Performance Of Small To Medium‐sized Enterprises Research Articles

Linking firm and managers' characteristics to perceived critical success factors for innovative entrepreneurial support

PurposeThis paper aims to examine perceived critical success factors (CSFs) affecting the performance of small to medium‐sized enterprises (SMEs) and their relationship with firm characteristics. The paper also seeks to investigate the interdependence relationship among the perceived CSFs themselves using correlation coefficients.Design/methodology/approachThis paper is part of a wider study that was designed to investigate the perceived critical success/failure factors (PCSFs) affecting the development of SMEs. The study is based on a review of the literature, which provided a theoretical understanding of both CSFs and firm characteristics. This theoretical linkage was then tested using primary data that were collected through a two‐page questionnaire survey of 203 SMEs randomly selected from three cities in the Republic of Botswana. Principal component analysis (PCA) with Varimax rotation was used to reduce the data. Analysis of variance (ANOVA) was conducted to test the relationship between firm characteristics and perceived impacts of selected CSFs, and correlations were used to assess the relationships between the CSFs.FindingsThe study identifies ten sets of perceived CSFs affecting the performance of SMEs; statistically significant relationships between the perceived impact of selected CSFs and firm‐specific variables, indicating that the perceived impact of CSFs vary from firm to firm depending on their size, age, industry, and management profile; and statistically significant relationships among the selected CSFs themselves.Research limitations/implicationsThe study relies exclusively on a questionnaire as the data collection instrument, and many respondents were unwilling to participate in the survey. Therefore, it took the authors eight months to collect 203 questionnaires. This forced the authors to make some important changes from the original research proposal.Practical implicationsSME managers and advisors should not deal with CSFs individually, but should adopt an integrated and innovative approach to deal with them collectively. This approach should consider SMEs' uniqueness, given that these CSFs are perceived differently depending on firm characteristics. The paper forwards some research and policy implications for designing SME support and promotional interventions.Originality/valueThe paper uses well‐established and researched CSFs in the SME literature. To this end, the paper's originality and value lie in the investigation of these factors in Botswana. However, the findings are applicable to most SMEs, since they continue to suffer from the same problems worldwide.

Exploring agile methods in construction small and medium enterprises: a case study

PurposeAgile methods have proven successful in increasing customer satisfaction and decreasing time and cost to market under uncertain conditions. Key characteristics of agile methods are lean, flexibility and highly iterative development with a strong emphasis on stakeholder involvement. Today construction firms in general and small to medium‐sized enterprises (SMEs) in particular are surviving in a drastic competitive environment in which they are facing more and more challenges. Additional innovation is needed in the construction sector, with increased participation from more competitive SMEs. The main purpose of this paper is to present a model to prioritize available management systems to help SMEs address the challenge of today's market competition more effectively.Design/methodology/approachThe research methodology used is that of interpretative case study and grounded theory based on a strong empirical foundation, on which new theoretical insight into knowledge management as an autonomous action is developed. The paper looks at ways by which SMEs are managed, based on the empirical data collected from 12 case studies. It presents the empirical findings drawn from the case studies. Finally, the adoption of agile methods is subjectively assessed as to its potential contribution for improving the business processes of small and medium construction firms.FindingsIt is assessed that agile methods offers considerable potential for application in construction SMEs and that there are significant hurdles to its adoption in the actual phase. Should these be overcome, agile methods offers benefits well beyond any individual company.Practical implicationsConstruction firms need to be aware of the advantages of new management paradigms and practices. The analysis shows that SMEs in the construction sector have to internalize agile values into their business processes to reap the benefits of agile methods. It also reveals that existing practices show some kind of agile flavours.Originality/valueAgile principles and methods are explored, including: philosophy, values, practices and benefits. The management approaches used by construction SMEs are analyzed and discussed. The paper presents recommendations and insights for enhancing the performance and efficiency of SMEs by adopting agile values in their business processes.

Corporate governance, ownership structure and performance of SMEs in Ghana: implications for financing opportunities

PurposeThis study seeks to assess how the adoption of corporate governance structures affects the performance of SMEs (small to medium‐sized enterprises) in Ghana.Design/methodology/approachRegression analysis is used to estimate the relationship between corporate governance and ownership structure and performance.FindingsThe results show that board size, board composition, management skill level, CEO duality, inside ownership, family business, and foreign ownership have significantly positive impacts on profitability. Corporate governance can greatly assist the SME sector by infusing better management practices, stronger internal auditing, greater opportunities for growth and new strategic outlook through non‐executive directors. It is clear that corporate governance structures influence performance of SMEs in Ghana.Originality/valueThis paper provides insights on the effects of corporate governance and ownership structure on the performance of Ghanaian SMEs. The paper also shows the implications of SMEs gaining access to finance as a result of adopting a good governance system.

Short‐term effects of benchmarking on the manufacturing practices and performance of SMEs

Facing increased competitive pressures due to globalisation and increased quality requirements from their customers, small and medium‐sized manufacturers must increase their productivity and their competitiveness in order to survive and prosper. One way of evaluating the attainment of this goal is to compare a firm's business practices and performance with those of a group of comparable firms, or with those of firms that are recognised for their excellence – that is, to “benchmark” the organisation. As management challenges have increased in complexity, benchmarking has become a strategic tool for organisations, both large and small, and for governments seeking to assist them. However, given a lack of empirical research, little is known as to the actual impacts of benchmarking. With this in mind, the present study sought to test a model of the relationship between benchmarking, the adoption of advanced manufacturing systems, and the performance of small to medium‐sized enterprises (SMEs). The model was tested with data from 102 Canadian manufacturing SMEs that have participated in a benchmarking exercise.

Best practice in SME adoption of e‐commerce

Describes how small businesses involved in e‐commerce may benchmark their performance against a number of critical success factors (CSFs). The proposed approach is based on a series of interviews carried out amongst small‐to‐medium‐sized enterprises (SMEs) whose activities were judged to represent best practice in e‐commerce. Encourages an SME to analyse its own strengths and weaknesses on a continuing basis and to compare them with those of its competitors. The first step in this process is to identify the company’s attitude to growth. Next, the SME should establish a suitable generic strategy and decide on a set of objectives that support it. Finally, it should identify a set of relevant CSFs. Analysis of the KITE interviews identified 11 CSFs relevant to the competitive performance of SMEs entering the e‐commerce market. Further research currently being undertaken as part of a follow‐up study will be used to validate this approach.