Success Of Small And Medium-sized Enterprises Research Articles

Empowering SME Success: Unraveling the Nexus of Knowledge-Oriented Top Management, Knowledge-Sharing Practices, and Open Innovation on Performance

This study investigates the correlation between Knowledge-oriented top management, Inward and outward knowledge-sharing practices, and the impact they have on Inbound open innovation and business performance. Leadership is acknowledged as a crucial factor in effectively managing an organization, particularly in relation to knowledge management success. Our focus is on knowledge-oriented leaders' perspectives on knowledge sharing strategies and practices, and their pivotal role in establishing and implementing open innovation in small and medium-sized enterprises (SMEs). Such practices contribute to long-term success by reducing costs, expediting time to market, enhancing market differentiation, and creating new revenue streams for SMEs.To test our theoretical model, we utilized SMARTPLS version 4 and collected data from a sample of 247 IT, marketing, and sales managers in Tehran, the capital of Iran. The results indicate that knowledge-oriented top management has a positive and significant influence on both inward and outward knowledge-sharing strategies and practices, inbound open innovation, and ultimately, business performance.Hence, the top manager and chief executive officer of a company, as role models with higher positions and authority, play a pivotal role in mobilizing the tangible and intangible resources of the company. They can establish a conducive culture, foundation, and incentives for sharing valuable and relevant knowledge across the organization and departments. This, in turn, fosters creativity, innovation, and departmental outputs, ultimately leading to improved overall business performance for the firm.

Understanding Managerial Action in Business Model Transformation of Small and Medium-Sized Enterprises

Small and Medium-Sized Enterprises (SMEs) typically adapt their business model opportunistically with new value propositions, adding partnerships or improving their cost structure. Business model transformation has been proven to drive SMEs innovation and success, however, the role of SME managers in facilitating such transformation remains unclear. While peer-to-peer sharing has received much attention in public debates and academic research, sharing among firms is largely neglected in both. Looking at current opportunities for SMEs in business-to-business (B2B) sharing, this research aims to identify recurring patterns of manager’s activities along a business model transformation for which a cross-case analysis with Swiss SMEs was used along several cycles of action research with semi-structured, deductively coded interviews.
 The research identified three phases of management action: managers focus on identifying the business opportunity, they adjust processes and technical infrastructure to enable their organization to seize the opportunity and involve the entire organization to ensure a lasting change in their business model. While the impact of B2B sharing on each SME may be considered limited, this research offers original insights how managers drive business model transformation in SMEs. It illustrates a novel process in three distinct phases while identifying dedicated managerial action for each phase.

Entrepreneurial Strategic Orientation: Prerequisite for SMEs Success in IoT and Digital Transformation Sphere?

Entrepreneurial orientation (EO) is a multidimensional construct that reflects a firm’s tendency to be innovative, proactive, and risk-taking. Previous research has demonstrated that companies with a strong EO possess a competitive advantage in the market when compared to those with a conservative approach to management. The objective of this study is to analyse the entrepreneurial orientation of small and medium-sized enterprises (SMEs) using the ENTRE-U scale and to identify the dimensions of EO that are critical for achieving business success in the context of digital transformation and IoT implementation. The identification of these dimensions is facilitated through a survey method and exploratory factor analysis. After administering the ENTRE-U scale to a representative sample of SMEs that use modern technologies, such as IoT, four distinct dimensions of EO emerged. Each dimension of EO has a significant impact on firm performance. By adhering to the established EO dimensions and using the proposed methodology, managers can develop an efficient business model that aligns with the current digital market demands, enhances SMEs (survival, resilience, and sustainability), and addresses the high uncertainty prevalent in today’s business environment.

A Review of International Mode of Entry Strategies for SMEs in East Java

The purpose of this research is to examine the internationalization of Small and Medium-sized Enterprises (SMEs) in East Java from both theoretical and practical perspectives. By analyzing existing literature and utilizing empirical data from earlier studies, this study seeks to deepen our understanding of the subject matter. The methodology of this study involves rigorous examination of the most recent theories and models, supplemented by empirical analysis of existing research on internationalization of SMEs. Various theories and models, ranging from classical to contemporary approaches, are explored in relation to the internationalization strategy of SMEs in East Java, and different entry modes for internationalization. The theoretical framework of this study is anchored on the resource-based view and network theory. This study uses content analysis of the latest theories and models coupled with empirical analysis of studies on the internationalization of SMEs that have been conducted. Several theories and models, both classical and new approaches, link the internationalization strategy of SMEs in East Java and several entry modes for internationalization. This theory is based on a resource-based view and network theory. The result of this study is East Java's SME internationalization strategy is hampered by various obstacles and issues, as per documented evidence. While the entry mode for internationalization hinges on networking, numerous SMEs in the region choose to network autonomously, as empirical data suggests. This study aims to provide policymakers, especially the government, with workable ideas for a long-term, proactive strategy to ensure the success of SMEs' internationalization in East Java. Empirical data proposes that limited knowledge about markets, trade regulations, communication barriers, financing, and transportation infrastructure supporting internationalization pose the most common challenges faced by SMEs in Indonesia. Consequently, the entry networking strategy mode is the key to independent internationalization for SMEs. This study contributes to a theoretical and practical review of SME internationalization mode entry strategies.

THE CRITICAL SUCCESS FACTORS FOR LEAN SIX SIGMA IMPLEMENTATION IN SMALL-AND-MEDIUM-SIZED ENTERPRISES

Lean six sigma (LSS) is an important business strategy for organisations, including small and medium-sized enterprises (SMEs). Over the years, SMEs have had a potentially significant impact on various countries’ gross domestic product (GDP). The main purpose of this research is to investigate the critical success factors (CSFs) for lean six sigma (LSS) implementation in the Kingdom of Saudi Arabia’s SMEs, and to contribute to discovering the factors that lead to business success, increase revenue, and enhanced competitive advantages. The study identified 29 factors from previous research in order to guide the successful implementation of LSS in the SME sector in Saudi Arabia in particular. The CSFs were refined, producing a consolidated list of 14 factors. A principal components analysis (PCA) identified four main factors: leadership support and management structure, technological capabilities, knowledge acquisition, and creativity and innovation. These factors could influence the success of SMEs in Saudi Arabia by adopting LSS in their business processes.

Towards a lightweight framework for service management evaluation in SMEs

Small and Medium-sized Enterprises (SMEs) are currently immersed in Volatility, Uncertainty, Complexity and Ambiguity (VUCA) environments and need to adapt and innovate both their services and their management practices and processes. Unfortunately, models and standards for service management are focused on large organisations, therefore, their application in SMEs is expensive and, generally, unfeasible. In order to contribute to the sustained success and development of SMEs, this paper presents a framework for service management evaluation. The objective of this framework, which is based on international standards and the main models for service management, is to be a roadmap containing well-defined and formalised processes that helps SMEs to improve the quality of their customer services. The proposal is validated in this work by means of its application to a real case study.

FACTORS THAT IMPACT THE EFFECTIVENESS OF SOCIAL MEDIA AS A MARKETING TOOL IN SMALL AND MEDIUM-SIZED ENTERPRISES IN SELANGOR, MALAYSIA

Small and medium-sized enterprises (SMEs) play a vital role in the Malaysian economy. The success of SMEs is critical for Malaysia's total economic progression, both nationally and globally. Conducting business online is one of the opportunities social media has provided entrepreneurs. SMEs often lack the means to conduct in-house marketing operations or hire a skilled marketing consultant. Social media is a massive dialogue that everyone can join. With social media, businesses have the added advantage of following statements and replying instantly. While there is much literature on social media marketing methods, there is not much information on how businesses might utilize social media to enhance profits. There is little academic research into the elements that drive social media use and its impact on SMEs in Malaysia. This research aims to develop an understanding of improving the use of social media as a marketing tool in SMEs and address its relationship to brand awareness, consumers' engagement, word-of-mouth, conversion rate, and effectiveness. For this quantitative study, data was collected using questionnaires conveyed to SMEs engaged in online marketing activities. The survey yielded 177 valid responses. The findings of this study indicate that word-of-mouth and engagement were insignificant. However, brand awareness and conversion rates were significant. This result is significant for SMEs in emerging markets as it allows them to establish their marketing presence and enhance brand equity.<p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0811/a.php" alt="Hit counter" /></p>

An integrated social network marketing metric for business-to-business SMEs

Social networks have been extensively studied in business-to-consumer (B2C) studies, but their effects in a business-to-business (B2B) marketing context are under-theorized. The study develops an integrated social network marketing metric (SNMM) for B2B small- and medium-sized enterprises (SMEs). Using the framework, the study establishes a theoretical link between behavioral reasoning theory (BRT) and marketing accountability theory (MAT). Data was collected from 254 B2B SME marketers in India through a structured questionnaire survey and semi-structured interviews. At first glance, the missing link between SME performance and SNMM appears to be time, knowledge, and financial resources. SMEs that embrace innovation, proactiveness, and risk-taking can benefit from social media technologies. Thus, social networking has a direct, positive effect on SME growth. The implications for B2B SMEs’ SNMM studies are also discussed. Furthermore, the rationality of B2B marketing metrics has a tremendous influence on business success. Although the study has found a positive impact of SNMM on B2B SMEs success, further research is needed.

Entrepreneurial orientation and SMEs success factors

Purpose. Drawing on the concept of entrepreneurial orientation (EO) and the aspect of top management style, this study attempts to find the factors that lead small and medium-sized enterprises (SMEs) to success in business. Methodology. In this study, a survey of 110 Latvian and Swedish forestry contracting companies’ top managers was conducted. Quantitative and qualitative research methods are applied to assess the companies’ performance and the factors driving the companies’ success. A questionnaire with a five-point Likert scale, principal component analysis, the Mann–Whitney U test and text coding were used to test the hypotheses and answer the research questions. Findings. EO-inherent SMEs, compared to their conservative counterparts, have a significantly higher number of employees, turnover, profit and return on asset rate. The differentiating success factors for EO-inherent SMEs are (a) employees’ contribution, treatment of employees and teamwork, (b) quality of manufacturing services and efficiency of company internal processes, (c) activity in improving collaboration processes with the buyer, (d) control of company operations, (e) the use of new technologies and machinery in manufacturing, and (f) high demands of manufacturing service buyers. Meanwhile, unfair competition, difficulties in raising funds and overall political instability in the country are considered as hindering factors for the success of EO-inherent SMEs. Value. The findings of this study contribute to the literature on entrepreneurial orientation in the SME context, characterising the success factors and differentiating style of SMEs’ top managers in creating a growing and high-performing company. Keywords: entrepreneurial orientation, success factors, performance, forestry SMEs. Paper category: research paper.

Critical success factors for managing construction small and medium-sized enterprises in developing countries of Middle East: Evidence from Iranian construction enterprises

The study aims to study the critical success factors (CSFs) for managing construction small and medium-sized enterprises (SMEs) in the developing countries of the Middle East. The statistical population included active experts in the field of construction in the study area. The sample size was determined using the Cochrane formula, and purposive and convenience sampling was used to select 118 participants as the primary sample. The questionnaire used in this study was based on 63 CSFs items derived from the extant literature, which were categorised into eight CSFs categories. The findings indicated that the mean rank score of the CSFs for managing construction SMEs for the CSFs categories and each CSFs item ranged between medium and high, and all CSFs items and areas can be considered significant CSFs for managing construction SMEs in developing countries of the Middle East. Furthermore, in the ranking of the CSFs categories, technology with an average (MS) of 6.38 was rated the most significant CSFs category, followed by human resource management aspect (MS = 5.48), dynamic capabilities (MS = 5.30), and organisational management (MS = 4.76). It is expected that the study findings and recommendations would significantly contribute to improving project success and efficiency of construction SMEs in developing countries while deepening stakeholders’ awareness of critical variables for prioritisation in order to remain competitive in the construction industry. • Construction SMEs in developing countries struggle to be competitive and profitable. • A mixed research design helped in identifying the key factors that can reverse the trend. • Use of technology, technical capability, and stakeholders upskills are considered very critical. • Practical blueprints, recommendations, and implications of the study are discussed.

Factors Affecting Performance of Small & Medium Enterprises: The Mediating Role of Knowledge Management

Entrepreneurial orientation, entrepreneurial innovation, and knowledge management all play critical roles in improving the performance of Pakistan's small and medium-sized enterprises (SMEs). Pakistan's business index score decreased from 137th to 138th due to the country's low performance in the small and medium-sized enterprise sector. Small and medium-sized firms must overcome several obstacles in order for the country's economy to thrive. This study will address this issue. We used a cross-sectional design and a quantitative technique in our research. Data were acquired via an email questionnaire and analyzed using the structural equation modeling technique and SmartPls. The findings suggested that entrepreneur orientation and innovation are critical factors in enhancing the success of SMEs. Additionally, knowledge management acts as a buffer between entrepreneurial attitude and organizational performance, as well as between entrepreneurial innovation and organizational performance. The study's findings have a number of implications for SME management and policymakers, including the importance of innovation and knowledge management in achieving better performance standards.

How Do Human Resource Management Practices Affect Innovation of Small- and Medium-sized Enterprises in a Transition Economy?

Small- and medium-sized enterprises (SMEs) are one of the engines for inclusive economic growth. Yet little is known about the contribution of human resource management (HRM) practices to the success of SMEs. This study empirically examines how HRM practices determine different categories of innovation of SMEs in the context of a transition economy. Using a longitudinal dataset and applying the instrumental variable methodology to correct for endogeneity problems, our study uncovers that HRM practices positively affect the quality of employed human and physical capital assets of SMEs. More importantly, we find that that HRM practices significantly contribute to the launch of new products and improvement of existing products. In addition, we also find that the adoption of HRM practices facilitate labour productivity and value added. Taken together, these findings highlight that HRM practices are a strategic resource for innovation and development of SMEs in transition economies by rewarding them with higher-quality capital assets. JEL: L25, O15, O31

South African business incubators and reducing the SME failure rate – A literature review

Small business failure is one of the biggest challenges faced by developing countries, and business incubators have been touted as a solution to reducing the failure rate of these small and medium-sized enterprises (SMEs). Thus, the number of business incubators has escalated worldwide, including South Africa. Consequently, significant time has been devoted to researching business incubators and their role in SME success. However, the effectiveness of these incubators is still in question, thus a study is being conducted to determine how effective business incubators are in reducing the failure rate of SMEs.The findings show that there are some improvements in SMEs that have been incubated or supported, but not enough to make a dent on the failure rate at the country level, as the failure rate has stubbornly remained the same. One of the concerning key findings is that there is a misalignment between the goals of business incubators (BIs) and the SMEs’ needs. SMEs are looking for access to finance and access to markets, while BIs are offering office space and other support services. BI and SME goals need to be more aligned if we are to effectively enhance small business development interventions and reduce current failure rates. More empirical research is still needed to measure and quantify the effectiveness of BIs to SME failure rates, as no research has attempted to link a business incubator to both the success of individual SMEs and the country’s SME failure rate.

Fatores de sucesso no contexto das PME: um estudo empírico realizado em Portugal

Small and medium-sized enterprises (SMEs) are considered important for economies’ growth and stability, as they contribute to job creation, the growth of Gross National Product and tax revenue. It is therefore essential to determine the factors contributing to their success. After carrying out a review of the literature on the subject, there is clearly no consensus on the factors leading to SME success. Therefore, an empirical study was made based on a questionnaire applied to a sample of Portuguese SMEs of excellence. The results obtained revealed the factors contributing least to SME success: (1) academic qualifications, (2) the gender of the founder(s) and (3) exporting orientation. Indeed, SMEs are aware that their success depends above all on maintaining good relationships with clients and on the quality of their products and/or services. Some implications for business practice are also suggested

Innovation capacity: A perspective on innovation capabilities of consulting engineering firms

Background: Small and medium-sized enterprises (SMEs) play a significant role in job creation and bridging the widening gap between the rich and the poor in South Africa. Several factors determine the success of SMEs. One largely-overlooked factor is innovation capacity, which is made up of different capabilities. Aim: The aim of this study is to investigate the degree of innovation capacity in South African consulting engineering firms and to identify the differences in the innovation capabilities across firm size. Setting: The target population for the study was consulting engineering firms operating in South Africa. Methods: The study followed a quantitative methodology. The survey was distributed using an email invitation to participate in the study, which contained a link to access the questionnaire online. Results: The results show that South African engineering consulting firms reported an ‘average’ to ‘high’ innovation capacity, where medium and large-sized firms performed similarly, and small firms lagged. The study found that there exists a significant hierarchy in performance for entrepreneurial capabilities, risk management capabilities and capabilities for market and customer knowledge: larger firms reported a higher scoring than smaller firms. It also found that small firms sharply lagged behind medium and large-sized firms regarding risk management capabilities and capabilities for market and customer knowledge. Conclusion: The results intend to assist policymakers in prioritising lagging capabilities as the point of departure for capability-building efforts. In addition, the results should assist entrepreneurs in being mindful of the potential blind spots that could be hindering growth.

More is none? Exploring how SMEs describe their best practices in performance measurement

PurposeThis paper aims to provide owner/managers with access to an evidence-based study for the purpose of improving practice in performance measurement (PM) in their small and medium-sized enterprises (SMEs).Design/methodology/approachAs a qualitative case study, it adopted semi-structured interviews to explore the best practices in PM from 32 SMEs in Malaysia. The interviewees were the owner/manager, the supervisor and/or the person who is responsible for human resources in the firm. Thematic analysis was conducted.FindingsFirst, it should be no surprise, as the study echoes previous research, that the traditional, complex PM systems are not functionally suitable for most SMEs. Second, the study identifies five common capabilities (5Cs) in human capital that these SMEs require in their PM practice, all of which are claimed to contribute critically to SME success and sustainability.Research limitations/implicationsWhile qualitative studies can obtain in-depth results, it is encouraged to continue similar research with additional samples for comparison, including quantitative studies and SMEs in other countries.Practical implicationsThe findings help SME owners/managers benchmark their current practices in PM and improve toward what peer firms have been doing well to benefit organizational development in a feasible tone.Originality/valueThis research informs SME practitioners of the 5Cs mechanism found to be effective for long-term organizational survival – including during unprecedented times such as an economic downturn or a pandemic.

THE RESPONSIBILITY FOR RISK MANAGEMENT IN THE SLOVAK SMEs FROM THE POINT OF VIEW OF THE HUMAN RESOURCES IN THE PERIOD OF QUALITATIVE ECONOMIC CHANGES

Small and medium-sized enterprises (SMEs) in developed countries represent an important part of their economic environment. They belong to accelerators of economic development in regions and countries. One of the specifications of SMEs is that they allow people to learn to use their own entrepreneurial skills. Thus, the success of SMEs depends on the skills of the person who is responsible for business management in the enterprise. Without skilled and competent managers no activity will be performed effectively. The development and changes in the economic environment, in which SMEs operate, cause the various reversals connected with uncertainty and the resulting risks. A competent person (owner/manager) in SME will need to anticipate these risks and develop appropriate mitigation and strategies for them. The owner/manager of SME should consider the fact, that there could be deviations in the realization process against the planned goal. This deviation presents the risk and the representative of SME should know, how it is possible to manage this risk. It means to reduce its negative impact. The lack of knowledge is a fundamental problem in the failure of most initiatives in the SMEs and the lack of experience can become a major risk to business survival. The goal of owners/managers in SMEs should be to reduce the possible errors and risks in that way that the SME gets into a situation in which it can anticipate changes, and it is able to respond to them and exploit them to their advantage. Each SME is unique and the risk may occur differently in comparison with other SMEs. Risk management and mitigation of risk are important to ensure the security of the company and its continuous development. The risk management in SMEs is perceived as a means of the improvement of SMEs’ success in their activities, due to the fact, that in most cases the unpredictable situations represent a serious loss-making exposure for the SMEs business sector which leads to the loss. For those SMEs whose capital base is insufficient, they can have catastrophic consequences in the case of realized activities, and they can lead to financial losses and subsequently to possible bankruptcy. For this reason, risk management is a prerequisite for minimization of the negative effects of unexpected situations. Still, a lot of SMEs rarely carry out process-related activities risk management. It is affected by limited resources (financial, human), which SMEs have, and which process risk management. There is a wide range of studies focused on risk management in SMEs, but only several of them are focused currently on the responsibility for risk management. This paper contributes to the dissemination of knowledge about the responsibility for risk management in SMEs and provides wider analysis in ways of responsibility for it. To reach the main of the paper, questionnaire surveys among 1018 Slovak SMEs were conducted. We compared the responsibility for risk management in SMEs between two groups of SMEs – technological and tourism from the point of view of sized category, and regional of SMEs. For the evaluation of differences and dependencies among three groups of respondents’ answers, according to their size category, economic branch in which they operate, and regional location, the Chi-square test was used. The associations among respondents’ answers were evaluated through Cramer’s V. The results showed the differences in responsibility for risk management among Slovak SMEs. The results of this study may provide implications for subsequent research focused on responsibility for risk management in the wider context.

Creative advertising and business performance: An investigation of small and medium-sized enterprise in the traditional Iranian food industry

ABSTRACT Today, small and medium-sized enterprises (SMEs) paly significant role in the economic development of both developed and developing countries. Improving the performance of these enterprises is one of the major concerns of communities. The success of SMEs is a function of establishing a long-‌term relationship with customers, which is translated into loyal customers. In fact, this is the marketing knowledge that enables them to win customers’ satisfaction. One of the most palpable and expensive components of marketing activities is advertising. Advertising is the tip of iceberg in marketing process. One of the major factors in the determining advertising strategies is creative ideas and creativity in advertising. Accordingly, this study was undertaken to “investigate the impact of creative advertising on the performance of SMEs in the food industry of Qom province with the mediating role of brand image. The study population consisted of the customers of food industries of Qom province. Random sampling method was used for selecting participants and data collection was performed by a questionnaire. A total of 386 questionnaires were completed. Structural equations were used for data analysis. Results of path analysis indicated that the creative advertising had a positive effect on brand image, and brand image in turn had a significant positive impact on business performance (customer satisfaction and loyalty. Finally, based on the research findings, some suggestions for future studies are presented.

Learning in SME Internationalization: A New Perspective on Learning From Success versus Failure

Entrepreneurial small- and medium-sized enterprises (SMEs) play a significant role in nearly all economies and are responsible for a significant proportion of cross-border transactions. In order to create and capture opportunities across borders, entrepreneurs in SMEs rely heavily on both self- and vicarious- and experience-based organizational learning. Although a significant percentage of the academic literature has concerned itself with learning from successful experience (or general experience), learning from failed experience (or learning from success versus failure) has receive much less attention. This is despite the fact that failure is generally more pervasive, particular with respect to SMEs, than success. In this paper, we review the extant knowledge on SME success- and failure-based learning from internationalization, with particular emphasis on how the two bases of learning interact. In addition, we relate the five focused issue articles that build on and extend this literature into a set of insightful theoretical and managerial contributions.

Effect of partnership quality on SMEs success: Mediating role of coordination capability and organisational agility

By constructing beneficial partnership quality (PQ), a firm could access external and complementary resources to improve its coordination capability (CC) and enhance organisational agility (OA) for responding to the variability of the business environment, then leading superior organizational performance (FP). This study uses the survey data collected from 257 small- and medium-sized enterprises (SMEs) in Taiwan to examine the causal effects of hypotheses testing. Results show that superior PQ enhances FP. Moreover, this research presents the mechanisms of CC and OA and offers evidence that PQ promotes FP through these mechanisms. Thus, an SME must put more effort into maintaining its interfirm partnership quality and then figuring out its effect with its internal coordination and agility activities in order to overcome the limitation of resource and development, surmount market changes and customer needs, and create a distinctive competitive advantage for further development in a dynamic business environment.