Trading Places – SMEs in the Global Economy
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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.
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Chapter 3: Traditional and Emergent Forms of Global Trading

Leo-Paul Dana, Hamid Etemad and Richard Wright

Extract

3 Traditional and emergent forms of global trading Leo Paul Dana, Hamid Etemad and Richard Wright Introduction Traditional approaches to internationalisation focused on a uni-polar and hierarchical distribution of power and control. In this chapter, we discuss an alternate approach to globalisation – an approach that involves a multi-polar distribution of power and control. Rather than focusing on the internationalisation of a centralised firm with a uni-polar distribution of power and control, we suggest that the world is moving toward multi-polar networks of firms. As corporations outsource to smaller specialised firms, power and control are becoming increasingly divided among independent SMEs that co-operate voluntarily for increased efficiency and profit. Symbiotic marketing relationships are thus leading to multipolarity. We are hence moving beyond a focus on the firm toward a focus on relationships with multi-polar networks. This is giving unprecedented opportunities to SMEs in the global economy. In this chapter, we put emphasis on local and cultural embeddedness. We shall show that this is important when attempting to understand either virtual clusters of the New Economy, or personal clusters of the bazaar. In the words of McMillan, ‘On the internet, just as in the bazaar, the methods of exchange are shaped by information and costs of getting it’ (2002, p. 47). Perhaps the future can best be understood by taking a look at the past. In this chapter, we shall examine the multi-polar networks of interdependent SMEs in the traditional bazaar, as well as the emerging relationships and multi-polarity of...

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