1. INFLUENCE OF EXPORT CONTROL
POLICY ON THE COMPETITIVENESS
OF MACHINE TOOL PRODUCING
ORGANIZATIONS
Dissertation Oral Defense Presented in Partial Fulfillment of the
Requirements for the Degree Doctor of Business Administration
Jeffrey D. Ahrstrom
University of Phoenix

2. COMMITTEE MEMBERS
• Bruce Laviolette, PhD, Dissertation Chair
• Ladonna Eanochs, PhD, Committee Member
• Kevin Bottomley, PhD, Committee Member

3. CONTENT
 Problem
 Study Purpose
 Research Questions
 Theoretical Framework
 Relevant Literature
 Terms & Abbreviations
 Method& Design
 Research Results
 Research Implications
 Conclusions
 Study Significance
 Recommendations
 Study Limitations
 Reflections
 Dissemination of Research

4. PROBLEM
• Domestic export control policy imparts competitive
disadvantages for manufacturers of export-controlled
machine tools.
• Inefficiencies of Licensure & Direct Restriction.
• External influences may reduce sales opportunities.
(Barkema, Drabenstott, & Tweeten, 1991; Borst, 2012;
Burris, 2010; Porter, 1990).
Overt Political Responses to the Geopolitical Environment are Considered but
Not the Focus of this Research.

5. STUDY PURPOSE
• Quantitative Examination of Potential Influences that Export
Control Impart on Competitiveness of Domestic Machine Tool
Manufacturers.
• Participant perceptions of domestic export policy relative to supporting
or not supporting export business activities.
• Policy Influences on Export Participation
Does Export Control Policy Support or Deter Sales Activities of
Domestic Manufacturers?

6. RESEARCH QUESTIONS
Research Question 1
RQ1: What is the relationship between perceptions of
domestic export policy as supportive of a firm’s export activity
and the total percentages of sales from export?
H10: There is no participant perception that a supportive
domestic export policy is related to the percentage of total
sales from export.
H1a: There are participant perceptions that a supportive
domestic export policy is related to the percentage of total
sales from export.

7. RESEARCH QUESTIONS
• Research Question 2
RQ2: To what degree is export policy a determining factor
in market participation by machine tool manufacturers?
H20: There is no difference in market participation
between firms with supportive export policies and firms with non-
supportive export policies.
H2a: There is a difference in market participation between
firms with supportive export policies and firms with non-
supportive export policies

8. THEORETICAL FRAMEWORK
• Competitiveness Theory
• Porter (1990)– Internal & External forces.
• Who has a say in in your ability to compete?
• Firm Strategy (Internal), Structure (Internal), Rivalry (External)
• Harrison & Kennedy (1997) – External factors include government
influence.
• Policy and Politics influence firm strategy with equivalent access to inputs.
• Tusche (2011) – Government significant competitive factor in global
trade.
• With global access to technology, material & labor, policy influence expands in
importance.

9. Relevant Literature
• Leonidou and Katsikeas (2010) - “Significant” gap in research of export control influence
on trade.
• Mysen (2013) – Indications of export policy influence on manufacturers international
activity.
• Atta et al. (2008) – Export control influences various segments of industrial trade.
• Burris (2010); Freedenberg (2010) & Porter (1990) – Restrictive governmental policy
restricts firm opportunity and activity.
• Freedenberg (2010); Koo (2007) – U.S. export policy on Dual-Use Technology =
Competitive Disadvantage for domestic manufacturers.
• Kawasaki (2009) – Export policy contributing factor to decline of domestic machine
manufacturers.
• Watts et al. (2009); Lombardo et al. (2009) – Direct link between domestic export policy
& sales loss by U.S. manufacturers.
• Borst (2012) – Domestic export regulatory system grounded in Cold War paradigm.
• Auer (2005) – U.S machine tool restrictions create opportunity for foreign firms.

10. KEY TERMS & ABBREVIATIONS
TERMS:
• Machine Tool: Powered piece of
equipment designed to
accurately and repeatedly cut or
profile rigid materials that
generally.
• Dual-Use: Technology that can
be used for both peaceful and
military aims.
• Bureau of Industry Security: U.S.
government department
addressing issues of national
security and high technology. A
principal goal for the bureau is
helping stop proliferation of
weapons of mass destruction.
ABBREVIATIONS:
Arms Export Control Act.......................................................AECA
Association for Manufacturing Technology..........................AMT
Bureau of Industry and Security............................................BIS
Commerce Control List..........................................................CCL
Department of Commerce......................................................DOC
Department of Defense ..........................................................DOD
Directorate of Defense Trade Controls..................................DDTC
Export Control Classification Number ..................................ECCN
Federal Office of Economics and Export Control .................BAFA
Military Critical Technologies List........................................MCTL
Missile Technology................................................................MT
Missile Technology Control Regime.....................................MTCR
National Academy of Sciences..............................................NAS
National Security ...................................................................NS
North Atlantic Treaty Organization.......................................NATO
Nuclear Nonproliferation.......................................................NP
Nuclear Suppliers Group........................................................NSG
Office of Foreign Asset Controls...........................................OFAC
Treaty on the Non-Proliferation of Nuclear Weapons...........NPT
Wassenaar Arrangement........................................................WA
Weapons of Mass Destruction ...............................................WMD

11. MACHINE TOOL EXAMPLES

12. METHOD & DESIGN
QUANTITATIVE METHOD:
• Descriptive- Quantifying possible influences of export control policies on the
competitiveness of machine tool producing organizations.
• Correlational – Compare theoretical market model to actual export shipments in
a specific market to examine inconsistencies of consequence.
• Comparing results from a Likert-type survey to theoretical and actual market results provided the
context for understanding influences of export control on organizational competitiveness.
• Triangulation – Comparison of data obtained from development of hypothetical
market models, actual market models, and responses to the user survey offer a
method to arrive at results from the different inputs to identify divergences or
congruencies

13. RESULTS
Two research questions addressed;
1. Relationships between industry participant perceptions of export policy as
being supportive of a firm’s export activity and the total percentages of sales
from export.
2. Examination to what degree export policy is a determining factor in market
participation by machine tool manufacturers.

14. RESULTS
RQ1 - Null hypothesis stated, “There is no participant perception that a supportive
domestic export policy is related to the percentage of total sales from export.”
• Results of this analysis were not significant, and insufficient evidence existed to
reject the null hypothesis.
• Spearman rho correlation analysis did not indicate a significant relationship at an
alpha of .05 (rs (95) = -.09, p = .403)
• Scatterplot of survey results does not indicate any visually
ascertainable polytonic relationships.
Figure 7. Scatterplot between
sales from export and
perceptions of export policy.

15. RESULTS
RQ2 - Null hypothesis stated, “There is no difference in market participation between
firms with supportive export policies and firms with non-supportive export policies.”
• Results of this analysis were significant, indicating that sufficient evidence existed to
reject the null hypothesis in favor of the alternative.
• Results of a Kruskal-Wallis analysis indicated significant differences regarding
the perceptions of market participation between participants in firms with
supportive versus non-supportive export policies (H[1] = 6.43, p = .011).
 Table 6
Kruskal Wallis Test Results for Market Participation by Supportive Export Policy
Supportive Non-supportive
Variable M Mean Rank M Mean Rank H(1) p
Market participation 3.44 70.79 2.83 51.28 6.43 .011

16. PRACTICAL IMPLICATIONS
Aligned with data developed during this research the assertion that export control policies
impose a competitive obstacle on domestic machine tool organizations did not find
support.
1. Rejection of restrictive export control policy paradigm.
2. Firm Strategy (Internal), Structure (Internal), Rivalry (External) should become
competitive focus.
3. Export markets are a viable space to market products.
4. Successful exporters are successful in part because they choose to export.
1. Export markets are a focus and not an afterthought.

17. CONCLUSIONS
• The assertion that export control policies impose a competitive obstacle on domestic
machine tool organizations did not find support in the research.
• Majority participation of survey respondents in export activity.
• Rejection of RQ2 Null Hypothesis & Failure to Reject RQ1 Null Hypothesis.
• Export policy is not a restrictive factor.
• Theoretical Market Model Aligns with Actual Market. Indicating minimal or
mitigated external (export policy) effect.
• Successful exporting organizations develop strategies and operational plans
aligned with necessity of export market.

18. CONCLUSIONS
Study Significance
• Presents formal study of domestic export control policy effects on competitiveness
of machine tool producing organizations.
• Anecdotal, opinion, and tangential literature on the subject but limited
academic review.
• Presents a framework for leadership in the industry to examine in
development of export market strategies.

19. CONCLUSIONS
Recommendations
• Machine tool producing organizations should consider export markets as viable
opportunities.
• Competitive environment in export markets may differ but is not unique in terms of
Product Technology, Local Support, Market Exposure.
• Industry Trade Group Support of Export Activity.
• Expand Export License Education to Remove Mystique and Fear of Complexity.

20. LIMITATIONS
• Availability of data that provided sufficient specificity to conduct an analysis of the
discrete market-influencing factors.
• Commodity shipment data gathered from secondary sources subject to inaccuracy.
• Industry organizations, government reports, and trade groups.
• Aggregate data did not include specifics of pricing, machine features, or
capabilities, nor did it include final manufactured component details that could
further support this investigation.
• Small sample size of domestic machine tool producer population included in research.

21. REFLECTIONS
• Overcomplicated the research by expanding into gravity models and triangulation
discussions.
• Would have liked to narrow focus to large “complex” equipment.

22. DISSEMINATION OF RESEARCH
• Publication of research in University of Phoenix Library and ProQuest databases.
• Presentation of results to Detroit Society of Manufacturing Engineers (SME) during Fall
meeting.
• Submitted abstract for presentation of research during International Machine Tool Show
(IMTS) in September 2016.
• Submit abstract of research to industry magazine The Fabricator” in July 2016.
• Share results with associates at Bureau of Industry Security Materials Processing and
Equipment TAC Committee.