SMEs and Marketing: A Literature Review

This literature review explores the internal and external factors that impact micro-small-medium enterprises, specifically examining the effects of management on business performance. It covers topics such as the definition of SMEs, the relationship between organizational culture and supply chain management, the contributions of micro-small enterprises to socio-economic development, and factors affecting employee performance. The review also discusses challenges faced by SMEs and strategies for entrepreneurship development.

Literature Review -
SMEs and Marketing

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Selecting Journals and Articles Analysed..............................................................................1
Analysis of Selected Articles..................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Small-medium entities have played a major part in the overall development and growth of
an economy. These enterprises have a very crucial participant as the backbone and support of the
economies in almost all the countries globally. SMEs has significant contribution to the National
Income, GDP in a huge ratio and it absorbs a larger segment of workforce in any economy.
Enterprises faces various challenges, but it is able to cope up with any market changes and still
persist to sustain themselves in the middle of seizure-conditions in economy. These enterprises
face numerous problems when it comes to their growth aspects, such as inadequacy of funds,
inefficient human resource (HR) capital, rapid changes to modern technology along with many
others. Many researches and findings shows that various factors have an impact on firm's
performance, therefore SMEs need performance measurement indicators to measure it. This
could help these enterprises to maintain, stabilise their existence and illustrate its business by
improving performance. The objective of this research is to asses and develop an concept based
review of literature (LR) on factors that influence the performance of entrepreneurial firms. In
addition the research is estimated to bring an performance evaluation to sustain and raise its
ability. In addition the research will also look to contribute towards an academic proposals of
authors to give an explanation of the facts that affect the working and output of SMEs.
MAIN BODY
Selecting Journals and Articles Analysed
According to the views of Liberto, (2020), Definition of small medium enterprises is not
very clear, but it is generally explained as the businesses that maintains assets, revenues and
number of workers under a limited threshold. AS per the views of Liberto, these enterprises are
small in size but plays an vicious role in the economy of a country (Small and Mid-size
Enterprise. 2020). These enterprises over-right larger sized firms in aspects of their share to GDP
and employees vast number of people and are basically entrepreneurial in behaviour and helps in
innovation and development. In United States there is no such clear definition criteria to identify
small-medium sized enterprises, but small enterprises are having manpower lower than 50
employees and medium sized enterprises have 250 employees. Liberto says that the requirements
for categories differ with the change in nations, and same is with the names and abbreviations.
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The term SMEs is typically addressed by the European Union, the United Nations, and the World
Trade Organisation (WTO), on the other hand in US these are commonly stated as small-to-
medium-sized businesses (SMBs). In other places such as Kenya, they are named as MSME,
short form of micro, small and medium sized entities and in India MSMED, or micro, small,and
medium enterprise development. Despite the variations in nomenclature, almost all countries
have the tendencies to differentiate the enterprises on the basis of their size and labour
composition or structure of the business. Although the SMEs are having different considerations
in the US such as companies with the workforce of not more than 500 people are SMEs, some
businesses runs with 1500 people still identified under this category. Although these enterprises
are considered as the heart of the economy in terms of job generation and GDP contribution the
SMEs still faces problems. The SMEs are supported by the Government incentives while
attracting capital funds, payment of taxes, reach to bank loans, to maintain them in this business.
According to the views of Al-Tit (2017), many studies and researches have been
concluded to explore the effects of organisation's culture and managing supply chain on
organisation's performance in different sectors. The author explained the relationship between
the organisation's culture, supply chain management and organisation's performance. In the
views of Al-Tit, the research on organisation's performance is based upon the its financial or
operational aspects, but there are different factors that have varied effects on organisation's
performance. These factors included the company's risk management, multiple-divisional
structures of organisation, governance, superiors, managerial practices, stakeholders,
innovations and development and many external factors (Factors affecting the organisational
performance of manufacturing firms, 2017). According to authors review organisational culture
means the collaborative values and faiths held by each person that forms the basis for algorithms
of behaviour in resolving problems. The author provides about the impacts of supply chain
performance and organisation's performance using a example of manufacturing and service firms
from Malaysia. Author focuses on proof from China to confirm the plus impacts of supply chain
performance on organisation's performance. Organisation's performance, is measured by market
and financial reports and results and its points to a significant impacts on organisation's
performance. The author's review stated that the supply chain practices exerts positive influences
on organisation's performance. Al-Tit also reviewed about the causes of quality of information
distribution and supplier's and customer's partnership on the organisation's performance of
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industrial firms in France (Seo and Lee, 2019). The author also reviewed the findings, to explore
the factors affecting the monetary and non monetary performance by assessing the implications
of organisation's culture and supply chain on the organisation's performance.
According to the views of Engidwa (2021), The contributions of micro-small enterprises,
MSEs has been recognised all around the world and it helps in reducing poverty. The author
focuses on integrating wealth creation for growth of MSEs which generate wealth and
employment. In the author's views the MSEs accounts for a larger contribution to enterprises
population at various levels of economic and social development of a country (The effects of
external factors on industry performance, 2021). In many countries across the globe mainly in
Africa and Asia, the micro entities industry covers a maximum of working people. Micro-small
enterprises creates the employment opportunities to maximum of the working population and
plays important role in economic development of the working people. Engidwa explains that
many countries of the world, the micro-small enterprises build up highest productions,
employment, equitable distribution of natural resources, income, and help to promote rural
development as well as the export market and connectivity in the country (Kebede and Simesh,
2015). In the author's view, micro-small enterprises in Ethiopia, plays fundamental role in social,
cultural and monetary growth along with serving as engines for eliminating unemployment. It
also helps to improve money creation along the aid of growing the financial boom to the
Governing of Federal Democratic Republic of Ethiopia (GFDRE). According to Engidwa, many
doubts about the quality of administration in this region with policy framing, there exists lacking
in innovation, lack of funds, inadequate market structure, organisational failures, lacking in
human aid management. The author provided the reviews on the findings of different authors as
well followed through their researches in extrinsic and interior things affecting the development
and growth of the entity.
According to the views of Roomi (2021), The objectives of any entrepreneur is to achieve
growth and higher profits, in order to achieve this it is crucial to determine the facts that
contribute to boosts in it. In general views the development of enterprise is a complex procedure,
which is neither linear nor dependent on a few facts. There are various factors which affects
growth such as leader's behaviour and personal traits, business structure and management, etc.
According to the views of Roomi, that are four important areas that they recommend the business
entrepreneurs to pay significant attention to when looking to their business improvement
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(Factors Affecting the Growth of Small Businesses, 2021). First it is explained that the leader's
characteristics such as behaviour, personality and attitude that can have significant impacts on
the growth of the business. The structure of business and management in their decision making
and operational activity will impact the successful development of the business. There are some
external factors that are different from the above mentioned considerations as they can be
controlled but the external factors cannot be controlled. The enterprise growth is sometimes
highly affected by external factors such as changing political, cultural, geographic and economic
scenarios at regional, national, state and local levels. The last factor explained by the author is
Location which affects and impacts the growth opportunities in certain areas. The location
affects the supply chain, costs of production, labour costs, services and legislation of the business
along with many other affluent factors. Roomi says that, only having a growth orientation does
not grantees growth, because there is need to explore and identify market opportunities to have
stronger growth and orientation. There is a need for identifying the most relevant factors for
business growth and exploit them for expansion and growth of the enterprises.
In the views of Elthair (2018), Small and Medium entities have an vital role to cast in the
country's socio-economic development. Small-medium enterprises are considered as a driving
force for future economy and SMEs have grown significantly in the recent years. These are not
only the important drivers of employment generation in the economy it connects the various
areas of the economy as well and significantly contributes to the GDP and national growth
(Factors Affecting the performance and business success of SMEs in Sudan, 2018). Elthair, says
that the small-medium entities are the suppliers in the economy which supplies the goods and
services across the whole economy consisting of the large companies, small businesses to the
urban areas as well as the rural areas. The author described SMEs as the major player while
framing policies, programmes, legislations and effective services for any sector in the economy.
The author reviews the international labour organisation, that there is no universally explained
definition for the small-medium sized enterprises, which helps to provide most effective
mechanism for the economic and social well being. The author explains about the factors that are
both inside and outside the organisation, that influences the continued and successful existence
of the organisation.
In the view points of Periyasamy (2021), enterprises efforts in improving of Employees
efforts is a key to its success. There is no overarching chants about employees performance, its
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all about how business manage, enhance, up-skill and motivate their employees. According to
the SHRM's report more than 85% of employees are not engaged in their workplace, hence, the
businesses needs to find a way to enhance employee engagement to increase employee's
productivity. Periyasamy explains that, the companies struggle to find the answers to certain
questions such as, employee performance, its measurement and factors influencing employee
performance. In the views of the author there are ways to improve employee engagement,
through employee performance management to make employees happy (Employee Performance,
2021). According to their views employees performance can be calculated by the employees
themselves, their managers and the people with whom they work with. The factors that influence
the employees performance are training and development, employee engagement, tools and
equipment, expectations and goals, and many other that may have positive or negative impacts
on them. The primary factors on which the company should focus to improve performance of
employees are training and development to enhance productivity and retention of employees.
Employee engagement is another way that could be done through clarifying goals, providing
right tools, listen to employees and proper guidance that improves their optima. Another thing is
employee performance management to make employees happy to drive company towards higher
user productivity and efficiency. This would enhance company culture by proper planning,
monitoring, developing, rating and rewarding of the employees by giving them job satisfaction,
personal growth, information recognition, promotion, incentives etc.
According to the views of, Hutahayan (2019), SMEs grows quite rapidly in Indonesia,
especially and mostly in Indonesian traditional food services with their variable food flavours
that are distinct to others. There are various external factors that are faced by the enterprises
(Federal Democratic Republic of Ethiopia, 2002). The author explians first problem as the issues
related to the legalities and licensing process and applying fair business competition and regional
autonomy. The second factor determined by the author is related to unstable prices and
macroeconomic conditions that affects the working of the business performance of SMEs. Third
aspect that is disclosed by the author is related to the sources of finance and availability of credit
heavily impacts the running of businesses and development of the small-medium entities and
their recovery from losses. The last is the limited resources that makes the production in the
SMEs to decay gradually leading to their closure. Hutahayan explains that even though these
challenges cannot hinder the development of the small-medium entities in the food business in
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Indonesia. The author also justifies the fact is undeniable fact that the sustainment of entities
heavily depends upon the ability of entrepreneur to tackle challenges, and face competition to
survive and thrive in the market. The author describes that the development in the strategies of
entrepreneurship can be done through creativity and innovation (Factors affecting the
performance of Indonesian special food SMEs in Entrepreneurial orientation in East Java,
2019). It includes the product research and improvement, pricing, promotion, and placing their
produce at the right place that would help to create value and superiority of products in the
market.
Analysis of Selected Articles
The central and main aim and contribution of this research is considerations from the
inadequate knowledge about the SMEs. In comparison to what is known and understood about
the huge entities and inconsistent in the finds of small-medium entities in the growth of countries
and those in the countries that are developing. By increasing the quality of understanding about
small-medium enterprises, precondition can be developed for increasing the level of adapting
changes in already known. The purpose was to align the existing knowledge to the scientific
knowledge for developing effective and efficient small-medium enterprise practices, which is
final aim that could be concluded from the research. The objective of the study is to explore and
discover the internal and external factors that impacts upon the micro-small-medium enterprises.
Specifically the objective of the study are examining the effects of management on businesses
performance, evaluate the effects of workplace factors that affects SMEs and effects of
entrepreneurial factors on the business performance. According to the views of different authors
such as Liberto, definition of SMEs in various countries changes according to the structure and
constitution of the enterprises. Al-Tit, explains their views differently on the impacts of supply
chain management and organisational culture on organisational performance. Engidwa, has its
views on Ethiopia's Industrial development and the requirements of the SMEs to flourish in their
economy. Periyasamy, has its views on the employee performance that significantly influences
the performance of the SMEs and many other authors described about the performance
development and improvement of the small-medium entities.
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CONCLUSION
In the study the most important purpose was the measurement of the effects of interior
and extrinsic variables on the performance of the SMEs. In the study, many parameters
according to the views of many authors are used to evaluate the performance of SMEs. The study
have seven independent variables that demonstrates that entrepreneurial aspects affects the
performance of the enterprises. Therefore, the conclusion recommends that policymakers should
adapt such ways investigating various situations to enhance the performance of enterprises
ventures. The studies provides the ides of commercial development services and enable
entrepreneurs to improve their performance.
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REFERENCES
Books and Journals
Employee Performance, 2021. [Online] Available Through,
<https://www.apty.io/blog/employee-performance-factors>
Factors Affecting the Growth of Small Businesses, 2021. [Online] Available Through,
<https://blog.som.cranfield.ac.uk/bgpblog/factors-affecting-the-growth-of-small-
businesses>
Factors affecting the organisational performance of manufacturing firms, 2017. [Online]
Available Through, <https://journals.sagepub.com/doi/full/10.1177/1847979017712628>
Factors Affecting the performance and business success of SMEs in Sudan, 2018. [Online]
Available Through, <https://www.eajournals.org/wp-content/uploads/Factors-Affecting-
the-Performance-Business-Success-of-Small-Medium-Enterprises-in-Sudan.pdf>
Factors affecting the performance of Indonesian special food SMEs in Entrepreneurial
orientation in East Java, 2019. [Online] Available Through,
<https://www.emerald.com/insight/content/doi/10.1108/APJIE-09-2018-0053/full/html>
Federal Democratic Republic of Ethiopia, 2002. Ministry of Trade and Industry (MTI). Micro
and small enterprises development strategy.
Kebede, M., and Simesh, G., 2015. The impact of environmental factors on the performance of
micro & small-scale enterprises in East Gojjam zone, Ethiopia. International Journal of
Science and Research, 6(3), 1619–1629.
Seo, Y. W., and Lee, Y. H., 2019. Effects of internal and external factors on business
performance of start-ups in South Korea: The engine of new market
dynamics. International Journal of Engineering Business Management., 11,
184797901882423.
Small and Mid-size Enterprise, 2020. [Online] Available Through,
<https://www.investopedia.com/terms/s/smallandmidsizeenterprises.asp>
The effects of external factors on industry performance, 2021. [Online] Available Through,
<https://innovation-entrepreneurship.springeropen.com/articles/10.1186/s13731-021-
00147-7>
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