A Critical Research Handbook
Edited by Lester Lloyd-Reason and Leigh Sear
Chapter 7: Managing the Global Operation
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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