Manufacturing Small And Medium Enterprises Research Articles

Enhancing organizational performance of Malaysian SMEs

Purpose– The purpose of this paper is to examine organizational learning (OL) capability as a mediator of the relationship between human resource management (HRM) and performance of Malaysian small and medium enterprises (SMEs).Design/methodology/approach– A cross-sectional design was adopted, where data were collected from a sample of 286 manufacturing and service SMEs, utilizing a survey questionnaire. Hypotheses were tested using structural equation modeling.Findings– Results from a two-stage structural equation modeling analysis suggest that the use of human-capital enhancing HR practices strengthen SMEs’ learning capability. Furthermore, SMEs’ learning capability mediates the effect of the HR practices on firm performance.Research limitations/implications– It uses a cross-sectional design which has prevented the examination of cause and effect relationship between two constructs. It also did not include large organizations in the sample population. It also did not consider other SME contextual variables which may otherwise exert significant impact on OL capability, or moderate the relationship between the constructs under study.Practical implications– A profound understanding of HR practices’ holistic effect on performances would assist organizations to implement strategies to sustain competitive advantage. Company capabilities embedded in employee behavior are less likely to be inimitable and organizations could effectively nurture the needed employee capabilities to achieve the desired performance outcomes.Originality/value– The study advances knowledge on HRM among SMEs by proposing that decisions on selection of HR practices can be guided by the objective of developing the OL capability of the firm.

The internationalization strategies of rapidly internationalizing high-tech UK SMEs

Purpose– The purpose of this paper is to investigate aspects of causation and effectuation decision-making in respect of the planned and unplanned nature of the internationalization strategies of a small sample of rapidly internationalizing, high-tech UK small and medium enterprises (SMEs). These exhibit four different rates of scale of international intensity (percentage of overseas sales to total sales) and market scope (geographical coverage and commitment).Design/methodology/approach– Interviews with managers of 16 independently owned high-technology-oriented manufacturing SMEs were undertaken in this investigation to reduce the potential effect of bias from parental decision-making and firm size, also trade sectoral conditions. These were drawn from an existing database.Findings– Aspects of both causation and effectuation logic were evident in planned and unplanned aspects of decision-making. Moreover, industry factors were seen to affect internationalization strategies in various ways and not least in respect of the need to exploit windows of opportunity in international niche markets and the usefulness of utilizing managers’ experience and networks in the sector in which firms operated.Originality/value– The contribution of this study is to build on earlier work where authors have used different terminology to describe firms that have internationalized soon after their foundation. Specifically, with respect to the planned versus unplanned nature of respective internationalization strategies and the causation as opposed to effectuation logic in decision-making.

Are exporting manufacturing SMEs more efficient than non-exporting ones? Evidence from Australia’s business longitudinal database

This paper examines the efficiency performance of exporting versus non-exporting manufacturing small and medium enterprises (SMEs) using the Business Longitudinal Database compiled by the Australian Bureau of Statistics for the period 2005–2006. The results from an analysis of 543 manufacturing SMEs indicate that overall manufacturing SMEs improved their technical efficiency levels over time, particularly the exporting ones nearly reaching 80%. Among firms of the same size and the same narrowly defined industry, we found that the non-exporting SMEs tended to have lower efficiency levels compared to their exporting counterparts. One may attribute these efficiency differences to the inclusion of more exporting firms in the database and/or the better use of production technology by exporting SMEs. This paper calls for a focus on improving SME efficiency performance as an effective way to enhance their success in global export markets by pursuing a number of initiatives/programs already implemented in other OECD countries.

Corporate Environmental Sustainability in Danish SMEs: A Longitudinal Study of Motivators, Initiatives, and Strategic Effects

AbstractWhile industry leaders proactively address environmental issues as an integrated part of corporate strategy, small and medium enterprises (SMEs) often perceive it as a means of cost reduction. The aim of this paper is to track the development of motivators, environmental initiatives, and their perceived effects on competitive advantage among SMEs. For that purpose, we conducted a longitudinal analysis of 4 repeated surveys over a period of 14 years among Danish manufacturing SMEs. Results show that Danish SMEs have increasingly deployed environmental initiatives that are associated with both lower costs and a differentiation dimensions of competitive advantage. The study also shows that over managerial attitudes, strategic intent has been the main driver when adopting such initiatives. Furthermore, we found that despite some differences between small and medium‐sized firms in terms of the levels of environmental engagement, the competitive benefits are generally robust regarding firm size. Before concluding, implications for future research and corporate managers are pointed out. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment

Fuzzy-based sustainable manufacturing assessment model for SMEs

Now-a-days, in the manufacturing, sustainability has become a necessity partly due to the threats created by traditional manufacturing practices, and due to regulations imposed by stakeholders. Sustainable manufacturing implies the creation of products that utilize minimum resources, has minimum negative impacts on environment and are safe for society at large at an affordable cost. This study proposes a fuzzy inference system-based model for the evaluation of manufacturing sustainability of small and medium enterprises (SMEs). In order to assess the manufacturing SMEs, decision makers’ opinion of the importance of sustainability measures and indicators and also the performance of enterprise with respect to indicators are gathered using linguistic variables. An illustrative list of sustainability indicators for manufacturing SMEs is identified considering the characteristics of SMEs. The implementation of our model for a manufacturing SME identified weak areas of performance which require appropriate strategy to enhance the overall sustainability. Based on the output of this assessment model and further deliberations with decision makers, case company is in process of selecting an appropriate strategy to reduce the environmental impacts. This model serves as a tool to assists the decision makers in assessing various dimensions of sustainability within their manufacturing SMEs.

A Study on Malaysian Food and Beverage Manufacturing SMEs Practices of Pre-Development Process

Product innovation is an important driver for organizations to improve their performance. Large-scale organizations have received full attention from many researchers with respect to efficient pre-development implementation and practices compared to small and medium enterprises (SMEs). Therefore, this study was performed with the main objective to identify SMEs practices in pre-development process. A survey questionnaire was developed and was sent to 687 Malaysian food and beverage manufacturing SMEs. Descriptive analysis was carried out to determine respondent profile and rank of eight critical success factors (CSFs) based on its contribution. Tests to investigate any differences between the level of importance and practice among SMEs were conducted using paired samplet-test. The results of the study indicated that Malaysian SMEs are aware of the importance of pre-development practices to improve organizational performance through the successful development of new products. However, several limitations (i.e. financial, work force, knowledge, experience, and technologies) had caused Malaysian SMEs unable to achieve efficiency and effectiveness in the pre-development implementation practice.

Do process innovations boost SMEs productivity growth?

In this paper, we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self-selection into these activities. First, we analyse whether the ex-ante most productive SMEs are those that start introducing process innovations; then, we test whether process innovations boost SMEs productivity growth using matching techniques to control for the possibility that selection into introducing process innovations may not be a random process. We use a sample of Spanish manufacturing SMEs for the period 1991–2002, drawn from the Encuesta sobre Estrategias Empresariales. Our results show that the introduction of process innovations yields an extra productivity growth, and that the life span of this extra productivity growth lasts for only one period.

Sustainable Product Service Systems in Small and Medium Enterprises (SMEs): Opportunities in the Leather Manufacturing Industry

This paper presents an approach to identify opportunities to develop sustainable Product Service Systems (PSS) involving Small and Medium Enterprises (SMEs). The purpose of the research is to build understanding of how the integration of product and service design and the use of Information and Communication Technologies (ICT) can contribute to identify opportunities to develop sustainable PSS involving SMEs. In order to develop the approach, research with 16 Colombian Manufacturing SMEs was carried out. A reference model and four generic types of PSS according to the relationships between product and service design and ICT are used to analyse the data. Finally, the possibility of extending the approach into a general framework to work with other industries is discussed.

Improving productivity in Indian SMEs

The manufacturing environment is now so competitive that the companies must not only continuously improve their performance, but also do it faster than others. Small and Medium Enterprises (SMEs) significantly contribute to the industrial output of an economy, and must be competitive for the national economy to be competitive in this era of international business. With almost all productivity improvement (PI) tools requiring a working knowledge of statistics, the Indian SME manager with his semi-literate workforce with little or no technical and mathematical training needs a simple and heuristic PI tool that addresses his particular needs. This article proposes a simple scheduling heuristic to improve productivity quickly and effectively and demonstrates its application and benefits through a case study in a spring manufacturing SME.

Change process: a key enabler for building resilient SMEs

Resilience is seen as a key organisational capability for sustainability in the current turbulent environment. At the same time, for organisations to be more sustainable and resilient, the delivery of innovative responses to the market through continuous change and improvement is necessary. If small and medium enterprises (SMEs) account for over 70% of the world's production, and there is a growing mandate to create sustainable SMEs, then instilling, developing and implementing change capabilities is paramount in making progress towards sustainability and resilience. Therefore, this article aims to demonstrate that change management process capability is fundamental to creating resilience in SMEs. This study is based on a multiple case study methodology through semi-structured, face-to-face interviews with 232 senior managers in 37 manufacturing SMEs across Europe. This article demonstrates that sustainability and resilience in SMEs will be enhanced by (1) ability to embrace organisational and people dimensions as well as operational aspects of change management, and (2) paying attention to long-term planning and external communication to drive change proactively. This article builds a bridge between the theoretical starting point, the results of empirical research and the usability of the presented findings in practice in order to contribute to the development of more resilient SMEs.

Human capital enhancing HRM systems and frontline employees in Australian manufacturing SMEs

The current study seeks to answer a number of key questions concerning the strategic management of frontline employees (e.g. individuals who do not occupy an executive, managerial or supervisory role in functions such as production, maintenance, service and clerical functions) and their contributions towards the performance of small- and medium-sized manufacturing firms in Australia. This study adopts a human capital perspective to examine the employee and organisational performance of small and medium enterprises (SMEs) in Australia. We were also interested in seeking to examine the presence of the human resource management (HRM) function of SMEs in Australia and their contribution towards employee and firm performance. Findings from the partial least square analysis identified the antecedents and consequences of a human capital enhancing (HCE) approach for the strategic HRM of frontline employees in Australia's manufacturing industry. Strategic orientations of small- and medium-sized manufacturing firms mediate the contribution of the HRM function in adopting a set of HCE HRM systems. HCE HRM system was found to have a direct and indirect impact on manufacturing performance outcomes. Frontline employees' performance was found to mediate the impact of HCE HRM system on manufacturing performance outcomes. Theoretical and practical implications are discussed in relation to the management of frontline employees in enhancing perceived employee and manufacturing performance.

Firm survival through a crisis: The influence of market orientation, marketing innovation and business strategy

As an outcome of the economic crisis, the global manufacturing sector is collapsing. Focusing on Chinese manufacturing small and medium enterprises (SMEs), this study investigates whether marketing innovation, defined as improvements in the marketing mix, can assist in withstanding the challenges of operating under the current economic conditions. A conceptual model linking market orientation, marketing innovation, competitive advantage and firm survival is tested using structural equation modelling. Three key findings are derived. First, the examined Chinese manufacturing SMEs had a greater perceived likelihood of survival had they developed and sustained a competitive advantage. Second, marketing innovation assisted in developing and sustaining competitive advantages based on differentiation and cost leadership strategies. Third, marketing innovation capabilities improved when the examined manufacturing SMEs were competitor oriented and had good inter-functional capabilities.

Internet‐based ICT adoption among SMEs

PurposeThe purpose of this paper is to investigate the demographic characteristics of small and medium enterprises (SMEs) with regards to their patterns of internet‐based information and communications technology (ICT) adoption, taking into account the dimensions of ICT benefits, barriers, and subsequently adoption intention.Design/methodology/approachA questionnaire‐based survey is used to collect data from 406 managers or owners of SMEs in Malaysia.FindingsThe results reveal that the SMEs would adopt internet‐based ICT regardless of years of business start‐up and internet experience. Some significant differences are spotted between manufacturing and service SMEs in terms of their demographic characteristics and internet‐based ICT benefits, barriers, and adoption intention. Both the industry types express intention to adopt internet‐based ICT, with the service‐based SMEs demonstrating greater intention.Research limitations/implicationsThe paper focuses only on the SMEs in the southern region of Malaysia.Practical implicationsThe findings offer valuable insights to the SMEs – in particular promoting internet‐based ICT adoption for future business success.Originality/valueThis paper is perhaps one of the first to comprehensively investigate the relationship between demographic characteristics of SMEs and the various variables affecting their internet‐based ICT adoption intention.

Labour productivity and employment in Australian manufacturing SMEs

This paper examines the relationship between labour productivity and employment in Australian manufacturing small and medium enterprises (SMEs). The results indicate that labour productivity of SMEs varies substantially between industries within the manufacturing sector, but on average labour productivity for manufacturing SMEs increased at a faster rate than that of large manufacturing enterprises across all industries. All manufacturing industries except one recorded employment growth during the period under study. However like labour productivity growth, employment growth also varies across industries within the manufacturing sector. Yet the study could not establish any definite relationship between labour productivity growth and employment. This finding is consistent with some previous studies.

Technology Transfer and Diffusion among Manufacturing Small and Medium Enterprises in Indonesia

It is evident everywhere that in manufacturing industry, levels of productivity are higher in large enterprises (LEs), including foreign-owned firms or multinational companies (MNCs), than in small and medium enterprises (SMEs), partly because the former enterprises enjoy higher levels of technological capacity. Thus, for SMES, increased productivity might be facilitated through a scaling-up of knowledge or technology. The case study of the Tegal metalworking industry in Central Java presented in this article shows that the most important channels for the diffusion of knowledge/technology among domestic manufacturing SMEs include subcontracting arrangements with foreign direct investment (FDI). However, the importance of FDI as a source of technology/knowledge varies across the differing types of domestic firms. This study also shows that government agencies are currently the largest providers of training and similar assistance for manufacturing SMEs in the country. Such programmes, however, are rendered less effective by a low level of coverage, a lack of effective evaluation and assessment, and a supply rather than a demand orientation.

Does the Creative Business Promotion Law enhance SMEs’ capital investments? Evidence from a panel dataset of unlisted SMEs in Japan

This paper examines whether the Creative Business Promotion Law (CBPL) enacted in 1995 has helped to enhance the capital investment of small and medium enterprises (SMEs) in Japan. Using a panel dataset of unlisted manufacturing SMEs in Japan, we examine their investment behavior under a marginal q model, incorporating leverage and annually constructed CBPL-approved dummies. The estimation results showed that CBPL approval substantially increased SMEs’ new investments. The positive effect of marginal q, and the negative effect of leverage were also shown, both of which were consistent with the hypothesis of the model.