2. Literature Review
2.3. Small and Medium Enterprise
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world. Taiwan became an important role in the value chain of the worlds high technology industry (Council for Economic Planning and Development, 2013).
With the 2001 dot-com bubble (internet bubble) and 911 attack, 2003 SARS-CoV and 2008 financial crisis, the growth of Taiwan’s economy (GDP) has slowed down to 3.4% per year. Taiwan was then suffering in unemployment.
Figure 8 Taiwan Unemployment Rate
2.3. Small and Medium Enterprise
Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are business categorized by its number of personnel. According to European Commission, small and medium-sized enterprises are defined based on staff numbers and or turnover or balance sheet total (Evaluation of the SME definition, 2014).
Company category Staff headcount Turnover Or Balance sheet total
Medium-sized < 250 ≤ € 50 m ≤ € 43 m
Small < 50 ≤ € 10 m ≤ € 10 m
Micro < 10 ≤ € 2 m ≤ € 2 m
Figure 9 The definition of Small and Medium Enterprise in EU recommendation 2003/361 (Evaluation of the SME definition, 2014)
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Unemployment Rate
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According to Standards for Identifying Small and Medium-sized Enterprises from Laws &
Regulations Database of The Republic of China (Standards for Identifying Small and Medium-sized Enterprises, 2015), the definition of small and medium-Medium-sized enterprise is similar to Europe standards but slightly different. It would need to be firms which have completed company registration or business registration with the basis of
- An enterprise in the manufacturing, construction, mining, or quarrying industry with either paid-in capital of NT$80 million or less, or less than 200 regular employees.
- An enterprise in the industry apart from any mentioned in the above and either its sales revenue of NT$100 million or less in the previous year, or has less than 100 regular employees.
According to Small and Medium Enterprise Administration, Ministry of Economic Affairs White Paper on Small and Medium Enterprises in Taiwan, 2018 (Small and Medium Enterprise Administration, 2018), there are 1,437,616 numbers of small and medium-sized enterprises in Taiwan, which counts 97.70% of the total numbers of enterprises in Taiwan. If breaking the numbers down into industries, 47.93% of the small and medium enterprises are in wholesale and retail industry. Total 8,904,000 numbers of employees work for small and medium-sized enterprises in Taiwan, which is 78.44% of the employment-population. It shows that small and medium enterprises is the backbone of Taiwan’s society and economy.
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2017 Small and Medium Enterprises Number of Firms in Taiwan
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Figure 10 2017 Small and Medium Enterprise Number of Firms in Taiwan
2017 small and medium enterprises in Taiwan revenue accounts for 30.22% of overall revenue in Taiwan. If the study breaks it down into industries, the number shows that Wholesales & Retail accounts for 36% of the total small and medium enterprises revenue, then comes the manufacturing industry with 35% of revenue.
Figure 11 2017 Small and Medium Enterprises Revenue by Industry in Taiwan
2.3.1. The Wholesale & Retail Industry
The definition of wholesale is purchasing in bulk quantities and selling merchandise in small quantities. In order to practice wholesale and retail business, it doesn’t need much capital but a smooth cash flow.
Wholesale and retail are two distribution arrangements that constitute a major part of the supply chain. When the goods are manufactured, they are sold in large quantities (wholesale) to the wholesalers who then sell them to the downstream who finally sells them to the end-users (S, 2018).
Wholesaler industry mainly focuses on wholesale business (53.5%) and international trading (44.3%) in Taiwan. In the Small and Medium Enterprise Administration, Ministry of
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2017 Small and Medium Enterprises Revenue by Industry in Taiwan
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Economic Affairs White Paper on Small and Medium Enterprises in Taiwan, 2018 (Small and Medium Enterprise Administration, 2018), it mentioned that no matter the scale of wholesaler and retail business, they are facing their primary threat from the environment which is a competitive industry with minimum profit margin, also high barrier to enter a new market, foreign currency fluctuation and rising labor cost. In retail business in Taiwan, the threats companies are facing are similar, but adding high employee liquidity (Small and Medium Enterprise Administration, 2018).
2.3.2. Corporate Communication in Wholesale & Retail Business: Costco
In this chapter, the study will share some of the wholesale & retail business corporation communication in real company practices. The study will take Costco as an example. Costco Wholesale Corporation is the second-largest retail supermarket in the United States of America.
It owns 785 locations worldwide with approximately 254,000 employees working.
On Costco Employee Website, there is Costco Today as a conversation connection with the employee. It is an employee magazine publishing and sharing about life at Costco. The employees are able to follow the Facebook page or Twitter page to read about other employee’s work achievements in Costco or some of the new policy changes in Costco……etc. There is a post below from Costco Today celebrating the accomplishment of employee worked at Costco for 30 years. This post is able to communicate with the employees in Costco that the company able to take care of the employee so much that they are able to stay in the company for so many years. It can help boost the employee’s morale. Costco established a new generation communication as mentioned in 2.1.3. of this study which the message will be able to reach their audience which is their employee more easily as well as having transparent marketing to external stakeholders as a marketing tool mirroring back to 2.1.3. Implementation of Corporate Communication as integrated communication.
Nevertheless, there is a well know Whistleblower Policy which Costco encourage their employees to speak out anonymously on the incidents they would like to report. The Whistleblower Policy is easily found on their website shows to employees and external stakeholders that the company doesn’t tolerate or shut employees up with their opinion. The company is open to criticisms and there is no topic too hard to speak out.
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2.3.3. Manufacturing Industry
Manufacturing is the process of producing goods. The process goes from inputting raw materials, parts, or components and converts them into finished goods.
Taiwan used to be famous as The Kingdom of Toys or The Kingdom of Furniture during the 1970s. As mentioned in 2.2.1. Taiwan Economic Landscape of this study. Taiwan was famous for the “Made in Taiwan” with the light industry. After the 1980’s, Taiwan gradually shift from labor-intensive manufacturing to high technology manufacturing such as semiconductor, optoelectronics, information technology, communications, and electronics.
2.3.4. Corporate Communication in Manufacturing Industry: Toyota
The study will take Toyota as an example of a manufacturing company with corporate communication practices. The example will focus more on the implementation of the integrated corporate communication which mentioned in 2.1.3. of this study.
In July 2003, Toyota renovated its corporate communication team. It merged its advertising and public relations department into one team. Below is quoted from Peter Renz who was the National Manager PR and advertising in Toyota Canada.
Figure 12 A post from Costco Today Facebook Page (Costco Today, 2020).
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We combined all the departments to ensure that we were speaking with a consistent voice and sending out a consistent message all the time. It’s given us an opportunity to think more ‘out of the box’ in terms of ideas. When we get together, we think of unique ways of communicating. Our agencies are thinking that way too and you get all three elements- Internet, PR and advertising – working together, you find tremendous efficiencies (Renz, 2003).
The communication in Toyota corporation is a rather large scale as there are geographically separated subsidiaries around the globe in Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, India, Indonesia, Korea, New Zealand, Philippines, Poland, Singapore, South Africa, Taiwan, Thailand, USA, Venezuela, and Vietnam. All of these mentioned subsidiaries own their own communication team which includes marketing communications, product branding, internal communication staffs, and media relations, public affairs, and investor relations. Some of the subsidiaries are larger which are equipped with the above-mentioned function and specialist while some of the subsidiaries are smaller which all function gathered in one communication department. No matter the size of the subsidiaries, they would reach out to the central communications department at Toyota Headquarters.
The company has a strong communication matrix and protocol with its oversea branches.
With different branches having regular meetings with the headquarter. The headquarter can easily announce its strategies and the subsidiaries are able to express its implementation. On the other hand, the subsidiaries would also need to feedback to the headquarter as the communication should be two ways and the headquarter would also need to understand the feedback and perhaps taking into account in future strategies.