Small Or Medium-sized Enterprises Research Articles

Changes in the perception of business risks to the threat of bankruptcy due to COVID-19

The aim of the article is to compare the impact of selected business risks on the threat of bankruptcy of small or medium-sized enterprises (SMEs) before COVID-19 and during the first wave of the COVID-19 pandemic. 688 SMEs from the business environment of the Slovak Republic participated in the research. Business risks, such as market, financial, personnel, operational and strategic risk were examined. Correlation and regression analysis were used to evaluate formulated hypotheses. The results yielded several significant findings. The three most important business risks before COVID-19 include market, financial and personnel risk according to entrepreneurs. Financial risk is the most significant business risk affecting the threat of bankruptcy in the SME segment in the Slovak Republic after the outbreak of COVID-19. The company's financial performance indicators and the ability of respondents to manage financial risk influence the threat of the company's bankruptcy more strongly during the pandemic. The findings are important for state organizations in mitigating the impacts of the COVID-19 pandemic on the business environment of SMEs in the Slovak Republic, as well as for entrepreneurs themselves and organizations that help SMEs.
 

Strategies and Techniques for the Internationalization of Non-Dominant Firms: A Qualitative Study

This study focuses on the strategies and techniques used by small or medium-sized enterprises (SMEs) to join and dominate large firms in global markets. The analytical works refer to the prevailing writings on international markets and entrepreneurship. Based on the categorizations and analyses of the themes and sub-themes, the historical development of global markets and theories is recounted, thereby creating a foundation for assessing the strategies and techniques of non-dominant firms. The findings indicate that the number of small and medium enterprises joining international markets is growing due to the adoption of robust strategies and techniques. An international model is proposed, which consists of three techniques of the Diaspora approach, social media approach, and re-approach, along with strategies that consist of three dimensions: a big dream or desire to internationalize, a need to internationalize, and an ability to internationalize." This paper provides a point of reference for practitioners and researchers interested in attaining comprehensive insight into internationalization.

Dynamics of Open Innovation in Small- and Medium-Sized Enterprises: A Metacognitive Approach

Open innovation (OI) is clearly becoming increasingly important to organizations. Studying its impacts has become a challenge as assessing OI possible effects on not only performance but also processes, time, and people is difficult and complex. To move beyond these barriers, this article develops a metacognitive framework that combines cognitive mapping—supported by the strategic options development and analysis approach—and the decision-making trial and evaluation laboratory technique. This dual methodology facilitates analyses of specific OI-related impacts on small- or medium-sized enterprises (SMEs). The data were collected from SME managers and entrepreneurs who agreed to participate in an expert panel in face-to-face group meetings. The findings include that the methodologies used facilitate the identification and understanding of cause-and-effect relationships among OI determinants in SMEs, and were validated by the participants and a project manager at COTEC Portugal— <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Associação Empresarial para a Inovação</i> (Business Association for Innovation). This organization is a leading think-and-action network for advancing technology diffusion and business innovation cooperation. The contributions and limitations of the proposed methodology are also analyzed.

SMEs’ Equity Financing: Does Corporate Law Matter?

Lack of appropriate financing is a major issue for European small or medium-sized enterprises (SMEs). They are highly dependent on bank lending for external funding, while there is a strong need for wider use of alternative finance, and especially of equity capital with respect to innovative and growth-oriented firms. In this Article, we explore the relationship between corporate law and SMEs’ access to equity finance, concluding that the organizational and governance structure of the enterprise is essential for making it attractive for investors.First, we provide evidence of this relationship showing the importance that US corporate law, and particularly Delaware corporate law, had in the successful funding of Silicon Valley’s startups. Second, we analyse the European framework. On one side, we address the measures adopted by the EU regulators for promoting SMEs’ alternative finance, which have been ineffective and have completely ignored business organization law. On the other side, we describe how a number of EU jurisdictions – with a focus on the Italian system – have amended their corporate law, easing access to equity finance.Finally, we discuss some empirical data and the possible implications in terms of regulatory competition among the EU Member States. financing SMEs, alternative finance, equity finance, corporate law, business form, regulatory competition

Trustworthy Small and Medium-sized Enterprise Network Partners: Small and Medium-sized Enterprise Partnerships in the International Entrepreneurial Process

This study explores how 40 decision-makers from Swiss and Thai small or medium-sized enterprises (SMEs) engage and develop international partnerships to discover, create, evaluate and exploit entrepreneurial opportunities across borders. Despite the growing importance of international entrepreneurship research, there is little research considering how entrepreneurial SMEs from different cultural contexts interact with international partners to develop international entrepreneurial opportunities. The findings show how Thai and Swiss entrepreneurs engage in the development of international partnerships to create, explore and exploit opportunities. The empirical study further emphasizes the importance of trustworthy and close interpersonal relationships. The meaning of friendship in culturally different countries is also explored as it pertains to the process of SME internationalization. The findings show important cultural differences. In the collectivistic Thai context, personal and professional networks are closely intertwined. In the development of new partnerships, Thai SMEs pursue the clear objective of developing friendships. In the individualistic Swiss context, partnerships mostly originate from opportunities in the professional context and relationships tend to develop more coincidentally into a trusted friendship.

Quality for a sustainable future

There is a growing number of organisations working on sustainable development and there is no lack of events organised or papers published on the subject. These activities are related to high level policies that appeal to political leaders. As far as businesses are concerned the target group mainly consists of large and globally active organisations. Very often small or medium sized enterprises (SMEs) are not involved, although they form the vast majority of companies. Quality management has the methods and the tools to bring sustainability to the SME level, facilitating action and leading to tangible results for the organisation. We present a general framework that allows any SME to take steps in sustainability by using quality management methods. An implementation path is given, related to the current maturity level of the company. This allows the sustainability movement to gain momentum and be spread out much more widely. But as many planetary problems are bringing us dangerously close to tipping points (global warming, mass extinction of species, …) this may not be enough. A new definition of sustainability is presented that can be used as a starting point for developing quality based economic and social systems.

Improving SMEs’ competitiveness with the use of Instagram influencer advertising and eWOM

PurposeUnder Saudi Vision 2030, there is a forthcoming raise of support to small- or medium-sized enterprises (SMEs) from the current 20 per cent of GDP to 35 per cent; thus, SMEs’ access to finance is becoming easier. At the same time, the cosmetics retail industry is expected to rapidly grow further in the next few years, on account of the already mounting demand and easy availability of cosmetics through online channels. The purpose of this study is to explore the use of beauty Instagram influencers in advertising as a tool to increase competitiveness for SMEs.Design/methodology/approachAn exploratory research design was used and in-depth interviews were conducted to get a better understanding of female Saudi young adults’ perceptions with regards to trust towards Instagram influencers, electronic word of mouth (eWOM) and advertising.FindingsSMEs can benefit greatly from eWOM in their quest for competitiveness. Therefore, when a beauty influencer on Instagram advertises a product to SMEs followers this leads to increased awareness and purchase intention. The findings indicated that the participants are quite sceptical when receiving reviews or promotion from beauty influencers on social media, as they rarely regard them as authentic. Moreover participants seem to trust influential beauty Instagrammers when they had a positive experience with the influencer before. Trust, honesty and authenticity were important factors that increase the impact of eWOM.Originality/valueThis paper offers an in-depth understanding of the use of Instagram advertising and eWOM in a rapidly developing industry and explores these as key communication pathways for modern SMEs in their effort to achieve resilience and competitiveness.

Corporate governance and firm networks: An empirical research based on Italy

We examine problems of strategic change and innovation in Italian firms which develop cooperative relationships with other firms. The inter-firm network phenomenon has taken on such importance in Italy that, in 2009, the State issued a law (Decreto Legge 5/2009) specifically to regulate the concluding of cooperative contracts for the formation of inter-firm networks. This law offers firms that wish to keep their groups of owners separate the possibility to establish a multiplicity of inter-firm relationships through the signing of just one single contract, named “Contratto di rete”, which, in this paper, we will refer to as a “network contract”. For historical reasons, all firms in Italy, even those quoted on the stock market (Milan Stock Exchange), exhibit a high level of ownership concentration. The largest class of blockholders is that of families who are active in the family firm. As regards the size of firms that maintain cooperative relationships, data on network contracts show that 95% of the firms stipulating these contracts are small- or medium-sized enterprises (SMEs), so categorised because they have fewer than 50 employees. Through strategic alliances and collaborative relationships, Italian family firms have been able to develop business ideas that, as a consequence of the companies’ small dimensions, would have been impossible otherwise. On the basis of this premise, we considered it convenient to analyse small- or medium-sized family firms that developed relationships of cooperation regulated by network contracts in the period between 1/1/2013 and 31/12/2016. With reference to this category of firm, we analysed data on strategic change and innovation for a sample of 391 firms that accepted to be interviewed by us. Some of these firms had opened their top management teams (TMT) and/or their Boards of Directors to the participation of individuals from outside the dominant family, while others had not. The results of this research show that the firm that extends participation in the board or the Top Management Team by involving individuals from outside the dominant family, so as to gain better access to critical resources controlled by partners, creates a more favourable context for strategic change and innovation.

Using the product environmental footprint for supply chain management: lessons learned from a case study on pork

PurposeThe purpose of this study was to test the chain-organization environmental footprint (chain-OEF) approach by applying it to part of a pork production chain in Belgium. The approach is supposed to provide insight into the environmental impact of a specific production chain in an efficient manner by applying pragmatic data collection throughout the chain. This is achieved by allocating the environmental impact of each of the production sites to the product of interest using straightforward allocation rules.MethodsThe cradle-to-gate (up to retail) environmental impact of pork was determined by life cycle assessment (LCA), in line with the product and organisation environmental footprint guidelines (PEF and OEF; European Commission 2013b). Foreground data was gathered at a feed production site, two farmers, a slaughterhouse and a meat processing site. All foreground operations are part of the same pork production chain in Belgium. The chain was completed using background data from Ecoinvent v3.01 (Wernet et al. 2016), Agri-Footprint v1.0 (Blonk 2014), European Life Cycle Database v3.0, LCA Food Database (Nielsen et al. 2003) and OEF Sector Rules Retail (Humbert et al. 2015b). The impact was quantified using the international reference life cycle data system (ILCD) midpoint method for 14 impact categories, but focussing on climate change.Results and discussionThe total carbon footprint of the cradle-to-gate pork production system equals 0.46 kg CO2-eq. (100 g pork)−1. This result is quite similar to that of earlier studies analysing the pork production chain: 0.58 and 0.57 kg CO2-eq. (100 g pork)−1 (Bracquené et al. 2011, Agri-Footprint 2014). Most of the carbon footprint was caused by feed production and more specifically, by the feed ingredients and their transport. Grains, soy and palm oil have the largest impact contributions. The farms are responsible for most of the remaining impact. N2O and CH4 emissions are the largest cause of greenhouse gas emissions at the farms. Also, in the other 13 considered impact categories, feed production and farming are responsible for more than half of the total impact, mostly followed by meat processing.ConclusionsApplying the chain-OEF approach in this study has shown that a chain LCA can be performed successfully and pragmatic data collection allows obtaining LCA results relatively fast, especially for small or medium-sized enterprises (SMEs). Whereas data availability was not such an issue, the main bottlenecks identified are data management and the link of LCA to other disciplines such as engineering, policy, etc. which could increase the added value of LCA studies.

A system framework for OKP product planning in a cloud-based design environment

Nowadays, one-of-a-kind (OKP) companies, which generally operate in an 'engineer-to-order' business mode, strive to deliver individualized products with quality to achieve customer satisfaction. Thus, an accurate and prompt analysis of customer requirements (CRs) in the early design stage is critical to its success. However, most OKP companies are small or medium-sized enterprises (SMEs). Due to the limited resources and low product planning budget, they often cannot obtain abundant CR information nor can they afford the expense of complicated planning process. To address these issues, a system framework is proposed in support of OKP product planning process in a cloud-based design (CBD) environment. The challenges and future market niches of OKP companies are presented. The comparison of typical distributed systems shows that CBD, which utilizes advanced information technologies and business model, has advantages in providing sufficient resources, decreasing product development time span for OKP companies in a cost-efficient way. This article describes the proposed system architecture, the business interaction process and the information communication among customers, designers and marketing analysts at the product planning stage. To validate the proposed framework, a prototype system module MyProduct is under development in the CBD environment with an illustrative example.

Možnosti harmonizace účetního výkaznictví pro malé a střední podniky

The most business entities in Europe are small or medium-sized enterprises (SME), which have a legal obligation to prepare financial statements in accordance with a set of accounting principles accepted in their country. Those statements are available to creditors, suppliers, and national governments but they could be badly understandable to creditors, suppliers and subjects in other countries. This is a great obstacle of their activities in the EU internal market. The existence of 27 different national accounting systems in the EU can be held for the most important obstacle.There are many ways how to develop compatible accounting standards for SMEs but the most significant activity in this field is the research project of IASB (International Accounting Standards Board). IASB has developed IFRS (International Financial Reporting Standards). Even though IFRS are suitable for all enterprises, their application in case of SMEs would be very expensive and could significantly increase compliance costs of taxation. This development has not been finished yet and there are still some problems which need to be solved before the introduction of accounting standards to the public. The research has shown that IFRS for SMEs should be used mainly by the entities which do not have public accountability – i.e. that its equities are not publicly traded and do not hold assets in a fiduciary capacity for a broad group of outsiders. This paper discusses those IFRS modifications, which should be done in case of SMEs.

Determinants for innovation implementation at SME and inter SME levels within peripheral regions

Purpose– Innovation efforts of small- or medium-sized enterprises (SMEs) in peripheral regions are limited both by innate resource limitations and by location factors such as excessive distance from key markets and higher cost bases for new technology. However, the emergence of the knowledge economy may enable leveraging of knowledge to address such innate limitations. The aim of this study is to twofold. First, the study explores how SMEs in peripheral areas, i.e. challenging regions, seek to implement innovation from a path perspective by examining the contributions from antecedent and mediator variables or constructs, including knowledge-based factors identified in the literature, using a cross-sectional survey of SMEs at firm level. Second, to further examine how these path model constructs and relationships contribute in a causal manner to innovation implementation at an activity level of analysis based on knowledge-based view and dynamic capability theory, using a case study analysis.Design/methodology/approach– A sequential mixed method approach is used. In relation to the first aim a hypothetical path model is tested using structured equation modelling techniques based on a cross-sectional survey of SMEs in peripheral regions (n=604). For the second aim, to further examine how the path model constructs and relationships contribute to innovation implementation in a causal manner at an activity level of analysis, an explanatory case-based approach is used based on dynamic capability theory.Findings– The findings show that at a firm level knowledge factors influence innovation implementation as mediating factors through knowledge acquisition and assimilation which is consistent with potential absorptive capacity, and knowledge sharing linkages. Antecedent factors of lifecycle, leadership, culture and historical propensity to innovation were found to interact with the mediating variables of knowledge acquisition and assimilation, TQM/business improvement and knowledge sharing linkages (external), to produce a range of innovation outputs, including knowledge transformation and sales of new products and services from innovation activities. Based on the case study findings the underlying knowledge-based dynamic capabilities which contribute to the relationships within the path model were identified and further research agendas established.Originality/value– There is a relative paucity of studies on innovation implementation within SMEs in peripheral regions using a knowledge-based perspective at firm level, as opposed to regional level (e.g. regional innovation studies). In this context unique resource limitations and the contribution of knowledge-based factors need to be addressed. This study seeks to compliment regional level studies by making a contribution at both a cross-sectional SME or firm level and at an activity level of analysis in this area and to identify areas for further research.

Role of self-organisation in facilitating adaptive organisation: a proposed index for the ability to self-organise

This paper reports the result of work which explores the role of self-organisation in facilitation of adaptive organisation and seeks to test the assumption that organisations that have a greater ability to self-organise will be superior as complex adaptive systems in handling environmental change, compared with organisations with a lesser ability to self-organise. Three Adelaide-based small- or medium-sized enterprises (SMEs) participated in this research as case study companies. A quantitative measure of the ability to self-organise (the ASO Index) is proposed, with communication between agents as the main driver of the self-organisation process. The efficacy of the ASO Index scores is substantiated by empirical evidence of self-organisation derived from questionnaires and observation. A high level of trust along with open communication was evident in enterprises where self-organisation had occurred.

The influence of current firm performance on future SME alliance formation intentions: A six-country study

Although research has implicitly assumed small- or medium-sized enterprises (SMEs) employ alliances to improve performance, few studies have directly investigated how and when current performance levels might prompt firms to cooperate. Based on disparate predictions of the behavioral theory of the firm (BTOF) and threat rigidity thesis, we developed competing hypotheses regarding the impact of performance dissatisfaction on future alliance intentions for firms with and without previous alliance experience. Employing a dataset of 657 SMEs from six countries, results indicate that for firms with alliance experience, increasing managerial dissatisfaction with current performance decreased intentions to employ future alliances, thus supporting the BTOF thesis. Overall, these results highlight the importance that current performance satisfaction plays in influencing future alliance formation intentions.

Design of ''green grade'' rating system for the environmental performance assessment of a firm

In this paper, a new concept called was introduced to assess the environmental performance of a firm. Seven links of the green value chain of a firm, including green management, green suppliers, green design, green process, green marketing, green consumption and green recycle, were thoroughly analysed and researched, resulting in the development of a new model to assess environmental performance of a firm quantitatively. The proposed model, known as green grade rating system, employed the Analytic Hierarchy Process, and was demonstrated as a practical, feasible and effective quantitative method to assess the environmental performance of a company. The proposed green grade rating system can be of great significance to small- or medium-sized enterprises (SMEs) since these produce the majority of output values in the industry of any country and are the main pollution sources due to their dated technology and limited capital.

Business-To-Business Ecommerce Of Information Systems: Two Cases Of Asp-To-Sme Erental

Enterprises today can “eRent” Information Systems (ISs), through the Internet, from Application Service Providers (ASPs). This emerging IS “eRental” concept is a special case of Business-to-Business eCommerce, where the product is an IS application and the business units engaged in commerce are an enterprise and an ASP. For small or medium-sized enterprises (SMEs), IS eRental might be an appealing solution to complex and costly IT acquisition and implementation. It is yet too early to assess what the future holds for ASP and how far-reaching ASP implications could be for IS delivery and management in the future economy. It is possible however, to focus on and learn from ASP case studies. This paper briefly describes Net-POS and Silverbyte, two Israeli software vendors for the hospitality industry whose members, mostly SMEs, confront with great difficulty the high cost of owning, maintaining, and managing the state-of-the-art IS infrastructure required in the Internet era. These vendors have recently entered the ASP arena by adding an IS eRental option to their for-sale IS offerings. The case studies are followed by a discussion of the new ASP concept as well as of possible directions for research on ASP-to-SME eRental.

Internationalization of Service SMEs: An Integrated Perspective from the Engineering Consulting Sector

Internationalization traditionally has been examined using a single theoretical framework in the context of large manufacturing firms. The authors argue that it is more relevant to examine foreign direct investment (FDI) theory (including transaction cost analysis), the stage models of internationalization, or network theory in an integrated and holistic manner. Using case studies of four New Zealand-based engineering consulting firms classified as small or medium-sized enterprises (SMEs), the study identifies and analyzes patterns and influences related to the smaller service firm's decision to internationalize, subsequent internationalization, market selection, and mode of entry. The findings show that SME internationalization in the engineering consulting sector is a complex process, and concepts inherent in FDI theory, the stage models, and the network perspective are all evident. These results support the argument that service internationalization is too broad a concept to be defined exclusively or examined by any one theoretical framework. Implications are drawn for research and practice.

Knowledge capability and maturity in software management

Knowledge management is used as the underlying theory to develop a set of key process areas for a supplement to the CMM in small or medium-sized enterprises (SME) that develop software. These processes involve a focus on managing knowledge capability rather than traditional project management. A longitudinal case study provides evidence that current practices have already established the feasibility of these key process areas.