THE EFFECTS OF GLOBALIZATION TO THE BUSINESS STRATEGIES OF THE

ENTREPRENEURS

CHAPTER I

INTRODUCTION

According to Teeple G. (2000), globalization is a process, a way of exporting and

importing products around the world. It is having an import and export of products

around the world, that mean that this is international trading of products. Due to

globalization people and different countries can benefit from one another. This can

help the growth of the economy, with the help of foreign investors. It can help or

encourage the other investor to invest to the country. It is a broad topic, because it

was happens every day. It is the critical process of trading. An example of process

were every residence are involve. The tendency of investment of funds and businesses

to move beyond domestic and national markets to other markets around the globe,

allowing them to become interconnected with different markets. Accordingly

globalization provides organization a superior competitive position with lower

operating costs, to gain greater numbers of products, services and consumers. It is led

to major increases in worldwide trade and exchanges in an increasingly open,

integrated, and borderless international economy. There has been remarkable growth

in such trade in goods and services, but also in exchange of currencies, in capital
movements, in technology transfer and in international flows of information. The

concept of globalization received attention from researchers because of its generally

recognized importance as an economic factor, but seemingly also due to of the lack

of a generally accepted definition. Although globalization has become a widely used

term widespread is its related misconception. It is one of the part of our everyday life.

This may apply in everyday life of the people. Because of continuous population

around the world, it’s become a problem of every country. Businessman need to think

different strategies for their business, to save the business they have. Because their

strategies is based on the weather and trend. Due of having a price height that’s why

it affects the business strategies of the entrepreneurs.

Researchers scope the entrepreneurs, and focuses on the strategies. Every

single human, do an action to make the globalization fulfill the needs of others. This

happens every single second around the world that people live. In a business,

entrepreneurs must need to set a plan or goal to see what will be the changes in your

business. People know that having a business is not easy to manage because of money

involves, sometimes other entrepreneur can't handle correctly their position.

Sometimes in a business, the costumers will fight employees because customers

doesn’t achieve the expectation of the product that the entrepreneurs have.

Entrepreneurs must consider the costumers always right, to have a better

communication between entrepreneur and customers. They can evolve their business

from the customer feedback. It may not mean much if one customer doesn't like
product that the entrepreneurs have, but if this is true for many of them and it means

entrepreneurs an request another features listen and be ready to adopt. Whether

they adopting the marketing plan simplifying a product or responding to new trends,

entrepreneurs also pay attention to customers’ feedback be all ears. They must know

first the place will put the business Entrepreneurs should be as conservative with their

money as possible able to deal with any rough patch that arises conserving several

months’ worth of operating expenses in the bank will help you survive must un

foreseen circumstances. An entrepreneur must be prepared to accept changes and

adapt business operation accordingly, be flexible. If a shift of the product or service is

warranted, don’t be left behind realize from start where are you likely not to be where

you'll end up. A lack of adaptability can result in loss in customers, profits and even

business failure. Entrepreneurship is often regarded as an important component in

stimulating economic growth, innovation, competitiveness, and alleviating poverty in

developing countries. Although entrepreneurship isn’t a new term for the developed

countries, economical infrastructure of most of them formed due to it and at least in

practice, it can be said to be rather new in developing countries. Due to lack of capital

accumulation, qualified human resources and social and political substructure, the

term remained a theatrical concept until recently and it can be accepted that

globalization phase launched and golden era of entrepreneurship especially in

developing countries.
STATEMENT OF THE PROBLEM

1. What is the percentage breakdown and weighted mean of marketing system

used by the entrepreneurs?

2. What is the percentage breakdown of the business strategies used by the

entrepreneurs?

3. What is the significant difference the respondents between the type of

marketing system used and to the effects of globalization to owners business

in terms of:

 Capital

 Product

 Supply

 Manpower

 Strategic marketing

 Tactical Marketing: Value Deployment & Communication

4. What are the effects of globalization to the entrepreneurs in terms of:

 Product

 Demand

 Supply

 Manpower

 Capital
 5. Is there a significant relationship between the effect of globalization to the

above mentioned variables and the marketing system used by the

respondents?

HYPOTHESIS

There is a relationship between globalization to the business strategies used by

the entrepreneurs.

There is no relationship between globalization to the business strategies used

by the entrepreneurs.

THEORETRICAL FRAMEWORK

According to the Barrie Axford (2013), globalization is the summary of the

simple way of living of the people. He also says that globalization is the new field, that

has a framework but lacks of basis, it has methodology and it interpret the modern

age of the world. This theory helps this study to further to understand how does the

globalization affects the entrepreneurs in terms of: demand, supply, capital,

manpower, product and the marketing system.

 CONCEPTUAL FRAMEWORK

GLOBALIZATION

MARKETING SYSTEM BUSINESS STRATEGIES

 Strategic marketing
 Product
 Demand
 Tactical Marketing:
 Supply
Value Deployment &
 Manpower
Communication
 Capital

ENTREPRENEURS

The figure above is the flow the study. Globalization is the main problem of the

research, and it affects the marketing system and the business strategies of the

entrepreneurs. The marketing system has a strategic marketing and tactical marketing

while on the other side the business strategies contains product, demand, supply

manpower and capital these are can affects the entrepreneurs.

SIGNIFICANT OF THE STUDY

 In this study, the researchers endeavor to answer the learning business finance

as a preparation for financing a future business. This research can give an idea to the

future business man and researchers. This result of this study will beneficial to the

following:

To the Learners

This research may help the future entrepreneurs that globalization has an

effect to their business. This can be beneficial to the students because they can be

aware of what globalization is. This may be the guide for them of what are the effects

of globalization and what are the strategies does the entrepreneur.

To the Teachers

This study may stands as awareness to the teachers. They can help their future

students to more understand what globalization is. They can also help their students

to know how globalization affects our society.

To the parents

This study may help their child/children to be aware to our environment. This

research can help the parents to motivate their child/children to be a good

entrepreneur in the future.

To the Future Researchers

This may help the future researchers to notice that being an entrepreneur they

must be an innovative and a good decision maker. This study may help them, to see
of what entrepreneurs used different strategies that they need to improve so the

globalization doesn’t become a risk for them.

DEFINITION OF TERMS

Beneficial - favorable or advantageous; resulting in good.

Endeavor - try hard to do or achieve something.

Entrepreneurs - an individual who, rather than working as an employee, founds and

runs a small business, assuming all the risks and rewards of the venture

Importing products - transactions in goods and services to a resident of a jurisdiction

(such as a nation) from non-residents

Exporting products - sending of goods or services produced in one country to another

country

Globalization - the process by which businesses or other organizations develop

international influence or start operating on an international scale

Good Decision Maker - a key skill in the workplace, and is particularly important if you

want to be an effective leader

Growth of the Economy - the increase in the inflation-adjusted market value of the

goods and services produced by an economy over time

Innovation - a new method, idea, product,

Lack of Capital Accumulation- the dynamic that motivates the pursuit of profit,

involving the investment of money or any financial asset with the goal of increasing
the initial monetary value of said asset as a financial return whether in the form of

profit, rent, interest, royalties

Risk - the possibility of losing something of value

Society - the aggregate of people living together in a more or less ordered community

Solely - not involving anyone or anything else

Strategies - a plan of action or policy designed to achieve a major or overall aim.

CHAPTER II

REVIEW OF RELATED LITERATURE

This research will know the unknown and rediscover some unfamiliar so the

researcher will found out. This make the researcher to be guided and help every new

generation to be aware.

According to Nolan and Zhang (2003) the liberalization of world trade and capital

markets led by globalization has created a new and challenging competitive arena for

all firms. Globalization has dramatically changed the competitive terrain faced by

firms from both developed and emerging economies. While for Fram and Ajami,

(2000) several changes in the business environment arising from this trend are, for

instance, convergence of consumers’ demand, expansion in international business

transactions, and the emergence of global markets for goods, services, labor and

capital. On the other hand, Ghemawat (2003) although, such integration of markets
and factors of production is still far less perfect than expected by economists it is

undeniably significant, it is interesting to study how these changes affect firms.

Addition of Jones, et.,al (2002) these effects are chosen to be investigated here

because they are frequently cited in the past literature as the most apparent and

immediate effects of globalization. Moreover, while globalization increases market

opportunities, it also raises the level of threats faced by firms. Hence, it is interesting

to explore these two contrasting effects on firms’ marketing activities.

On the other side, Deardorft (2010), the trend towards more interdependence

among nations, several changes in the business environment have emerged. There

has been an emergence of global markets for goods, services, labor and financial

capital. Increasing trade and investment liberalization and communication

technologies has resulted in large volumes of international business transactions.

Addition of Hafsi et,.al. (2002), political factors refer to privatization, deregulation and

trade liberalization of many nations in favor of free flows of trade and investments.

Knight, et,.al.(2000),technological forces such as advance development in

communication and transportation technologies, which promote growth in

international business transactions, are also key drivers of rapid globalization. On the

positive side, globalization enables firms to outsource and find customers around the

world, e.g., the auto and electronics industries. The globalization of production and

operations benefits firms through the realization of economies of scales and scope.

On the other hand, Lenway et,.al. (2001) globalization is an interesting phenomenon

since it is obvious that the world has been going through this process of change

towards increasing economic, financial, social, cultural, political, market, and

environmental interdependence among nations. Virtually, everyone is affected by this

process. Given these changes, globalization brings about a borderless world.

Nevertheless, McLean and Woo, (2000), tells that globalization drives people to

change their ways of living, 3 prompts firms to change their ways of conducting

business, and, spurs nations to establish new national policies. Events transpiring in

different parts of the world now have dramatic consequences to other parts of the

world at a faster pace than anyone could imagine in the past.

In the study of Herbertsson (2005) gives a theoretical basis for assumptions

made; they already stated that elements such as increased Internet usage and MNCs

presence and for example lower trade barriers are signs, if not criterions, of

globalization in a country. Although the interest in international or cross border

entrepreneurship is well deserved and understandable due to the relatively young age

of the phenomenon and its potential to create a broad collective international

discussion, it is not the topic on the political agenda. Addition of Reynolds (2005), the

next step must be exposing all elements of importance in the entrepreneurial

framework. Opinions differ as to why the importance of the effects of globalization

has increased in recent years or why entrepreneurship have gained an important role

globally. One plausible argument can be described as the victory over information

asymmetry. On the other hand, Adan (2011), the economy of poor countries (mostly
sub-Saharan African) remains in crisis, showing little or no signs of stability and

closures are most frequent in the industrial sector due to the sophisticated foreign

products competition. Addition of Ibrahim (2004), globalization creates room for free

access to the world market, the truth seems to lie in the assertion that only

developed countries benefit from the deal because they put in place protective

measures or standards to discriminate the quality and quantity of developing

countries goods and services entering their markets and at same time dictating poor

economies to open their markets for foreign goods and services. Otherwise, Bachelor

et.al. (2005), benefits of globalization have not been felt to the fullest in Somalia

except for the increase in the communication services. The excessive openness of

the market created a dumping ground for goods from the developed world. The

inability by government to control the imported goods from competing with

domestically produced same products worsened the position of the local industry

whose production relies much on imported raw materials amidst the unstable

exchange rates. This has gravely impacted on the manufacturing industry leaving it

with no option but to further restructure, close up or scale down in production. For

Nicholas (2004), globalization can be thought of as a process of integration of goods

and capital markets across the world in which barriers to international trade and

foreign investment are reduced. But for Kraemer (2002) globalization as the growing

interconnectedness of the world through cross-border flows of information, capital,

and people. On another side, Goyal, (2006), Globalization has also generated large
international opposition over concerns that it has increased inequality and

environmental poverty. There is a need to study the impact of globalization on

economy. According to Ismihan (2008), globalization has been the most fashionable

term in the world economy during the last two decades. Based on the article of (2004)

the author opines that multiple views prevails on nature of globalization as well as its

socio-economic impact. He has discussed the various theoretical aspects of

globalization and its socio economic impact. The basic perception of the author is that

the present day globalization is imperialist’s globalization.

A marketing strategy refers to a business can called an overall game plan for

reaching prospective consumers and turning them into customers of the products or

services the business provides. According to Philip Kotler and Kevin Keller (2001), the

marketing strategy lays out target markets and the value proposition that will be

offered based on an analysis of the best market opportunities.

REVIEW OF RELATED STUDY

Research helps and defines the unknown to more understandable and clear for

those readers and future researchers. This research composed of different studies to

defined globalization and entrepreneurship.

According to Johnson and Scholes, (2003), globalization also refers to the

strategy of approaching worldwide markets with standardized products. For Gichira,

(2007), globalization of the world economy is the integration of economies

throughout the world through trade, financial flows, the exchange of technology and

information and the movement of people. In addition of Cheng (2000), globalization

seems to be unavoidable to many countries and numerous initiatives and efforts have

been made to adapt to it with the aim of taking advantage of the opportunities

created from it to develop their societies and people, in recent years, there have been

increasing international concerns about the dangerous impacts of globalization on

indigenous and national development. Various social movements have been initiated

against the threats of globalization, particularly on developing countries. With such a

grouping and central decision making, the effects of globalization have been massive.

To ensure efficiency and effectiveness in implementation of the strategy, they have

organized legal entities into 29 regions grouped into four geographic areas: Americas,

Asia-Pacific, EMEIA (Europe, Middle East, India, and Africa) and Japan.

The globalization of production and operations benefits firms through the

realization of economies of scales and scope. Hence, no one can deny that

globalization has changed the way we conduct business.

Although globalization is a worldwide phenomenon, the extent to which each

country is globalized is not identical. To measure the degree of globalization of each

nation, a globalization index was recently developed by cooperation between Foreign

Policy Magazine, AT Kearney and EDS Company. The index indicates that some small

developing countries in emerging economies such as Singapore and Malaysia were

among the top twenty most globalized nations from 2001 to 2004 with Singapore
being ranked as the most globalized nation.

According to Mazrui (2001), some historians believe that economic and social

globalization can be traced to 320 BCE, with the establishment of the Maurya Empire

in India. The Maurya Empire was among the first societies to develop international

commerce, having established trade with Asia and Europe. During the second century

BCE, natives of present-day China established the Silk Road, a trade route that ran

through China, Egypt, Persia, India and Rome. The Silk Road was a multilateral project,

with each nation contributing to the protection of trade routes and the establishment

of trade protocols. Eventually, religious organizations from Asia, India, Mesopotamia

and Europe established communities and worship sites in foreign nations.

Environmental globalization was initiated through the exchange of crops and

livestock. For Smith, (2001), nations began to utilize economic measures, in place of

or in addition to military conflict, to settle international disputes. In 1945, the World

Bank was established, followed by the International Monetary Fund in 1947. The

establishment of these organizations was intended to help regulate and monitor the

economic relationships between countries. The development of radio, television, and

most recently Internet technology greatly hastened the pace and potential for

intercultural exchange. In addition, immigration and international travel have created

ethnic communities in many nations. Marriage and interbreeding further obscure

traditional division’s between societies. Whereas the globalization debate previously

focused on the activities of governments and social organizations, the growth of

multinational corporations and e-commerce gave rise to a new facet of the debate.

For (Dicken2007), the high rate of interdependence and inter-linkages among nations

of the world occasioned by high speed economic, social, political, technological and

cultural interactions can be used to describe globalization. To this end, globalization

can be considered as a very complex as well as a multifaceted phenomenon, and these

encompass, political globalization, economic globalization, technological globalization

and socio-cultural globalization. On the other side, Hill (2009), many international

companies such as Xerox, Motorola, Honda, and Samsung, carry out their productions

and marketing mainly outside their country of origin. Thus, customers find it difficult

to distinguish between French, Japanese, or even American companies

CHAPTER III

RESEARCH DESIGN

The descriptive method is used to in gathering the needed information for this

study. Specifically, the researchers utilize a questionnaire type of correlational

method which enables the researchers to gather information from the respondents

without the respondents having difficulties in answering the questions. The

researchers utilized that the globalization is one of the problem in the business

strategies of the entrepreneurs.

RESEARCH METHODOLOGY

The progression of this research started by researching variables namely:

globalization and its effect to the business strategies of entrepreneurs. Then the

researchers drafted the instrument of the study, afterwards the researchers

proceeded with pilot testing and its validation.

After validating and pilot testing the researchers performed the survey for

data gathering and data analysis. The analyzed data will be summarized to come up

with the conclusion of the study.

SAMPLING METHOD

The researchers will use the Slovin’s Formula to calculate the sample size from

the overall population and the margin of error. Slovin's Formula provides the sample

size (n) using the known population size (N) and the acceptable error value (e). Fill

the N and e values into the formula n=N÷(1+Ne2). The resulting value of n equals

the sample size to be used. In this study the researchers focuses on the

entrepreneurs to provide the needed information for this research. To calculate the

sample population researchers will use the formula:

n =N / (1+ Ne²)

N=95 e=0.05

n= 95÷(1+95(0.052)
n= 95÷ 1+(0.2375)

n=76.77 or 77

RESPONDENT OF THE STUDY

The focus of this study are the entrepreneurs that will be interview through

personal communication. The researchers choose this place for the reason of it will

give the researchers needed information.

RESEARCH LOCALE

The researchers conducted their study at the Farconville Village, Barangay

Parian, Calamba City. It is situated near the Brgy. Hall of Parian and Parian Elementary

School. The entrepreneurs at that placed is in the urban area where the consumers

can easily access their stores.

RESEARCH INSTRUMENT

In this study, researchers used survey questionnaire to further understand and

identify the effects of globalization to the entrepreneurs. The questionnaire will be

the way to know the changes of the entrepreneurs on their business strategies.

As a part of this study, the researchers conducting the survey that investigate

the effects of globalization to the business strategies of the entrepreneurs. The

researchers appreciate if you could complete the following table. Any obtained
connection of this study is can be identified if you will remain confident in answering

this regarding the effects of globalization.

VALIDATION OF INSTRUMENT

The researchers used questionnaire that were validated by the researcher, class

advisers and the chairman from the panelist.

PILOT TESTING

The undersigned researchers of Montessori Professional College of Asia to

conduct a pilot testing to 77 respondents for the thesis entitled: THE EFFECTS OF

GLOBALIZATION TO THE BUSINESS STRATEGIES OF THE ENTREPRENEURS as

completion to the requirements of Practical Research 2 under the supervisor of Mr.

Vimpi Carlo I. Abuan.

The gathered data from this pilot testing will use treated and utmost

confidentiality.

STATISTICAL TREATMENT

To answer the statement of the problem and to analyze the gathered data

researchers will utilize the following formula:

 To answer the statement of the problem number 1 the researchers will use the

Weighted Mean, to analyze the perception of the respondents and identify the effects

of globalization in terms of capital, demand, manpower, product, supply, strategic

marketing, and tactical marketing: value deployment and communication.

To answer the statement of the problem number 2 the researchers will use the

Percentage formula to analyze the percentage breakdown of the business strategies

used by the entrepreneurs and identify the percentage of the business strategies by

the entrepreneurs.

To answer the statement of the problem number 3 the researchers will use the

Rpbtis, to analyze the significant difference the respondents between the type of

marketing system used and to the effects of globalization to owners business and

identify the effects of globalization in terms of capital, manpower, product, supply,

strategic marketing, and tactical marketing: value deployment and communication.

To answer the statement of the problem number 4 the researchers will identify

the effects of globalization to the entrepreneurs in terms of: product, demand, supply,

manpower, and capital.

To answer the statement of the problem number 5 the researchers will use the

Pearson’s R, to analyze and identify the significant relationship between the effect of

globalization to the product, demand, supply, manpower, and capital and the

marketing system used by the respondents.