Small To Medium‐sized Enterprises Sector Research Articles

Synchronizing U.S. Statess Strategic Plans to Increase Exports to Emerging Markets

For competitive advantage, the United States seeks to increase exports, as well as expand exports to emerging market consumers. The vast majority of U.S. firms (98%) are small to medium sized enterprises (SME). Most U.S. export firms are SME. However, only 1% engage in exporting. The U.S Federal and State governments encourage SME to go global and existing internationalized SME to expand exporting. The National Export Initiative (NEI) promoted such export expansion. The NEI/NEXT initiative takes the NEI to a new level. U.S. federal and state governments are minimally synchronized to assist SMEs to leverage the world’s growing middle class consumption demand estimated at 3.2 billion by 2020, the vast majority of which is expected in China and India. This paper examines the NEI’s progress and strategies by the five leading U.S. exporting states and features export activity to the emerging markets of BRICSA. It considers if, and how, states’ plans include supports to the SME sector firms. It analyzes the states’ alignment with the U.S. NEI and the extent to which the NEI has facilitated federal and state collaboration. Further, it reviews NEI/NEXT objectives and strategies for the U.S. to take further steps to internationalize U.S. business practices.

Access to finance to SMEs at a regional level – the case of Finance Wales

Since the economic recession of 2008, there is increasing evidence that small to medium sized enterprises (SMEs) have found it increasingly difficult to access funding from conventional sources such as banks. As a result, there have been various public sector interventions within the UK to close this finance gap, although this has been developed at a national rather than a regional level. This paper examines the development of one of the few publicly owned regional development funds in the UK and its role in supporting the SME sector in Wales during the economic recession. It shows the strategy undertaken was contrary to expectation during a time of economic crisis, especially in the failure to reduce the cost of borrowing to SMEs and to utilise the full range of financial instruments to ensure to maximise its impact.

Cost of capital in SMEs

PurposeThe purpose of this paper is to discuss the applicability of value based management (VBM) concepts for small to medium‐sized enterprises (SMEs) and to identify obstacles for its implementation. Estimating cost of capital is central to all VBM concepts, it is hence intended to critically analyse approaches that allow estimating cost of capital for non‐publicly traded firms.Design/methodology/approachThe paper is based on literature review and a case study approach. A case study on estimating the cost of capital has been conducted with a single manufacturing firm in Germany.FindingsVBM may provide useful management concepts for SMEs. Estimating the cost of capital has been found to be a critical element of implementing VBM concepts. Due to the absence of capital market data, cost of equity in SMEs has to be derived by means of alternative procedures. Results of a case study implicate that a combination of different methods may provide reasonable results in practice.Research limitations/implicationsThe applied research approach and the heterogeneity of the SME sector do not allow generalizing the results of this research.Originality/valueThe paper addresses a major barrier for implementing VBM in SMEs. It proposes a combination of analogy and qualitative approaches for estimating the cost of equity in SMEs.

Six Sigma and SMEs: a critical review of literature

PurposeThe purpose of this paper is to capture the evolution and status of utilization of the Six Sigma philosophy in the development of small to medium‐sized enterprises (SMEs), as well as to document prominent development of practices through a systematic literature review.Design/methodology/approachThe methodology adopted for this study used the principles of content analysis and deductive reasoning vis‐à‐vis various sub domains of Six Sigma methodology pertaining to industries in general and SMEs in particular.FindingsThe literature revealed that: Management's commitment is most important in SME Six sigma implementation. Benefits of Six Sigma have been enjoyed largely by the bigger industrial units and to a relatively lesser extent by the smaller units, i.e. SMEs. Quality management culture has largely been ignored or given less importance in the SME sector, which is evident from the meagre literature. There is a dearth of clear and SME‐specific methodologies (for Six Sigma approach) for quality improvement and there are far fewer models for quality improvement in the SME sector.Originality/valueIt has been found, on the basis of a systematic literature review approach (used in this paper), that quality management and development in SMEs needs to be done in a planned manner using Six Sigma roadmap.

Development strategies for Indian SMEs: promoting linkages with global transnational corporations

PurposeThe purpose of this paper is to trace the scope and dimensions of global opportunities that emerge in the era of globalization through the rapid growth of transnational corporations (TNCs), which Indian small to medium‐sized enterprises (SMEs) could exploit. The backdrop to the discussion is the growth of small‐scale industries (SSIs) in the era of globalization relative to the pre‐globalization era, with a particular focus on their export performance.Design/methodology/approachBased on secondary data, the growth of SSIs is analyzed and the scope of global opportunities for Indian SMEs is explored.FindingsAlthough the growth of the SSIs segment of the SME sector in India has slowed in terms of the number of enterprises, level of people employed and production, SSI export performance has been impressive in the globalization period. The SSI sector has grown more towards the international market than the domestic market in the globalization era. Globalization has offered new markets to SMEs primarily through two major developments: the adoption of a complex integration strategy by TNCs for their production network, and the global procurement strategies and global expansion of TNC supermarket chains.Practical implicationsThe paper prescribes a dual strategy of vertical integration of local SMEs with global TNCs for the production of intermediate goods and horizontal cooperation through networking among local SMEs to link up with global TNCs for the production and marketing of consumer goods. The role of Indian policymakers as a facilitator in the process is emphasized.Originality/valueThis paper throws light on recent growth performance of small‐scale enterprises in India and provides insight on the emerging global opportunities to Indian SMEs, which need to be given due consideration by Indian policymakers for exploitation.

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.

The European Commission and SME support mechanisms for e‐business

This paper explores and validates the premise that European small‐ to medium‐sized enterprises (SMEs) are less advanced in their adoption of e‐business than their US counterparts. The authors then examine the efforts of the European Information Society Project Office (ECISPO) in encouraging and informing SMEs by using the Internet as an educational, informational and networking tool. The methods employed by the ECISPO are evaluated against an information processing model. The authors then question the validity/usefulness of the site usage statistics which are provided in an aggregated format. The paper concludes that the full interactivity of the Web is being underutilised as an informational tool and proposes an e‐business adoption model for the SME sector. The paper also concludes that site usage statistics need to be presented in a disaggregated form to enable more detailed analysis to be performed.

IIP and SMEs: awareness, benefits and barriers

This paper considers the impact of the Investors in People (IIP) Standard upon small‐ to medium‐sized enterprises (SMEs) in the Midlands. The paper describes IIP, then considers the significance of SMEs and the impact of training and development in that sector. The paper then presents an analytical framework, firmly rooted in a literature review, that provides the basis for an examination of the reasons why SMEs might commit (or fail to commit) to IIP, the difficulties encountered and the benefits received. Our empirical findings are discussed in the context of this framework. These findings are based on questionnaire responses from almost 600 SMEs, and interviews with promoters of IIP. Some key responses are broken down according to size‐band and/or growth‐orientation. In addition, follow‐up interviews were conducted with selected firms, ranging from IIP enthusiasts to rejecters. This study therefore combines quantitative data with qualitative input. The attitudes and experiences of the respondents offer fresh insight into the appropriateness of IIP as an organisational development tool for the SME sector. The SME support network in England and Wales is undergoing a critical transition. The role of the Training and Enterprise Councils in promoting IIP to SMEs also comes under scrutiny, and our study has lessons for the promotion of IIP by the new learning and skills councils.

SME and large organisation perceptions of knowledge management: comparisons and contrasts

Compares the perceptions of both large organisations and small‐ to medium‐sized enterprises (SMEs) at a meta level in regard to knowledge management (KM) to improve overall understanding and synthesis of the philosophy and to develop sector‐specific learning in the SME sector. First, identifies and describes the key dimensions of KM using a socially constructed KM model. Second, uses a survey of large (> 250 employees) and SME (< 250 employees) organisations to investigate the perceptions of the KM dimensions. Third, reviews a series of qualitative social constructionist workshops, involving both large and SME organisations which were run to gain a deeper insight into the sectoral comparisons. The results indicate that KM is understanding and implementation is developing in the large organisation sector and knowledge is recognised as having both scientific and social elements. However, the SME sector was less advanced with a mechanistic approach to knowledge and a lack of investment in KM approaches and systems.

Danish Technological Institute SME sector networking model

In the late 1980s, the Danish Technological Institute received funding to examine whether networking might provide a mechanism through which to promote survival and growth among SME (small to medium‐sized enterprises) sector firms. To overcome the absence of a large‐firm hub in the SME sector, the institute evolved a five‐phase model in which an independent individual external to the potential network became responsible for brokering the interfirm co‐operation process. Plymouth Business School, in collaboration with the institute′s UK subsidiary, UK Business Net, undertook a study to gain further understanding of this problem. Describes the nature of identified provision gaps and provides the basis for evolving a detailed specification of the competences required of a network broker. This knowledge permitted the redesign of the broker competency development programme. Early results from implementation of the new system indicate a significant improvement in the capability of brokers to fulfil their assigned role in utilizing networking as a potential mechanism for enhancing SME‐sector growth.