The influence on export performance of performance ambiguity among foreign sales agents

Abstract

Purpose – This study examines the extent to which exporter difficulties in evaluating foreign sales agent performance affect export performance, either directly or as mediated by opportunism. Methodology – In developing the hypotheses, the study integrates transaction cost theory and principal-agent theory. The proposed relationships between the constructs (performance ambiguity, opportunism, and export performance) are examined for a multi-industry sample of Norwegian exporters in their dealings with foreign sales agents. A survey of 410 qualified key informants yielded 101 usable questionnaires—a response rate of 24.6%. Structural equation modelling is used for data analysis and hypothesis testing. Findings – The analysis finds support for the hypothesis that sales agent performance ambiguity relates negatively to export performance. While performance ambiguity is positively related to sales agent opportunistic behavior, opportunism does not significantly influence export performance. It seems that the adaptation costs created by the evaluation problem are of greater importance in reducing export performance than the costs created by opportunistic behavior. Research limitations and implications – In focusing on the core dimensions of sales agent performance in foreign markets, other factors influencing export performance are not included. The fact that small Norwegian firms dominate the sample, further limits application and generalization of the findings. Nevertheless, the study provides export managers and scholars with a more thorough understanding of basic potentially deteriorating dimensions in the relationship between exporter and foreign independent sales agent. Originality/value – To the best of our knowledge, this study is the first to examine how performance ambiguity and opportunistic behavior among foreign sales agents impact on export performance. By concentrating on basic deteriorating dimensions, the study adds to the few that focus on inhibiting drivers of exporter – foreign-sales-agent relationships.