In a global supply chain, many partnering firms are normally Small and Medium Scale Enterprises (SMEs) which support a focal firm from the process of supplying raw materials to the delivery of the final products and services to the end customers. With regard to the supply chain of the focal firm, SMEs play a very crucial role in attaining cost efficiencies in procurement and production processes, and accurate and timely delivery of products and services to the end customers. However, this requires a close and trustworthy relationship between the focal firm and the associated SMEs. In the words of Lee (2004), focal firm and SMEs (partnering firms) need to have alignment of interests amongst themselves to attain unmatched competitive advantage. However, surprisingly, it is observed that managers rarely emphasize on alignment of interests of partnering firms. This is primarily due to divergent mission and objectives of members of a supply chain. Scale of operations and structure of SMEs are also big hurdles to achieve unanimity of objectives between a focal firm and SMEs. This paper tries to explore the objectives, activities and structure of SMEs that are possible sources of misalignment of interests of these firms with the focal firm.

Small and Medium Scale Enterprises (SMEs) are an important part of any supply chain in any industry by means of supplying products and services to buying firms. Big firms, like the giant General Electronics, largely depend on the suppliers situated in India and other developing countries to manufacture and deliver its hundreds of products and services to customers spread across the world. These suppliers are normally micro SMEs, which work at a relatively lower level in comparison to big Multinational Enterprises (MNEs), but their role is nonetheless very crucial in a global supply chain setup. Now, research has proved that successful businesses are epitomized by close and synchronized collaborations amongst the players of business activity. In this endeavor, different players of supply chain operate at different levels.

A global supply chain setup normally incorporates a focal firm that produces the main product, number of suppliers of raw materials and services, hundreds of distributors and dealers, and the end customers. Proctor and Gamble, a world leader in consumer food products has hundreds of suppliers and millions of customers across the world. Proctor and Gamble has continuously strived to achieve the expectations of the customers and it does so by having one of the most effective and efficient supply chains in the world. Achieving supply chain competencies demand a high degree of collaborations with the suppliers. Having a close collaboration with suppliers, which are normally SMEs, is a big challenge. This is because of the inherent differences in the scope and nature of operations between SMEs and MNEs.

Supply Chain Management Journal, Global Supply Chain, Small and Medium Scale Enterprises, SMEs, Multinational Enterprises, MNEs, Multinational Enterprises, MNEs, Organizational Objectives, Supply Chain Management, Retail Industry, Business Environment, Strategic Planning, International Business Networks.