Year: 2003
Type: dissertation
Abstract: The objective of this study was to identify factors affecting small and medium enterprise (SME) performance in peripheral locations.The study was carried out in the field of strategic management.Previous research into business success and failure does not provide a comprehensive explanation for SME performance.Particularly little research has been focused on factors affecting the performance of established SMEs in peripheral regions.The empirical data were primarily based on an extensive mail survey and indepth case interviews.A survey was made of entrepreneurs of 145 successful independent SMEs in Eastern Finland operating in the manufacturing, business services, and tourism sectors.In matched case studies, successful and failed cases were compared.In data analysis, both qualitative and quantitative methods were applied.Analysis of all successful SMEs revealed that they constitute a heterogeneous group with a large variety of characteristics, though they also have some common characteristics.As a result of clustering the successful SMEs according to their growth mode and strategies three distinct clusters emerged: (1) stable independent survivors;(2) innovators with continuous growth; and (3) networkers with leapwise growth.Moreover, the study revealed that SMEs whose existence has never been threatened and those that have sometime encountered such a situation differ in significant ways.Also, there were similarities among failed firms, and among successful firms: some of these were common to all failed or successful firms, while some were cluster specific.It seems that SME performance can be affected by a variety of interrelated factors which should taken into consideration in order to achieve success and to avoid failure in business.The findings suggest that there are several types of successful SMEs.More importantly, the study revealed the different "success formulas", i.e. sets of typical behaviors in each cluster.Comparisons between non-threatened and threatened SMEs and between successful and failed SMEs provided valuable information by increasing our understanding of the factors affecting SME performance.Several theoretical and practical implications are discussed.Nascent and acting entrepreneurs, organizations fostering SME development, financiers, public policy makers, and other stakeholders of SMEs can learn from the results.Suggestions for further research are presented.
Author: Mika Pasanen
Language: English
Topic: Firm Innovation and Growth
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3096969729