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Globalization Effect on Developing Countries’ Business


Background of Study

Globalization is the phenomenon through which countries across the globe are connecting through financial trade, political issues, transportation and operations. It is mostly termed as economic globalization since the economy of a particular country carries out trading activities in order to become a part of the global economy (Pope 2002; Cremins 2006). This can be through adopting latest market trends including marketing and selling overseas or simply through adopting technological innovations. Through globalization many developing nations have been seen to improve their fiscal conditions and reduce poverty.

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Growth is a versatile experience that is usually linked with firm endurance, attainment of business goals and achievement, or taking up activities to a higher level (Storey 1994; Kinsella et al.1994; Delmar and Wiklund 2003; Wickham 2004; Dobbs and Hamilton 2007). Growth and development of business may indulge in various forms such as employment, profits, capturing market share and development of products and services, although not essentially all at the similar time (Pope 2002; Cremins 2006).

Entrepreneurship reflects in one way or the other the organization’s ability to rapidly involve in ground-breaking, hands-on, risk-seeking, independent, and competitively belligerent behaviors to attain its calculated purposes (Dess, Lumpkin, and Covin 1997; Miller and Friesen 1984). Globalizing operations of SMEs (companies with five hundred or fewer employees), have been gathering a lot of heed lately. In Asia, Europe and Northern America, SMEs are making use of opportunities of growth available in global markets simply because of the rapid changes in the technological applications being utilized for communications and transportation, and other administrative factors (Organization for Economic Co-operation and Development 1997; Oviatt and McDougall 1994).

SMEs play a major role in the economic development of any nation; their empowerment has been the primary reason for over forty years of opulence and development. Many large export-import businesses started out as SMEs, and enterprises could be considered as foremost in the globalization of developing economies.

This study is an attempt to explore the relation between globalization, growth and development, entrepreneurship and SMEs in developing nations. The study analyzes the globalization of Nigerian SMEs in order to learn the strategies viable for globalization of SMEs in developing nations and how this impacts the overall growth of the economic strength of the nation.

Objective of the Study

The objective of this study is to show how globalization can benefit a particular nation and improve its economy. This objective is implemented by considering a developing economy that is Nigeria and focusing on how globalization is prevailing in the economy and how SMEs are responding to it. Furthermore, the objective of the study is to see how globalization takes place in SMEs with entrepreneurial orientation.

Research questions

In order to meet the objectives of this study, this study aims to identify, taking the Federal Republic of Nigeria as a case study from the developing economies, these issues here by addressing the following research questions:

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  1. What is the role of entrepreneurship in the functionality of small and medium enterprises undergoing globalization?
  2. Typically, in a globalizing environment, are entrepreneurial SMEs more probable than non-entrepreneurial SMEs, to formulate a viable and useful marketing strategy for globalization?
  3. Moreover, when dealing with globalization or globalization, are SMEs that utilize marketing strategy, more reluctant to initiate policies and techniques focused towards uplifting their performance?
  4. Finally, what are the pros and cons faced by SMEs when undergoing globalization?

Literature Review


This chapter aims to outline the strategic factors related to the marketing of SMEs in the global arena. This chapter bridges the gap between the prior research which implies that the quest of various operational strategies amidst entrepreneurial orientation may be supported successfully in order for any business to globalize successfully (Dess, Lumpkin, and Covin 1997), and the objectives of the current study which aims to highlight the importance and impact of globalization on SMEs, taking Nigeria as the case study.

Why Globalize?

Ever since 1986 there have been major alterations in the macroeconomic environment around the world. The appreciation of the major currencies has caused destruction in the price advantage that developing economies export’s had formerly benefited from, wages went up, and the labor movements along with the protection of the environment turned out to be of more importance. With rise in the cost of production, competition among products was no longer a topic of importance as that of competition prevailing in the Southeast Asian nations, China and other developing countries. SMEs in large numbers started to shift their operations to other cheaper locations.

This practice was not applicable to firms that were involved in manufacturing only, rather it started implementation in trading companies as well since they started to outsource their facilities involved in purchasing and distribution. This was termed as the transnational model. According to Parasuraman and Zinkhan (2002, p. 287), “Internet technology has the potential to alter almost every aspect of business operations”. Along with many other factors, Internet played a great role in enhancing the globalization of SMEs which was supported by numerous scholars, such as Poon and Jevons; Rialp; Knight and Liesch, Etemad and Wright, etc. They all disputed that the commercialization of the Internet was paving path for random chances for SMEs. Such developments tempt business researchers to refurbish their concepts and policies and accommodate the operations of their SMEs accordingly.

The Internet will transform the dynamics of worldwide business and lead to faster globalization of SMEs. SMEs can now get access to the identical capabilities as large businesses, and are adept to enlisting worldwide markets that before might have been unaffordable due to the substantial assets required. And it would furthermore be intriguing to investigate the span to which the Internet has assisted SMEs from evolving nations to globalize (Dess, Lumpkin, and Covin 1997).

Other scholars have furthermore contended that the Internet is only a device rather than of scheme for SMEs. SMEs habitually have their own handicaps in evaluation with large businesses, which have larger assets and mesh of operations. Although the cost of setting up a straightforward location is reduced and inexpensive for most SMEs, the cost of setting up complete, high profile sites is high-priced for SMEs. Major browsing engines for example Yahoo and Google assign high charges for administering their Internet traffic to businesses by leasing key phrases that contemplate their enterprise, which is apparently a handicap for SMEs (Parasuraman and Zinkhan 2002).

SMEs presently provide a considerable share employment and prospects for growth in future all over the world (Organization for Economic Co-operation and Development 1997; United Nations 1993). “Moreover, they are believed to account for some 35% of exports from Asia and approximately 26% of exports from developed countries in the rest of the world, including the United States” (Organization for Economic Co-operation and Development 1997).

Globalization of SMEs

Globalization and the significance of actively operating SMEs (small and medium-sized enterprises) are the major trends being witnessed in today’s corporate world. This study is an attempt to investigate the correlation among the entrepreneurial directives of SMEs, strategies utilized for marketing along with techniques and performance of the business being affected by globalization. The study will offer viable and consolidated findings and conclusions drawn from qualitative evidence regarding important entrepreneurial roles being applied to the globalization of SMEs (Dess, Lumpkin, and Covin 1997).

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In various other countries, for example, Italy, South Korea, and China, small and medium enterprises contribute a share of 60 per cent of the entire exports of the respective country. SMEs are functioning in an environment which is subjected to globalization changes on daily basis. Globalization is the rising phenomenon in all economies over the world.

This encompasses manufacturers, customers and governments of various countries. Boundaries among local and global markets are decreasing in relevance as companies head towards the global market. Harmoniously in European, North American and Japanese countries, global competitiveness has greatly strengthened (Dunning 1993). In this environment, to the extreme that SMEs can prove to be catalysts of growth for innovative product markets and the wider development of economies in various nations, the increase of the globalized SMEs is an important factor. However, in view of their small size, most SMEs lack the expertise, market strength and other resources of the traditional MNCs (multinational companies). Compared with these organizations which are larger in size, rich in resources; the complex nature of operations become more difficult for SMEs experiencing globalization.

The success of SMEs undergoing globalization depends largely on the formation and exercising of their strategy development (e.g. Miles and Snow 1978; Porter 1980). Strategy is a reflection of the organizations short- and long-term plans for overcoming the challenges and opportunities confronted by the businesses at a rapid pace. Companies exercise various strategies to attract and retain customers and effectively deal with an array of concerns prevailing in the environment including the competitiveness, scarcity of resources and suppliers.

SMEs are considered to be the catalyst of economic growth, providing jobs and reducing poverty in developing economies. SMEs have also been witnessed as being the sole means through which rapid economic growth and industrialization have been successfully attained (Harris and Gibson, 2006; Sauser, 2005; van Eeden, Viviers and Venter, 2004; Arinaitwe, 2002; Kiggundu, 2002; Yusuf and Schindehutte, 2000; Monk, 2000; Goedhuys and Sleuwaegen, 2000; Birch, 1981, 1987). While these contributions made by SMEs are highly acknowledged, entrepreneurs come across many hurdles that obstruct their development in the long run.

Research on development of SMEs has proved that percentage of failure to globalize is higher than in the developing nations as compared to the developed ones (Arinaitwe 2002). Scholars have already pointed out that commencing a business itself is a risky ordeal altogether and to warn entrepreneurs about the chances of failure in setting up an SME are very narrow; even though SMEs have been the in existence for almost forty years now. In order to overcome these considerably big failures all that can be done is to have a handful of long and short term strategies developed beforehand (Sauser 2005; Monk 2000).

Aggressive positivity has been viewed among development of SMEs and economies at the same time (Harris and Gibson 2006; Monk 2000; Sauser 2005; Birch 1987; Birch 1981). However, no substantial research has been carried out or documented with respect to this positive relationship occurring in the developing countries. Studies in development of SMEs are necessarily required for their prevalence in developing countries like Nigeria because there is an evident dissimilarity in the development process between developed and developing economies (Arinaitwe 2002). Moreover, it is also important to realize the difficulties being faced by SMEs during development in African countries because they are evidently dissimilar from those occurring in developed countries. These hurdles include a scarcity of financial wherewithal, scarcity of management expertise, non feasible locations, policies and procedures, economic situation, as well as risky elements such as deprived network, dishonesty, very low willingness to purchase the products and services and the rate of poverty. According to Arinaitwe (2002), interior and exterior differ among developed and developing nations.

Entrepreneurs might be faced with similar challenges in accomplishing their growth opportunities, but provided the heterogeneity of SMEs differences in development are seen in how these are managed by the entrepreneur (Kinsella et al. 1994; Barkham et al. 1996; Gibb 2000; Wickham 2004; Donohoe and Wyer 2005). Wickham (2004) projected that the entrepreneur’s conceptualization of how it would affect their individual role in the business resolute the strategies assumed to practice firm growth, where one such policy is globalization.

Theoretical Framework

Globalization is a reflection of various trends that firms utilize for marketing and selling their products in various different countries around the world. It is coupled with governments reducing operations and venturing obstacles, carrying out production operations in various countries at a time, local firms acquiring raw materials or spare parts from cheaper suppliers overseas, and international firms continuously carrying out their competitive functions in local markets (Dunning 1993). Globalization has been a steady procedure, stemming from a broad array of self-supporting trends.

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One of the most substantial factors has been the development of liberalism on the economic and political front since the postwar period, which has caused the decrease in protecting trade. Other shifts range from the growth of technology and communication arena to the development of the Eurobond market (Dunning 1993).

Looking at the macro and commerce scenario, globalization is glimpsed to be a major origin of turbulence in the markets, high competitiveness indicted by the MNCs, missing connections amidst the markets due to liberalization of trade undertakings and the increase of international trading possibilities, all of which in one way or the other influence the presentation and capabilities of the SMEs.

In similar scenarios, entrepreneurship is advised to be the only beneficial device for survival. Entrepreneurship is primarily connected with a quest for prospects, undergoing dangers and ready to face the dangers catalyzed by a market leader which is powerful and follows a certain set of standards (Dess, Lumpkin, and Covin 1997; Miles and Snow 1978). Firms which have an entrepreneurial orientation are inclined to indulge in innovating undertakings, undergo hefty dangers and virtually start the method of innovating their services and goods (Miller and Friesen 1984; Morris and Paul 1987). Lumpkin and Dess (1996) idealize that most crucial value of an entrepreneurial setup is going into new markets especially going into these new markets with newer goods and services as well as supplying possibilities for new projects and commencing new goods in alignment to seize the market. They finally concluded in their discussion that along with innovation, taking risks and being proactive, entrepreneurship also points out that independence and aggressiveness are just as important.

In definition, innovation connotes a business environment that not only supports fresh ideas but also promotes them, experiments and brings creativity that may pave path for development of new and fresh products or techniques or technologies. Taking risks reflects the tendency to dedicate resources to projects that involve a significant option of disappointment, along with odds for high returns.

There are two theoretical approaches discussed in previous literature, that is network theory and stage theory are formulated on the concept that businesses turn out to be successive to the time they have been operating in domestic market. However this is not the case in many instances (Oviatt and McDougall, 1994; Johnson, 2004). These theories project that a highly augmenting number of small firms undergo globalization from the stage that they were formulated. The firm that globalizes from the day of inception has a global orientation from the very beginning (Oviatt and McDougall1994; Crick and Jones 2000; Johnson 2004).

Many scholars have theorized that such firms who take globalization from their very inception are actually a sub set of another kind of firms who took over globalization as a part of their formulation strategy with respect to growth (McDougall and Oviatt 2000; Rasmussen and Servais 2000; Zahra and George 2002; Autio et al. 2000; Zucchella 2002).

Models of Globalization

The three different models of globalization prevalent in the corporate world at present are discussed below. These are namely, Proactive approach, Entry Strategy Adopted, Marketing leadership, the choice of Global Market and the Market, Vernon and Dunning’s idea of Globalization

Proactive approach

Proactive approach as compared to re-activeness has opposite implications. It encompasses initiating a process; insistently pursue projects and being at the centre of actions taken to formulate the surroundings in a manner that brings positive results for the firm. Independence points out that any action taken independently by an individual or a group especially in giving rise to a single idea or a vision for growth and then taking it down to the road of completion. In the final round, aggressive competition refers to the firm’s propensity to confront its opponents intensely and unswervingly in order to do better than them in the market (Covin and Slevin 1989; Khandwalla 1977; Lumpkin and Dess 1996; Miller and Friesen 1984; Morris and Paul 1987). Based on evidence from various literary sources, Dess, Lumpkin, and Covin (1997) draw a conclusion that shaky and multifaceted environments often demand a positive strategy making capacity which is only possible in entrepreneurship. This environment is only prevalent in globalization, especially for SMEs, which may not possess the relevant resources to go down the competition lane extensively in both the local and international markets.

The factors that come to mind when we discuss global firm growth are usually classified into a category of positive and negative factors that actually conclude the factors that determine the growth of the business generally (Czinkota and Tesar 1998; Lawless 2007). Positive factors are linked with the proactive quest for international market opportunities by the entrepreneur. Equally, entrepreneurs only give importance to global market expansion owing to the minimal growth opportunities in local markets. In this scenario, the entrepreneur undergoes a passive and risky move towards choosing the market and the kind of market entry strategy that has been decided (Czinkota and Tesar 1998; Lawless 2007).

Globalization poses many challenging opportunities and can make the environment quiet aggressive for smaller firms (Organization for Economic Co-operation and Development 1997). Dess, Lumpkin, and Covin (1997) note that passivity in these environments often give rise to downward performance, because in such environments, the main purpose and reason behind competitive advantage, structure of the industry and standards of performance are usually small and in a continuous condition of instability. Success of products is favorably achievable through competitive aggression and a positive stance that moves the enterprise away from the competitors (Dess, Lumpkin, and Covin 1997). In short, orienting to entrepreneurship may be particularly helpful in unsure or unstable environments (Dess, Lumpkin, and Covin 1997; Miller and Friesen 1984). Given the turmoil posed by globalization, it is predictable that SMEs with openness to entrepreneurship will work better than those that are not open to entrepreneurship (Sauser 2005; Monk 2000).

Most of the literature has been written to emphasize on the connection between entrepreneurship and strategy development of a firm (e.g., Covin and Slevin 1989; Dess, Lumpkin, and Covin 1997; Miller and Friesen 1984; Morris and Paul 1987). Development of strategies is done at a firm level and involves a variety of activities that organizations take on to create their planned mission and goals. These activities comprise study, scheduling, decision making, and administration and are instilled with the organization’s traditions and common value system (Miller and Friesen 1984; Porter 1980).

Marketing leadership amidst Globalization

Marketing leadership is typified in this study to be an innovation strategy, building a strong and result oriented sales force, and diligent control of channels used for distribution (Morrison and Roth 1992). For many organizations, to be successful, a viable marketing strategy is necessary.

There have been numerous studies that have put emphasis on significance of a well oriented marketing strategy in the daily activities of the firm. Quality leadership is simply as the term relates the interpretation of products and services of excellent quality, which meet or sometimes go beyond the expectations of the consumer (Buzzell and Gale 1987; Szymanski, Bharadwaj, and Varadarajan 1993). When a product is of high quality it tends to breed a strong bonding with the customer thus increasing loyal customers and enabling high prices to be charged as compared to competitors (Buzzell and Gale 1987). Specialization in products is often emphasized in specialty products, which are usually charged heavily and targeted to smaller markets (Porter 1980). It is similar to Porter’s focus approach, in which the firm targets explicit markets with original or extremely distinguished products greater to those of rivals. At the strategic intensity, firms endangered by globalization can react in various ways.

The focus here is acquiring technology, getting prepared to globalize and prepare the enterprise for the globalization. Technology acquisition involves research and development (R&D), to enhance and extend the objectives of the firm. Advanced technology is a key to enabling firms to go ahead with innovation and positively take action to cope up with the altering conditions prevailing in the external setting (Miles and Snow 1978; Porter 1990). Technology acquisition was considered to be contextual in large firms, but the space has slimmed down significantly in last few years. In proportionality, SMEs are now using latest technologies to approximately the same degree as big firms (Organization for Economic Co-operation and Development 1997).

Acquiring technology is an important way companies tend to cope up with the increasing demand to globalize. One very high possibility for this is that globalizing extensively may induce commerce to move up the value-added chain, a procedure that typically ensures R&D. Additionally, globalization compels organizations to customize their products in order be suitable for the global markets, match the complex standards governing product development or make them globally desirable. Also, with globalization the global competition increases and the production time for products shrink as the demand increases. Thus, companies need to extensively invest in research and development to upgrade and speed up their capacity to innovate (Kotabe 1990; Porter 1990; Zahra 1996).

In supplement, various micro and macro elements assist to conclude why a business should go global. These encompass components affiliated with the clientele and affray, communal, heritage, financial and technological facets of worldwide enterprise natural environment and supply affirmative or contradictory determinants of the globalization of SMEs (Bell 1995; Tybejee 1994).

Once the conclusion to trade items becomes vibrant, the entrepreneur has to consider the suitability of the merchandise or service in its present pattern for acceptance in new worldwide markets. The grade of adaptability and accessibility of economic assets to support the modification of the merchandise or service, and in purposeful localities for example worldwide trading, sales, output and circulation sway the viability of the trade items activity. At the identical time, the entrepreneur should consider its own firm promise to worldwide enterprise development and accessibility of information and abilities essential to manage so.

The choice of Global Market and the Market Entry Strategy Adopted

The globalization of business activities of entrepreneurs tends to occur in the markets, where the main route of entry into the market is through exports, since it allows the employer to maintain control of the primary decisions (O’Gorman 2001; Pope 2002 Zahra and George 2002; Lawless 2007).

The reason why entrepreneurs grow their business globally is essential in shaping the strategies for entering new markets, according to Hollensen (2001). The choice of the overall strategy is inserted into the broader strategic direction or vision of the entrepreneur and the achievement of a “strategic fit” between supply product / service of the company and the demands of a different business cultural world, social and economic landscape (McGee et al. 2005).

The achievement of this “strategic fit” usually requires a degree of structural reconfiguration of the SME. Small businesses often operate with limited resources and have a lower threshold to absorb risks in international markets compared to larger companies. Therefore, the networking, strategic alliances and partnerships is an important means to compensate for the lack of resources in SMEs (Fliess and Busquets 2006; Nummela, et al. 2006). This structural change should be supported with the acquisition of knowledge and skills at the level of entrepreneur to effectively manage relationships and global networks.

In essence, the SMEs are facing three options: direct export, indirect exports or a combination of both. Direct exporting means that the entrepreneur to assume full control over export activities. This may be the initial strategy of globalization, but as the number and diversity of sites of increased then it becomes difficult to maintain this level of control by the employer (Hollensen 2001; Nummela, et al. 2006). The indirect export involves a third party, usually an agent or distributor who will take responsibility for a series of activities (sales, market studies, the distribution of the product / service, etc.) and provide support and guidance on legal issues (Pope 2002; Lawless 2007).

The use of networks, strategic alliances and franchising and licensing agreements are additional options of indirect market entry for analysis by the employer. To date, a brief overview of the approaches to globalization is complemented with a discussion of what they say are the main components of the globalization process adopted by the SMEs. Participation in these stages will result in a number of challenges in achieving international growth. These issues are examined in this theoretical study, and identify the main challenges are in the global firm’s growth of SMEs.

Globalization generally is seen to be a response of firms to opportunities and threats that are prevalent due to globalization. It is often seen to be a characterization by management to modify business strategies, marketing activities, and general practical exercises carried out on daily basis in the organization. In universal markets, since the organization encounters varied consumer needs and challenging offerings, as well as changeable financial and technical conditions, being receptive to globalization may be mainly significant in the achievement of the SME. Certainly, foreign competitors are often supported by restricted governments, use unexpected and new strategies, and are widespread over many national markets. The primary challenge faced by firms is to develop value for buyers as competently as possible. Companies that are ever ready to take up the challenges of globalization are better in position to achieve a greater success and globalize as compared to non responsive firms.

Coming down to globalization, many firms tend to extend their sales into international markets. Globalization provides new and extensive profitable markets which are helpful in increasing the competition level of the firm and pave path for fresh product ideas, innovation in manufacturing processes and the latest technology (Cavusgil and Zou 1994). However, globalization is unlikely to reap good results unless the firm is not prepared for it. Planning in advance has often been considered as significant to the achievement of taking up and successfully completing new ventures (e.g., Chakravarthy and Perlmutter 1985). Such planning is particularly vital in ventures involving international markets, in which the business surroundings can be significantly more composite than in local market (Bloodgood, Sapienza, and Almeida 1996; Chakravarthy and Perlmutter 1985).

Thus, in conclusion, preparing to globalize describes the efforts of a firm to prepare beforehand as it looks forward to expansion in the international markets. Such preparation would encompass global market research; indulging human as well as financial resources to support the global venture and; and producing products that match the needs of foreign markets which are targeted (Nummela et al 2006). Marketing activities and processes are considered to operate along different dimensions within the firm: “culture, strategies, and tactics” (Webster 1992). As Webster points out, culture is a primary set of beliefs that govern the firms. Strategy is a reflection of how the firm prepares itself to target and positions it and how it will indulge in competition at the cost of its products and markets. Coming to the operations level, strategies and actions are fulfilled through the marketing mix tools and other elements within management’s grasp.

All dimensions, included must be produced and brought into action in the succession to the preceding level. That is, society or culture is primarily a precursor of strategy, and strategy is primarily a precursor of techniques, which in turn leaves a great influence on business performance (Webster 1992). In this study, we look at entrepreneurship is placed in line with the culture of the company; strategies include marketing leadership all actions related to strategizing; and techniques include acquiring technology, going global and preparing to spread out at an international level.

Vernon and Dunning’s idea of Globalization

The globalization method is conceptualized as “the method of acclimatizing firms’ procedures (strategy, structure, assets, etc.) to worldwide environments”. Globalization ideas try to interpret why businesses select to function after their household market and the schemes and organizations they evolve to manage this. Many ideas have been sophisticated to interpret the method of globalization, for example the customary trading set about that focuses on the company’s centre competences blended with possibilities in the foreign natural environment, the cost founded outlook that proposes that the business should own a “compensating advantage” in alignment to overwhelm the “cost of foreignness”, Vernon’s worldwide merchandise life cycle, Dunning’s eclectic idea, etc. A helpful beginning issue in the idea of globalization is Johanson and Vahlne’s Uppsala form of globalization, which vitally posits that firms’ globalization rises as its foreign market information does, which has been verified as being crucial (Pope 2002; Lawless 2007).

This behavioral outlook is drawn from case investigations of the globalization routes, taken by several small and medium sized companies. The idea presented in this phase takes businesses as being either (1) a non-exporter, (2) a digressive exporter, having (3) overseas sales procedures, or (4) overseas output units. Trade barricade decreases and international market development have directed to a quicker stride of business globalization than the phases idea would suggest.

It has furthermore directed businesses to pursue routes that are at variance from the linear and predictable route idealized as sophisticated to interpret the method of globalization, for example the customary trading set. This focuses on the company’s centre and takes into account competences blended with possibilities in the foreign natural environment; the cost-based outlook that proposes that the business should own a “compensating advantage” in alignment to overwhelm the “cost of foreignness”, Vernon’s worldwide merchandise life cycle, Dunning’s eclectic idea, etc (Pope 2002; Lawless 2007).

Trade barricade decreases and international market development have directed to a quicker stride of business globalization than the phases idea would suggest. It has furthermore directed businesses to pursue routes that are at variance from the linear and predictable route of the phase theory. Arrow recounted transaction charges as the cost of running the financial scheme and as distinct from output costs. McGee et al (2005) characterizes transaction charges as the “costs of contracting”. Searching for data, bargaining, supervising, and agreement enforcement are examples of such costs. In TCE, vigilance is concentrated on economizing efforts that join the association of agreements – where a transaction happens when a good or service is moved over a technologically divisible boundary (McGee, et al. 2005).

Comprehensive publications live on the alternative of application mode (summarized in McGee, et al. 2005). These alternatives include: trade items application modes (indirect, direct agent/distributor, direct branch/subsidiary), contractual application modes (licensing, franchising, mechanical affirmations, service agreements, administration agreements, construction/ turnkey agreements, co-production agreement), and buying into application modes (direct application, acquisition junction venture). Entry mode in this study is conceptualized as “an institutional placement that makes the application of a company’s goods, expertise, human abilities, administration or other assets accessible in a foreign country” (McGee, et al. 2005).

Successful Globalization

The alternative of foreign application mode is a critical component for success. Chakravarthy and Perlmutter (1985) recognizes three rudimentary advances to application mode choice: (1) no explicit alternative of market application mode for example the case where SMEs obtain unsolicited instructions from foreign purchasers, (2) an alternative made in agreement with the living market application scheme, and (3) a alternative that considers strategic directions and is founded on a methodical evaluation of the distinct likely modes.

Organizational performance is a reflection of the extent at which other objectives including financial incentives are accomplished through implementation of above mentioned techniques and strategies to market. SME typically initiates new projects with many objectives, the most basic of which is the financial incentive—that is, more concerned with the market share, growth in sales and profit and other similar elements. The extent to which these objectives are achieved is actually the measure of the performance of the enterprise (Cavusgil and Zou 1994). The focus of this study is to measure the capability of taking up SME to a global level with entrepreneurial mindsets and the arbitrational influence of strategies and techniques, thus impacting the performance of the enterprise, positive or negative.

Globalization in Nigeria – An Overview

The approach taken in this study is similar to model explaining the mediating-effects as proposed by Lumpkin and Dess (1996), in which the actions and strategies of a business intervene in the entrepreneurial perspectives of the company performance. Globalization is seen to leave a reasonable amount of impact on the connection between entrepreneurship, strategic marketing capabilities and techniques along with the performance of the firm. Thus, it is clear from the discussion so far that culture and strategy, strategy and techniques, and performance of the organization are probable to differ in different scenarios of globalization (Lumpkin and Dess 1996; Venkatraman 1989).

Previous studies have proved that a number of elements constrain the performance of SMEs, especially a limited capital resource. However, the extent to which the limitation of capital alone is responsible is still under question. Additional capital is usually not a requirement and can be defeated through creative initiatives of the enterprise (Dia 1996; Godsell 1991; Hart 1972; Harper 1996). Kallon (1990) discovered that the amount of financing required to initiate a new venture is usually not required when we talk about the growth of the business. He also mentioned that the access to credit financing from commercial market is not directly responsible for the relationship to be unsuccessful (Kallon 1990).

On the other side of the picture, some studies have discussed that SMEs are usually under-capitalized. Raising capital from borrowing from banks in Nigeria is quite difficult and therefore, owners or starters of SMEs in Africa tend to rely upon their own savings and fund generation is considered to be a slow process which affects businesses growth. Most of them are unable to meet basic needs for talking loans from commercial market, and some cannot bear the cost of taking such loans (Gray, Cooley, and Lutabingwa, 1997; Kiggundu, 1988; Trulsson, 1997; Van Dijk, 1995).

Keyser et al. (2000) in his study found that in Zambia, a shortage of basic capital requirement was a primary problem for business owners, as only 24% are unable to succeed in getting a loan from the commercial market to start their venture. Koop, de Reu, and Frese (2000) in their respective study pointed out that amount of capital that a business required to start their business was directly related to the success of the business. On the basis of the ongoing research it can be understood that raising financial capital is challenging in Nigeria and the difficulties faced by business owners surely have implications on the success or failure of SMEs.

Additionally, another problem that SME are seen to be facing as a cause of their failure to globalize are administrative problems. Kazooba (2006) in his study revealed that lack of knowledge in properly keeping records and the lack of necessary managerial mindsets and skills are all major factors responsible for unsuccessful SMEs. Many researchers have pointed out that lack of knowledge towards technical expertise along with insufficient skills to manage and operate, and lack of proper planning and market research turn out to be extremely critical (Lussier 1996; Mahadea 1996; Murphy 1996; van Eeden et al. 2004). Upon examination of the literature produced by these studies it is not clear that which elements of management are actually problematic which have resulted in failure of many small businesses in the African economy and that of Nigeria.

Conceptual Framework

The conceptual framework for the present study encompasses finding from various studies from the past literature reviewed (Tushabomwe Kazooba 2006; Harris and Gibson 2006; Eeden, Viviers and Venter 2004; Goedhuys and Sleuwaegen 2000; Mambula 2002; Chrisman and Leslie 1989; Ansoff 1965). This study is solicited on a framework presented by Ansoff (1965) that classifies various kinds of strategies and tactics required to setup and run a successful small business enterprise and potential obstacles that the entrepreneurs might face. This framework proposed that problems confronted by small businesses are administrative problems, problems in operations or a weak strategy.

  • Problems related to the administration of businesses include those related to the structuring of organizations and access to resources which are necessary for continuation of businesses. For example, administrative problems include problems regarding human resource, capital or financial and other issues related to management.
  • Problems in the Operations are mainly internal and are considered to be at functional levels of the organizations. These problems are mainly related to the inefficiencies in the process of allocating resources to various business functions and managing them. Marketing, operations, and inventory management are some examples.
  • Lastly, there could be problems related to development and implementation of strategies as SMEs will have to ensure that their products or services meet the industry standards and can face up their competition (Harris and Gibson 2006).

To overcome these problems, entrepreneurs need to learn thoroughly the nature of their business and the nature of the desires of customers. These issues can also be dealt with if assistance is acquired from the marketing and promotion department.

Literature also identifies other areas of major concern which are important to SME in Nigeria specifically. These include external problems such as infrastructural problems, economic and political issues such as corruption or inflation, acquiring technology and decreasing demand. This study tries to establish the varieties of issues faced by SMEs in Nigeria and why so many are unsuccessful even though numerous facilities for such business are provided by government and private organizations. The evident contribution of SMEs in Nigeria has been seen in terms of employment and income. According to studies utilized for this study they provide “20% to 45% of full-time employment and 30% to 50% of rural household income” (Liedholm, McPherson, and Chuta 1994).

Onwuka InterBiz was the first locally established and operated businesses that got its enlisting on the Nigerian Stock Exchange (NSE). The business became a foremost constructor of iron alloy goods in the country. It has since dropped on hard times (Keyser et al. 2000). Therefore the government should consistently struggle to take apart pointless hindrances. As critical development motors, SMEs require to be on the main concern lists of the government principle in order to flourish, luckily some prerequisites currently live – abundant raw components, bargain work, prepared market, very fast increasing telecommunication infrastructure, accessibility of long-run financing and advancing political and financial climate. Bribery, dishonesty, pointless ethnic rivalry and soiled government still present alarming challenges (Liedholm, McPherson, and Chuta 1994).

Going back to the examination of the studies provided in the previous chapter of this report it could be suggested that major obstacles in the development of SMEs in Africa are poor infrastructure and financial framework, administrative weaknesses, dishonesty amongst officials at all levels and lack of accountability which allows major disruptions in the business activities. Factors such as infrastructural weaknesses, failure to adopt latest technology and the fluctuation in demands for products and services need to be investigated further.

The literature review presented indicates that, very little research has been carried out to date on the growth limitations of SMEs in Nigeria particularly. Studies regarding other African countries may not be viable on the growth constraints of small businesses in Nigeria in general and none on this topic. Studies on other African countries may not be viable or applicable to the Nigerian business scenario. Given the significance of SMEs to the economic viability of a country, and also the function that SMEs play in reducing the rate of poverty, we hypothesize that a consideration of the problems unconstructively impacting SMEs in Nigeria is an important milestone in administrating and keeping away from the enormous breakdown of these SMEs (Yusuf and Schindehutte 2000).

The Federal Republic of Nigeria is known to be one of the most populated African countries (Okpara 1996/2006). “It’s boundaries are connected the Republic of Benin on the western front, Chad Republic and the Republic of Cameroon on the eastern side, Niger Republic on the northern side and the Gulf of Guinea in the south. With a population estimated at over 100 million, one in every two West Africans is said to be a Nigerian” (Yusuf and Schindehutte 2000). Nigeria has the highest gross domestic product amongst all West African countries and second in line with South Africa in the entire African continent (Adaya 1998).

Recognizing the essential role that SMEs and private companies play in development of economy, most of the nations have instituted client support networks systems to increase the growth of these enterprises. Coming to Nigeria, this is no exception. Since 1970s the government has introduced and developed steps to promote SME development including financial, economic and export objectives (Yusuf and Schindehutte 2000).



This chapter provides the methods utilized to reach the findings for the purpose of this study and recommend any further steps that can be utilized to successfully globalize SMEs in Nigeria. The purpose of this chapter is to identify the correct technical conclusions. Through the method of research adopted we conclude the major target of this study which was to discover globalization and the recount of SMEs in evolving nations. The aim of the study being qualitative leads to the methodology being qualitative, descriptive and phenomenological.

Reasons for adopting a qualitative approach

The study utilized a phenomenological framework to accomplish the objectives of this study. Qualitative study mentions is inductive, holistic, personal and process-oriented to realize, understand, recount and evolve an idea about an occurrence or setting. It is a methodical set about utilized to recount personal life knowledge and give them significance (Burns & Grove 2003:356; Morse and Field 1996:1999).

Qualitative study is affiliated mainly with phrases, dialect and know-how other than measurements, statistics and numerical figures. The primary research which could be in the form of questionnaire or interview or focus group is not conducted for this study mainly because the of the time limitation, as the researcher could not contact the industry players since it was difficult for him to travel out to the country to carry out this type of research.

Qualitative methodology makes use of deductive approach where information from different sources is assimilated grouped and then findings are extracted to form opinion focusing on the research questions. Research utilizing qualitative study is tailored to a person-centered viewpoint and comprehensive comprehending of human know-how, without focusing on exact concepts.

Although descriptive but it also makes use of some facts and numbers that encompasses statistics from various findings of literature utilized, for example Lussier (1996); Mahadeo (1996), Murphy (1996), van Eeden et al (2004). The findings are presented in such a way that suitable answers to the research question can be made. The study does not suggest any hypothesis testing as the study does not involve any statistical testing.

Data Sources

The study makes extensive use of secondary sources which are in the form of existing literature and studies. Even informative material from websites is also incorporated. Typically, the secondary sources which have been consulted for information gathering and writing up the report include books, journals, newspaper articles, magazines, corporate findings published online and offline.

Limitations of the Study

The problem with the use of secondary sources is to find relevant information which actually helps in answering the research questions and therefore, the researcher has carried out the investigation over a long period of time keeping in view the objectives of the study.

Moreover, qualitative design is descriptive therefore it is not objective and the findings are subjective to the researchers own understanding and interpretation, rather than globally accepted principles and laws. Also, the secondary sources utilized may have their own limitations which can become a part of the current study. Since the study did not involve any primary research therefore first hand information which could have been more appropriate for getting the industry insights is not included

Time factor is another limitation for not utilizing an empirical analysis. The study tries to adopt the latest resources in order to conclude the research objective, however due to limited time and the sources being outdated, the findings cannot be validated to date.

Discussion and Analysis

The SME sector in Nigeria is extremely labor concentrated, and employs about eighty percent of the country’s labor force. The division remains a genuine foundation for the small local savings and is broadly spread over the entire country though with attentiveness in the key and town cities like Lagos, Aba, Kano, Onitsha, Nnewi and Port Harcourt.

The SME sector is involved in promotion of indigenous expertise and strengthens the increase of economic activities and thus leads to reduction in poverty. The federal and state administration have carried out enough activities previously to catalyze development and growth of the small and medium enterprise division through the building of institutions and programs that assist or finance SMEs. Despite these creditable efforts and those by the patron agencies, the contribution of the division to the economic growth of Nigeria has still been very stumpy (Lal 2007).

SMEs have been completely documented by governments and development experts as the major element of financial growth and a main feature in promoting development and opportunities in private sector. The growth of the SME sector therefore stands as a main element in the growth plan of most economies and holds particular implication in the case of Nigeria (Siaka 2005). SMEs not only make a significant contribution to enhanced living standards, service creation and poverty decline but they also bring about considerable opportunities for domestic and local development of high levels of efficiency and ability. From a planning point of view, SMEs are more and more documented as the principal means for thriving unbiased and strong industrial diversification, growth and distribution of opportunities.

In most countries, together with the urbanized countries like Japan, USA, UK, etc, SMEs report for more than half of the economies sales, production and consequently input to the country’s GDP (Lal 2007).

A major gap in Nigeria’s industrial progress in process for the past years has been the absence of a strong and virile SME sub-sector. With over 120 million people, vast productive and arable farmland, rich variety of mineral deposits and other natural resources, Nigeria should have been a haven for SMEs. Unfortunately, SMEs have not played the noteworthy and essential role they are anticipated to play in Nigeria’s financial growth, expansion and industrialization (Lal 2007).

Presenting a receptive study Siaka (2005) reviews from their start, the worldwide enterprise undertakings of 196 entrepreneurial, high-tech companies in the developing nations including Nigeria. Although the author finds little unswerving or explicit sustenance for stage models in Nigeria—the idea most matched for interpreting the longitudinal demeanor of companies in Nigeria over time—she determines that the accretion of experiential information (a key descriptive component of stage models). This is probable to be of importance in working out the pace and capacity of the worldwide expansion of SMEs. However, the companies in Nigeria infrequently profited from their expertise and information of worldwide markets and procedures in modes completely unforeseen by the idea. Namely, by utilizing application modes, and occasionally convoluted blends of application modes, more conventionally affiliated with bigger and more skilled firms (Siaka 2005).

In contrast to the familiar undertakings to globalize, it is forecasted by both the stage forms and FDI ideas that numerous companies investigated in this study globalize some facets of their value chain through the inbound undertakings of other internationalizing companies (i.e., companies going into the global western market from elsewhere).

Particularly, Nigeria as a nation, characterizes cross-border undertaking as the foundation of the globalization process. These cross-border undertakings proceed both inbound and outbound, which are termed as “inward” and “outward” globalization. They encompass a broad variety of engagements and complexities ranging from straightforward transactions to FDI in many ways. These undertakings are affiliated with the value chain, for example research and development, output, and marketing (Lussier 1996).

Each of the companies in Nigerian SME sector, pursue an apparently exclusive rule of globalization, leveraged by its own tactical objectives and the state of its assets and experience. The dominant finding is that the range of globalization for small enterprises in Nigeria is much less restricted by asset constraints and need of know-how than either of the above theories might suggest.

Differences in the power of cross-border connections over a variety of undertakings propose that some companies in Nigeria set out to gain experiential information more rapidly than other ones and that partners are chosen strategically in relative to the firm’s exact enterprise activities (Lussier 1996).

Van Eeden et al (2004) sketched explicitly amazingly findings from their investigations of African based firms. They observe that the conclusions and methods in internationalizing these innovative and service-based SMEs are as convoluted as those inherent in the stage forms, FDI ideas, and networking theories. These findings are constrained by time factor and assets; under the strong comparable issues of such overriding notes of the theoretical reasons in this study which are straightforward yet powerful (Van Eeden et al 2004).

Small and medium Nigerian entrepreneurial companies relish tremendous new possibilities in the increasing international comparable arena. However, they furthermore face critical constraints. Nigerian managers should empower their causes of profit (including information or know-how in localized markets) to reimburse for the handicaps of secured assets, restricted access to worldwide markets, and general innocence in worldwide procedures to present effectively in worldwide markets. The methods and ideas provided in this study alter broadly, counting on the characteristics of each firm and its administration at any exact issue in its evolution.

No lone, established form amply interprets the achievement of these SMEs. Rather, demeanor of Nigerian firms should be considered as a holistic method in which insights are drawn from a kind of theoretical forms, encompassing the stage forms, FDI ideas, and networking theories.

The study of Apulu and Latham (2010) focuses expressly on patterns of globalization in ethnic Nigerian entrepreneurial firms. The authors article the method by which ethnic entrepreneurs in the western countries first utilize their own localized ethnic community and systems in the market to assist globalizing companies from their initial homeland—a strikingly similar finding to , Kapurubandara (2009) “internally administered cross-border activities” for little, entrepreneurial companies in the non western countries (Kapurubandara 2009).

Armed with the information and know-how of organizing cross-border enterprise undertaking from homeland to other countries, these entrepreneurs subsequently assisted as catalysts in helping FDI from the developed nations back to their nation of origin. From the vantage issue of benchmark ideas, such FDI is turning around the main heading of globalization halfway through. However, examined from the mesh viewpoint, Nigerian entrepreneurs first utilize their ethnic systems to assist ethnic markets in the western countries by trading provision from their homeland. They subsequently reinforced the procurement function in their value chains by buying back into those nations from which the demand was received (Apulu and Latham 2010).

The entrepreneur himself is the key decision maker in the globalization of SME in any country. Nigerian entrepreneurs engage in overseas activities for different reasons. There are push drivers, internal stimuli at the company or home country level. And there are also pull drivers, external stimuli coming from the target country. The two most common reasons for starting global activity in other countries are of the pull type (Apulu and Latham 2010). The most frequent is the attraction of growing overseas markets. For some SMEs in Nigeria, having overseas customers gives credibility, not only globally, but at the domestic level as well. Following customers that go overseas is the second reason. The customer may demand that the SME go international. However, there are also differences among these countries (Kapurubandara 2009).

The most common push driver is to exploit full production capacity. Nigerian entrepreneurs are likely to refer to this reason most frequently, probably because of their small domestic market. The second most frequent push driver is a shrinking domestic market. SME entrepreneurs probably want to escape from mature markets and from increasing competition at home (Central Bank of Nigeria 2001).

Some SMEs in Nigeria adopt a niche strategy to compete against larger companies that offer mass produced products. But even these companies are under assault, as they have to compete against products coming from developing countries.

Perhaps the best example is China. Large companies and SMEs alike are threatened by what has been called the ‘China price’ (Economic Policy 2000). Chinese companies are offering low prices that most domestic companies cannot afford to match. Born global companies have attracted a lot of attention in the literature on the globalization of SMEs. This type of company contradicts the theory of the gradual incremental globalization of the company. Born global companies are created specifically with the purpose of seizing a global opportunity (Economic Policy 2000).

Born global is a business organization that, from or near its founding, seeks superior international business performance from the application of knowledge-based resources to the sale of outputs in multiple countries. Despite being a favorite research topic, born global companies are still rare. Only about 4% of the companies identified in Nigeria can be characterized as born global (Siaka 2005). The number is too small to try to generalize any of the findings; nevertheless, some of the main characteristics are worth noting. Most of these born global companies are in the service sector. More than half have fewer than 50 employees (Kapurubandara 2009). They have a much more intensive global activity than the average surveyed company. All the Nigerian born global companies receive income from overseas, compared with just under half of surveyed literature as a whole (Siaka 2005).

Nigerian managers from born global companies are driven by pull factors, exporting mainly services to growing overseas markets. These managers are more educated than the average manager: half of them have university education and over one third postgraduate qualifications. They speak, on average, two languages, and English is spoken by all. Nearly half of them have lived overseas. This group of managers travels constantly, averaging over 10 international trips annually to visit current or prospective customers and to attend trade exhibitions (Kapurubandara 2009).

Lastly, the literature identified the adoption of technology and internet to facilitate the globalization process (Lal 2007). In most cases, the internet technology will upgrade the speed of SME globalization by removing or reducing the requirement for disinterested companies. These proposed effects of the technological innovation on the susceptibility of the Nigerian SMEs globalization have been noted down by Lal (2007) in his study which stated that the use of a web site plays a role of a catalyst for SMEs in the process of globalizing (Lal 2007). The Internet is not only a support for letting SMEs begin globalization but also helps to build strong foothold global markets through marketing activities, international sales promotional activities and inter-firm Research and Development. For Nigerian SMEs, only because it is a pathway to global markets, the Internet makes it possible for them to become global whether it was initially planned to do so or not. Applications that are primarily identified are communications network, marketing and sales promotional activities. Targeted players include all participants of the enterprise’s network along with international clients, partners and research and development institutions (Lal 2007).

Oyedijo (2005) argued that the Internet offers functions that make possible networking, enabling firms to relate with each other more strongly and to greater extents with other actors, including clients, sellers, and partners. The Internet potentially lowers the cost of right of entry and leveraging relationships by aiding the improvement of firms’ visibility, competence and familiarity, with admiration to their network relationships. For Nigeria, the Internet’s simplicity of utilization, universal principles, and far-away electronic right of admission consequence in tools of communication and sharing of information, building better visibility; collaboration and business activities, enhancing strength to act efficiently and society and advantaged access networks, ornamental familiarity (Oyedijo 2005).

Conclusion and Recommendations

Regardless of the significance of SMEs to global business forefront, practically there has been modest research that has evaluated the position of entrepreneurship and its connection to promotional strategies, policies and corporate performance in these firms. Entrepreneurship and SMEs have turned out to be major and important players in the success of national economy and international trade, yet very little is learnt about how such enterprises function and succeed under the concept of globalization, particularly in Nigeria. Moreover, as indicative in studying available resources, it has been evidenced in this study that there is a reasonable role of globalization on the association between private ownership or entrepreneurship and promotional strategies which may lead to overall economic growth.

Firstly, in an economy undergoing globalization there is very high probability that noticing the problems faced by small business managements in a non-Western background may be significant in terms of the types of support (including the finance and accounting department, training department, management, and technology arena), the Western countries may extend (Okpara 2006).

Secondly, the economy of Nigeria, which is focused on in this research, is swiftly developing, and Nigerian entrepreneurs have extended their businesses to the global forefront. Therefore, educators and researchers have explicably understood the extent of development of small-businesses, which plays an important role in providing subsidiary support services to MNCs.

Thirdly, it is calculated that SME management policies and procedures in the Western world are applicable in a non-Western economy such as Nigeria.

Fourth, this research draws organization’s and management’s consideration to the vital requirement for viable executive and entrepreneurial practices to improve the efficiency and sustainability of SMEs in Nigeria.

Finally, from the point of view of an academician this study proves to be a contributing research in future, particularly in a developing nation such as Nigeria. Therefore, the present study proves to be of greater significance scholars and researchers in the same manner.

Further study and hypothesizing in the Nigerian arena is necessitated; so are the rules and regulations for global business activities. Since this study is not so explorative in nature especially with respect to scope and gravity, prospective research must focus on comparison among the globalization of SMEs in old and new financial system. And the intention that Internet’s role in globalization is strongly related is worthy of undergoing future research. On the same note, analysis of ROI setting up and running the businesses by adopting Internet or other technologies is becoming necessary.


Without re-inventing the wheel, the intelligent alternative for Nigeria today should be to re-focus vigilance on pro-actively boosting the development of local economy, assist inculcation in effective administration heritage in already existing small and medium enterprises and apparatus principle assessment for assimilating the casual part into the current and nationwide economy. Economic adversities for example epileptic power provide, under-developed infrastructure, need of long-run capital for expansion/modernization, provide string of connections mismatch and administration deficiencies are key obstacles to maintained growth.

Most research on the globalization of the SME has been interested in their exporting. But companies may also become global through importing. An entrepreneur that aims to be competitive in the global arena, or that wants to be prepared to face increasing international competition in its domestic market, also needs a global perspective. A more holistic approach is needed to capture the intensity, complexity and diversity of today’s globalization process. The similarities among the small and medium-sized enterprises from Nigeria and other countries and their globalization strategies easily outweigh their differences among entrepreneurial decisions.

Most literature has focused on the differences, perhaps missing the many similarities. Nigerian SMEs are not regularly included in international studies, but their international behavior is similar to that of their counterparts from the four developed countries in this survey. Born global companies—those companies created specifically to seize an international opportunity—are still the exception rather than the rule. Further work is necessary to explore the significance of previous inward international experience in initiating outward activities. Inward globalization may play a more important role in global business than has been acknowledged in the literature.

Some simple recommendations that can be taken into account are:

  • Creating enterprise clusters/cooperatives round the homeland that could nurture concepts, drag living amenities simultaneously to accomplish finances of scale, set up new collective output amenities and service outlets where the proprietors would be to blame for their achievement or failure.
  • Making the Nigerian university abilities more creative and the NGOs and study organizations more engaged, by conceiving enterprise incubators and development hubs round them. So that they could assist compose sound enterprise designs, supply primary teaching, agency space and ancillary support services to SMEs.
  • Persuade the materialization of Community Development Venture Capital (CDVC) Funds in Nigeria in a similar manner as a group of banks. Entrepreneurs can purpose either as NGOs or on financial cornerstone in Nigeria to focus on the exclusive relative benefits of exact regions/territories of the nation.

Furthermore the Nigerian entrepreneurs, international associations and foreign NGOs furthermore have a vital function to play in either supplying operational support, coming out to entrepreneurs or support new ventures. A navigation program aimed at evolving new entrepreneurial plans through local, statewide and as well as nationwide enterprises can help in recognizing, developing and designing lucrative concepts and implementing modes of commercializing those concepts.

With the advent of Internet, minimization of trade barriers and time-to market has raised questions on current theories. In the techno cyber world, most of the entrepreneurial SMEs are trading globally from their very beginning or in the present stage, often with no unswerving skill or resources over the Internet. Moreover, Nigerian SMEs are very apt on monetary performance for raising global revenues and cutting down operational costs. Keeping this in view, it can be suggested that studies which are aimed at investigating bases for entrepreneurial decisions related to investment in acquiring and / or upgrading technological setup of companies including the use of internet can also be regarded as of higher value for both academic and practical use by readers.


The research conducted was qualitative in nature and was primarily focused towards identifying if there is a relationship between Entrepreneurial orientation in SMEs and their incentive to globalize. A brief overview of theoretical approaches to globalization is complemented with a discussion of what are considered to be the main elements of the decision to globalize, especially adopted by the SMEs.

Participation in these stages has been seen to result in a number of challenges in achieving international growth. These issues are examined in this theoretical study, and identify the main challenges are in the global firm’s growth of SMEs. The study first defines globalization under a theoretical framework and then is seen to be a response of firms to opportunities and threats that are prevalent due to globalization. It is often seen to be a characterization by management to modify business strategies, marketing activities, and general practical exercises carried out on daily basis in the organization.

In universal markets, since the organization encounters varied consumer needs and challenging offerings, as well as changeable financial and technical conditions, being receptive to globalization may be mainly significant in the achievement of the SME. Certainly, foreign competitors are often supported by restricted governments, use unexpected and new strategies, and are widespread over many national markets.

The primary challenge faced by firms is to develop value for buyers as competently as possible. Companies that are ever ready to take up the challenges of globalization are better in position to achieve a greater success and globalize as compared to non responsive firms.

In conclusion we find that regardless of the significance of SMEs to global business forefront, practically there has been modest research that has evaluated the position of entrepreneurship and its connection to promotional strategies, policies and corporate performance in these firms. SMEs have turned out to be major and important players in the success of national economy and international trade, yet very little is learnt about how such enterprises function and succeed under the concept of globalization. Moreover, as indicative in studying available resources, it has been evidenced that the reasonable role of globalization on the association between private ownership or entrepreneurship and promotional strategies

The findings of the study include major convulsions proposed by major contributors of the literature review, namely Murphy (1996), Lussier (1996), Chakravarthy and Perlmutter 1985, Van Eeden et al (2004) and Mahadeo (1996). It is recommended that emphasis has always been laid upon globalization through exporting activities. However companies may also become global through importing.

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