Small Or Medium-sized Enterprise Research Articles

The impact of organizational learning on Polish SME market performance

Abstract The main purpose of this paper is to analyze impact of organizational learning (OL) on Polish small- or medium-sized enterprise (SME) performance. Results are based on interviews with owners and managers from two samples of Polish small- and medium-sized firms: a “pre-COVID-19” sample (the survey was conducted during May–July 2019) and a “COVID-19” sample (the survey was conducted during December 2020–January 2021). The results based on the “pre-COVID-19” sample show partial support for the hypothesis about a positive relationship between market performance and OL for Polish SMEs. Two out of three measures of OL, i.e., the diversity of information sources and the commitment to learning, showed positive relationship with two aspects of market performance, i.e., the sales dynamics and the self-assessed success as compared with that of competitors. None of the OL measures have been correlated with the financial results. For the “COVID-19” sample, commitment to learning showed very weak positive correlations with both financial results and sales dynamics. These relationships were not confirmed when other firms’ characteristics had been included.

Small- or Medium-Sized Enterprise Uses Operations Research to Select and Develop its Headquarters Location

Location decisions are strategic and usually multicriteria. In decision making, companies need to anticipate future developments at potential locations. Company-driven and municipal development measures change location conditions over time. For location-seeking companies, the realization of municipal measures is fraught with uncertainty. They are planned by several municipal actors, and their long-term implications are hard to predict. Thus, the early-systematic consideration of company-internal and -external development measures is vital for decision makers (DMs) in a future-oriented location assessment. In our paper, we develop a robust decision support framework for companies to solve the regional facility location and development planning problem (RFLDP). Our framework includes a quantitative planning approach based on established operations research (OR) optimization models and a practical guideline for a structured acquisition of relevant data. The chief executive officer (CEO) (or DM) of a small- or medium-sized enterprise (SME) asked us to solve his acute RFLDP. For this, we proposed a systematic workflow and accompanied the SME’s regional facility location and development planning. In doing so, we structured the CEO’s decision-making process effectively and created an objective-transparent basis for his strategic decisions. The core feature of our work is the inclusion of the human factor of DMs, as we interacted with the CEO along his decision-making process to gradually develop decision recommendations. As a result, the SME benefited from a better-informed and transparent planning process. We recommended a decision option that was structurally superior to other options, which emerged from the CEO’s intuition and conventional facility location problem solution approaches. Other stakeholders also benefited from the results of our work. History: This paper was refereed. Funding: This work was supported by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) [Grant 439640382].

Incentive Contracts for Sustainable Growth of Small or Medium-Sized Enterprise

This study analyzes incentive contracts in public procurement supply chains using a game-theoretic approach. Specifically, we compare a structure in which the host company is a large enterprise and the partner company is a small or medium-sized enterprise (SME) to a structure in which the host is an SME and the partner is a large enterprise. For each structure, we examine whether an incentive contract improves supply chain performance and confirm that the performance improvement effect is greater when the host company is an SME. Our analysis has several policy implications. SMEs are less likely to be selected as host companies for large-scale procurement projects, limiting their growth opportunities. Thus, to enable SMEs’ sustainable growth through large-scale procurement projects, the governments can allocate a portion of public procurement to SMEs. The introduction of incentive contracts elicits sustainable cooperation from large companies when an SME is the host company in a public procurement supply chain.

Resource Allocation Between Exploration and Exploitation Strategies: A Case Study on A Malaysian SME Family Firm

Studies of exploration and exploitation strategies in small or medium-sized enterprise (SME) firms highlight resource scarcity as a critical issue. Imperatively, SME firms need to allocate their scarce resources efficiently in order to implement exploration and/or exploitation strategies. However, studies of resource allocation between exploration and exploitation strategies in SME family firms are limited. The main objective of this research, in the context of SME family firms, is to explore the types of resources allocated between exploration and/or exploitation strategies and what circumstances both strategies can be implemented. The nature of a family firm, known as 'familiness', provides an opportunity to further investigate this unique resource. This research utilises a case study methodology and a Malaysian SME family firm is selected due to its importance in terms of economic and social development. The study found that the abilities and familiness of a family firm are the main factors in allocating resources for exploration and exploitation strategies. In fact, cultural differences between the first and second generation have an impact on the engagement of the firm with respect to exploration and exploitation strategies. The result enhances the understanding of resource allocation and enriches the theories in studies of family firms.

The Importance of Mutual Understanding Between External Accountants and Owner–Managers of SMEs

AbstractThis study investigates the perspective of the owner–manager of a small or medium‐sized enterprise (SME) on the importance of mutual understanding with an external accountant. Mutual understanding means that the owner–manager understands what the accountant is saying and feels understood by the accountant. The results, based on 310 completed surveys of Belgian owner–managers, show that owner–managers who have a high level of mutual understanding use the advice of their external accountant more extensively. This is in turn positively linked to the financial health of an SME. Furthermore, several drivers that enable the establishment of a high level of mutual understanding are explored. Owner–managers with a high level of mutual understanding consider their accountant as a strategic partner, experience a high level of proactive behaviour with them, have a higher frequency of formal contact, and perceive informal contact as important. External accountants should consider these opportunities in their client management and training of internal staff. Education of clients and openness also seem very important, as the level of a client's accounting knowledge, the number of accounting topics owner–managers deal with, and transparency towards the accountant are significantly positively related to mutual understanding.

Learning the Building Blocks of Service Innovation from SMEs

Delivering service innovation that delights customers is a difficult task. For product-focused companies, even imagining a potential service innovation is difficult. And what is perhaps most difficult is growing through service innovation as a product-focused, small or medium-sized enterprise (SME)--smaller companies typically lack the resources to research, invest in, and survive such a risky transformation. But some manufacturing SMEs have been able to achieve a high level of growth through service innovation, specifically by leveraging digital technologies. These companies combine digital tools in novel ways to support their production and enterprise efforts. When we began our study of how these companies were succeeding with digital tools, what we expected to find were discrete technologies being applied within discrete business functions. What we found, however, were companies extending their original implementation to link multiple parts of the operation, from the front office, through design and engineering, and to production--and then, in many cases, out the door to their customers, as service innovations. How are manufacturing SMEs achieving this level of sophistication, given their many constraints? And what lessons can larger organizations learn from these smaller companies? What we learned from our interviews is that successful service-oriented innovations often appear simple and obvious in hindsight. But the path to this success is anything but obvious or straightforward. Instead, many of the service innovations we observed evolved over time from a recognition of unmet needs at the customer level, combined with learning-while-doing on the part of the SME. The lessons we took from our work with SMEs, we believe, can serve both SMEs and their larger counterparts. The Example of PoolPak International PoolPak International, a manufacturer of large-scale commercial and industrial dehumidification systems, is emblematic of the approach we found in successful SME service innovators. PoolPak discovered an opportunity to deliver a smart, connected solution to solve a key customer problem: the environment in which dehumidification units are housed can be a dangerous place for humans. Because of this, customers wanted remote access to their units. It's relatively easy to imagine a solution in today's world of broadband, pervasive smartphones, and LTE, but even just 10 years ago, the world was much different, and the solution more technically complex. The company created a custom-built solution that combined its existing software-rich controller with an off-the-shelf wireless radio that, quite literally, dialed out to report problems. It was expensive and it didn't scale, but it was a necessary first step to coupling the product with a service targeted to specific customer needs. And the company learned from the experience, developing more expertise and more sophisticated technical solutions with each generation of equipment and accumulating a wide variety of real-world use cases. As wireless broadband continued to proliferate and sensor prices plummeted, a standard wireless controller became inevitable. The company had been programming world-class HVAC controllers for decades; now, it seized the opportunity to leverage its expertise to cash in on these trends. Although the wireless controller the company now uses is commodity hardware, the program it runs, the data it collects, and the analysis it performs are the secret sauce--and those are the products of years of accumulated expertise. The connected HVAC controller is an interface to the company's core business competencies, not a portal to some magical technological disruption. Today, PoolPak offers a service that provides condition-based assessment of its dehumidification units that includes the ability to schedule predictive maintenance. PoolPak's Internet of Things-based service offering is the result of nearly a decade of work in understanding customer needs and developing digitally supported services to meet those needs. …

Exploration and exploitation in established small and medium-sized enterprises: The effect of CEOs' regulatory focus

Based on theory of regulatory focus and organizational ambidexterity, we hypothesize that the level of engagement in exploration and exploitation in a small or medium-sized enterprise (SME) is affected by the respective CEO's chronic regulatory focus. In our analysis of survey responses from CEOs in Switzerland, we find that the CEO's level of promotion focus positively affects the firm's engagement in both, exploration and exploitation, while the CEO's prevention focus is negatively associated with the firm's exploration but not significantly related to its exploitation. The positive associations between a CEO's promotion focus and the firm's exploration/exploitation activities are enhanced under conditions of intense competition.

According to Custom ...? The Role of ‘Trade Usage’ in the Proposed Common European Sales Law (CESL)

Article 67 of the proposed Common European Sales Law (CESL) stipulates that usage and practices are binding on traders. It follows that, if such customs can be referred to in the interpretation of contracts, they create flexibility in the understanding of contractual agreements and therefore introduce a factor of uncertainty in commercial dealings. One may wonder whether a flexible rule like this is appropriate for the context in which CESL is meant to operate – B2B contracts in which at least one of the parties is a small or medium-sized enterprise (SME). A particular concern for the European market, in which many businesses are SMEs, is that local usage is likely to be unknown or even unknowable to one or both of the parties. The appeal of the CESL as an alternative contract regime therefore may be diminished. This paper addresses the question whether the CESL’s reference to trade usage in contract interpretation is indeed a weakness. A comparison is made with US literature in which two theories – the plain meaning rule and the incorporation theory – support different views on the role of usage in trade contracts. Applied to two existing uniform regimes for commercial contracts, the Uniform Commercial Code (UCC) and the Vienna Convention on Contracts for the International Sale of Goods (CISG), these theories reveal the strengths and shortcomings of the application of usage in specific market contexts. Distilling a number of parameters from earlier studies on these instruments, a comparison is made to test whether the CESL can safely make use of trade usage as a means of contract interpretation. It will be argued that the particular context in which the CESL operates – ie cross-border contracts involving SMEs – implies that the role of usage should be clarified in order to guarantee legal certainty. Such clarification can either mean that usage is only referred to in a very limited sense (eg only international usage widely observed in the particular area of trade in which the parties operate and which could be known to both parties to the contract), or that other means are created by which parties can become aware of trade usage in a particular market or area (eg databases of guidelines or trade practices).

According to Custom...? The Role of 'Trade Usage' in the Proposed Common European Sales Law (CESL)

Article 67 of the proposed Common European Sales Law (CESL) stipulates that usage and practices are binding on traders. It follows that, if such customs can be referred to in the interpretation of contracts, they create flexibility in the understanding of contractual agreements and therefore introduce a factor of uncertainty in commercial dealings. One may wonder whether a flexible rule like this is appropriate for the context in which CESL is meant to operate – B2B contracts in which at least one of the parties is a small or medium-sized enterprise (SME). A particular concern for the European market, in which many businesses are SMEs, is that local usage is likely to be unknown or even unknowable to one or both of the parties. The appeal of the CESL as an alternative contract regime therefore may be diminished.This paper addresses the question whether the CESL’s reference to trade usage in contract interpretation is indeed a weakness. A comparison is made with US literature in which two theories – the plain meaning rule and the incorporation theory – support different views on the role of usage in trade contracts. Applied to two existing uniform regimes for commercial contracts, the Uniform Commercial Code (UCC) and the Vienna Convention on Contracts for the International Sale of Goods (CISG), these theories reveal the strengths and shortcomings of the application of usage in specific market contexts. Distilling a number of parameters from earlier studies on these instruments, a comparison is made to test whether the CESL can safely make use of trade usage as a means of contract interpretation.It will be argued that the particular context in which the CESL operates – i.e. cross-border contracts involving SMEs – implies that the role of usage should be clarified in order to guarantee legal certainty. Such clarification can either mean that usage is only referred to in a very limited sense (e.g. only international usage widely observed in the particular area of trade in which the parties operate and which could be known to both parties to the contract), or that other means are created by which parties can become aware of trade usage in a particular market or area (e.g. databases of guidelines or trade practices).

Conclusion of Contract Under the Draft Common European Sales Law

On October 11, 2011, ten years after the launch of the consultation process in 2001, the European Commission published its Proposal for a Regulation on a Common European Sales Law (CESL). Under the Proposal, CESL constitutes an optional contract law regime available for cross-border contracts between a trader and a consumer (T2C) or between traders if at least one party, seller or buyer, is a small or medium-sized enterprise (SME) (T2T). In Arts 30-39 the proposed CESL contains the provisions on ‘conclusion of contract’. As far as they go, they largely reflect the Draft Common Frame of Reference (DCFR) on ‘formation’ of contract (and the Feasibility Study (FS)) as well as other international and regional texts, notably CISG, PICC and PECL. However, the opt-in nature of the proposed CESL requires a mechanism for subjecting a particular contract to CESL as the governing contract law regime. This mechanism is now contained in Arts 8 and 9 of the Regulation designed to give effect to the proposed CESL and constitutes the most significant innovation of the Proposal as compared to the DCFR. At the heart of this mechanism is an agreement between the parties to ‘opt in’ to the proposed CESL. This agreement to use CESL is distinct and conceptually separate from the agreement resulting in the contract under the proposed CESL. It is not a choice of law in the conflict of laws sense because CESL, if adopted, would be a second national contract law regime within the law of every Member State (similar to CISG in the signatory states albeit of an ‘opt-in’ rather than ‘opt-out’ nature). The agreement to use CESL and the agreement to conclude a contract under CESL constitute two different layers of agreement. The proposed Regulation contains the formal requirements for the agreement to use CESL. The substantive requirements of this agreement – consensus, invalidity, mistake and the like – are a question of the applicable national law, which might be the provisions of CESL itself as far as they go. The contract under CESL will be governed exclusively by the rules of CESL to the extent that the respective matters are addressed by CESL. The applicable (non-CESL) national law will continue to govern ‘matters’ outside the scope of CESL Thus, at both layers of agreement the rules of the proposed Regulation and CESL will interact with the applicable national law in a number of ways. Moreover, both agreements will be interdependent and the finality of an exchange of assets between the parties can be determined only by considering both agreements together and possibly in conjunction with national law.

Resilience and competitiveness of small and medium size enterprises: an empirical research

A small- or medium-sized enterprise (SME) is normally a company that employs about 50–200 people. Because of the globalisation of market and operations, and technological advances, the competition among SMEs has radically increased over the years, and their survival is increasingly dependent on a number of factors including resilience of SMEs to refocus some of their strategies and technologies. In this article, a review of selected literature has been undertaken on some of the SME characteristics and new strategies, techniques and technologies that can provide a competitive advantage and sustainability in the global market and operations. Based on the literature review, a framework has been developed with key factors/enablers that determine the resilience and competitiveness of SMEs. This framework has been empirically studied by collecting data from SMEs. It involves a sample of 40 SMEs in the Southcoast of Massachusetts and provides further insight into the key characteristics associated with resilience and competitiveness of SMEs that are influenced by advances in operations strategies, technology and globalisation. Finally, a detailed summary of findings and conclusions are presented.

Human resource challenges for small growing companies in Flanders

AbstractFor Flemish entrepreneurs, human resource management (HRM) is one of the biggest challenges for further development and growth. Hence, we aim to shed light on how successful entrepreneurs in Flanders manage their human resources. Building on the growth models of Greiner and Ulrich, we conducted a qualitative study of various human resource practices within Flemish entrepreneurial firms in different sectors and stages of growth. We investigated the interplay between the focus of HRM and the growth phase of a small or medium‐sized enterprise (SME). The main objective is to better understand the major challenges entrepreneurs experience when managing people during the first stages of company growth. Our findings suggest that HRM within growing SMEs shifts from an operational focus on people to a more strategic focus on procedures. Throughout the process of evolution, entrepreneurs need to find the right balance of HR practices, paying attention to formalization, delegation, and coaching. © 2010 Wiley Periodicals, Inc.

Marketing strategies for small to medium‐sized enterprises

PurposeReviews the latest management developments across the globe and pinpoints practical implications from cutting‐edge research and case studies.Design/methodology/approachScans the top 400 management publications in the world to identify the most topical issues and latest concepts. These are presented in an easy‐to‐digest briefing of no more than 1,500 words.FindingsWhat's the best way to market a small or medium sized enterprise (SME)? The seemingly obvious answer is that adopting a well‐researched, long‐term approach to meeting customers’ needs, would ensure continued growth and development. However, in this case, the obvious answer would be wrong. Market research indicates that entrepreneurial firms don't take the long‐term approach. Instead, their marketing strategies often rely on crisis management, gut feelings and actions designed to deal with immediate competitive pressures.Practical implicationsProvides strategic insights and practical thinking that have influenced some of the world's leading organizations.Originality/valueThe briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to digest format.

Harnessing the power of geographical knowledge: the potential for data integration in an SME

Geographical knowledge has long been used as a basis for decision making in business. Often this has been implicit because of the lack of information systems available to harness the power of the spatial dimension of data. A conceptual framework is presented which facilitates geographical (or spatial) data to be used as the basis of integration. The spatial dimension of the data is used to link, for example, customer sales with delivery. Powerful geographical knowledge is then harnessed in support of the business strategy. This paper reports on research with an small or medium sized enterprise (SME) aimed at developing an information systems strategy. A key driver in the strategy became data integration across the business. The case study organisation is used to illustrate the ideas discussed. Conclusions are drawn to assist the improvement of practice and identify areas for further research.