Globalization and Entrepreneurship in Small Countries

Mirjana Radović-Marković, Rajko Tomaš

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000074925
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

The changeable business environment requires a new business framework and an understanding of the global market trends and the culture that will impact on business. Globalization and Entrepreneurship in Small Countries considers important business principles and makes them accessible for entrepreneurs and small business owners. It addresses the role of managers and leaders and management techniques in the context of global strategy of companies, as well as the culture diversity that comes with globalization of organizations. To meet the constantly changing conditions and demands, business must transcend boundaries to get what it needs regardless of where it exists – geographically, organizationally, and functionally.

This book draws together earlier literature on SME development and internationalization from disparate sources into a cohesive body of work, which traces the evolution of our understanding of the topic. It explores just how globalization affects the demand for business and entrepreneurship, and will therefore be of interest to researchers, academics, policymakers, and students in the fields of entrepreneurship, globalisation, organisational studies, and SMEs development in small countries.

1 The Change in Economic Power Distribution in Conditions of Economic Globalization

Rajko Tomaš

1.1 Natural and Social Global Order

In the last three decades globalization has become the word that is very often used for explaining many phenomena in global trade, economy, politics, demography, ecology, communications, technology, culture, democracy, etc. Its usage for explaining the tendencies in a modern world is sometimes inadequate. It is often attributed the powers it does not have, and it is often used as an explanation of the phenomena that are difficult to prove being caused by it, i.e., in the lack of an adequate scientific interpretation, it becomes a universal cause of a great number of all tendencies in the modern world. Therefore, it is observed as a cause of a great number of phenomena in different spheres of life, while it is also forgotten that it is a synthetized consequence of a technological and economic development. All of these are the reasons for which, before we start the analysis of changes in distribution of economic power in conditions of globalization, we must explain the nature, appearance forms, and range of globalization.

We are the witnesses of divided opinions on globalization in the modern world. Preoccupied with everyday life, local and national development forms, people are often surprised by global tendencies, often perplexed before their implications, and sometimes opposed to the unknown form of internationalization of conditions they live in. Historical overview of the globalization matches the history of trade development, technical progress, transport development, communications progress, colonial conquests, wars, establishment of international standards and institutions. In short, on the example of globalization history we confirm the truthfulness of Protagoras’ statement that “man is the measure of all the things; of those that are, that they are and those that are not, that they are not”. Planet Earth, by its essence, is a natural global system, and thus globalization is also a natural order of relations on planet Earth. Global natural order on planet Earth is a unity of natural resources, unity of relations and processes that take place among them, as well as free, unlimited action of natural forces and free movement of living beings in the natural environment they live in. Due to the limitation of natural resources on planet Earth, from the aspect of human needs, as well as limited power and contradictions between economic and political interests of human communities, people establish social global order. People have created their communities, established the mechanisms of their functioning, set the limits between them, and set the rules and measures of integration and disintegration of the processes that take place in the organization of humanity. People make decisions on globalization of the world, primarily coming from the relations they have created and that they control. This judgment on globalization is significantly distinguished and it rarely matches the global natural order on planet Earth. People establish the global world according to their own vision, motives, and power, following social laws, often contrasted with natural laws of relations on planet Earth, so global natural order is significantly different than global social order. Human communities are distinguished by economic, political, and military power, so their impact on creation of global social order is different.

1.2 Homogeneity of Human Motivation and Globalization

Among the authors, there is no consent on definition and history of globalization. Thus Frank (1998) claims that forms of globalization have also existed three millennia BC. However, Frank has, obviously, equalized the traces of trade development with the first signs of globalization. Regarding Frank’s statement we can ask the following question with reason: whether the trade development determines dynamics, nature, and limits of globalization? The trade is a significant feature of globalization, but it cannot be exclusively reduced to it. People exchange goods when they dispose with its surplus. Commodity exchange does not imply that we live in a global world. As long as there are motives for people to retain the borders between their communities, retaining the right to regulate the life within them by themselves than to set the limits for the mobility of people, goods, ideas, and political movements, the existence of the trade between communities does not mean that they are a part of global order. Global social order can be spoken of only within a context of homogeneous motivation of people throughout planet Earth, which is a rather unreal assumption having in mind the fact that all the resources on Earth are limited and unevenly allocated. Therefore, globalization is determined by the level of the homogenization of human motivation and their communities on planet Earth. It is true that with development of technologies that contribute to labor productivity growth, it occurs that trade is spread in the world, transport is developed, and the methods of communication and exchange of information and ideas are perfected. All of that are the parameters that contribute to homogenization of people’s interests in the world which increases the globalization level of relations in the world. The appearance of trade in local and regional proportions is significant for the long-term process of the globalization of trade and economy, but it is not the globalization by itself because it does not take global proportions. According to that, we can speak of globalization only when there are real assumptions for the establishment of homogeneity of the motivation of people in the world. From that aspect, much more realistic is the view of Thomas Friedman (2005) of the globalization history. It distinguishes three periods in globalization history (1.0, 2.0, and 3.0) according to the carrier of global processes and the subject of globalization. In the first period (1492–1800) the carrier of globalization was the countries and the subject of globalization was the natural resources. In the second period (1800–2000) the companies globalized market and labor. The third period of globalization began around 2000 and lasts until today. The carriers of today’s globalization are individuals and small groups, and the subject of globalization is the competition for reaching the opportunities that are offered in the market to an individual. Friedman points out that globalization 3.0 is specific by not being typically European or American, which was the case with the previous two. “In globalization 3.0 you are going to see every color of the human rainbow take part” (Friedman, 2005, p. 34). Therefore, according to Friedman, globalization 1.0 strengthened the countries, globalization 2.0 the companies, and globalization 3.0 individuals. However, although it was acceptable that main carriers of globalization process, historically observed, were the countries, companies, and individuals, there is no sufficient evidence that the effects of those carriers on globalization were strictly classified within time frameworks provided by Friedman. For example, the First and Second World War show that in the first half of the 20th century, the countries were the ones that had a great impact on globalization process. During big wars, all the processes specific for a form of globalization have experienced a drop. Establishment of a new order in globalization, as a rule, was always followed by efforts of the states, companies, as well as individuals. Although it is true that in certain periods the countries and companies had a dominant role in spreading the globalization process, we cannot claim that by the establishment of a dominant role of one subject there ceases the impact of the previous dominant subject. Accordingly, modern globalization is a consequence of the synergy of global interests of states, international institutions, companies, and individuals on the market principles. Or, as it was defined by McMichael, “Integration on the basis of a project pursuing market rule on a global scale” (McMichael, 2000, p. xxiii). Historically observed, with the development of technology and labor productivity, there comes the synthesis of the interests of countries, companies, and individuals that they achieve through the globalization process.

1.3 Global Multicultural Entrepreneurial Environment

The fact is that individuals, regardless of the part of the world they live in, today have more of the same information than other people in human past. That is one of the manners of homogenization of people’s interests on planet Earth that we have spoken of as a condition of the appearance of global social order. Through homogenization, people feel that the global world is increasingly becoming a condition for the achievement of their motives. Of course, availability of information, simplicity of communication, and low costs of information exchange do not affect only the people’s motivation harmonization. They affect the harmonization of the level of education, level of people’s competitiveness on the labor market, as well as harmonization of opinion on a series of tendencies in the global world. In addition, this creates the assumptions for the multiplication of the forms of cooperation in research and work in real time without constraints due to geographic remoteness, and very soon, due to language barriers (Friedman, 2005, p. 35). Modern globalization, through the strengthening of individuals, has a strong impact on development of innovations and increase of labor productivity. For that reason, it becomes acceptable for both companies and investors. Globalization, initiated by the motives of individuals and strongly supported by interests of companies and investors, constitutes a multicultural entrepreneurial environment. Potentially, it offers the possibility to unite all the knowledge of the world in a process of development, i.e., so far unrecorded possibility of labor productivity growth. However, we must not forget that globalization that is moved by individuals’ motives takes place in the conditions of unharmonized allocation, but still in the conditions of unequal possibilities. Globalization based on motivation of individuals gradually globalizes the labor market and sharpens the competition, which will result in the tendency to harmonize the labor price in the global market. In all cases where this tendency would affect the labor price reduction, we can expect the resistance from the part of employed people, as well as the states. For that reason, the success of globalization moved by individuals’ mot...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• List of Tables
• List of Boxes
• Preface
• 1 The Change in Economic Power Distribution in Conditions of Economic Globalization
• 2 Global Entrepreneurship – Empowering Diversity and Inclusion in Entrepreneurship
• 3 Globalization Impact on Entrepreneurship in Small Countries: A Case Study of Serbia
• About the Authors
• Index