Globalization And Small And Medium Scale Industries

1.0 INTRODUCTION

1.1 Background Information to the Study

Every organization is struggling in order to survive in today’s competitive marketplace. Information technology revolution is changing the world and all aspects of businesses. The development in information technology and communication has resulted in many possible alternative solutions for managing global businesses effectively. Today’s business environment is extremely dynamic and experiencing rapid changes as a result of technological improvement, increased awareness and demands of electronic trade concept of globalization.

Globalization is a process of deeper economic integration between countries and regions of the world. It is the geographic dispersion of industrial and service activities (Riley, 2015). According to Rushikesh (2020), globalization is nothing but it is the adjustment of national economy with that of the world economy. It is the conversion of a national market into international one. In globalization, international mobility of factors of production is possible. In short, it is the integration of national economy with that of global economy. Globalization means globalization of marketing, production, investment and technology. Due to globalization there was a shift in market from seller’s market to buyer’s market. It is an advanced stage of the development of business. In globalization the whole world opens for exchange of capital, technologies, labour, information, transportation and the most important the marketing without any barriers or hindrances. It helps in bringing the world closer to economies of the world which helps in removing the differences of developing and developed countries. It helps in bringing the world closer to economies of the world which helps in removing the differences of developing and developed countries. Globalization takes place in three modes which are exchange of Trade of Goods and services, movement of capital and Flow of finance through exchange of capital of the world. In common parlance the globalization is limited up to integration of world economies, however the real meaning of Globalization was defined by the Economic policy of India introduced in 1990 (Kumari, 2020). The globalization process has changed the face of small and medium scale enterprise by means of economic integration and market liberalization.

Small scale businesses are the economic backbone of nations and they comprise the largest proportion of businesses in most economies as well as frequently offer the greatest potential for job creation (Mohd & Mohamed, 2013). SMEs can be defined based on certain criteria which include, turnover, number of employees, profit, capital employed, market share, asset value and relative size within the industry. One of the major focuses on small scale businesses is that these enterprises make remarkable contributions to the economies of both developing and developed countries (Oladimeji, Ebodaghe & Shobayo, 2017). In all developing countries, the small and medium scale industries play a significant role. Small and medium scale industries contributes for around forty five percent of the manufacturing output and around forty percent of the total export of a country in addition to generating employment in the country. According to Usman (2021), the development of small and medium enterprises must be seen as an attempt towards the achievement of a wider economic and socio-economic objective, as well as poverty alleviation. The enterprise also drives the country’s development as they create employment and contribute to the gross domestic product (GDP). Small and medium scale enterprises are expected to facilitate the growth and development of human and capital resources towards general economic development and making global impact (Oladimeji, et al., 2017).  Thus this study tends to examine the effect of globalization on small and medium scale industries….