Small And Medium-sized Enterprises Environment Research Articles

Is formalisation Enough to Achieve Growth in SMEs?

The objective of this research is to determine whether the formalisation (FORM) of small and medium-sized enterprises (SMEs) has an impact on the growth, and determine which aspects of SMEs management, when formalised, are associated with and contribute to the growth of these organisations. A survey was applied to 403 proxies of SMEs in Lima, Peru. A structural equation model was used to validate the hypotheses. The results indicate that there is a positive and significant association between the FORM of SMEs management and the growth of these organisations. The main finding of this research is to determine that the formalisation of SME management in Lima, Peru explains their growth by only 27%, leaving 63% explained by other factors that could be not only management aspects, but also aspects of the SME environment. State institutions, companies and academia should analyse the low economic contribution of SMEs from a broader approach and not only from the position that formalisation is the only reason for growth. Other aspects should be studied, such as education in management issues by entrepreneurs, development of collaborators' competencies, improvement in the efficiency in the management of State institutions, among other factors; and thus, find the appropriate mechanisms that contribute to the growth of SMEs. This research is the first to analyse, in a single study, whether the formalisation aspects of SMEs management contribute to their growth. Finally, this research has contributed to the construction and conceptualisation of the SME growth variable.

THE SITUATION WITH THE DEVELOPMENT OF SMALL AND MEDIUM-SIZED ENTERPRISES IN MACEDONIA IN RELATION TO THE SOURCES FOR THEIR FINANCING

The impact of small and medium-sized enterprises (SMEs) in employment and value added in the Republic of Macedonia registered a slight increase in the period from 2009 to 2013. Just like in other economies in the region, most SMEs work in the wholesale and retail trade sector (44.0%), followed by the manufacturing sector (13.0%) (OECD 2016). Based on the importance of SMEs in the Macedonian economy in general, this paper aims to point out the gap that exists between the well-identified weakness of the Macedonian economy towards stimulating the life expectancy of SMEs on the one hand and their development on the other, emphasized in the forms of the sources of funding available to them. For that purpose are used statistical analyzes and comparisons, and are accepted conclusions about the current situation with the SMEs environment and the forms of financing of SMEs in Macedonia

Impact of internal additional compensations policy on revenues in cross-sectoral SME environment

A contemporary business practice attributed to the small and medium-sized enterprises (SMEs) reflects rather ad-hoc employees' compensations policies. In this study, we investigate whether cross-sectoral differences exist with respect to the additional compensations performance on the sample of IT (information technologies) and non-IT small firms coming from an emerging market in Europe. The central research includes systematic statistical analysis of the relations between additional compensations performance (both material and non-material) and revenues growth for more than 60 SMEs. We conclude that cross-sectoral differences of additional compensations' impact on revenues growth are evident. IT SMEs are more likely to experience year-to-year revenues growth when they perform additional compensations towards their employees and they execute non-material additional compensations more frequently. However, variables observing employee category receiving an additional compensation and funding spent for additional compensations did not show considerable statistical significance with respect to impact on revenues growth for both observed sectors.

Impact of internal additional compensations policy on revenues in cross-sectoral SME environment

A contemporary business practice attributed to the small and medium-sized enterprises (SMEs) reflects rather ad-hoc employees' compensations policies. In this study, we investigate whether cross-sectoral differences exist with respect to the additional compensations performance on the sample of IT (information technologies) and non-IT small firms coming from an emerging market in Europe. The central research includes systematic statistical analysis of the relations between additional compensations performance (both material and non-material) and revenues growth for more than 60 SMEs. We conclude that cross-sectoral differences of additional compensations' impact on revenues growth are evident. IT SMEs are more likely to experience year-to-year revenues growth when they perform additional compensations towards their employees and they execute non-material additional compensations more frequently. However, variables observing employee category receiving an additional compensation and funding spent for additional compensations did not show considerable statistical significance with respect to impact on revenues growth for both observed sectors.

Identification of key lean practices within Indian automotive SMEs environment

Indian small and medium-sized enterprises (SMEs) are facing stiff competition both in and out of the county by the big players in particular. Indian SMEs are suffering from scarcity of vital resources and latest technical knowhow. It's imperative for them to use resources judiciously by implementing lean manufacturing. It's not feasible for SMEs to implement all the lean practices like big players. The objective of current study is to identify key lean practices for the Indian automotive SMEs to reap the maximum benefits out of it. Factor analysis was applied to identify independent lean practices because the various lean practices suggested by the different researchers were found overlapping and confusing in nature. Multiple regression analysis is used to identify the key lean practices which Indian SMEs can afford and must implement. Customer involvement is the most important lean practice followed by problem identification and prevention, total productive maintenance, and others.

Environmental management and corporate social responsibility practices of small and medium-sized enterprises

The main aim of this paper is to facilitate small and medium sized enterprises (SMEs) to adopt environmental management (EM) and corporate social responsibility (CSR) practices. The study reveals SMEs‟ motivation, pressure, targets and methods for EM and CSR practices. Additionally, the paper investigates how these variables relate to employee number, turnover and geographical locations. The outcomes of the research will add value to SMEs decision-making processes in both strategic and policy levels (e.g. supplier selection) and policymakers‟ initiatives to make SMEs environment and socially friendly. Although there are studies on EM and CSR practices of SMEs, they mainly focus on impact of EM and CSR practices on business performance, and SMEs‟ motivation for adopting EM and CSR practices in specific country. Studies that reveal SMEs‟ motivation, pressure, targets and methods for EM and CSR practices and their relationship with their characteristics (e.g. size, turn over, and geographical location) are scant. This research bridges this gap. Our data originates from 223 carefully selected representative SMEs in the West Midlands, UK (105) and Kolkata, India (118) covering manufacturing and process industries. The relevant data was collected using questionnaires and analysed using Analysis of Variance (ANOVA) and Multivariate Analysis of Variance (MANOVA) methods. The results reveal that perceptions of SMEs‟ motivation, pressure, targets and methods of EM and CSR practices vary considerably with respect to size, turn over and geographical location. The findings are significant to policymakers, client organizations and individual SME for improving EM and CSR practices.

Lean implementation within SMEs: a literature review

Purpose– Lean business ideology has been one of the recent dominant research areas in operations management. However, there is a dearth of research focusing on Lean in small- and medium-sized enterprises (SMEs). The purpose of this paper is to fill this gap by systematically reviewing the literature in relation to the implementation of Lean in SMEs.Design/methodology/approach– Tranfieldet al.’s (2003) systematic review methodology was employed covering three stages: planning, conducting and reporting/dissemination.Findings– A descriptive analysis of the papers reviewed is provided. From the thematic analysis of the literature four main themes are identified: the scope/type of Lean being adopted by SMEs, how Lean is used in SMEs, the impact of Lean implementation on SMEs and the critical success factors for Lean implementation in SMEs. Key inhibitors and enablers related to firm size when implementing Lean are also identified in the concluding discussion.Research limitations/implications– Nine recommendations for future research are developed associated with Lean implementation in SMEs.Practical implications– The authors suggest SMEs to integrate organisational factors such as employee empowerment and the development of a supportive strategy into their Lean implementation plans. A preliminary “Staircase Road Map” to guide SMEs in implementing Lean is also developed.Originality/value– This paper goes beyond previous literature reviews of Lean by systematically and critically evaluating key themes of Lean implementation within an SME environment. It not only provides a road map for SME owners/managers who intend to implement Lean, but also provides the academic community with an agenda for future research.

Determinants and barriers to lean implementation in food-processing SMEs – a multiple case analysis

This study explored contextual or determining factors and their impacts on lean manufacturing in small- and medium-sized enterprises (SMEs) operating in food-processing industries. In order to get an in-depth insight into the real situation at the work floor, this study adopted a multiple-case-study research approach. The inherent characteristics of food industries, such as mandatory quality assurance requirements, low shelf life of food products, and the extremely volatile demand and supply presented barriers to lean manufacturing adoption. In addition, the challenges of ‘change’ in an SME environment are distinct from those faced by large organizations. The small size of the plant, the traditional setup, and inflexible layout make it difficult to implement lean manufacturing in food-processing SMEs. The knowledge of contextual factors influencing lean manufacturing adoption in food processing SMEs will be a contribution to current knowledge. Many studies have explored lean constructs and tools, while far fewer have explored the crucial element of actually implementing these. The study will also help practitioners to anticipate potential obstacles and take proper measures to deal with them during lean implementation.

Rethinking IT governance for SMEs

PurposeThe purpose of this paper is to critically rethink the concepts and the theoretical foundations of IT governance in small‐ and medium‐sized enterprises (SMEs).Design/methodology/approachThe paper is based on multiple case studies. In total, eight cases of outsourced information system projects where failures occurred were selected. An outsourced information system failure (OISF) is suggested as a failure of governance of the IT in a SME environment. A structure for stating propositions derived from two competing theories is proposed (Agency Theory and Theory of Trust).FindingsThe results reveal that trust is slightly more important than control issues such as output‐based contracts and structured controls in the governance of IT in SMEs.Practical implicationsThe world of SMEs is significantly different from that of large companies, and therefore, the concept of IT governance in SMEs needs reconsideration. For researchers and practitioners, it would be more meaningful to focus on actual, working SMEs instead of on a version of their activities derived from those of large companies.Originality/valueThe paper offers two contributions. First, it elaborates the limited research on IT in SMEs and second, it brings theoretical foundations for their IT governance. The value of IT governance in SMEs is explained.

A case study

PurposeSix Sigma within small and medium‐sized enterprises (SMEs) is rapidly emerging as the new wave of change in Six Sigma. The purpose of this paper is to review the implications of applying Six Sigma methodology over the SMEs, taking a specific case of a bicycle chain manufacturing unit. The study could be a paradigm initiative towards high quality products and services at low cost for every SME.Design/methodology/approachBased on the literature, this paper proposes a process flow chart to present a one‐shot picture of the Six Sigma application in a bicycle chain manufacturing unit which falls in an SME environment. The methodology adopted is DMAIC methodology of Six Sigma, which had been mostly successful so far in large‐scale industries. The methodology has been applied to reduce the bush rejection rate (bush is an important component of a cycle chain) by reducing defects inherent in the processes. The statistical techniques such as two sample t‐test and process capability analysis have been used to establish the process capability before and after the Six Sigma application.FindingsThis paper is an attempt to justify the highly useful role of quality management techniques like Six Sigma for SMEs which are normally presumed to be in the domain of large industries. In this paper, Six Sigma methodology has been applied to a small unit manufacturing bicycles chains with dwindling productivity levels. After applying Six Sigma it was found that the chain manufacturing firm can increase its profit by controlling high rejection rate of cycle chain bush. Application of Six Sigma project recommendation brought up the process sigma level to 5.46 from 1.40 by reduction in bush diameter variation in the process of bicycle chain bush manufacturing. This increase in sigma level is equivalent to monetary saving of Rs 0.288 million per annum, which is a noteworthy figure for an industry of such level. The success of this study paves the way to further extend the Six Sigma application to more such industries working in the SME environment.Originality/valueThis paper provides documented evidence of Six Sigma implementation in a bicycle chain manufacturing unit which has been taken as representative of a small and medium‐size industry. The study will yield a great value to academics, consultants, researchers and practitioners of Six Sigma.

Information technology competency in SMEs: an examination in the context of firm performance

The ability to use information technology for business process improvement, in the facilitation of information gathering for better decision-making, and otherwise enhancement of firm performance has long been the realm of large firms. However, with declining costs, enhanced computing power, and faster internet connectivity small and medium-sized enterprises (SMEs) may be able to create and develop an effective information technology competency. In this study, we examine the notion of information technology competency to determine its usefulness with respect to SMEs. Specifically, Tippins and Sohi's (2003) information technology competency construct is replicated and applied in a SME environment. This application allows us to test whether there is a relationship between a SME's information technology competency and firm performance. Data from a sample of SMEs indicate that information technology competency is applicable to the SME context and has a positive relationship with firm performance. The results offer support for the idea that the measures and effects of information technology competency are relevant to the study of small and medium enterprises.

Six sigma for small and medium-sized enterprises

Having arisen in large corporations, six sigma is surely one of the most comprehensive approaches for company development and performance improvement of products and processes. Nevertheless, it appears that the majority of small and medium-sized enterprises (SMEs) either do not know the six sigma approach, or find its organisation not suitable to meet their specific requirements. This study identifies the specific requirements based on a sample of SMEs in Germany and examines how six sigma has to be modified to be applicable and valuable in an SME environment. The overall results are reflected in ten imperative functional requirements for an adjusted approach. © Emerald Group Publishing Limited.

Global strategies for SMe‐business: applying the SMALL framework

The World Wide Web (WWW) offers exciting new opportunities for small and medium‐sized enterprises (SMEs) to extend their customer base into the global marketplace. However, in order to exploit these advantages in a global strategy, the SME needs to adopt an entirely different approach to strategic planning and management which can enable it to deploy an extensive infrastructure network based on shared resources with other firms. This paper presents a framework for the analysis and design of global strategies within the organisational context of SMEs using Internet‐based information technologies. Central to the framework – SMALL – is the transformation of the key attributes of an SME environment through a virtual organising perspective. The framework is supported by a number of case examples of SMEs operating in a global context and a detailed analysis of three Australian SMEs. It provides a new perspective to strategies for e‐business in SMEs and to e‐business research.