Sme Malaysia

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Vol. 3, No. 1

International Business Research

Small and Medium Enterprises (SMEs) Competing in the Global Business Environment: A Case of Malaysia Mohd Zulkifli Muhammad (Corresponding author) School of International Business and Finance Labuan Universiti Malaysia Sabah, Labuan International Campus, 87000, F.T Labuan, Malaysia Tel: 60-87-460-498 E-mail: zulrider@yahoo.com

Abdul Kamal Char School of International Business and Finance Labuan Universiti Malaysia Sabah, Labuan International Campus, 87000, F.T Labuan, Malaysia Tel: 60-87-460-525 E-mail: abdkamal@ums.edu.my

Mohd Rushdan bin Yasoa’ School of International Business and Finance Labuan Universiti Malaysia Sabah, Labuan International Campus, 87000, F.T Labuan, Malaysia Tel: 60-87-466-714 E-mail: rushdan@ums.edu.my

Zakiah Hassan School of International Business and Finance Labuan Universiti Malaysia Sabah, Labuan International Campus, 87000, F.T Labuan, Malaysia Tel: 60-87-460-820 Abstract Small and Medium Enterprises (SMEs) play a vital role in the country's economic development. The current trend of economic growth and the rapid industrial development has made Malaysia as one of the most open economies in the world. In conjunction with the Ninth Malaysian Plan (2006-2010), the government is devoting and designing the SME development plan to assist the SMEs to meet the new business challenges in the competitive global business environment. The focus of this paper is the discussion of the competitiveness facing SMEs in the global business environment by examining the opportunities and supports from the government. Furthermore, this study also analyses the challenges of Malaysian SMEs in globalize market together with economics turmoil. Keywords: Small and Medium Enterprises (SMEs), Challenges, Competitiveness, Globalization 1. Introduction It is apparent that small and medium enterprises (SMEs) play a vital role in the economic development of a country. The current trend of economic growth and the rapid industrial development has made Malaysia as one of the most open economies in the world. In conjunction with the Ninth Malaysia Plan (2006-2010), the government is devoting and designing the SME development plan to assist the SMEs to meet the new business challenges in the competitive global business environment. There is no doubt that economic activities are moving in the direction of globalization. The system of production and distribution is evolving worldwide. The important role that international trade plays in connecting countries around the world is clear. Globalization creates new structures and new relationships, with the result that business decisions and actions in one part of the world have significant consequences in other places. Underlying and reinforcing these globalization trends is the rapidly changing technological environment, particularly in information processing, and telecommunications. Changes in telecommunications and data processing capabilities make it possible to coordinate research, marketing and production operation around the world. Almost instantaneous communications make it possible to trade financial instruments twenty-four hours a day, and thus more return-sensitive are location of resources within firms, industries and countries. 66

E-mail: zakiah_hassan78@yahoo.com

International Business Research

January, 2010

The growth of global markets stimulates competition and forces governments to adopt market-oriented policies, both domestically and internationally. Modern technologies have greatly reduced the cost of information and the capabilities to participate in the global economy. In fact, there is ample evidence that SMEs has not only flourished in domestic economies, but that their international presence has grown as well. An overview of SME participation in the global economy reveals at least three lines of activity: trade, technology, and investment. The most commonly discussed topic in SMEs international...
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