A critical analysis of small and medium size firms in Tobago

This research project provides a detailed analysis of small and medium size firms in Tobago by justifying author’s interest in whether small and medium size firms contribute to trading and business in Tobago. The chapter defines aims and objectives are clearly stated in the chapter to give an idea about how the research is conducted and which areas are particularly analysed.

Running head: DISSERTATION
A critical analysis of small and medium size firms in Tobago
Name of the Student
Name of the University
Author’s Note

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Abstract
This research project is performed on the small and medium size organizations located in
Tobago. The major purpose of the research is to derive a useful insight about how the small
and medium size firms perform in a recently growing market environment. The introductory
chapter of the research provides the idea that small and medium size firms in Tobago have
recently observed a rapid growth due to arrival of foreign investors, economy and
government initiatives toward the development of SMEs (Small and Medium Enterprise) in
Tobago. The review of existing papers help to observe that even though the small and
medium size firms in Tobago are on the edge of development, the employers are not much
concerned about the incorporation of corporate culture and growth due to limited workforce.
This means that labour crisis in the regional environment is creating a strong influence on the
small and medium size organizations. In addition, the existing literature also provides the fact
that SMEs in Tobago usually have a family based culture, where each member is treated like
a family person who take an equal amount of responsibilities and have equal contribution to
task accomplishment. Both primary and secondary analysis have been performed in the
research. Primary data have been collected from books, and journal articles while the
secondary data have been collected by performing an interview among the employees and
managers of small and medium size firms in Tobago. Non-probability sampling method has
been applied to choose the respondents and sample size for the interview is 5 managers and
50 employees of small and medium size organisations in Tobago. The findings indicate that
even though SMEs in Tobago receive a sudden growth but the internal structure of small
businesses are not in place. Employees in such small businesses lack motivation due to lack
of monetary and non-monetary benefits. Due to ineffective leadership style, employee growth
is limited. The findings indicate employees demand an organizational culture where they can
openly discuss their workplace and personal issues with supervisors and managers.

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Table of Content
CHAPTER 1: INTRODUCTION..............................................................................................7
1.1 Introduction..........................................................................................................................7
1.1.1 SMEs contribution........................................................................................................7
1.1.2 Governmental back up to SMEs in Tobago..................................................................8
1.2 Research Rationale...............................................................................................................8
1.3 Research Aim and Objectives..............................................................................................9
1.4 Research Questions..............................................................................................................9
1.5 Research Scope....................................................................................................................9
1.6 Outlines of the following chapter.......................................................................................10
1.6.1 Chapter 2: Literature Review......................................................................................10
1.6.2 Chapter 3: Research Methodology..............................................................................10
1.6.3 Chapter 4: Findings and Analysis...............................................................................10
1.6.4: Conclusion and Recommendation.............................................................................10
2.0 Introduction........................................................................................................................11
2.1 Organizational culture of SMEs in Tobago.......................................................................11
2.2 Government’s initiatives in backing the SMEs in Tobago................................................12
2.3 Larger access to Finance....................................................................................................13
2.4 Impact of small business enterprises on the economy.......................................................14
2.5 GDP/Revenue/Value Added..............................................................................................15
2.6 Nation’s strategies to enhance the business environment..................................................17
2.7 Impact of the internal forces on business performance of SME........................................18

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2.8 Gap Analysis......................................................................................................................22
CHAPTER 3: RESEARCH METHODOLOGY.....................................................................23
3.1. Research Philosophy.........................................................................................................23
3.2. Research Onion.................................................................................................................23
3.3. Research Methodology......................................................................................................24
3.4. Research Approach...........................................................................................................24
3.5. Positivism..........................................................................................................................25
3.6. Realism..............................................................................................................................25
3.7. Interpretive........................................................................................................................26
3.8. Pragmatism........................................................................................................................26
3.9. Data Collection Methods...................................................................................................27
3.10. Research Strategy............................................................................................................27
3.11. Research Choices............................................................................................................28
3.12. Questionnaire Development Process...........................................................................28
3.13. Sampling Theory.........................................................................................................29
3.14. Interviews....................................................................................................................29
3.15. Questionnaires.............................................................................................................29
CHAPTER 4: FINDINGS AND ANALYSIS.........................................................................31
4.1 Introduction........................................................................................................................31
4.2 Data findings and analysis.................................................................................................31
1.3 Questionnaire for Employees........................................................................................37

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CHAPTER 5: CONCLUSION AND RECOMMENDATION................................................44
5.0 Conclusion..........................................................................................................................44
5.1 Linking objectives with the literature and primary data....................................................44
5.2 Recommendations..............................................................................................................47
5.3 Limitation...........................................................................................................................48
5.4 Future scope of the study...................................................................................................48
References................................................................................................................................49
Appendices...............................................................................................................................55
Interview Questions for the Managers.................................................................................55
Questionnaire for Employees...............................................................................................55
Quantitative Data (Transcript).............................................................................................59
Transcript (Qualitative Data)...............................................................................................66

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List of Table
Table 1: Leadership initiatives in the cottage industry............................................................19
Table 2: Organizational culture contributing to performance improvement...........................21
Table 3: Leaders’ initiatives motivating in employees............................................................23
Table 4: Motivational factors...................................................................................................25

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List of Graphs
Graph 1: Influence of functional elements on business...........................................................40
Graph 2: Leadership initiatives in the cottage industry...........................................................41
Graph 3: Organizational culture contributing to performance improvement...........................42
Graph 4: Leaders’ initiatives motivating in employees...........................................................44
Graph 5: Motivational factors..................................................................................................46

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Topic- A critical analysis of small and medium size firms in Tobago
CHAPTER 1: INTRODUCTION
1.1 Introduction
This research project provides a detailed analysis of small and medium size firms in Tobago
by justifying author’s interest in whether small and medium size firms contribute to trading
and business in Tobago. The chapter defines aims and objectives are clearly stated in the
chapter to give an idea about how the research is conducted and which areas are particularly
analysed.
Small and medium size enterprises fall under the category of rapidly growing businesses
providing maximum work opportunity to nation’s citizens (Duval and Utoktham 2014). Large
MNCs are usually not high in number due to unstable and slow economy but small and
medium size firms under a limited financial capital find it convenient to operate business in
Tobago (Bahaw 2017). Thus, it is highly necessary to perform a research on how SMEs have
become a backbone of Tobago’s GDP and trading.
1.1.1 SMEs contribution
Trinidad and Tobago introduces initiatives to secure funding for small and medium
size enterprises by contributing a significant percentage to GDP as well as providing work for
a large part of the workforce. As per the T&T Chamber of Industry and Commerce (TTCIC),
there were above 20,000 SMEs running operation in the nation as of 2012. Ramkissoon-
Babwah (2012) mentioned that a small business in Tobago and Trinidad is defined as having
a staff 6 and 25 employees and sales up to TT$5m to TT$ ($770,000), but a medium size
enterprise in Tobago has 26-50 employees and sales up to TT$10m ($1.5m) (Lewis, Pun and
Lalla, 2005). On the basis of such criteria, the Central Statistics Office anticipates that above
80% of all registered business in the nation are SMEs. However, it is also identified that even

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though SMEs contribute a lot to the GDP of T&T, small and medium size firms do not have
much influence on the economy because the economy is mainly dominated by petroleum
businesses (Lewis and Jordan 2008).
1.1.2 Governmental back up to SMEs in Tobago
The recently formed government in Tobago has vowed to enhance the support for
SMEs. The Ministry of Finance particularly noted that SMEs have been generating a
significant proportion of new employment opportunities in the nation and that remain
attractive to the new generation who are interested in innovation and Information
Technology. Nonetheless, Lashley (2016) commented that as SMEs often suffer from lack of
financial support and training and the government mentioned that it would ensure appropriate
funding for the state institutions such as the National Enterprise Development Company
(NEDCO) and this institution is mainly responsible for promoting an entrepreneurial culture
among the youth of the nation (Ngoasong 2014). In addition, it has also been identified that
the government is also continuing the Fair Share program and designed to give micro
enterprise as well as cooperative access to public procurement opportunities. Artana et al.
(2007) mentioned that governments departments are required to create small business
platform designed to encourage SME involvement.
PESTLE analysis
Political: Due to persistent governmental initiatives towards the growth and development of
Small and medium size firms, Tobago is enjoying a challenge-free trading environment
barring the political stand aside (Işcan,. Ersarı and Naktiyok 2014). The country is more after
the freedom of civilians; thereby, the number of entrepreneurs is increasing in the nation with
their small and start-up businesses.

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Economic: International Monetary Fund (IMF) Tobago’s nominal GDP is considered to
increase at a CAGR of 3.8% from its 2015 level of TTD 150.247 billion and reach TDD
195.033 billion 2022 (Kaya and Koch 2015). Due to the entry of foreign investors and
development of small firm like Digicel, the economy in Tobago is healing faster than the
status recorded in the last decade.
Social: As put forward by Krausmann, Richter and Eisenmenger (2014), Tobago is widely
known as the home of lively living, with the carnivals, steel bands. In addition, the island lies
close to coast of Venezuela which attracts many foreigners and the nation lives with an
advanced and mixed culture.
Technology: When it comes to technology, it is worth mentioning that Tobago had
progressed a lot. Due to entry of small and medium size business, the technology is rapidly
being used (Bahaw 2017). This is because; the small and medium size firms adopt technology
to cut their operation cost such as labour cost and reach the mass audience.
Legal: Being an emerging nation with respect to trading, Tobago is much concerned about
the trading regulation such as Public Private Partnership 2006 (PPP) states that
implementation and Regulation must prescribe the framework and the parameters under
which the private partnership could operate (Belias and Koustelios 2014).
Environmental: Tobago is famous for its greenery and Tobago has some largely wooded
areas which include a protected rainforest and beaches (Bamiatzi and Kirchmaier 2014). The
government of the nation is highly concerned about the environmental resources.
SWOT analysis
Strength
 Tobago’s GDP is supposed to grow
at a CAGR of 3.8% by 2022 (Kaya
Weaknesses
 Not all Tobago is striving
economically; there is a large gap

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and Koch 2015)
 Unemployment rate is only 4.1%
 Tobago has estimated population of
1.37 million in the year 2016 which
is supposed to increase and it
increases the workforce capacity of
the nation (Bamiatzi and Kirchmaier
2014)
which separates the wealthy and
poor
 Tobago is surrounded by crimes
caused by drug trafficking
 High salary cost compared to Latin
America, Colombia which could
prevent IT firms who are seeking
cost arbitrage
Opportunities
 Tobago has developed its trading
relationship with the United
Kingdom and the country is looking
forward to expand its trade
relationship with developing nations
like the United State and China
(Artana et al. 2007)
 The local ITO sector (Information
Technology Outsourcing) is small
but they are able to deliver high
value ITO services to the global
nations
 Local universities in Tobago have
raised the voice for ITeS sectors by
designing and providing focused
Threats
 The foreign trades in Tobago often
gets into trouble due to regional
pirated groups who attack the supply
chain network of goods carrying
through the sea. Such incident often
leads to killing. Consequently,
foreign labours usually do not step
to Tobago (Bahaw 2017)
 As some social factors such as
sustainability, diversity, healthcare
and fair taxation being imposed by
the government as well as lobbied
into significant terms for large
corporations, the small and medium
size firms are getting choked

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courses and they ensure a
sustainable talent pool. This is a
significant opportunity for SMEs as
they can rely on the regional labours
instead of investing in the global
talent
(Lashley (2016).
 Large corporations and the
governments tend to hire third party
sourcing agencies, whose purpose is
to minimize the power of small
business vendors and commoditize
their products and services. This is
because the large corporation is able
to increase the rate of GDP
Framework 1: SWOT
1.2 Research Rationale
The current state of trading in Tobago implies that SMEs are rapidly growing and
contributing a significant percentage to the GDP. Even though the other sector such as Food
and Beverage and Information Technology industry are playing a great role in creating
work opportunity for the people in Tobago, SMEs are not lagging behind whatsoever, as
overall contribution of SMEs to GDP is significantly high (Grazzi et al. 2016). This finding
creates the significance of performing a research on this context. Moreover, the study helps to
learn how small and medium size businesses are going to help Tobago in enhancing or
creating a healthy balance in the economy. The following are some of the major areas can be
derived from the research:
 Overall Contribution to nation’s GDP
 Type of work opportunities generated by SMEs
 Future scope for business in Tobago
 Government’s initiative to sustain SMEs

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1.3 Research Aim and Objectives
The research aims to analyse the small and medium size firms in Tobago and following
objectives are formed to meet the stated research aim.
 To analyse the recent impact of small and medium size enterprise in Tobago
 To evaluate the role of internal and external forces in SMEs development in the
nation
 To analyse the future scope for SMEs in Tobago
1.4 Research Questions
 What is the current impact of SMEs in Tobago?
 How do SMEs in Tobago support the business environment and economy of the
nation?
1.5 Research Scope
This is conducted considering the present and growing presence of SMEs in Tobago
with the focus of extracting the findings related to GDP contribution and economy
development. A secondary analysis has been performed by sorting some particular journals
on the presence and impact of SMEs. Research follows the documentation analysis which
includes the sources of reports, newsletter and publication. To implement this process, first
all materials, documents and descriptive statistics have been read and presented.
1.6 Outlines of the following chapter
1.6.1 Chapter 2: Literature Review
This chapter looks at the existing studies on the impact of small and medium size
enterprise. The discussion and analysis in the chapter helps to understand the growing
presence of SMEs in Tobago. This chapter also pays attention to the government’s initiatives

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in supporting the SMEs. The literature reviewed in this chapter is a mixture of academic
journals and books.
1.6.2 Chapter 3: Research Methodology
This chapter mainly presents the type of research techniques applied to perform the
research. Data collection process, limitations and ethical framework for the research have
also been discussed in the chapter.
1.6.3 Chapter 4: Findings and Analysis
This chapter provides the findings of secondary research and provides an analysis of
the secondary data. The data has been presented with tables and graphs.
1.6.4: Conclusion and Recommendation
This chapter provides a comprehensive conclusion about the theory and secondary
research together and provides a clear insight about the impact of SMEs in Tobago in the
recent time. This chapter also provides the limitation and other difficulties faced during the
making of the dissertation.

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CHAPTER 2: LITERATURE REVIEW
2.0 Introduction
The literature review has been performed with focus of extracting the growing impact
of small and medium size business in Tobago. This chapter reviews the existing papers to
find the growth and barriers experienced by SMEs in Tobago. The analysis has been
supported with reliable evidences and numerical data set. To conduct the review, 20 different
journals and books have used in the discussion. The major focus of the literature is on SME
business development in Trinidad and Tobago.
2.1 Organizational culture of SMEs in Tobago
A study performed by Lashley (2016), has mentioned the fact that small and medium
size organizations are more likely to adopt organic culture compared to big organizations.
The author has mentioned that a small number of people are conventionally united under a
common belief as well as values, which refers to the fact that in SMEs dynamic
organizational culture seem to be easier. The owner has the highest influence with respect to
the beliefs and values on the businesses and this is probably the biggest reason a high
attention has been given to the research on SMEs. On the other side, Nathai-Balkissoon and
Pun (2016) mentioned that each organisations has its own culture but the major element of an
effective corporate culture is the organizational mission, work environment, management
style and recruitment policies. However, Ramkissoon-Babwah (2015) performed a research
and mentioned that the fact that small and medium size firms are usually comfortable with
sharing an equal amount of job responsibilities among themselves which is similar to the
characteristics of the clan culture in which the operations developed on the collaboration.
In this context, Duval and Utoktham (2014) commented that members tend to share
common characteristic and observe themselves as the part of their big family who are highly

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involved. This is one of the major characteristic usually followed by the small and medium
size organizations. For example, Tom’s of Maine- a maker of all-natural hygiene products;
thus, to develop the bran, the owner Tom Chappel insisted on developing respectful
relationship with the employees, customer suppliers and market environment itself.
(Ramkissoon-Babwah and Mc David 2014)
2.2 Government’s initiatives in backing the SMEs in Tobago
Recently formed government in Trinidad and Tobago created the scope for the
establishment of SMEs. Hossein (2015) provided the fact that in October, 2015 budget
speech, Ministry of Finance mentioned the fact that small and medium size organizations
have been creating a significant proportion of new employment opportunities in the nation,
which remains a good news for the coming generation because the rate of education is
increasing rapidly in Tobago and those fresh talents can find their platform to develop their
career. Laing and Lewis (2017) particularly mentioned that governments are required to
generate windows for small businesses to promote the SMEs participation. The financial
review presentation occurred in April, 2016 did not make any further policy announcements.
Verbano, Crema and Venturini (2015) mentioned that NEDCO, an agency established in
2002 to support nation’s SMEs, operates a series of different programmes and one of which is
familiar as Entrepreneurial Training Institute and Incubation Centre, which emphasizes on
providing entrepreneurial and marketing training and basic support as well as providing start-
up firms on-site IT (Campopiano, De Massis and Chirico 2014).
On the other side, Cagno and Trianni (2014) mentioned that one of the major barrier
to SME growth is the availability of financing. On the other side, Bamiatzi and Kirchmaier
(2014) performed a research and found that almost 11% of the SMEs start-up usually come
from the banking system but almost 70% comes from personal and family saving. On the
other hand, Ismail and King (2014) performed a research and found that a major problem is

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that SMEs inability to communicate business models, plans to banks and inability to involve
in a structured technique to review and price the credit risk. However, Nathai-Balkissoon and
Pun (2016) mentioned that one attempt to address the gap started in 2014 at the time when
Inter-American Development Bank approved a $150,000 grant to enable CariCRIS to expand
its SME rating service. Hence, the use of CariCRIS credit rating was meant to enhance the
assessment of default risk; thus, increasing efficiency of SMEs lending for banks and
increasing access to finance for Tobago’s SMEs (Sheehan 2014) .
2.3 Larger access to Finance
There is usual perception among several analysts in the nation that SMEs in Trinidad
and Tobago have much to provide with respect to diversifying the economy as well as
developing emerging business and employment opportunities but they are usually held back
by a risk-averse as well as widely conservative business culture. According to the
Wainwright Iton, CEO of the Trinidad and Tobago Securities and Exchange Commission
(TICSEC), agreed it could be difficult to promote emerging businesses to list on the stock
exchange (Khan. Siriram and Greigg 2014).
In such context, Jamaican stock exchange had been more successful in the recent
time, providing newly listed organizations’ adequate tax breaks. Lashley (2016) particularly
mentioned that organizations listed on Jamaica’s junior Market get a five year exemption
from the corporate tax, which is followed by a heavily discounted rate over the last few year.
Nonetheless, a similar programme in T&T has not been much successful, Hossein (2015)
mentioned that people act entrepreneurial from corporate tax. In addition, World Bank
estimated that the global crowd-funding market could reach $90bn-95bn by 2025
(Krausmann, Richter and Eisenmenger 2014). An article in the TTSEC quarterly newsletter
published in the fourth quarter of 2025 recognized a set of different techniques, guiding that

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equity crowd the-funding as presently defined in US as well as Canadian regulations could be
worth in-depth investigation (Hickson and Ellis 2014).
2.4 Impact of small business enterprises on the economy
Studies in many literature have found the small business create a significant
percentage of new emerging jobs. Pablo-Romero and De Jesús (2016) argued that small
business usually become labour intensive instead of capital intensive. Employment scope
created by small business give T&T an economic advantage over some other Caribbean
nations, particularly in the manufacturing as well as retail sector. Small organizations are
more likely to employ less skilled workers as well as individual with no prior work
experience and such employment practice generally benefits the economy in two ways- such
as small business employ workers who could have otherwise have difficulty in securing jobs;
thus, the duration of transitional unemployment among these individuals (Ramkissoon-
Babwah 2012). On the other hand, employment of these workers increases their productivity
by giving them on the-job training and work experience.
High worker productivity
As put forward by Allahar and Brown (1995), a small firm typically has less-diffused
ownership and a less complex organizational structure and the chance is high that business
owner is directly involved in management. Consequently, owners and managers could more
easily observe and ensure productivity of workers. Hence, Bohušová and Blašková (2013)
argued that small business have lower productivity compared to the larger ones as reflected in
comparatively lower wages and fringe benefits by the small business owners to their
employees compared to the large organizations. Additionally, the author has also mentioned
that these business are less likely to observe and experience the cost savings linked with
producing on a large sale vis-à-vis economies of scale.

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Minimization of Unemployment
As mentioned by Khan Siriram and Greigg (2014), small business plays great role and
carries the potential to a necessary role in unemployment reduction Trinidad and Tobago.
Short-term temporary job creation scheme such as Community Enhancement Partnership
Employment Programme and Unemployment Relief Programme (URP) are inadequate in
dealing with in-depth and long-term issues faced by majority of unemployed. Thereby, the
growth of small businesses in Tobago is effectively suited to deal with sustainable
employment generation as well as long-term growth initiatives compared to these temporary
employment programmes. Nonetheless, Hossein (2015) arguably cited that two possible
disadvantages of small business policies as an aspect of unemployment management is the
tome sand for any job creation is relatively long. Here, public works programs for instance
could provide boost to employment. Small business policies would do least to help the most
depressed regions, where demand is weakest and there is a historical dependence on big
employers.
2.5 GDP/Revenue/Value Added
According to Hickson and Ellis (2014), Gross Domestic Product to make a significant
contribution to GDP mainly as their large high numbers and income generation impact in the
form of wages and salaries paid to the employees and profits received by entrepreneur.
Hence, the author has also pointed out the fact that small business play a great role in serving
localised market. In addition, with respect to intermediate goods/value added, several small
business exist to serve specific demands as in case of consumer goods for which considerable
diversity of taste exist. Longmore, Jaupart and Cazorla (2014) also mentioned that small
firms are significant suppliers of specialized intermediate goods and goods used in the
production of others goods. Therefore, it can be mentioned that small business have great

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impact on manufacturing sector as it usually relates to the overall GDP contribution. The
following figure shows the contribution of small and medium size firms.
Figure 1: Contribution of Small Business & Total Business in Sub-Sector
Manufacturing to GDP
(Source: Longmore, Jaupart and Cazorla 2014)

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Figure 2: Contribution to small business in sub sector manufacturing
(Source: Lashley 2016)
As provided in the figure above, the leading contributor to gross output which
aggregate sales/revenue made as well as value added for the year 2003 was the assembly type
and related to industries sub-sector, with about TT$241million in combined ales and a value
added of $TT 76 million (Lashley 2016). Nonetheless, the care should be taken in
interpreting these figures, particularly, it relates to the economic impact, because of the
possible error of over-estimation. This particular flaw is identified due to the capital intensive
or tech-heavy nature of this sub-sector, whereby, the business that qualify as small business
enterprise under CSO’s data used may not qualify under the assets size and sales categories.
2.6 Nation’s strategies to enhance the business environment
As put forward by Longmore, Jaupart and Cazorla (2014), Trinidad and Tobago is
one of the 10 nations identified by World Bank in its “Doing Business 2015” report as having
enhanced the most with respect to the ease of doing business through 2013-2014. According
to the report, overall ranking of Trinidad and Tobago increased by12 spots over the previous

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year which makes the nation one of the top 10 most enhanced. Authorities in Trinidad and
Tobago made positive changes in three significant areas in 2013 -2-14 and they made it easier
to start a business, to obtain credit as well as resolve insolvency. Lewis and Jordan (2008)
mentioned that government’s new online platform for business reduced the registered time
from 38 days to 14.5. Meanwhile, credit bureaux in Tobago recently cover about two-thirds
of adult population, aligned with the norms in OECD nations. Throughout Latin America and
the Caribean, the corresponding figure remains around 39%. Eventually, in accordance with
the World Bank Report, the new solvency law “strengthened protection of secured creditors’
rights in insolvency proceeding, giving greater flexibility in enforcement actions.
While comprehensive data is not available to permit a particular anticipation of the
influence of new SME expansion need, the evidence is that there has clearly been a strong
growth in the SME sector over the last couple of years. Ramkissoon-Babwah (2012)
mentioned the fact that NEDCO programme has developed a client base of 56000 businesses
as well as advanced close to TT $100 million in loans to different sectors with the inclusion
of light manufacturing, food and agro-processing and services. In this context, Globalization
as well as trade liberalization are presenting new opportunities and barriers for small business
development. Nonetheless, in the case of Trinidad and Tobago, small and medium size firms,
till now have to contribute more relevant activities to Caribbean development, they require a
more outward oriented strategy demanding more clear export opportunities to take part in the
production chain with the produces abroad.
2.7 Impact of the internal forces on business performance of SME
According to Epstein (2018), the internal environment of the firm is conceptualized as
the corporate environment that has the specific implications on the business functionalities.
The business leaders or the managers need to review the performance of the associated
employees and identify the internal strategic factors. These internal strategic factors are

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mostly known as the strengths and weaknesses of the company that decide the business
potentiality to deal with the external competitiveness. Rahim et al. (2017) explained that
identification of the internal strengths and weaknesses determine whether the company has
the capability to participate in a competitive environment. Various reasons are discussed by
the research scholars to identify the internal strategies that have the clear impact on the
business. Bahaw (2017) pointed out that the internal environment of the company generally
include the capabilities, resources, and competencies, which are often conceptualized as the
resource based view approaches. This RBV approaches determine that the company need to
prioritize the resources more than the industry structure for gaining and sustaining the
secured position in a competitive environment. The major concerns associated with the RBV
approach is the resource and the organisational capabilities. According to Saridakis et al.
(2018), the company can divide the resources by concentrating on three major aspects, such
as the tangible assets, intangible assets, and organisational capabilities of combining these
assets. The exploration of the theoretical concerns will present the ideas regarding the impact
of the internal sources on business functions. The internal environment of the business is
categorized into several dimensions, such as finance, marketing, information system, and
human resource. The further section of the study will explore their impacts on SME’s.
 Marketing
According to Farooq and Mertzanis (2017), marketing is a concept of defining,
anticipating, and meeting the needs of the customers by offering the suitable goods or
services. The extensive research on this segment highlights that the marketing process within
a firm depends on seven basic functionalities. These basic functions are customer analysis,
product sales, product or service planning, pricing structure, distribution strategy, market
research, and opportunity analysis. For example, cottage industry focuses on the customer
segments at the initial stage. The products or the services offered by the cottage industry need

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to evaluate the information gathered from the extensive market research. Ogutu and Kihonge
(2016) argued that marketing process within a firm depends on four pillars, such as target
market, integrated marketing, customer needs, and ability to generate profits. SMEs need to
concentrate on these aspects to secure their competitive position for a longer time.
 Financial
Financial aspect of the company is another most considerable internal business concerns
that have the clear impact on the firms’ abilities. According to Boschmans and Pissareva
(2018), in order to implement the effective strategy, the business management needs to
identify the strengths and weakness of the financial resources of the firm. The financial
environment of an organisation depends on the three major decisions, such as financing,
investments, and dividend. Financial decision is mostly known as the capital budgeting,
which determines the allocation of the capital resources to the product, project, and assets.
Investing decision is determining the relevant capital structure that is necessary for
organizing the business functions. The third decision is dividend decision, which is
concentrates on the issues like earning percentages paid to the shareholders, insurance of the
shares, and dividends paid over the stability. These basic decisions are developing the entire
financial environment in a systematic way.
 Operations
According to Kaya and Koch (2015), business operation is the crucial part of the internal
business environment. The operational process converts the logistics input into the final
product. Business operations determine the use of the machineries, combining, and
maintaining the equipments. In the Cottage Industry, the maintenance of the products and
production process is essential. It is noticeable that the production operations generally
represent the larger portion of the human resource management and associated assets.

24DISSERTATION
Especially, in the small and medium sized firms, the majority of the profits are generated by
allocating the assets into the appropriate business operations (Farooq and Mertzanis 2017). In
fact, majority of the costs are invested for the operational processes. Therefore, business
operation is a considerable strategic force influencing business functions.
 Human Resources
One of the most important internal factors of the firm is the human resource management.
It is noticeable that the professional and personal skills of the employees as well as the
employer create the higher efficiency of the global competitiveness. The involvement of the
adequate ad high skilled human resource support helps in organizing the business
functionalities (Saridakis et al. 2018). The performance efficiency of this workforce helps in
achieving the competitive advantage in this challenging business world. Therefore, it is
necessary to concentrate on the development of the better human resource management that
can ensure the better performance management. The performance parameter of the human
resources creates the significant impact on the organisational sustainability.
The above discussion determines the internal segmentations that have the clear impacts on
the business. The small and medium sized enterprises need to consider these segments for
sustaining their competitive position. It is noticeable that majority of the SMEs face trouble
in investing more capitals to compete with the larger firms. The lack of capital resources can
sometimes be much challenging for the SMEs (Boschmans and Pissareva 2018). In such
cases, the effectiveness of the human resource department would be much necessary.
Organizing the business functionalities in a systematic way will be helpful for the retaining
the competitive position and generate profits in a considerable way. Hence, the practices of
making the most fruitful approach and sustaining the competitive position are necessary for

25DISSERTATION
the SMEs. The influence of the internal environment needs to be utilized in a positive way for
ensuring success for the future prospects.
2.8 Gap Analysis
The above presented literature helps to note the fact that although the papers have
presented the findings that SMEs in Tobago in the recent time have observed a rapid growth
but the papers did not say much about the hotel and cottage sector. It is true that SMEs have a
great contribution to the GDP growth but due to resources crisis and unstable economy, the
nation is not able to expand the cottage industry. The papers have mentioned the fact that
governments of Tobago is effectively backing up the small sector but it is found that
presently governments are not paying much attention to the SMEs in cottage sector. In
addition to this, in small and medium size firms organize different sort of organizational
culture and leadership style but the existing papers have only mentioned about family based
culture in SMEs in the cottage sector. On the other side, it is also identified that SMEs in the
cottage sector are lagging behind with respect to technology and digitalization but existing
papers did not mention the fact that small firms find new ways to grow and expand their
business with the help of technology. Moreover, the papers lack proper case examples of
small and medium size firms in Trinidad and Tobago.

26DISSERTATION
CHAPTER 3: RESEARCH METHODOLOGY
3.1. Research Philosophy
The research philosophy that will be selected in this research is intended to facilitate
the researchers to use effective research paradigm. Research philosophy is deemed to be of
four types such as positivism, realism, interpretive and pragmatism (Taylor, Bogdan and
DeVault 2015). For the reason that the current research will analyse the internal an external
environment of the SMEs in cottage industry of Tobago, positivism research philosophy was
employed. Employing this philosophy has facilitated the researcher in attaining suitable
research results through linking the theories and models employed within the literature
review section (Lewis 2015). Positivism serves as the most important philosophy in
extracting most useful responses from the survey participants in this research. Positivism
philosophy is also deemed to be most effective method for the reason that the study employed
quantitative research method.
3.2. Research Onion
The researcher with the support of research onion can attain effective results by
means of employing effective research tools (Alvesson and Sköldberg 2017). Moreover,
research onion employed in this study can also serve as an effective way through which the
researcher can attain suitable outcomes through accomplishing six different tasks. The six
layers present in the research onion are directly associated with the research process as well
as techniques which might be used by the researcher (Flick 2015). In addition, the research
onion aspects used has facilitated in effective implementation of research strategy,
philosophy, approach, techniques and time horizon.

27DISSERTATION
3.3. Research Methodology
The research methodology that will be used in this research has facilitated the
researchers in following a specific path that can further facilitate in adding validity of the
study (Vaioleti 2016). Research methodology that has been used in the current research has
facilitated in obtaining better opportunities that further has enhanced authenticity of research
results attained by the researcher. In the current research qualitative and quantitative research
methodology was employed. Qualitative data was gathered based on which interviews have
been carried out (Panneerselvam 2014). Moreover, primary and secondary research
methodology has been employed in which secondary data has been gathered from most
authentic sources such as government websites and journal articles. In quantitative research
method questionnaire has been developed that has facilitated in gathering numerical data for
analysis of research results.
3.4. Research Approach
Research approach serves as the most vital step in carrying out a research in order to
arrive at actual and desired research results (Choy 2014). In such context, deductive research
approach was used in this study that has facilitated the researcher in recognising all the steps
for carrying out the desired activities associated with the study. Deductive research approach
was implemented in this research for the reason that it facilitates in scrutinising the existing
models and theories associated with the research through attaining help from the collected
data (Marczyk, DeMatteo and Festinger 2017). For the reason that positivism research
philosophy is associated directly with quantitative data analysis, deductive research approach
has been considered as among the most important approach in attaining suitable results from
the research. This approach can facilitate in evaluating the ways in which internal and
external factors present within the SMEs in cottage industry enhances employee motivation
(Brannen 2017).

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3.5. Positivism
Positivism can be explained as a philosophical theory which indicates that certain
knowledge is focussed on natural process along with their relations and properties. For this
reason, information gathered from sensory experience, interpreted by means of logic and
reason serves as an effective source of all positive knowledge (Marczyk, DeMatteo and
Festinger 2017). Employing this philosophy has facilitated the researcher in attaining suitable
research results through linking the theories and models employed within the literature
review section. Positivism serves as the most important philosophy in extracting most useful
responses from the survey participants in this research. Positivism philosophy is also deemed
to be most effective method for the reason that the study employed quantitative research
method (Marczyk, DeMatteo and Festinger 2017). This research philosophy has been used in
this study as it describes an approach to research on society that particularly focuses on
scientific illustrations like experiments and statistics.
3.6. Realism
Realism research philosophy focuses on the idea of independence of reality from the
human perception. Such philosophy is focussed on the assumption of scientific approach to
the knowledge development (Marczyk, DeMatteo and Festinger 2017). Realism philosophy
that is implemented in the research can be divided into two groups such as direct and critical.
It is known that research philosophy has a set of characteristics that encompass epistemology,
axiology and ontology. Considering the same, the philosophy of realism is implemented
within the objects associated with research. This research philosophy is used in case of
qualitative research in which direct realism can be explained as the aspects observed and it
portrays the world by mean of personal human senses (Marczyk, DeMatteo and Festinger
2017). Critical realism also argues that humans experience certain illustrations from the real

29DISSERTATION
world. Based on critical realism philosophy images and sensations of the real world might be
deceptive and might not portray the real world.
3.7. Interpretive
The research philosophy that will be selected in this research is intended to facilitate
the researchers to use effective research paradigm. Interpretive research philosophy is
focussed on the understanding of experiences as well as recognition of the individuals
Interpretive research can be understood as a research paradigm which is relied on the
anticipation that social reality is not objective or subjective (Taylor, Bogdan and DeVault
2015). This is also shaped by human experiences as well as the social contexts. This is the
reason for which interpretive research philosophy is best suited in its socio-historic context
through reconciling the subjective interest from the observed data. Interpretive research is
employed with the qualitative research that is shaped by human experience as well as social
contexts (Taylor, Bogdan and DeVault 2015). This is the best possible research philosophy
for the reason that the interpretive researchers observe the social reality as being incorporated
in socio-historic context by reconciling the subjective interpretations of several participants.
3.8. Pragmatism
Pragmatism research philosophy includes both the philosophies related with
interpretive and positivism in order to attain increased accuracy of the research results
(Taylor, Bogdan and DeVault 2015). This research philosophy can be explained as a
deconstructive paradigm which advocates the implementation of mixed research methods and
also focuses on analysing the aspects that works on decoding truths regarding the research
questions under research. This research also can be explained as a philosophical movement
which encompass those that claim that a proposition or ideology is real. This is possible in
case the research is completed satisfactorily and the meaning of a proposition is observed to

30DISSERTATION
be present in practical consequences of accepting it (Taylor, Bogdan and DeVault 2015).
Pragmatic researchers offer themselves enough freedom to employ any type of research
methods, procedures and techniques related with the qualitative and quantitative research. In
this type of research it is also relied that all the research techniques used in pragmatism
philosophy has its limitations and in this distinct approaches might be complementary.
3.9. Data Collection Methods
Qualitative and quantitative data collection process has been used in this research.
Quantitative data in this research indicates the fraction of information that might be analysed
in order to analyse the information gathered with respect to the research results. The
quantitative data will be gathered from questionnaire surveying which data will be gathered
regarding human perception concerned with specific research information (Taylor, Bogdan
and DeVault 2015). Secondary data will be gathered from several authentic websites,
government sources, journals and peer reviewed articles and books. This will also make sure
that the qualitative data which is gathered for the secondary sources will be relevant and
autistic sources in order to gather valid conclusions on the research. Qualitative data was
gathered based on which interviews have been carried out (Taylor, Bogdan and DeVault
2015). Moreover, primary and secondary research methodology has been employed in which
secondary data has been gathered from most authentic sources such as government websites
and journal articles. In quantitative research method questionnaire has been developed that
has facilitated in gathering numerical data for analysis of research results.
3.10. Research Strategy
The research strategy selected within the research offers the researchers with a chance
of guiding the investigation in the direction of attaining a particular objective focussed on the
research objectives (Taylor, Bogdan and DeVault 2015). Research strategy facilitates the

31DISSERTATION
researcher in providing the reference through decreasing the targeted results in which the
existing part of the overall research is performed on a predefined goal. Research strategy that
can be employed in the research might be three types such as explanatory, exploratory and
descriptive. In the current research explanatory research design is implemented for the
treason that it facilitates the researcher’s n explaining the cause effect relationship (Taylor,
Bogdan and DeVault 2015). This also focuses on forecasting the likely future research
outcomes. This research strategy is also employed for the reason that it is basically performed
in identifying the causes behind the research along with the issues that is confronted within
the research results.
3.11. Research Choices
3.12. Questionnaire Development Process
Questionnaire design will be developed in a manner that it is effective enough in
gathering suitable response from the managers and the employees operating within the
cottage industry in Tobago (Marczyk, DeMatteo and Festinger 2017). The questionnaire will
be segmented into two parts that will include questions for the managers and another set of
questions for the employees. The questionnaire that will be prepared to for gathering
responses from the managers and the employees will include both the close and open ended
questions. The close ended questions will include three major questions focussed on
organizational transition, culture, employee motivation and the leadership style (Marczyk,
DeMatteo and Festinger 2017). The open ended questions also included questions on
company policy, job profile and work environment that impacts employee motivation. It will
also encompass questions on organizational culture, incentives offered by the management in
increasing the motivation of the employees.

32DISSERTATION
3.13. Sampling Theory
Sampling serves as a technique based on which the target respondents are chosen
from a huge population (Marczyk, DeMatteo and Festinger 2017). Simple random sampling
technique was employed in this research in analysing the performance of the small and
medium sized companies in the cottage industry. This sampling technique is used in selecting
the respondents for the survey for the reason that it offers equal change to the respondents to
get selected. Focussed on this technique, 5 managers and 45 employees from organizations
operating in the cottage industry of Tobago are selected. Moreover, it has also been evaluated
that quantitative analysis requires a huge sample size for gathering as well as evaluating the
responses of selected respondents. For the reason that quantitative data was needed in
gathering suitable research results simple random sampling method facilitated in collecting
responses from large sample size (Marczyk, DeMatteo and Festinger 2017).
3.14. Interviews
For collecting relevant data regarding the motivation of employees within the cottage
industry of Tobago, interview has been carried out with the managers of the selected
companies in Tobago. The interview contained open ended questions that has facilitated in
attaining organizational transition, culture and improved employee motivation within the
companies of cottage industry.
3.15. Questionnaires
Data collection regarding the culture, leadership and employee motivation factors within the
cottage industry of Tobago has been carried out through offering questionnaires to the
selected employees. Close ended questionnaire was prepared for them that has facilitated in
attaining suitable response on their viewpoints regarding leadership culture and motivational
factors followed in their organizations and their effectiveness.

33DISSERTATION

34DISSERTATION
CHAPTER 4: FINDINGS AND ANALYSIS
4.1 Introduction
This chapter provides the findings and analysis of secondary data on SMEs in
Tobago. A secondary analysis has been performed by collecting the secondary data from the
journal articles and books. To make the analysis meaningful and comprehensive, thematic
data analysis method has been applied. Likewise, the analysis has been conducted by liking
the secondary data with the findings found in the literature review.
4.2 Data findings and analysis
Qualitative Data
1.How do you tend to manage cultural change over the next three years?
According to one of the managers of a hotel in Tobago, cottage industry is one such industry
in the recent time that have observed a dynamic marketing environment where market needs
and demands are rapidly changing as the trend. Thus, it is certain that implementation of
change remain as the opportunity for business growth. Presently, the business in the sector is
following its existing culture of making the most out of its small workforce considering the
investment it makes but when it comes to the completion of factory based manufacture, it
bears the loss of its production due to limited workforce. However, when it comes to cultural
change in the operation in the cottage industry, it is identified the sector is lagging behind
with respect to technology. While many small and medium size firms have adopted
technology in their operation to speed up the growth of the operation, businesses in the
cottage sector are still following the existing trends of managing operation. Thus, if any
cultural change is required to be implemented in the coming years, technology implantation
should come first in the priority order. In addition to this, the cottage industry also needs to

35DISSERTATION
adopt the corporate culture of running operation, as a business with family ambience may not
sustain when the competition arrives in the sector. According to the managers, in
implementing the organizational operation, each member has to take a large set of job duties
and responsibility to achieve the organizational goal. Furthermore, as the need for
development, the organization in the cottage industry need to develop or arrange employee
education program such training and development program, which could help employees to
learn new skills and knowledge.
2.How do you plan to bring in organizational transition in Tobago cottage industry?
One of the managers of a small firm mentioned the fact the competitiveness is
embodied in the characteristic of the organization such as the current efficiency as well as
effectiveness of the utilization of the resources, the intention and the capability to link with
profitability to growth of capacity and the ability to modernize to enhance technology and
organization. The manager has also mentioned the fact that competitive advantage, which
should be measured with respect to the rivals in the market and it is highly determined by the
efficiency and effectiveness of the markets. According to the managers, entrepreneurship, the
launch of a new productive combination and innovation are the major driving forces that
continually generate new competitive advantage and opportunity for profits and growth.
A manager of another middle size firm in Tobago concurs with the view that
competitiveness is usually generated at the firm level; however, that is partially obtained from
a systematic context and emerges from complex patterns of interactions between the
agenesis, the governments and other parties and will thus demonstrate different forms in
society. In the literature, it was found that strategies of SME development are generally based
on the context and country and each nation will have its own barrier, opportunity, and
priorities for change. In such case, the availability of resource may vary by nation; thereby,

36DISSERTATION
the outcome achieved could be different. The manager have revealed the fact that the peace
and stability remain the key requirement for the development of small and medium size and
for attracting the foreign investment. The findings of this article also show that war and crime
remain as the major deterrents of private investment particularly for the foreign investors.
Thereby, such data points clarify the fact that small and medium size organizations in Tobago
need a crosscutting strategy as the success here mostly depend on the ability of government
to execute sound microeconomics policies, the ability of the stakeholders to enhance
microeconomic business environment and the capability of SMEs to carry out the competitive
practices and the strategies. So, effective policies usually come in cluster; thereby,
development of SME strategies should be integrated into the wonder national development
strategy
3.How leadership style followed within the organization help you in increasing employee
motivation?
One of the managers in of a small start-up firm in the cottage industry has mentioned that
most of the small organizations follow the cliché of maintaining a healthy and friendly work
culture with the focus of developing an effective teamwork culture. The organization has a
firm belief that sharing responsibilities among the team members often help to enhance the
organizational productivity. However, friendly approach of a leader with an open
management style makes things easier for all. Thus, most of the small firms prefer to
implement a democratic leadership style aligning an open communication method, where
employees can come up to the leader and discus their issue faced in the workplace. Leaders
often set success examples by being open and flexible with the situation to make employees
understand the importance and purpose of work responsibility. The leaders take the
responsibility of making manageable mutual acceptance a significant priority to make sure
everyone in the team has taken part in the task. The manager of the organization has also

37DISSERTATION
mentioned the fact that as the number of employees in the small firm is usually less, chances
of emotional issues are often there which could lead to conflict. Thus, leaders apply the
conflict resolution skills. However, the leader must have to gain such skills because conflict
in the workplace is inevitable.
4.3 Interview Analysis
Theme 1: “Organizational cultural change”
There could be several reasons why the culture of a firm needs to be changed and these
reasons may include lack of morality, lack of job meaning and changes in the business. There
could be some incidents where the organization itself prefers to implement organizational
change for the betterment of business and the community it serves. There could be some
scenario where the business, for example, needs to incorporate Information Technology, so in
that case, the organization must needs to apply structural change dividing IT department as
well as catering to training and development. On the other hand, organizational change
sometimes remains as the opportunity for business growth. One of the managers have
mentioned that
“Cottage industry is one such industry in the recent time that have observed a dynamic
marketing environment where market needs and demands are rapidly changing as the trend.
Thus, it is certain that implementation of change remain as the opportunity for business
growth”
Even though the fact mentioned by the manager is not directly about cultural change but it is
worth mentioning that any internal change can impact organizational existing culture. For
example, if a business in the cottage sector applies digital marketing or IT, its family based
work culture need to be changed because here one individual cannot supervise IT functions,
and all members involved in the business must know the use of IT. However, the

38DISSERTATION
implementation of change can bring effective return to the business. In this context, Belias
and Koustelios (2014) fostering the capacity to carry out genuine change is highly important
as completion becomes global in the long future.
Theme 2: “Key to Success: Organizational Transition and Managing Employee Emotions”
According to Bamiatzi and Kirchmaier (2014), the studies across many industries suggest
that the rated of failure change initiatives such as reengineering projects, implementation of
strategic plans and IT systems, merger acquisition remains a shocking 70%. However, the
manager of a small business in Tobago has mentioned that “the most general influencer to
determine success or failure of change initiatives is people”.
This means that when people are properly engaged with change, they stand against it but
when people let go of what could be left and could sense meaning and find out what is new,
they could gain the ability of initiating and creating sustainable change. This lesson teaches
managers how to deal with the internal process and the human process that has been
repeatedly recognized as the missing relation in failed change efforts in business. Another
significant key success factor is facilitating communication during the whole process and this
can be done by every communication vector possible with the inclusion of process like
emails, hall meeting, one to one chatting and small group meeting. So it can be ascertained
that communication is a significant practice is implementing internal change in the
organization. Notwithstanding, Cagno and Trianni (2014) argued that in a small business,
communication remains in the activity queue because small business or the organizations in
the cottage industry are mostly family based.
Theme 3: “Impact of leadership on employee motivation”
As stated by Işcan, Ersarı and Naktiyok (2014), leadership is conceived as a technique where
on or more people could create impact on or influence a group of person to move in a proper

39DISSERTATION
direction. This means that the leader certainly has an important role on the performance of its
followers by motivating them. Nonetheless, it is highly important for the leader to know
which particular method works better to motivation; for example, some employees are simply
motivated by job security, while others are by transparent company policies, power,
recognition, compensation. Conversely, there is a category of employees who are intrinsically
motivated and enjoying their job. However, there could be many situations where the
employees lack motivation because for example, they find a communication gap in their
leader’s role and consequently, they do not find it easy to share their workplace issues with
their leaders. This fact clarifies that poor communication skill of a leader can negatively
impact the employees. Notwithstanding, if a business has effective communication between
the leaders and followers, work responsibilities are done effectively. One of the managers
have a medium size firm have mentioned in the interview that
“The organization has a firm belief that sharing responsibilities among the team members
often help to enhance the organizational productivity”
However, sharing responsibility can only be possible when there is a proper communication
between the team members and to build such healthy communication gap, the leader needs to
come up and take initiatives of interacting with employees on a frequent basis.
Implication of the analysis
The analysis of the interview helps to observe that the fact that there are three significant
aspect involved in organizational change- such as people management, leadership and culture
development and these three elements altogether contribute to business growth. When a
business is supposed to implement change, it is certain that leadership plays a great role in
implementing the same. The following chart shows the influenced of each element in
organizational cultural change derived from the analysis above.

40DISSERTATION
24%
31%
24%
21%
People management
Leadership
Cultural development
Employee Motivation
Graph 1: Influence of functional elements on business
1.3 Questionnaire for Employees
1.Do you think that the leaders in cottage industry can introduce new ways of
thinking to bring in organizational change?
26%
34%
22%
18%
Chart Title
Strongly Agree
Agree
Disagree
Strongly Disagree

41DISSERTATION
Graph 2: Leadership initiatives in the cottage industry
Findings and Analysis
The above mentioned graph helps to observe that almost 34% of the respondents have
mentioned that they agree with the fact that leaders in the cottage industry can introduce new
ways of thinking to bring in suitable organizational changes and almost 26% of the
respondents strongly agree with the context. However, almost 22% of the respondents have
mentioned that they do not agree with the fact that leaders can bring new ways of applying
change in the sector. The graph indicates that almost 18% of the respondents have mentioned
that they strongly disagree with the fact.
In the study performed by Bahaw (2017), it was found that mall firms in the cottage
industry usually prefer to develop a healthy and friendly work culture to avoid unnecessary
workplace issues and hazard among the workers because employees in such business receive
a family feel. The employees are given the maximum authority to perform their job
responsibility in a timely manner. This mean even though employees tend to work under
family culture but employees are treated ass the family members. However, the major
disadvantages of such culture is the expected barrier in business expansion and employee
base is limited. Thus, it is highly necessary for the leaders to bring in new changes and make
the business sustainable. In addition, the findings of the literature also mention the fact that
the leaders should take the responsibility of setting goals, guiding team discussion as well as
making the financial decisions bit the leaders must have to acknowledge the fact that co-
workers can have valuable insight into a managerial function. Thu, leaders consult them
when required. Consequently, the leaders can gain creative input and fresh ideas that may not
usually come up when the leader works alone in a business. Thus, when the leader is
supposed to apply new ideas or ways of operating the business, he/he should be aware of the
fact that the process could become dangerously slow if the leader involves the team member

42DISSERTATION
in every business decision. So, the leader needs to judge carefully about the moment of
adopting an autocratic approach.
2.Do you think that the organizational culture help in terms of performance
improvement?
30%
34%
16%
20%
Chart Title
Strongly Agree
Agree
Disagree
Strongly Disagree
Graph 3: Organizational culture contributing to performance improvement
Findings and Analysis
The graph presented above helps to observe the fact that almost 34% of the
respondents agree with the fact that organisational culture can positively contribute to
organizational performance development. Likewise, almost 30% of the respondents have
mentioned that that organizational culture has a strong influence on the performance. On the
other side, almost 16% of the residents have mentioned that organisational culture has no
influence on organizational performance and almost 20% of the respondents strongly with the
fact.

43DISSERTATION
According to Bohušová and Blašková (2013) organizational performance depends on
several factors including leadership, workforce capability and organisational culture. The
authors have also mentioned that if the culture of the organization is not aligned with the
work purpose and organizational goals, the employees often get distracted from the flow of
operation. In addition, the culture of the organizations may have a strong impact on the
performance when the employees tend to work towards the organizational goals and mission.
However, receiving a desired output from employees could be challenging if employees
needs and demands are not met adequately. Employees lack motivation when they do not
receive adequate benefits from their employer. In addition to this, leaders contribute or play a
great role in managing or developing the organizational culture. According to findings of the
existing papers, there could be many situations where, due to improper leadership style,
employees are not able to deal with the work challenges and workplace issues remain
undiscovered and unresolved. Therefore, when developing an organizational culture for the
betterment, the employer must align leadership, employee motivation with organizational
goals.
3.Leaders are interested in providing incentives that can motivate employees towards
accomplishing their assigned task?

44DISSERTATION
24%
30%
26%
20%
Chart Title
Strongly Agree
Agree
Disagree
Strongly Disagree
Graph 4: Leaders’ initiatives motivating in employees
Findings and Analysis
The graph and table help to observe that almost 24% of the respondents have
mentioned that incentives structure can help to motivate employees with respect to
accomplishment of tasks and similarly almost 30% of the respondents also have the same
opinion about the context. However, almost 26% of the respondents have a contradictory
view about the fact while 20% of the total respondents strongly disagree with the context.
A study performed by Belias and Koustelios (2014) indicates that employee
motivation is a significant factor contributing to the overall organizational development.
Thus, employee incentives and pay structure are also the significant elements which must be
included in employee motivation approaches. According to Herzberg’s two factor theory, pay
structure should be adequate as well as reasonable enough and it should be equal and
competitive to others in the same industry (Sinha and Trivedi 2014). When the organisation
demand additional output from the employees, it is certain that employee want the same in
return. Moreover, when the employees are provided with appropriate monetary and non-

45DISSERTATION
monetary benefits, they become more responsible towards their job responsibilities.
Particularly, in the cottage industry, business is generally constrained in a small workforce
where each member in the team is having a large set of responsibilities. So, when the
employees are not paid off the required benefits, the employers may have to face the negative
consequences such as poor productivity, limited growth and high employee turnover.
Therefore, it can be mentioned that incentives and other additional pays can have a positive
impact on the employees which can be reflected on employee performance and organization’s
overall productivity. In addition to this implication, some other case examples found in the
literature indicate that leaders alone usually do not take this responsibility of designing the
pay structure or the incentive policies, which means when designing the same, corporate or
industry policies are incorporated. However, in the case of cottage industry, leaders and
managers themselves make their own policies.
4. The company policy, job profile and work environment are motivating factors within
the workplace?
38%
22%
22%
18%
Chart Title
Strongly Agree
Agree
Disagree
Strongly Disagree

46DISSERTATION
Graph 5: Motivational factors
Findings and Analysis
Almost 38% of the respondents have mentioned that work environment, job
environment and company policy are the significant motivational factors often influencing
the employees and likewise, almost 22% of the respondents have the similar view on this
context. On the other side, almost 18% of the respondents have mentioned that job profile,
work environment, do not fall under the category of motivational factors. Likewise, almost
22% of the total respondent have this same contradictory view about the context.
Even though, the data points mention about some particular factors as the motivation
but the literature has a broad view about motivation. According Raziq and Maulabakhsh,
(2015) work environment, to some extent, motivate employees about the job and their work
responsibilities but work profile does not have any direct influence on motivation.
Employees get motivated when they receive proper amount of benefits including both
monetary and non-monetary but job profile remain as the core organizational function which
is not related to employee motivation (Işcan, Ersarı and Naktiyok 2014). Notwithstanding,
work environment is a part of employee motivational factor; this means if the employees get
to work in a healthy culture – such as open communication style, they start spending more
time on work.

47DISSERTATION
CHAPTER 5: CONCLUSION AND RECOMMENDATION
5.0 Conclusion
The chapter sums up the information gathered from the literature study as well as the
primary data collection process. The study explores the impacts of the external and internal
business environment on SMEs in Tobago. With the special reference of the Cottage
industry, the study explored the business process undertaken to achieve the competitiveness.
This chapter of the study will identify whether the information obtained through the literature
study and the primary data collection process has met the predetermined objectives or not.
The links would be created between the objectives, literature, and the primary data collection
result. Based on this assessment, the preferable recommendations will also be provided. The
future scope of the research will be discussed to understanding the relevancy of this entire
research process.
5.1 Linking objectives with the literature and primary data
Objective 1: To analyse the recent impact of small and medium size enterprise in
Tobago
Small and medium sized enterprises have been struggling with the challenging
business environment. Especially, in the post globalisation era, the SMEs are competing with
the larger firms. The larger firms have the adequate capital and human resources for
developing the business operations. The small and medium sized organisations need to focus
more on the human resources and the operational activities for participating in this
competitive landscape. It is noticeable that the SMEs have to deal with the continuous forces
from both the external and internal environment. The information gathered from the literature
study indicates the challenges from the government rules and regulations on business
practices of the SMEs have the significant impact on the business operations. The primary

48DISSERTATION
questionnaire also reflects that SMEs often face the challenging situations due to the rules
and policies imposed by the government. The government rules and organisational structure
in the SMEs in Tobago also have the considerable impact in such context. Therefore, the
objective of analysing the impacts created on the SMEs in Tobago is achieved in this research
study.
Objective 2: To evaluate the role of internal and external forces in SMEs development
in the nation
The internal and external business segments have the significant impact on the
business operations. Considering the current competition in the business world, it can be
inferred that the business companies need to concentrate more on the innovative business
practices for gaining competitive advantage. Especially, SMEs need to pay attention towards
both of the internal and external environment. As stated in the literature review, small
business have lower productivity compared to the larger ones as reflected in comparatively
lower wages and fringe benefits by the small business owners to their employees compared to
the large organizations. Therefore, it is necessary to identify the opportunistic scenario that
can turn out to be much profitable for the upcoming future. On the other hand, he literature
study also states that identification of the internal strengths and weaknesses determine
whether the company has the capability to participate in a competitive environment.
Evaluating the internal strengths and opportunities create the more sustainable position in a
competitive landscape. It also evaluates the business potentiality to deal with the constant
competitions from the external market.
The information obtained from the primary data collection process indicates that the
development of the internal operational activities and segments help in dealing with the
challenges from the external market. The development of the effective leadership skills and

49DISSERTATION
skilled human resource management can be helpful in such context. The leaders take the
responsibility of making manageable mutual acceptance a significant priority to make sure
everyone in the team has taken part in the task. It is also notified that the organization has a
firm belief that sharing responsibilities among the team members often help to enhance the
organizational productivity. Hence, coordinating with the associated human resources will be
effective enough to deal with the external competitions. Therefore, it is proved that the
external and internal environment create the significant impact on the business functionalities
of the SMEs. The objective for this segment is thus achieved.
Objective 3: To analyse the future scope for SMEs in Tobago
The discussion in this research study explores the idea of the business operations
undertaken by the SMEs. It is noticeable that the SMEs have been dealing with both the
internal and external business forces that are much challenging for them to sustain their
competitive position. However, the ideas obtained from the literature study indicate that the
SMEs in Tobago have been adopting more innovative approaches for strengthening their
competitive position. On the other hand, it is also noticeable that the development of the
efficiency level of the human resources will be helpful enough in driving the innovative
practices within the business organisation. The data collected from the survey process also
indicates that the leaders have been focusing on developing more innovative approaches to
motivate the employees and enhancing their performance level. Primary research process also
highlights that the overall ranking of Trinidad and Tobago increased by12 spots over the
previous year which makes the nation one of the top 10 most enhanced.
The ideas derived from the literature study and the primary data collection process
develops the idea of the future prospects of the SMEs in Tobago. The business potentiality to
compete in a challenging scenario is quite remarkable. While many small and medium size

50DISSERTATION
firms have adopted technology in their operation to speed up the growth of the operation,
businesses in the cottage sector are still following the existing trends of managing operation.
Therefore, it can be inferred that the objective is stated through the research done on literature
review and primary data collection process.
5.2 Recommendations
The study explores the ideas of the impacts created by the internal and external
environment on SMEs. The study explained the challenges faced by the SMEs in Tobago.
Identifying the challenges observed in the primary and secondary researches, the following
recommendations are provided:
 It is noticeable that if any cultural change is required to be implemented in the coming
years, technology implantation should come first in the priority order. Therefore, the
business leaders need to collaborate with the associated employees to develop the
better work culture. It will help in participating in a competitive business scenario.
The leaders need to develop the communicational transparency to convey the needs
and demands of the external market. It will enhance the performance parameter,
which eventually lead towards business success.
 The SMEs need to concentrate on the futuristic development. Considering the internal
and external forces that have the clear impact on the business functionalities, it can be
stated that the leaders need to undertake more innovative approaches. Especially, in
order to compete with the larger firms in Tobago, the SMEs need to concentrate on
the innovative business operations.
 Development of the internal business operations is much helpful in responding to the
external forces. The SMEs need to collaborate with the government rules and
regulations to sustain the competitive position in a challenging business scenario.

51DISSERTATION
Creating more opportunistic segments would be helpful enough in maintaining the
competitiveness more specifically.
5.3 Limitation
Conducting the entire research is not an easier process for a researcher. Many of the concerns
are encountered in gathering the adequate data. The first limitation identified in this research
is the time constraints. If the time boundary were eliminated, more information could have
been included in this specific research process. On the other hand, there is no appropriate
source of validating the sources used for this research study. The lack of relevant sources of
ensuring authenticity of the data is thus considered as an observable limitation. Moreover, the
biased responses of the participants created the significant barriers in analysing the data
appropriately. Therefore, these constraints made the study quite limited.
5.4 Future scope of the study
The information derived from the literature review and the primary data collection
process can be used as secondary information for the similar research study in future. The
information will help in strengthening the analytical skills to create in-depth analysis of the
subject matter. The way of data collection method would be presented more accurately in
future. While conducting the entire study the researcher would like to focus on extending the
time schedule so that the data and information can be gathered more effective way. On the
other hand, extended time schedule is more effective in conducting the entire study in a
systematic manner.

52DISSERTATION
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Appendices
Interview Questions for the Managers
1. How do you tend to manage cultural change over the next three years?
………………………………………………………………………………
2. How do you plan to bring in organizational transition in Tobago cottage
industry?
………………………………………………………………………………
3. How leadership style followed within the organization help you in increasing
employee motivation?
………………………………………………………………………………
Questionnaire for Employees
1. Do you think that the leaders in cottage industry can introduce new ways of
thinking to bring in organizational change?
Strongly Agree Agree Disagree Strongly Disagree
2. Do you think that the organizational culture help in terms of performance
improvement?
Strongly Agree Agree Disagree Strongly Disagree
3. Leaders are interested in providing incentives that can motivate employees
towards accomplishing their assigned task?
Strongly Agree Agree Disagree Strongly Disagree
4. The company policy, job profile and work environment are motivating factors
within the workplace?
Strongly Agree Agree Disagree Strongly Disagree

59DISSERTATION
5. Do you feel that employees adjust to the changing priorities in the cottage
industry based companies?
Strongly Agree Agree Disagree Strongly Disagree
6. Management actively attains input from employees before certain vital decisions
are made
Strongly Agree Agree Disagree Strongly Disagree
7. Organizational structure change that has been made have been successful
Strongly Agree Agree Disagree Strongly Disagree
8. The organization is very supportive of change
Strongly Agree Agree Disagree Strongly Disagree
9. I feel that certain positive changes might result from continuous improvement
process in companies
Strongly Agree Agree Disagree Strongly Disagree
10. The company accomplishes an excellent job in keeping employees informed
regarding matters affecting them
Strongly Agree Agree Disagree Strongly Disagree
11. I understand the importance of value diversity and respect the value of
differences in race, gender, age, etc
Strongly Agree Agree Disagree Strongly Disagree
12. I have a clear path for career development and promotion within the company
Strongly Agree Agree Disagree Strongly Disagree
13. The company provides with necessary tools, technologies and support to perform
job at its best
Strongly Agree Agree Disagree Strongly Disagree
14. I feel that the work is distributed equally across the team

60DISSERTATION
Strongly Agree Agree Disagree Strongly Disagree
15. The feedback provided by the employees are valued by the managers in the
organization
Strongly Agree Agree Disagree Strongly Disagree
16. The company has set high ethical standards for the behaviour of employees
among them and I hold myself to such standards
Strongly Agree Agree Disagree Strongly Disagree
17. The mangers lead, share, encourage and stimulate the team members to develop
and grow professionally
Strongly Agree Agree Disagree Strongly Disagree
18. In complex situations, leaders must allow the subordinates work problems out in
their own
Strongly Agree Agree Disagree Strongly Disagree
19. Offering guidance without pressure serves as a major aspect of becoming a good
leader
Strongly Agree Agree Disagree Strongly Disagree
20. Leaders offer chances to the subordinates to appraise their own work
Strongly Agree Agree Disagree Strongly Disagree
21. I feel that the leadership style followed within the company is effective enough on
enhancing employee morale and organizational performance
Strongly Agree Agree Disagree Strongly Disagree
22. Democratic leadership style mostly followed in the cottage industry
organizations have positive impact on employee performance
Strongly Agree Agree Disagree Strongly Disagree

61DISSERTATION
23. Ideal working conditions and different types of recognition are provided by
supervisors
Strongly Agree Agree Disagree Strongly Disagree
24. I am being fairly paid in comparison to others and I am satisfied with my
current salary level
Strongly Agree Agree Disagree Strongly Disagree
25. The organizational culture and management style in the company is
characterised by consensus, teamwork and participation
Strongly Agree Agree Disagree Strongly Disagree

62DISSERTATION
Quantitative Data (Transcript)
1.Do you think that the leaders in cottage industry can introduce new ways of
thinking to bring in organizational change?
Strongly Agree 13 26% 50
Agree 17 34% 50
Disagree 11 22% 50
Strongly Disagree 9 18% 50
2.Do you think that the organizational culture help in terms of performance
improvement?
Strongly Agree 15 30% 50
Agree 17 34% 50
Disagree 8 16% 50
Strongly Disagree 10 20% 50
3.Leaders are interested in providing incentives that can motivate employees towards
accomplishing their assigned task?
1. Strongly
Agree
12 24% 50
Agree 15 30% 50
Disagree 13 26% 50
Strongly Disagree 10 20% 50

63DISSERTATION
4. The company policy, job profile and work environment are motivating factors within
the workplace?
Strongly Agree 19 38% 50
Agree 11 22% 50
Disagree 11 22% 50
Strongly Disagree 9 18% 50
5. Do you feel that employees adjust to the changing priorities in the cottage
industry based companies?
Strongly Agree 17 34% 50
Agree 13 26% 50
Disagree 12 24% 50
Strongly Disagree 8 16% 50
6. Management actively attains input from employees before certain vital decisions
are made?
Strongly Agree 19 38% 50
Agree 11 22% 50
Disagree 14 28% 50
Strongly Disagree 6 12% 50
7. Organizational structure change that has been made have been successful?
Strongly Agree 13 26% 50
Agree 17 34% 50

64DISSERTATION
Disagree 11 22% 50
Strongly Disagree 9 18% 50
8. The organization is very supportive towards change
Strongly Agree 11 22% 50
Agree 18 36% 50
Disagree 13 26% 50
Strongly Disagree 8 16% 50
9. I feel that certain positive changes might result from continuous improvement
process in companies?
Strongly Agree 14 28% 50
Agree 12 24% 50
Disagree 11 22% 50
Strongly Disagree 13 26% 50
10. The company accomplishes an excellent job in keeping employees informed
regarding matters affecting them?
Strongly Agree 11 22% 50
Agree 9 18% 50
Disagree 16 32% 50
Strongly Disagree 14 28% 50

65DISSERTATION
11. I understand the importance of value diversity and respect the value of
differences in race, gender, age, etc
Strongly Agree 13 26% 50
Agree 14 28% 50
Disagree 12 24% 50
Strongly Disagree 11 22% 50
12. I have a clear path for career development and promotion within the company
Strongly Agree 11 22% 50
Agree 9 18% 50
Disagree 17 34% 50
Strongly Disagree 13 26% 50
13. The company provides with necessary tools, technologies and support to perform
job at its best?
Strongly Agree 11 22% 50
Agree 7 14% 50
Disagree 12 24% 50
Strongly Disagree 20 40% 50
14. I feel that the work is distributed equally across the team?
Strongly Agree 15 30% 50
Agree 17 34% 50

66DISSERTATION
Disagree 8 16% 50
Strongly Disagree 10 20% 50
15. The feedback provided by the employees are valued by the managers in the
organization
Strongly Agree 12 24% 50
Agree 10 20% 50
Disagree 15 30% 50
Strongly Disagree 13 26% 50
16. The company has set high ethical standards for the behaviour of employees
among them and I hold myself to such standards?
Strongly Agree 16 32% 50
Agree 13 26% 50
Disagree 11 22% 50
Strongly Disagree 9 18% 50
17. The mangers lead, share, encourage and stimulate the team members to develop
and grow professionally?
Strongly Agree 9 18% 50
Agree 12 24% 50
Disagree 14 28% 50

67DISSERTATION
Strongly Disagree 15 30% 50
18. In complex situations, leaders must allow the subordinates work problems out in
their own?
Strongly Agree 10 20% 50
Agree 13 26% 50
Disagree 12 24% 50
Strongly Disagree 15 30% 50
19. Offering guidance without pressure serves as a major aspect of becoming a good
leader?
Strongly Agree 17 34% 50
Agree 13 26% 50
Disagree 11 22% 50
Strongly Disagree 9 18% 50
20. Leaders offer chances to the subordinates to appraise their own work
Strongly Agree 18 36% 50
Agree 14 28% 50
Disagree 8 16% 50
Strongly Disagree 10 20% 50

68DISSERTATION
21. I feel that the leadership style followed within the company is effective enough on
enhancing employee morale and organizational performance?
Strongly Agree 18 36% 50
Agree 12 24% 50
Disagree 11 16% 50
Strongly Disagree 9 20% 50
22. Democratic leadership style mostly followed in the cottage industry
organizations have positive impact on employee performance?
Strongly Agree 20 40% 50
Agree 11 22% 50
Disagree 9 18% 50
Strongly Disagree 10 20% 50
23. Ideal working conditions and different types of recognition are provided by
supervisors?
Strongly Agree 12 24% 50
Agree 9 18% 50
Disagree 14 28% 50
Strongly Disagree 15 30% 50
24. I am being fairly paid in comparison to others and I am satisfied with my
current salary level?

69DISSERTATION
Strongly Agree 12 24% 50
Agree 9 18% 50
Disagree 14 28% 50
Strongly Disagree 15 30% 50
25. The organizational culture and management style in the company is
characterised by leadership, motivation and culture
Strongly Agree 16 32% 50
Agree 13 26% 50
Disagree 11 22% 50
Strongly Disagree 9 18% 50
Transcript (Qualitative Data)
1. How do you tend to manage cultural change over the next three years?
Cottage industry is one such industry in the recent time that have observed a dynamic
marketing environment where market needs and demands are rapidly changing as the
trend. Thus, it is certain that implementation of change remain as the opportunity for
business growth”
2. How do you plan to bring in organizational transition in Tobago cottage
industry?
“The most general influencer to determine success or failure of change initiatives is
people”.

70DISSERTATION
3. How leadership style followed within the organization help you in increasing
employee motivation?
“The organization has a firm belief that sharing responsibilities among the team members
often help to enhance the organizational productivity”