Small and medium-sized enterprises

The phenomenon of globalization is not limited to large companies. Small companies are also affected by and, in turn, affect globalism. They play a vital role in contributing to their national economies through employment, new job creation, development of new products and services, and international operations – typically exporting.

The vast majority of businesses in developed economies are small and medium-sized enterprises. For example, in New Zealand 97% of businesses employ 19 or fewer full-time employees; and in Australia by June 2004 there were over a million small businesses. Those with only one operator accounted for 72.6% of all such firms; and the majority of small business operators were involved in one business only (92.5%).

Although many small businesses are affected by globalization only to the extent that they face competing products from abroad, an increasing number of entrepreneurs are being approached by potential offshore customers. Information about the activities of small firms is spread through trade shows, government export initiatives and the growing use of websites for making contact and placing orders online. One example of a very small but successful global business is that of Madeleine Utrillo, of West Ryde, Sydney.

Information technology

Eureka Teleconferencing is one of many new firms that aim to make clients' teleconferencing experience simple, effective and cheap.

Of all the developments promoting global business today, the one that is transforming the international manager’s agenda more than any other is the rapid advance in information technology (IT). The speed and accuracy of information transmission are changing the nature of the global manager’s job by making geographic barriers less relevant. Indeed, the necessity of being able to access IT is being recognized by managers and families around the world, who are giving priority to being plugged in' over other lifestyle luxuries.

International managers are aware that though it is now much more difficult for information to be centrally or secretly controlled by governments or organizations, IT makes propaganda, rhetoric and advertising much more powerful because it is so much more pervasive. Political, economic, market and competitive information is available almost instantaneously to anyone around the world, but this does not necessarily permit informed and accurate decision making.

A gross example of misinformation comes from the tobacco industry. For nearly 40 years, the industry'-sponsored Council for Tobacco Research (Cl’R) waged what The Wall Street Journal recently labeled 'the longest-running misinformation campaign in US business history’. Self-portrayed as an independent scientific agency to examine 'all phases of tobacco use and health,' the CTR has actually been the centerpiece of a massive industry effort to cast doubt on the links between smoking and disease.

Managers should be alert for bias of all kinds. Cultural barriers are being lowered gradually by the role of information in educating societies about one another, but cultural and religious prejudices are still strong. When President Bush in 200142 announced a ban on aid to international organizations that perform or promote abortions, it signaled the end of US funding to family planning centers in Africa that provide sexual education to millions of young Africans. Although many such centers do not perform abortions, they do offer information and counselling on the procedures – and thus can expect to lose all the funding they receive directly and indirectly from the US, often about one-quarter of their annual budget.

On the other hand, commercial advertising and other sources of information have made consumers around the world more aware of how people in other countries live, and thus tastes and preferences have begun to converge. Global brands of colas, blue jeans, athletic shoes, and designer ties and handbags are now as much on the mind of the taxi driver in Shanghai as they are in the home of the schoolteacher in Sydney.