M. Krishna Erramilli

Customer value, satisfaction, loyalty, and switching costs: An illustration from a business-to-business service context

Although researchers and managers pay increasing attention to customer value, satisfaction, loyalty, and switching costs, not much is known about their interrelationships. Prior research has examined the relationships within subsets of these constructs, mainly in the business-to-consumer (B2C) environment. The authors extend prior research by developing a conceptual framework linking all of these constructs in a business-to-business (B2B) service setting. On the basis of the cognition-affect-behavior model, the authors hypothesize that customer satisfaction mediates the relationship between customer value and customer loyalty, and that customer satisfaction and loyalty have significant reciprocal effects on each other. Furthermore, the potential interaction effect of satisfaction and switching costs, and the quadratic effect of satisfaction, on loyalty are explored. The authors test the hypotheses on data obtained from a courier service provider in a B2B context. The results support most of the hypotheses and, in particular, confirm the mediating role of customer satisfaction.

Market orientation and performance in service firms: role of innovation

There is wide acceptance of the precept that market orientation is associated with superior firm performance. However, empirical support for the proposition in prior literature is weak. This study examines the relationship between market orientation and performance with data from 201 international hotels and finds that market orientation is positively associated with both judgmental measures of performance – service quality, customer satisfaction, and employee satisfaction, and objective measures of performance – occupancy rate, gross operating profit, and market share. Specifically, the study finds that the immediate impact of market orientation is to spur innovation, which, in turn, enhances judgmental performance, which, in turn, enhances objective performance.

Resource-Based Explanation of Entry Mode Choice

The development of new and better, theoretically sound and managerially useful, explanations for host country production and marketing modes and export modes have been consistently pursued by entry mode scholars. Consequently, we have a rich diversity of explanations for these modes based upon three different market-based paradigms of the firm. Building upon these approaches and recent advancements in the theory of the firm, we propose a resource-based theoretical platform that not only offers new explanations for the choice of host country production and marketing modes and export modes, but also augments them.

Knowledge Acquisition and Performance of International Joint Ventures in the Transition Economy of Vietnam

From a knowledge-based perspective, the authors develop a model that proposes (1) that certain international joint venture characteristics influence the joint ventures knowledge acquisition from its foreign parent and (2) that the amount of knowledge acquired affects venture performance. The authors test the model in Vietnam and find that parental conflict, commitment, and receptivity affect knowledge acquisition. As they hypothesize, the amount of knowledge acquired contributes significantly to venture performance.

Brands Across Borders: Determining Factors in Choosing Franchising or Management Contracts for Entering International Markets

Abstract Should hotel companies expand internationally through management contracts or franchising? It depends on a companys core competencies—as well as the resources available in the market itself.

Internationalization Theory and Korean Multinationals

Is the internationalization theory, which has been employed to explain the international expansion patterns of Western firms, equally good for Asian MNCs? Employing South Korean foreign direct investment data from 1973 through 1990, the paper tests two central tenets of the internationalization theory. Results show that physical distance plays a critical role in market selection during the early waves of investment, but economic factors become more important in subsequent waves of investment. Furthermore, the use of majority ownership modes increases over time, but firms appear to ‘leapfrog’ when the market potential is good. The paper concludes that the internalization theory could be very useful even in an Asian context, particularly when employed in conjunction with strategic and economic models.

Does Ethnic Similarity Influence Foreign Equity Position in Joint Ventures? An Empirical Analysis of IJVs in China

ABSTRACT The notion that firms seek structural control (higher ownership) in international joint ventures (IJVs) to protect competitive advantages underlies transaction cost theory and has been supported by studies involving developed-country investors. Researchers, however, question the generalizability of these findings, especially ownership preferences in the presence of “ethnic similarity” between home and host countries. Results from 1,763 Chinese IJVs suggest that Overseas-Chinese (Hong Kong, Singapore, and Taiwan) and Non-Chinese (Japan, South Korea, and Western countries) investors have the same propensity for “structural control,” except for labor-intensive firms, providing credence to classic transaction-cost explanations and downplaying the role of ethnic similarity.

An Innovative Classroom Approach to Analyzing the Role of Culture on Business Relationships using the Global View International Business Simulation

Business simulations have been used since the late 1950’s. They were spawned by the fusion of developments in war games, operations research, computer technology, and education theory (Keys and Wolfe 1990). However, there are only a few computer simulations that exist in the international business domain (Butler and Herbig 1992). Given the growing importance of globalization and international dimensions of marketing strategy, a business simulation with a global perspective can be a useful pedagogical tool for international marketing management classes.