SMEs

Question 1

What is an SME?

Answer 1

Small number of employees with low turnover.

Can depend on who is defining them.

Question 2

What is the EU definition of a SMEs?

Answer 2

Micro (<10 employees, <2mil turnover).
Small (<50 employees, <10mil turnover).
Medium (<250 employees, <50mil turnover).

Question 3

Give some UK SME facts:

Answer 3

5.8 million small businesses at the start of 2019.
This is 99.3% of total businesses.
Small business population increased 3.5% 2018-2019.

Question 4

Why are SMEs important in the UK?

Answer 4

They account for 3/5 of employment.
Account for half of turnover in UK.
They demand a variety of other services and products helping other industries grow.

Question 5

How can growth be measured?

Answer 5

Increase in profits/share prices.
Knowledge generation and acquisition.
Scale of operation.
Type of business.

Question 6

What did Greiner and Churchill&Lewis propose?

Answer 6

Growth models.

Seek to describe changes that entrepreneurs face when growing a company and how to manage these changes.

Question 7

What are Churchill Lewis’ growth models’ general concepts?

Answer 7

Formation.
Survival.
Growth.
Maturity.
Resource maturity.

Question 8

What is Greiner’s growth models’ general concepts?

Answer 8

Creativity (crisis of leadership).
Direction (crisis of autonomy).
Delegation (crisis of control).
Coordination and monitoring (crisis of red tape).
Collaboration (crisis of internal growth).
Alliances (crisis of identity).

Brackets indicate the revolutionary step required.

Question 9

What is essential for stakeholders throughout the growth process?

Answer 9

Stakeholders need to see growth expressed quantitatively; this restricts companies in how they grow.

Question 10

What is the Characteristic Approach Model?

Answer 10

Storey said that Greiner and C&L’s models described growth rather than predicted it.
The Characteristic approach model aims to predict growth.

Question 11

What are the 3 characteristics?

Answer 11

Entrepreneur.
Strategy (Positioning and planning).
Company characteristics (Age, type, structure, culture).

Question 12

Is the entrepreneur an important characteristic for a company?

Answer 12

Yes, when Steve Jobs left Apple share prices plummeted to 25% of their value.

Question 13

How can SMEs be helped to grow?

Answer 13

Knowledge transfer/exchange opportunities (conferences etc.).
Training.
Mentoring (from funding partner etc.).
Networks.
Clustering (business parks).
Financial support.

Question 14

What assistance may not be beneficial to growth?

Answer 14

Storey and Westhead found little evidence that formal training improved the performance of small companies.
Personal management development training appears to have no impact on performance.

Gibbs found that SME development depended upon stakeholder interactions.

Question 15

What is a network?

Answer 15

A set of elements (members) connected with each other.
Governments have invested heavily in regional entrepreneurial networks. to promote growth.
Networks are typically most useful in the early stages of growth.

Question 16

What is a cluster?

Answer 16

Geographical concentration of related businesses.

Question 17

What is the Incubator model?

Answer 17

Hughes et al. proposed a model relating Resource Pooling Activity to Strategic Network Involvement. Check powerpoint.

Question 18

How might the impact of government intervention promote innovation?

Answer 18

Employee number.
Turnover.
Productivity.
Legal status.
Location.
Company links.
Export activity.

Question 19

Does government intervention work?

Answer 19

Intervention reduces opportunities to learn.

Governments have standardised approaches which may not fit all circumstances.