The Personal and the Personnel Adjustments and Costs to Small Businesses Entering the International Market Place (1993)

The small business sector long has been regarded as a major vehicle for economic growth in industrialized countries (Litvak 1988, Knight 1988, and Havenga 1988). Indeed, increased efforts to develop global markets have viewed small business as important to overall economic policy (Cadwell 1988, Litchfield 1988). Although the actual impact of international trade agreements on the small business sector is not yet clear (Rugman and Verbeke 1989), managers of small firms have responded enthusiastically (Bullock 1987, Cadwell 1988). In addition, a substantial amount of research has been conducted on the economic impact of exporting on the small firm. In general, these studies suggest that given careful product and market selection, intense commitment, and meticulous planning, firms that export generally exhibit above average growth, profitability, and stability (Edmonds and Khoury 1986; Beamish and Munro 1987, 1985, 1986). However, what is not well defined are the costs, in terms of training and other internal and lifestyle adjustments associated with becoming an exporter. Although Beamish and Munro (1985, 1987) allude to the problems of managing sales representatives in foreign locations and suggest that presidents of small manufacturing firms typically devote 20 percent of their time to the export function, the personnel aspects of entering the international marketplace have not been delineated. This article will explore two facets of personnel management. Prince's (1988) definition of a small business (50 or fewer employees) was used, and it was surmised that either the owner or president would be personally involved in the exporting function (Beamish and Munro 1987). Hence, the costs and skill acquisition needs, as they relate to the entrepreneur or senior manager, will be described. In addition, a more general approach will explore the costs and the necessity of job restructuring and new employee and skills acquisition. Rather than attempt to develop new theoretical constructs, this article will add to the knowledge base developed by Rugman and Verbeke (1989), Beamish (1988), Beamish and Munro (1987, 1986), Edmonds and Khoury (1989), and Beamish et al. (1985). The intent is to be of practical benefit in three ways. First, entrepreneurs working to compete internationally will be more aware of the costs, in terms of their personal time and relationships, as well as likely skill requirements, both personal and employee-related. The decision to export then can be made on other than purely economic considerations, because data will be developed that isolate factors that may influence changes in personal lifestyle and the lifestyle of employees. Second, curricula development may be affected. As the personnel aspects of exporting are not well known, these data could be integrated into present courses in small business creation and development. Third, this article will point out where more in-depth exploration is necessary. REVIEW OF THE LITERATURE Aside from the previously cited works by Beamish et al., Rugman and Verbeke, and Edmonds and Khoury, there is a dearth of supporting data on this topic. Thom (1990) has done some useful work in linking innovations on the social front to the goal and strategy development system. Cellich (1989) discussed training in a strategic sense, while Sullivan and Shavely (1989) mentioned human resources in a peripheral manner. None of this research stressed the personnel function. Of course, a large number of works explore the challenges and opportunities faced by small firms that export (Noriki 1988; Howard and Herremans 1988; Keynak, Ghauri, and Olofsson-Bredenlow 1977; Rossman 1984; Hester 1985; Darling and Postnikoff 1985; Vozikis and Mescon 1985; Sharkey 1989). Again, none of these articles strongly delineate the personnel aspects of exporting. Finally, the training literature was researched, with a similar result. Collins' (1990, 22) fine article on the British small business scene alludes to the cost to family life, but does not elaborate on the concept. …