Do Rewards Build Importer Compliance and Commitment in Overseas Trade?

Do Rewards Build Importer Compliance and Commitment in Overseas Trade?

Purpose - Conflicts of interest can arise in interdependent relationships. For instance, importing agents may act opportunistically and not comply with the exporter’s regulations. Thus, it is important that the principal seeks ways to encourage its agents to perform optimally on its behalf. It becomes necessary to establish a reliable reward system that positively influences agents’ role performance. This study examines whether monetary and non-monetary rewards increase the role performance of overseas agents in international trade. Design/Methodology/Approach - Analyzing the responses of 50 exporting representatives in South Korean small and medium-sized enterprises (SMEs), it revealed that while compliance and commitment positively influence agents’ role performance, rewards encourage only commitment, not compliance, of agents. Findings - The findings suggest that non-monetary rewards are as important as monetary incentives in improving the importers’ role performance. In short, the importers’ role performance is improved when non-monetary rewards are actively in place, and their levels of compliance and commitment play the mediating roles. Research Implications - These findings were vital because exporters want their import agents to be compliant and committed. The results indicated that exporters value long-term commitment more than short-term compliance. Moreover, the role performance of importing agents improves when they are highly committed to their exporter’s cause.