Australian Small And Medium-sized Enterprises Research Articles

Exploratory Survey of Australian SMEs: an Investigation into the Barriers and Opportunities Associated with Circular Economy.

Small- and medium-sized enterprises (SMEs) account for 97.4% of all businesses in Australia and, contribute, by revenue, 32% to the country's economy. In the last decade, Australian SMEs have become increasingly aware of the importance of sustainability and need to shift away from a linear to circular economy (CE). Since 2019, there has been considerable growth on CE adoption research in SMEs, but empirical research examining Australian SMEs has yet to be undertaken. This study has used a survey and aims to understand the enablers and barriers of CE adoption in Australian SMEs. The research addresses three specific research questions- What are the barriers that impact CE adoption in Australian SMEs?; What enablers facilitate CE adoption in Australian SMEs?; and What is the effect of industry type, geographic location and job roles on enablers and barriers identification for CE adoption in Australian SMEs? Based on 352 responses from the survey of Australian SMEs, the paper identifies and analyses the enablers and barriers that these organizations face as they transition towards circular economy. The impact that location, industry sector and the role respondents undertake within the organization provides some interesting insights into how Australian SMEs are managing the process of adoption of CE. The research demonstrates that there is an overwhelming need for the development of consistent, sectoral, industry and location-specific policies by the federal and state governments to support internal policy development and the acquisition of new technologies in order to stimulate Australian SME CE adoption. In addition, Australian SMEs need to have a better understanding of how budgetary constraints, the lack of customer awareness and an absence of clearly defined business process impact CE adoption.

Benefits of business conference participation for Australian SME managers: a case study of a belt and road initiative conference

PurposeThis study aims to explore the benefits of participation in a topic-relevant business conference as a learning and professional development apparatus for senior managers of small- and medium-sized enterprises (SMEs). It analyzes the experiences of 12 Australian SME senior managers who participated in a Belt and Road Initiative (BRI) business conference in Hong Kong.Design/methodology/approachData were collected through pre- and post-conference attendance interviews. Kirkpatrick and Kirkpatrick’s (2005) four levels framework was used to analyze the effectiveness of business conferences on the participants at four different levels of the framework: reaction, learning, behavior and results.FindingsThis study finds that the business conference has shown effectiveness for the participants at the reaction (Level 1), learning (Level 2) and behavior (Level 3), indicating that participation in a topic-relevant business conference is useful for the learning and professional development of SME managers. However, only a moderate level of results (Level 4) was identified from attending the BRI conference, which implies that the content and quality of the business conference may influence the achievement of expected results.Originality/valueThis paper contributes a new understanding of the benefits of topic-relevant business conference participation as a learning and professional development apparatus for SME senior managers.

An integrated model of BIM return on investment for Australian small- and medium-sized enterprises (SMEs)

PurposeThe business benefits envisaged for BIM represent the main criteria for decision-making about BIM implementation – or shy away from BIM. Despite the significance, traditional evaluation techniques have difficulty to capture “the true value” of BIM from multiple levels and dimensions – as an effective evaluation method is supposed to. This study aims to identify the significant factors that affect BIM return on investment (ROI), develop an integrated model for companies and examine the influence of intangible returning factors of BIM on the rate of BIM implementation.Design/methodology/approachA cluster sampling technique was used; 92 questionnaires completed by Australian architecture, engineering and construction small- and medium-sized enterprises (SMEs) provided the basis to identify and analyse the key measurable returning factors, value drivers and strategic benefits associated with BIM ROI.FindingsApplying the PLS-SEM technique, findings reveal that a lack of reliable quantification methods for the ROI factors associated with BIM significantly affects the organisation's commitments to implement BIM. In essence, the failure to adequately identify and assess these benefits could result in the system not being appropriately implemented and supported by executive sponsors, who give priority to hard and tangible ROI measurements.Practical implicationsThe outcome of this study would be of direct appeal to policymakers, industry professionals and the academic community alike, in providing data-informed insight into the intersection between the implementation of BIM and the concept of ROI. Findings would provide a springboard for further research into using ROI factors to increase BIM implementation. Though the findings are directly applicable and contextualised for Australia, they provide lessons and offer a blueprint for similar studies in other countries and settings. That is, regardless of the context, findings raise awareness and provide a point of reference for the quantification of intangible returning factors rather than the tangible returning factors, as one of the first studies in its kind.Originality/valueThe study provides original insight in drawing attention to an untapped area for research in BIM implementation, namely BIM ROI. Apart from raising awareness around BIM ROI, the study is novel in providing a quantified model that establishes the links and level of impacts of various factors associated with BIM ROI. Findings of this study, particularly add value to the body of knowledge related to the business implications associated with BIM implementation in the context of Australian SMEs, while providing lessons for other countries and settings.

Australian SME's experience in transitioning to circular economy

Small and medium-sized enterprises (SMEs) are becoming increasingly aware of the values of the Circular Economy (CE) as a sustainable alternative to the traditional linear economic model. However, the academic discussion thus far mostly clusters around conceptualisation and idiosyncratic cases challenging to replicate and generalise. Based on 16 case studies of Australian SMEs' success stories, this paper narrates their vision, alignment with 3R concepts, and critical success factors through transitioning to Circular Economy. Leaders' vision of embracing CE, rather than directly seeking financial outcomes, has led to their success. While aligning towards a singular aspect of 3R (reduce, reuse, or recycle), SMEs demonstrate an attempt to blend all 3Rs into their frugal business model. The leadership's passion and finding a practical solution are the essential internal critical factors for SMEs successfully implementing CE. Collaboration is the key external factor, suggesting persuasive public, private, and academic partnerships to address CE challenges.

Leadership and digital communication in Australian SMEs amid COVID-19

ABSTRACT The purpose of this study is to explore the relationship between transformational leadership (TL) and employee performance (EP) in the context of digital communication in small and medium-sized enterprises (SMEs) in the supermarket and grocery stores industry in Australia. EP is the key to any organization’s success and leadership plays a significant role in influencing employees. TL affects performance and it’s posited that such effect is positive. However, criticisms of the leadership style have also been postulated. Due to these inconsistencies in previous studies’ observations, this study explores how TL is affected by digital communication in the new era impacted by digital transformation. Findings from this study will fill the gap in the existing literature by developing new knowledge on the relationship between TL and EP in the context of COVID-19, where many SMEs have shifted operations online.

A Roadmap to Integrate Digital Twins for Small and Medium-Sized Enterprises

In the last decade, Australian SMEs are steadily becoming more digitally engaged, but they still face issues and barriers to fully adopt Industry 4.0 (I4.0). Among the tools that I4.0 encompasses, digital twin (DT) and digital thread (DTH) technologies hold significant interest and value. Some of the challenges are the lack of expertise in developing the communication framework required for data collection, processing, and storing; concerns about data and cyber security; lack of knowledge of the digitization and visualisation of data; and value generation for businesses from the data. This article aims to demonstrate the feasibility of DT implementation for small and medium-sized enterprises (SMEs) by developing a framework based on simple and low-cost solutions and providing insight and guidance to overcome technological barriers. To do so, this paper first outlines the theoretical framework and its components, and subsequently discusses a simplified and generalised DT model of a real-world physical asset that demonstrates how these components function, how they are integrated and how they interact with each other. An experimental scenario is presented to transform data harvested from a resistance temperature detector sensor connected with a WAGO 750-8102 Programmable Logic Controller for data storage and analysis, predictive simulation and modelling. Our results demonstrate that sensor data could be readily integrated from Internet-of-Things (IoT) devices and enabling DT technologies, where users could view real time data and key performance indicators (KPIs) in the form of a 3D model. Data from both the sensor and 3D model are viewable in a comprehensive history log through a database. Via this technological demonstration, we provide several recommendations on software, hardware, and expertise that SMEs may adopt to assist with their DT implementations.

Small-scale private equity: demand versus supply

PurposeThis paper aims to bridge the gap between theoretical dissertations on the demand and supply for equity by Australian small and medium-sized enterprises (SMEs) and the reality of the capital raising markets.Design/methodology/approachThe mixed-methods approach includes questions integrated into a survey of 26,000 SMEs paired with semi-structured interviews with the CEOs or Chairs of the 15 Australian small-scale private equity (SSPE) firms.FindingsContrary to capital structure theory expectations, 46 per cent of Australian SMEs are interested in equity funding, despite a stated ability to acquire additional debt. The authors reveal a mismatch between supply and demand for SSPE with few SMEs able to meet private equity (PE) firms’ stringent investment criteria.Research limitations/implicationsThe population of Australian SSPE firms is small and interviewee responses are qualitative and are not easily replicated.Practical implicationsTo improve SSPE market liquidity, SMEs must overcome severe information asymmetry to demonstrate their quality and reduce the cost of due diligence for PE firms. One relatively easy step is for SMEs to voluntarily adopt auditable financial controls on SMEs similar to publicly traded firms.Originality/valueFew studies focus on small firm equity, which is essential to economic growth and innovation. The authors use a large data set of Australian SMEs and unique informationally rich interview data on the population of Australian firms in SSPE, an industry known for its lack of transparency.

Critical determinants for electronic market adoption

PurposeUnderstanding the critical determinants for the adoption of electronic markets (e-markets) is significant for the development of sustainable electronic business. The purpose of this paper is to investigate the critical determinants for the adoption of e-markets in Australian small- and medium-sized enterprises (SMEs) for electronic business.Design/methodology/approachA comprehensive review of the related studies is conducted. That leads to the development of a conceptual model for exploring the critical determinants for the adoption of e-markets in Australian SMEs. Such a model is then tested and validated using structural equation modelling on the survey data collected, leading to the identification of the critical determinants for e-market adoption in Australian SMEs.FindingsThe study reveals that perceived direct benefit, perceived trust, top management support and external pressures are critical for the adoption of e-markets in Australian SMEs. Perceived indirect benefit and organization readiness are insignificant for the adoption of e-markets.Originality/valueThis paper contributes to existing electronic business research by enriching the understanding of the critical determinants for the adoption of e-markets in Australian SMEs. Such a study provides government departments, e-market operators and SMEs with practical guidelines for the better use of e-markets in electronic business.

Unanticipated Change in Organisational Leadership: An Employees’ Perspective in Australian SMEs

This study uses phenomenography as a qualitative methodology within a sensemaking approach to investigate how employees experience unanticipated organisational leadership change in small firms, and it is applied in an empirical study of change management in Australian Small and Medium-sized Enterprises (SMEs). In-depth interviews of 24 employees across 8 different Australian SMEs elicited employees’ varied experiences and aspects of unanticipated leadership change such as transparency, supportive communication, affective responses and self-identity. In particular, the findings reveal common affective reactions and experiences but four different ways in which employees experience unanticipated leadership change. Based on our findings, implications and future direction for research are discussed.

Service innovation and adoption in industrial markets: An SME perspective

Service innovation is essential, particularly for companies operating in highly competitive environments, as it can lead to innovation adoption behaviors, which in turn influence overall business performance. Drawing upon the innovation adoption and relationship marketing literature, and grounded within the structure-conduct-performance paradigm and social exchange theory, this study examines the reputational and relational mechanisms through which service innovation influences the innovation adoption decisions of small and medium-sized enterprises (SMEs). A survey of 336 Australian SME representatives reveals the critical role of suppliers’ sustainable competitive advantage (SCA) and affective commitment in mediating the relationship between service innovation and innovation adoption behavior. However, industry-relevant moderators in the form of technological turbulence and long-term orientation constrain the mediating effects. Specifically, perceived SCA has stronger mediating effects among short-term-oriented customers, whereas affective commitment has stronger mediating effects when technological turbulence is low. The findings provide useful insights for organizations in terms of capitalizing on their reputation and relationship with customers to encourage the adoption of innovation by SMEs.

Factors That Influence Adoption of Cloud Computing: An Empirical Study of Australian SMEs

Cloud computing is a recent computing paradigm enabling organizations to have access to sophisticated computing services via the Internet on a fee-for-service basis. It provides Small and Medium-sized Enterprises (SMEs) with opportunities to become as technologically advanced as their larger counterparts, without significant financial outlays. This paper examined the important factors that influence SMEs’ adoption of cloud computing technology. Drawing upon aspects of the Technology, Organization and Environment framework and Diffusion of Innovation Theory, we developed a research model of SMEs’ adoption of cloud computing and tested it through an online survey of 149 Australian SMEs. Data was analyzed using multiple regression methods, with results showing that SMEs were influenced by factors related to advantaging their organizational capability (i.e., relative advantage, quality of service and awareness) rather than risk-related factors (i.e., security, privacy and flexibility). The findings offer insights to SMEs owners, Cloud service providers and government in establishing Cloud computing adoption strategies for SMEs.

The impact of government financial assistance on the performance and financing of Australian SMEs

PurposeThis paper aims to examine the impact of government financial assistance provided to Australian small and medium-sized enterprises (SMEs).Design/methodology/approachThis study uses firm-level panel data on more than 2,000 SMEs over a five-year period from the Business Longitudinal Database compiled by the Australian Bureau of Statistics. The authors measure the impact of government financial assistance in terms of subsequent SME performance (income from sales of goods and services and profitability) and changes in the availability of alternative nongovernment finance.FindingsThe authors find government financial assistance helps SMEs improve performance over and above the effects of conventional financing. They also find than the implicit guarantee effect signalled by a firm receiving government financial assistance suggests firms are more likely to obtain nongovernment finance in the future. Control factors that significantly affect SME performance and finance availability include business size, the level of innovation, business objectives and industry.Research limitations/implicationsNearly all of the responses in the original survey data are qualitative, so we are unable to assess how the strength of these relationships varies by the levels of assistance, income and profitability. The measure of government financial assistance of the authors is also general in that it includes grants, subsidies and rebates from any Australian Government organisation, so we are unable to comment on the impact of individual federal, state or local government programmes.Practical implicationsGovernment financial assistance helps SMEs improve both immediate and future performance as measured by income and profitability. This could be because government financial assistance quickly overcomes the financial constraints endemic in SMEs. Government financial assistance also helps SMEs obtain nongovernment finance in the future. The authors conjecture that this is because it overcomes some of the information opaqueness of SMEs.Originality/valueFew studies focus on the impact of direct government financial assistance compared with indirect assistance as typical in credit guarantee schemes. The authors use a very large and detailed data set on Australian SMEs to undertake the analysis.

BIM adoption within Australian Small and Medium-sized Enterprises (SMEs): an innovation diffusion model

Despite the envisaged benefits of BIM adoption for SMEs, BIM in SMEs has remained an underrepresented area within the available academic literature. This study proposes and draws upon a framework grounded on innovation diffusion theory (IDT) to provide an illuminating insight into the current state of BIM and the main barriers to BIM adoption within Australian SMEs. Based on analyses of 135 questionnaires completed by SMEs through partial least squares structural equation modelling (PLS-SEM) and grounded on the proposed framework, the current state of BIM adoption and barriers to BIM adoption for SMEs are discussed. The findings show that currently around 42% of Australian SMEs use BIM in Level 1 and Level 2 with only around 5% have tried Level 3. It comes to light that lack of knowledge within SMEs and across the construction supply chain is not a major barrier for Australian SMEs. In essence, the main barriers stem from the risks associated with an uncertain return on investment (ROI) for BIM as perceived by key players in SMEs. The findings also show the validity of the framework proposed for explaining BIM adoption in Australian SMEs.

Doing well by doing good: A study of university-industry interactions, innovationess and firm performance in sustainability-oriented Australian SMEs

Increased concerns about excessive resource consumption, environmental degradation and social inequity have led to calls for a transition toward a more sustainable economy and society. Against this background, the role of innovation in helping enterprises become more sustainable has received increasing attention in the academic literature. While cooperation with external actors is assumed to increase enterprises' capacity for sustainability-oriented innovation (SOI) there is a dearth of empirical studies to support this notion, particularly with regard to university–firm interactions. This is surprising, given the so-called “third mission” activities. The purpose of this study is to address this gap by examining the role and effect of university–firm interactions on innovation outcomes, and firm performance in SOI in small and medium-sized enterprises (SMEs). Using structural equation modelling to analyse a sample of 153 SMEs, we find that generic links in the form of human resource transfer have a significant positive effect on innovativeness, and innovativeness, in turn, is positively related to firm performance. Furthermore, human resource transfer affects firm performance through innovativeness. Therefore, this study supports the premise that developing human resource transfer via employing new graduates, providing graduates with further education and providing employees with vocational training generates performance benefits in the form of innovation outcomes, which in turn indirectly leads to productivity and sales growth in SOI in Australian SMEs. This research contributes to an improved understanding of the relationships between university–firm interactions, the innovation output, and firm performance in the context of SOI in SMEs adding to the emerging dialogue on the “third mission” activities of universities, and the business case for sustainability.

Challenges and Success Factors of ERP Systems in Australian SMEs

Today, great potential is envisaged for ERP systems in small and medium-sized enterprises (SMEs), and software vendors have been repackaging their ERP systems for SMEs with a recent focus on cloud-based systems. While cloud ERP offers the best solution for SMEs without the overheads of the huge investment and management costs that are associated with traditional ERP systems, the SME sector faces many challenges in their adoption. Traditional ERP studies have predominantly focused on large organizations, and gaps in the literature indicate that both vendor and consumer perspectives require more understanding with new technology offerings for SMEs. This paper describes some of the common challenges, such as cost effectiveness, alignment between software and business processes, customized governance and training, which form the major SME constraints for ERP system adoption. Due to the dynamic nature of SME businesses, best practice guidelines for an SME’s ERP implementation could be arrived at through closer investigation of its business requirements in order to avoid misfits. This forms the main objective of the study. We identify key success factors of ERP implementation in an Australian SME as a case study. These target success factors are then compared to the actual outcomes achieved. Factors such as business process alignment with the ERP system, meeting customer and stakeholder needs and reducing recurring and maintenance costs were key to the success of ERP implementation for the Australian SME. In particular, the IT and business strategy alignment with a customer focus and flexible reporting features of ERP systems has resulted in business agility.

Security and Privacy Concerns for Australian SMEs Cloud Adoption: Empirical Study of Metropolitan Vs Regional SMEs

New national infrastructure initiatives such as National Broadband Network (NBN) could enable Small and Medium-sized Enterprises (SMEs) in Australia to further embrace Cloud computing service. However, the ability of Cloud computing to store data remotely and share services in a dynamic environment bring along with it Cloud security and privacy concerns. In this study, we examined the influence of privacy and security factors on Cloud adoption by Australian SMEs through a questionnaire survey. Data was collected from 150 SMEs (i.e. 79 metropolitan SMEs and 71 regional SMEs) and structural equation modelling was used for data analysis. The findings show that Cloud privacy and security factors are not the most critical concern for Australian SMEs. Moreover, the results indicate that Cloud computing adoption is not influenced by the geographical location of the SMEs. This study extends the current understanding of Cloud computing adoption by Australian SMEs.

Finance-seeking behaviour and outcomes for small- and medium-sized enterprises

Purpose – Model finance-seeking behaviour and outcomes by Australian small- and medium-sized enterprises (SMEs) using firm-level panel data. The paper aims to discuss this issue. Design/methodology/approach – Using firm-level three-year panel data for more than 2,000 SMEs from the Business Longitudinal Database compiled by the Australian Bureau of Statistics, the authors estimate separate models for the seeking of finance (debt and/or equity) and the outcomes of finance seeking (successful or unsuccessful). Key explanatory variables include declared business focus (on financial, cost, operational, quality, innovation, and human resource measures), presence of business plans and other documentation related to successful finance seeking, innovation, indicators for family and foreign-owned businesses, and profitability. Control variables include sales, the number of employees, length of operations, export and import activity, government financial assistance, and industry classification. Findings – Business objectives together with a large number of firm-level characteristics, including firm age, size, industry and sales, profits, growth and exports, significantly affect both finance-seeking behaviour and outcomes. The authors find evidence that the pecking-order and agency cost theories of capital structure at least partly explain the financial behaviour of Australian SMEs. Research limitations/implications – Several of the responses in the underlying survey data are qualitative so the authors are unable to assess how the strength of these relationships varies by the levels of sales and profitability. Practical implications – The findings show that business objectives significantly affect SME finance-seeking decisions and outcomes. SMEs that focus on profitability or growth have a strong willingness to seek additional finance; in comparison, SMEs that focus on the quality of their products or services are less likely to apply for additional finance. As only half of the SMEs in the sample considered profitability or growth to be a major business focus, core business objectives greatly affect SME financing decisions. Further, pecking-order theory not trade-off theory better explains the financial behaviour of SMEs, yielding evidence that SMEs continue to face financial constraints when pursuing growth. Some evidence also of agency cost theory in the positive effects of family ownership on debt seeking. Originality/value – One of very few studies to examine finance seeking by SMEs, especially in Australia. Further, only study known to include declared business strategy, presence of business plans and other finance-related documentation and innovation in addition to the usual focus on growth and profitability to explain financing behaviour. Very large panel of longitudinal data used to explain financial decision making over time.

Australian SMEs waste to landfill

Landfill waste has a negative impact on the environment and small and medium sized enterprises (SMEs) are believed to be significant contributors. There is little government or scholarly research, however, quantifying the collective volume of waste SMEs send to landfill. Where studies do exist they measure total volumes (landfill and recycling combined) and/or do not distinguish between specific waste streams (e.g. wood) and subcategories (e.g. dust). This paper contributes to knowledge by giving insight into the collective volume of waste of 404 SMEs, reconceptualising SME waste into subcategories and by measuring landfill volumes. It presents findings from these 404 Australian SMEs which found that, in descending order, cardboard, paper, plastic wrap, wood dust and particleboard were the subcategories these SMEs sent to landfill in the greatest volumes. It also argues that this reconceptualisation, and associated data collection protocols, have the potential to enable scholars and policy makers to determine the waste subcategories to which SMEs contribute most, formulate targeted interventions and research or evaluate environmental outcomes.

Firm-Level Determinants and Impacts of Finance-Seeking Behaviour and Outcomes for Small and Medium-Sized Enterprises (SMEs) in Australia

This paper uses firm-level data from the Business Longitudinal Database compiled by the Australian Bureau of Statistics to examine finance-seeking behaviour and outcomes by Australian small and medium-sized enterprises (SMEs). By modelling the determinants of SME financing behaviour and outcomes using discrete choice techniques and more than two thousand firm cases, we throw useful light on the firm-level factors involved in both debt and equity financing decisions, the availability or lack of availability of finance, and the impact of these outcomes on future firm behaviour. Our findings indicate that a large number of SME characteristics, including firm age, size, industry and sales and the declared strategies for operations, profits, growth and exports, significantly affect both finance-seeking behaviour and outcomes. Putting aside any supply-side circumstances, we conclude that Australian SMEs suffer from severe financial constraints and this significantly affects their strategizing and decision-making across a number of areas.

Environmentally driven technical innovation by Australian construction SMEs

Purpose – The purpose of this paper is to investigate whether technical innovations by construction industry small and medium-sized enterprises (SMEs) with an environmental focus, require any specific circumstances for successful marketplace delivery. Design/methodology/approach – A value tree of significant factors was developed from a literature review. This was tested by a survey of established technical innovators within SMEs in the area of Sydney and environs, using analytic hierarchy process methodology. Findings – The regulatory environment was demonstrated to be much more important to environmental innovators than to others. Conversely the influence of clients and end users was less significant for the environmentally focused innovators. Research limitations/implications – The sample size was necessarily small because the subjects were all peer recognised technical innovators. Analysis of variance was used to identify significant differences between environmentally focused and other innovations among the survey respondents. Social implications – Performance-based standards were seen to be significant enablers for environmentally focused innovation delivery. A degree of flexibility in building regulations may be crucial to innovation delivery by SMEs. Originality/value – The paper stresses the importance for regulators of reaching an understanding of the restrictions that prescriptive standards may put of those seeking to improve the environmental performance of the construction industry.