Total Enterprises Research Articles

Analysis of Knowledge Management and Total Quality Management Implementation: A Study on Indonesian Small and Medium Enterprises

This study deals specifically with analyzing the implementation of Knowledge Management (KM) and Total Quality Management (TQM) in Small and Medium Enterprises (SMEs) in Indonesia. The purpose is to analyze the implementation of KM Elements and TQM Practices in SMEs in Indonesia and identify the challenges faced by SMEs in Indonesia in implementing TQM and KM. This article is based on information about SMEs in Indonesia that are recorded in the digital ecosystem of 27 million in December 2023. . The primary and secondary data collected were analyzed using content analysis techniques with a qualitative approach. The results show that the most applied Knowledge Management Elements (KME) are "Knowledge Application" and "Knowledge Acquisition" and the most applied Integrated Quality Management (TQMP) practices by SMEs in Indonesia are "Continuous Improvement". Keywords Total Quality Management, Knowledge Management, TQM practices, KM elements, Indonesian Small and Medium Enterprises

ATTITUDE OF GIRL STUDENTS TOWARDS AGRICULTURAL ENTPRENEURSHIP

India is one of the most populated country in the world. It has third largest entrepreneurial ecosystem in the world. Agricultural entrepreneurship has wide scope in India. India has around 63 million enterprises, of which 11.4% are agricultural enterprises. Out of total enterprises, only 20% are women-owned. Entrepreneurial activities related to food processing, value addition, custom hiring services can generate employment for youth and reduce unemployment. Agricultural entrepreneurship provides huge scope to women to tap their entrepreneurial potential. It is crucial to enhance their attitude towards entrepreneurship to mainstream them in this sector. With this consideration, the present study was undertaken to investigate the attitude of girl students towards the agricultural entrepreneurship. It was conducted in Anand Agricultural University. 50 final year undergraduate girl students were randomly selected for the study. The responses were collected using specially designed interview schedule. It is found that majority of the girl students had highly favorable attitude towards agricultural entrepreneurship. Academic performance, Annual family income, Family type, agricultural entrepreneurship workshop was found positively significant. Locality was found positively related and academic performance was found negatively significant with the attitude of girl students towards entrepreneurship.

A Comparative Analysis of Financing Channels for Small and Medium-sized Enterprises (SMEs)

Small and medium-sized enterprises (SMEs), as an essential component of the Chinese economy, represent 99% of total enterprises, contributing 60% of China's GDP, 50% of tax revenue, and 80% of urban employment. However, SMEs often face difficulties in obtaining affordable financing, with capital shortage being their most significant challenge. This study aims to compare different financing channels for SMEs to optimize financing decisions, reduce financing risks, enhance financing capabilities, promote the development of financing markets, and improve competitiveness. This research is of vital importance for the sustainable development of SMEs and economic growth. This paper will analyze and compare the advantages and disadvantages of financing channels, focusing on bank loans and trust loans, and present an overview of the overall financing scale and channels in the pre-pandemic era. Despite economic uncertainties, Chinese SMEs have demonstrated resilience and adaptability. They are actively seeking new market opportunities, optimizing financing strategies, reducing operating costs, and responding proactively to government policies. These efforts are expected to help them navigate through economic challenges and achieve sustainable development.

The impact of employee engagement and innovation performance on business success in manufacturing and service enterprises in Albania and Kosovo

This study aims to investigate the interplay between employee engagement and innovation performance in shaping the success of manufacturing and service enterprises in Albania and Kosovo. The data collection involved the distribution of questionnaires to entrepreneurs, managers, and employees of the enterprises, with direct interviews conducted in some cases. The data collection period spanned from the end of 2022 to the beginning of 2023. SPSS was employed to create the database and analyze the collected data. The study encompasses 190 companies operating in the services and production sectors, with 100 located in Albania and 90 in Kosovo. The selection of these sectors is based on their significant contribution to the region’s economic landscape. Of the total enterprises, 105 (55%) are manufacturing enterprises, and 85 (45%) are service enterprises.The findings reveal a robust and positive correlation between employee engagement, innovation performance, and business success. Employee engagement (r = 0.458**) and innovation performance (r = 0.396**) exhibit significant correlations (p < 0.01), with both factors demonstrating statistical significance (p = 0.000). The multivariate regression analysis confirms the positive influence of both employee engagement and innovation performance on business success, supported by a significance of ANOVA analysis (p = .000). This study contributes to the understanding of the specific dynamics of employee engagement and innovation performance in the context of manufacturing and service enterprises in Albania and Kosovo. It offers valuable insights for managers and entrepreneurs seeking to enhance the success of their organizations.

Comparative investment decisions in emerging textile and FinTech industries in India using GARCH models with high-frequency data

The domestic textiles and apparel industry stood at $152 billion in 2021, growing at a CAGR of 12% to reach $225 billion by 2025. The textiles and apparel industry in India has strengths across the entire value chain from fibre, yarn, and fabric to apparel. On the other hand, many FinTech companies gained enough importance and attention during the Demonetization and COVID-19 pandemic situation where most people are dependent and prefer cashless payments and receipts over hard cash payments and receipts. Due to the growth of FinTech companies in India, consumer lending FinTech companies in India make up 17% of total FinTech enterprises. Many angel investors are coming forward to invest in such FinTech companies as this industry has much potential to grow in future. As there is enough scope for the expansion of FinTech companies in India, retail investors come forward to invest in the stocks of listed FinTech companies. As retail investors always look forward to returns either in the form of dividends or appreciation of stock prices, it is also necessary to analyse and model the stock price volatility of FinTech companies in India before investing. Hence, this research study is an attempt to use high-frequency data i.e. 1-minute closing prices, to formulate suitable GARCH (Generalised Autoregressive Conditional Heteroscedasticity) models for stock price volatility of listed textiles and FinTech companies that could also capture the asymmetric volatility if it exists due to third phase of COVID-19 pandemic and Russia-Ukraine war. The results concluded that there is a presence of positive shocks which might be due to the third wave of the COVID-19 pandemic that might have again shot the demand for financial products and services of these FinTech companies namely Paytm and PolicyBazaar and there is no negative shock of Russia-Ukraine war.

Impacting Human Resource Quality on Business Operation Performance: A Case Study at Small and Medium Enterprises in Vietnam

In Vietnam, small and medium enterprises account for 95% of the total enterprises and are considered essential to economic restructuring, industrialization, and modernization. The development of this type of enterprise makes a necessary contribution to gross national income and economic growth and solves many social problems. However, the competitiveness of this business sector is still minimal, mainly due to the low quality of human resources. Thus, the article aims to explore the key factors affecting human resource quality and its impact on business operation performance. The article applied structural equation modeling and data surveying from 900 employees working for SMEs. Finally, seven factors affected the human resource quality and its impact on business operation performance with a level of 1%. The authors proposed managerial implications to enhance human resource quality for many sides: managers, business leaders, local authorities, and the Government.

Solutions for private economic development become a important drive of the economy

The article analyzes the development of Vietnam’s private economy (non-state enterprises) from 2017 to 2021. Research results have shown that, from 2017 to 2021, the private economy has achieved the following achievements. encouraging results in terms of the number of enterprises, the scale of investment capital, and the creation of jobs for society. The private sector has contributed over 39% of the GDP, more than 29% of the state budget, and attracted more than 85% of the country's labor force. However, the development of Vietnam's private economy in recent years is still limited: the proportion of medium and large enterprises in total operating enterprises is still low (6.2%); informal status of the private sector still accounts for a high proportion (88.7%); quality growth and low - profit margins; labor productivity is still low; the alliance and linkage between state-owned enterprises, foreign-invested enterprises, and the domestic private economic sector are not close. Based on analyzing the current situation, the article has proposed 6 solutions to develop Vietnam's private economy, including: (1) Completing the socialist-oriented market economy institution; (2) Formulate a strategy to develop a system of medium and large-scale enterprises that actively participate in the global value chain; (3) Develop a roadmap to formalize household businesses; (4) Investing in the development of processing and manufacturing industries, increasing labor productivity and economic efficiency; (5) Develop a mechanism for joint ventures and linkages between the state-owned enterprises, the foreign-invested sector and the domestic private sector; (6) Promote the building of business culture and enhance the social responsibility of each enterprise.

Study on Transportation Logistics Industry development under economics: The case of HCM, Vietnam

The objective of this paper is to measure seven factors, including Labor, Capital & Scale, Physical Infrastructure, Information Technology Infrastructure, Institutions, Openness to the Economic Environment, and Emission. Furthermore, another objective is to assess which factors impact on Labor Productivity, Capital Productivity, and Gross Domestic Product (GDP) of the Transportation Logistics Industry in Ho Chi Minh. It will also assess how GDP is impacted by Labor Productivity and Capital Productivity. The Methodology used includes Cronbach’s Alpha, Exploratory Factor Analysis, Pearson Correlation and Multivariate regression. Highlight results are Transportation Logistics Industry’s Scale, such as total enterprises of Transportation Logistics Industry impacts on Labor Productivity at Sig. < .001 and Beta = 0.706, impacts on Capital Productivity at Sig. < .001 and Beta = 1.728, and impacts on Transportation Logistics Industry’s GDP at Sig. < .001 and Beta = 0.712, which impacts all in the positive direction. Besides, while Labor Productivity impacts in the same direction on GDP at Beta = 1.006 and Sig. < .001, Capital Productivity does not impact on GDP. Therefore, to develop Transportation Logistics Industry, there is a need to focus on Transportation Logistics Industry’s GDP by boosting its Labor Productivity. Also, there is a need to focus on the Transportation Logistics Industry’s Scale in the direction of increasing total enterprises is important and necessary.

Determination of factors affecting competitiveness through technical and economic analyses of dairy cattle enterprises in Balıkesir province

In this study, technical and economic analysis of dairy cattle enterprises in Balıkesir province were carried out. The factors which affect the competitiveness of enterprises and are important in terms of the continuity of production were determined. The stratified sampling method was used to determine the sample, and the study material was two-year (2017–2018) data obtained from 147 enterprises. In addition to the economic analysis of the data obtained, factors affecting unit profit in enterprises were estimated using the multiple linear regression model. The cost elements in total enterprises in Balıkesir province in 2017–2018 include feed expenses (47.90%-47.29%), livestock depreciation (16.64%-16.13%), labor expenses (13.84%-14.30%), veterinary health expenses (4.03%-4.50%), fuel transportation expenses (3.43%-4.15%), building equipment depreciation (3.37%-3.64%), and other expense items. A distinct difference was observed between scales in terms of profit and loss states of the enterprises in the study, with an increase in the profitability level from small toward large scale enterprise. The small-scale enterprises, in particular, are at a loss. The most important determinant of competitiveness in the study is the region’s development level, where the enterprises are established in the borders of Balıkesir province. Additionally, among the technical parameters, the calving interval and the reduction of the disease rate have a positive effect on the competitiveness of the enterprises. Therefore, improving the financial structure of the enterprises and boosting the rate of technology utilization while simultaneously increasing enterprise scales will contribute positively to competitiveness.

Coherence Among Street Vendors Act and City Planning Policies Case Study- Patiala

The magnitude of informal sector and its contribution to national economy indicates that 92% of total work force of 457 million in India, work in the informal sector. Informal sector contributes 60% to country’s GDP (Gross Domestic Product). This sector shares 98% of the total enterprises in the country. As per 2011 census, Patiala has 4.46 lakh urban population served by 22,000 formal units and 7,000 informal units. Out of these 7,000 informal units, about 2000 informal units fall in walled city. This paper is an attempt to review the coherence among the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 and the City Planning Policies by studying the provisions made by the urban local bodies (ULB) to address the issues of informal sector under this Act and its integration with the city Master Plan before the enactment and after the enactment of the Vendors Act 2014. For better understanding the author has studied the historical evolution of informal trading activities in Patiala, its growth pattern, trend, spatial distribution, socio economic characteristics, space occupied, movement within informal and formal trade and its impacts on traffic, land use and physical environment. Salient features of The Protection of Livelihood and Regulation of Street Vending Act,2014 have been discussed along with the practical application of the same by Municipal Corporation Patiala and its coherence with the city planning document.

Financial performance analysis of MSME sector: An empirical study

The MSME sector is the most demanded, vibrant and dynamic sector which contributes highly to country’s manufacturing output, employment and exports. As this sector contains more than 80% of the total enterprises of the economy, its labor intensity is much higher than that of any other large enterprise. MSME is an important pillar of Indian economy as this sector is continuously contributing greatly to the growth and development of Indian economy by creating around 70 million employment, manufacturing more than 6000 products, contributing about 45% of manufacturing production and 40% from exports. Presently, the MSME sector is mostly dominated by microenterprises. This signifies that this sector is inviting and giving opportunities to new people for earning and being independent through its available schemes. Therefore, this paper is focused on the financial performance analysis of MSME sector.

A Study on Growth and Distribution of Medium Scale Enterprises in Karnataka

Micro, Small,and Medium Enterprises (MSMEs) have been accepted as the engine of economic growth and encouraging equitable development. MSMEs constitute over 90% of total enterprises in most economies and have been credited with creating the highest rates of employment and account for a large share of industrial production and exports. In India, too, the MSMEs have been the backbone of the Indian economy.Karnataka isone of the Top Five Industrialized States in the country. It has achieved substantially in promoting hi-tech industries insectors like Electronics, Telecommunication, Information Technology, Precision Engineering, Automobiles, Readymade garments, and Food Processing. It has a history of pioneering industrial growth initiatives since the Princely State of Mysore and subsequently in the post-independence era. The paper is based on secondary data and aims at studying the growth and distribution of Medium Scale Enterprises in the state of Karnataka.

ЛОГІСТИЧНИЙ ПІДХІД В УПРАВЛІННІ ПОТОКОВИМИ ПРОЦЕСАМИ АГРОХОЛДИНГІВ

The article considers the reasons for the emergence of agricultural industrial holdings in Ukraine, examines the theoretical foundations of the national agricultural industrial holdings logistics system, identifies the links of logistics with other business processes of the holding, in particular with production processes. The article explores the main methods and the main indicators of logistics potential evaluation system of the agro-industrial holding and it also assesses the current state, main problems, and prospects of agro-logistics development in Ukraine. During the research the main components of agro-logistics of national agro-traders were investigated, the logistic component in the cost of national agro-industrial sector final production was determined. The article aims are to study the theoretical foundations of the logistics system in agro-industrial holding structures, to assess the current state and prospects of agro-logistics in Ukraine, as well as to explore the main methods of assessing the logistics potential of Ukrainian agricultural holdings. Agricultural holdings have absorbed almost 40% of the total Ukrainian agricultural enterprises number and 38% of the agricultural land area cultivated by various agro enterprises. Today logistics is one of the most important factors in achieving a leading position in agribusiness, the implementation mechanism of which is a logistics model. Based on the theoretical material, the existing logistics model of a modern agricultural holding and methods for determining its efficiency were analyzed. Thus, in order to determine the overall logistics potential of a modern agro-industrial holding, it is necessary to calculate the efficiency assessments amount of it’s individual components – logistics network configuration and it’s capacity, organizational structure of the holding's logistics system, quality of logistics services, raw materials and finished products management system. providing logistics flows.

Impact of COVID -19 on MSMEs in India

The Micro Small and Medium enterprises (MSMEs) have been accepted as the engine of economic growth and play an important role in the equitable economic development of country.The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports.Coronavirus outbreak is eroding the already battered Indian economy in more ways than one.MSMEs, which is a crucial pillar of emerging economy like India’s are not able to do business as usual.The main objective of the study is to measure the major liquidity measures announced by the Central Government in this pandemic situation and to identify the rise of MSMEs in India and the initiatives by the banks. The study is based on the secondary data.

Türkiye sığır besiciliğinde yapısal durum ve sektörel analiz

Türkiye’de 2018 yılı itibariyle toplam kırmızı et üretiminin %89,73’ünü (1.003.859 ton) sığır eti oluşturmaktadır. Sığır besiciliğinde maliyeti oluşturan masraf unsurları içerisinde besi materyali ve yem başta gelmektedir. Son yıllarda artan nüfus ve talep düzeyine bağlı olarak piyasada oluşan kırmızı et arz açığı başta kasaplık-besilik hayvan ve karkas et ithalatına gidilmesine yol açmıştır. 2016-2018 yılları arasındaki 3 yıllık dönemde kasaplık ve besilik sığır ithalatı sırasıyla 257.131 baş ve 1.972.224 baş olarak gerçekleşmiştir. Yapılan bu ithalatın değeri 2.448.225.330 USD (9.044.379.646 TL) olarak hesaplanmıştır. Besiciler üzerinde son dönemde artan üretim maliyetleri ile gümrük vergisi avantajıyla yurtiçine giren ithal kasaplık hayvan ve ete bağlı olarak yıkıcı bir rekabet ortamı ve fiyat baskısı oluşmuştur. Diğer taraftan sığır besi işletmelerinin karlılık düzeyleri azalmış ve sektörel sürdürülebilirlik olumsuz yönde etkilenmiştir. Son 2 yılda yaklaşık 20 bin sığır besi işletmesi kapanmış veya faaliyetini durdurmuştur. Türkiye genelinde 264.230 adet sığır besi işletmesi mevcut olup, bu işletmelerin %64,02’si 10 başın altında hayvana sahip küçük ölçekli işletmelerdir. Sığır besiciliğinde 50 baş ve üzeri işletmelerin toplam işletmeler içerisindeki payı ise sadece %5,07’dir. Buna karşın büyük ölçekli olarak sınıflandırılan bu işletmeler 1.532.564 baş sığır varlığı ile besi sığırlarının %38,41’ine sahip bulunmaktadır. Sığır besiciliğinde üretim maliyetleri üzerinde etkili olan başlıca faktörler arasında besi süresi, hayvanın menşei, kullanılan ırkın verim özellikleri, günlük canlı ağırlık artışı, yem rasyon içeriği, yem hammadde fiyatlarındaki değişim, döviz kurundaki dalgalanmalar, besi performansı ve karkas randımanı, işletme girdilerinin dönemsel tutarı, hastalık ve ölüm oranları gibi unsurlar yer almaktadır. Sektörde üretimin sürdürülebilirliği açısından uygun fiyat ve kalitede yem ile besi materyali tedariki başta olmak üzere sığır besi işletmelerinde maliyet minimizasyonu amacıyla gerekli önlemlerin alınması, işletmelerin sınıflandırılarak desteklenmesi yanı sıra kârlı ve optimum ölçekte faaliyet göstermeleri için uygun piyasa koşullarının sağlanması, perakende et satış fiyatları üzerinden üreticiye aktarılan marjın artırılması ve pazarlama zincirindeki aracı sayısının azaltılarak tüketici için daha uygun fiyattan et satın alabilecekleri bir piyasanın temin edilmesi önem taşımaktadır.

The 21ST Century Capabilities for Improving SME Performance

Most of business in the world, including Indonesia, consists of SMEs (around 99% of the total enterprises). With this large number of SMEs must be balanced with good performance in order to sustain and beneficial for the nation, considering their contribution that almost two-third of the national GDP. In this modern era, where everything is connected, we cannot assess SMEs performance solely on conventional products but also need to add other abilities from a founder to be able to bring the company to continue and growth. This, innovation, marketing, digital and learning capabilities are the key capabilities for the firms in their efforts to achieve superior performance especially in Indonesia. Thus, this research aimed to (i) investigate to what extend founder capabilities are effective on SME performance, and (ii) propose strategies to improve SME performance. To answer the research objective, this research used mixed method. To assess SMEs performance through founder capabilities in doing innovation, marketing, digital, and learning, a survey was conducted. Continues with in-depth interview to explore appropriate program for improving SMEs performance. Samples for the survey were taken from different categories of SMEs (micro, small and medium) and across industrial sector, approximately 100 samples were gained for the study. For the in-depth interview, a total of seven samples from each difference SMEs group and industrial sector was drawn. The questionnaire from the survey then analyzed using multiple linear regression to investigate the effect of independent variables (innovation capabilities, learning capabilities, marketing capabilities, and digital capabilities) toward dependent variable (SMEs performance). The result is most of the independent variables are significantly affected the SMEs performance. From the in-depth interview, the respondents suggested comprehensive detailed program for workshop, seminar, coaching, or mentoring to improve SMEs performance.
 
 Keywords: Small Medium Enterprise, SME performance, Innovation Capability, Learning Capability, Marketing Capability, Digital Capability

The Albanian organization and organizational structure - the challenges of the adaptation to the dynamic reality

There were 78 400 enterprises active in Albania in 2011, employing 180 800 people, of which 47% worked in 1,684 enterprises employing more than 20 people. These last enterprises represented 61 percent of the total turnover, and 75 percent of the total investments. These enterprises are predominantly in the industrial and construction sectors. Enterprises with 1-4 employees represent 91 percent of the total enterprises, and represent 14 percent of total turnover. Small enterprises are dominant in the service sector. Business in Albania is currently operating in a global environment, which has a great impact on the theory or practice of organizations, and also on the working behaviour of employees. This already complex environment, which is becoming increasingly dynamic, and growing competition, are also changing the way in which work is organized, as well as the solutions. Great opportunities are arising from a better understanding of Albanian contemporary organizations and the work environment. To take advantage of these opportunities, the trends regarding the relationship between organizational design and design work should be studied and identifi ed. The aim is to identify the potential patterns and the current trends and tendencies in Albanian organization design, providing useful knowledge in the fi eld of Albanian business practices, and future challenges for research in this direction.

Environmental risk and housing price: An empirical study of Nanjing, China

Abstract Some previous studies have investigated the impact of environmental risk on housing price, which focused mainly on a certain type of environmental risk. Studies are lacking on the associations between housing price and total environmental risks considering various types of risks within a city. We conducted an empirical study in Nanjing, China. We first assessed the spatially resolved accidental risks of chemical-industrial enterprises, gas stations, expressways, and the cumulative risks of soil heavy metal pollution and atmospheric PM2.5 pollution. We then derived the total environmental risks in Nanjing. Finally, we applied the hedonic price model to investigate the impacts of total and specific environmental risks on housing price. The results show that the higher environmental risks of gas stations and chemical enterprises were associated with lower housing prices. In addition, associations between housing price and the environmental risks of expressways and atmospheric PM2.5 were positive. The different associations for different risks led to an inverted U-shaped association between housing price and total environmental risk. In areas with lower total environmental risks, major risk types were heavy metals in the soil and air pollution risks. Soil and air pollution levels increase as the distance to urban centers decreases. The spatial heterogeneity of soil and air pollution risks is not easily perceived. When people are purchasing a residence, they probably do not consider the risk factors of soil and air pollution but focus instead on the factors of location, structure, and neighborhood. Thus, housing price was positively associated with total environmental risks. In areas with higher total environmental risks, gas stations and chemical enterprises started to show their impacts. Since these risks are high and perceivable, people avoid these kinds of risks, and thus, housing price was shown to be negatively associated with total environmental risk.

The Causal Effect of Access to Finance on Productivity of Small and Medium Enterprises in Vietnam

In many developing countries, obtaining financial services at affordable rates and fair terms has been a significant challenge for small and medium enterprises (SMEs). However, this issue has not been paid much attention in Vietnam, even though SMEs account for about 95% of total enterprises and the financial market of the country has not been well developed. This study investigates the causal effects of access to finance on productivity of SMEs operating in the manufacturing sector in Vietnam. Productivity was measured as the total factor productivity (TFP) obtained by production function estimation using the Levinsohn and Petrin approach. Regarding financial accessibility, two factors covered the extent to which firms might have a bank loan or overdraft facility were employed. To study the causal inferences of access to finance on firm productivity, the research adopted the difference-in-differences (DID) approach, as well as the propensity score matching (PSM) coupled with DID technique. The empirical results indicated that improving the financial accessibility could directly enhance firm productivity. Particularly, it was shown that firms having access to a bank loan could significantly improve TFP by approximately 8.6% in the DID model and about 9% in the PSM-DID model. Meanwhile, the firm average TFP increased by approximately 12.3% and 15.7% in simple DID and PSM-DID models, respectively, when firms had an overdraft facility. These findings suggest that the government should put more effort into assisting SMEs in generating bankable projects, and create a sound and healthy financial environment to stimulate firms’ access to finance, which will ensure their sustainability and growth.

The Effects of CEO’s Compassionate Rationalism Leadership Strategies on Innovation Activities and Business Performance in SMEs

Domestic SMEs play a key role in production and employment, accounting for 98.9% of total enterprises, 74.4% of employment, 50.8% of production, and 49.0% of value added (as of 2016). However, they are faced with difficulties of survival because of continuous decrease in profitability, shortage of funds and manpower, insufficient accumulation of technology, minimum wage increase, and 52-hour workweek. In order for SMEs to continue to develop in such a difficult environment, we must constantly innovate our organization by making full use of our knowledge, information, experience and ability. To do this, CEO (management) leadership is very important to ensure that the best people are focused on the organizational innovation and management performance without moving the company. In this study, we wanted to establish empirically how the newly emerging compassionate rationalism leadership of SMEs business managers affected the innovation activities and management performance of companies. Research has shown that management’s compassionate rationalism leadership has a positive and significant causal relationship with the innovation activities and management performance of the enterprise. Therefore, SMEs managers need to learn the bottom eight strategic factors of compassionate rationalism leadership and use them strategically to make efforts to create positive emotions for the organization so that members can be immersed in innovative activities and management performance creation.