The economic environment and associated constraints have significant and unequal effects on Small and medium enterprises (SMEs). Constraints have been used, among other growth factors, to understand why some SMEs fail to grow while others foster. However, beyond knowing the effects or constraints, it is important entrepreneurs know how they can avoid constraints. The study provides an important contribution by showing that South-African SMEs that face constraints because of competition, government rules and regulations, financing gaps and corruption, can navigate away from these constraints by going international. The evidence shows a positive moderating effect of internationalization on the relationship between local constraints and SME growth. However, the results also reveal that lack of government support is a significant constraint to growth when SMEs export internationally.

Internationalization as a "work-around" strategy: How going abroad can help to overcome local constraints

Studies indicate that 75% of small enterprises in the world fail during their first 5 years of operation. In Kenya, just about 20% grow to the next size category. Scholars have prescribed formal strategic management modes, but the small enterprises (SEs) continue to not only fail but also depict informal strategic management modes. However, few studies have been done to examine whether the dismal performance of SEs is due to other factors unrelated to the management of the enterprises, especially in the context of a developing country like Kenya. The specific objectives were to identify the strategic management modes employed by the small enterprises in Kisumu County with specific reference to the Youth Enterprise Fund beneficiaries in Kisumu County and to assess the factors influencing the choice of these modes. The study was anchored on Mintzbergs' theories on deliberate, emergent, and reactive strategic management modes. The study adopted a descriptive cross-sectional research design. The target population was the 242 small enterprises run by the Youth Enterprise Development Fund (YEDF), out of which 134 enterprises were sampled using Yamane's criteria. The study adopted questionnaire and interview methods as the basic data collection methods with the questionnaire being tested through content validity index and Cronbach alpha's internal consistency index, respectively. The study found that the basic modes used by small enterprise were deliberate, emergent, and reactive and that the small enterprises in Kisumu County used these modes interchangeably but relied more on the reactive mode of strategic management. The study revealed that the choice of these modes was dictated by the personal, environmental, and firm characteristics of the enterprises. The study concludes that continued exposure to formal modes would only sustain the endemic failure of the SEs because the SEs need formal exposure to models that address their situation. The study therefore urgently recommends formalization of elements of reactive strategic management modes and the personal factors in small firm curricula.

https://www.econstor.eu/bitstream/10419/146833/1/822173646.pdf

Factors influencing choice of strategic management modes of small enterprises

Determinants of survival and growth of small and medium enterprises in rural KwaZulu – Natal

South African Small Medium and Micro Enterprises (SMMEs) play an important role in terms of stimulating the national economy. Despite the aforementioned, prior research shows that the failure rate of these entities is amongst one of the highest in the world, which is believed to be caused by economic factors. Several economic factors which impact on SMME sustainability have subsequently been researched and identified. As a result, SMME sustainability has received attention from the national government in recent times. One of economic factors which have been perceived by the authors as a major contributor to the high SMME failure rate is the lack of internal controls. Ultimately the responsibilities to both implement internal control frameworks and maintain all internal controls, rests with the management of an organisation. In essence, it can be said that a business is uncontrollable when it is essentially unmanageable. With the absence of adequate internal controls, an environment is created where an organisation is susceptible to all kinds of detrimental risks and, if these risks are not taken care of on time, the overall sustainability of the organisation could be negatively affected, which may lead in imminent failure. The main objective of this study was to determine the degree to which the implementation of an adequate system of internal control can help improve SMME sustainability. The research that was conducted was empirical in nature and fell within the ambit of the positivistic research paradigm. Questionnaires were administered and distributed to 110 owners and/or managers of SMMEs (SMME leaders) that operate within the fast moving consumer goods industry, situated in the Cape Peninsula. Based on the findings, it is obvious that most of the SMMEs do have a variety of internal controls, as prescribed by formal internal control frameworks but their support in terms of SMMEs sustainability were quite limited.

/pdf/the-status-of-internal-controls-in-fast-moving-small-medium-44okym2yjp.pdf

The status of internal controls in fast moving small medium and micro consumer goods enterprises within the Cape Peninsula

The broadly-based literature on organizational studies has concentrated mainly on resolving organizational issues through acquisition of resources, decreasing transaction costs and incentives. In other words, scholars commonly examine the organization itself, at the expense of inter-organizational relations. However, with the emergence of “network governance” organizations are no longer to be considered as isolated but rather as actors that actively seek to maintain themselves in a given situation by collaborating with other actors, forming organizational networks. This study utilizes a network perspective to examine the influence of leadership on management of unity/diversity contradiction in educational program implementation. A deductive approach is used to generate propositions by analyzing implementation efforts in respect of educational program in Azerbaijan: “State Program on education of Azerbaijan youth abroad in the years 2007-2015”. The analysis examined a research question: How do leadership activities affect to manage unity/diversity contradiction in network? This question was addressed using qualitative method. In education program, unity and diversity were found to exert an important influence on success of network. At the implementation level, understanding of unity and diversity concept helps network managers to attract diverse actors to the network and unite them around network’s goal. The coordinating units of network manage the unity/diversity contradiction by activating member organizations, facilitating interaction, framing the structure and mobilizing network members. Thus, effective management of contradiction increases the network’s capacity to access information, financial resources and experiences.

/pdf/managing-contradiction-and-sustaining-sustainability-in-2x0meooq78.pdf

Managing contradiction and sustaining sustainability in inter organizational networks through leadership: a case study

Small and medium-sized enterprises (SMEs) in Thailand are very important to economic growth and considerably essential to generate employment as in many other developing countries. SMEs account for ...

Internal and External factors hampering SME growth : a qualitative case study of SMEs in Thailand

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Internal and External factors hampering SME growth : a qualitative case study of SMEs in Thailand