27C : Survival Of Small Firms

Question 1

What are some reasons for the survival of small firms

Answer 1

• Flexibility : react more quickly to changes in the market

• Lower barriers to entry

• Stronger relationships with customers

Question 2

What are the impacts of SME firms on the economy

Answer 2

• More part time work created

• Increased flexibility : faster decision making by management

• Improved Staff loyalty : relationships between management and staff are assually better in small firms which could improve motivation and productivity