The opportunities the universities of applied sciences offer to small and medium-sized enterprises (SMEs) in internationalisation
SMEs operate, nowadays, in a multitude and complex global business environment with an explosion in innovation and new knowledge generation. There are several factors effecting businesses that have to be taken into consideration in decision-making. Even when the SME is not operating at international market it has to take into account the global business environment and its challenges through competition, environmental, political, legal, economic, technological, social-cultural and other factors. The impact of changes in values, attitudes and cultural factors has to be taken into consideration when planning the operations. The increase in competition and the changes in technological environment, including the internet, digitalisation, and the use of mobile and social media, have impact on the internationalisation. However, it also offers new opportunities for SMEs. SMEs are able to find new markets and ways to market their products/services. There are many challenges to SMEs, too. These include business planning process where many analyses are made, for example analysing the business environment, the market, customers as well as competitors, the competitive environment, the company and its resources.
On the basis of these analyses a summary of various factors influencing the business operations can be made. By using business analysis tools, for example SWOT analysis, critical success factors can be identified. Networking at local, regional, national and international levels is important and its significance is increasing. (Chaffey & Ellis-Chadwick & Johnston & Mayer 2006, 349; Griffin & Pustay 2002, 14, 344; Hooley & Piercy & Nicoulaud 2008, 59-170, 541-569; Kotler & Keller & Brady & Goodman & Hansen 2012, 55-64, 120-174, 244-354, 690-697, 862, 911-913; Smith & Taylor 2006, 7-21, 216;Terpstra & Sarathy 2000, 6, 24-83, 113, 144.) Universities of applied sciences can take part in internationalisation of SMEs and their business operations at many stages, in many phases and at many levels. In this article Tampere University of Applied Sciences serves as an example.
Tampere University of Applied Sciences – TAMK is a regional and multidisciplinary higher education institution. TAMK operates in the city of Tampere, in the Tampere region, nationally and internationally and it offers education in several fields of study.The close cooperation between education and research, development and innovation (RDI) services creates opportunities to produce innovative know-how for the benefit of SMEs. TAMK supports the internationalisation of SMEs through education, international courses, operations and projects, R & D, innovation and regional higher education network. TAMK has in its network partner universities, other institutions and organisations all over the world.
This international network benefits the SMEs. TAMK has assisted and continues to assist today in internationalisation of SMEs in many ways and at many levels in various phases and in many business areas. The following are some of the areas TAMK plays key roles: business, product/service and event innovations; market, distribution channel and customer satisfaction surveys; distribution channel contacts, business environment analyses; instructions for setting up enterprises; business and marketing plans; product design and development; planning marketing and marketing communications mix; international trade fair participation; international marketing and marketing communications campaigns, customer relationship events, event management and marketing; brochure and other marketing material design, media production; web page design, business cultures and how to do business in various market areas; customer contacts through intensive courses, events and projects; assistance of international trainees and exchange students in business; development of foreign trade procedures; training. Exchanges, internships, theses, international courses and projects (examples: “TRADIGME – Tradigital Media Marketing & Online Business with Social Media” and “Business Innovation Focused on Experience-based Products/Services” and other forms of operations offer possibilities for SMEs.
Cooperation with SMEs – challenges and some solutions
There are many challenges involved in cooperation with SMEs. Many SMEs do not have enough knowledge about the expertise of the universities of applied sciences. Active marketing is needed to make the services available to businesses. It is important to make it easy for the SMEs to use services, and therefore it is useful to utilise all connections and networks of the universities in marketing. One way is to connect SMEs in planning processes of projects at early stages to ensure commitment.
Internships and theses based upon assignments from SMEs offer possibilities to extend the cooperation. SMEs can give assignments to the intensive courses and projects to work on (innovations, web page design, marketing plans etc.). The partner SMEs can also take the full advantage of the visits to other European HEIs and SMEs. There is a lot of potential for SMEs also through international curriculum development, for example the European module ”Interpersonal and Intercultural Competence”, designed in the partnership of 13 European HEIs and one centre of training. The writer, Pirkko Varis, and some SMEs from the Tampere region were involved with the design of the module. It offers possibilities to the SMEs, for example intensive courses.
When SMEs give assignments to higher education institutions the interest already exists. There might still arise difficulties, for example concerning the schedule. Deadlines are often very strict. The staff of the SME is so occupied with its daily tasks that it might be difficult to have time for meetings and guidance. As a consequence some important aspects might be ignored or they might be tackled insufficiently. Flexible learning environments and arrangements, learning through projects, team work and cooperatives are some possible solutions. It is important to plan the meetings very carefully. Time concept and attitude to deadlines vary between cultures. When representatives from various disciplines and cultures participate in the development of international operations it often is difficult to find a common understanding. Anyway it takes time.
Interpretations of concepts and the content of the assignment may be very different among the participants. In addition, various cultural backgrounds have impact on the ways people act and react. Listening habits, communication patterns and relation to silence are different in various cultures. (Lewis 2006, 67-71.) These issues should be taken into consideration. A lot of time is needed for discussions and clarifications and a lot of communication is needed. The command of the language used may cause problems. The interpretation of body language is important but difficult. Hierarchies and the status of the decision-makers in the enterprises and the roles of the persons taking part in the decision-making are different in different cultures and this might have as a consequence problems and obstacles to achieve the results. Individualistic and collectivistic decision-making processes and styles are very different from each other and this leads to different ways of action. The differences between task-oriented and relations-oriented people have to be taken into consideration. It is important that project members get to know each other. There is a need for extensive communication. (Schneider & Barsoux 2003, 221-222, 248.)
Nowadays, people assisting in internationalisation of SMEs require project management skills. It is important to find out about the legislation concerning intellectual property rights, too. It is useful to understand the impact of cultural factors on various issues and especially on business communication. It is important to be aware of issues related to cross-cultural communication and to acquire training in cross-cultural communication.
Chaffey, D., Ellis-Chadwick, F., Johnston, K. & Mayer, R. 2006. Internet Marketing. Strategy. Implementation and Practice. 3rd ed. Essex: Pearson Education Limited.
Griffin, R.W. & Pustay, M.W. 2002. International Business. A Managerial Perspective. 3rd ed. New Jersey, Upper Saddle River: Pearson Education Inc.
Hooley, G., Piercy, N.F. & Nicoulaud, B. 2008. Marketing Strategy and Competitive Positioning. 4th ed. Essex: Pearson Education Limited.
Kotler, P., Keller, K.L., Brady, M., Goodman, M. & Hansen, T. 2012. Marketing Management. 2nd ed. Essex: Pearson Education Limited.
Lewis, R.D. 2006. When Cultures Collide. Leading Across Cultures. 3rd ed. London: Nicholas Brealey Publishing.
Schneider, S. C. & Barsoux, J-L. 2003. Managing Across Cultures. London: Prentice Hall.
Smith, P.R. & Taylor, J. 2006. Marketing Communications. An Integrated Approach. 4th Edition. London: Kogan Page.
Terpstra, V. & Sarathy, R. 2000. International Marketing. 8th ed. Orlando, Florida: The Dryden Press.
About the author
Pirkko Varis, M.Sc. in Econ. & Business Administration, is Senior Lecturer in Marketing at Tampere University of Applied Sciences. She has been for many years involved in developing international marketing and marketing communications of SMEs. She is the coordinator of several intensive programmes and courses, too.