SMEs and Globalization

SMEs and Globalization

Introduction

Globalization can be described as the economic integration of global markets and the socio-cultural researchacross different countries. It aims at promoting business operations globally and provides a competitive edge for the organizations involved due to low operating cost but gain a substantial number of products, services, and consumer. It is facilitated by technological advancements that enhancement international communication. On the other hand, SMEs refer to the population of firms which can be referred to as a heterogeneous whose contribution to the innovation system is not limited to products and service.

Objectives

The main objective of this research is to discuss the growth of SMEs and globalization today and to analyze the manner in which SMEs and globalization complement each other.

Research Questions

1. What are the micro and macro factors that determine the success of SME

Internationalization? How do they exert their influence?

2. What drives the internationalization of SMEs?
3. What factors determine entrepreneurial decision-making in the process of

Internationalization?

4. How do the SMEs focus on branding while going global?
5. What kind of strategies do firms need to formulate while going global?
6. How do SMEs from countries at varying levels of economic development

differ in their strategies?

7. Is there scope for developing new theories other than the well-researched

models such as born global and Uppsala models?

8. How do the regional and bilateral trade agreements and international

organizations like the World Trade Organization lead to competitiveness

and internationalization of SMEs?

9. How do the home country and distance (cultural, administrative,

geographic and economic distance) with particular host countries affect

the international expansion of SMEs?

Literature Review

(Blutstein, 2017)

Globalization has expanded the production of goods and services because traders can easily reach a mutual agreement that is beneficial to both parties. There are substantial reduction and removal of tariffs with other trading barriers. Moreover, the regulations set by world trade organization have led to the elimination of bias treatment in international. This gives an equal opportunity to all the nations and not restricting it to countries with a good market value for its products. Through such influences on multinational trade, world trade has progressively extended the market scope and it is therefore easily accessible for all countries. The trading policies contribute to the creation of favorable environments for traders to expand the multination market and as a result, accelerate trade liberations.

(Yang, 2000)

Globalization has both positive and negative impact. However, its impact in developing world countries seems to be positive. This is due to the opportunity given to the emerging markets to participate in the growth of the global GDP as seen in China. Their export level has been growing over the years and the number of investors in the country has increased by 15%. Other emerging markets have the ability to experience exponential growth just like China and establish their national and cultural identity.  The trading policies contribute to the creation of favorable environments for traders to expand the multination market and as a result, accelerate trade liberations. International Monetary Fund is another organization that is impacting globalization positively.

(Ahmad, 2013)

Global marketing is inevitable especially in the 21^st century where business is more competitive than the previous centuries. Its benefits for instance, the division of labor due to specialization,  make it outweigh the negative impacts. It International organizations play a Major role in promoting globalization. Though the World trading organization has been criticized by third world countries as having compromised various agreements, it is functional and continues to facilitate free trade. Culture impacts the international business it, therefore, impact that the regional cultures by considered to attain the acceptable reputation needed for international relations.

(Klewitz and Hansen, 2014)

Globalization is the collective term for the trade and market that takes place on a global level. In the recent years, local firms have had no option but to consider entering the international market because they risk losing their local market to international firms who have entered their home markets. SMEs are important for globalization as they provide technical innovation for the global economy. Aside from acting as a source of employment, SMEs provide competition for bigger and more established firms. SMEs are able to compete with any firms regardless of the size or financial standing. Several small enterprises form a considerable competition to larger firms when they come together. SMEs complete and fulfill the needs of other business by creating conducive and perfect markets for other small companies. SMEs complement big business as these large firms find it almost impossible to do without SMEs.

(Bijaoui, 2016)

When it comes to SMEs and globalization, the globalization process of SMEs is dependent on the particular country’s level of growth and development. The globalization level of the country in question can be measured by reading the speed in which the country becomes affiliated with the global market. It is easy to find and located fact-driven SMEs in developed countries in contrary to developing countries. however, it is possible to find such  SMEs in developing countries which are doing much better than other developing countries. The governments of developing countries need to offer support to SMEs in their countries through transparent and credible national actions to create a conducive and productive market for such businesses.

Research philosophy

The researcher finds joy in carrying out the investigations and coming up with reliable data and information for analysis. This process is where his pride lies; in the questions, the data, the estimations and in the analysis he carries out and presents. There are several conditions that must be looked at in order to come up with a concrete conclusion.  All through the research process, different research questions shall be answered to come up with complete and accurate data. There shall be questions that seek to find how SMEs and globalization complement each other. The questions will also provide solutions to what the leaders and frontrunners in SMEs and globalization should do to enhance its performance, the way that the already existing performance can be maintained and ways of maintaining the motivation of employees.

Research Approach

This research could be an exploratory audit focused on running up a causal affiliation between SMEs and globalization. In this manner, the relevant part of the investigation will comprise the social juncture of annals, from individual rudimentary and even be helper sources. Simple statistics series will show up as consciousness amassing talks and online diagram so that it will be coordinated the use of evaluation. Discretionary statistics will be acquired through a tribulation examination of composing related to employee satisfaction, mainly those written in reference it’s scattering in Kuwait. The digital survey will in particular contact an extra vast collecting of spectators of individuals at sensible charges.

Research Strategy

All collectively for the previously noted inquiries to be tended to, the research will take exploratory layout finished in essential ranges. These recognition social affairs may be gotten from the customer collecting of SMEs and global customers and will assist the authority to installation clients’ perspective on financial reward, ultimately possible limits to its allotment. The second one time of the survey might be a discussion with a view to be used to gather data on how a whole lot net based totally business has been realized in SMEs and globalization and related purchaser perspectives closer to it.

Research Design

The kind of study adopted by the study is one which suited the research and its objectives. This kind of design that complemented the research as it presented the situation in an honest manner and the researcher had no power over the variables. Descriptive survey design is made up of surveys and fact-finding inquiries that are of separate characteristics. The major purpose of descriptive research design is a description of the facts as they truly are.

Research Theory

Research theory is seen as an area filled with characters and is burdened by a way of a chosen field of appreciation.  Research theory is the primary factor in the development of data for the research. While a certain research is being carried out, examination land up discernibly obvious and key physical games that ought to be grasped using all the open strategies. In such way use of positivism is input in this research since it makes it practicable for assurances simply from the robust resources that can’t be addressed. This should involve information collecting from relevant areas in opposition to helping resources.

Ethical Implication

The Ethical implication of this research is made up of a number of factors which include records housebreaking and protection, accuracy in data assessing, following the recent establishment, provision of wrong information, and web accessibility. For example, something such as the retrieval of online records such as emails and card numbers is an easy process. It is very easy to carry out online abuse and bullying as long as an individual is connected to the internet and is part of the online world.  Their unobtrusive additives should remain as personal as possible without introducing them to the outcast. The information and data given to the clients should not be fake, instead, it should be data and information that can be relied on as it is real. One should be careful not to exaggerate some matters being handled in the research.

Research Methodology

The methodology can only be retrieved depending on the purposes of the research and the research questions. The aim of the methodology is to give reasons why the research is of the essence and it should be a direction for the way forward for the research that is being carried out. The methodology should also provide the answers to the questions asked in the research being carried out. The research methodology from the mixed methodology reflects answers to questions that begin with “what”. Depending on the kind of inquisition, the kind of methodology used should be mixed methodology or inductive methodology.  In the methodology, the appropriate survey tools to be employed are those which include both qualitative and quantitative kind of questions. Both quantitative and qualitative methodologies are embedded in Likert-based and open-ended questions in two delivered surveys or questionnaires. A mixed methodology is more recommended and preferred for research, as it is not limited to any specific area or pattern.  For instance, when it comes to quantitative research, theories are handled as deductive approaches; qualitative generalization is not used often. Research methodology keeps on changing and improving where mixed methodology is the best way forward.

Sampling

Simple Random Sampling Technique

Simple Random Sampling Technique is the most appropriate method as it is not biased in any manner. This sampling technique gives an equal opportunity to every section of the research without placing more focus on one section more than the other. Simple Random Sampling Technique is a kind of technique that is usually recommended as the records used are usually reliable due to its virtuous nature. Any alterations or changes made, for instance, the people used while collecting data does not have any impact on sampling when using this kind of technique. Simple Random Sampling Technique is a kind of technique applied when there is a need for accurate and dependable results.

Data Collection Method

Data Collection is a crucial part of any kind of research or proposal study. Accurate data collection methods will always result in valid and dependable results which will ensure that the research is effectively carried out. On the other hand, the wrong kind of data collection methods will most definitely result in invalid result which will, unfortunately, affect the results of the research being carried out.  Data collection methods refer to the tools used in the collection and analysis of data, and the manner in which the process is carried out. Data collection methods vary depending on the type of research that is being carried out.  There are several research methods used during data collection and these include interviews and questionnaires among others. To interview is to collect data and information by way of asking questions. The researcher is able to retrieve information directly from the interviewee. The researcher has an advantage when employing this data collection method, as he is able to read the reaction of the person he is interviewing. This fact simply means that the researcher is able to point out whether the interviewee is giving an honest response or a false response.  Use of interviews as a data collection method is beneficial in attaining the results essential for the research. Optional assets of direction consolidate the earlier data from books, internet and other scholastic dispensed materials, as an instance, diaries.

Primary data to be used when conducting a research may also be gathered through the use of a questionnaire. Questionnaires may be in the form of closed questions or open-ended questions as long as they both collect the relevant data from SMEs owners or managers when using questionnaires as a method of data collection, the kind of questionnaire which uses the Likert scale is referred to as the closed question questionnaire.  Likert scales measure perception, attitude, values and behavior quite efficiently. Face to face interviews are more dependable when collecting data for SMEs and globalization as they carry out in depth analysis, that is, more questions are asked for the purpose of the research. The researcher distributed the questionnaires to the respondents with the help of their assistants through the drop and pick method. The researcher, through a follow up, ensured that all the questionnaires had been picked up and filled by the respondents.

Tools Used for Analysis

To analyze data is to process it to turn it into meaningful data for research purposes. Statistical Package for Social Sciences was used to edit, handle blank responses, code and categorize the data that was retrieved through questionnaires. The system was also used to retrieve descriptive analysis which played a crucial role in the retrieval of results on the manner of responses and their frequency too.

Percentage analysis

This procedure is usually used to research novel segments of the specimen of the exam that became used as a bit of collecting of records. The data got from the audit, and moreover, auxiliary sources have various publications in which it is able to be shown in one of a kind exclusive systems that intrigue the general public for extra sincere comprehension. Some of these structures be a part of charts, graphs and tables.

Analysis and Findings

Question 1

SMEs are not profitable in developing countries

When asked whether SMEs are not profitable in developing countries, 30% of the respondents strongly agreed, 30% agreed, 20% strongly disagreed while another 20% of the respondents strongly disagreed.

Question 2

Globalization and SMEs are completely reliant to each other

When asked whether Globalization and SMEs are completely reliant to each other, 30% of the respondents strongly agreed, 30% agreed, 20% strongly disagreed while another 20% of the respondents strongly disagreed.

Question 3

Is it true that larger firms cannot do without SMEs?

When asked if it is true that larger firms cannot do without SMEs, 60% of the respondents strongly agreed, 20% agreed, 10% strongly disagreed while another 10% of the respondents strongly disagreed.

Question 4

Is it wise to invest in the foreign market?

When asked whether it was wise to invest in the foreign market, 50% of the respondents strongly agreed, while another 50% of the respondents agreed. None of the respondents strongly disagreed or disagreed with the question.

Question 5

Has globalization been on the rise in the 21^st Century?

Globalization has indeed been on a significant rise in the 21^st century. The rate at which local firms and markets ventured into the international market in the 20^th century cannot be compared to the rate at which local firms and markets are investing in the same now. The economic globalization which allows the free movement of goods and services increases the volume of trade done within the regions. This is facilitated by the increasing economic integration and the interconnectedness of economies globally. It has led to affordable and readily available services which stimulate the countries growth and improve its financial stability. The shift of political system from the national level and opening up to free trade has a positive influence on the global market due to reduction of tax on the exported or imported products. Moreover, the formation of the free market and enhancement of political integration leads to a solid regional cooperation and therefore protect each other from competitive rivalry. However, the political and the economic system are interdependent and cannot function independently. Global markets support the growth and expansion of SMEs, a market which globalization cannot do without.

Reliability and Validity

The data and information used in this research are completely reliable, as they have been derived from reliable respondents through reliable data collection methods. The sampling and analysis of the data collected was carried out by professionals to bring out valid results. The records provided in this exam is a claim painting created through sharp and strong information amassing from important and helper sources. Remembering the actual objective to recollect authentic blue information, polls became turned around to individuals who responded to both open completed and inquiries close completed. The auxiliary sources join books, destinations and reviews.

Conclusion

Putting into regard all the steps and process involved in conducting the research on SME and globalization. Globalisation keeps on rising and the international market keeps on expanding with every year that goes by. It is almost impossible to talk about globalisation without touching on SMEs, which complements globalisation. SMEs in developed countries are more advantaged than SMEs in developing countries. Developing countries lag behind when it comes to globalisation as their presence in the international market is not felt as the presence of firms from developed countries. SMEs act as a source of employment, and provide competition for small companies. The larger and more developed firms and markets are still dependent on SMEs to ensure growth and success. The current local markets do not have an option but to set up businesses and invest in the foreign market lest they become quickly replaced by foreign markets which have come to invest at home.

Appendix

1. SMEs are not profitable in developing countries
2. Globalization and SMEs are completely reliant to each other
3. Is it true that larger firms cannot do without SMEs?
4. Is it wise to invest in the foreign market?
5. Has globalization been on the rise in the 21^st Century?

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