- Tae-Young Jun (Gyeongsang National University) - Yong-Hwan Byun (Hallym Universit)
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With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Transfer pricing is the process by which a multinational corporation calculates a price for goods and services that are transferred to affiliated entities. Consider a Korean electronic enterprise that buys supplies from its own subsidiary located in China. How much the Korean parent company pays its subsidiary will determine how much profit the Chinese unit reports in local taxes. If the parent company pays above normal market prices, it may appear to have a poor profit, even if the group as a whole shows a respectable profit margin. In this way, transfer prices impact the taxable income reported in each country in which the multinational enterprise operates. It's importance lies in that around 60% of international trade involves transactions between two related parts of multinationals, according to the OECD.
The purpose of this study is to explore the relationship among entrepreneurs' illegality acceptance business purposes, venture firms' performances. The existing literatures on illegality corruption have largely discussed on a macro-level very few attempts have been made on a corporate-level. Particularly, it is difficult to find these studies on venture firms. Many studies on entrepreneurship have been showing empirical evidence that a positive relationship between entrepreneurs' capital, such as education experience, business performances exists.
However, it is hard to find that any studies have explored the influence on firms' performances of unconventional forms of entrepreneur capitals, such as corruptive illegal behaviors. Recently, Aids van Praag (2007) analyze whether illegal entrepreneurship experience can be a predictor for the level of business performance, expecting a positive relationship. Their results indicated that illegal entrepreneurship can not be associated with business performance in general. In this paper, we attempt to analyze whether entrepreneur's illegality acceptance business purposes affect venture firms' subjective financial performances. In general, we expect a negative relationship between illegality acceptance firm's performances. We further expect that interactions between entrepreneurs' illegality acceptance business purposes will significantly affect firm's performances.
Even though many entrepreneurs frequently express the need of corruption illegality for their business in real world, few empirical studies have quantified the relationship between illegality acceptance business purpose business performances. However, very few empirical studies have measured the relationship among entrepreneur's illegality acceptance, business purpose, business performances. In addition, no empirical studies have attempted the interaction effect of illegality acceptance business purpose on a firm's performance. The objective of our study is to fill this knowledge gap. Based on the relevant economic psychological literature, we proposed four hypotheses as follows.
Hypothesis 1 : Entrepreneur's illegality acceptance will be negatively related to venture firm's performances.
Hypothesis 2 : In the purpose of business, achievement-seeking will be positively associated with venture firm's performances.
Hypothesis 3 : In the purpose of business, money-seeking will be negatively associated with venture firm's performances.
Hypothesis 4 : Interaction effects between illegality acceptance business purposes will be significantly related to venture firm's performances.
In order to test these hypotheses, we ed all 300 independent companies on the Daedeok Cluster Venture List of 2005(these are situated in Daejeon city). We phoned the CEOs or highest-ranking officers of these firms sent questionnaires to them. 90 firms replied to the survey(a response rate of 30%). We assured that the responses would be kept completely confidential. Firms ranged from 3 to 210 employees in size, with a mean of 44 employees. Also, firm age ranged from 1 year to more than fifteen years old, with a mean age of 4.8 years. Our sample included firms from four industries: 19 of IT manufacturers(21.1%), 11 of computer related firms(12.2%), 35 of software firms(38.9%), 25 of other industrial firms(27.8%).
The four variables such as illegality acceptance, money seeking, achievement seeking, subjective performance were measured using multi-item indexes, so we did reliability validity analysis. The Cronbach alpha coefficients for this study ranged from 0.63 to 0.84, all within acceptable ranges described in the literature for study. With respect to convergent validity, all items loaded at 0.61 or higher with their corresponding constructs, which is considered very significant. Lastly, all of the items loaded higher on their predicted constructs than on their cross loadings, indicating discriminant validity was achieved.
Hierarchical regression analysis was used to test the hypotheses. Before we conducted the analysis, the correlation coefficients were estimated to detect any multicollinearity among our independent variables. The correlation coefficients show a low to moderate degree of multicollinearity among the independent variables. we transformed the variables for firm size to correct for non-normality due to positively skewed distributions. The natural logarithm of the value was used in the hierarchical regression analysis. In addition, in order to reduce potential problems of multicollinearity, the components of the interaction term to test Hypothesis 4 were stardized before multiplication.
All regressions control for the size age of the firms, also for industry, growth stages types of startup, in the latter case using dummy variables. Overall, the results showed that entrepreneur's illegality acceptance was negatively related to firms' subjective performance but not to firms' financial performance(thereby rendering weak support for H1). Regression results also indicate that significant evidence for a negative relationship between business purpose, i.e., entrepreneurs' money-seeking, firm's performances(thus supporting H3). However, firm's performances business purpose, i.e., entrepreneur's achievement, are not significantly related to each other(thereby rejecting H2).
In addition, we found that negative associations between firms' performances the interactions between entrepreneurs' business purpose illegality acceptance. More specifically, interaction between illegality acceptance money-seeking is negatively associated with subjective performance. Interaction between acceptance of illegality achievement-seeking is negatively associated with financial performance(thus partially supporting H4). These results of interaction effect mean that a entrepreneur with higher acceptance of illegality with higher money-seeking or achievement-seeking at same time can significantly reduce firm's performance.
In general, our results show negative association between entrepreneur's acceptance of illegality business performance as measured by financial non-financial items. The results also show strong evidence for a negative association between entrepreneur's business purpose(in case of money-seeking) business performance. Furthermore, our findings indicate that entrepreneurs' illegality acceptance firm's performance are more negatively related for entrepreneurs who have higher money-seeking or achievement-seeking purpose of business. Existing studies related to entrepreneurship have treated entrepreneur capital such as education experience as important factors for explaining the venture firms' performances. This study suggests that entrepreneurs' psychological behavioral capitals can be important factors in explaining the venture firms' performances.
Nevertheless, the study has a few limitations. First, the sample recruited from Daejeon is not the representative of domestic venture firms. Thus it does not cover all the regions in Korea the results may not apply to all sectors of venture business. Second, this study relied upon questionnaire-based self-reports. Respondents may not be able to report accurately about themselves their firms' performance. Because the use of a mail survey is a legitimate research approach, it may not adequately capture the subtle features of organizational illegality. In addition, all the measures that are obtained from a self-report can create the potential for common method variance. Third, we did not specify causal directions in developing testing hypotheses because the current study has the limitation of cross-sectional design. We hope that future studies will deal with such issues more rigorously using longitudinal data other types of study designs to better investigate causal relationships.
The purpose of this research is to explore differences between small medium-sized companies large-sized companies in the impact of human resource innovativeness(HRI), learning orientation(LO), HRI-LO interaction on innovation effect business performance. Although learning orientation has long been considered as a key factor influencing good performance of a business, little research was devoted to exploring the effect of HRI-LO interaction on innovation effect business performance. In this study, it is investigated whether there is a synergy effect between innovative human workforce learning orientation corporate culture, in addition to each by itself, to generate good business performance as well as a success of new innovations in the market.
Research hypotheses were as follows, including H1) human resource innovativeness(HRI), learning orientation(LO), interactions of HRI LO(HRI-LO interaction) positively affect innovation effect, H2) there is a difference of the effect of HRI, LO, HRI-LO interaction on innovation effect between large-sized small-sized companies, H3) HRI, LO, HRI-LO interaction, innovation effect positively affect business performance, H4) there is a difference of the effect of HRI, LO, HRI-LO interaction, innovation effect on business performance between large-sized small-sized companies.
Data were obtained from 479 practitioners through a web survey since the web survey is an efficient method to collect a national data at a variety of fields. A single respondent from a company was allowed to participate in the study after checking whether they have more than 5-year work experiences in the company. To check whether a common source bias is existed in the sample, additional data from a convenient sample of 97 companies were gathered through the traditional survey method, were used to confirm correlations between research variables of the original sample the additional sample. Data were divided into two groups according to company size, such as 352 small medium-sized companies with less than 300 employees 127 large-sized companies with 300 or more employees. Data were analyzed through t-test regression analyses.
HRI which is the innovativeness of human resources in the company was measured with 9 items assessing the innovativenss of practitioners in staff, manager, utive-level positions. LO is the company's effort to encourage employees' development, sharing, utilizing of knowledge through consistent learning. LO was measured by 18 items assessing commitment to learning, vision sharing, open-mindedness. Innovation effect which assesses a success of new products/services in the market, was measured with 3 items. Business performance was measured by respondents' evaluations on profitability, sales increase, market share, general business performance, compared to other companies in the same field. All items were measured by using 6-point Likert scales. Means of multiple items measuring a construct were used as variables based on acceptable reliability validity. To reduce multi-collinearity problems generated on the regression analysis of interaction terms, centered data were used for HRI, LO, Innovation effect on regression analyses.
In group comparison, large-sized companies were superior on annual sales, annual net profit, the number of new products/services in the last 3 years, the number of new processes advanced in the last 3 years, the number of R&D personnel, compared to small medium-sized companies. Also, large-sized companies indicated a higher level of HRI, LO, HRI-LO interaction, innovation effect business performance than did small medium-sized companies. The results indicate that large-sized companies tend to have more innovative human resources invest more on learning orientation than did small-sized companies, therefore, large-sized companies tend to have more success of a new product/service in the market, generating better business performance.
In order to test research hypotheses, a series of multiple-regression analysis was conducted. In the regression analysis examining the impact on innovation effect, important results were generated as : 1) HRI, LO, HRI-LO affected innovation effect, 2) company size indicated a moderating effect. Based on the result, the impact of HRI on innovation effect would be greater in small medium-sized companies than in large-sized companies whereas the impact of LO on innovation effect would be greater in large-sized companies than in small medium-sized companies. In other words, innovative workforce would be more important in making new products/services that would be successful in the market for small medium-sized companies than for large-sized companies. Otherwise, learning orientation culture would be more effective in making successful products/services for large-sized companies than for small medium-sized companies. Based on these results, research hypotheses 1 2 were supported.
In the analysis of a regression examining the impact on business performance, important results were generated as : 1) innovation effect, LO, HRI-LO affected business performance, 2) HRI by itself did not have a direct effect on business performance regardless of company size, 3) company size indicated a moderating effect. Specifically, an effect of the HRI-LO interaction on business performance was stronger in large-sized companies than in small medium-sized companies. It means that the synergy effect of innovative human resources learning orientation culture tends to be stronger as company is larger. Referring to these result, research hypothesis 3 was partially supported whereas hypothesis 4 was supported.
Based on research results, implications for companies were generated. Regardless of company size, companies need to develop the learning orientation corporate culture as well as human resources' innovativeness together in order to achieve successful development of innovative products services as well as to improve sales profits. However, the effectiveness of the HRI-LO interaction would be varied by company size. Specifically, the synergy effect of HRI-LO was stronger to make a success of new products/services in small medium-sized companies than in large-sized companies. However, the synergy effect of HRI-LO was more effective to increase business performance of large-sized companies than that of small medium-sized companies. In the case of small medium-sized companies, business performance was achieved more through the success of new products/services than much directly affected by HRI-LO.
The most meaningful result of this study is that the effect of HRI-LO interaction on innovation effect business performance was confirmed. It was often ignored in the previous research. Also, it was found that the innovativeness of human workforce would not directly influence in generating good business performance, however, innovative human resources would indirectly affect making good business performance by contributing to achieving the development of new products/services that would be successful in the market. These findings would provide valuable managerial implications specifically in regard to the development of corporate culture education program of small medium-sized as well as large-sized companies in a variety of fields.
- Young Woo Min (Soongsil University) - Heon Deok Yoon (Soongsil University)
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This study has attempted the analysis on the Korean small medium manufacture enterprises which conducted business activities for more than 2 years by making investments on Vietnam in order to examine the determining factor of its effects on the investment result of the direct investment small medium enterprise advanced into Vietnam. To put it concretely, this study’s questions are as follows. First, how are the determinants of the foreign direct investment performance under other environment like Vietnam different from factors in existing theories?
Second, how does the extent of production globalization affect to the performance in accordance with globalization progress of multinational enterprises?
Third, from the viewpoint of network, is the global integration good for performance? or is the localization good? which is better for performance?
Fourth, what is the suggestion through the analysis of determinants of performance?
With priority given to the enterprises, the question investigation has been carried into effect, the regression analysis analysis of variance has been used as the analytical method.
With priority given to the Korean small medium manufacture enterprises advanced into Vietnam, this study conducted the analysis on location-specific advantage, firm-specific advantage, global integration localization level, in order to find out their influence power over the investment result. Also, the influence factor of results on those enterprises has been observed by divided the form of investment motive into the domestic market oriented the global sourcing oriented investment change in its influence factor in case of the multinational enterprise.
The results of actual analysis can be summarized as follows:
At first, upon the relation between location-specific advantage performance, labor productivity are significant for positive performance whereas market trait, local procurement level have no influence. also the market potential would be determinant of performance for investors opening domestic market.
Secondly, upon the relation between parent firm`s factor performance, globalization level internationalization experience(in case of multinational enterprises) give `+' effect whereas competitiveness level do not influence.
Hence, performance is created by maximizing relativity efficiency among countries through geographical diversification. also the reason why competitive power has no influence on the performance seems to be caused by that many firms make the profit by moving the manufacturing facilities, already entered into the mature stage, to Vietnam that has cost competitiveness. Therefore, strategy of manufacturing the stardized products is needed for Vietnam investor companies better than being high quality strategy due to considering the low level of local Vietnamese technical resources raw materials.
Thirdly, as trait factor of affiliated companies manufacturing technical level influence positively but production period has no influence with performance.
Fourthly, the relation among global integration, localization level performance. The level of global integration in the business strategy fields does not influence directly whereas in the business management fields such as recruitment extension of equipment, global integration has negative impact on the performance. However in the t-test between high low level integration companies in the business strategy fields raise better performance. Consequently in the perspective localization would be always advisable.
The results presented in this paper suggest as follows:
Firstly, items suitable to investment in Vietnam are fields that maintain a certain degree of the competitive power in Korea can improve the manufacturing technique continuously, inconsideration of Vietnam's market trait technical manpower level, stardized goods rather than high-tech's are more suitable.
Secondly, many current invested firms mainly show the outcome on the basis of low cost labour. However, they say their main bottlenecks are rapid increase of wage labour management problem, also as Vietnam government promote a plan to revise the labour law to be consistent with ILO rule before the year 2011, the cost reduction oriented investment is not desirable. Rather, such a long-term strategy as the extension of foreign manufacturing area through the geographical diversification is needed.
Thirdly, FDI firms for opening up the local market also should be able to secure the economies of scale through the export to neighbour countries, considering the Vietnam's market size, also their products should possess the special characteristic different from Vietnam's local product, considering the notion of preferring a foreign made goods.
Fourthly, as the global integration strategy of an affiliated company, to enlarge the localization step by step from the recruiting in the beginning, equipment investment, pricing, to the marketing like advertising, distribution etc. rather than to strengthen the global integration would be more desirable, because the Vietnam's market environment is different from other countries.'
To backup the suggestion of these kind business-strategic sides, it is suggested that gov’t policy also is needed to replenish as follows.
First, as world business enterprises are promoting the globalization strategy following with WTO system the domestic productive capacity of Korean companies invested in Vietnam is nothing but 13.6%, our small medium enterprises support strategy also should support not only domestic production operation but international activities. That is, our financial support, R&D support assurance support system are targeted only domestic production activities, however, it is needed to enlarge the supporting area more aggressively to the activities between the foreign investment companies domestic businesses between foreign investment companies the 3rd national companies, keeping step with Korean companies’ geographical diversification promotion.
Second, the existing internationalization support programs for small medium business, such as foreign investment support center, foreign incubating support program, also support by ing the target item through each nation’s market survey, but inter-regional joint support program is needed to support the wider range’s strategic specialization in production including neighbor countries.
Third, as the foreign investment enterprises in Southeast Asia has concentrated the productive efficiency on the basis of the low wages, the backup of technical manpower’s supply is needed, however, there is bottleneck in securing the technician. So it needs to review the technical education training program for foreign worker by making use of domestic declining industries technician.
However, this study has some limits.
First, Korean small medium enterprises’ investments on Vietnam are still early stage most of them invested for global sourcing. Therefore, there are limit to examine closely the difference of determining factors of its effects on the investment for opening the domestic market, because of observation’s limitation. also, as the investors still concentrate on some industries, I could not examine the difference by the characteristics of industries' specification.
Second, in order to analyze the effect of global integration level on performance, I divided the business activities into the strategy field the management field, classified product planning, pricing, distribution management etc, into the strategy field. However, as it can be seen as classification by function, it needs to study the global integration level by subdividing in detail according to the business characteristics in future.
This paper explores that an effect of entrepreneurial activity(start-up) has impacted on job creation by employing Korean regional data. Such a study has been rarely reported in the literature in Korea, whereas a big bunch of researches stored in some OECD countries such as U.S.A., U.K., Germany, etc. A contribution of this paper can be said to find first empirical evidence on positive relationships between entrepreneurial activity employment in Korea. The hypothesis, higher entrepreneurial activity(or entrepreneurship), higher economic growth more job creation, has been argued in the literature in recent. Under the hypothesis, countries(or area) associated with higher entrepreneurial activities may enjoy higher growth more job opportunity. A famous economist, Schumpeter, already asserted entrepreneurs played a key role or creative destruction in economic development. Entrepreneurs who invented breakthrough technology or perceived a big potential profit opportunity may establish new firms, which leads to promotion of employment productivity.
A consolidated research team called Global Entrepreneurship Monitor(GEM) was launched in order to confirm the hypothesis that entrepreneurial activities might promote growth employment in 1999. The GEM report showed that entrepreneurial activities have enhanced economic growth created jobs in many countries such as U.S.A., U.K., Italy, Japan, Israel, etc. The result of the GEM project was very similar to the existing researches investigated by many pioneers such as Birch(1979), Davis et al.(1996), Acs et al.(1999), Davisson et al.(1999), Acs Armington(2004), Audretsch Keilbach(2004, 2005), Audretsch et al.(2006), SBA(1998, 1999, 2005), among others. Thus many governments of OECD countries have supported small medium enterprises as an alternative deriving strategy to create new jobs to stimulate economic development by encouraging new establishments after oil crisis in 1970s.
The objective of this paper is to investigate via empirical estimation how entrepreneurial activity affects employment in Korea by using Korean regional data. According to the empirical result, I found that entrepreneurial activity has created job opportunity in Korea as done in the foreign countries such as U.S.A., U.K., Germany, Netherl, among other countries. According to my research, the entrepreneurial activity(establishment) has impacted differentially on promoting employment by regions. That is, the job creation opportunity made by establishment with employees was greater in metropolitan area than in rural area. Such a result seems to be closely related to the structural status. That is, the ratio of start-ups with employees to the regional population was shown higher portion in metropolitan area than in non-metropolitan(rural) area. While the opportunity of job creation from the establishment without employees was shown greater in rural area rather than in metropolitan area.
Theoretical rationale how entrepreneurial activity stimulates employment opportunity is provided its empirical model is also derived. The empirical model is derived from the representative firm's profit maximization function, including the entrepreneurial activity variable in the production function. From the first order condition of the profit maximization, labor dem function is constructed as follows in terms of taking logarithm for each variable.
(1)
Where L; labor dem, w : real wage, E : entrepreneurial activity, H : human capital, D : regional aggregated dem, X : other control variables such as enterprise's size or agglomeration effect. The subscript ‘j' indicates region ‘t' time series. In Eq.(1) I assumed that entrepreneurial activity is exogenous variable, which makes it possible to be estimated by reduced form equation.
Establishment associated with entrepreneurial activity keeps long run influence on labor market : employment is increased at beginning stage of establishment but it will be offset partially at intermediate period because of the entry effect in the concerning market. Due to dynamic market's competition process, some enterprises will be bankrupted, which results in reducing employment opportunity. However, enterprises survived in the market will hire more employees to grasp more profit in the long run. Mueller et al.(2006) showed that entrepreneurial activity might affect differentiated impact on employment according the three dynamic stages : they called 'direct effect' for the beginning stage, ‘displacement effect' for the intermediate stage 'induced effect' for the long run period. Therefore the total effect should be summed up the whole dynamic impacts accumulated. To incorporate the dynamic influence Almon lag model is additionally employed as follows.
(2)
Empirical equations (1) (2) were estimated separately by using statistical software Eviews 5.0 program. Empirical model (1), based on the panel data, was estimated by employing fixed effect model of the panel data. Generally speaking, statistics(e.g., high R2 t-statistics) related to regression parameters of coefficient are shown good enough to be accepted safely. Most coefficients estimated are also shown appropriated signs consistent with theoretical rationale.
A set of data employed in the empirical model is summarized as follows. Index of employees of the non-farm forest fishing industries taken logarithm is used as dependent variable. Several explanatory variables(taken logarithm) are used including labor forces, wage, number of establishments per 1000 regional population(proxy variable for entrepreneurial activity), human capital, R&D investment, enterprise's scale agglomeration variable, regional income, so on. I classified region into two groups or metropolitan area(7 big cities) non-metropolitan(rural) area(9 provinces) from 1995 to 2005. One of the contributing points is to use appropriate proxy variable for the entrepreneurial activity. I used three types of entrepreneurial activity variables : (i) number of establishments with employees divided by regional population 15 years over by region, (ii) number of establishments without employees divided by regional population 15 years over by region, (iii) combination of (i) (ii) mentioned above.
The main findings are summarized as follows. First, it was shown that entrepreneurial activity(start-up) has promoted employment in Korean their pattern of dynamic impact process was very similar to the cases of foreign countries including U.S.A., U.K., Germany, Netherls, etc. Second, entrepreneurial establishment has shown different pattern of impact on job creation by region : the higher entrepreneurial start-up area, the higher job creation. In addition, the entrepreneurial start-up’s impact was shown different types by regions. Urban cities have enjoyed higher job creation associated with higher entrepreneurial start-ups, in which establishment with employee was shown higher in metropolitan urban areas than in rural areas. Third, human capital is also shown important factor to create new jobs in metropolitan areas, which is consistent with existing researches. Fourth, job creation was positively related to firm's size. Large scaled firms survived in the market or new establishments with more employees at beginning stage usually creates more employment opportunity. It suggests that government had better support intermediate sized firms to promote the capacity of employment in Korea. At present, government has supported impartially small medium sized enterprises regardless of firm's size. Fifth, dynamic impact process of the entrepreneurial start-up on job creation was shown variously according to the dynamic process stages(short-run, intermediate, long-run). At the beginning stage the entrepreneurial impact on job creation was shown jump up trend, but its effect diminished over time, its impact increased again in the long-run, implying that firms survived in the market enhanced their competitiveness , in turn, create more jobs.
- JaeSung Park (Chonnam National University Business Incubator) - Chul Lee (Chonnam National University Business Incubator) - JaeJon Kim (Chonnam National University)
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As business incubation centers (BICs) have been operating for more than 10 years in Korea, many early stage startups tend to use the services provided by the incubating centers. BICs in Korea have accumulated the knowledge experience in the past ten years their services have been considerably improved. The business incubating service has three facets : (1) business infrastructure service, (2) direct service, (3) indirect service. The mission of BICs is to provide the early‐stage entrepreneurs with the incubating service in a limited period time to help them grow strong enough to survive the fierce competition after graduating from the incubation. However, the incubating services sometimes fail to foster the independence of new startup companies, raise the dependence of many companies on BICs. Thus, the dependence on BICs is a very important factor to underst the survival of the incubated startup companies after graduation from BICs. The purpose of this study is to identify the main factors that influence the firm's dependence on BICs to characterize the relationships among the identified factors.
The business incubating service is a core construct of this study. It includes various activities resources, such as offering the physical facilities, legal service, connecting them with outside organizations. These services are extensive take various forms. They are provided by BICs directly or indirectly. Past studies have identified various incubating services classify them in different ways.
Based on the past studies, we classify the business incubating service into three categories as mentioned above : (1) business infrastructure support, (2) direct support, (3) networking support. The business infrastructure support is to provide the essential resources to start the business, such as physical facilities. The direct support is to offer the business resources available in the BICs, such as human, technical, administrational resources. Finally, the indirect service was to support the resource in the outside of business incubation center.
Dependence is generally defined as the degree to which a client firm needs the resources provided by the service provider in order to achieve its goals. Dependence is generated when a firm recognizes the benefits of interacting with its counterpart. Hence, the more positive outcomes a firm derives from its relationship with the partner, the more dependent on the partner the firm must inevitably become. In business incubating, as a resident firm is incubated in longer period, we can predict that her dependence on BICs would be stronger. In order to foster the independence of the incubated firms, BICs have to be able to manipulate the provision of their services to control the firms’ dependence on BICs. Based on the above discussion, the research model for relationships between dependence its affecting factors was developed.
We surveyed the companies residing in BICs to test our research model. The instrument of our study was modified, in part, on the basis of previous relevant studies. For the purposes of testing reliability validity, preliminary testing was conducted with firms that were residing in BICs incubated by the BICs in the region of Gwangju Jeonnam. The questionnaire was modified in accordance with the pre-test feedback. We mailed to all of the firms that had been incubated by the BICs with the help of business incubating managers of each BIC. The survey was conducted over a three‐week period. Gifts (of approximately ￦10,000 value) were offered to all actively participating respondents. The incubating period was reported by the business incubating managers, it was transformed using natural logarithms. A total of 180 firms participated in the survey. However, we excluded 4 cases due to a lack of consistency using reversed items in the answers of the companies, 176 cases were used for the analysis. We acknowledge that 176 samples may not be sufficient to conduct regression analyses with 5 research variables in our study.
Each variable was measured through multiple items. We conducted an exploratory factor analysis to assess their unidimensionality. In an effort to test the construct validity of the instruments, a principal‐component factor analysis was conducted with Varimax rotation. The items correspond well to each singular factor, demonstrating a high degree of convergent validity. As the factor loadings for a variable (or factor) are higher than the factor loadings for the other variables, the instrument's discriminant validity is shown to be clear. Each factor was extracted as expected, which explained 70.97, 66.321, 52.97 percent, respectively, of the total variance‐each with eigen values greater than 1.000.
The internal consistency reliability of the variables was evaluated by computing Cronbach's alphas. The Cronbach's alpha values of the variables, which ranged from 0.717 to 0.950, were all securely over 0.700, which is satisfactory. The reliability validity of the research variables are all, therefore, considered acceptable.
The effects of dependence were assessed using a regression analysis. The Pearson correlations were calculated for the variables, measured by interval or ratio scales. Potential multicollinearity among the antecedents was evaluated prior to the multiple regression analysis, as some of the variables were significantly correlated with others (e.g., direct service indirect service). Although several variables show the evidence of significant correlations, their tolerance values range between 0.334 0.613, thereby demonstrating that multicollinearity is not a likely threat to the parameter estimates.
Checking some basic assumptions for the regression analyses, we decided to conduct multiple regression analyses moderated regression analyses to test the given hypotheses. The results of the regression analyses indicate that the regression model is significant at p < 0.001 (F=44.260), that the predictors of the research model explain 42.6 percent of the total variance. Hypotheses 1, 2, 3 address the relationships between the dependence of the incubated firms the business incubating services. Business infrastructure service, direct service, indirect service are all significantly related with dependence (β=0.300, p < 0.001; β=0.230, p < 0.001; β=0.226, p < 0.001), thus supporting Hypotheses 1, 2, 3.
When the incubating period is the moderator dependence is the dependent variable, the addition of the interaction terms with the antecedents to the regression equation yielded a significant increase in R2 (F change=2.789, p < 0.05). In particular, direct service indirect service exert different effects on dependence. Hence, the results support Hypotheses 5 6.
This study provides several strategies specific calls to action for BICs, based on our empirical findings. Business infrastructure service has more effect on the firm's dependence than the other two services. The introduction of an additional high charge rate for a graduated but allowed to stay in the BIC is a basic legitimate condition for the BIC to control the firm's dependence. We detected the differential effects of direct indirect services on the firm’s dependence. The firms with long incubating period are more sensitive to indirect service positively, more sensitive to direct service negatively, when assessing their levels of dependence. This implies that BICs must develop a strategy on the basis of a firm's incubating period.
Last but not least, it would be valuable to discover other important variables that influence the firm’s dependence in the future studies. Moreover, future studies to explain the independence of startup companies in BICs would also be valuable.
- Jae Pil Park (Kunsan National University) - Jae Ho Chung (Mokwon University)
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Current economic stagnation stemmed from the low aggregate domestic dem business investment, makes SMEs difficult to get external debt financing from financial intermediaries in Korea. In this process, Stiglitz Weiss (1981) explain that asymmetric information agency cost prevent commercial banks from channeling credit into the innovative SMEs with promising projects. In order to deal with these problems, financial intermediaries should produce, save analyze every piece of information about their future borrowers during their everyday financial services with them for more accurate loan decisions.
Even though small business is an engine for economic growth in many industrialized countries such as U.S., Japan, Germany South Korea, there is a tendency to depend highly on commercial banks for external finance. So, the public private bank-borrower relationship could be one of important factors which affect loan decision credit evaluation in a bank-based system.
The definition of relationship banking is represented as long term implicit contract between financial intermediaries their debtors. Its strong points are increased credit accessibility, intertemporal smoothing, less collateral requirement less cost of external debt but it also require cost for extra private information or monitoring cost which is the biggest hindrance against relationship banking. In the end, this cost might set up hold-up problem.
The significant contribution of this research is founded on the fact that relationship represented as checking accounts savings accounts might increase the loan accessibility that reputation might also be a good explanatory variable for lenders to access their loan applications. This research is related to Cole (1998) but we extend loan decision, credit level reputation to the relationship lending in SME financing.
We utilized 1998 SSBF (Survey of Small Business Finances) data released by the Board of Governors SBA including SME (fewer than 500 employees) information on firm itself owner characteristics, financial services, income balance sheets. The number of sample data is 3,561 small businesses with the individual weight representing the total number of U.S. SMEs. This paper statistically analyzes the relationship lending for SMEs the attitude of American financial intermediaries.
We investigate that loan decision credit level are dependent upon the relationship banking such as usage of checking accounts savings accounts, personal business reputation (owner’s bankruptcy delinquency) firm characteristics by using logistic function in SAS. According to the result of statistical model, it verifies that long-term financial transactions based on the checking account have an affirmative effect on credit level accessibility to bank loans. For example, relationship lending increases the possibility of getting good credit level by 1.45～1.88 times enables business to access the bank credit by 1.35～2.05 times from 8 different models based on the odds ratio in logit model. This result proved that relationship banking defined as the previous history of checking accounts statistically alleviates the level of asymmetric information increases probability of getting external financing good credit level.
However, the usage of savings accounts only increases the credit level by 1.6 times but it does not verify any consistent effect on the loan decision which implies that savings accounts could not be considered as reliable information for loan application evaluation because in U.S. saving account does not show the details of financial conditions comparing to checking account.
At the same time, the fact of former bankruptcy personal/business delinquency, forbids SMEs to get external financing completely for at least 7 years. Specifically, one business owner's delinquencies decrease the credit levels by 1.46～1.53 times the 1.51～1.53 times respectively. Moreover, owner's bankruptcy decreases the credit accessibility by 44～54 times meaning that the former experience of bankruptcy blocks debt financing completely. However, the past bankruptcy does not have any systematic impact on the current credit level because there are inconsistencies of statistical significance direction of impact. This result suggests that owner’s reputation represented as bankruptcy plays a pivotal role in accessing SME loan applications in severe level of asymmetric information so as to complement insufficient qualified information.
The lessons from this research is that in Korea government should activate the vehicles of relationship lending by fostering relationship lending providers against the commercial bank like the U.S.'s case. For example, United State federal law, McFadden act was enacted in 1927 to specify that each national bank was allowed to branch within the state where it is situated until the introduction of Riegle-Neal interstate banking branching efficiency act of 1994 for 67 years on the purpose to protect small banks from the larger ones. This policy gave local small banks enough time to gain regional competitiveness by maximizing longsting relationship banking against big national banks. With this point of view, Korean government is able to maximize financial intermediation of the relationship banking suppliers by distributing the SME policy fund to them for economic efficiency because SME policy fund should be allocated into the financially unsound but promising SMEs.
Unfortunately Korean government only restructured primary relationship banking intermediaries such as regional banks, credit institutions, mutual savings banks merchant banking corporations during the 1997 Korean exchange crisis now tries to eradicate bankruptcy delinquency histories not on the basis of the economical decision but on the political decision which in return might demolish the whole structure of the relationship banking. These policies are not the right answers for small business financing in point of relationship banking in Korea because it will only result in ex-ante adverse ion ex-post morale hazard resulted from asymmetric information.
This research raises a couple of issues for further study. First, because we don’t have any reliable SME survey data like SSBF which are comprehensive government-released, researches in Korea only investigate this topic by using small ad-hoc interview data which does not have representativeness normality condition. Moreover, the result of them might distort the fact by accident or by intention. Second, in Korea, there is not much research about relationship banking by using statistical analysis large portion of them are highly focused upon the descriptions of relationship banking itself.
My further research will be extended into the physical distance between relationship banking provider small business by using historic data in the era of IT evolution because IT weakens the importance of distance in general. With this point of view, oil price is also a significant variable for testing the relation between relationship banking distance. At last, by using the Korean SME data, I would like to test real impact of different measures (saving account, checking account, interaction term, so on) on the probability of financial accessibility credit level like foreign researches did.
Usually, economic recession creates a momentum for the emergence of new retail format because consumers become more sensitive to prices because of their decrease in income. The financial crisis in 1997 provided a momentum for structural change in the retail industry from the late 1990s in Korea. As a new retail format, discount stores have rapidly grown in Korea. The financial crisis has caused fierce competition in the retail sectors in Korea. Although traditional markets (also called as conventional markets, open air market, or traditional wet market) have still major portions in Korean retail sector, it is clear that the sale of the traditional market has been decreasing drastically due to the growing penetration of discount stores into the retail sector. While the number of failing traditional markets has been added every year, some markets are doing very well. The purpose of this paper is to investigate a research question : “What makes differentiate successful markets from failing markets?” The research focuses on retail strategy as a starting point to solve the research question. The change in consumption is necessarily linked to a more competitive environment for the retail industry thus likely to force the industry to try new strategies. The premise of this paper is that the traditional markets should adopt new strategy to obtain sustainable competitiveness. Development of a strategy defines for the store its business relative to its competitors. There are five dimensions of a retail strategy : location, merchise, price, service, communications. Each retailer should determine which dimensions will best serve its advantage by examining its own position relative to its competition. Although location strategy is the most important in retail strategy, it is very hard to apply location strategy unless the market is newly developed in a new location. Planning the merchise mix is one of the most important aspects of operations. The merchise a retailer carries defines the store for the customer. Thus, the study focuses on the merchise strategy among retail strategies as a key factor for discriminating successful markets from unsuccessful markets. That is, the study proposes that successful markets have different merchise compositions from those in unsuccessful markets. The study also attempts to develop strategic implications for traditional markets.
The study determines the successful market with the number of visitors to the market. The study assumes that the more customers visit the market, the more sales the market will make. The main dependent measure was the number of visitors of each market. The independent measures are the proportions of classified stores in the market. The observed stores are as follows : agricultural products, stock farm products, marine products, processed food, clothing, household goods, restaurants. The observed number of classified stores is transformed into the proportions. The research attempts to investigate merchise composition with the proportion of seven classifications of stores in four types of traditional market including neighborhood market, regional market, metropolitan market, national market. The four types of traditional markets are classified mainly based on the size of trade area, that is, the travel distance of the customer. The neighborhood market’s trade area is a residence district where the market belongs to. The regional market’s trade area is a small city where the market belongs to. The metropolitan market’s trade area is metropolitan areas. The national market’s trade area is nationwide.
Data were collected from a total of 412 markets nationwide including 31 national markets, 47 metropolitan markets, 115 regional markets, 219 neighborhood markets. The average numbers of visitors are 2,214 for neighborhood markets, 2,282 for regional markets, 6,515 for metropolitan markets, 3,554 for national markets. The average travel distances are 0.91Km for neighborhood markets, 5.28Km for regional markets, 7.93Km for metropolitan markets, 14.54Km for national markets.
Although the correct number of segments is crucial, the proper number of segments is unknown in real-world applications. Mixture regression models have recently received attention from both academics practitioners due to their considerable potential for the solving this problem. The research has undertaken empirical research using the methodology of a mixture regression modeling in order to investigate merchise compositions in markets. The analysis procedures are as follows : First, the research used mixture model to discriminate successful markets from unsuccessful markets. Then, the research used mixture regression model to identify merchise compositions. That is, the research constructed a mixture regression model using the proportions of merchise categories as explanatory variables the number of visitors as a dependent variable. The results show that competitive markets have different proportions in merchise categories from those found in less competitive markets.
The Results are summarized as follows :
First, 50% is unsuccessful, 45.6% is successful, 4.4% is very successful in neighborhood markets. The average number of visitors in the unsuccessful neighborhood market is 667, while the number of visitors is 2,889 in the successful market 12,689 in the very successful market. The proportions of farm stock products household goods are high in the successful neighborhood markets.
Second, 76.2% is unsuccessful, 18.4% is successful, 5.4% is very successful in regional markets. The average number of visitors in the unsuccessful regional market is 1,218, while the number of visitors is 4,178 in the successful market 13,481 in the very successful market. The proportions of farm stock products processed foods are high in the successful neighborhood markets.
Third, 73.7% is unsuccessful 26.3% is successful in metropolitan markets. The average number of visitors in the unsuccessful metropolitan market is 2,402, while the number of visitors is 17,914 in the successful market. Since the number of visitors in the successful markets is 8 times to that of unsuccessful markets, there is a notably huge difference between unsuccessful successful metropolitan markets. Fourth, national markets failed to be divided into successful unsuccessful groups due to small samples.
Based on the research results, political implications are as follows :
First, government supports for traditional markets have previously focused on facility improvement. For renewed markets expect that they can attract more customers with some efforts in better service more promotion. However, renewal in merchise in the market is essential to attract customers continuously. Thus, it is recommended that renewal both in facility merchise be uted simultaneously.
Second, the research found that different types of traditional markets should have different merchise compositions. Neighborhood markets are recommended to increase the portion of farm stock products household goods. Regional markets are recommended to increase the portion of farm stock products processed foods.
Third, while the half of neighborhood markets is successful, most regional markets metropolitan markets are depressed. Thus, government supports should concentrate more on these regional metropolitan markets.
Cooperative relations with external companies are important for networking with outside resources-not internal resources-in terms of competitiveness of product development in tem with increased networking of value activities. Apple's iPod is creating a myth of the 21st century through the externality of a network created based on platform leadership. The platform is becoming a base for product development of the upstream process usage value creation of the downstream process, in terms of the value chain. The platform is an opposite concept of ‘stalone' development. In other words, a platform is where value is created issues are resolved in the process of business partners interfaces performing keystone(Iansiti, 2004) roles. Members of an ecosystem are seamlessly combined based on a platform, a business ecosystem is established with the formation of a common interface collection. The purpose of this research is to present the possibilities of research that features platform leadership from an open, innovative perspective, where the research activities of small-to medium-sized companies go beyond ‘stalone' effectively use external ideas R&D resources. Once a mutually beneficial network is formed among business ecosystems based on a platform, companies will be able to implement mutually beneficial solution provider strategies, which involve discovering solutions from the customer perspective by joining hs with partners, rather than independently engaging focusing on manufacturing. This also allows enhanced market value. As a result, the level of risk of market failure, which is attributable to excessively technology-oriented product development, can be reduced.
The following is a summary of the key discoveries of this research.
First, a platform has characteristics as the greatest common measure for value creation problem resolution among companies. Countless combinations are enabled potentials for evolution increase through effective use of the greatest common measure, which is a platform characteristic. This research proposed a framework that involves formation of a business ecosystem by companies performing keystone roles together with complementors, which are partners of value increase, while considering the platform's greatest common measure.
Second, sub-elements that evaluate the healthiness of a business ecosystem have been developed. For a business ecosystem to continuously evolve develop, the ecosystem's productivity needs to be increased. In addition, members of the business ecosystem need to stably maintain a certain number of objects, despite environmental changes, thereby increasing robustness of the ecosystem. Another required factor is ecosystem scalability(niche creation), where innovative members grab new business opportunities achieve expansion. This research developed proposed sub-level indexes that evaluate the three elements mentioned above.
Third, this research categorized propositions related to platform leadership management needed for the keystone company ecosystem members to continuously enable the growth evolution of the business ecosystem into nine propositions. There are two types of interaction between a flower-the platform- honeybees-ecosystem members. In terms of the first type, honeybees focus on making their own honey using the flower. This is similar to the ‘stalone' business model where honeybees fly around use flowers to create their own honey sell honey to earn money. The second type is where the honeybees focus on supplying moisture so that the honeybees flowers come together for the flowers to become fruit. This becomes the source of strength that enables fruits to create flowers evolve into an ecosystem of the next generation. The platform model can evolve develop in the long term only when it becomes a model that creates fruit. The following is a summary of the key propositions.
Proposition1 :(Law of platform yard) Above all, the keystone company needs to effectively design manage a yard-the platform. Members leave platforms that aren't fun. Then the owner of the yard, the company, suffers. This is platform leadership the key to business ecosystem thinking.
Proposition 2 :(Law of externality) The keystone needs to enhance the network externality of the platform. Externality refers to two parties actively engaging in transactions, leading to the creation of new customers or new knowledge/technology.
Proposition3 :(Law of conductor) The keystone company needs to perform the role as a conductor, rather than as a ruler, thereby enabling mutual benefits among companies of a business ecosystem. It is difficult to become a conductor with technology alone. There needs to be a philosophy of mutual benefits.
Proposition4 :(Law of honeybees) The strength of a platform grows in the market in tem with an increase in the number of business partners of the platform. This is the same as the relationship between flowers honeybees. If honeybees suddenly disappear from the face of the earth, the earth's ecosystem will be placed in danger. If the number of honeybees, which help to provide moisture, decreases, then plants cannot bear fruit. Of the keystone companies that perform the role of a hub of a business ecosystem, there are those that lure honeybees through a fragrant flower, while there are others that are not able to attract honeybees because they have a flower with no fragrance. Fragrance plays an important role in attracting the honeybees enhancing the interfaces of the ecosystem.
Proposition5 :(Law of an open platform open ecosystem) A closed system that looks for answers internally has a lower level of sustainability. An open platform continuously increases externality effects grows rapidly. A closed mindset might seem to bring victory in the short term, but this is because harmony with the external environment makes sustainable development difficult.
Proposition6 :(Law of integration communication) While the ‘stalone' model involved division, the approach of the platform is integration. Increased evolution potential at the ecosystem level countless combinations are made possible by using the greatest common measure, a platform characteristic, through an integrated approach. For an integrated approach, communication among ecosystem members internal customers is important.
Proposition7 :(Law of problem-solving platform) The most important role of the platform is to resolve common problems of members of a business ecosystem. The platform should lead to the realization of the potentials of base technologies that enable the systematization of the ecosystem, resolve common, fundamental problems experienced by ecosystem members. Once the value creation ability of a business ecosystem loses strength, the central force of the platform sharply weakens.
Fourth, this research attempted at integration of the L, A, J-type small- to medium-sized company classification(Kim Ki-Chan others 2007), in accordance with small-to medium-sized companies' ability to accept innovation, based on the types of platform leadership(Iansiti; 2004b) that were categorized considering complexity in relations among companies the level of environmental change innovation from the perspective of a business ecosystem. Through this process, this research was able to come up with implications for R&D cooperation between small-to medium-sized companies large corporations from the perspective of a business ecosystem. It presented the need for a business ecosystem approach in exping developing mutually beneficial cooperation between small-to medium-sized companies large corporations. This research presents the business ecosystem approach as a means for exping developing existing models for mutually beneficial cooperation between small-to medium-sized companies large corporations. Such models placed focus on vertical relationships in a stable industry. Because there is a strong connection between the business ecosystem approach the theoretical framework of mutually beneficial cooperation that has been accumulated until now, the integration of the two theories provides more practical implications. Key concepts presented by the business ecosystem approach-keystone company, niche company, platform leadership, ecosystem health-effectively correspond to existing mutually beneficial cooperation models' L, A, J models, confidence phase, etc.. Lastly, this research takes a look at the roles of government, large corporations, small- to medium-sized companies in the development of a business ecosystem.
- Namgyoo Kenny Park (Seoul National University) - Junghyun Suh (Seoul National University) - Hyojung Kim (Seoul National University)
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The purpose of this study is to analyze how Pora TV became market leader in the domestic market how Pora TV has managed its global expansion. This study draws outline of online contents market, which is swiftly shifting from text·image contents to video contents, investigates factors how Pora TV accedes to the market leader under this marked change. Additionally, this study seeks to analyze overseas expansion, which is the foremost task of Pora TV to thread out from limited domestic market.
Online contents market is well known for low entry barrier low switching cost. For this reason, it is surprising that Pora TV defends its leading market status from its entire life time, , thus, it is beneficial to flash on the growing process of Pora TV. Specifically, behind successful launching of Pora TV, there was inexhaustible entrepreneurship of Kim Kyung-Ik, the president of Pora TV, which resulted in innovative services such as unlimited storage space streaming video services for the first time in the industry. First mover advantage also played a major part in successful launch of Pora TV. As a first mover, Pora TV was able to obtain not only a large number of users, but also their video contents. Database formed at that time served as a foundation for Pora TV to excel other websites in volume of contents. Lastly, Kim’s clear vision did a part, planning for global expansion from the beginning of the company steadily using pre-roll commercials to secure revenue models.
However, harsh competition, along with the fundamental limit in size of the domestic market, the attractiveness of Korean online video market is decreasing. For their continuous growth, most contents providers, including Pora TV, are endeavoring to exp globally. Although Pora TV had started out globally with aggressive moves, Pora TV has a lot on its hs. Cultural differences do exist even for video contents. With most of the contents based on Korean culture language, Pora TV is bound to have a difficult time. Relatively high-resolution video services of Pora TV might act as a demerit in countries with insufficient network infrastructure. Another problem is that Pora TV lacks capital to extend its server network capabilities in a short period.
However, the fact that Pora TV has managed its business well above anyone’s negative expectation tells us that it would be too early to decide the future of Pora TV just judging by its problems. Video contents based on Korean culture, which had been believed to be a demerit in global market, are giving Pora TV a chance to succeed in Asian market. The prospect that Pora TV will fall both in domestic world market if it does not manage to equip itself with global competitiveness still holds. This feeling of emergency is giving Pora TV the strength to innovate continuously.
In addition, illuminating the global expansion of Pora TV can be a yardstick for Korean contents companies. As the number of players is increasing in the small-sized market, Korean online contents market is getting saturated rapidly. This is also true in the online video market, which has only 4 years of history. Thus, investigating the pioneering steps of Pora TV in global expansion can serve as a good reference to many domestic contents companies.
- Cheol Park (Korea University) - Hyung Gyun Nam (Korea University)
Although small businesses are important for the economic development of a country, the success rate of them is lower. Especially, as Korea has pursuit the big company oriented policy consumers have preferred the br of big company, several small companies have had sustainable competitiveness. A systematic research of success failure factors for small business is needed for higher survival rate of them.
This study suggested success failure factors of marketing for small business through literature reviews applied them to two small companies in Korea. Market oriented product, accurate targeting positioning, effective marketing communication channel establishment are considered as key success factors of marketing for small company. Wheres too technology oriented product, lack of marketing budget expenditure, difficulties in building of marketing channel are considered as failure factors. These factors are well suggested in basic marketing textbook but a lot of marketing managers do not consider or ignore them to ute marketing strategy in Korea.
Fawoo technology, LED light source manufacturer, was analyzed as a success company A company, lazer blood-sugar test manufacturer, was chosen as a failure company.
Fawoo technology established at Bucheon, Gyung-gi Do in 1989. Its annual sales volume is 24 billion won they listed stocks on KODAQ in 2005. They have developed many light products using LED exported them to Japan, US, Europe, China. Through the case analysis, success factors of Fawoo technology were identified as follows;
1) Market oriented product : solution for problems of existing product(e.g. lightness, lifetime, heating), better performance competitive price comparing to Japanese products, flexible customized bulb in shape design)
2) Good marketing research : Accurate data collecting for initial targeting, to catch needs of saving energy for public sectors, collecting market information by on-going participation to international forum
3) Proper marketing communications : product display promotion through international convention over 10 times per year, 78 language versions of Internet homepage, aggressive PR by free installation to public sectors
4) Innovative marketing channel : developing new market for national energy saving project, establishing direct channel for B2B transaction(e.g. heavy energy using company), exploring global channel by 1017 project
5) Strategic alliance : R&D with universities, cooperation with Jeju city other cities, an exclusive agreements with Lawson in Japan, establishment of subsidiaries with global companies
A company established at Daejeon in 2003. They had a special patent of lazer technology. After examining an application of the technology, they decided to develop a blood-sugar test. Although new blood-sugar test adopted high lazer tech, consumers did not welcome it. Failure Factors of A company were identified as follows;
1) Imperfect product : too big size, difficult measurement of sugar diabetes, poor A/S system, ignoring customer's usage habit
2) Poor marketing research : no market research before product development, too late inappropriate research methods, wrong targeting positioning based on bad market research
3) Shortage of marketing professionals : no professional salesperson, too simple uneffective marketing promotion(e.g. free sampling to large hospitals), troubles with exploring overseas market, lack of knowledge for distributions promotion
4) Lack of Marketing Budget : over Expenditure for R&D Engineering, difficulties of additive funding
In conclusion, implications for management policy for successful marketing of small business further research issues are suggested. Especially, this study suggests a tripod model as a support method for small business, government, university.
The model considers a cooperation among Small Medium Business Administration, Academy of small medium business, Business schools of University, small medium sized companies in Korea. In short words, university help small company with marketing knowledge government or academy(or related association) coordinate support the universities companies performance.
As coordinators, Small Medium Business Administration Academy of Small Medium Business offer incentives for university professor(e.g. research fund) priority of supporting(e.g. fund raising) for small companies. Universities companies have obligations of reporting of the cooperation
Professors students in business school of university can help small companies to offer market research, making marketing strategy, br management, consulting, market exploit, PR, special lecture, sale assistant, etc. Considering lack of resources for small companies, this kinds of supporting would be helpful.
In addition, small companies cooperate with universities to offer marketing internship, profit sharing, employment project chance, Research case materials, experience of marketing practice, etc. As business schools need the practical business places cases, their offering might be useful.
This study extracted the success failure factors of marketing for small business based on literature reviews showed two typical cases of small business. Further research should analysis more cases on marketing of small business considering company size, industry, item, etc.
- Young Eun Choi (Yonsei University) - Il Im (Yonsei University)
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ERP systems are integrated systems that process various types of information needed for companies. According to a report by KEBIX, there is a huge gap between large companies small to medium size enterprises (SMEs) in the extent to which they adopt use ERP systems. Differences also exist between large companies SMEs in the factors affecting companies' decisions to adopt ERP systems. It is imperative, therefore, to investigate what factors influence SMEs' intention to adopt ERP systems how these factors differ from those of large firms. This study investigates the factors that influence SMEs' intention to adopt ERP systems in the context of agricultural SMEs. Agricultural SMEs play the role of intermediary between farmers retail companies such as department stores discount stores.
Since SMEs have limited resources for IT they tend to change their business processes to the information systems they are adopting, instead of developing customized information systems for their business processes. Also, SMEs have difficulties in providing solid education training programs to users.
Relationship with partner companies can be an important determinant of system adoption for SMEs. SMEs have less power in collaborating with other companies, especially with large companies. Therefore, the relationship with partner companies is expected to be an important factor in ERP adoption.
Some researchers view ERP adoption as a “innovation adoption” because ERP systems entail so many changes in the organization adopting it. Diffusion of innovation (DOI) by Rogers(1973) is a widely used framework to explain the pattern of adoption use of information systems. According to DOI, there are different types of technology adoption among people : “adapters” “innovators.” Adapters seek proven solutions aligned with past management while innovators look for fundamental solutions that can change the structure of the problem. The first hypothesis is derived from this discussion.
H1 : SMEs with more innovative CEOs will have higher intention to adopt ERP systems.
Organizations lacking proper knowledge to underst the functions the technologies associated with a system tend to delay adoption decisions. If CEOs have been exposed to ERP systems or had chances to observe the benefits, they would be more willing to adopt ERP systems. This leads to the second hypothesis :
H2 : SMEs with CEOs having more knowledge on information technology will have higher intention to adopt ERP systems.
In the same vein, if an organization's employees had more experience or knowledge on a certain technology, they would be more positive adopting the technology. Organizations with less knowledge or experiences would delay the use of the technology.
H3 : SMEs having more experiences with information technology will have higher intention to adopt ERP systems.
Organizational culture is rooted on the value system shared by the organization the members. Past studies showed that organizations with optimistic organizational culture were more effective. Organizations having more optimistic corporative culture would be more positive in adopting ERP systems which will improve the performance.
H4 : SMEs having more corporative organizational culture will have higher intention to adopt ERP systems.
Past studies posited that the “task-technology fit” is a critical factor that determine the success of an information system. Task here is defined as “information processing behavior carried out by an individual” technology is defined as “tools used by individuals to carry out his/her task.” In the context of information systems, technology refers to “tangible intangible tools support services provided to support users.”
People are more willing to adopt a technology when they believe that the technology will improve their productivity. In other words, those who perceive higher task-technology fit would be more positive on adopting the technology.
H5 : SMEs perceiving more task-technology fit will have higher intention to adopt ERP systems.
Past studies on EDI revealed that a company's relationship with its partner companies affected the intention to adopt EDI systems. SMEs typically have less power compared to their large partner firms. Agricultural SMEs' most influential partners are large retail companies which have sophisticated ERP other information systems. From those retail companies' point of view, it would be better to do business with those SMEs having ERP systems. Therefore, if an agricultural SME has a strong relationship with those retail firms, the SME would be influenced by those retail partners have stronger motivation to adopt ERP systems.
H6 : SMEs having stronger relationship with partner companies will have higher intention to adopt ERP systems.
Korean government provides various supports for agricultural SMEs. If the government supports more for ERP systems or if SMEs perceive that the government promotes use of ERP system, SMEs have more incentives to use ERP systems.
H7 : SMEs perceiving stronger government support will have higher intention to adopt ERP systems.
In order to test these hypotheses, operational variables of the constructs were developed mainly based on past studies. A summary of operational variables for each construct references are shown in (Table 1).
A survey was administered among agricultural SMEs in Korea. After eliminating invalid responses a total of 30 responses were used for the final analysis. Basic demographic statistics of the respondents are shown in (Table 2). The results of validity check are summarized in (Table 4) (Table 5). Most constructs met the criteria for validity checks.
Partial least square (PLS) method was used for further analysis in this study. The analysis results are shown in . As shown in the figure, the impact of CEO characteristics was not statistically significant. Organizational characteristics external environment were significantly affecting SMEs' intention to adopt ERP systems.
The implications of the results can be summarized as follows : First, people's experience with IT organizational culture are important factors that affect SMEs' intention to adopt ERP systems. Also, as people perceive the system fits with their tasks, SMEs have more intention to adopt ERP systems. This implies that ERP systems would be adopted more by SMEs if proper training chances to experience ERP systems are provided. Second, the stronger relationships SMEs have with their partner companies, the more intention they have to adopt ERP. It provides an important implications : the partner firms' systems should be considered to determine what type of systems should be deployed to SMEs. Third, government support is a critical factor for SMEs to adopt ERP systems. It probably is because SMEs have limited resources it is a risky decision for them to invest money in ERP systems. If government firmly supports their adoption of EPR, SMEs would be able to make decisions with more confidence.mly supports their adoption
of EPR, SMEs would be able to make decisions with more confidence.
- Sun Hwa Kim (Korea Small Business Institute) - Jung Dae Suh (Korea Small Business Institute)
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This study identifies the determinants of firm growth, focusing on the differences across the size of firm. The survey results of 600 manufacturing firms including SMEs LEs are used for the empirical test. The results show that the factors affecting firm growth differ not only between SMEs LEs, but also among the groups of SMEs by size.
Only a few firms have achieved continuous growth start-ups have mostly accounted for the number of firms increased. Theoretically, established firms could live forever, they could grow shrink as necessary to meet competitive conditions. Over the last thirty years, researchers have carried out significant research relating to firm formation, growth, survival, decline, closure. These small firm dynamic studies have taken three main paths : proportional growth, net job creation, business survival.
The important role played by firm size in the economy has been frequently studied in the economics literature. Additionally, the role of firm size dynamics has been the subject of extensive research, primarily framed as how firm growth rates depend on size, industry, age of establishments, firm industry lifecycles, so on.
Regardless the development stage of economies, the overall distribution of firm size is highly skewed, with a small number of very large firms coexisting in the economy along with large numbers of smaller firms. This is especially true for the case of Korea which has very large numbers of small firms with a small number of larger firms. Such a distribution of firm size has been one of the chief obstacles to creation of stable jobs, export increase, economic growth. Thus, the growth of established firm is full of significance for the applicable firm as well as the nation's economy.
The relatively small body of business literature dealing with the reasons for small firm growth can be categorized into two schools of thought. The first adheres to an organizational life cycle perspective, which sees growth as a natural phenomenon in the evolution of the firm. The second school of though sees growth as a consequence of strategic choice. In either case the attributes of the business owner, organizational resources environmental opportunity are crucial in exping the firm or in overcoming the barriers to the evolution of the firm from one stage to the next.
The theories discussed so far all recognized that the attributes abilities of the business owner have an important impact on small firm growth will be reflected in strategic choices the ways in which he or she operates the business.
Previous firm growth studies have found out that firm growth processes rely on a mixture of systematic factors stochastic shock. In spite of the weak explanatory power of most of these studies empirical tests have revealed significant coefficient estimates indicating that systematic factors stimulate start-up growth. The explanatory factors included in these studies are entrepreneur-, firm specific industry specific or related to the region. Most firm growth studies, however, have neglected the differences between small firms larger firms.
There are fundamental differences between small large firms that it would not be appropriate to neglect. According to some of the studies, small firms do have different growth patterns from larger firms. The growth of larger firms is different in several respects. While small firms' survival depends to some extent on their growth, for large firms above the MES the objectives of survival, growth profits become separated may even conflict. The growth of small firms is often seen as a having a beneficent character, often being taken as a goal for policy intervention.
We have classified the determinants of growth in three categories; a) business environment-factors that have a potential impact on both the decision making the business activities; b) firm characteristics-variables traditionally encountered in the empirical studies of firm growth in the economic literature factors that have a potential impact on the abilities attitudes of the business owner or are indicators of entrepreneurial attitudes; c) firm strategies - factors reflecting the way the owner or entrepreneur operates his/her business.
The hypotheses to be tested with regard to the determinants of growth are :
Hypothesis 1 : The growth of firm will be affected by the factors of business environment.
Hypothesis 2 : Firm characteristics may have substantial impact on the growth of firm.
Hypothesis 3 : The Strategies of firm will exert an effect on the growth of firm.
Hypothesis 4 : The types of factors affecting firm growth may depend on the size of firm.
The results show that three determinants, business environment, firm's characteristics business strategies, have shown to have significant effects on the growth of firm. However, when dividing the sample into three groups by the employment size, it has shown considerably different results. The determinants of growth are considerably different between SMEs LEs as well as among SMEs by the size. As a result, all of four hypotheses are accepted.
Among other variables, domestic business, CEO's capabilities reputation of firms, export br, in particular, have significant impact on the firm growth. This is especially true for the case of relatively smaller size of firm. But for the case of larger firms, no determinants in the study shows a significant effect on the firm growth.
It is supported according to the results that smaller firms are more sensitive to the fluctuation of business conditions than the larger firms are. It implies that for the smaller firms' stability growth the government should pay more attention on the factors of macroeconomic stability. also the results support that the strategies of firms themselves should be changed according to their size it is suggested that the appropriate government policy measures should be developed according to the size of firm.
- Chang Seok Song (Soongsil University) - Jiyun Park (Catholic University)
[논문다운받기]
Inter-firm cooperation between large small medium enterprises(SMEs) have been on-going for the past few years. Most of the inter-firm cooperation to date, however, have been mostly government-led with the large private companies or state-owned cooperations responding to the government's call. The focus of the government's policy was on improving the overall business exchange relationship conditions that the SMEs hold on providing support with the management resources for the SMEs. As a result, it was viewed largely as something granted by the government to the SMEs. It is true that the government's systematic administrative efforts proved effective in the overall establishment dispersion of the inter-firm cooperation. However, there are also criticisms that the implementation of the inter-firm cooperation is restricted unilateral. This study looks into the state-owned corporation that is considered as the best practice in implementing the inter-firm cooperation policy most accurately most aggressively. The study aims to evaluate the implementation of the inter-firm cooperation policy to date to identify suggestions for further improvement of the policy. To analyze the current status, PSBP(philosophy-structure-behavior-performance) paradigm is used, where philosophy is added to the SCP model(structure-conduct-performance model).
The cooperation philosophy reflects the overall cooperate goal, vision, mission values which provides the propelling force for a company's network structure, its behavior performance. Key elements are organization interoperability, goal interoperability, partner immersion trust(Achrol et al., 1990, Lim Jun 1999). In particular, trust is viewed as the key concept in the formation of a corporate network. Williamson (2008) presents the trust approach as the most desirable interaction between the large private companies the SMEs. In terms of the relationship structure, the hybrid contracting, a combination of a short-term, market-oriented exchange the integration(hierarchy) of the related parties of the contract, is found to be the most common form of the relationship between the large private companies the SMEs(Williamson 2008). Here, the large private company the SMEs are members of the business ecosystem. They develop through a flexible network structure where a strong network a weaker network are weaved together(Dyer Nobeoka 2000, Iansiti Levien 2004a, b). The focus of cooperation behavior in the inter-firm cooperation must shift from a lower level of cooperation, consisting of division of labor in manufacturing production, to a higher level of cooperation in R&D marketing that can enable a build-up of technological capacities for the SMEs. Also, open innovation is needed in order to activate further innovation at the SMEs.
The study will look into the possibility of an integration the current situation of the cooperation philosophy, relationship structure, cooperation behavior performance. This paper is a case study of East-West Power Corporation(EWP) the SMEs that are in a cooperative relationship with EWP. The PSBP model will be applied to the analysis result drawn from the case study, which is conducted through an in-depth interview a survey.
The following is an explanation of the results from the survey the interviews regarding the four areas of cooperation between EWP the SMEs.
•Cooperation Philosophy : Compared to the 2004 figures, the trust approach gained higher scores. ‘Honesty', ‘Trustworthiness', ‘Fairness', ‘Keeping promises', ‘Keeping confidentiality' were the categories used in the evaluation. The average score was 6.4(out of a 7 point scale). The score is much higher than that of large private companies, indicating that trust-oriented cooperation philosophy, which is the PSBP's starting point, is established at a high level.
•Relationship Structure : The relationship structure between EWP SMEs is a market-oriented relationship structure based on lowest price competitive bidding. The SMEs working with EWP replied that the relationship they have with EWP is very important but the level of dependence is low; this result backs up the afore mentioned structure. In contrast, we find similar results from the SMEs working with large private companies, who have a more integrated(hierarchy) relationship structure with the SMEs. A short-term, relaxed market-oriented structure does create a fair even playing field to all SMEs, but has its limits in the long-term inter-firm cooperation that aims for a higher level of cooperation. To overcome such limitations, EWP has maintained a separate team to support the SMEs that they work with has also set up a Consultative Committee for SMEs, comprised of key SMEs that work with EWP. It is suggested that EWP work on further strengthening its integrated(hierarchy) structure to disperse share knowledge to upgrade the R&D capability innovation of the SMEs. Such efforts will enable the organization to further evolve into a more flexible cooperation network.
•Cooperation Behavior : The results of the survey asking the level of EWP's cooperation behavior in the two categories, 1) how well does EWP supports the SMEs capability building 2) how well does EWP support the SMEs through a benign approach, are as follows. The overall level of satisfaction of the SMEs regarding the cooperation behavior of EWP scored an average of 4.7 points out of a 7 point scale. The score for behavior pursuing both the SMEs' capability building protection were the highest at 4.9 points. The next highest score was given when EWP worked to build up the SMEs' capability but showed less effort in protecting them. This shows that the inter-firm cooperation creates a higher level of satisfaction when it is oriented towards building up the SMEs' capability. However, the SMEs viewed most of the inter-firm cooperation for technology capability building as part of a benign behavior to protect the SMEs. This illustrates that the high level of trust philosophy in the inter-firm cooperation is not connected to the cooperation behavior. Comparison of the survey results from EWP from other large private companies show no major difference in the categories of ‘Awareness of being a cooperative partner', ‘Communication' ‘Close cooperation.' It does, however, show significant difference in the scores for ‘Mutual visits', ‘Sharing of key information' ‘Joint work.' EWP the SMEs that work with EWP have a short-term, market-oriented relationship structure. such relationship structure is affecting the cooperation behavior. When asked what is the most important element in a cooperation behavior, 63% answered that stability in business exchange is the most important element, indicating that the SMEs are affected by the short-term, market-oriented relationship structure.
•Performance : The scores for ‘Product development', ‘Technology improvement', ‘Response capability' ‘Overall competitiveness' were relatively high, while scores for ‘Cost reduction', ‘Delivery time reduction', ‘Sales increase' ‘Profit increase' were relatively low. For EWP to achieve better scores in this categories, improvement is needed to further develop all areas of the philosophy, relationship structure cooperation behavior. At the same time, more work is needed to solve the problem found in the issue of low relevance among the four ares so that the high level of philosophy can positively affect the relationship structure the cooperation behavior.
The study finds that for the cooperation behavior to result in actual performance outcome in both the large private companies the state-owned corporations, a change in the philosophy or the relationship structure must take place first. However, such changes are not easy to be realized. Only changing the cooperation behavior, without changing the philosophy or the relationship structure, may result in a benign approach or the continuation of a muscular approach. The inter-firm cooperation pursued to date has shown a high level of trust in the philosophy area. However, the short-term, market-oriented approach hinders the trust philosophy from being leveraged to other areas of cooperation behavior performance. To overcome such limitations, the government-led inter-firm cooperation must be redirected to a private-sector-led inter-firm cooperation, with the following features : a contract methods that enables a long-term cooperation relationship, multi-players participating in an open innovation process, a platform that enables such open innovation. For the inter-firm cooperation to be further developed applied as a more sophisticated tool for different industries, different size organizations different partners, the whole process should be redirected as a private-sector-led, government-supported effort.
After the seminal work of Oviatt McDougall(1994), lots of related researches had been lively conducted on prerequisites of venture’s foreign market entry, internationalization process of start-up ventures, outcomes of venture’s international strategy from inception. As to the accelerated internationalization of start-up ventures, few researches were attempted on what types of following activities a focal venture implemented after the frequent entries into several foreign countries through diverse entry modes, however.
In other words, researches on whether subsequent change activities after start-up venture’s global presence have impacts on its survival growth as well as how start-up venture in pursuit of aggressive internationalization responds to changing environments of global industry transforms business strategy organizational structure were rarely conducted up to date. Considering those limited research trends, there would be increasing dems for academics to solve research questions like “what actions should ventures which have attempted frequent entries into several local markets ute in such a case that requires core characteristics of global management?,” “why should ventures implement subsequent strategic change actions after aggressive foreign market entries?,” “what consequences could result from those strategic change actions implemented by ventures in pursuit of globalization?,” etc.
According to the traditional definition of international business, ventures which have attempted repetitive or simultaneous entries into foreign markets could be regarded as ones with global strategy. Those ventures, even if start-ups, might at once reveal structural characteristics of MNE with several subsidiaries in host countries need global management style with coordination integration in multi-site functional operations. However, ventures with repetitive or simultaneous entries into foreign markets could not help facing on growing scarcity of resources, aggravating complexity in internal organization, increasing ambiguity in decision-making because of such innate limitations of start-ups as liability of newness liability of smallness as well as coordinating integrating problems of management caused by aggressive globalization. Moreover, if start-ups do business in globalized industries which experienced prompt changes of situation due to hypercompetition, those ventures with insufficient alignment level of general management might be lack of buffer which could be used to absorb external shocks.
Most of all, if liability of foreignness was caused by aggressive internationalization added up to innate limitations of start-up, a focal venture might reveal seriously decreasing level of alignment in general management. Insufficient alignment in general management might brought about inefficient resource allocation less flexible responses to environmental changes. In brief, aggressive entries into foreign markets could lead to augmenting scarcity of alignment in general management such a scarcity could deteriorate venture’s business circumstance financial performance.
Questing growth strategy based on repetitive or simultaneous entries into foreign markets might threat a focal venture’s survival longevity. In this situation, venture should take two types of strategic actions so as to diminish its mortality. At first, venture’s founding manager in pursuit of aggressive globalization ought to dip his or her toes into entrepreneurial learning personally. Considering the fact that decreasing level of alignment caused by aggressive globalization could make venture’s survival economic performance less realized, venture’s founding manager should get further understings on independent interconnected effects of business environment factors, strategic planning factors, organizational factors for strategy implementation. Secondly, individual knowledge obtained by venture’s founding manager need to be transformed into organizational knowledge. To find a means of settling the troubles caused by decreasing level of alignment in general management, existing substance of strategic planning should be reinvestigated new organizational instruments, that is, new structure task processes which could support the new strategy, should be provided.
In order to verify aforementioned arguments, in-depth case study on the globalization process of com2us which has accomplished relatively strong position in world mobile game industry was conducted in this paper. In detail, we divided entire process of com2us globalization into three subsequent periods analyzed what types of change adaptation activities in mobile game industry, founding manager, business strategy, organizational structure, task process had been implemented during each period. According to the results of case analysis, in spite of some limitations from single-case-based research, (ⅰ) venture’s try-out for globalization rapid changes in global industry situation might bring about decrease in alignment level of general management in a focal venture, (ⅱ) both entrepreneurial learning of founding manager changes in components of organizational forms like strategy, structure, process could make positive impact on solving the problems caused by decreasing alignment level.
Results of case analysis on com2us provide some implications for early globalization of start-up venture in respect of theory development entrepreneurial management. Regarding further research, it will be more necessary to study no internationalization but globalization of start-up venture the impact of changes in components of general management on survival economic performance of a focal venture with global strategy from inception. Most of all, future researches on early globalization of start-up venture should look around such topics as possibility of field-based case study, applicability of growth stage theory to start-up’s global expansion, rebuilding process of organizational capability competitive advantage in start-ups with global strategy, aggrizement of entrepreneurship in global business, industry impact on global competitiveness of start-ups, modifiability of Integration-Responsiveness framework to globalization process of start-ups.
Considering entrepreneurial management, such a simple internationalization initiative as extemporary foreign market entry would not guarantee a stability in survival growth of start-up ventures. Founding manager top management of start-up ventures with global strategy from inception must transform continuously its competitive strategy, organizational structure, administrative processes in order to adapt to rapid changes in hypercompetitive environment of global industry. Also, it should be remembered that start-up’s aggressive entries into foreign markets with various mode might call upon founding manager top management of start-up ventures to learn how to change develop their understing knowledge for the management of global business.
Implications for government which looks forward to promoting domestic ventures to take part in aggressive globalization could be suggested through results of case analysis on com2us. Most of all, it should be recognized that there is fundamental difference between policies for venture internationalization that for venture globalization. In this context, government should prepare some policies for global competitive advantages of start- up ventures. In addition, other policies for systems which investigate global competitive potential of an individual start-up venture ameliorate cognitive maps of founding managers should be suggested.
- Hee Cheol Moon (Chungnam National University) - Hyeon Jeong Oh (Chungnam National University)
[논문다운받기]
There are various export support programs(ESPs) in Korea to promote the export of small medium enterprises(SMEs) by the central government, such as SMBA MKE, the local governments, the export promotion agencies such as Small Business Corporation(SBC), KOTRA, KITA, etc.
However, since such programs are not widely known, most of the Korean SMEs cannot enjoy the benefit of them. Also, some of those programs do not consider the needs or the characteristics of the export development stages(EDS) of Korean SMEs. Thus, some programs are redundantly introduced by several organizations, causing an inefficient use of government funds.
Therefore, we analyzed the present level of perception utilization of ESP, the relationship among the perception level, the utilization level the export performance of the SMEs. Specifically, based on the assumption that SMEs in different EDS will require different types of ESPs, we will empirically test whether there are differences in the perception or the utilization of the ESP in the EDS of SMEs.
An empirical study was conducted in order to verify the hypotheses, with 117 samples obtained through online offline surveys of SMEs based in Daejeon. In this study, several statistical techniques, such as descriptive analysis, factor analysis, cluster analysis, reliability testing, ANOVA testing, path analysis, are used to analyze the causal relations among the level of perception utilization of the ESP the performance of them.
The main results of this study are as follows.
First, the research revealed that the higher the level of perception, the higher the level of utilization of the ESP. This means that the level of perception should be increased in order to raise the level of utilization of the ESP. Also, the research result shows that the utilization of the ESP has a positive effect on both economic strategic performance. Since it is prerequisite to raise the level of perception utilization of the ESP In order to improve SMEs' export performance, it is required to intensify publicity activities to develop more business-fiendly programs for SMEs such as ‘Reach Out Program.'
Second, the utilization of ESP has a higher effect on strategic performance than on economic performance. Also, it is revealed that economic performance is influenced by the indirect effect rather than the direct effect. More precisely, the utilization of EDS influences positively strategic performance such as SMEs' br image, competitive power, etc. After that, the increased strategic performance make the economic performance higher. Therefore, it is required to focus not on improving the economic performance in a short term, but on modifying reforming the current ESP to increase the strategic performance which will make eventually the economic performance in the long term.
Third, there are differences between the level of perception utilization according to the EDS. Thus, a customized plan for increasing the level of perception utilization for each EDS is required.
Finally, based on export development stages, there are differences in the relationship between the level of utilization the performance of the ESP. This means that an ESP, customized to each firm's EDS, is required in order for the ESP to be a more effective efficient program. The research revealed that the education/promotion support program the export-promising SME support program are effective for the first EDS the foreign market penetration program the education/promotion support program are for the second EDS the foreign market penetration program is expected to be effective in the last EDS.
In conclusion, if we summarize implications of the existing literature the result of this study, we can suggest several policy alternatives from 3 perspectives, 1) EDS perspective, 2) ESP problem perspective, 3) policy beneficiary policy maker perspective to solve various problems of current ESP.
Policy Suggestions : EDS Perspective
EDS
Policy Objectives
Support Programs
1st EDS
(Export Introduction Stage)
Exping Export Infrastructure
∘Supporting domestic dem-bound companies to export
∘Export incubating
∘Domestic exhibition
∘Foreign market information Overseas marketing supports
2nd EDS
(Export Growth Stage)
Intensifying Export Ability
∘Sending trade promotion mission
∘Training human resources for overseas expansion
∘Supporting overseas branch opening
∘Global networking
3rd EDS
(Export Maturity Stage)
Improving
Export Structure
∘Global br support
∘Supporting to receive global certification
∘Foreign currency transaction supports funding for SMEs
Policy Suggestions : ESP Problems Perspective
Problems
Suggestions
High Cost, Low Efficient Structure of ESP
∘Reforming problems building long term plan with verified ESPs
∘Customized ESP for each firms considering its’ export capability EDS
Policy-driven ESPs
∘Modifying current ESPs preparing new ESP from a dem perspective
∘Benchmarking programs of foreign countries customizing them
Lack of Objective Evaluation System
∘Introducing periodical evaluation about ESPs to preventing budget mismanagement efficient resource allocation
∘Operating evaluation committee for developing evlauating policies regarding SMEs
Low level of Perception Utilization of ESP
∘Intensifying P.R. of administering organizations of ESP
∘Raising SMEs’ awareness of ESPs’ importance effects
Lack of connection system among ESPs
∘Strengthening the control function for preventing redundant supports for utilizing budget efficiently
∘Operating trade council consisting of MKE, SMBA, Local Governments, Agencies concerned with trade, Academic world, Market experts
Subjects
Suggestions
SMEs
(Policy Beneficiaries)
∘Increasing the ratio of matching fund of benefitted firms
∘Introduction of graduation of ESP benefit
∘Establishing Internalization strategy in stages or Born Global Strategy by firm’s or overseas countries’ characteristics
∘e-Transformation to learning organization considering rapid changes in trade environment in digital era
Government Agencies
(Policy Maker)
∘Changing support policy from direct support to Indirect support with global stards
∘Building effective efficient overseas marketing supporting system
∘Developing objective systematic evaluation tool
∘Building cooperation system to utilize resources budget among industry, academic world, research institutes, governments
∘Increasing education opportunities for policy maker about overseas marketing
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