Globalization: different types of small business behaviour
Titel:
Globalization: different types of small business behaviour
Auteur:
Julien, Pierre-Andre
Verschenen in:
Entrepreneurship & regional development
Paginering:
Jaargang 8 (1996) nr. 1 pagina's 57-98
Jaar:
1996-01
Inhoud:
The trend towards market globalization has accelerated in the last ten years. It can be explained by the growth in trade of goods and especially services, by new foreign investments and the presence of multinational companies throughout the world, but above all by an increase in exchanges of all kinds of information. This trend is likely to have a considerable impact on small business, by intensifying competition on local and domestic markets and by speeding up the process of product obsolescence. Research suggests that this trend affects small business not only in terms of markets, but also in terms of operation or production. Behaviour by small firms in response to the trend can be divided into six types. A few very small firms have been able to remain outside international markets, in special niches or in small or isolated regions. Others, however, are having to face up to the efects of globalization and increasing international competition. Many have become better able to resist growing globalization through innovation and complex modernization of their production processes. Some have taken advantage of the opportunity to embark on different forms of importing materials, goods, services or equipments, as a way of increasing their competitiveness. Others export some or most of their production, thus taking advantage of the new open borders, although they often do this in reaction to unsolicited opportunities or orders from abroad. A small number of firms, however, import or export proactively, but are also beginning to diversify into many countries. These different strategies explain only a part of small business behaviour in response to the phenomenon of globalization. Many small firms, for example, subcontract work for larger exporters, or join business networks to make the most of international resources and possibilities. All these strategies are useful in helping small firms to face up to and profit from globalization. Data from a number of countries suggest that these strategies are used increasingly by small businesses and are helping to maintain srnall business dynamism.
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