Organizational environment and management skills in small and medium-sized enterprises

Abstract

At present, managers need to acquire and master various management skills that contribute to a positive organizational environment. The aim of this study is to investigate the association between management skills and the organizational environment of small and medium-sized enterprises (SMEs) in Karachi, Pakistan. The primary objective is to determine how various management skills — negotiation, decision-making, leadership, communication, and teamwork — affect the organizational environment within SMEs. Scientific methods for research adopt a descriptive and quantitative approach, utilizing a questionnaire administered to managers of 253 SMEs. Data analysis was conducted using structural equation modeling (SEM) via the partial least squares (PLS) method, employing SmartPLS 4 software. Findings of the study reveal that the latent variables of negotiation and leadership significantly impact the organizational environment, with an R-square value of 0.854. The effect size (F-square) indicates a high impact of negotiation (F-square = 0.720) on the organizational environment, while leadership has a lower but still significant effect (F-square = 0.103). Other management skills, such as decision-making, communication, and teamwork, also show positive associations with the organizational environment, although to lower degrees. Conclusions. The study emphasizes the significance of management skills, particularly effective negotiation and leadership, in fostering a productive organizational environment in SMEs. Also, it suggests that training and development in these areas could significantly improve performance.