GLOBALISATION OF BUSINESS ENVIRONMENT

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INTRODUCTION

According to the Uppsala/ Stage model exporting is the first step of the internationalisation process (Johanson & Vahlne, 1990:11). The model is based on the perception that enterprises gradually internationalise in an incremental manner through a series of stages starting with exporting and eventually expanding to other forms of internationalisation. Hence exporting became the most common mode of entry into foreign markets as it lays a critical foundation for advancement into other forms of international business (Morgan, 1997:68; Leonidou & Katsikeas, 1996:519; Hill, 2005:487). Exporting has a special status over other forms of internationalising. According to Czinkota (2002:123-124), exports are special to nations because they are the main support of international economic performance; they shape the public perception of the competitiveness of a nation and also determine (at least in the long term) the level of imports that a country can afford. Exports not only support international economic performance, but also contribute to GDP growth (Ahmed, Cheng & Messinis, 2007:10).
According to Ahmed et al. (2007:10), exports improve productivity growth through the following means: Enabling the adoption of foreign technologies Greater capital utilisation and utilisation of advantage of economies of scale and comparative advantage Helping create a conducive and stable macroeconomic environment through increasing employment, labour productivity and enhancement of the country’s external earning power The African Development Report (2004:127) also supports the distinctive character of exporting with regard to inducing growth. The report points out that exporting provides countries with foreign currency to pay for the import requirements for growth. Ruth (1998:274) also notes that exporting is the only form of internationalisation that contributes to the improvement of the balance of trade. According to Osland, Taylor and Zou (2001:156), enterprises in different countries use the exporting mode of entry for a variety reasons. In their study, they established that the USA managers chose exporting to gain economies of scale so that they could reduce costs in order to be able to cut the price to the consumer and also to minimise the resources committed to the business venture.
The Japanese managers on the other hand used exporting to gain first movers advantage, as exporting is the quickest means of entry into foreign markets. According to Czinkota (2002:123), exporting affords enterprises an opportunity for market diversification, thus providing stability, as an enterprise is not dependent on any particular market. In addition, exporting permits an enterprise to learn from competition, be sensitive to different demand structures, and lets an enterprise appreciate divergent cultures. Van Biesebroeck (2005:389) indicates that exporting enterprises are afforded greater opportunity to absorb foreign knowledge and as such become more productive than domestically oriented enterprises in the same location and industry. The literature indicates that exporting is important and the benefits accruing from it are less likely through other modes of entry and/or are fewer than when other modes are used. However, it is noted that enterprises are confronted with many constraints when they attempt to enter foreign markets (Tesfom & Lutz, 2006:277; Leonidou, 2004:280).
A number of studies have identified various export constraints or barriers inhibiting the entrance of enterprises into the international market place. Export barriers can be encountered by enterprises at different stages of internationalisation, that is, before enterprises engage in foreign operations (pre-export), in the early stages of entry into foreign markets and as experienced exporters (Morgan, 1997:73; Leonidou, 2004:281). Earlier studies have documented various export constraints/barriers faced by enterprises in developed countries (Kaleka & Katsikeas, 1995:499; Mahajar & Hashim, 2002:70; Leonidou, 2004:286; Tesfom & Lutz, 2006:277). Leonidou’s review (2004:281), based on studies from developed countries, classified export barriers according to the source, that is, barriers emerging from within the enterprise referred to as internal barriers and those from the host or home environment, referred to as being external. Leonidou (2004:281) further divides the internal barriers into functional, informational and marketing categories, while external barriers are separated into procedural, governmental, task and environmental categories.
Leonidou’s review (2004:286) did not only list barriers affecting the exporting, but consolidated the rankings of barriers according to their impact as rated by both exporters and non-exporters. He (Leonidou, 2004:296) found that the barriers that have a strong obstructing effect to enterprises were barriers pertaining to informational inefficiencies, price competitiveness, foreign customer habits and politico-economic hurdles. The analysis also showed that the frequency, intensity or importance of export barriers can vary according to different time, spatial and industry contexts. According to Tesfom and Lutz (2006:263), a number of studies that show how export constraints/barriers affect enterprises from developing countries have been conducted and findings published, to name a few, Weaver and Pak (1990), Brooks and Frances (1991) and Burgess and Oldenboom (1997).

TABLE OF CONTENTS :

• ACKNOWLEDGEMENTS
• SUMMARY
• LIST OF FIGURES
• LIST OF TABLES
• CHAPTER 1 – INTRODUCTION AND PROBLEM STATEMENT
  • 1.1. INTRODUCTION
  • 1.2. PROBLEM STATEMENT AND RESEARCH QUESTIONS
  • 1.3. RESEARCH SETTING
    • 1.3.1 Physical characteristics
    • 1.3.2 Economic environment
  • 1.4. LITERATURE REVIEW AND HYPOTHESES
  • 1.5. RESEARCH DESIGN
    • 1.5.1 The degree to which the research question has been crystallised
    • 1.5.2 The method of collecting data
    • 1.5.3 The power of the researcher to produce effects on the variables
    • 1.5.4 The purpose of the study
    • 1.5.5 The time dimension
    • 1.5.6 The research environment
  • 1.6. THESIS LAYOUT
  • 1.7. ABBREVIATIONS
• CHAPTER 2 – GLOBALISATION OF BUSINESS ENVIRONMENT
  • 2.1 INTRODUCTION
  • 2.2. EVOLUTION OF GLOBALISATION
  • 2.3. THE KEY DRIVERS OF THE GLOBALISATION PROCESS
    • 2.3.1. Market factors
    • 2.3.2. Competitive factors
    • 2.3.3. Cost factors
    • 2.3.4. Political factors
    • 2.3.5. Technological improvements in transport and communication
  • 2.4. IMPACT OF GLOBALISATION
    • 2.4.1. Impact on growth
    • 2.4.2. Impact on poverty
    • 2.4.3. Impact on environment
  • 2.5.THE ROLE OF THE KEY ACTORS IN THE GLOBALISATION PROCESS
  • 2.5.1. Demonstration and competition effects
  • 2.5.2. Labour mobility effects
  • 2.6. GLOBALISATION DEBATE
  • 2.7. CONCLUSION
• CHAPTER 3 – INTERNATIONALISATION OF ENTERPRISES
  • 3.1. INTRODUCTION
  • 3.2. THEORIES OF INTERNATIONALISATION
    • 3.2.1. Traditional theories
    • 3.2.1.1. The Uppsala/stage model
    • 3.2.1.2. Network theory
    • 3.2.1.3. Foreign direct investement theorories
    • 3.2.2. Emerging paradigms
  • 3.3. INTERNATIONAL ENTRY MODE
    • 3.3.1. Exporting
    • 3.3.2. International licensing
    • 3.3.3. International franchising
    • 3.3.4. Contract manufacturing
    • 3.3.5. Management contract
    • 3.3.6. Turnkey projects
    • 3.3.7. Greenfield
    • 3.3.8. Acquisition
    • 3.3.9. Joint ventures
  • 3.4. INTERNATIONAL ENTRY MODE SELECTION
  • 3.5. EXPORTING VERSUS INVESTMENT MODES
  • 3.6. CONCLUSION
• CHAPTER 4 – EXPORTING
  • 4.1. INTRODUCTION
  • 4.2. APPROACHES TO EXPORTING
  • 4.3. EXPORT BARRIERS
  • 4.4. EXPORT DEVELOPMENT PROCESS
  • 4.4.1. Export stimuli
  • 4.5. EXTERNAL EXPORT STIMULI WITHIN LESOTHO
  • 4.6. CONCLUSION
• CHAPTER 5 – RESEARCH METHODOLOGY
  • 5.1. INTRODUCTION
  • 5.2. PROBLEM STATEMENT AND HYPOTHESES
  • 5.3. SAMPLING FRAME OR TARGET POPULATION
  • 5.3.1. Sampling design
  • 5.4. DATA COLLECTION
    • 5.4.1. Nominal scales
    • 5.4.2. Ordinal scales
    • 5.4.3. Interval scales
    • 5.4.4. Ratio scales
  • 5.5. INSTRUMENT DESIGN
  • 5.5.1. Pre-testing
  • 5.5.2. Response rate
  • 5.5.3. Preparing data for analysis
  • 5.5.4. Validity and reliability
    • 5.5.4.1. Validity
    • 5.5.4.2. Reliability
  • 5.6. DATA ANALYSIS
  • 5.6.1 Descriptive statistics
  • 5.6.2 Analysis of variance
  • 5.7. CONCLUSION
• CHAPTER 6 – EMPIRICAL ANALYSIS AND INTERPRETATION OF RESULTS
  • 6.1 INTRODUCTION
  • 6.2 DEMOGRAPHIC INFORMATION
  • 6.3 VALIDITY
  • 6.4 RELIABILITY
  • 6.5 ANALYSIS OF VARIANCE
  • 6.5.1 Perceptions of managers in Lesotho based manufacturing enterprises towards international constraints
  • 6.5.2 Perceptions of managers of Lesotho based manufacturing enterprise towards distribution constraints
  • 6.5.3 Perceptions of managers in Lesotho based manufacturing enterprises towards financial constraints
  • 6.5.4 The relationship between exporting constraints, (namely international, distribution and financial constraints) and enterprise characteristics
  • 6.6 DESCRIPTIVE STATISTICS
  • 6.7 CONCLUSION
• CHAPTER 7 – CONCLUSION AND RECOMMENDATIONS
  • 7.1. INTRODUCTION
  • 7.2. PROBLEM STATEMENT AND LITERATUE REVIEW
  • 7.3. FINDINGS
  • 7.3.1 Demographic profile
  • 7.3.2 Factor analysis
  • 7.3.3 Analysis of variance
  • 7.3.4 Descriptive statistics
  • 7.4. RECOMMENDATIONS
  • 7.5. LIMITATIONS AND FUTURE RESEARCH
  • REFERENCES
  • APPENDIX

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