Early theories on
globalization were written by classical economist whose main concern was not on
International trade out on the political economy of a nation. Duyile (2004)
explained that “after the industrial revolution, trade mainly exports and
imports between nations expanded”. As information and communication technology
advance and production becoming more complex, scholars and researchers started
writing about firms, producers and marketing strategies. Companies started
producing for foreign markets and more complex products introduced. The system
was described by Lilus (2001) as “mass production for mass market”. The control
and coordination efforts brought about multinational organizations involved in
production and distribution of goods and services across national
research has drawn attention to globalization and its effects on national
economy. As a result, a number of controversial views have been made. Questions
asked included Impact on economic growth and development, introduction and
expansion on small and scale business enterprise, political and social life of
developing and under-developed nations. Conditions under which local or
indigenous organizations choose to operate are also influenced by political,
economic and complex social relationships. Schults (2004) explained that
“Business activities are rapidly becoming internationalized as trade becomes
more global and products seek wider and international markets for their goods
Small and Medium scale
business enterprises in Nigeria are involved in various business activities and
the volume is greatly influenced by many factors. The success, survival, growth
and development of Small and Medium Enterprises (SMEs) can be determined by
level of interactions and influence from global operations. Entrepreneurship in
SMEs according to Wore (2004) is a significant factor in the process of any
country’s economic development. The role involves more than increasing per
capita output and income. It involves initiating and constituting changes in
the structure of business and society. The change is accompanied by growth and
increased output. Globalization can be said to have influenced Nigeria small
and medium scale enterprise either positively or negatively and may be with no
significant effect or relationship.
1.2 BACKGROUND OF THE STUDY
according to Ajayi (2005) refers to “increase over time in a country’s real
output of goods and services”. Output is measured by gross national product or
national incomes with SMEs have significant contributions. Economic development
implies not only real output but growth that is accompanied by changes in the
structure of a nation’s economy. This include the structure of business
organizations, national political and social structures, technical and
institutional arrangements by which output is produced and distributed as part
of economic development. dependence on globalization in some situations could
not be in a form of SMEs development to the extent that there is growth in
poverty. Within this view, Vernon (2001) said, “it is possible to have growth
without development as growth and development of business organizations are not
exactly the same”.
The economic history
of any nation to Osuji (2005) also explained that “no nation has ever developed
without an appreciable growth and involvement of international trade and
relations”. The role of globalization in national economy also exert influence
on the speed of growth of business organizations especially the SMES. Growth in
finance through direct foreign investment, fiscal and monetary policies, money
and financial institutions are influenced by International or global activities
which also influence a nation’s Small and Medium scale business enterprises.
Technology and production processes for example are “determinants of the rate
at which productivity capacity and income can grow (Buckley and Ghauri, 1999).
Studies have revealed that developing nations have had higher production
technology than the under-developed nations. Faster growth, more investment,
expansion of SMES comes partly from interdependence and globalization.
contributes to growth by improving the productivity of organizations. Prahalad
(2005) explained that “SMES activities are significantly higher in growing
economies especially in European and American nations”. This suggests a link
between economic development and SMES. The analysis of the relationship between
globalization and SMES varies and the effect can be streamlined according to
entrepreneurial skills, sources of finance, training and manpower development,
government policies and employment generation. However, the focus of this
research work would be streamlined. Globalization has been undertaken by a
number of authors and scholars including Mckinnon (1973), Gupta (1984), Vernon
(2001), Prahalad (2005) among others. In the studies, there is the idea that
globalization enhances a nation’s economic development through improvement in
production and distribution efficiency through technology transfer, reduction
in costs, availability of sources of funding g, material and financial
resources from more developed economies.
Ajayi (2005) quoting
Dr. Kwame Nkrumah, the then leader of Ghana that “African political and
economic interdependence will be worthless unless we use it to obtain economic
and financial independence”. Throughout the world, governments have taken
necessary measures to ensure the integration of economic activities more
closely into the machinery of carrying out policies on SMES. The roles of
globalization on SMES and a nation’s economy are influenced by a host of
factors. These include the characteristics of the nation’s monetary system,
organization of institutions and markets, political and economic environments
and level of economic development.
system from pre-colonial era to date was structured around general education
and the business was mainly to equip Nigerians with an education that prepares
them to become employees. Schools according to Onoh (2004) “do not equip
individuals to cope with demands and problems of an emerging technological
society”. Political and opinion leaders as well as students have found that
Nigeria educational system is bookish and restricted. It could be said to b e
irrelevant to the pressing economic, social cultural and entrepreneurial needs
of the nation. A research on the effect of globalization on Nigeria Small and
Medium scale industry is to examine education aspect, effect of globalization
through education, training and development of entrepreneurs of SMEs in
Nigeria. The study is to ascertain and determine the effect of globalization as
an avenue for cross – fertilization of ideas on SMEs in Nigeria. To know how
globalization efforts have assisted in promoting functional education for SME
entrepreneurship, for creativity, providing marketable and salable skills,
education for self-reliance and self-actualization and total independence.
1.3 SCOPE OF THE STUDY
In the history of
Nigeria since political independence, the nation’s under-developed economy has
made remarkable impact on Small and Medium scale enterprises’ development. Most
critics of Nigeria’s economic programmes cannot but attribute the problems to educational
system. Olannye (2002) holds the view that “teaching and learning of
entrepreneurship assist in the production and distribution of goods and
services compared to over dependence on imported products”. Since, 1999, under
a democratic system of government, Nigeria have experienced true trade and
investment opportunities due to globalization
The owner or
entrepreneur of a Small or Medium scale enterprise could in fact be an
illiterate, semi-literate or a person trained in a discipline order than
management science. An entrepreneur in the opinion of Steinthof (2003) is “a
person who starts or organizes a commercial enterprise especially in one
involving financial risk”. In modern day realities, individuals educated in
pure and applied sciences do find themselves in business management
responsibilities either by design or by accident. It is easier, less time
consuming, less waste generation that are more beneficial to the enterprise if
the organizer is equipped with basic principles of management.
The key position of
globalization in small and medium scale enterprises education for economic
growth has been widely acknowledged. Odebusuyi (2000) describes “SMEs as the
springboard for sustainable economic development”. One of the pressing problems
of SMEs in emerging nations of Africa and Asia is the lack of management
capability for planning and organization of bushiness organizations for
delivery of goods and services. Quality of SMEs and their management techniques
can be improved through the concept of globalization.
This research study
will focus on globalization effects on education and training for SMEs to
ascertain the effect of globalization on SMEs entrepreneurship. Competences
education and training related to SMEs status. Determine the content, design of
SME education as provided by globalization activities. The scope also include
entrepreneurs of SMEs in Lagos metropolis, commercial nerve centre of the
country in anticipation that the findings will be applicable to Nigeria SME
1.4 STATEMENT OF THE PROBLEM
and literacy involves entrepreneurs’ ability to learn, acquire specific skills
and general knowledge to operate and maintain business information. Small and
medium scale enterprises organized on bases of sound principles and guidelines
would be able to get fair and adequate information to work with. Todaro (2003)
insisted that when entrepreneurs are literate and discipline, they provide
enough managerial capabilities to monitor and direct the affairs of the business.
With poor educational
background of entrepreneurs of SMEs, many business decisions are not well
analyzed, poor record keeping, inadequate working capital arrangement,
inadequate exposure to explore opportunities. Management of an organization
largely depends on what Duyile (2004) described as “business know-how”.
Business know-how entails achievement drive, control mechanism, tolerance and
effective decision-making processes. Small business in Nigeria have potentials
and know-how for survival, success, growth and expansion. They have large
markets to penetrate, expand sales volume, maximize profit and with access to
various sources of financing. With poor, low educational background, they
stumble, collapse and fail.
Problem for survival
and growth of SMEs in Nigeria could result from inadequate planning, ignorance
of the concepts of globalization, technology and competition. These
organizations are constantly withdrawing and new ones entering business. Some
withdraw because business is doing badly and to some, because of other
opportunities for gain. Hisrich (1985) agreed that there are many reasons for
SMEs failures, withdrawals, survival and growth. “Globalization may have a significant
relationship with SMEs operations in Nigeria. The research study is to
ascertain if education and training of SMEs entrepreneurs contributes
positively to SMEs growth and development as influenced by globalization, to
determine, education as a concept of globalization and its effect on Nigeria
small and medium scale industry.
1.5 PURPOSE OF THE STUDY
It is the purpose of
this study to evaluate and appraise the roles and effects of globalization on
Nigeria Small and Medium Scale. The
study is structured and streamlined to examine globalization effects on the
growth and development of SMEs. Education on related variables like skills and
general knowledge on SMEs organization, legal aspects, government guidelines
and policies on SMEs as influenced by globalization concepts and philosophy.
The study’s purpose also stem from the interests to analyse and apply
philosophy of international concepts of developed nations to Nigeria’s system.
Approach to this
research study is skewed towards the orientation of education of the
entrepreneurs of SMEs as an integral part of the survival and development of
the business. Perhaps, because of the importance of SMEs in any national
economy, if a hundreds of SME operators in the sub-sector are asked questions
on operational, general, financial knowledge of SMEs as emphasized by
globalization, no less than ninety will claim ignorance of the concept and its
application. Joyce (2004) described small scale businesses as “the springboard
for sustainable economic development that is influenced by national and
International factors”, SMEs position can be illustrated as vehicles for
industrialization, poverty eradication, employment generation and economic
development. Consequently, operators and Nigeria entrepreneurs need training
and education on SME and globalization concepts for the sustenance and growth
of the organizations.
1.6 RESEARCH QUESTIONS
To provide a clear
understanding of the study’s statement of the problem, provide focus and
framework, and to assist in data collection and procedures, the following
research questions are formulated.
What is globalization and how does it
influence the survival, growth and development of Nigeria small and medium
What is the role of entrepreneurs’ education
and awareness of globalization and to what extent does it affects business
How is small and medium scale business in
Nigeria influenced by globalization?
What is the relationship between globalization
and SMEs and how does it affect the operators and entrepreneurs?
Are Nigerian small scale business
entrepreneurs trained and educated on business management and globalization?
To what extent has education influenced young
Nigerians to own and manage their small scale businesses and has globalization
contributed to such decisions and management of the business?
What is the effect of globalization on Nigeria
small and medium scale industry?
What is the importance and relevance of SME
and globalization to a nation’s economy especially the economic development of
1.7 AIMS AND OBJECTIVES
research study has among its aims and objectives the following:
To determine the meaning and operational
system of globalization, small and medium scale business enterprises.
To determine how the training and education of
Nigeria young entrepreneurs assist in the establishment, management, growth and
development of small and mediums scale enterprises.
To ascertain how small business organizations
in Nigeria are structured and organized for optional results and efficiency as
influenced by globalization.
To evaluate effects of SMEs entrepreneurs’
education and skills to manage resources, maximize profit, sales and production
volume, and to enlarge market share.
To ascertain if entrepreneurs level of
education can enhance management of SMEs to operate at national and
To know the effect of globalization,
performance rating, management efficiency and where necessary to recommend how
performance can be improved on to ensure survival and growth of small scale
businesses in Nigeria.
To know the influence of globalization on SMEs
in Nigeria in relation to technology transfer, exploring market and marketing
opportunities, sources of funds, management strategies and economic variables.
To determine the role of modern information
communication technology to globalization, education and tracing of Nigeria
entrepreneurs and SMEs.
1.8 RESEARCH HYPOTHESES
The following research
hypotheses are assumptions upon which data and information are collected, analyzed
for interpretations. The Null and alternative
stated such that the acceptance of one would means the rejection of the
other. The assumptions are also stated
to guide data collection and determine statistical tool for analysis and
1. HO: That globalization does not influence the
technology of small and medium scale enterprises in Nigeria.
2. H1: That globalization do influence the
technology of small and medium scale enterprises in Nigeria
1.9 SIGNIFICANCE OF THE STUDY
The research study is
positioned to appraise the impact of globalization on Nigeria’s small and
medium scale enterprises industry. The appraisal and study is to assess
globalization on the education and training of Nigeria entrepreneurs for
efficient system of SMEs, the purpose of determining how the nation’s economy
has responded to global trends in educating Nigeria entrepreneurs in financial
and monetary, technological advancement, production capacity and market
expansion principles and concepts.
The study is also
significant as it involves identifying and defining globalization processes of
educating and creating awareness, skills, knowledge, capacity building and
effects on production and distribution of goods and services by Small and
Medium Scale enterprises. Among various theories, no particular concepts can be
said to be wholistic and sufficient to appraise globalization and SMEs
influence on a developing economy. Consequently, this research study borrowed
heavily from management, International studies, administration in structural
composition and analysis of the effect of globalization on Nigeria’s SMEs
The study is
significant in its attempt to appraise education and training variables to the
roles and objectives of globalization to SMEs in Nigeria. Variables adopted for
analysis include technology, market, labour, investment opportunities,
constraints and challenges. The study is however descriptive in nature and
therefore embraces detail description of globalization, small and medium scale
enterprises, entrepreneurship, training and education. The study is also
expected to help fill the gaps of unidentified variables created by previous
studies. To realize this, the study attempted providing a clear and vivid
understanding of the relationship between globalization and performance of SMEs
entrepreneurs’ education and training.
The research work is
positioned to increase and expand the knowledge of performance and survival or
otherwise of SMEs through entrepreneur education and training on globalization.
The study is to provide a platform upon which benefits of globalization can be
realized, wherein SMEs policies can be re-positioned in terms of training on
skills acquisition programmes, planning, goal setting and implementation. The study
is also significant as it will enhance the understanding of globalization, its
strategies and philosophy on education of entrepreneurs to benefit individuals,
corporate organizations, government agencies and national economy.
1.10 DEFINITION OF TERMS
Small and medium scale
enterprise as an entity with no corporate identity, where the entrepreneur is
liable to business actions, decisions and liabilities, SMEs established by one
or group of persons to make and provide goods and services with the aim of
making and maximizing profit. Also used synonymously to business organization
are SME, concern, organization and business.
Human and material
expansion, capacity building, extension of business operations resulting from
education and training on globalization, use of operational standards,
adherence to given regulations and guidelines on business management, expansion
of business activities due to SME entrepreneurs know-how, knowledge and skills
formally or through informal system.
The inflow of capital
resources from foreign investors or foreign government for the purpose of
assisting SMES in production of goods and services and their distribution, the
flow of financial and material resources in and out of a country for investment
purposes and specifically on SMEs.
distribution and consumption of goods and services in a country, it entails
production capacity, channels of distribution, consumer’s behaviour, small and
medium scale business and rate of consumption. Economy of a nation that
includes real and financial sectors.
Small and medium scale
entrepreneur’s attitude, mental state of mind, general knowledge and skills
that propel him or her to act and operate the business in a particular way;
knowledge and skills through which an entrepreneur focuses on business
information, management, operations, production
entrepreneurs’ mind, actions and behaviour when investment drive and motivation
are blocked, stopped or prevented, inability to attain predetermined business
objectives and goals. SMEs’ standard and target set by the entrepreneur
deprived by lack of education, training and information.
distribution and consumption of goods and services at international level,
business global activities that emphasize technology transfer, trade across
national boundaries, even distribution of resources and availability of scarce
products, global business activities including training and education of
entrepreneurs to stimulate economic activities.
Utilization of human
and material resources by small and medium scale business management to
survive, grow and develop. Integration of general education, training for
specific skills acquisition. Education and skills of entrepreneurs to enhance
business expansion, performance and for enhanced scope of operations.
indicators like poor clothing, insufficient food, crowded accommodation, dirty
shelter, low level of education and illiteracy, brief life style, low income
that falls below standard. Living less than a standard that propels an
individual to be discipline and go into ownership of a small scale business.
Better and enhanced
utilization of SMES resources matched with better work methods, procedures and
waste saving devices. Entrepreneurs’ predetermined target for efficient
operations and maximizing profit.
Process of encouraging
and effecting transfer of skills, knowledge experience and technology, transfer of knowledge and skills from one
party to another aimed at improving performance for small scale business
survival, growth and development.
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