condition of successful admittance
of SME on Foreign trade
Mária Pomffyová, Katarína Zimermanová, Anna
Kalavská
Matej Bel University, Institute
of managerial systems, Affiliate Branch of the Faculty of
Economics in Poprad, Nábrežie Jána Pavla II 2802/3,
058 01 Poprad
maria.pomffyova@umb.sk
Abstract
The foreign trade of Slovak
small and medium sized enterprises (SME) is not well known yet. The authors and
scientists are interested in foreign trade of big firms and companies having a
lot of experiences in operating on foreign markets with a measure of products.
Small and medium sized enterprises in Slovak republic and also in other
countries are specific in their relation to foreign markets and risks in
foreign trade. This article is focused on relation of the Slovak SME to foreign
trade on European Union (EU) market and on trade with other countries, and
various problems they meet. Enterprises
have at their disposal many important priorities and advantages,
which should entirely be utilized, and the good position on the market should
be reached also by virtual working team interactivities. Experiences reached by
project of virtual communication realized into educational process created
teams on DP EF UMB in Poprad are involved in this paper. Utilization of these
communication tools represent precondition for flexible and versatile
organization of work dealings, which are bounded by lower costs and quick
decision-making process.
Key words: risk, foreign trade, education, ICT, virtual working
teams, cross-cultural competences
Globalisation and Foreign trade
We can
follow many discussions about world that is in a new phase of development,
about changes in all parts of our lives and their reflection. Many authors
discuss about what globalisation is. There are many positive and negative
opinions on the globalisation as on the level of local, regional, national,
international and global integration as a consequence of intensive connection
among countries - economics, their culture and politics.
International
trade as a form of external economic relation represents exchange of goods and
services cross the national borders. Foreign trade means exchange of goods and
services from the point of view of one country.
Foreign
trade is opportunity for expanding enterprises, on the other side it means risk
for domestic producers, especially producers operating on regional market. They
do not dispose with sufficiency of cheap money, qualified staff and advanced
technology; their labour productivity is low.
Many SME
entrepreneurs will never try to do their business on foreign market because
they have enough opportunities on their small regional (national) market.
They have
financial sources, qualified staff, advanced technology and very good
organisation of all business activities, but they are interested in the
existing firm, manage their staff to get special knowledge and qualification
and their goal is to be number one on the regional or national market. They are
not ready to meet competition.
We
focussed our attention to research in SME realised to find their relationship
to foreign trade and risks in foreign trade.
Classification
tries to bring order by putting risks into different categories; quantification
tries to attach precise numbers to the distinction developed in the
classification stage. Through quantification, managers hope to be able to
determine the likely losses associated with risk of different types and
severity.
Slovak SME and Foreign Trade - Results of
Research
Small and
medium sized enterprises in Slovak republic (similar to enterprises in other
countries from middle and east
We
addressed with a questionnaire to 90 enterprises in region Spiš
(north-east of Slovak republic). To distribute it we used mail, e-mail,
personal visits and friends. The list of question was by 43 enterprises
responded.
We divided
answers into two groups – enterprises acting on foreign markets and “domestic”
local enterprise; enterprises acting on foreign markets (34,88 %),
enterprises not acting on foreign markets (65,12 %) The group of
enterprises acting on foreign markets consists of enterprises doing business
only with EU countries (46,8 %), enterprises
acting on other foreign markets (13,33 %) and EU and other countries
markets (40 %). (Zimermanová, 2006)
In the
second group we have searched the reasons of “staying inside” (Graph 1). The
most often presented reason of staying on the national market is enough
opportunities on the regional market (61 % small businesses - crafts). The
second reason is insufficiency of money (11 % of all searched enterprises
of which 77 are crafts). To the next reasons belongs insufficiency of
information about doing business in foreign countries (7 %), unknown
business conditions on foreign markets and language barrier (11 %).
Graph 1
The most often presented reasons of staying on national (regional)
market
More than
a half of searched enterprises is afraid of possible problems in foreign trade
(nearly 1/3 of them are enterprises working only on the regional markets), 41,86 % of the searched Slovak small and medium sized
enterprises is absolutely not afraid to operate on foreign markets (it contents
of 83 % enterprises working on foreign markets).
What are
searched enterprises the most afraid is unknowing of conditions on foreign
markets (92 % of enterprises which are afraid). Then they are fearful of
competition (68 %).
Language
barrier is problem for 32 % respondents. The knowledge of foreign language
itself is not sufficient to avoid misunderstandings. A good manager should
know the culture of his/her business partners, which is the key
to any successful business deal. Therefore in any business negotiation
with foreign partners appropriate attention to cross-cultural aspects
has to be paid as well.
Prediction to be successful by foreign trade
Managers
and employers can obtain some cross-cultural skills while studying
foreign languages, or by means of specific subjects aimed at cross-cultural
issues, as well as during their study or practice stays abroad. Level of
knowledge doesn’t provide the advantage in the company competitive process. It
is needed to enhance their personal acquirements
(Kontríková&Pomffyová 2006). Therein the most
important point is the quality of human resources as a sum of capital of
individual knowledge created by companies (employers) – it means skilled
employee. Globalisation brings “portfolio employees” with scale of various
skills and qualifications they will use to get various jobs. Only small group
of employed people will have a fluent career, as we know it nowadays. It
follows that employee will be a “forever student”. (Hamaj,
2001)
On the second, to support Slovak SME
to participate on foreign trade it is necessary to give them enough of
information about possible ways and available support in starting business with
business partners form foreign country. To prepare entrepreneurs to do business
on foreign markets it is needful very good education and training and further
education for owners and managers. (Sudolská, 2007).
In our
research we have found, that – as we predicted - the relation of the Slovak
small and medium sized enterprises to foreign trade depends on their product.
One person usually owns small enterprises – crafts, their customers are living
close to them. So that they don’t need to offer their products on foreign
markets (e. g.: hairdressers, tailors, small producers of furniture, shoemaker,
etc.). On the other side, there are small enterprises producing software and
they are very successful exporters. If they can
explore your business activities we recommend them to improve cooperation with
domestic and foreign companies e.g. participation on the trade fair and
exhibitions, using of the database for searching the trading partners, etc.
Such cooperation as well as the requirements of concerning economies
globalization, it’s necessary to adopt conditions of labour market in
multinational companies in a form of participation of companies and businesses
to foreign-trade activities. An example how to present their products is information
acquired and penetrate into customers’ or potential purchasers’ conscious via
distributions, which are supplied by the product range catalogues, and various
expos through own web pages on the internet, where it is displaying its offer (etc.
www.gartier.sk) and also after sales
services. Thereby they can achieve the top position not only on national level,
because of improving the services and marketing activities the enterprises can
penetrate to world market.
Also at the same time they should
create the business partnership and clusters by virtual working teams. It could
help them to reduce costs in trade and production, too; they get faster
information needed to decision-making process. In this process a very important
role has effective utilization of available tools of communication supported by
ICT, which brings the increase of the importance of cyber-culture.
New trend in business sphere is
outsourcing. Very simply outsourcing can be defined as a process in which a
company delegates some of its in-house operations/processes to a third party.
Thus outsourcing is a contracting transaction through which one company
purchases services from another while keeping ownership and ultimate
responsibility for the underlying processes. The clients inform their provider
what they want and how they want the work performed. So the client can
authorize the provider to operate as well as redesign basic processes in order
to ensure even greater cost and efficiency benefits. It is the way how firms
can be successful if they offer their own services and products on the top
level for others, etc. foreign partners.
They can extend also experts and their own knowledge via Human Resource
Outsourcing services. It provides comprehensive transactional and
administrative services that enable HR staff, employees and managers to access
update and use HR information more efficiently and effectively not only on
domestic trade as well as at foreign business. Also the employees must have
language and communication skills.
The consequence of this, the skills
and competences needed by employer and managers to be effective have changed
radically. It has changed standard and requirements of competent people and
best form of their development seems to acquisition of practical experience in
the area of foreign business and communication.
Disadvantages
in the usage of modern information and communication technologies are connected
especially with employer’s personality, his skills and amount of knowledge.
Managers need for their work the „hard“ skills, such as using IT skills,
critical thinking, organisational development, objective setting and
motivation, etc. the „softer“ skills such as multicultural skills, flexible
adaptation in new environment, leadership, interpersonal skills, team works,
etc.
How SME can explore our research activities
In third
we recommended SME to collaborate with universities and research institutes.
They can give their own knowledge and skills obtained from many various
projects and cooperation activities. For example, our institute is developed
cooperation between school and businesses also with SME by development of virtual
working team’s cooperation through active support of multimedia technologies
(electronic presentations, www pages) and tools of communication
(videoconferences, chat, e-mail, on-line and off-line discussion, etc.).
We have
detected it’s very difficult to obtain a practical skills and knowledge
especially by virtual communication process. The reason how to explore these
skills is the process of further education realized by utilization of different
forms of trainings, educational methods, as well as project learning, etc.
Managers will learn to cope altogether; they can solve any problems of
practise. In opposite increasing globalisation creates a more competitive
environment where business will claim those managers to be leaner, more
flexible and adaptable.
To achieve
improvement of communication by virtual working teams we had prove distant
learning methods by practice into education of foreign languages especially by
German business correspondence seminars. Students of Affiliate Branch in Pored
of Mate Bell University as well as students from Czech and Rumanian
universities created such working teams. At first, students presented yourself and
their own teams as well as their countries.
They made some presentation about their countries and universities by
PowerPoint. The typical team included three-four members and they worked once
each two weeks, relying on tools such as e-mail, audioconference and the Internet services to accomplish their
goals. After them, they aimed different problems of business correspondence and
solve tasks concerning to business and economic practice. The goals of this
cooperation is the development of knowledge and skills in the area of foreign
languages, using of ICT tools as well as multicultural communicative abilities
within the frame of solved problems aimed to different matter of business
activities. Such cooperation and application of non-directive educational
methods and alternative training project methods realized by virtual
collaboration of international team give more abilities how to learn to accept
of multicultural practices and preferences of these partners as well as their
intercultural needs and communication manners.
By
realization of our project we focused an attention to set the rules how to be
successful by virtual working process. Our students solved different problems
by virtual communication and used some communication tools. We compared their
application and after them we summarised the best ways how to use them in
different situation. In the next there are appointed rules for effective virtual
communication. We can obtain such knowledge in the working process, as well as
by educational process.
Aims of projects
- making utilization
of electronic communication aimed at adjustment in different multicultural
environment more effective,
- raise the chance of
active participation of students at habilitation of their works in abroad, in a
form of short-term territorial mobilities or through videoconferences,
- support basic and
applied research at the faculty,
- select suitable
tools to create, process and present information,
- utilize and develop
language skills in an international communication effectively,
- abandon obstacles
arising in the process of intercultural communication,
- to develop of
abilities to overcome problems in social communication, with reference to
projects tasks fulfilment in the process of education of sociology, foreign
languages and subjects focused on acquisition skills in the area of work with
information and communication technologies,
- develop rules of
„virtual sociology“, methodology and procedures necessary for virtual
cooperation with the aim to make the process of virtual communication more
effective,
- utilize methods of
distant education with the possibility to participate in on-line video-lectures
in a form of videoconferences and creation of electronic forms of presentations
to support the process of education.
Outputs
- creation of a
portal of cyber- cultural academic advisory service with the aim to create
on-line support for expansion of possibilities of education covering
cross-cultural affairs,
- implementation of
multi-/inter- cultural items into subjects of studies acquired in the process
of education at our faculty and from foreign universities,
- effectiveness of
utilization of electronic communication with the aim to adjust to different
multicultural environments,
- development of
active cooperation in business sector with the aim to solve the tasks of
cooperation of virtual working teams in international teams and business.
Conclusion
The small
and medium sized enterprises have been assigned growing roles in economic
development in recent years. Many factors influence SME`s success including
industry structure, competition, entrepreneurial decision, employee relations,
entrepreneurial objectives, organisational structure, as well as education,
training and prior experience resulting in managerial skills of SME`s managers.
The risk of doing business on foreign markets is closely related to the need of
good knowledge of business area and terms of business in target country and
leads to looking for simple solution for the risk elimination. We can say when
firms should cooperate with foreign partners, it is needed to adopt themselves
in a flexible ways to economic, legislative and social, demographics and cultural
environment and put stress on communication in foreign languages. Also
cross-cultural competences play an immensely important role in contemporary
globalized world especially in international businesses dialogues. The easiest
way is to choose the country with similar conditions (legislation, demand,
trade customs, etc.) on the market. In our opinion, this is why many Slovak
small and medium sized enterprises the most often do trade with partners from
Nowadays, the
way how to obtain cooperation with foreign partners is to utilise partnership
created by virtual working teams. We appointed what to make to be virtual
communication more effective:
1.
For beginning of communication it's needed to acquaint
yourself, about your school or business, about solved problems and cultural
mannerism and differences of yours countries, etc.
2.
The relations among partners can be created more
effective by informal communication – by unofficial chat or e-mail.
3.
Mutual confidence you can adjoin by informing about
yours goals, skills and personal qualities of individual team’s members.
4.
If there are any distinctions in communication sphere
it’s desirable to have a communication expert which has the best knowledge
about all countries.
5.
For the meeting you must set the objectives and avoid
a meeting if the same information could be covered in a memo, e-mail or brief
report.
6.
It is more important to choose the right of a variety
communication media, such as sending an e-mail or posting the information on
your company's intranet or discussion forum or to ring by phone, etc.
7.
If you want to be certain you have delivered the right
message, you can schedule a meeting to simply answer questions about the
information you have sent.
8.
Listen for key comments that flag potential action
items and don't let them pass by without addressing them during your meeting.
9.
Don't finish any discussion in the meeting without
deciding how to act on it.
Literature
1. HAMAJ, P. Sociálne aspekty využívania šancí
celoživotného vzdelávania a jeho vplyvu na uplatnenie sa v
pracovnom procese. In: Zborník z medzinárodnej vojensko-vedeckej
konferencie „Miesto a úloha celoživotného vzdelávania
v kariére profesionálneho vojaka“. Liptovský Mikuláš:
Vojenská akadémia, 2001. s. 125 - 130. ISBN 80-8040-162-4.
2. Pomffyová, M. 2005. Pozitíva
a negatíva multikultúrneho
prostredia a ich vplyv na rozvoj edukačného procesu.
Plzeň: elektronický časopis Essentia.
redakce@essentia.cz. ISSN 1214-3464. :
číslo článku: 2/2005. 9s.
3. POMFFYOVÁ,
M., Kontríková, I. How to make communication process in Virtual work teams more effective. In:
Universitatea de Vest "Vasile Goldis"
4. POMFFYOVÁ, M. Aspekty e-learningu
v podnikovom vzdelávaní.
5. SUDOLSKÁ,
M. 2007. Využitie GIS pri modernizácii edukačného
procesu. In:
Sborník sympozia GIS Ostrava 2007. VŠB-TU
6. ZIMERMANOVÁ,
K. 2006. Foreign trade - what do expect small and medium sized enterprises. In:
Proceedings from international scientific conference „Small and medium sized
enterprises in era of globalisation and integration“. Banská Bystrica :
UMB, Ekonomická fakulta, 2006. ISBN 80-8083-296-X.