The Relationship between MNEs & SMEs Essay Example | Topics and Well Written Essays - 2000 words

The Relationship between MNEs & SMEs - Essay Example planetary dominance of the ternion and the MNEs within it will be gone forever. 1. The relationship between MNEs within the TRIAD and SMEs in low cost economies and characte renegade how TRIAD MNEs fill sustained their dominance within international markets. The relationship between MNEs within TRIAD and SMEs in low cost economies has been specially found on the intricate dynamics of global heap with the former dominating the business surround while the later simply working towards ontogeny a ecological niche in the vast international market (Royd et al, 2004, 94-96). Therefore, MNEs get to been significant in developing global supply chains and other complex networks in low cost economies which saw the rise of SMEs in those countries. As a result, the connection between MNEs within TRIAD and SMEs in low cost economies is diverse in the sense that the aspect of market competition and economic rivalry has prevailed linking the two in which MNEs have been perceived as dominating the market in low cost economies at the expense of topical anaesthetic SMEs. ... sing the link between MNEs and SMEs, it is requirement to focus on the business environment in low cost economies prior to the entry of TRIAD MNEs and how their activity spurred growth among local SMES. There is a symbiotic relationship linking TRIAD base MNEs and SMEs in low cost economics whereby MNEs are perceived as potential partners on economic growth and expansion of trade linkages and thus welcomed and supported by the local SMEs through supply networks and other business cooperation mechanism(United Nations, Transnational Corporations and Management Division, 1993, 65-71). As a issuance of fact, the relationship involving SMEs and MNEs has been bolstered by governments and other trade agencies in low cost economies who have realized the huge potential of trade linkages involving the two. Therefore, low cost economies have laid several incentives in place for MNEs to cooperate with SMEs creating a dynamic liaison that is beneficial to trade. Attracting MNEs particularly those with manufacturing plants has become the focus of most local economic development agencies that endeavour to promote an enabling environment for the respective MNEs due to the many benefits associated with MNE activities in local businesses. Apart from the creation of job opportunities in low cost economies, MNEs have been identified and credible agents in the development of strategic clusters in low cost economies that could spur economic development. More particular has been the fact that MNEs can annex the development of SMEs in low cost economies through purchasing inputs and material components thus creating niche for local businesses. The connection involving MNEs of TRIAD and SMEs of low cost economies are primarily based on