Trading Places – SMEs in the Global Economy

Trading Places – SMEs in the Global Economy

A Critical Research Handbook

Elgar original reference

Edited by Lester Lloyd-Reason and Leigh Sear

Lester Lloyd-Reason and Leigh Sear bring together leading researchers and thinkers in this critical guide to the ongoing, worldwide research shaping the role played by SMEs within today’s global economy. The expert contributors contend that the past twenty years have seen an explosion in research into international SMEs, resulting in a considerable body of academic literature and thinking. This research, they argue, may merely serve to increase our lack of understanding in this area, and often results in myths and misconceptions upon which SME policies and support programmes have been developed and introduced.

Chapter 7: Managing the Global Operation

Tim Mazzarol

Subjects: business and management, critical management studies, entrepreneurship, international business


Tim Mazzarol Small firms that choose to enter international markets face the same management problems of their larger counterparts, and the same challenges of international market entry. However, unlike their larger counterparts, small firms must operate within overseas markets without specialist management skills and a deep base of financial resources. This chapter examines the key aspects of how small firms can manage their international operations, specifically their export marketing and foreign joint venture activities. The term ‘globalisation’ is used to refer to the process of exporting and the production and distribution of goods and services, including the growth of a firm’s engagement and investment in overseas markets (Graham 1999). The role and importance of small firms to the global economy is illustrated by their relative contribution to the business activity within most countries. An example is that of the 18 countries that comprise the Asia Pacific Economic Cooperation (APEC) region, where small firms comprise over 98 per cent of all enterprises, 60 per cent of all private sector employment and 30 per cent of all direct export activity (APEC 2002). Within the United States small firms (that is, businesses with less than 500 employees) comprise in excess of 70 per cent of all firms, whilst in Europe small firms, of which 20 per cent are engaged in exporting, account for around two-thirds of all employment (European Commission 2003; US Census 2004). Whilst small firms typically account for around 95 per cent of all business activity in most economies...

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