Performance Of Small And Medium Enterprises Research Articles

An Evaluation of The Impact of Leadership Styles on the Performance of SMEs in Zambia: A Conceptual Perspective

Small and Medium Enterprises (SMEs) contribute a significant portion to Zambia’s economy, playing vital roles in employment, revenue generation, and societal development. Despite their importance, SMEs in Zambia face challenges, including high failure rates attributed to ineffective management and unsuitable leadership. Leadership is crucial for organizational success, yet its impact on SME performance in Zambia remains underexplored. This research aims to assess the influence of leadership styles on Zambian SMEs' performance. The study is rooted in the understanding that effective leadership is essential for organizational success, particularly in SMEs facing dynamic and competitive environments. Drawing on existing literature, the research examines various leadership styles, including transformational, transactional, laissez-faire, and servant leadership. Leadership styles have significant implications for organizational performance. Transformational leadership inspires followers to surpass expectations and fosters innovation and employee motivation. Transactional leadership focuses on goal setting and rewards, ensuring compliance but may limit long-term growth. Laissez-faire leadership grants autonomy but risks organizational disorganization. Servant leadership prioritizes employee well-being, adaptability, and long-term sustainability, aligning closely with SME needs. The study suggests that servant leadership is particularly well-suited for managing Zambian SMEs due to its emphasis on employee engagement, adaptability, talent retention, organizational culture, and long-term sustainability. By fostering a supportive environment, empowering employees, and promoting a positive organizational culture, servant leaders can navigate the challenges faced by Zambian SMEs and nurture their growth and success. In conclusion, effective leadership is crucial for Zambian SMEs to thrive in today's competitive landscape. Servant leadership emerges as a promising approach for managing SMEs, offering a holistic framework that prioritizes employee well-being and organizational sustainability. Recommendations include fostering servant leadership practices among SME culture and contribute to Zambia’s economy.

Antecedent SMEs Performance: The Interaction Effect of External Integration

Competence and entrepreneurial orientation are key factors in maintaining the resilience of SME businesses. Specifically this study has the following objectives; (1) to identify the effect of entrepreneurial orientation (EO) on the performance of SME companies, (2) to identify the effect of entrepreneurial competence (EC) on the performance of SME companies (3) to identify the effect of EO on the performance of SME companies with external integration moderation variables (ExIn), (4) to identify the effect of EC on the performance of SME companies with external integration moderation variables (ExIn). The population and sample of this study are small and medium enterprises (SMEs) in several districts/cities in the province of Bali with respondents owners/leaders of SMEs several 150 people. Data analysis using SEM approach and processing with the help of Smart PLS 3.2.2. The results showed; the first hypothesis that entrepreneurial orientation (EO) has a positive effect on the performance of SME companies (FP). Based on the test results obtained the first hypothesis is accepted. The results of the second hypothesis test that entrepreneurial competence (EC) has a positive effect on the performance of SME companies (FP). The second hypothesis was rejected. Hasip tested the third hypothesis that external integration can moderate (strengthen) the influence of entrepreneurial competence (EC) on the performance of SMEs. The third hypothesis (H3) was rejected.

Organizational Practices’ Role in Managing Open Innovation and Business Performance

Given the ever-changing world of technological advances, and due to the fact that business entities strive for efficiency and cost reduction, open innovation (OI) has become the focus of academic and scholarly discussions. Furthermore, to increase their competitiveness, small and medium enterprises (SMEs) have started implementing OI practices. This study aims to investigate the impact of SMEs’ internal organizational practices on OI and the impact of the latter on SMEs’ business performance. This quantitative study, which was based on gathering insights from SMEs, sought to answer two research questions related to the effects of organizational practices on the adoption and management of OI processes in SMEs and the role of OI in accelerating the business performance of SMEs. The findings revealed that not all SMEs’ internal organizational practices have a positive impact on both OI and SMEs’ business performance. This study is among the earliest studies in the UAE and GCC region to explore the impact of specific internal organizational practices on SME OI adoption and its business performance. The present study contributes theoretically and practically to OI literature and assists SME managers in evaluating their internal organizational practices’ suitability for OI adoption.

The mediating role of marketing management in the relationship between online presence and product innovation among SMEs

PurposeThis study explores the mediating role of marketing management in the relationship between online presence and product innovation among Small and Medium Enterprises (SMEs).Design/methodology/approachThe sample comprises 205 Costa Rican SMEs collected by the Global Competitiveness Project during the first half of 2019. The data were analyzed using a two-stage modeling strategy for ordinary regression models to analyze mediation effects.FindingsMarketing management as a strategic resource or capability accounts for the relationship between online presence and product innovation performance in SMEs, meaning that online presence resources require complementary organizational capabilities in marketing management to enhance product innovation.Originality/valueThis study, grounded in the resource-based view theory, contributes to the innovation field by identifying marketing management capabilities as an intermediate strategic interaction between online presence and product innovation performance in SMEs. Thus, managers should recognize the advantages of integrating marketing management principles and tactics into online presence tools to realize the value of their products by tailoring them to their client’s needs.

Does ESG implementation influence performance and risk in SMEs?

AbstractThe relationship between Environmental Social and Governance (ESG) activities and financial performance has been explored within large companies. The presence of these activities in Small and Medium Enterprises (SMEs) is still in its early stages in the literature, requiring further empirical evidence. Given the importance of SMEs in economy and based on Stakeholder Theory, a set of hypotheses regarding the influence of ESG on financial and risk performance has been tested using a sample of 538 Spanish SMEs. Specifically, an index has been developed to assess ESG at both global and individual levels. The study analyses the impact of these variables on corporate performance, taking into account factors such as the pandemic period, level of disclosure and the size effect. The results demonstrate the importance of developing and index tailored to measuring ESG within this type of company, as the methodology employed can impact the outcomes. Moreover, at the individual level, all dimensions reflect a significant relationship, but the overall ESG score does not. The social and labor dimensions prove to be the most beneficial indices for enhancing resilience during periods of crisis. Finally, the findings confirm that it is more difficult for SMEs to monetize the results of ESG investment and that disclosing these activities has a positive impact. This study contributes to existing knowledge by constructing a robust measure of the level of ESG implementation and quality, providing valuable insights for SMEs on how to effectively manage their ESG activities.

Determinants of Micro, Small and Medium Enterprises (SMEs) Performance

This study aims to analyze the influence of capital, human resources and technology on the performance of micro, small and medium enterprises (SMEs) in Gorontalo City.  The analysis method uses multiple linear regression with a crossection approach. The data used in this study was primary data sourced from 30 respondents. The results of this study show that: 1) capital has a negative insignificant effect on the performance of SMEs; 2) human resources have a positive insignificant effect on MSME performance and 3) technology has a significant positive effect on SMEs performance. This study provides practical implications for the government as a policy maker in an effort to improve the performance and empowerment of SMEs, especially in Gorontalo City.  

Tacit Knowledge Sharing as a Catalyst for Innovation Capability in Small and Medium Enterprises (SMEs) in the Malaysian Furniture Industry

In the shift to a knowledge-based economy, SMEs in the Malaysian furniture industry need to improve their innovation capability to meet the dynamic challenges and opportunities of the information age and secure a competitive advantage. Empirical research shows that a variety of factors play a crucial role in determining the innovation capabilities of the firm. The aim of this conceptual paper is to investigate how tacit knowledge sharing influences the innovation performance of SMEs in the Malaysian furniture industry, and to examine the mediating role of innovation capability at both individual and organizational levels. The conceptual framework was constructed after synthesizing the existing literature and highlights the essential role of tacit practices such as knowledge donation and collection are critical in cultivating a culture of knowledge sharing that significantly influences innovation performance at both individual and organizational levels. The paper hypothesizes that innovation capability could serve as a mediator between tacit knowledge sharing and innovation performance, emphasizing the need for SME owners and managers to prioritize tacit knowledge to achieve better innovation outcomes. The conceptual framework is grounded in Resources-Based View theory, which elucidates the interactions between variables. The theoretical and practical implications of this model are also discussed.

Measuring the Effects of Entrepreneurial Orientation on Social Media Adoption and SME’s Performance in Kathmandu Valley: Evidence from Structural Equation Modeling Using Smart PLS 4.0

Social media platforms have become crucial for Small and Medium Enterprises (SMEs) to enhance their online presence and engagement in the contemporary digital media landscape. The study highlights the significance of entrepreneurial orientation in utilizing social media for SME growth and performance, especially in the face of challenges like digital literacy and infrastructure gaps. Furthermore, the study outlines its structure and aims to establish a link between entrepreneurial orientation, social media adoption, and SME performance, offering insights to guide future initiatives. Structural Equation Modeling (SEM) using Partial Least Squares (PLS) was utilized to test four hypotheses among 280 respondents to analyze the connections and causal relationships between the effect of entrepreneurial orientation on social media adoption and SME performance. The findings reveal that a lack of knowledge and skills, limited resources for investing in social media, and privacy and security concerns are significant challenges to adopting social media. SEM results indicate a significant relationship between entrepreneurial orientation (β= 0.264, P<0.01) and social media (β= 0.150, P < 0.05) in SME performance (β = 0.281, P<0.05), whereas innovation capability shows an insignificant relationship (β = 0.002, P > 0.05). Respondents also opined that staying updated with the latest trends and collaborating with influencers and digital marketing experts are some managerial solutions to mitigate the challenges. Challenges like knowledge gaps and resource limitations affecting adoption were identified as significant hindrances, while effective social media integration was identified as a performance-impacting factor. Staying updated and collaborating with digital marketing experts are vital for overcoming obstacles and thriving in the evolving Nepali economy through SMEs.

IMPACT OF LEADERSHIP STYLES ON PERFORMANCE IN SMALL AND MEDIUM-SIZED ENTERPRISES IN MANIPUR

This quantitative study examined the impact of leadership styles on the performance of small and medium enterprises (SMEs) in Manipur, India. Transformational, transactional, and passive avoidant leadership were measured as independent variables. Firm performance consisted of sales growth, return on investment (ROI), and growth in the number of employees over the past year. A sample of 197 SME leaders participated in the survey. Correlation and regression analyses tested the relationship between leadership styles and aspects of SME performance. Results demonstrated that transformational leadership had robust, significant positive associations with all three performance measures. Transactional leadership also positively predicted sales growth and ROI. In contrast, passive avoidant leadership could have been more inconsequential or mildly detrimental for SMEs. Together, the leadership styles accounted for 19-24% of variation in firm performance. The findings highlight the crucial role of engaged leadership approaches centred on inspiration, rewards, and modelling integrity for enabling Manipuri SMEs to thrive. Practical implications suggest integrating transformational leadership principles into local entrepreneurship training programs.

Entrepreneurial Behaviour and the Performance of Small and Medium Enterprises in South-West, Nigeria

  In recent times, the performance of Small and Medium Enterprises (SMEs) has generated increased interest because of their crucial contribution to the national and global economies. Against this back drop, this study empirically investigated the impact of entrepreneurial behaviour on the performance of SMEs in South-West, Nigeria. Specifically, this study evaluated the combined impact of entrepreneurial orientation, entrepreneurial competency, entrepreneurial mindset, and social network on the performance of SMEs. This study adopted a survey research design. The population of this study consisted of one hundred and forty-nine thousand, three hundred and seventeen (149,317) registered SMEs in operation with Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) as at the end of December, 2021 in South West, Nigeria. This study adopted a tabular approach proposed by Gill et al. (2010) Gill et al. (2010), as cited in Taherdoost (2017), to arrive at a sample size of six hundred and fifty-nine (659) respondents. This study employed multi-stage sampling technique, involving stratified sampling, proportionate sampling, and simple random sampling. The primary data used for the analyses were collected from the respondents through the use of structured questionnaire, and responses were analysed using descriptive and multiple regression analysis. The results revealed entrepreneurial behaviours (entrepreneurial orientation, entrepreneurial competency, entrepreneurial mindset, and social network) had a significant and positive impact on the performance of SMEs (Adjusted R2 = 0.878, p< 0.05). This study concluded that entrepreneurial behaviours enhanced the performance of SMEs in South-West, Nigeria. The study recommended that SMEs’ owners and managers should adopt an entrepreneurial approach, including entrepreneurial orientation, entrepreneurial competency, entrepreneurial mindset, and social network strategies. By doing so, they can develop more innovative products and services, outperform competitors, improve output, and retain customers in their operating sector.

Business Strategy and Small and Medium Enterprises (SMEs) Performance: The Moderating Role of the Business Environment

Enhancing performance is a crucial approach to ensuring the sustainability of small and medium-sized enterprises (SMEs). The primary focus is on improving SME performance to promote more effective growth. Therefore, the objective of this study is to examine the factors contributing to enhancing SME performance. In empirical research conducted in Indonesia, specifically in South Sumatra Province in 2021, where the contribution to GRDP was only 1.72% compared to other provinces above 10% (Jakarta, East Java, and West Java), the aim is to validate the hypotheses. Through a self-administered survey, 109 eligible questionnaires were collected from SME businesses for this study. Additionally, data analysis employed the Partial Least Square-Structural Equation Modeling (PLS-SEM) technique. The findings of this study indicate the acceptance of the relationship between business strategy and SME performance. Similarly, it is hypothesized that the business environment, acting as a moderator, strengthens the impact of business strategy on SME performance. Insights from this study on the effectiveness of small and medium-sized enterprises (SMEs) in South Sumatra, Indonesia, provide valuable input for future decision-making.

Financial Literacy and Performance of Small and Medium Scale Enterprises in Abuja, Nigeria

Many Small and Medium Enterprises (SMEs) failed because they lack financial knowledge, attitudes, behaviours and influence to be a successful entrepreneur, those that are successful are traced with insufficient business acuity, as well as basic accounting knowledge, undermines entrepreneurial activity. Therefore, this study examined financial literacy and performance of SMEs in Abuja, Nigeria. The study used survey method in achieving the objectives through the use of primary data collection. Questionnaire were administered to 550 respondents in all the six areas council of Abuja, Nigeria while 469 was usable and analysed for the study. The data analysis method used was multiple regression due to the nature of the data collected. The findings from the study revealed that respondents have adequate financial knowledge of their various businesses as such impact positively on their businesses in Abuja, Nigeria. Also, it was revealed that financial behavior of SMEs owners in Abuja had a positive significant impact on their businesses performance. However, financial attitudes of the business owners and operators in Abuja improves the performance of their businesses. It was revealed from the analysis of the study that the financial influence of the SMEs owners contributed at a low rate to the performance of their businesses in Abuja. The study concluded that financially literacy of SMEs owners in Abuja contributed positively to the growth of their businesses. The study recommended that government agencies along with micro finance institutions and deposit money banks should organize financial education programmes that will create more awareness and growth on areas that are lacking in financial literacy.

Successful Leadership Styles from the Lense of Qualitative Perspective: A Conceptual Visit

This paper explores the relevancy of transformational and servant leadership styles in Small and Medium Enterprises (SMEs) in Malaysia. The topic of leadership has been studied extensively throughout the years, with various leadership theories have been proposed. Previous studies have also highlighted on how leadership style is crucial in influencing the performance of an organization. Moreover, these two well-known leadership styles are believed to sit well with the concepts and strategies practiced among SMEs in this country. This study seeks to offer literature and practical insights into why these two styles of leadership are relevant and practical for the distinctive circumstances of Malaysian SMEs. Therefore, the researcher concluded with a rationale that applying the right and suitable leadership styles will influence the performance and success of Malaysian SMEs in the future.

The Role of market development strategy on the performance of manufacturing small and medium enterprise owners in southwest Nigeria

The manufacturing sector's performance is crucial to the development of an economy. The ability of small and medium enterprises (SMEs) to plan their growth strategy is instrumental to attain high performance. The fundamental concept used in this study is the Ansoff matrix model.  Hence, this study examined the role of market development in the performance of SMEs. 384 copies of questionnaires were distributed among the manufacturing SME owners and managers in Southwest Nigeria of which 361 copies were retrieved and analyzed. Structural Equation Modelling (SEM) was used for the analysis.  The results indicated that market development has a significant effect on SME’s performance. The path coefficients of   0.81, 0.76, 0.80 and 0.85 revealed a large degree of relationship between market development and customer satisfaction, market share, profitability and service quality respectively. According to the statistical analysis, market development has a high predictability for service quality (73.5%) followed by profitability (65.3%), market share (58.7%), customer satisfaction (65.8%) and profitability (65.3%). The implications are that when SME owners enter a new market apart from their existing market and can attract more customers to serve, it will in turn increase the satisfaction of their customers and improve their perceived quality leading to an increase in financial returns as well as an increase in the portion of the market that they control. This study recommends that the management of manufacturing SMEs should venture into new geographical areas with the appropriate development of new market segments and the creation of new distribution channels.

TRAJECTORY OF SME DEVELOPMENT: A CRITICAL ANALYSIS AND PROSPECTIVE INSIGHT INTO DIVERSIFICATION PROGRESS IN NIGERIA

The pivotal role of small and medium enterprises (SMEs) in fostering economic diversification has been widely acknowledged as crucial for achieving inclusive growth and development. Recognising this, the Nigerian government has outlined the Strategic Roadmap and Action Plan (SRAP 2021–2024), aligning with the National Digital Economy Policy and Strategy (NDEPS) and the National Development Plan (NDP), 2021–2025. This initiative seeks to establish an ecosystem for innovation-driven enterprises (IDE) and empower SMEs to embrace emerging technologies, a crucial aspect of technological catching-up in developing economies. This paper utilised qualitative research approach to critically analysed the perspective of SMEs development and its role in advancing economic diversification in Nigeria, an emerging economy within Sub-Saharan Africa (SSA), particularly in the context of technological catching-up. However, the introduction of policies such as SRAP has shown promise in encouraging SMEs to leverage technology for enhanced innovation, providing a pathway for these enterprises to catch up technologically in the broader context of developing economies. Additionally, our paper identifies infrastructure deficits as a critical factor impeding SME development, contributing significantly to the country's low ranking on the global Ease of Doing Business (EoDB) index. In light of these findings, we recommend a comprehensive and effective implementation of policies to boost SME performance, generate employment opportunities, and alleviate poverty, thereby contributing to technological catching-up and broader national development in the context of developing economies.

Financial Inclusion as a Veritable Tool for the Performance of Small and Medium Enterprises: Empirical Evidences from Osun State, Nigeria

Policymakers, researchers, and other stakeholders globally have been discussing the success and failure of small and medium enterprises (SMEs). Financial inclusion has been considered a fresh way to expand the distribution of cheap financing to low-income and disadvantaged groups in society, thereby facilitating the operation of commercial activities. Therefore, the aim of this study is to investigate how financial inclusion affects the performance of SMEs in Osun State, Nigeria. The study made use of primary data. Data from the respondents were gathered using a structured questionnaire. 8,923 Osun State-registered SMEs are the study's population. Through the use of a simple random sampling technique, 450 respondents made up the study's sample size. The performance of SMEs (sales growth) and the independent variable, financial inclusion dimensions (proximity, payment infrastructure, store of value, and information storage), were examined using multiple regression analysis on the data. The results showed that financial inclusion as a whole had a 71.4% significant impact on SMEs' performance. The findings also revealed that proximity (0.987), payment infrastructure (0871), stores of value (0.784), and information storage (0.691) all significantly impacted the performance of SMEs. The study came to the conclusion that the growth of these financial inclusion dimensions has an impact on SME performance in Osun State, Nigeria. Accordingly, the study recommended that the government, financial institutions, and other stakeholders continue to enhance their delivery of financial inclusion dimensions and educate the general public about the range of financial services that are accessible beyond credit services, which are well-known and widely used.

Financial Inclusion and Access to Finance for Small and Medium Enterprises (SMEs) - A Literature Review

Purpose: The aim of this paper is to review the interrelationships between financial inclusion, digital finance, and Small and Medium Enterprises (SMEs) performance in emerging economies, with a specific focus on Zambia. Design/methodology/approach: The use of Google Scholar, Elsevier, research gate, and science direct generated the survey methodology. The suitable publications were selected from the papers published between the years 2000 and 2023. The terms applied for searching keywords include small and medium enterprises, financial services, SMEs in Zambia, financial performance of SME, SMEs in Africa, financial inclusion, economic growth, financial literacy, digital technology, and digital finance.

The Impact of Business Diagnostics on the Activities of SMEs in Nigeria

In the context of Nigeria, where the average lifespan of businesses is limited to approximately five years, addressing and overcoming challenges has become a critical imperative. This study underscores the pivotal role of business diagnostics in supporting the growth and sustainability of businesses, particularly Small and Medium Enterprises (SMEs), in Nigeria. Specifically, it investigates how SMEs in Nigeria employ diagnostic tools, such as SWOT analysis, to discern their strengths, weaknesses, opportunities, and threats. Utilizing a qualitative research methodology, the study employs a structured, open-ended questionnaire as the primary data collection instrument, with a sample of fifteen strategically chosen SMEs participating in a specialized course at a business school. Purposive sampling ensures diversity among the selected SMEs, enriching the depth of the collected data. The structured, open-ended questionnaire allows participants to express their perspectives, facilitating in-depth responses freely. Thematic analysis is applied to identify patterns and insights within the qualitative data, providing nuanced answers to the research questions. The findings underscore that business diagnostics significantly contribute to the effective management and growth of SMEs in Nigeria, illuminating the potential for increased economic development through improved SME performance. Incorporating the results, the study sheds light on the varied experiences and perspectives of SMEs with business diagnostics, offering a rich and contextualized exploration of the subject matter. Meaningful recommendations derived from the study's findings, contribute to the body of knowledge on effective business diagnostics for SMEs in Nigeria.

Sustainable Procurement Practices and Organisational Performance of Small and Medium Enterprises in Ghana

This study empirically examines the predictive relationship between sustainable procurement practices and its dimensions (staff competence, sustainable IT infrastructure and top management support) and the performance of Small and Medium Enterprises (SMEs). Using the explanatory research design, structured questionnaires were administered to 317 managers and owners of selected SMEs. The Structured equation modeling (SEM) via Smart PLS 4.0 was used for analyzing and testing the hypotheses. The findings show that top management support and sustainable IT infrastructure have moderately significant and positive impact on SMEs performance whilst staff competence did not have any statistically significant effect on SMEs performance. Even though staff competence did not have a statistically significant effect on SME performance in this context, managers and owners should not avoid training and developing staff competence as it may translate in affecting other aspects of business operation not accounted for by SME performance. Through the lens of the institutional theory, resource-based theory and the theory of altruism, the study proves the predictive relationship between sustainable procurement practices and small and medium enterprises in Ghana.

The Effect Analysis of Religiosity, Financial Literacy, and Islamic Financial Planning on The Performance of SMEs

SMEs (Small and Medium Enterprises) serve as the backbone of the Indonesian economy, in a country with the world's largest Muslim population. Therefore, further analysis is needed regarding the factors influencing the performance of SMEs in an effort to maximize the country's revenue. This research aims to examine the relationship between religiosity, financial literacy, and Islamic financial planning on the performance of Micro, Small, and Medium Enterprises (MSMEs) in the Greater Jakarta area (Jabodetabek). This study employs a quantitative approach using the Structural Equation Model Partial Least Square (SEM-PLS) with primary data collected through an online purposive sampling technique from 113 MSMEs in Jabodetabek. The performance of MSMEs is significantly influenced by religiosity, Sharia financial literacy, and Islamic financial planning. Religiosity has a significant impact on Sharia financial literacy and Islamic financial planning. Sharia financial literacy affects Islamic financial planning significantly.