Search results for: SMEs

Authors: Jeremiah Madzimure

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In order to stay competitive in business and improve performance, Small and Medium Enterprises (SMEs) need to make use of business networking and logistics integration. Strategic networking and logistics integration in business companies have become critical as they allow supplier partnering, exchange of vital information/ access to valuable resources allowing innovation, gaining access to additional resources, sharing risks and costs which is required for enhancing company performance. The purpose of this study was to examine the influence of strategic networks and logistics integration on company performance: the case of small and medium enterprises in South Africa. A quantitative research design was adopted in this study, and 137 SMEs owners and managers completed and returned the survey questionnaire. Confirmatory Factor Analysis (CFA) was conducted using the Analysis of Moment Structures (AMOS), version 24.0 to assess psychometric properties of the measurement scales. Path modelling techniques were used to test the proposed hypothesis. Three research hypotheses were postulated. The results indicate that strategic networks had a positive and significant influence on logistics integration and company performance. As well logistics integration had a strong positive and significant influence on company performance. This study provides a useful model for analysing the relationship between strategic networks and logistics integration on company performance. Moreover, the findings of the study provide useful insights into how SMEs should benefit from business networking and logistics integration so as to improve their performance. The implications of the study are discussed, and finally, limitations and recommendations are indicated.

Keywords: strategic networking, logistics integration, company performance, SMEs

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Authors: Beata Ślusarczyk, Sebastian Kot

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In subjective terms, Polish SME sector occupies a prominent position in the national economic development, in which planning of the management strategies should be primarily based on identifying and meeting the innovation needs. As a research sample, there is chosen a printing sector of industry. SMEs share in printing sector in Poland is estimated at the level of 81% of all enterprises. In recent years, the printing industry achieved one of the highest levels of EU support in Poland. There is a relatively high increase in the development of technological innovations in equipment and the associated significant increase in production capacity. It can be also noticed that on average, every third enterprise belonging to the printing industry has implemented innovations, but not all of them effected in better economic results. Therefore, the aim of this article is to evaluate the impact of the implementation of innovation projects financed from the EU funds for performance of SMEs in the printing industry. As the results of research of EU funds co-financing effects on the development of innovation in the printing industry, it was specified that examined SMEs prefer to implement product innovation to receive a grant to the project at a level between 40% to 60%, the remaining part of the investment is usually covered with equity. The most common type of innovation had indicated a single implementation, related only to the change in process, technology, or organization. The relationship between variables of the EU funds and management of innovative activities was verified. It has been observed that the identified variables arising from the support in a form of the EU funds had a positive effect on the level of earned revenue, the increase in margin and in increase in employment as well. It was confirmed that the implemented innovations supported by the European funds have a positive impact on the performance of the printing companies. Although there is a risk that due to the decreasing demand for printing services such a high level of funding the companies in this sector will significantly increase competition in the long term, that may also contribute to the economic problems of the enterprises belonging to the analyzed branch.

Keywords: innovations, SMEs, performance, results

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Authors: Ignitia Motjolopane

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Small and medium enterprises (SMEs) play an important role in economies by contributing to economic growth and employment. In the fourth industrial revolution, the convergence of technologies and the changing nature of work created pressures on economies globally. Generative artificial intelligence (AI) may support SMEs in exploring, exploiting, and transforming business models to align with their growth aspirations. SMEs' growth aspirations fall into four categories: subsistence, income, growth, and speculative. Subsistence-oriented firms focus on meeting basic financial obligations and show less motivation for business model innovation. SMEs focused on income, growth, and speculation are more likely to pursue business model innovation to support growth strategies. SMEs' strategic goals link to distinct business model innovation paths depending on whether SMEs are starting a new business, pursuing growth, or seeking profitability. Integrating generative artificial intelligence in start-up SME business model innovation enhances value creation, user-oriented innovation, and SMEs' ability to adapt to dynamic changes in the business environment. The existing literature may lack comprehensive frameworks and guidelines for effectively integrating generative AI in start-up reiterative business model innovation paths. This paper examines start-up business model innovation path with generative artificial intelligence. A theoretical approach is used to examine start-up-focused SME reiterative business model innovation path with generative AI. Articulating how generative AI may be used to support SMEs to systematically and cyclically build the business model covering most or all business model components and analyse and test the BM's viability throughout the process. As such, the paper explores generative AI usage in market exploration. Moreover, market exploration poses unique challenges for start-ups compared to established companies due to a lack of extensive customer data, sales history, and market knowledge. Furthermore, the paper examines the use of generative AI in developing and testing viable value propositions and business models. In addition, the paper looks into identifying and selecting partners with generative AI support. Selecting the right partners is crucial for start-ups and may significantly impact success. The paper will examine generative AI usage in choosing the right information technology, funding process, revenue model determination, and stress testing business models. Stress testing business models validate strong and weak points by applying scenarios and evaluating the robustness of individual business model components and the interrelation between components. Thus, the stress testing business model may address these uncertainties, as misalignment between an organisation and its environment has been recognised as the leading cause of company failure. Generative AI may be used to generate business model stress-testing scenarios. The paper is expected to make a theoretical and practical contribution to theory and approaches in crafting a robust business model innovation path with generative artificial intelligence in start-up SMEs.

Keywords: business models, innovation, generative AI, small medium enterprises

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Authors: Satya S. N. Narayana, P. Parthiban, T. Niranjan, N. Kannan

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Enterprises adopt methodologies to increase their business performance and to stay competent in the volatile global market. Lean manufacturing is one such manufacturing paradigm which focuses on reduction of cost by elimination of wastes or non-value added activities. With increased awareness about social responsibility and the necessary to meet the terms of the environmental policy, green manufacturing is becoming increasingly important for industries. Large plants have more resources, have started implementing lean and green practices and they are getting good results. Small and medium scale enterprises (SMEs) are facing problems in implementing lean and green concept. This paper aims to identify the key issues for implementation of lean and green concept in Indian SMEs. The key factors identified based on literature review and expert opinions are grouped into different levels by Modified Interpretive Structural Modeling (MISM) to explore the importance among the factors to implement lean and green manufacturing. Finally, Fuzzy Analytic Network Process (FANP) method has been used to determine the extent to which the main principles of lean and green manufacturing have been carried out in the six Indian medium scale manufacturing industries.

Keywords: lean manufacturing, green manufacturing, MISM, FANP

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Authors: Amit Kohli, Pooja Lekhi, Gihan Adel Amin Hafez

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Blockchain is a distributor ledger technology trend that extended to different fields and proved a remarkable success. Blockchain technology is a vital proliferation technique that recuperates the food supply chain traceability process. While tracing is the core of the food supply chain; still, a complex system mitigates the exceptional risk of food contamination, foodborne, food waste, and food fraud. In addition, the upsurge of food supply chain data variance and variety in the traceability system requires complete transparency, a secure, steadfast, sustainable, and efficient approach to face the food supply chain challenges. On the other hand, blockchain technical aspects merged with a detailed implementation plan, the advantages and challenges in food traceability have not been much elucidated for small and medium enterprises (SMEs.) This paper demonstrated the advantages and challenges of applying blockchain in SMEs combined with the success stories of firms implementing blockchain to cover the gap. Moreover, blockchain architecture in SMEs and how technology, organization, and environment frameworks can guarantee the success of blockchain implementation have been revealed.

Keywords: blockchain technology, small and medium enterprises, food traceability, blockchain architecture

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Authors: Madara Apsalone

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Knowledge management and innovation is key to competitive advantage and sustainable business development in advanced economies. Small and medium-sized enterprises (SMEs) have lower capacity and more constrained resources for long-term and high-uncertainty research and development investments. At the same time, SMEs can implement organizational innovation to improve their performance and further foster other types of innovation. The purpose of this study is to analyze, how socio-cultural factors such as shared values, organizational behaviors, work organization and decision making processes can influence knowledge management and help to develop organizational innovation via an empirical study. Surveying 600 SMEs in Latvia, the author explores the contribution of different socio-cultural factors to organizational innovation and the role of knowledge management and organizational learning in this process. A conceptual model, explaining the impact of organizational team, development, result-orientation and structure is created. The study also proposes insights that contribute to theoretical and practical discussions on fostering innovation of small businesses in small economies.

Keywords: knowledge management, organizational innovation, small and medium-sized enterprises, socio-cultural factors

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Authors: Gerson E. Cornejo, Luis A. Gamarra, David S. Mauricio

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The Enterprise Resource Planning Systems (ERP) allows the integration of all the business processes of the functional areas of the companies, in order to automate and standardize the processes, obtain accurate information and improve decision making in time real. In Peru, 79% of medium and small companies (SMEs) do not use any management software, this is because it is believed that ERPs are expensive, complex and difficult to implement. However, for more than 20 years there have been Open Source ERPs, which are more accessible and have the same benefit as proprietary ERPs, but there is little information on the implementation process. In this work is made a case of study, in order to show the implementation process of an Open Source ERP, Odoo, based on the ASAP methodology (Accelerated SAP) and applied to a company of corrective and preventive maintenance services of vehicles. The ERP allowed the SME to standardize its business processes, increase its productivity, reducing up to 40% certain processes. The study of this case shows that it is feasible and profitable to implement an Open Source ERP in SMEs in the Automotive Sector of Peru. In addition, it is shown that the ASAP methodology is adequate to carry out Open Source ERPs implementation projects.

Keywords: ASAP, automotive sector, ERP implementation, open source

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Authors: Amina Oukennou, Zitouni Beidouri, Otmane Bouksour

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Small to Medium-sized enterprises are a very important component of the economy. They are present in the whole industries all over the world. They are considered as the engine for future growth in the economy. Project management is an economical international factor impacting all types of enterprises including the SMEs. This paper has the aim of measuring the weight of using projects and project management in Moroccan SMEs in comparison with the large companies. The study is based on interviews with experts: project managers, managers, directors, and consultants. They were asked questions measuring the weight of using projects, the level of using project management, and the resources employed. Eighteen Moroccan companies from a range of industries and sizes were consulted. All the companies consider projects as a key element in their strategy. Most of them affirm the great usefulness of the approach 'project', especially for the external activities. The main differences lie in the duration and the size of used projects. Despite the commonly shared idea about the importance of the project management, the interviewed persons believe that the project management knowledge has the same importance or less than the technical knowledge. All the companies affirm the need for a simpler version of project management. The content varies from one company to another.

Keywords: project dimension, project management, small to medium-sized entreprise, Morocco

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Authors: O. Colot, M. Croquet, L. Cultrera, Y. Fandja Collince

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The objective of our research is to evaluate the impact of the allowance for corporate equity (ACE) on the financial structure of Belgian SME in order to highlight the potential existence of a fiscal leverage. To limit the biases linked to the rationing of the capital further to the financial crisis, we compare first the dynamic evolution of the financial structure of the Belgian firms over the period 2006-2015 by focusing on three sub-periods: 2006-2008, 2009-2012 and 2013-2015. We give then an international size to this comparison by including SMEs from countries adjoining Belgium (France, Germany, Netherlands and the United Kingdom) and within which there is no ACE. This comparison allows better understanding the fiscal advantage linked to the ACE of firms evolving in a relatively unstable economic environment further to the financial crisis of 2008. This research is relevant given the economic and political context in which Belgium operates and the very uncertain future of the Belgian ACE. The originality of this research is twofold: the long study period and the consideration of the effects of the financial and economic crisis on the financing structure of Belgian SMEs. The results of this research, even though they confirm the existence of a positive fiscal leverage for the tax deduction for venture capital on the financing structure of Belgian SMEs, do not allow the extent of this leverage to be clearly quantified. The comparative evolution of financing structures over the period 2006-2015 of Belgian, French, German, Dutch and English SMEs shows a strong similarity in the overall evolution of their financing.

Keywords: allowance for corporate equity, Belgium, financial structure, small and medium sized firms

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Authors: B. M. Arthur-Aidoo, C. O. Aigbavboa, W. D. Thwala

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The performance of construction employees cannot be underestimated if the success of construction projects are to be achieved. This is because the construction industry has been characterised as labour oriented sector, which most of its activities being executed by labour. In the construction sector, employees are driven by incentive schemes which perform encourage and motivate workers for higher efficiency and higher output. The construction sector, however, depends mainly on its labour. In view of the sector's high dependency on its employees, that there must be a significant incentive scheme which must be established to act as a stimulus to drive high performance from employees among the various known incentive packages. This study, therefore, seeks to appraise the incentive packages adopted by construction SMEs. To establish reliable findings that will contribute to knowledge, the study utilised an exploratory approach via semi-structured interviews among sampled construction professionals with the requisite expertise on employees' incentive schemes. The study further established that although incentive schemes are classified in various ways and mediums that act as stimuli to encourage high performance among employees, some are more influential and impacts performance than others. Additionally, the study concludes that medical allowance, holiday with pay, free working tools, and training for employees were ranked the most influential incentives that promote high outputs by workers within the construction SME sector.

Keywords: appraisal, construction, employees, incentive, small and medium-sized enterprises, SMEs

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Authors: Festus M. Epetimehin

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This study was conducted to identify the effect of National Directorate of Employment (NDE) training on the profit of Agricultural-Small and Medium Enterprises (SMEs) and to evaluate the factors that influenced farmers' participation in NDE training, as well as the type and frequency of training farmers and other agro-allied entrepreneurs in Nigeria. Using a multi-stage sampling procedure, a total of 384 respondents were sampled, including 192 beneficiaries and 192 non-beneficiaries in Oyo and Lagos States, respectively. Data were analysed using Binary Logit regression and Propensity Score Matching techniques. According to the binary logit analysis, respondents’ gender, availability to extension services, and the location of respondent’s operation were determinant factors influencing NDE training enrolment. All identified factors are related to the probability of respondents’ involvement in a positive way. Propensity score matching revealed that Agricultural-SMEs who participated in the NDE program boosted their profit by N341,072.18. The positive outcome of the effect implies that NDE training enhances Agri-SME performance in Nigeria. The study concluded that greater funding should be provided for the NDE for performance-enhancing training of the Agri-SMEs.

Keywords: PSM, binary logit model, Agri-SME

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Authors: Nihal Chandratilaka Matara Arachchige, Nishantha Sampath Punichihewa

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Intellectual property (IP) assets are the ‘crown-jewels’ of innovation-driven businesses in the knowledge-based economy. In that sense, IP rights such as patents, trademarks and copyrights afford enormous economic opportunities to an enterprise, especially Small and Medium Enterprise (SME). As can be gleaned from the latest statistics, the domestic industries in Sri Lanka are predominantly represented by SMEs. Undeniably, in terms of economic contribution, the SME sector is considered to be the backbone of the country’s ‘real economy’. However, the SME sector in Sri Lanka faces number of challenges. One of the nearly-insurmountable-hurdles for small businesses is the access to credit facilities, due to the lack of collateral. In the eyes of law, the collateral is something pledged as security for repayment in the event of default. Even though the intellectual property rights are used as collateral in order to facilitate obtaining credit for businesses in number of Asian jurisdictions, financial institutions in Sri Lanka are extremely reluctant to accept IP rights as collateral for granting financial resources to SMEs. Against this backdrop, this research investigates from a legal perspective reasons for not accepting IP rights as collateral when granting loans for SMEs. Drawing emerging examples from other jurisdiction, it further examines the inadequacies of existing legal framework in relation to the use of IP rights as collateral. The methodology followed in this paper is qualitative research. Empirical research and analysis concerning the core research question are carried out by conducting in-depth interviews with stakeholders, including leading financial institutions in Sri Lanka.

Keywords: intellectual property assets, SMEs, collaterals financial facilities, credits

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Authors: A. R. Nor Azlina, H. Salwana, I. Zuraeda, A. R. Rashidah, O. Normah

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Transitioning towards globalization in the business environment has necessitated more essential growing changes such as competition, business strategy, innovation in technology and effectiveness of societal trends on adopting corporate governance are seen to be drivers of the future. This transformations on business environment has a significant impact to organizations’ performances. Many organizations are demanding for more proactive entrepreneurs with dynamic team, who can run and steer their business to success. Changing on strategy, roles, tasks, entrepreneurial skills and implementing corporate governance in relationship development is important to enhance the organization’s performance towards being more cost-efficient and subsequently increase its efficiency. Small Medium Enterprises (SMEs) in most developing countries are contributors to the economic growth of a nation. However, the potential of Microfinance Institutions (MFIs) is always overlooked in contributing towards SMEs development. The adoption of corporate governance and accountability in MFIs as driving forces for these SMEs is not incorporated in measurements of organization performance. This paper attempts to address some of the governance issues associated with dimensions of accountability in improving performances of microfinance institutions. Qualitative approach was adopted in this study to analyze the data collected. The qualitative approach emerges as contributing factor in understanding and critiquing accountability processes, as well as addressing the concerns of practitioners and policymakers. A close researcher engagement with the field which concerns process, embracing of situational complexity, as well as critical and reflective understandings of organizational phenomena remain as hallmarks of the tradition. It is concluded that in describing and scrutinizing an understanding of managerial behavior, organizational factors and macro-economic relationship in SMEs firm need to be improved. This is also the case in MFIs. A framework is developed to explore the linkage of corporate governance and accountability issues related to entrepreneurship as factors affecting MFIs performances in facing ongoing transformation of organization performance within Malaysian SMEs industries.

Keywords: accountability, corporate governance, microfinance, organization performance

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Authors: Jo Rhodes, Peter Lok, Zahra Sadeghinejad

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The aim of this study is to determine the impact of metacognition on top management team members and firm performance based on full team integration. A survey of 1500 small to medium enterprises (SMEs) was initiated and 140 firms were obtained in this study (with response rate of 9%). The result showed that different metacognitive abilities of managers [knowledge and experience] could enhance team decision-making and problem solving, resulting in greater firm performance. This is a significant finding for SMEs because these organisations have small teams with owner leadership and entrepreneurial orientation.

Keywords: metacognition, behavioural integration, top management team (TMT), performance

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Authors: Silipa Halofaki, Devi R. Seenivasagam, Prashant Bijay, Kritin Singh, Rajeshkannan Ananthanarayanan

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This comprehensive literature review delves into the effects and applications of work system design on the performance of Small and Medium-sized Enterprises (SMEs). The review process involved three independent reviewers who screened 514 articles through a four-step procedure: removing duplicates, assessing keyword relevance, evaluating abstract content, and thoroughly reviewing full-text articles. Various criteria, such as relevance to the research topic, publication type, study type, language, publication date, and methodological quality, were employed to exclude certain publications. A portion of articles that met the predefined inclusion criteria were included as a result of this systematic literature review. These selected publications underwent data extraction and analysis to compile insights regarding the influence of work system design on SME performance. Additionally, the quality of the included studies was assessed, and the level of confidence in the body of evidence was established. The findings of this review shed light on how work system design impacts SME performance, emphasizing important implications and applications. Furthermore, the review offers suggestions for further research in this critical area and summarizes the current state of knowledge in the field. Understanding the intricate connections between work system design and SME success can enhance operational efficiency, employee engagement, and overall competitiveness for SMEs. This comprehensive examination of the literature contributes significantly to both academic research and practical decision-making for SMEs.

Keywords: literature review, productivity, small and medium sized enterprises-SMEs, work system design

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Authors: Yiea Funk Te, Daniel Mueller, Irena Pletikosa Cvijikj

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Small and medium enterprises (SMEs) play an important role in the economy of many countries. When the overall world economy is considered, SMEs represent 95% of all businesses in the world, accounting for 66% of the total employment. Existing studies show that the current business environment is characterized as highly turbulent and strongly influenced by modern information and communication technologies, thus forcing SMEs to experience more severe challenges in maintaining their existence and expanding their business. To support SMEs at improving their competitiveness, researchers recently turned their focus on applying data mining techniques to build risk and growth prediction models. However, data used to assess risk and growth indicators is primarily obtained via questionnaires, which is very laborious and time-consuming, or is provided by financial institutes, thus highly sensitive to privacy issues. Recently, web mining (WM) has emerged as a new approach towards obtaining valuable insights in the business world. WM enables automatic and large scale collection and analysis of potentially valuable data from various online platforms, including companies’ websites. While WM methods have been frequently studied to anticipate growth of sales volume for e-commerce platforms, their application for assessment of SME risk and growth indicators is still scarce. Considering that a vast proportion of SMEs own a website, WM bears a great potential in revealing valuable information hidden in SME websites, which can further be used to understand SME risk and growth indicators, as well as to enhance current SME risk and growth prediction models. This study aims at developing an automated system to collect business-relevant data from the Web and predict future growth trends of SMEs by means of WM and data mining techniques. The envisioned system should serve as an 'early recognition system' for future growth opportunities. In an initial step, we examine how structured and semi-structured Web data in governmental or SME websites can be used to explain the success of SMEs. WM methods are applied to extract Web data in a form of additional input features for the growth prediction model. The data on SMEs provided by a large Swiss insurance company is used as ground truth data (i.e. growth-labeled data) to train the growth prediction model. Different machine learning classification algorithms such as the Support Vector Machine, Random Forest and Artificial Neural Network are applied and compared, with the goal to optimize the prediction performance. The results are compared to those from previous studies, in order to assess the contribution of growth indicators retrieved from the Web for increasing the predictive power of the model.

Keywords: data mining, SME growth, success factors, web mining

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Authors: William Castillo, Hugo Viza, Arturo Vargas

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The Pacific Alliance is a trade bloc that is composed of four emerging economies: Chile, Colombia, Peru, and Mexico. These economies have gained macroeconomic stability in the past decade and as a consequence present future economic progress. Under this positive scenario, international business firms have flourished. However, the literature in this region has been widely unexamined. Therefore, it is critical to fill this theoretical gap, especially considering that Latin America is starting to become a global player and it possesses a different institutional context than developed markets. This paper analyzes the effect of international entrepreneurial orientation and institutionalism on international performance, for the Pacific Alliance small-to-medium enterprises (SMEs). The literature considers international entrepreneurial orientation to be a powerful managerial capability – along the resource based view- that firms can leverage to obtain a satisfactory international performance. Thereby, obtaining a competitive advantage through the correct allocation of key resources to exploit the capabilities here involved. Entrepreneurial Orientation is defined around five factors: innovation, proactiveness, risk-taking, competitive aggressiveness, and autonomy. Nevertheless, the institutional environment – both local and foreign, adversely affects International Performance; this is especially the case for emerging markets with uncertain scenarios. In this way, the study analyzes an Entrepreneurial Orientation, key endogenous variable of international performance, and Institutionalism, an exogenous variable. The survey data consists of Pacific Alliance SMEs that have foreign operations in at least another country in the trade bloc. Findings are still in an ongoing research process. Later, the study will undertake a structural equation modeling (SEM) using the variance-based partial least square estimation procedure. The software that is going to be used is the SmartPLS. This research contributes to the theoretical discussion of a largely postponed topic: SMEs in Latin America, that has had limited academic research. Also, it has practical implication for decision-makers and policy-makers, providing insights into what is behind international performance.

Keywords: institutional theory, international entrepreneurial orientation, international performance, SMEs, Pacific Alliance

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Authors: Kousay Abid

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The aim of this paper is to better understand talent and talent management (TM) in small French companies as well as in medium-sized ones (SME). While previous empirical investigations have largely focused on multinationals and big companies and concentrated on the Anglo-Saxon context, we focus on the pressing need for implementing TM strategies and practices, not only on a new ground of SME but also within a new European context related to France and the French context. This study also aims at understanding strategies adopted by those firms as means to attract, retain, maintain and to develop talents. We contribute to TM issues by adopting a multilevel approach, holding the goal of reaching a global holistic vision of interactions between various levels while applying TM, to make it more and more familiar to us. A qualitative research methodology based on a multiple-case study design, bottomed firstly on a qualitative survey and secondly on two in-depth case study, both built on interviews, will be used in order to develop an ideal analysis for TM strategies and practices. The findings will be based on data collected from more than 15 French SMEs. Our theoretical contributions are the fruit of context considerations and the dynamic of multilevel approach. Theoretically, we attempt first to clarify how talents and TM are seen and defined in French SMEs and consequently to enrich the literature on TM in SMEs out of the Anglo-Saxon context. Moreover, we seek to understand how SMEs manage jointly their talents and their TM strategies by setting up this contextualized pilot study. As well, we focus on the systematic TM model issue from French SMEs. Our prior managerial goal is to shed light on the need for TM to achieve a better management of these organizations by directing leaders to better identify the talented people whom they hold at all levels. In addition, our TM systematic model strengthens our analysis grid as recommendations for CEO and Human Resource Development (HRD) to make them rethink about the companies’ HR business strategies. Therefore, our outputs present a multiple lever of action that should be taken into consideration while reviewing HR strategies and systems, as well as their impact beyond organizational boundaries.

Keywords: french context, multilevel approach, small and medium-sized enterprises, talent management

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Authors: Anita Richter

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Innovation is one of the key foundations of competitive advantage, generating growth and welfare worldwide. Consequently, all firms should innovate to bring new ideas to the market. Innovation is a vital growth driver, particularly for transition countries to move towards knowledge-based, high-income economies. However, numerous barriers, such as financial, regulatory or infrastructural constraints prevent, in particular, new and small firms in transition countries from innovating. Thus SMEs’ innovation output may benefit substantially from government support. This research paper aims to assess the effect of government interventions on innovation activities in SMEs in emerging countries. Until now academic research related to the innovation policies focused either on single country and/or high-income countries assessments and less on cross-country and/or low and middle-income countries. Therefore the paper seeks to close the research gap by providing empirical evidence from 8,500 firms in 15 transition countries (Eastern Europe, South Caucasus, South East Europe, Middle East and North Africa). Using firm-level data from the Business Environment and Enterprise Performance Survey of the World Bank and EBRD and policy data from the SME Policy Index of the OECD, the paper investigates how government interventions affect SME’s likelihood of investing in any technological and non-technological innovation. Using the Standard Linear Regression, the impact of government interventions on SMEs’ innovation output and R&D activities is measured. The empirical analysis suggests that a firm’s decision to invest into innovative activities is sensitive to government interventions. A firm’s likelihood to invest into innovative activities increases by 3% to 8%, if the innovation eco-system noticeably improves (measured by an increase of 1 level in the SME Policy Index). At the same time, a better eco-system encourages SMEs to invest more in R&D. Government reforms in establishing a dedicated policy framework (IP legislation), institutional infrastructure (science and technology parks, incubators) and financial support (public R&D grants, innovation vouchers) are particularly relevant to stimulate innovation performance in SMEs. Particular segments of the SME population, namely micro and manufacturing firms, are more likely to benefit from an increased innovation framework conditions. The marginal effects are particularly strong on product innovation, process innovation, and marketing innovation, but less on management innovation. In conclusion, government interventions supporting innovation will likely lead to higher innovation performance of SMEs. They increase productivity at both firm and country level, which is a vital step in transitioning towards knowledge-based market economies.

Keywords: innovation, research and development, government interventions, economic development, small and medium-sized enterprises, transition countries

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Authors: Indre Brazauskaite, Vilte Auruskeviciene

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Significance of the study is outlined through current strategic management challenges faced by SMEs. First, innovation is recognized as competitive advantage in the market, having ever changing market conditions. It is of constant interest from both practitioners and academics to capture and capitalize on business opportunities or mitigate the foreseen risks. Secondly, it is recognized that integrated system is needed for proper implementation of innovation process, especially during the period of business incubation, associated with relatively high risks of new product failure. Finally, ability to successful commercialize innovations leads to tangible business results that allow to grow organizations further. This is particularly relevant to SMEs due to limited structures, resources, or capabilities. Cooperation between scientific and business institutions could be a tool of mutual interest to observe, address, and further develop innovations during the incubation period, which is the most demanding and challenging during the innovation process. Material aims to address the following problematics: i) indicate the major barriers and challenges in innovation process that SMEs are facing, ii) outline the possibilities for these barriers and challenges to be addressed by cooperation between scientific and business institutions. Basis for this research is stage-by-stage integrated innovation management process which presents existing challenges and needed aid in operational decision making. The stage-by-stage innovation management process exploration highlights relevant research opportunities that have high practical relevance in the field. It is expected to reveal the possibility for business incubation programs that could combine interest from both – practices and academia. Methodology. Scientific meta-analysis of to-date scientific literature that explores innovation process. Research model is built on the combination of stage-gate model and lean six sigma approach. It outlines the following steps: i) pre-incubation (discovery and screening), ii) incubation (scoping, planning, development, and testing), and iii) post-incubation (launch and commercialization) periods. Empirical quantitative research is conducted to address barriers and challenges related to innovation process among SMEs that limits innovations from successful launch and commercialization and allows to identify potential areas for cooperation between scientific and business institutions. Research sample, high level decision makers representing trading SMEs, are approached with structured survey based on the research model to investigate the challenges associated with each of the innovation management step. Expected findings. First, the current business challenges in the innovation process are revealed. It will outline strengths and weaknesses of innovation management practices and systems across SMEs. Secondly, it will present material for relevant business case investigation for scholars to serve as future research directions. It will contribute to a better understanding of quality innovation management systems. Third, it will contribute to the understanding the need for business incubation systems for mutual contribution from practices and academia. It can increase relevance and adaptation of business research.

Keywords: cooperation between scientific and business institutions, innovation barriers and challenges, innovation measure, innovation process, SMEs

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Authors: Igho Ekiugbo, Christos Papanagnou

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The energy sector continues to face increased scrutiny due to climate change challenges emanating from the burning of fossil fuels, such as coal, oil, and gas. These climate change challenges have motivated industry practitioners and researchers alike to gain an interest in the way businesses operate. This paper aimed to investigate and assess how small and medium-sized enterprises (SMEs) are reducing the impact of their operations, especially those within their supply chains, by assessing the sustainability practices they have adopted and implemented as well as the benefits and challenges of adopting such practices. Data will be collected from SMEs operating across the downstream oil and gas sector in Nigeria using questionnaire surveys. To analyse the data, confirmatory factor analysis and regression analysis will be performed. This method is deemed more suitable and appropriate for testing predefined measurements of sustainable supply chain practices as contained in the extant literature. Preliminary observations indicate a consensus on the awareness of the sustainability concept amongst the target participants. To the best of our knowledge, this paper is among the first to investigate the sustainability practices of SMEs operating in the Nigerian oil and gas sector and will therefore contribute to the sustainability and circular economic literature.

Keywords: small and medium-sized enterprises, sustainability practices, supply chains, sustainable supply chain management, corporate sustainability, oil and gas, business performance

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Authors: Vivek Anand, Rainer Naegele

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Industry 4.0 envisages 'smart' manufacturing and services, taking the automation of the 3rd Industrial Revolution to the autonomy of the 4th Industrial Revolution. Powered by innovations in technology and business models, this disruptive transformation is revitalising industry by integrating silos across and beyond value chains. Motivated by the challenges faced by SMEs and Startups in understanding and adopting Industry 4.0, this paper aims to analyse the concept of Growth Poles and evaluate the possibility of its application to Innovation Clusters that strive to propel Industry 4.0 adoption and capacity building. The proposed paper applies qualitative research methodologies including focus groups and survey questionnaires to identify the various factors that affect formation and development of Innovation Clusters. Employing content analysis, the interaction between SMEs and other ecosystem players in such clusters is studied. A strong collaborative culture is a key driver of digital transformation and technology adoption across sectors, value chains and supply chains; and will position these cluster-based growth poles at the forefront of industrial renaissance. Motivated by this argument, and based on the results of the qualitative research, a roadmap will be proposed to position Innovation Clusters as Growth Poles and effective ecosystems to support Industry 4.0 adoption in a region in the medium to long term. This paper will contribute to the current understanding of the role of Innovation Clusters in capacity building. Relevant management and policy implications stem from the analysis. Furthermore, the findings will be helpful for academicians and policymakers alike, who can leverage an ‘innovation cluster policy’ to enable Industry 4.0 Growth Poles in their regions.

Keywords: digital transformation, fourth industrial revolution, growth poles, industry 4.0, innovation clusters, innovation policy, SMEs and startups

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Authors: Satinder Bhatia

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Limited Liability Partnerships (LLPs) was a concept introduced in India in 2009. Ever since then, there has been a fierce growth in the number of organizations registered as LLPs outpacing the number of registrations as private companies. Among other benefits extended to LLPs, the audit being mandated only for LLPs having a turnover of at least Rs 40 lakhs or capital contribution of Rs 25 lakhs, has been a major attraction. This has resulted in only about 10 per cent of LLPs coming under mandatory audit. Even for such companies, the accounting standards to be followed in the preparation of financial statements have not been specified. The Revised Indian Accounting Standards (Revised IndAS) which are aligned with IFRS to a great extent, may apply to LLPs only under limited conditions. Thus, the veracity of even the audited financial statements of LLPs can be questioned. If in future, these LLPs would like to list on a stock exchange to raise capital, there can be serious hurdles if investors do not find the financial statements to be reliable and consistent. LLPs are generally governed by country-specific rules in the area of accounts and audit. Thus, such rules vary across UK, EU and the USA. Some countries have adopted the IFRS for SMEs and since LLPs can be referred to as SMEs; they would come under the ambit of these IFRS provisions. Besides, as the scope of audit widens to cover qualitative information in addition to quantitative data, audit of LLPs has now acquired a new meaning and a new urgency as demands for at least limited purpose audits are arising from different stakeholders including lenders, suppliers, customers and joint venture partners.

Keywords: audit disclosures, audit quality, guidance for SMEs, non-audit services

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Authors: Eliane Abdo, Olivier Colot

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SMEs are always considered as a national priority due to their contribution to job creation, innovation and growth. Once the start-up phase is crossed with encouraging results, the company enters the phase of growth. In order to improve its competitiveness, maintain and increase its market share, the company is in the necessity even the obligation to develop its tangible and intangible investments. SMEs are generally closed companies with special and critical financial situation, limited resources and difficulty to access the capital markets; their shareholders are always living in a conflict between their independence and their need to increase capital that leads to the entry of new shareholder. The capital structure was always considered the core of research in corporate finance; moreover, the financial crisis and its repercussions on the credit’s availability, especially for SMEs make SME financing a hot topic. On the other hand, financial theories do not provide answers to capital structure’s questions; they offer tools and mode of financing that are more accessible to larger companies. Yet, SME’s capital structure can’t be independent of their governance structure. The classic financial theory supposes independence between the investment decision and the financing decision. Thus, investment determines the volume of funding, but not the split between internal or external funds. In this context, we find interesting to study the hypothesis that SMEs respond positively to the financial theories applied to large firms and to check if they are constrained by conventional solutions used by large companies. In this context, this research focuses on the analysis of the resource’s structure of SME in parallel with their investments’ structure, in order to highlight a link between their assets and liabilities structure. We founded our conceptual model based on two main theoretical frameworks: the Pecking order theory, and the Trade Off theory taking into consideration the SME’s characteristics. Our data were generated from DIANE database. Five hypotheses were tested via a panel regression to understand the type of dependence between the financing methods of 3,244 French SMEs and the development of their investment over a period of 10 years (2007-2016). The results show dependence between equity and internal financing in case of intangible investments development. Moreover, this type of business is constraint to financial debts since the guarantees provided are not sufficient to meet the banks' requirements. However, for tangible investments development, SMEs count sequentially on internal financing, bank borrowing, and new shares issuance or hybrid financing. This is compliant to the Pecking Order Theory. We, therefore, conclude that unlisted SMEs incur more financial debts to finance their tangible investments more than their intangible. However, they always prefer internal financing as a first choice. This seems to be confirmed by the assumption that the profitability of the company is negatively related to the increase of the financial debt. Thus, the Pecking Order Theory predictions seem to be the most plausible. Consequently, SMEs primarily rely on self-financing and then go, into debt as a priority to finance their financial deficit.

Keywords: capital structure, investments, life cycle, pecking order theory, trade off theory

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Authors: Pranab Kumar Goswami, Elena Gurung

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Small and medium enterprises (SME) are considered as the driving force for the economic growth of a developing country like India. Most of the SMEs are located in residential/non-industrial areas to avoid legal obligations of occupational safety and health (OSH) provisions. This study was conducted in Delhiwith a view to analyze the accidents that occurredduringthe year 2019 & 2020. The objective of the study was to find out the accident prone SMEs in Delhi and major causes of such accidents. Methods: Survey and comprehensive data analysis methods, followed by applying simple statistical techniques, were used for this study. The accident reports for the study period collected from the labour department and police stations were analyzed for the study. The injured workers were interviewed to ascertain safety compliances, training and awareness programs, etc. The study was completed in March2021. Results: It was found that most of the accidents took place in SMEs located in residential/non- industrial areas in Delhi. The accident-prone machines were found to be power presses (42%) and injection moulding machines (37%). Predominantly unsafe machinery or unsafe working conditions and lack of training of worker were observed to be the major causes of accidents in such industries. Conclusions: It was concluded from the study that unsafe machinery/equipment and lack of proper training to the workers were two main reasons for increase in accidents.It was also concluded that the industries located in industrial areas were better placed in terms of workplace compliances. The managements who were running their operations from residential/non-industrial areaswere found to be less aware on health and safety issues. Lack of enforcement by government agencies in such areas has escalated this problem. Adequate training to workers, managing safe & healthy workplace, and sustained enforcement can reduce accidents in such industries.

Keywords: SME, accident prevention, cause of accident, unorganised

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Authors: Georgios Pardalis, Krushna Mahapatra, Brijesh Mainali

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Compared to other sectors, the residential and service sector in Sweden is responsible for almost 40% of the national final energy use and faces great challenges towards achieving reduction of energy intensity. The one- and two-family (henceforth 'detached') houses, constituting 60% of the residential floor area and using 32 TWh for space heating and hot water purposes, offers significant opportunities for improved energy efficiency. More than 80% of those houses are more than 35 years of old and a large share of them need major renovations. However, the rate of energy renovations for such houses is significantly low. The renovation market is dominated by small and medium-sized local companies (SMEs), who mostly offer individual solutions. A one-stop-shop business framework, where a single actor collaborates with other actors and coordinates them to offer a full package for holistic renovations, may speed up the rate of renovation. Such models are emerging in some European countries. This paper aims to understand the willingness of the SMEs to adopt a one-stop-shop business framework. Interviews were conducted with 13 SMEs in Kronoberg county in Sweden, a geographic region known for its initiatives towards sustainability and energy efficiency. The examined firms seem reluctant to adopt one-stop-shop for nonce due to the perceived risks they see in such a business move and due to their characteristics, although they agree that such a move will advance their position in the market and their business volume. By using threat-rigidity and prospect theory, we illustrate how this type of companies can move from being reluctant to adopt one-stop-shop framework to its adoption. Additionally, with the use of behavioral theory, we gain deeper knowledge on those exact reasons preventing those firms from adopting the one-stop-shop framework.

Keywords: construction SMEs, innovation adoption, one-stop-shop, perceived risks

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Authors: Shui Lien Chen, Chen-Yin Kuo

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U-computing use has brings many new services of commerce, which could provide a new experience for customer. Location Based Services (LBS) is one of U-computing service. With increase of the smartphone and mobile internet users, there are many small and medium-sized enterprises (SMEs) take LBS in marketing strategy in Taiwan. For example, they would provide Facebook check-in to get a benefit (e.g. discount, free dessert and coupon) to attract customers purchasing. Therefore, this study is to understand which factors would affect SMEs adoption of u-computing and the performances after adopt U-computing. This study collected 187 useful data that were analyzed by SmartPLS 2.0 software. The results of this study are as follows. First, entrepreneurial orientation and market orientation positively affects innovation. Second, business resources and innovation positively affect u-computing use. Finally, U-computing positively affects both business value and customer value.

Keywords: entrepreneurial orientation, market orientation, innovation, business resources, u-computing use, LBS

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Authors: Rumbidzai Sipiwe Zimvumi

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The study aimed to identify the top management team attributes for ambidexterity in small and medium-sized enterprises by utilizing the upper echelons theory. The conventional opinion holds that an organization's ability to pursue both exploitative and explorative innovation methods at the same time is reflected in its ambidexterity. Top-level managers are critical to this matrix because they forecast and explain strategic choices that guarantee success by improving organizational performance. Since the focus of the study was on the unique characteristics of TMTs that can facilitate ambidexterity, the primary goal was to comprehend how TMTs in SMEs can better manage ambidexterity. The study used document analysis to collect information on ambidexterity and TMT traits. Finding, choosing, assessing, and synthesizing data from peer-reviewed publications allowed for the review and evaluation of papers. The fact that SMEs will perform better if they can achieve a balance between exploration and exploitation cannot be overstated. Unfortunately, exploitation is the main priority for most SMEs. The results showed that some of the noteworthy TMT traits that support ambidexterity in SMEs are age diversity, shared responsibility, leadership impact, psychological safety, and self-confidence. It has been shown that most SMEs confront significant obstacles in recruiting people, including formalizing their management and assembling executive teams with seniority. Small and medium-sized enterprises (SMEs) are often held by families or people who neglect to keep their personal lives apart from the firm, which eliminates the opportunity for management and staff to take the initiative. This helps to explain why exploitative strategies, which preserve present success, are used rather than explorative strategies, which open new economic opportunities and dimensions. It is evident that psychological safety deteriorates, and creativity is hindered in the process. The study makes the case that TMTs who are motivated to become ambidextrous can exist. According to the report, small- and medium-sized business owners should value the opinions of all parties involved and provide their managers and regular staff the freedom to think creatively and in a safe environment. TMTs who experience psychological safety are more likely to be inventive, creative, and productive. A team's collective perception that it is acceptable to take chances, voice opinions and concerns, ask questions, and own up to mistakes without fear of unfavorable outcomes is known as team psychological safety. Thus, traits like age diversity, leadership influence, learning agility, psychological safety, and self-assurance are critical to the success of SMEs. As a solution to ensuring ambidexterity is attained, the study suggests a clear separation of ownership and control, the adoption of technology to stimulate creativity, team spirit and excitement, shared accountability, and good management of diversity. Among the suggestions for the SME's success are resource allocation and important collaborations.

Keywords: navigating, ambidexterity, top management team, small and medium enterprises

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Authors: Gunnar Oskarsson, Gudjon Helgi Egilsson

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Due to globalization, small and medium-sized enterprises (SME) increasingly offer their products and services in foreign markets. The main reasons are either to compensate for a decreased market share in their home market or to exploit opportunities in foreign markets, which are becoming less distant and better accessible than before. International markets are particularly important for companies located in a small economy and offering specialized products. Although more accessible, entering international markets is both expensive and difficult. In order to select the most appropriate markets, it is, therefore, important to gain an insight into the factors that have an impact on success, or potential failure. Although there has been a reasonable volume of research into the theory of internationalization, there is still a need to gain further understanding of the decision-making process of SMEs in small economies and the most important characteristics that distinguish between success and failure. The main objective of this research is to enhance knowledge on the internationalization of SMEs, including the drivers for the decision to internationalize, and the most important factors contributing to success in their internationalization activities. A qualitative approach was found to be most appropriate for this kind of research, with the objective of gaining a deeper understanding and discovering factors which impact a company’s decision-making and potential success. In-depth interviews were conducted with 14 companies in different industries located in Iceland, a country extensively dependent on export revenues. The interviews revealed several factors as drivers of internationalization and, not surprisingly, the most frequently mentioned source of motivation was that the local market is inadequate to maintain a sustainable operation. Good networking relationships were seen as a particular priority for potential success, searching for new markets was mainly carried out through the internet, although sales exhibitions and sales trips were also considered important. When it comes to the final decision as to whether a market should be considered for further analysis, economy, labor cost, legal environment, and cultural barriers were the most common factors to be weighted. The ultimate answer to successful internationalization, however, is largely dependent on a coordinated and experienced management team. The main contribution of this research is offering an insight into factors affecting decision-making in the internationalization process of SMEs, based on the opinion and experience of managers of SMEs in a small economy.

Keywords: internationalization, success factors, small and medium-sized enterprises (SMEs), drivers, decision making

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Authors: Wongsim Manirath

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In order to implement AIS adoption successfully, it is important to consider the quality of information management and understand Information Quality (IQ) factors influencing AIS adoption. This research aims to explore ways of managing AIS adoption to investigate the adoption of accounting information systems within organisations. The study has led to the development of a framework for understanding the AIS adoption process in an organisation. This research used qualitative, interpretive evidence. This framework was developed from case studies and by collecting qualitative data (interviews). This research has conducted 10 case studies to study how IQ is managed through the accounting information system adoption process. A special focus is placed on determining how organisation size influences the information quality practices. The finding is especially useful to SMEs as many SMEs have the desire to grow bigger. By better dealing with IQ issues, there could be a successful future.

Keywords: data quality, information quality, accounting information system, information management

Procedia PDF Downloads 439