This research study aims to examine the challenges encountered by small and medium enterprises (SMEs) while operating in different market segments. It will explore the impact of these challenges on profitability and market share, and suggest recommended activities to improve SMEs' performance.
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Running head: RESEARCH ENQUIRY RESEARCH ENQUIRY Name of the student Name of the university Author note
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1RESEARCH ENQUIRY Table of Contents 1.Introduction...................................................................................................................................2 1.1Background of the research....................................................................................................2 2.Problem statement........................................................................................................................3 3.Aim and objectives.......................................................................................................................3 4.Research questions........................................................................................................................4 5.Justification of the potential output of the research......................................................................4 6.Conceptual framework and hypothesis development...................................................................5 6.1Lack of sufficient financial funding.......................................................................................5 6.2Insufficient planning and management...................................................................................5 6.3Lack of technological development........................................................................................6 6.4Monitoring and controlling activities.....................................................................................7 6.5Attrition in the workforce.......................................................................................................8 6.6Hypothesis Development........................................................................................................9 7.Methodology.................................................................................................................................9 7.1Research philosophy...............................................................................................................9 7.2Research approach................................................................................................................10 7.3Research design....................................................................................................................10 7.4Data collection process.........................................................................................................11 7.5Sampling strategy and sample size.......................................................................................12 References......................................................................................................................................13
2RESEARCH ENQUIRY Topic:Challenges encountered by medium and small scale enterprises: a research study 1.Introduction 1.1Background of the research Thedifferentoperationsthatarecommencedbytheventuresarereliantonthe management approaches and the competition that is encountered by the same. The medium and small scale enterprises face a variety of challenges that affected the potentials of the venture in continuing with the effectiveness of the operations.Agostini,Nosella and Soranzo (2015)stated that the different modifications that are commenced by the ventures are reliant on the better understating of the issues that are encountered by the ventures. Lack of suitable leadership structure and financial funding affect the capabilities of the small and the medium size enterprises in improving the efficiency of the propositions in adherence to the demand of the customers. The different initiatives that are commenced by the organization are related to the comprehensive strategy creation and the corporate culture that is being followed by the same. However,Karadag(2015)opined that the lack of suitable planning and development of the organization affect the potentials of the same in improving the effectiveness of the operations while adhering to the sustenance related needs of the same. On the other hand, insufficient financial resources of an SME affects the capabilities of the same in supporting the dynamic R&D operations while improving the innovativeness of the operations.Mohammed and Obeleagu-Nzelibe(2014)noted that thelack of proficient human resources in the organizational outset assist a venture in influencing the potentials of the same while operating in the diverse objectives of the same. In this relation, the lack of proficient and skilled employees in the organizational processes incapacitate the SMEs in influencing their potentials in encouraging the uninterrupted functioning of the systems.Therefore, the research
3RESEARCH ENQUIRY will aim at influencing a coherent understating of the different issues that might be encountered by the SME businesses while operating in diverse environmental contexts. 2.Problem statement The different challenges that are being encountered by the SMEs while operating as per the objectives of growth and expansion in the different markets. The limiting factors has affected the potentials of the SMEs in influencing a competitive edge which could have assist the same in improving the market position and profitability of the ventures (Taneja & Toombs, 2014). The study will examine the different challenges related to financial funding, planning, technological developments, lack of monitoring and controlling activities and attrition in the workforce that mightbeencounteredbytheSMEswhileoperatingindifferentmarketsituations.The enumeration of the research problem would assist in continuing with the efficiency of the operations in adherence to the diverse modifications in the market segments. 3.Aim and objectives Theaimof undertaking the research is to examine the different challenges that are encountered by the SMEs while operating in the different competitive market segments. Theobjectivesfor undertaking the research will be: 1.To identify the challenges that are being encountered by the SMEs 2.To examine the impact of the challenges on the profitability and market share of the SMEs 3.To identify the correlation between the challenges encountered by the SMEs and the profitability of the same
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4RESEARCH ENQUIRY 4.TosuggestrecommendedactivitiestotheSMEswiththeaimofimprovingthe profitability of the same in the different markets 4.Research questions Thequestionsfor undertaking the research will be: 1.What are the challenges that are being encountered by the SMEs? 2.What is the impact of the challenges on the profitability and market share of the SMEs? 3.How are the challenges encountered by the SMEs related to the profitability of the same? 4.What are the recommended activities that might be considered by SMEs while improving the profitability of the same in the different markets? 5.Justification of the potential output of the research The research will assist in delineating the different issues that are being encountered by the SMEs. The delineation of the issues would assist in influencing future research based on the understanding of the different modifications that might be undertaken by the same in the specific fields (Eniola& Entebang, 2015). The current research will aim at providing a guidance to the future studies to explore the changes that might be initiated by the SMEs while operating in the different business environments. On the other hand, the current research will provide an extensive view of the different issues that are being encountered by the SMEs and the manner in which the same might be mitigated. The recommended actions that might be commenced by the SMEs will develop the potentials of the same in continuing with the efficiency if the operations in adherence to the common objectives of organizational sustenance.
5RESEARCH ENQUIRY 6.Conceptual framework and hypothesis development 6.1Lack of sufficient financial funding Lack of proper financial funding can hinder the growth of the small to medium enterprises. According toHusin and Ibrahim(2014),SME need adequate financial funding in order to grow their business to cover the expenditure of raw materials, new staffs, supplies and other growing necessities.Musa and Chinniah(2016) stated thatinsufficient funding does not only have an impact on the business but also highly impact the employees and their performance. Lack of sufficient financial funding makes it difficult for small to medium enterprises to attract lenders and investors as financial funding determine the ability of the company and investors find companies with insufficientfunding as a risk. This affects the ability of a company to purchase essential and necessary resources. Paul,Parthasarathy and Gupta(2017)states lack of sufficient funding in the long run can jeopardize the abilities of the SME to finance daily operations in the long run that include inventorypurchases,equipmentneedsandsalariesoftheemployees.However,Osakwe, Chovancova and Ogbonna(2016)stated that SME’s businesses may be successful in the beginning however continuing with the success is uncertain because of various factors like downturn in the economy, existence of the large markets, growing competition and shifts in the consumer demands. Uncertainty in a business is inevitable and during the time of crisis SME’S may anticipate debt. 6.2Insufficient planning and management Insufficient planning and management impede the growth of a business and may result in business failure. According toMcCann and Ortega-Argilés (2016),planning and management is one of the most important aspect for the growth of a business.Aziz and Samad(2016)states
6RESEARCH ENQUIRY insufficient planning and management of a business results in the incapability of establishing organizational goals. According toKumar and Rao(2015),lack of proper planning and management in a business paves for incompetent teams in the workforce.Kossaï and Piget (2014)states insufficient planning and management is one of the main causes of organizational failure because of the lack of vision and incapability to anticipate the probable risks. According toLong, Ajagbe and Kowang(2014),insufficient planning and management companies are unable to assess the strengths and weakness of their company thus making them insufficient in gaining a competitive advantage in the market.Love and Roper(2015)states insufficient planning and management paves way for ineffective decision making and inefficient use of the resources.Boiral,Baron and Gunnlaugson(2014)states proper planning and management in a business helps to overcome and efficiently manage unavoidable circumstances. However contradicting to thisMazzarol (2014)has stated that fact that there are many situations that are unavoidable and inevitable which affects companies despite of having proper planning and management. 6.3Lack of technological development With technological advancement the use of technology is growing in the workforce and is an important aspect that contributes to the growth of the business. According toRahman, Yaacob and Radzi(2016),lack of technological development in the business comes in the way of communication between the suppliers, employees and customers.McCann and Ortega-Argilés (2016)states in the world of digitalization it is important for businesses to adopt new technology in order to maintain positive customer relationships.Aziz and Samad(2016)opines lack of technologicaldevelopmentleadstodifficultyinmanagingnecessaryandimportantdata.
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7RESEARCH ENQUIRY Restricting to progress in the field of technology in an organization may likely fade away a business into obscurity. Kumar and Rao(2015)stated that lack of technologicaldevelopment makesan organization disorganized and inefficient. According toTaneja and Toombs(2014),lack of technological development in the SME may limit the research capacity that will restrict from the business to grow. Lack of technological development makes a business subjected to security threats.Husin Ibrahim (2014) states thatlack of technological development hampers in keeping up with the society and changes that may result in organizational failure. However according to Musa and Chinniah (2016),technological development in a business has resulted in employees becoming dependent on technology. Technological development in a business may often make errors often negatively affects the ventures. 6.4Monitoring and controlling activities Monitoring and controlling activities is important for businesses especially SME in order to maximize the efficiency and productivity of the small and medium enterprises.Mohammed and Obeleagu-Nzelibe (2014)states lack of monitoring and controlling activities results in incapability of regulating the financial procedures of an organization and provides financial stability.Monitoring and controlling is necessary for effective decision making for the benefits of an organization. According toOsakwe,Chovancova and Ogbonna(2016)monitoring activities help in maximizing the sales to the target customers. Lack of controlling activities decreases the efficiency in the workforce and deteriorate performance of the employees. AccordingtoMcCannandOrtega-Argilés(2016),monitoringactivitiesprevents ventures to violate the important laws. Monitoring the performance of the employees to assess the level of productivity for the benefits of the company or the organization. However,Aziz and
8RESEARCH ENQUIRY Samad(2016)states monitoring and controlling activities require apparatus that are expensive for SME and increase the budget of the organization. Moreover according toKaradag (2015), monitoringemployeesmakeemployeesinsecureandnervousbecauseoftheconstant monitoring. Monitoring reduces trust level between the organization and the employees that often affect the organization negatively. 6.5Attrition in the workforce Small and medium businesses often face attrition in the workforce. According toMcCann and Ortega-Argilés(2016)attrition in the workforce highly depends on the performance of the organization. Employee dissatisfaction leads to employee attrition and making the same to switching to other ventures.Kossaï and Piget(2014)states employee attrition is evident when there is lack of recognition for the employees. The lack of growth of the company or the organization results in employee attrition because of the lack of career development of the employees. According toKumar and Rao (2015)micromanaging employees pave way for attrition in the workforce as it shows lack of trust in the employees and stamps out the opportunities for innovation in the workforce. Providing low wages to employees result in employee attrition in an organization that becomes detrimental for the survival of the SME in the market.Mazzarol (2014)states SME business tend to pressurize employees with work overload because of lack of employees which causes employee attrition.However,Eniola and Entebang(2015)states employee attrition in a workforce opens gates for new employees to join an organization and contributes new ideas in the organization. Therefore, the enhanced rate of employee attrition affects the capabilities of the SMEs in influencing the potentials of the same in continuing with the efficiency of the operations.
9RESEARCH ENQUIRY 6.6Hypothesis Development H0– The challenges that are being encountered by the SMEs (relating to financial resources, human resources, planning, technological infusions, monitoring and controlling) does not affect the profitability and market share H1- The challenges that are being encountered by the SMEs (relating to financial resources, human resources, planning, technological infusions, monitoring and controlling) affects the profitability and market share 7.Methodology 7.1Research philosophy The research will be commenced through the application ofpositivism philosophywhich will assist in influencing cognition through review of different scientific and psychological elements that restricts the potentials of growth of the SMEs while operating in different markets. Choy(2014)stated that the positivism philosophy observes different factual knowledge based on observations, data collection and analysis. The positivismphilosophy depends on the quantifiable amount of information for improving the understanding the different research variables. In this relation, the application of the positivism philosophy would assist in enriching the study through the enumeration of the challenges that are being encountered by the SMEs through quantifiable measures. The development of the different mechanisms would assist in influencing a coherent study while understanding the different issues that are encountered by the SMEs while operating in different business environments. On the other hand, the application of positivism philosophy would assist in improving the research findings through the delineation of different challenges that might be encountered by the SMEs through the enumeration of different quantitative considerations.
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10RESEARCH ENQUIRY 7.2Research approach The research will be commenced through the utilization ofdeductive approach, which will assist in retrieving data from different sources. The information from the different sources will assist in improving the quality of the research through the improvements of specific research paradigm.McCusker,and Gunaydin(2015)stated that the application of deductive approach assists a researcher in influencing the hypothesis (or hypotheses) relying on existing theory. Therefore, the development of the hypothesis in this research will assist in planning a suitable and systematic list of activities which will be undertaken during the research in alignment with the objectives of the same. The development of deductive approach will assist in influencing a suitable knowledge on the different risks and barriers that are being encountered by the SMEs while operating in the international markets. The delineation of the issues that are encountered by the SMEs would assist in continuing with the efficiency of the operations while adhering to the different aspects of change in the business environments. The quality of a research is reliant on the effectiveness of the quantitativedatacollectionprocedure. Therefore,the applicationof the deductive approach in the research study would assist in influencing insights on the different modifications that might be considered by the SMEs with the aim of improving their market position and profitability. 7.3Research design The research will be initiated through the utilization of the explanatory research design, which will assist in delineating the cause and effect relation between the challenges that are being encountered by the SMEs while operating in different markets and the profitability of the same. The explanatory research aims at influencing a cognition towards the relation that is
11RESEARCH ENQUIRY shared between the variables. The exploration of the variables and the relation shared by the same assists in enriching the research study through the enumeration of different theories and paradigms in support of the variables while aligning the concepts with the objectives to guide the research towards an unbiased outcome (Wiek& Lang, 2016). In this relation, the utilization of the explanatory research design would assist in influencing a coherent understanding of the variables and the manner in which the same are interlinked. On the other hand, the application of the explanatory design in the research framework would assist the researcher in examining the causeofthechallengesthroughretrievingdatafromresponsecollectionfromdifferent entrepreneurs (Anney,2014).Therefore, the application of the explanatory design in the study would assist in improving the quality of the study through the enumeration of quantitative and qualitative data collection and analysis. 7.4Data collection process The research will be commenced through the utilization of mixed data collection methodology, which consists of Primary quantitative analysis and Secondary Qualitative data collection. The primary quantitative analysis would be initiated through the development of a survey questionnaire which will comprise of 20 close ended questions. The questions in the survey questionnaire will be based on the approach of exploring the issues that are being encountered by the SMEs while operating in the international markets. The questionnaire will be circulated among 100 managers from a list of SMEs that are present in Australia. The collection of the responses from the different respondents would assist in improving the quality of the research study through the assessment of authentic information. On the other hand, the Secondary Qualitative data collection method will assist in influencingacoherentargumentativestudyonthedifferentchallengesthatarebeing
12RESEARCH ENQUIRY encountered by the SMEs while operating in different international markets. The Secondary data collecting would be undertaken through the review and evaluation of different available peer reviewed journals, articles, blogs, newsletters and company reports. The development of the secondaryresearchwouldassistinimprovingtheeffectivenessoftheoperationswhile influencing the potentials of the venture.Therefore, the assessment of different available literatures would assist in delineating the major issues that are being encountered by the SMEs andtherebysuggestrecommendedactivitiesforimprovingthemarketpositionandthe profitability. 7.5Sampling strategy and sample size The sampling strategy that will be utilized during the research study will besimple random sampling, which is a sampling technique where a group of subjects from a larger group or population is chosen on a random basis. The utilization of the simple random sampling would assist in continuing with the efficiency of the research study through the large sample size. The large sample size would assist in facilitating unbiased outcomes. On the other hand, the simple random sampling provides equal opportunities for the respondents to be selected from a given population, which will assist in avoiding the personal idiosyncrasies of the researcher.The sample size for the research would be 100 managers from a list of SMEs that are present in Australia.Itwillassistinenrichingtheresearchstudythroughauthenticandcomplete information on the challenges that are being encountered by the ventures.
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13RESEARCH ENQUIRY References Agostini,L.,Nosella,A.,&Soranzo,B.(2015).Theimpactofformalandinformal appropriability regimes on SME profitability in medium high-tech industries.Technology Analysis & Strategic Management,27(4), 405-419. Anney, V. N. (2014). Ensuring the quality of the findings of qualitative research: Looking at trustworthiness criteria.Journal of Emerging Trends in Educational Research and Policy Studies (JETERAPS),5(2), 272-281. Aziz, N. N. A., & Samad, S. (2016). Innovation and competitive advantage: Moderating effects offirmageinfoodsmanufacturingSMEsinMalaysia.ProcediaEconomicsand Finance,35, 256-266. Boiral, O., Baron, C., & Gunnlaugson, O. (2014). Environmental leadership and consciousness development: A case study among Canadian SMEs.Journal of business ethics,123(3), 363-383. Choy, L. T. (2014). The strengths and weaknesses of research methodology: Comparison and complimentarybetweenqualitativeandquantitativeapproaches.IOSRJournalof Humanities and Social Science,19(4), 99-104. Eniola,A.A.,&Entebang,H.(2015).SMEfirmperformance-financialinnovationand challenges.Procedia-Social and Behavioral Sciences,195, 334-342. Husin, M. A., & Ibrahim, M. D. (2014). The role of accounting services and impact on small medium enterprises (SMEs) performance in manufacturing sector from East Coast
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