1. Introduction
Commonly defined as the spread and connectedness of production, communication and technologies across the
world, Globalization has also involve the interlacing of economic and cultural activity. In the recent period, the effect
of globalisation on businesses and especially small businesses has been the topic of conversation in academic
environment.
Globalization creates new structures and new relationships, with the result that business decisions and actions in
one part of the world have significant consequences in other places. It is argued that the enterprises operating on a
global market can take advantage of enhance their international competitiveness via economies of scale, exploitation
of lower input costs, risk compensation, optimality of market segmentation. However it is a fact that not all the firms
take the advantage of globalization equally and it put pressure on small and medium enterprises (SMEs) which can't
easily find an organisational solution to cope with global business opportunities without suffering from limited
resources.
The effect of globalization on SMEs has received a lot of attention in international circles because although they are
small, in both developing and developed countries these enterprises make significant contributions to the economy.
For many SMEs, instead of competing against large multinational companies SMEs can take the advantage of
opportunities afforded by e-commerce to access new and often distant markets or global value-chains. This study
presents how the new business environment originated by globalization affect enterprises and if SMEs can use the
potential of e-commerce to handle the difficulties of the new environment.
The findings of the study shows that SMEs have already been making use of e-commerce in creating value-added,
new services and new business models, expanding their business and compete in global markets. However despite its
benefits, there are a number of technical and non-technical limitations associated with ecommerce that limit or prevent
SMEs getting into use information technology and e-commerce operations. Because many of these SMEs can't cope
with these limitations such as technical, economic and legal barriers by themselves, they need public and/or private
support.