Book Review: SMEs as Global Operators; Theory of the Firm – A Capabilities Approach

This book represents a selection of papers presented at a conference dedicated to International Entrepreneurship at McGill University, Montreal in September 2000. The contributions are grouped around three themes. Part one deals with the internationalization process. It is concerned with the movement of small and medium-sized enterprises (SMEs) from a purely domestic trade perspective to an international one. Part two examines aspects of the internationalization of SMEs, in particular the public promotion of cluster development, the importance of ethnic networks in SME development and the rise of women entrepreneurs. The final section looks at how increasing internationalization is affecting management practices. The idea of a new transnational management elite is proposed, an elite that has more in common with its counterparts in other countries than it does with the mass of workers in its own country. In this section, the effect of e-commerce on management is reviewed and it is concluded that this is very much a double-edged sword. The title of the book is perhaps a little misleading. The bulk of the papers are to do with the problems of SMEs in an increasingly global business environment. However, the papers that do deal with entrepreneurship are in the main interesting and informative. In this context the contribution of Lituchy, Bryer and Reavley, who examine the problems facing women entrepreneurs in the Czech Republic and in Japan, is worthy of note, as is the essay by Menzies, Brenner and Filion. They look at entrepreneurship and the importance of social capital and networks among ethnic minorities in Europe, North America and Asia. Notwithstanding this comment, there is much of interest in this topical and useful addition to the literature. The rise of SMEs as global operators is a recent, but increasingly widespread and important development in the world economy. An important contribution of this book is to attempt to produce a model of SME internationalization. The editors argue that such a specific model is currently missing. Models developed for traditional large-scale multinational enterprises (MNEs), based around the work of Hymer or the idea of the ‘stages model’, do not wholly capture the diversity and subtlety of SME international development. Their ideas concerning such a model are marshalled in the final chapter. As small firms increasingly have to compete with global players, new forms of internationalization come forward. Collaborative networks, strategic alliances and integrated outsourcing are responses that challenge existing models of MNE development. The model is based on ‘special relationships’, the idea that smaller companies collude to produce an outcome greater than the sum of the parts. The term they have coined is symbiotic synergy, ‘to exemplify the higher efficiencies or outcomes associated with special relations’. To underpin this idea they use Sun Microsystems, Millennium Pharmaceuticals and Siebel Systems as examples that started from atypical beginnings. Globalization and Entrepreneurship is a well edited volume that brings together important aspects of the internationalization process with special reference to small and medium-sized enterprises. As it is dealing with a contemporary issue, this book will undoubtedly be of interest to the academic world, but there is also much to interest the business reader. Max Good Hull Business School Hull University, UK