Survival Of Small And Medium Enterprises Research Articles

Rethinking survival, renewal, and growth strategies of SMEs in Bangladesh: the role of spiritual leadership in crisis situation

PurposeFor Bangladeshi small and medium enterprises (SMEs), the COVID-19 economic shock is remarkable in both its complexity and intensity. SMEs need systemic inspiration to solve the crisis, aligned with a moral and authentic approach that serves both the leader and the follower’s interests. This study aims to conceptualize the innovation-focused success method of SMEs before and after the pandemic to manage the crisis by establishing spiritual leadership based on Islamic perspectives.Design/methodology/approachTo discuss the impact of spiritual leadership on innovation-focused SME performance configuration through the lens of a crisis, a comprehensive literature study has been carried out in which over 360 articles are read and reviewed by the authors. It has also established the reliability and validity of literature analysis. Also, a qualitative investigation has been used to support the direction of the study.FindingsFor a subsequent process of scientific deployment and evaluation of its execution, a new applied strategic innovation-focused SME success configuration through spiritual leadership development is made available. The primary value of this paradigm is the potential to calculate and treat the aspects of spiritual leadership obtained from Islamic ideas.Research limitations/implicationsPrior analytical or empirical attempts from multiple viewpoints are subsequently needed to inquire about the proposed conceptualization.Practical implicationsAmong the realistic consequences of this analysis is that while a number of leadership paradigms have been embraced by a broad body of leadership studies, the findings indicate that this paper should pay heed to the influential spiritual style of leadership, taking into account Islamic perspectives on the context of crisis. Therefore, Bangladeshi SMEs need to develop and run leadership training programs focused on the Islamic viewpoint of spirituality to encourage the actions of leaders during and after crises.Social implicationsThe legal and moral values of the society would ultimately be upgraded from this conceptualization. Moreover, less corruption in corporate activities would improve the economic prosperity of a nation. It would also contribute to the cross-cultural portrayal of the positive picture of Islam.Originality/valueThis holistic conceptualization describes the mediating role of strategic innovation practices based on theoretical foundations, which have seldom been done in previous research, between the Islamic model of spiritual leadership and SME success during and after a crisis.

Intellectual entrepreneurship and future success of Pakistani SMEs

In contemporary business environment, the small and medium enterprises (SMEs) are facing complex and multifaceted challenges to sustain and achieve competitive edge in the ever-increasing knowledge-based economy. In the beginning of the 21st century, the paradigm of the national and international business has entered into the age of distrust, discontinuity and uncertainty because of globalisation, technological advancement, innovation and internet. In this economy, the most vital component of the success for SMEs is intellectual entrepreneurship. Intellectual entrepreneurship is considered as the silver bullet to address the long-standing challenges, survival and success of SMEs. The objective of this study is to address the conceptual theme and define the term intellectual entrepreneurship in business perspective. To the best of our knowledge, this is the first study that addresses the importance of intellectual entrepreneurship and purposes its definition. Moreover, this paper wishes to highlight the practical challenges of Pakistani high-tech SMEs.

A review of the human resource management dilemma for SMEs: case of central Uganda

The increasing interest in human resource practices is driven by the hypothesis that employees and their management are critical to the success of an organization. Small and medium enterprises (SMEs) contribute significantly to several countries’ economies in terms of gross domestic product, employment fraction and exports. Human resource management (HRM) on the other hand plays a pivotal role in the growth and survival of SMEs if systematically understood and implemented in these businesses. As such, this paper aims to analyze factors that affect successful HRM and implementation in small and medium enterprises. Our findings demonstrate that SMEs need to make an effort to close the gap between demand and supply of labor for them to be able to compete with larger firms in the market. We conclude that the factors that affect human resource management are mainly due to the internal organization of these businesses and if HRM is properly implemented, it almost guarantees sustainability and competitive advantage of small firms. An “employee retention model” was formulated which can be used by SMEs to guide the retention of employees hence reducing staff turnover.

Inventory stickiness, environmental dynamism, financial constraints and survival of new SMEs in China

PurposeAlthough the adoption of lean inventory management for performance improvement has been widely recognized, sticky inventory management is still a stopgap measure for new small and medium enterprises (SMEs) against survival risks. The purpose of this paper is to demonstrate the nonlinear relationship between new SMEs inventory stickiness and venture survival by focusing on the moderating effects of environmental dynamism and financial constraints.Design/methodology/approachClassical moderating model is employed to investigate the effects of environmental dynamism and financial constraints on the relationship between inventory stickiness and venture survival. This study uses the accelerated failure time model for survival analysis and tests the relationships based on a large set of new manufacturing SMEs in China over the period from 1999 to 2007.FindingsThe main finding is that inventory stickiness has an inverted U-shaped impact on the likelihood of survival. However, the inflection point of this inverted U-shaped relationship lies at the end of the sample. Further moderation analysis indicates that environmental dynamism positively moderates the inverted U-shaped relationship between inventory stickiness and venture survival, while financial constraints negatively moderate this relationship.Practical implicationsMost new SMEs have great potential to increase the likelihood of survival by improving inventory stickiness before achieving effective lean inventory management. Sticky inventory management can help new SMEs achieve better survival in a dynamic environment. However, new SMEs that are financially constrained should prudently implement sticky inventory management.Originality/valueThis paper contributes to the existing understanding about the likelihood of SMEs survival by addressing the role of sticky inventory management. It may be the first study to empirically demonstrate the moderating effect of environmental dynamism and financial constraints on the inverted U-shaped relationship between inventory stickiness and venture survival.

DECONSTRUCTING ENTREPRENEURIAL MARKETING DIMENSIONS IN SMALL AND MEDIUM-SIZED ENTERPRISES IN NIGERIA: LITERATURE ANALYSIS

In Nigeria, many small and medium enterprises (SMEs) go moribund despite the efforts of government and other supportive agents. There is a dearth of entrepreneurial marketing (EM) models that address the problem of short-term survival of SMEs faced by owners or managers. This paper aims at evaluating extant literature and models on EM to propose a new and comprehensive model for research. In this pursuit, a background literature review on EM was conducted in several peer-reviewed journals to identify the evolution of EM and the milestones and the dimensions of EM and their significance in existing models in relation to the performance and survival of businesses. Nine key dimensions were identified, namely: innovativeness, proactiveness, calculated risk-taking, resource leveraging, customer intensity, value creation, market sensing, alliance formation and teamwork. Based on these dimensions, a new and exhaustive model of EM is proposed. This paper concludes that applying these EM dimensions to SMEs would significantly propagate success in an innovative and sustainable way.

Sustainability of SMEs in the Competition: A Systemic Review on Technological Challenges and SME Performance

In the era of economic globalization, small and medium enterprises (SMEs) are recognized as an engine of sustainable economic development in both the developed and developing world. In literature, three competitive challenges—the sustainability challenge, the global challenge and the technological challenge—faced by industrial entities in the current globalized economy, are categorized. Of them, this paper undertakes a systemic review of the literature covering the theme of SMEs and technology in order to identify how technological progress in the SMEs, correlates with SMEs survival improvement in the global competition. The review identified six driving forces—social capital, link with Multi-National Corporations (MNCs) and Transnational Corporations (TNCs), innovation, sharing and networking, information technology, and adoption of productivity-enhancing technology—influencing technological upgrade in the SMEs. The review also identified two conditions for successful technological adaptation in the SME sector—availability of technologically skillful workforce in the economy, and identification of opportunities of new technologies in the competition. These conditions could be viewed in the macro environment and emphasize the need for the economies’ readiness towards SMEs’ success.

Market Orientation and Survival of Small and Medium Enterprises in Nigeria

Abstract The adoption of a market orientation (MO) model for effective management of small and medium enterprises (SMEs) in Nigeria and beyond has drawn diverse views. Extant studies conducted in Nigeria in the past decades have leveraged on the existing entrepreneurial marketing model that has not significantly contributed to the survival of SMEs in Nigeria. The objective of this quantitative study is to investigate the effects of MO on the survival of manufacturing SMEs in Nigeria. The study adopted a positivistic ontology and descriptive survey design. The study randomly selected 387 owner-managers of manufacturing SMEs in Nigeria. The results show that MO significantly contributed to the survival of SMEs in Nigeria. Based on the results, the study recommends that integrative Entrepreneurial Marketing (EM) should be adopted by both the owners and managers of SMEs as this would help reduce the rate of business failure in Nigeria.

Impact of bank finance on the survival of small and medium enterprises in Nigeria

Banking industries play an important role in the survival of Small and Medium Enterprises (SMEs) and it is known to provide a good business environment or investment climate that encourages private firms to be well managed, efficient, create jobs, increase the rate of economic growth and reduce poverty. The degree of backwardness of small and medium enterprises in Nigeria is not only associated by the poor management of the enterprise but also other complimentary services such as financial assistant of banking industry that would see businesses through their teething stages. Yet little or nothing is known about the impact of financial institution on the survival of SMEs in Nigeria.Hence this study analyzed the impact of bank finance on growth of small and medium Enterprises in relation to GDP growth. Secondary data was used for this study. The secondary data spanning from 1999-2013 was obtained from the World Bank’s Development indicators for 1999- 2013, and all other variables were obtained from the National Bureau of Statistics annual report, 2013 and Central Bank of Nigeria bulletin for 2013. The data collected was analyzed using Multiple Regression and Co-integration Model.The long-run results indicate that finance, credit from private sectors, fiscal deficit and management of accounting information have a significant and positive effect on SMEs growth in Nigeria. Gross fixed capital formulation has an insignificant effect on GDP growth in the long run. An increase of 1 percent in finance will, on average, lead to an increase of about 8 percent in SMEs growth. This implies that the Nigerian economy has been enhanced by the SME sector, possibly through innovations leading to employment generation, job creation, and poverty alleviation. The lag length of the long-run model was selected on the basis of the AIC.. The F-statistic value of the long-run model is also significant and implies that all the independent variables are jointly significant. The Durbin–Watson (DW) test statistic shows an absence of autocorrelation in the model.Keywords: Bank, finance, SMEs, Survival, Nigeria

Value and alliance capability and the formation of strategic alliances in SMEs: The impact of customer orientation and resource optimisation

Strategic alliances offer significant opportunities to organisations, including the ability to expand their capabilities and to optimize value. In exploring the question of whether firms with differing value expectations choose to enter strategic alliances with firms of different capabilities, this study adopts a qualitative research approach using five Business to Business (B2B) manufacturing small and medium enterprises (SMEs). This study focuses on improving our understanding of three related questions, first, whether or not they aim to capture or create value from the alliance; second, what is the nature of their capabilities and third, what is the inter-relationship between value and capabilities in SME alliance formation. A qualitative research approach enabled in-depth investigation and facilitated the emergence of relevant themes; customer orientation and resource optimisation. The insights derived from the study should help SMEs in partner selection and alignment thereby increasing chances of alliance success and longevity, and in turn SME sustainability and survival.

Exploring the role of technological developments and open innovation in the survival of SMEs: an empirical study of Pakistan

Small and medium enterprises (SMEs) play an important role in terms of sustainable economic development. Therefore, the survival of this sector is highly important for every economy. This study theoretically and empirically explores the role of technological developments and open innovation (OI) on SME survival. The first part of this paper is based on library search and available literature on SMEs and the role technological innovations towards the flourishment of SME. Findings from this review shed some lights on the potential of social networking as part of online marketing. Furthermore, the researchers conducted a self-administrated questionnaire-based survey to empirically examine the conceptual framework. The empirical results revealed that the effect of online marketing via social media is more powerful and diverse due to its ability to reach more customers. In addition, open innovation is an effective and emerging tool in the success of SME.

Exploring the role of technological developments and open innovation in the survival of SMEs: an empirical study of Pakistan

Small and medium enterprises (SMEs) play an important role in terms of sustainable economic development. Therefore, the survival of this sector is highly important for every economy. This study theoretically and empirically explores the role of technological developments and open innovation (OI) on SME survival. The first part of this paper is based on library search and available literature on SMEs and the role technological innovations towards the flourishment of SME. Findings from this review shed some lights on the potential of social networking as part of online marketing. Furthermore, the researchers conducted a self-administrated questionnaire-based survey to empirically examine the conceptual framework. The empirical results revealed that the effect of online marketing via social media is more powerful and diverse due to its ability to reach more customers. In addition, open innovation is an effective and emerging tool in the success of SME.

Factors affecting e-business adoption in SMEs: an empirical research

Purpose – Nowadays, small and medium enterprises (SMEs) are incrementally using e-business tools in order to compete in an extremely hostile market and gain global access. The importance of e-business adoption for the economic success and survival of SMEs creates a very interesting field of research. The purpose of this paper is to develop and empirically test a conceptual framework that investigates the factors affecting the e-business adoption decision in SMEs. Design/methodology/approach – The examination of the proposed conceptual framework was made with the use of a newly developed structured questionnaire that was distributed to a group of Greek SMEs. The questionnaire was distributed to 600 companies, while 161 usable questionnaires were finally returned. exploratory factor analysis, confirmatory factor analysis, linear regression methods and the structural equation modelling (SEM) technique were used to test the research hypotheses. Findings – The proposed model explains 71 per cent of the variance of e-business adoption, with firm size, firm scope, IT infrastructure and internet skills being the most important e-business adoption drivers (with firm size being the most significant). On the other hand, CEOs knowledge, adoption cost, and competitive pressure do not seem to play an important role in the e-business adoption decision. Research limitations/implications – A limitation stemming from the implemented methodology is the use of self report scales to measure the constructs of the proposed model. Moreover, the present paper lacks a longitudinal approach, since it is cross-sectional and provides a static picture of e-business adoption. Practical implications – The paper makes an effort in order to point out areas that companies should emphasise in order to successfully adopt e-business and, therefore, harvest its potential benefits. Certain practical implications are offered in the final part of the paper. Originality/value – First, the present study places SMEs in the centre of its attention, while the contemporary research mostly examines the implementation of e-business practices in large organisations. Second, the present study proposes a three-dimensional conceptual framework, including technological, organisational and environmental context. Such a multidimensional approach has randomly been explored in the existing literature. Third, the results of the study may be generalised in other developed countries with similar economic realities and yield interesting outcomes for practitioners in these countries.

Financing small and medium enterprises in Asia and the Pacific

Purpose – The purpose of this paper is to propose policy suggestions for the financing of small and medium enterprises (SMEs) in the Asia-Pacific region. Recent literature suggests that lack of capital is the most severe constraint for SME survival and growth. Enabling policymakers to assist SMEs in their search for financing will boost economic growth. Design/methodology/approach – The methodology includes both quantitative and qualitative components. Current World Bank data on the strength of various financial institutions in the countries of interest is analyzed to discover areas of improvement. Additionally, 32 experts from East and South Asia were interviewed several times to determine areas of concern in financing SMEs. Their responses and the evidence from the World Bank data form the basis of the policy prescriptions in the paper. Findings – Financing is a critical constraint for SMEs for several reasons. Many SME owners do not manage working capital effectively, information asymmetry between banks and SMEs retards the loan application and approval process, and underdeveloped equity markets deny SMEs future growth opportunities. Policymakers can ameliorate conditions by serving as facilitators and communicators; governments should not provide financing directly if possible. Practical implications – It is hoped and expected that the policy prescriptions offered herein will enhance the growth and survival prospects of SMES, thereby creating more employment, innovation, and economic growth. Originality/value – The main contribution of this work is its scope. While the financing of SMEs is a familiar topic, the review of issues and policies in East and South Asia, and their distillation into practical advice for officialdom, is what makes this manuscript unique.

Leadership and corporate governance of small and medium enterprises (SMEs) in South Africa: Public perceptions

The main, underlying constraint to the growth of Small and Medium Enterprises (SMEs) is a lack of corporate governance (CG) structure (Mahmood 2014). In considering the UK- Department for Business Innovation and Skills report (2012), this constraint is described as one of the fundamental problems holding back the growth of SMEs. The report states it is this lack of leadership and management capability that should be present, to drive performance and enable them to succeed. However, statistics support the indispensable role that SMEs perform in a country’s economy and when the significance of this sector is taken into account, the role that CG and its practices play within SMEs has to be clearly understood (Le Roux, 2010). Due to SMEs survival and growth being dependant on their good business leadership and corporate governance, the ability to lead, manage, and take full advantage of the resources available have, in recent years, been highlighted on global public platforms and the media. It has further been acknowledged, through prior research studies on SMEs that, for a business to be successful, the critical role of leadership and good CG has to be fully understood. The purpose of this paper is to report on South African public perceptions of leadership and corporate governance of SMEs. The study aimed to analyse and evaluate these perceptions towards SME owner/managers and their consequences, on the survival and growth of SMEs. A mixed method approach allowed for qualitative and quantitative techniques in collecting data from individual participants, with primary data collected from nine provinces of South Africa, and 180 participants as the sample. The research instrument consisted of closed-ended, questionnaires made up of 5-point Likert scale responses and 20 questionnaires were distributed to each province. Delivery of the questionnaires was done through email to individual respondents, with follow–up via telephone calls. The research findings indicate that most respondents believed that the growth and survival of SMEs is, due to the lack of business leadership and poor CG. In addition, respondents agreed that SME owners/managers are just average entrepreneurs, as they do not have leadership qualities or skills and that CG does not exist in many SMEs, particularly in South Africa. The paper’s benefit will be to the owners/managers of SMEs, as well as, policy makers and financial agencies for SMEs. It is recommended that further research, with a larger sample size, be drawn from various townships

Exploring Alternative Sources of Financing Small and Medium Enterprises (SMEs) in Malawi: Lessons from Elsewhere

Small and medium enterprises are the backbone of any economy and Malawi is not an exception. However, there are many structural, institutional and regulatory challenges bedeviling SMEs and these are more pronounced in developing countries like Malawi. One major area challenging the survival and growth of SMEs in Malawi is access to finance. The only readily available market for financing has been the commercial banks whose interest rates have always been exorbitantly high. This article tries to undertake a review of other alternative financing mechanisms that Malawi can explore to promote the SME sub-sector. This was done by reviewing practices from other jurisdictions. Available options include equity guarantee schemes, equity investment schemes and capital markets approaches that do not involve listing.

External Environmental Factors Impacting on Access to Debt Finance by Small and Medium Enterprises in South Africa

Small and medium enterprises (SMEs) are critical to the reduction of the high rates of poverty and unemployment in South Africa. The failure rate of SMEs is very high. Access to debt finance is one of the major constraints to the survival of new SMEs in South Africa. Access to debt finance to by SMEs can be influenced by both borrower-specific (internal factors) and systemic factors (external factors). The objective of the study was to examine the external environmental factors that can impact on access to debt finance by SMEs in South Africa. The study evaluated how external factors such as the macro-economic environment, the legal system, crime and corruption can impact on access to debt finance by SMEs. DOI: 10.5901/mjss.2014.v5n20p1013

The Financing Options for New Small and Medium Enterprises in South Africa

New SMEs are critical to the reduction of the high rates of poverty and unemployment in South Africa. The failure rate of new small and medium enterprises (SMEs) is very high. Access to finance is one of the major constraints to the survival of new SMEs in South Africa. The purpose of the study was to examine the traditional and innovative financing options available to new SMEs in South Africa. The study analysed the traditional sources of equity and debt such as business angels, venture capitalists, commercial banks, trade credit and government agencies. The study suggested that one of the innovative ways to improve access to finance by new SMEs is crowdfunding. There is the need to provide a regulatory environment that will support the growth of crowdfunding in South Africa. DOI: 10.5901/mjss.2014.v5n20p748

Challenges that Vietnamese SMEs have been facing

Vietnam economy is facing both opportunities and challenges of the market mechanism and globalization. Social and economic development policies have created positive outcomes. For instance, the economic structural change program has brought out promising results in improving the economic growth and contributing to a more proportionate structure of the industries. At the same time, the progress of integration and participation of Vietnam to international organizations and forums required business enterprises to have appropriate policies in order to adapt to the new business environment and meet the requirements of competition. Small and Medium Enterprises (SMEs), which are often considered as the direct result of the changes in economic thought after Renewal policy (Doi Moi) in 1986, is now playing an important part in the economy in terms of the quantity of enterprises as well as the contribution to the country’s GDP. Changes and continuous movements of the economy supported SMEs to expand and develop but brought into many difficulties and challenges. Therefore, the internal renewal is essential to the survival and development of SMEs themselves. The paper aims at identifying the challenges that SMEs have been facing and the root of those issues. Due to the difficulties in collecting data, the research limits primarily with the analysis on the data from the SMEs in Ho Chi Minh City. However, this limitation had a small impact on the research result as Ho Chi Minh City is the most developed city and has the highest contribution to GDP and the highest number of business enterprises. Finally, the research had provided a number of suggestions which may help SMEs overcome difficulties to develop sustainably and contribute more positively to the overall development of the economy.

Information technology and survival of SMEs: an emprical study on Malaysian manufacturing sector

This study focuses on the impact of information technology on the survival rate of small and medium enterprises (SMEs) in the manufacturing sector in Malaysia. It analyses the effects of information technology on survival of SMEs in 2000 and 2005, based on two separate groups of firms. It sets out to show that information technology has positive and significant effect on survival of the firms, besides other factors such as minimum efficient size, market and firms attributes, transaction cost, uncertainty, opportunism, information asymmetry and atmosphere, profitability and learning have impact on the survival of SMEs. With using Cox proportional hazard regression model, we found that factors such as profits, R&D, location, ownership, market size, entry rate, industry growth and capital---labor ratio affect the survival of SMEs. Of equal importance is the expenditure on information technology, which is said to have an impact on the viability of firms. The results further demonstrate that being in certain stage of maturity of firms could be important in the effect of information technology on survival of SMEs.

An Analysis of External Finance Availability on SMEs’ Decision Making: A Case Study of the Emerging Market of Poland

This article explores an understanding of the entrepreneurial behavior of small and medium enterprises (SMEs) in Poland, one of the emerging markets of the European Union, during the recent period of economic slowdown. It considers the role of accessibility to external financial resources in shaping decisions undertaken by such enterprises. The hypothesis is that, in a period of economic slowdown, SMEs that have difficulty in accessing external sources of financing adopt different strategies than those that have free access to those resources. The findings indicate that access to the external sources of financing is a statistically significant factor determining decisions of SMEs in relation to employment reduction, price reductions on goods/services, suspension of previously planned investments, and an increase in the level of salaries. Consequently, the study is important as it considers factors that impact the success and survival of SMEs in the emerging market; it is also unique, as it investigates these aspects in the recent period of the global economic downturn. © 2014 Wiley Periodicals, Inc.