The sustainability of small businesses in recessionary times (original) (raw)
The smooth running of small and medium-sized manufacturing enterprises (SMEs) presents a significant challenge irrespective of the technological and human resources they may have at their disposal. SMEs continuously encounter daily internal and external undesirable events and unwanted setbacks to their operations that detract from their business performance. These are referred to as 'disturbances' in our research study. Among the disturbances, some are likely to create risks to the enterprises in terms of loss of production, manufacturing capability, human resource, market share, and, of course, economic losses. These are finally referred to as 'risk determinant' on the basis of their correlation with some risk indicators, which are linked to operational, occupational, and economic risks. To deal with these risk determinants effectively, SMEs need a systematic method of approach to identify and treat their potential effects along with an appropriate set of tools. However, initially, a strategic approach is required to identify typical risk determinants and their linkage with potential business risks. In this connection, we conducted this study to explore the answer to the research question: what are the typical risk determinants encountered by SMEs? We carried out an empirical investigation with a multi-method research approach (a combination of a questionnaire-based mail survey involving 212 SMEs and five in-depth case studies) in New Zealand. This paper presents a set of typical internal and external risk determinants, which need special attention to be dealt with to minimize operational risks of an SME.
International business by SMEs: empirical findings from New Zealand
2009
Why do small firms from small countries internationalize? This study investigates the motives of small-scale entrepreneurs from New Zealand to internationalize via exporting, and particularly evaluate the role of government assistance. Our empirical findings of 139 SMEs situated in the Canterbury region of New Zealand suggest that export is strongly related to government-induced programs. Also important are personal motivations, declining domestic sales, saturated domestic market and excess capacity.
SME Growth in a Recession: What Does a Growing Business Tell?
Open Journal of Business and Management
This article talks about growing small businesses in a recession and examines management strategies that made the company grow. Recessionary periods are accepted tough for small and medium enterprises (SMEs) to survive and grow, yet some do. SME performance is discussed associating with different factors including barriers, business characteristics, owner-manager lifestyle and networks. Prior studies have a significant contribution in exploring aggregate SME growth phenomena, but there is a little understanding of how SMEs grow in the recessionary periods. This study used a pluralist methodology with the participant action research as a primary approach, case study as a design and mix-method strategy to collect and analyse data. The research is dominant by qualitative research where such data were collected from a series of informal interviews and observation. Similarly, quantitative data such as business records and financial information were gathered from primary and secondary sources. The case study firm implemented two management strategies: learning in the organisation and restructuring the organisation to achieve growth during the recession of 2008-2009. Even though the precise impact of these strategies is challenging to establish, both learning and restructuring strategies were making the firm grow in the recession of 2008-2009. Since SMEs operate in a context, any "ready-to-use" and "one-size-fits-all" strategies and advice do not help individual businesses grow. This paper will be of interest to all the people who are involved in making the SMEs grow in recessionary periods.
The evolution of SME policy: the case of New Zealand
Regional Studies, Regional Science
Building on policy process theories, this study constructs a meaningful historical narrative that explains the developments in small and medium-sized enterprise (SME) policy in New Zealand during the period 1978-2008 that marked the point where SME policy was firmly institutionalized as a subsystem within the wider economic policy framework. Temporality is a key characteristic of the policy process and historical accounts are an important means of describing how the process unfolds over time. The enquiry draws on archival sources as well as the personal accounts by individuals who were directly involved in SME policy development. Findings illustrate how the role of SMEs as a policy subsystem develops within an overarching economic policy framework. More specifically, we identify the periods of stability and those of change and what the role of actors, context and events is in this process by highlighting the complexity and interrelated nature of SME policy development. At the time of writing, the foundations of globalization are being called into question. Together with the ever faster rate of technological change, these are important pillars in the predominant political discourses that underpinned the formulation of SME policy during the period of this study. Understanding how SME policy was developed in the past could lead to a better understanding of the role of SME in this new world. As new policy is developed, this study brings to the fore the dynamics of institutional context, policy actors and stakeholders, and the impact they have on policy outcomes.
Business development and the growth of rural SMEs
OECD regional development working papers, 2019
The paper reviews the role of Small and Medium Size Enterprises (SMEs) as drivers of employment and economic growth in rural regions across a number of OECD geographies. It argues that SME creation is especially important for rural economic development and identified lessons for national level policy that can help strengthen the performance of SMEs and enhance the creation of new SMEs. This working paper focuses on four cases studies in Atlantic Canada, Quebec, Scotland and the United States to derive general findings and recommendations
Small and Medium Enterprises (SMEs) are considered engines for economic growth, not only in India but all over the world. They account for 80% of global economic growth. Market conditions have dramatically changed for Indian SMEs after economic reforms. SMEs are regularly facing new challenges in terms of cost, quality, delivery, flexibility and human resource development for their survival and growth. In the context of a dynamic market scenario, they have to formulate their strategies for developing various capabilities and competencies to satisfy their domestic as well as global customers. For long-term competitiveness, SMEs have to focus on all aspects of organisational functions such as assets, strategy development, processes and their performance. This study tries to illustrate this concept with the help of a case study. It is observed that to be competitive, SMEs should have clarity of mission and should proactively develop their human resources and competencies to meet fast changing customer requirements.
Formulating a Strategic Framework to Promote Sme Development
Southern African Institute of Industrial Engineering, 2013
SMEs are critical to economic development within the South African economy by contributing considerably to the national GDP and private sector employment. However they are unable to overcome the primary obstacle of access to funding, which translates into an inability to attain the necessary physical, human and consulting resources. Private equity and the venture capital sector has been critical in providing this necessary funding to support SME creation and growth in developed countries, but has been underrepresented in South Africa. This is set to change by an amendment to Regulation 28 which allows pension funds to legally allocate a portion of the fund to private equity investments. SMEs currently lack an understanding of the business value curve utilized by financiers to gauge the risk-reward characteristics of an investment. SME strategies need to convey how the business model will isolate imitators as well as bridge misfits between their current resources and future requireme...
Strategic Management Practices and Barriers in Rural SMEs
Small and Medium Enterprises (SMEs) make up the majority of business entities in the region and contribute significantly to revenue generation and employment. For SMEs to be profitable and to grow into larger corporate entities, a significant amount of management capacity is required. As a SME owner, private sector leader and management student, the author has recognised a significant gap which exists between SMEs and the knowledge required by owners to deploy an effective company strategy to maximise potential of a business. The purpose of this research study is to examine the need for this gap to be addressed, the level of strategic thinking among owners which exists –if any; and the barriers to its inclusion by SMEs in Guyana. By investigating and studying twenty three (23) organisations in a rural community, reference was made to both quantitative and qualitative data from respondents in the context of management knowledge literature of SMEs. Host country and knowledge provider perspectives were also considered. The results of the research confirmed the limited to average level of strategic thinking which currently exists in the majority of SMEs. By addressing the identified knowledge gap all the parties involved including the SMEs, the host country and the knowledge providers are likely to benefit significantly in terms of increased revenues, profits and employment.
This study attempted to identify factors that are affecting business success of small and medium enterprises (SMEs) in Thailand. The intention of this study is to provide the understanding on how people should start their business by looking at all the factors affecting business success hence help to reduce the risk of failure and increase chances of success. The study examined eight factors that influence the SMEs business success. These factors are: SMEs characteristic, management and know-how, products and services, Customer and Market, the way of doing business and cooperation, resources and finance, Strategy, and external environment. The theoretical framework has been drawn out and questionnaire was designed based on the factors chosen. Eight hypotheses were developed to find out factors that are affecting Business Success of SMEs in Thailand. The entire hypotheses were successfully tested with SPSS and five hypotheses were accepted. The regression analysis result shown that the most significant factors affecting business success of SMEs in Thailand were SMEs characteristics, customer and market, the way of doing business, resources and finance, and external environment.