Globalization, SMEs, and Digitalization: The Role of Marketing and

Entrepreneurial Behavior

Sunil Kumar Vohra

, Shashi Kant Gupta

, Susheel Kumar Singh

and Prabhdeep Singh

Amity University, Noida, India

Eudoxia Research University, New Castle, U.S.A.

Heera Lal Yadav Balika Degree College, Lucknow, India

Shri Ramswaroop Memorial University, Lucknow, India

Keywords: Small and medium-sized enterprises, Digitalization, Marketing, Entrepreneurial performance, Globalization.

Abstract: Digitalization is not a new phenomenon, but it is evolving and altering in ways that affect businesses

worldwide and open doors for Small and medium-sized enterprises(SMEs) to participate in the global

economy. Although digitalization, globalization and SMEs are major concerns for global and European

corporations alike, Digitalization and SMEs' international strategic choices, which have not been thoroughly

explored, are critical to investigate. Both globalization and the increase of SMEs with an international

presence are significant developments on a global scale.The multidimensional behavior of an entrepreneur

who is imaginative, proactive, independent, proactive, and willing to compete aggressively to capitalize on

market possibilities is known as entrepreneurial behavior. This research investigates at marketing and

entrepreneurial behavior have a role in the effects of digitalization and globalization on SMEs.To help SME

managers, this research offers hypotheses data and conclusions on the crucial roles of moderating the effect

of entrepreneurial behavior and marketing.

1 INTRODUCTION

SMEs are crucial to the growth and development of

both established and developing economies,

particularly when it comes to creating jobs, raising

gross domestic product (GDP), redistributing wealth,

and other factors (Mpi, D.L. 2019). Yet, survival and

improved SME performance rely on supportive

government policies, superior organizational

cultures, and entrepreneurial behavior that may

advance and build a nation's SME sector (Park, et al.,

2020).

The entrepreneurial orientation is a reflection of

the entrepreneurial behaviors of creativity, initiative,

and risk-taking. Entrepreneurial orientation (EO)

enables small organizations to find new business

prospects, and the finding of new chances strengthens

their distinction from other companies (Rajagopal, et

al., 2022).

In this sense, marketing leadership entails the

development of original marketing plans, the

utilization of professional sales associates, and the

vigilant administration of channels of distribution.

Since it often sits at the center of a company's overall

strategic plan, a strong marketing strategy may be the

most crucial element to success for most businesses

(Irudayasamy, et al., 2022).

The term "globalization reaction" is used to

characterize how seriously businesses take the

benefits and risks brought about by globalization.

Changes in corporate strategy, advertising methods,

and other quick fixes are all the result of

management's initiative (Naradda Gamage, et al.,

2020). In this Study, the impact of digitalization and

globalization on SMEs is studied, along with the role

played by marketing and entrepreneurial behavior.

Vohra, S., Gupta, S., Singh, S. and Singh, P.

Globalization, SMEs, and Digitalization: The Role of Marketing and Entrepreneurial Behavior.

DOI: 10.5220/0012908000003882

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd Pamir Transboundary Conference for Sustainable Societies (PAMIR-2 2023), pages 623-627

ISBN: 978-989-758-723-8

623

2 LITERATURE REVIEW

Table 1: Insights into SME Success: Marketing, Entrepreneurship, and Diversity Dynamics.

Author Findings

Nuseir, et al.,

2020

Empirical evidence linking digital marketing strategies to increased revenue generation among UAE's

SMEs.

Agyapong, et

al., 2020

Investigates how a global perspective might shape the connection between entrepreneurial behaviour and

financial success.

Al-Hakimi, et

al., 2022

Aims to examine the moderating role of marketing ethics and competitive intensity on the correlation

etween cost and

rofit.

Arzubiaga, et

al., 2018

Explored the moderate impacts of two primary sources of board diversity in family enterprises, family

engagement level and gender diversity, as possible strategies for boosting family firms' performance

when utilizing entrepreneurial ideas.

Genc, et al.,

2019

Investigates whether or not there are mitigating elements in the connection between EO and the success

of SMEs.

3 HYPOTHESIZED

RELATIONSHIPS

According to Webster's (1992) theory, an

entrepreneurial perspective predates Marketing plans,

which come before results. Figure 1 suggests the

hypothesized links.

H1: Marketing leadership strategy, quality

leadership strategy, and product specialization

strategy are all more likely to be pursued by a

company with a higher entrepreneurial orientation

than they are otherwise.

H2: The more aggressively a company pursues a

marketing leadership approach, the more likely it is to

acquire new technologies, adapt to the effects of

globalization, and make preparations to enter

overseas markets.

H3: There is a positive correlation between a

company's pursuit of a quality leadership strategy and

its interest in acquiring new technologies.

H4: The greater the company's emphasis on

product segmentation, the more likely it is to actively

seek out and acquire cutting-edge technological

capabilities.

H5: The performance of the firm improves as it

adds more technology.

H6: The firm performs better the more it adapts to

globalization, in general.

H7: The performance of the company improves as

it makes more preparations in advance to access

international markets.

Figure 1: Predicted Correlations Among Research

Hypotheses.

4 RESEARCH METHODOLOGY

The data collection process for this study occurred in

three distinct stages. Initially, semi-structured

interviews were conducted with a range of

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stakeholders, including business leaders,

policymakers, and industry advocates. These

interviews served to refine the research topics and

develop appropriate survey instruments. Following

this, a pilot test of the questionnaire was undertaken

involving 100 companies to ensure its effectiveness

and clarity. Subsequently, the finalized questionnaire

was distributed to 800 randomly selected

manufacturers operating within industries affected by

globalization. These industries were chosen based on

their relevance to electronic systems.

The selection criteria for these sectors

encompassed various factors such as the number of

workers, annual sales activity, market dominance,

and the duration of presence in the market. The aim

was to encompass a diverse range of companies

within the study sample. Upon analysis, no significant

differences were found across these industry

classifications, suggesting that contextual variables

within the industries did not substantially influence

the study's findings. The questionnaire distribution

was staggered into three waves, each separated by

approximately two weeks. Respondents were

incentivized to participate, resulting in a response rate

of 32%.

Out of the 273 completed questionnaires

received, 268 were deemed valid for analysis. To

assess nonresponse bias, comparisons were made

between the characteristics of responding businesses

and those of a random sample of 50 non-responding

businesses. This analysis found no statistically

significant differences, indicating that nonresponse

bias was unlikely to impact the study outcomes.

Measures were presented on a 7-point scale to elicit

granular responses. Exploratory factor analysis was

employed to derive dimensions within the marketing

strategy construct scale. Factors such as leadership in

marketing, quality, and product specialization

emerged from this analysis.

The study also employed various performance

metrics to assess the overall health of each company.

These measures underwent validation through factor

analysis in LISREL 8 structural equations

computational modeling, ensuring their construct

validity. A high level of fit was observed across all

models, indicating the robustness of the measures

used. Additionally, Cronbach's alpha tests

demonstrated that the multi-item measures were

either highly reliable or sufficiently reliable. Overall,

the comprehensive approach to data collection,

analysis, and validation employed in this study

provides confidence in the reliability and validity of

the findings presented.

5 RESULT AND ANALYSIS

The hypotheses were subjected to rigorous

examination through three distinct model testing

approaches. Initially, t-tests were employed to

scrutinize the primary study construct scores,

discerning disparities between highly globalized and

less globalized enterprises. Subsequently, a

combination of multivariate regression and

correlation analyses was employed to scrutinize and

substantiate our hypotheses. Finally, a comparative

analysis of the hypotheses testing outcomes for the

two categories of companies was conducted, enabling

a nuanced understanding of the impacts of

globalization on various business models. A subset of

Small and Medium-sized Enterprises (SMEs) with an

international footprint (n = 216) was initially selected

for analysis. These enterprises boasted an average

workforce of 143 individuals, with employee counts

ranging from 5 to 500. With an annual revenue

generation of $100 million, they exhibited export

activities to three countries, with approximately 25%

of their revenue stemming from exports. This subset

was subsequently bifurcated into two groups of equal

size (n = 108 each), based on a median globalization

score. All statistical analyses were predicated upon

these classifications, offering a structured framework

for assessing the hypotheses.

Furthermore, SMEs grappling with the challenges

of globalization may derive substantial benefits from

embracing an entrepreneurial mindset. Businesses

imbued with such a spirit are predisposed towards

employing innovative marketing tactics to penetrate

unexplored markets and navigate complex business

landscapes adeptly. This is particularly pertinent for

SMEs, as deploying imaginative advertising

strategies, prioritizing product quality, and carving

out a niche through product specialization are

strategies likely to yield favourable outcomes. The

findings of subsequent studies, delving into the

validation of the study's hypotheses, are presented in

Table 1. Evaluation of hypotheses H1–H4, all centred

on bivariate relationships, was conducted through

correlation analysis utilising Pearson's correlation

coefficient. With respect to hypotheses H5–H7,

which share a common dependent variable, the

necessity to test only one regression equation arose.

Both hypotheses H1a and H1b, asserting a significant

linkage between an entrepreneurial mindset and

success in marketing and quality management,

garnered substantial support (p < .01). Hypothesis

H1c, positing a positive correlation between an

entrepreneurial mindset and product specialization,

received moderate backing (p < .05). Notably,

Globalization, SMEs, and Digitalization: The Role of Marketing and Entrepreneurial Behavior

625

responses to globalization and proactive market

readiness emerged as pivotal strategies, as identified

by managers, in navigating the challenges posed by

globalization.

Table 2: Discussion of the differences between the groups

and the study hypotheses.

Implied

Relationship Hypothesi

High-

Globaliza

tion

Group Low-

Globaliza

tion

Group Assessme

Entrepreneurial

Behaviors

Marketing

leadership

H1a .41** 0.3

Support

Quality leadership H1b .26** 0.0

Support

Product

ecialization

H1c .21* .39

Support

Marketing

leadership

Technology

Acquisition

H2a .36** .31

Support

Globalization

res

onse

H2b .37** .22

Support

Internationalization

preparation

H2c 0.17 0.1

Not

signific

ant

Quality leadership

Technology

uisition

H3 0.15 .26

Support

Product

ecialization

Technology

acquisition

H4 .26** .25

Support

Technology

acquisition

Performance

H5 -0.7 0.1 Not

signific

ant

Globalization

response⇒Perform

ance

H6 .34** 0.1

Support

Internationalization

preparation⇒Perfor

mance

H7 .25** 0.0

Support

6 CONCLUSION

The study presents a cross-sectional snapshot of

business conditions, a method often criticised for

overlooking causal relationships in construct

interactions and failing to grasp the full complexities

of a dynamic system over time. Moreover, the

research was confined to a select few industries

directly impacted by globalization. Future

investigations should encompass a broader spectrum

of industries to validate the findings. Longitudinal

studies are recommended, comparing shifts in

business strategy with specific globalization

occurrences at defined junctures, offering insights

into the evolving relationship between marketing

strategies and performance over an extended

timeframe. Additionally, conducting in-depth

dialogues with industry leaders can yield valuable

insights for constructing case studies, enabling

thorough tracking of strategy and methodology

changes along with their underlying rationales.

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