and open-mindedness have an impact on the intensity of learning, whereas shared vision influences the direction of learning In export markets, sustainable competitive advantage created by learning orientation can be obtained through an exporter’s capabilities of building high quality relationships with its importers Learning orientation is related to customer interface behaviours (Celuch et al 2002) and assists the exporter in achieving competencies in foreign market knowledge (Yeniyurt et al 2005) These capabilities will stimulate the exporter to join 208 T.T.M Nguyen and T.D Nguyen efforts with its partners in order to achieve mutual and individual goals successfully, which discourage opportunistic behaviours (Stern and Reve 1980) The learning-oriented exporter is willing to understand the needs and wants of its partners, and to satisfy these needs more effectively and efficiently than its competitors The learning-oriented exporter values the benefits of exporter-importer relationships and will seek to put its partners’ needs as a priority in the organizational concerns (Slater and Narver 1995, Hult et al 2000, Emden et al 2005) Thus, Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 H1: There is a positive relationship between learning orientation and relationship quality The mediating role of exporter ethnocentrism Early conceptualization of ethnocentrism was predominantly used in the discipline of social psychology, where the concept was defined as ‘the view of things in which one’s own group is the centre of everything, and all others are scaled and rated with reference to it’ (Sumner 1906, p 13) Based on Sumner’s work, Adorno et al (1950) define ethnocentrism in terms of an individual who tends to be ‘ethnically-centred’, meaning to strongly accept the culturally ‘alike’ and reject the culturally ‘unlike’ From this viewpoint, ethnocentrism is seen from an evaluative perspective, as an attitude of judging all other cultures by the standards of one’s own culture Ethnocentrism is found in every culture The feelings that we are right and they are wrong pervade every aspects of a culture’s existence (Samovar and Porter 1995) Ethnocentrism is a universal phenomenon, exhibited by virtually all groups throughout the world which makes it difficult for one to accurately assess the realities of a situation (Sumner 1906) In the context of international working relationships between exporters and importers, exporter ethnocentrism refers to an exporter’s self-centred bias toward its own country and against foreign countries (Lee 1998) Exporter ethnocentrism is reflected in an obligation to domestic markets and products, and concerns about the decline of the domestic industry (Lee 1998) Many of the dysfunctional behaviours that occur in management are attributable to deeply rooted ethnocentric attitudes Exporter ethnocentrism will also lead the exporter to place higher priority on domestic markets over foreign markets and hinders the capability of communicating in a flexible way with foreign partners (Lee 1998) This increases the likelihood that the exporter fails to select a good foreign importer and disregard its partner’s interests, resulting in the failure of building and enhancing a good working relationship with the partner Thus, H2: There is a negative relationship between exporter ethnocentrism and relationship quality Internationalization is a complex process and through this process, an exporter may face several uncertainties These uncertainties are mainly caused by a lack of knowledge about international operations and the international business environment (Nguyen et al 2006) The desire to reduce uncertainty motivates firms to learn new types of business activities, as well as about new types of business environment (Johanson and Vahlne 1977) Research indicates that exporters with high ethnocentrism are likely to have an inflexible, narrow, and self-centred view of international marketing (Kashani 1989) An exporter who learns about new international markets is likely to have significant impact on its international expansion behaviour (Lord and Ranft 2000) Thus, the level of ethnocentrism of the exporter can decrease if the exporter acknowledges the differences of foreign Asia Pacific Business Review 209 partners A strong learning-oriented exporter not only fosters an innovation within the organization, but also requires an organizational climate that constantly challenges the status quo (Senge 1990) Such an exporter is capable of responding quickly and effectively to external exchange (Bennett 1998), leading to a reduced level of exporter ethnocentrism Thus, Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 H3: There is a negative relationship between learning orientation and exporter ethnocentrism Method Sample In order to explore the relevance of the proposed model of learning to build quality relationships between exporters in transition economies and their foreign importers, Vietnam was selected as an emerging economy and in transition from a centrally planned to a market-oriented economy A systematic sample of 297 Vietnamese exporters in Ho Chi Minh City, the major business centre of Vietnam, was surveyed to test the model Respondents were managers who had been in charge of export activities Partially selfadministered questionnaires that were mailed to the respondents and then collected by interviewers were utilized The sample comprised 151 (51%) state-owned firms and 146 (49%) firms with other types of ownership (joint-stock, limited-proprietary, and private-owned firms) In terms of firm age, 181 (61.6%) firms were in business about 10 years or less and 97 (32.6%) firms had been in business from 11 –30 years Only 17 (5.7%) firms had been in business for more than 30 years In terms of relationship duration, 181 (60.9%) firms had business relationships with their partners for less than five years and 116 (39.1%) firms had had business relationships with their business partners more than five years Measurements Exporter ethnocentrism was measured by four items adapted from Lee (1998) because this study dealt with exporter ethnocentrism rather than consumer ethnocentrism Learning orientation was measured using the scale developed by Sinkula et al (1997) Learning orientation consisted of three dimensions: commitment to learning (4 items); openmindedness (3 items); and shared vision (4 items) Finally, relationship quality was a highorder construct comprising two second-order constructs (trust and commitment), and two first-order constructs (satisfaction and minimal opportunism) Trust had two dimensions: honesty and benevolence Honesty was measured by 12 items and benevolence was measured by 10 items These measures were developed by Kumar et al (1995) Commitment was measured by using Kim and Frazier’s (1997) scale Commitment comprised three dimensions: continuance commitment (6 items); behavioural commitment (10 items); and, affective commitment (7 items) Satisfaction was measured based on the scale (7 items) developed by Gaski and Nevin (1985) Minimal opportunism was measured using Lee’s (1998) scale (13 items) The questionnaire was initially prepared in English and then translated into Vietnamese by an academic expert who is fluent in both languages Back translation was undertaken to ensure the equivalence of meanings 210 T.T.M Nguyen and T.D Nguyen Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Data analysis and results Measurement validation All measures used were validated by confirmatory factor analysis (CFA) Relationship quality was a high-order construct comprising four dimensions: trust (TRT); commitment (COM); satisfaction (SAT); and minimal opportunism (MOP) Trust was a second-order construct: honesty (hon) and benevolence (ben) Commitment was also a second-order construct: continuance (con), behavioural (beh), and affective (aff) Satisfaction and minimal opportunism were first-order constructs Learning orientation was also a secondorder construct: commitment to learning (LCO); shared vision (LSV); and openmindedness (LOP) Finally, exporter ethnocentrism was a first-order construct The screening process shows that the data exhibited slight deviations from multinormality however, all univariate kurtoses and skewnesses were within the range of [ 1, 1] Therefore, the maximum likelihood estimation method was used (Muthen and Kaplan 1985) The CFA results indicate that the measurement models of these constructs fit the data well (Table 1) In addition, all factor loadings were high and substantial (the lowest loading was 0.67) These results indicate that the measures of all first-order constructs and all dimensions of second-order constructs were unidimensional and their convergent validity was achieved The correlations (with standard errors) between the dimensions of the second-order constructs indicate that they were significantly different from unity (Table 1) Therefore, the within-construct discriminant validity was achieved (Steenkamp and van Trijp 1991) As the measures of all first-order constructs and the dimensions of all second-order constructs were unidimensional, summates were used in the measurement model of relationship quality and the final measurement model It is noted that two summates were used for minimal opportunism and satisfaction These summates were formed by randomly summing the indicators in each scale into groups, and each group was represented by one indicator The use of two and three summates (instead of one) identifies the model without using additional constraints and is referred to as partial disaggregation (Bagozzi and Edwards 1998) The CFA results of the measurement model of relationship quality fit the data well The correlations (with standard errors) between the dimensions of relationship quality, indicate that they were significantly different from unity Therefore, the discriminant validity between the dimensions of relationship quality was also achieved Finally, the final measurement model also received a good fit to the data The correlations between constructs together with their standard errors indicate that they were significantly different from unity (Table 2) These findings support the across-construct discriminant validity (Steenkamp and van Trijp 1991) Structural results Structural equation modeling (SEM) was used to test the model The SEM results indicate that the proposed model received an acceptable fit to the data: x2(243) ¼ 387.02 (p ¼ 0.000); AGFI ¼ 0.879; GFI ¼ 974; and, RMSEA ¼ 0.045 Figure presents the standardized estimates, Table shows the unstandardized estimates of the structural paths, and Table presents the direct, indirect and total effects of learning orientation on relationship quality Consistent with H1, a positive relationship between learning orientation and relationship quality was found (b ¼ 0.32, p , 0.001) H2 posits a negative x241ị ẳ 54.76 (p ¼ 0.07); CFI ¼ 0.994; GFI ¼ 0.966; Commitment to learning (lcm) Shared vision (lsv) Open mindedness (lop) Honesty (hon) Benevolence (ben) Continuance (con) Behavioural (beh) Affective (aff) Dimensions Note: r(se): correlation (with standard error); rc: composite reliability; rvc: average variance extracted Minimal opportunism: x265ị ẳ 76.80 (p ẳ 0.15); CFI ¼ 0.997; GFI ¼ 0.963; RMSEA ¼ 0.025 Satisfaction: x214ị ẳ 20.38 (p ẳ 0.11); CFI ẳ 0.997; GFI ¼ 0.980; RMSEA ¼ 0.039 Exporter ethnocentrism: x2ð2Þ ¼ 0.54 (p ¼ 0.763); CFI ¼ 1.00; GFI ¼ 0.999; RMSEA ¼ 0.00 Commitment: x2ð227Þ ¼ 257.53 (p ¼ 0.08); CFI ¼ 0.993; GFI ¼ 0.925; RMSEA ¼ 0.021 Trust: x2ð208Þ ¼ 229.61 (p ¼ 0.15); CFI ¼ 0.994; GFI ¼ 0.993; RMSEA ¼ 0.019 Learning orientation: RMSEA ¼ 0.034 Constructs Table Summary of scale validation 0.59(0.085) 0.80(0.095) 0.66(0.089) 0.58(0.081) 0.63(0.082) 0.74(0.098) Lsv $ Lop Lop $ Lcm Hon $ Ben Con $ Beh Con $ Aff Aff $ Beh 0.70(0.084) r(se) Lcm $ Lsv Correlations Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 0.72 0.67 0.55 0.50 0.68 0.51 0.61 0.68 0.78 0.59 0.96 0.85 0.75 rvc 0.91 0.86 0.94 0.91 0.93 0.91 0.92 0.96 0.92 rc Asia Pacific Business Review 211 x221ị ẳ 32.86 (p ¼ 0.05); CFI ¼ 0.995; GFI ¼ 0.976; Note: r(se): Correlation (with standard error); t(12 jrj): t-value of 12jrj Final measurement model: x2242ị ẳ 387.01 (p ẳ 0.000); CFI ẳ 0.974; GFI ¼ v0.902; RMSEA ¼ 0.045 Relationship quality: RMSEA ¼ 0.044 Measurement models Table Correlations between constructs 0.73 0.74 0.26(0.073) 0.26 0.27(0.071) 0.74(0.077) $ Commitment 0.37 0.34 0.46 0.63 0.63(0.077) 0.66(0.078) 0.54(0.067) $ Trust $ Trust $ Minimal 0.24 0.48 12jrj 0.37(0.076) 0.76(0.086) 0.52(0.070) r(se) $ Commitment $ Minimal Learning orientation $ Relationship quality Relationship quality $ Exporter ethnocentrism Exporter ethnocentrism $ Learning orientation Trust Commitment opportunism Minimal opportunism Satisfaction Satisfaction opportunism Satisfaction Correlation Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 10.14 10.28 8.29 3.38 4.81 4.36 6.87 2.79 6.86 t(12jrj) 212 T.T.M Nguyen and T.D Nguyen Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Asia Pacific Business Review 213 Figure Structural results (standardized estimates) relationship between exporter ethnocentrism and relationship quality This hypothesis was supported (b ¼ 0.19, p , 0.01) Finally, H3 proposes a negative relationship between learning orientation and exporter ethnocentrism This hypothesis was also supported (b ¼ 0.26, p , 0.001) Discussion The major objective of this study is to investigate the role of learning orientation in building quality business relationship between exporters in transition markets with their Table Structural results (unstandardized estimate) Path H1 Learning orientation ! Relationship quality H2 Exporter ethnocentrism ! Relationship quality H3 Learning orientation ! Exporter ethnocentrism Est(se) t-value p-value 1.51(0.339) 20.62(0.227) 20.37(0.100) 4.46 22.74 23.70 0.000 0.006 0.000 Note: Est(se): Estimate (with standard error) Table Direct, indirect and total effects of learning orientation on relationship quality (standardized estimate) Learning orientation Direct effect Indirect effect via exporter ethnocentrism Total effect Exporter ethnocentrism Relationship quality 20.26 – 20.26 0.32 0.05 0.37 Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 214 T.T.M Nguyen and T.D Nguyen foreign importers Following extant research on learning orientation and business relationships, we test a model that explains the role of learning orientation in relationship quality We also examine the mediating role of exporter ethnocentrism in the impact of learning orientation on relationship quality Firstly, we found that learning orientation is an influential force that drives an exporter to build and maintain strong relationships with its foreign partners As a form of organizational culture, learning orientation is an organization-level resource and is related to specific and routine processes that enable the exporter to become competent in understanding and responding to their partners’ needs These competencies will create superior values to its foreign partners (Celuch et al 2002, Yeniyurt et al 2005) The effort of the exporter to understand and to satisfy its partner will also result in the partner’s beliefs that the exporter is an expert in performing its obligations and behaves in the best interests of its import partner Therefore, the import partner is likely to trust and commit to the working relationship with the exporter As such, learning orientation will smooth the exporter-importer relationship and enhance the quality of the relationship Consistent with the results found in advanced economies (see, Calantone et al 2002, Sanzo et al 2003), the results of this study indicate that the role of learning orientation in relationship quality is not limited to advanced economies Further, the results of this study reveal that ethnocentric behaviour prohibits exporters from building quality relationships with their foreign partners A negative relationship between learning orientation and exporter ethnocentrism found in this study indicates that learning orientation will assist exporters in mitigating their ethnocentric behaviour As a result, adopting and nurturing learning orientation is a must for exporters in transition economies, like Vietnam, who want to strengthen the quality of relationships between them and their importers in order to gain sustainable competitive advantages in export markets Implications Theoretical implications This work contributes to an under-investigated field of study in Vietnam by examining the role of learning orientation in building quality business relationships in export markets The findings of this study provide further support for learning orientation which has been found to be a key organizational culture that influences firms’ attitudes and behaviours in advanced economies (see Slater and Narver 1995) This role of learning orientation has also been confirmed in a transition market We found that learning orientation enhances relationship quality between Vietnamese exporters and their foreign partners In addition, research on ethnocentrism has focused heavily on the consumer (Sharma et al 1995) Less attention has been paid to the exporter, particularly in transition economies The findings of this study reveal that ethnocentrism exists in exporters which will be detrimental to the relationship with their importers Such ethnocentric behaviour will be diminished by learning-oriented exporters The empirical findings substantially add to the literature on the importance of adopting a learning orientation approach, especially in the export-import relationship in transition economies, and can serve as an initiation for further research in the area in transition markets Managerial implications The results of this study offer some important implications for general managers and export managers of export firms in Vietnam, as well as in other transition economies Asia Pacific Business Review 215 Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Learning orientation facilitates exporters to build high quality relationships with importers Also, it lessens the degree of exporter ethnocentrism which is destructive to the relationships Thus, exporters in those economies should adopt and invest in the learning orientation approach in order to strengthen their business ties with their importers In doing so, exporters should develop and nurture a learning culture within their organizations They should commit to the learning of members, continuously question their routines, assumptions and belief, and provide a focus for learning that fosters energy, commitment, and purpose among organizational members (Sinkula et al 1997) Conclusions The transformation of the Vietnamese economy with the adoption of an export promotion strategy requires Vietnamese exporters to change their traditional ways of doing business To be successful in export, instead of relying heavily on the relationships between governments, Vietnamese exporters should develop and maintain high quality relationships with importers The results of this study reveal the importance of learning orientation for exporters in building high quality relationships with importers A series of limitations of this study remain to be addressed Firstly, generalizability of the findings to other settings must be undertaken with the utmost caution because only one city, in one transition economy was sampled Replication and extension to other transition economies is a direction for future research Secondly, limitations relate to the examination of the relationship from only one side of the dyad, the exporter Establishment of the validity of the hypotheses is limited by the single model, viewed from the exporter side only Future research should consider the use of dyadic information Finally, the cross-sectional design employed inhibits strong inference regarding the direction of the causal relationships of the constructs Longitudinal research designs would better enable researchers to make inferences about the causal sequence Notes on contributors Trang T.M Nguyen (PhD, UTS) is Lecturer in Marketing, Faculty of Economics, Vietnam National University, HCM City Her works have been published in Advances in International Marketing, Asia Pacific Journal of Marketing and Logistics, Journal of Consumer Behaviour, Journal of Customer Behaviour, among others Tho D Nguyen (PhD, UTS) is Associate Professor of Marketing, Faculty of Business Administration, University of Economics, HCM City and Honorary Associate, School of Marketing, University of Technology, Sydney His works have been published in Advances in International Marketing, 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commodity necessary to guarantee organizational survival Shared vision There is a commonality of purpose in our firm There is total agreement on our organizational vision across all levels, functions, and divisions All employees are committed to the goals of our firm Employees view themselves as partners in charting the direction of our firm Open mindedness We are not afraid to reflect critically on the shared assumptions we have made about our markets Personnel in our firm realize that the very way they perceive the marketplace must be continually questioned We always collectively question our own biases about the way we interpret market information Relationship quality Trust: honesty Our firm has often provided importer A information that has later proven to be accurate Importer A has often provided us information that has later proven to be accurate Our firm usually keeps the promises we make to importer A Importer A usually keeps the promises they make to our firm Whenever our firm gives importer A advice on business operations, they know we are sharing our best judgment Whenever importer A gives us advice on business operations, we know they are sharing their best judgment Our firm can count on importer A to be sincere Our firm thinks that importer A can count on us to be sincere Our managers feel that the importer A offers our firm reliable recommendations Our firm offers reliable recommendations to importer A Our firm deals fairly and sincerely with importer A Our firm feels that importer A deals fairly and sincerely with our firm Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Asia Pacific Business Review 219 Trust: benevolence Though circumstances change, our firm will be ready and willing to offer importer A any assistance and support When making important decisions, our firm is concerned about importer A’s welfare When importer A share their problems with our firm, we will respond with understanding When it comes to things that are important to us, we can depend on importer A’s support When we share our problems with importer A, we know that they will respond with understanding Though circumstances change, our firm believes that importer A will be ready and willing to offer us assistance and support When making important decisions, importer A is concerned about our firm’s welfare When it comes to things that are important to us, importer A can depend on our firm’s support We can count on importer A’s decisions and actions which will favourably affect us in the future Importer A can count on our firm’s decisions and actions which will favourably affect them in the future Commitment: continuance commitment We are going to continue the relationship with importer A for many years We think that importer A is going to continue the relationship with our firm for many years We expect the business relationship with importer A to last for a long time Our firm is certain that our relationship with importer A will last a long time Our firm believes that if another exporter offered importer A a better deal, they would take them on even if it meant dropping us If another importer offered us a better deal, we would take them on even if it meant dropping importer A Commitment: behavioural commitment We respond quickly to importer A’s requests for help We think that the importer A responds quickly to our firm’s requests for help We devote more time to importer A when they need help We adjust our marketing programme for importer A when necessary We provide special aid to importer A when they are in trouble We provide customized product or services as requested by importer A We give advice and suggestions when importer A has problems We think that importer A devoted more time when we need help We think that importer A provided special aid to us when we were in trouble Importer A has given advice and suggestions when we have problems Commitment: affective commitment A high sense of unity exists between importer A and us Our relationship with importer A is a long-term alliance We have a strong business link with importer A We want to remain a member of importer A’s network because we genuinely enjoy our relationship with them We think that importer A wants to remain a member of our firm’s business network because they genuinely enjoy their relationship with us We think importer A has developed a close business relationship with us Importer A and our firm share common business interests Minimal opportunism We have always provided importer A with a completely truthful picture of our business Importer A has always provided our firm with a completely truthful picture of their business We carry out the duties of our relationships even if importer A does not check up on us Our firm thinks that importer A carries out the duties of relationships even if our firm does not check up on them We have never promised importer A that we would things, that we actually had no intention of following through 220 T.T.M Nguyen and T.D Nguyen Downloaded by [Universidad Autonoma de Barcelona] at 03:18 29 October 2014 Importer A has never promised us that they would things that they actually had no intention of following through To get the necessary support from importer A, we rarely mask the true nature of our needs To get the necessary support from our firm, importer A rarely masks the true nature of their needs Regardless of its impact on importer A’s business (profitability, sales volume, and market share), they always conscientiously perform their duties to us In order to get what importer A needs from our firm, importer A has rarely changed the facts In order to get what we need from importer A, we have rarely changed the facts On rare occasions we have had to lie to importer A about certain things in order to protect our interests Satisfaction Overall, I believe we are both quite satisfied with our working relationship This is among the best importer relationship that our managers have experienced Our firm’s relationship with importer A has been a happy one Our firm’s relationship with importer A has fully met our firm’s expectations Our firm is proud of having this working relationship with importer A We are very pleased with what this importer A does for us If we had to it all over again, we would still choose to use the importer A  ...Asia Pacific Business Review Vol 16, Nos – 2, January– April 2010, 203–220 Learning to build quality business relationships in export markets: evidence from Vietnamese exporters Trang T.M... reduce such risk To bridge this gap, this research makes an attempt to investigate the role of learning orientation in building high quality business relationships between exporters in Vietnam and... Following extant research on learning orientation and business relationships, we test a model that explains the role of learning orientation in relationship quality We also examine the mediating