Comparative analysis of managerial practices in small medium enterprises in Malaysia
Abu Bakar Abdul Hamid
Rohaizat Baharun
Noor Hazarina Hashim
Faculty of Management and Human Resource Development
Universiti Teknologi Malaysia
Abstract
The purpose of this paper is to examine the existing practice in managerial strategic and tools being used and problems faced by local small medium enterprises (SMEs) in the manufacturing sector. With today’s arduous competition, it requires the SMEs to tune its current business practice to cope with the rapid changes in the business environment. Due to the rapid changes, SMEs’ managers need to equip themselves with new knowledge and ideas to promote effective managerial practices. In other
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SMEs would produce quality and high value-added products and services for both the domestic and export markets, as well as contribute significantly to the
Gross Domestic Product; and
d. SMEs would increase productivity through the use of modern technology and management that would increase the SMEs competitiveness in the export market. Review of the literature
The SMEs sector in Malaysia
In Malaysia, The Ministry of International Trade and Industry (MITI) redefined SMEs as: (i) A small scale firm “with less than 50 full-time employees, and with an annual turnover of not more than RM10 million” or
(ii) A medium scale company “with between 51 and 150 employees, and with an annual turnover of between RM10 million and RM25 million”.
In practice, both quantitative and qualitative criteria (Mohd Khairuddin and Syed Azizi
2003) or economic and statistical definition (The Bolton Committee, 1971) are used to define an SME. However, in Malaysia, only quantitative criteria are chosen to define an SME such as the one defined by MITI. In the authors’ opinion, there has been no universally accepted definition of what an SME is and a wide range definition is used.
In research works for SME, majority of SME definition were based on operational definitions (see works for example Dart, Ng and Sarkar, 1990; Mohd. Khairuddin,
2000).
According to Mohd Khairuddin (2000), the SMEs in Malaysia may
Book Report Trimester One-Report #2 Title: The title of my book is The Fourth Stall Part Two, and is the sequel to one of my favorite books of all time. Author: The author of The Fourth Stall Part Two is Chris Rylander, and he has written three books in the Forth Stall series. Genre: The genre of The Fourth Stall Part Two is realistic fiction with a lot of excitement and suspense.
The form of this research thus relies more on quality instead of quantity. The data is obtained from relatively small samples and is normally not analyzed with statistical technique. This type of research is normally to answer ‘how or why’ questions (Yin, 2003). The methods of collecting data sources are mainly interviewing, focus groups, observation and document reviews (Meurer et al., 2007). The main purpose of this kind of research is to gather an in-depth understanding of the phenomenon studied and to describe the situation through detailed information (Adar, 2011). The purpose of this study is to gain insightful information in order to have a better understanding on how internal and external factors influence SME’s in choosing the right market entry mode. Therefore, the author regarded that the qualitative is the most suitable to understand how the factors affecting entry mode choices. In addition, this study has no intention to test statistically
The company will have a middleman role, which connects the suppliers to its clients. There are few economies of scale in place because there is no significant capital investment required and specialised technology is not required. The company will likely encounter other competitors coming into the market when it commences sooner or later. However, its strong brand development achieved by successful and stable customer relationship established will lead to a low threat of new entrants in the market.
b. The biggest socioeconomic programs contain those which have been set up for small-scale companies. Probably the most significant of small-scale company groups designated for preferences are small-scale company issues and small-scale company issues owned and operated by socially and also economically deprived people. Both kinds of companies happen to be given unique position in U.S. Government contracting with the Small Company Act (15 U.S.C. 631 et seq.) (A/OPE, 2011).
Being an SME can be considered a subset of rational persuasion. Managers who possess expert knowledge in a relevant field and who continually build on that knowledge can get others to help them get work accomplished. (DuBrin, 2010)
In addition, existing companies benefit from economies of scale. Overall this threat is assessed at a medium level.
Small businesses were once the backbone of the United States economy. After a time these business owners expanded, merged, and bought other businesses. This historic business trend has created some the well know corporations we know of today. One example would be the development of Wal-mart. Today, small businesses operate in the shadows of “big box” stores. However, small business owners account for more than 90% of, but only less than 5% or 10% of the GDP, “gross domestic product.” As a manager of a large corporation or a prospective business owner it is wise to be knowladgeble of new competitors, state of the economy, and current management trends. There are trends today that will change everyone’s expecatons of small business
The primary motive for most SPEs is off-balance sheet financing, often to avoid reporting capital leases under SFAS No. 13. Under GAAP, companies are able to avoid consolidation of SPEs in which they do not have a majority voting interest. To achieve off-balance sheet treatment, a minimum 10% investment from an independent third-party investor is required, in exchange for which the third-party investor controls the SPE and bears the risk of loss (Schroeder et al., 2005).
In India, about 670 industries are completely reserved for very small companies, which means that the economy lose the benefits of scale, don’t get foreign investments and are unable to compete globally. In 2001, the average Indian clothing company had only 50 machines, compared to 500 in the typical Chinese plant. The same problem
Small businesses are becoming a trend in the work environment today. The analogy of small businesses to large business brings about the question, “Can they eventually equal up in the world
In this case some big companies dominate the whole industry and as a result the small companies
From the report by Yoshino, Taghizadeh-Hesary, Charoensivakorn and Niraula (2015), the activities of SMEs in Thailand within the year 2007 to 2011 constitute to the increased in economy growth accounted for about 37.0% of Thai’s GDP and produces around 80.4% of employment opportunities in Thailand. However, during the same period, reports from Yoshino et al (2015) is that the SMEs in manufacturing sector experience a decrease employment rate for almost 6.2% because of the decrease in the sector’s growth rate. Furthermore, it was reported that the overall SME in Thailand experience a decrease in growth rate of 1% from 8.3% to 7.3% between the year 2010 to 2012.
The writer believes that by the SMEs being closer to the customers, it creates that personal touch and fosters a personal relationship with the
Although there have been numerous schemes and programs in different economic environments, there are a number of distinctive recurring approaches to SME finance.
When operating an SME, having experience in the industry is also vital as it is to better understand operations and the market at a wider perspective. Like Charles and Keith they attained some experience while working at a shoe shop owned by their parents when they were younger this gives them a better understanding of the customers and what kind of shoes they are looking for. It is important to choose the suitable marketing approach and target market is also important. As well as the right resource management so that the correct leadership style, culture, time management, staff motivation is used. The marketing approach used should also be done right so as to reach out to the customers, setting the right price, communicate ideas and to build total product offering. I have also