Academic journal article International Journal of Entrepreneurship

The Roles of Foreign Language in Export Operations of Thai SMEs

Academic journal article International Journal of Entrepreneurship

The Roles of Foreign Language in Export Operations of Thai SMEs

Article excerpt

INTRODUCTION

Small and medium enterprises (SMEs) are firms which are now playing an important role in a nation's economy and global trade. They make substantial contributions to employment and comprise the majority of businesses (Holmes et al, 2003). Like other countries in the world, the Thai government had policies to support SMEs under the 10th National Economic and Social Development Plan (2007-2011) where strategies are established to create economic balance and sustainability through development and fortification of SMEs (Office of the National Economic and Social Development Board, 2007 (in order to make SMEs become a driving force of the country's economy.

Due to increased competition in national markets, SMEs are changing strategic direction to international markets. SMEs engaged in exporting tend to be more productive than those that are not. One of the factors pushing SMEs to international markets is the Association of Southeast Asian Nations or ASEAN in the year 2015. The collaboration within the ASEAN Community involves three areas: ASEAN Political-Security Community (APSC), ASEAN Economic Community (AEC) and ASEAN Socio-Cultural Community (ASCC(. The AEC will be a collaboration of particular significance as it will create a single market where manufacturing capacity, products, services and labor can move freely across member countries (ASEAN, 2008). Such an arrangement will increase the value of trade among the ASEAN countries. Hence, the ASEAN community has forced SMEs to start looking to the international market place for new customers.

However, doing international business transactions is not an easy task. The ability of SMEs to export is generally regarded as a measure of its competitiveness. To accomplish the achievement, SMEs need to be ready in many aspects such as resource capacity (Williams, 2011) and the role of networks (Bhagavatula et al., 2010). Apart from those factors, managerial characteristics are an important resource that is crucial for them to launch an international base (Reid, 1983). In many studies, language is seen as a managerial resource which is a significant factor in influencing exporting decision. Language is important to every kind and size of business, especially SMEs (Williams, 2011). Many findings reveal that when entrepreneurs have a mastery of a foreign language, they are more likely to become exporters (Lautanen, 2000; Obben & Magagula, 2003). In a competitive business environment, a company needs to be sure that it reaches its full potential. Therefore, having knowledge in a career alone doesn't guarantee one's success. According to Crystal (2003), in today's business, knowing a foreign language is a bit like having an extra instrument or one more piece of software to use.

In the past, the language playing a vital role the most is English; people need to know English in order to use it for international communication when they work. However, at present, knowing only English language might not be enough; it is necessary for all firms to adjust or improve themselves to the new circumstance. According to Herbig and Krmer (1991), the world is growing smaller every day." The smaller world which is full of high competition requires communication capabilities to understand better and interact with those from foreign cultures. That is, the ability to understand and communicate with each other through more than one language is strongly required. The more customers are satisfied, the more the organization gains advantages. In order to run the business successfully, employees need to know other languages necessary in doing a business apart from English.

Since little research has been done on Thai SMEs' export business with regard to the use of foreign language, the current study intends to investigate the role of foreign language in export operations of SMEs in Thailand. It is beneficial to know how important language is in their job and how much they are using it. …

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