Impact Of Globalisation On Small Business Enterprises

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Small Enterprise Association of Australia and New Zealand
26th Annual SEAANZ Conference Proceedings
11-12 Sydney 2013

The Impact of Globalisation on Small Business
Enterprises (SBEs)
Sukh Deoᵃ
ᵃ Centre for Business, Information, Technology and Enterprise, Wintec, New Zealand, contact – Tel:
+640 7834-8800; Extn: 8567; Email: sukh.deo@wintec.ac.nz

Abstract:
Small firms play a significant role in the economic development of nations. Policy makers now pay more attention to SBEs for their innovative and entrepreneurial capabilities. Globalisation has made economies and businesses become more interdependent for survival and growth. This situation enhances the role of SBEs/SMEs for job creation and economic growth. As globalisation creates new opportunities for SBEs, it also creates new challenges for them. This study examines and reports on findings from an exploratory and qualitative research undertaken to explain the impact of globalisation on SBEs. It is expected to make some contribution to small enterprise research relating to SBEs performance in a rapidly globalising environment. Findings from the study indicate that, although SBEs can make business decisions quickly because of their lean governance structures, they have knowledge, technology and resource constraints that preclude them from investing in new innovations and approaches. Most SBEs have limited access to finance and lack specialised skills needed to operate in a globalising environment. They depend on learning from network contacts, advisers and accountants. Such professional services are costly and beyond most SBEs’ budgets.
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Keywords: globalisation, SBEs, challenges, opportunities.

©copyright Deo (2013) all rights reserved.
This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden.

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26 Annual SEAANZ Conference 2013
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Introduction
Small firms play a significant role in the economic development and growth of nations. Governments pay more attention to SBEs now than ever before. Policy makers are becoming increasingly aware of the innovative and entrepreneurial potential and capabilities of the smaller firms in producing goods and services needed by the society and in creating jobs that contribute to economic growth. The increase in attention on SBEs is taking place in the wake of the recessionary impact of the recent financial crisis on economies globally. Financial markets of most economies are globally connected, hence the globalised impact of the financial crisis.
With globalisation intensifying countries are becoming increasingly interdependent for international exchange of goods and services, economic growth and sustainability. This phenomenon enhances the case for SBEs to have much bigger roles for job creation and economic growth in many countries.
Globalisation has opened up new opportunities for MNEs, SMEs and SBEs and an increasing number of SBEs now consider trading internationally as an important business option. They are seen as a new generation of international traders. However, globalisation has also created new challenges for the survival and sustainability of firms, especially the SBEs. As more small firms enter the emerging and growing markets domestically and overseas many face challenges which arise from various sources e.g. the threat of competition from new and emergent entrants in their markets.
SBEs characteristically have very flexible and lean governance structures. This enables them to make and implement decisions quickly. For instance, in comparison to their larger counterparts, SBEs take less time on decisions to modify systems and processes, produce new products and services, adopt new selling strategies or get to new customers. Such decisions are usually dependent on
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