IMPORTANCE OF MANAGERIAL SKILLS AND KNOWLEDGE IN MANAGEMENT FOR SMALL ENTREPRENEURS Zuzana Papulová Matej Mokroš Comenius University Faculty of Management Department of Strategy and Entrepreneurship Bratislava, Slovakia
Abstract Small enterprises are generally considered to be more operative, can respond quicker and are more flexible than big companies, which form their strategies for years ahead. Limited focus on operations can have its advantages, but can also prevent enterprise to exploit new unseen opportunities. Development of market economy in Central and Eastern Europe has been suspended for decades, while for the rest of the world the problems of small and medium enterprises are in the centre of discussion for almost half of century. Problems with existence and development of small enterprise could be solved with closer attention to vital managerial skills and management knowledge for the small entrepreneurs. Support and provision of further education in these areas could help small entrepreneurs overcome initial development difficulties. “Entrepreneurs who have tried and failed are part of the risk taking economy, but it is not necessary to accept the current failure rate as normal” John Baldwin Introduction Various experts describe today’s global economy as one in transformation to knowledge economy. Information systems and information technology have become at the beginning of the 21st century the most important factors for economy functioning in developed countries. However, it is not only the information systems and information technology, but actually working with information itself, which convey the change of thinking and creation of value in modern approaches to business and management. These changes are reflected in current economy. The utilization of resources is being shifted from current capital strategic resources to strategic resources in the form of information, knowledge, creative thinking and innovation. Skills and knowledge belong to critical factors of production. Enterprises can gain competitive advantage by implementing continual and on-going innovations and the managerial skills and knowledge are in the centre of this process of innovations. Many times these facts are underestimated by small entrepreneurs and overlooked by support programs for development of this size of entrepreneurship. Small enterprises, as part of small and medium enterprises (SME), form considerable part of state economy and they are also considered an important source for development of economy. Development and support programs for small enterprise should also focus on the area to help of skills and knowledge. Whether these assertions are justified and the neglect of managerial skills by small enterprises affects their success are the questions which we would like to cover in this contribution.
E-Leader, Prague 2007
1. Level of management of small enterprises
1.1. Situation of small enterprises in Slovakia
Small enterprises are part of larger category of small enterprises and medium enterprises. They all together form 98.8% of all companies in European Union. They are considered to be the engine for society development. Because of higher flexibility they can achieve competitive prices when manufacturing smaller batches. Small and medium enterprises (SMEs) play significant part in employment and professional training of young people. Compared to big companies, they employ more women, young people and part-time employees. SMEs are closely connected with the region than large employers and therefore have significant influence on further the region’s development. Fiscal decentralization of the regions of Slovakia creates pressure on municipalities and mayors, who must pay a closer look on actual needs of all employers doing business in the particular region. Only this ways the mayors can secure loyalty of these employers and support them in their business. SMEs as the largest employer...