Small Medium Enterprises Case Study
2.4. Small Medium Enterprises (SMEs)
Small Medium Enterprises (SMEs) do not have a stable definition because it varies on the economic status of each country. Generally, SMEs are divided into two: small enterprises and medium enterprises. In the developing countries, the employment level for micro enterprises should be less than 10. Small enterprises should range from 10 to 49 while large enterprises should range from 50 to 249 (Hussain, et al., 2012). It was specified by the European Commission that these enterprises contribute to the skills, innovation and employment of the entrepreneur. On the other hand, Azizi (2015) came up with the definition that SMEs function in the same setting as their other counterpart without the comprehensive benefits …show more content…
In a speech made by Ambassador Jesus P. Tambunting in an international forum, he emphasized there that SMEs are mostly family-owned businesses that are based on gut-feelings since they are probable to plan for their industry (CBERD, n.d.). Business decisions will most likely come from the owners/ managers’ own perception because they only base their conclusions on the opportunities available to them. As a result, SMEs are usually less competitive than the larger companies because they lack management, knowledge and financing. These enterprises are also subject to regulatory and bureaucratic requirements (Sunjka & Emwanu, 2015). Some of the issues that are also being faced by small and medium enterprises are limited human resources, time and money (Azizi, 2015). In addition to that, Aziz, et al. (2012) stated that lack of government support and successor programs also contributes to the obstacles that are currently being faced by SMEs in countries around the globe. If a business lacks these things, the growth of the industry itself will drastically slow down. This would also increase the chances of being vulnerable to risks. With regards to the economy, challenges that would affect the future growth of SMEs would be the susceptibility of the global financial market, global political volatility, increase in cost of energy and recurring natural disasters (Aziz & Yazid,
Small Medium Enterprises (SMEs) do not have a stable definition because it varies on the economic status of each country. Generally, SMEs are divided into two: small enterprises and medium enterprises. In the developing countries, the employment level for micro enterprises should be less than 10. Small enterprises should range from 10 to 49 while large enterprises should range from 50 to 249 (Hussain, et al., 2012). It was specified by the European Commission that these enterprises contribute to the skills, innovation and employment of the entrepreneur. On the other hand, Azizi (2015) came up with the definition that SMEs function in the same setting as their other counterpart without the comprehensive benefits …show more content…
In a speech made by Ambassador Jesus P. Tambunting in an international forum, he emphasized there that SMEs are mostly family-owned businesses that are based on gut-feelings since they are probable to plan for their industry (CBERD, n.d.). Business decisions will most likely come from the owners/ managers’ own perception because they only base their conclusions on the opportunities available to them. As a result, SMEs are usually less competitive than the larger companies because they lack management, knowledge and financing. These enterprises are also subject to regulatory and bureaucratic requirements (Sunjka & Emwanu, 2015). Some of the issues that are also being faced by small and medium enterprises are limited human resources, time and money (Azizi, 2015). In addition to that, Aziz, et al. (2012) stated that lack of government support and successor programs also contributes to the obstacles that are currently being faced by SMEs in countries around the globe. If a business lacks these things, the growth of the industry itself will drastically slow down. This would also increase the chances of being vulnerable to risks. With regards to the economy, challenges that would affect the future growth of SMEs would be the susceptibility of the global financial market, global political volatility, increase in cost of energy and recurring natural disasters (Aziz & Yazid,