美国essay写作-美国essay指导，Small Business – Size as a Chance or HandicapThe sector of small and medium sized businesses (SMEs) is an important factor in most economies. In Germany, for instance, there are 3.2 million SMEs (1999). These are 99.3 %of all enterprises subject to VAT. These SMEs generate 44.8 % of the total turnover subjectto VAT. SMEs carry out 46.0 % of gross investments; hence contribute significantly to totaldemand.SMEs have a good reputation for their ability to innovate and for their close customerrelationships. Smaller businesses, however, have some disadvantages that make it difficultfor them to compete with the large players in their industry. This article analyses theadvantages and disadvantages that result from the smaller size of an organisation.What is small?In order to describe the strengths and weaknesses of SMEs, it is necessary to determine,what actually a small or medium sized business is.Literature, political and non-governmental institutions provide a wide range of definitions ofthe term “Small and Medium sized Enterprises” . Just the word “Small and Medium” indicatesthat most definitions use the companies’ size to distinguish between SMEs and largercorporations. Amongst these quantitative elements is the number of employees the mostcommon one.The following examples indicate the range of descriptions for the term SME.Most quantitative definitions refer to the number of employees; some also include size limitsby turnover and balance sheet total.Definition by Micro Enterprise Small Enterprise Medium EnterpriseNo. of employeesUS Small Business Administration1 – 19 20 – 99 100 – 499UK Department ofTrade and Industry1 – 9 10 – 49 50 – 249Eurostat 1 – 9 10 – 99 100 – 499Definition by CriteriaSmall Enterprise Medium EnterpriseNo. of employees 50 250Turnover in Mio ECU 7.0 40.0EuropeanCommissionBalance Sheet Total in Mio ECU 5.0 27.0No. of employees 50 250Turnover in Mio € 5.4 21.7HGBBalance Sheet Total in Mio € 2.7 10.7IfM Bonn No. of employees 1 – 9 10 – 499Turnover in Mio € 0.5 51.1Figure 1 Examples of quantitative definitions of SMEsAll quantitative criteria should be used with care. It is especially important to take intoconsideration industry-specific differences. A car dealer with 250 employees is large,compared to the average car dealer. A car manufacturer with 250 employees, however,would be considered a small player. The criteria of balance sheet total and annual turnovermight be useful for statistical reasons. Nevertheless they provide little information about the#p#分页标题#e#- 2 -© Dagmar Recklies, March 2001financial power of the organisation. Nevertheless, it is especially the lack of financial powerthat puts smaller businesses at disadvantage compared with their larger competitors. A moresuitable measure would be cash flow. This, however, is even more than balance sheet totaland turnover subject of individual accounting policies.The qualitative definitions focus at special characteristics of SMEs that distinguish them fromlarger corporations. Similar to the quantitative definitions, a variety of qualitative definitionscan be found. The element that is common in most of them is the strong linkage betweenenterprise and owner. Examples of quantitative definitions are:Committee for Economic Development (US):A small business has at least two of the following features:· Management is independent, since the manager usually owns the business.· Capital is supplied and ownership is held by an individual or a few individuals· The area of operations is primarily local, although the market isn’t necessarily local.· The business is small in comparison with the larger competitors in its industry.US Congress (Small Business Act 1953):A small business is one that is independently owned and operated and is not dominant in itsfield of operation.(Both derived from Megginson et al,1997)Hauser (2000) gives the following quantitative factors:· the identity of ownership and personal responsibility for the enterprise’s activities· the identity of ownership and personal liability for the entrepreneur’s and the enterprise’sfinancial situation· the personal responsibility for the enterprise’s success or failure and· the personal relationship between employer and employeesThe definition of the European Commission (1996) also includes the element ofindependence. It states that an enterprise is an SME only if it is not owned by more than25 % by a large enterprise.In summary, the most common qualitative element in definitions for SMEs is the independentownership, mostly by an individual, a family or a small group of individuals. Other criteria asnon-dominance in its industry or relative size compared to other players in the industry canbe critiqued. They ignore that many successful SMEs are highly specialised niche players,which often dominate their special niche of the market or their special industry segment.Such criteria would necessarily require defining the scope of the industry hence include moresubjective elements.- 3 -© Dagmar Recklies, March 2001Small Business or Entrepreneurial Business?The terms small business and entrepreneurial business are sometimes usedinterchangeably. Although small and entrepreneurial businesses may be one and the same,#p#分页标题#e#the terms stand for different concepts. Megginson at al (1997) distinguish as follows.The principal objectives for an entrepreneurial business are profitability and growth. Thebusiness is characterised by innovative strategic practices and/or products. The entrepreneurstarts and manages a business for reasons as achievement, rapid growth, immediate andhigh profits and – partly – quick sell-outs.A small business, which is not entrepreneurial, may never grow large. It expects normalsales, profits and growth to stay in business. The owners often prefer a more relaxed andless aggressive approach to running their business. Their principal purpose is furtheringpersonal goals.In the result, SMEs may or may not be entrepreneurial, whereas entrepreneurial businessescan be SMEs or large corporations. Hence, the degree of entrepreneurial sprit in an SME islargely determined by the intentions of the owners. Bridge (1980) has grouped them intothree categories.Life-style · Often run by an individual· Facilitates and is part of the life-style the individual wants to have· Frequently found in arts or crafts, where the owner lives to practice thecraft rather than practices the craft in order to live· Basis of business is more important than the level of return it canprovideComfort Zone · Provides the owner with sufficient level of returns for the level of comforthe wants in life· Level of benefit the business can provide in return for a reasonableamount of effort is more important than the basis of businessGrowth · Owners wish to manage the business to maximise its earning potential,especially for the futureFigure 2 Groups of SMEs according to owners’ intentionsHence, those owners that have growth intentions for their businesses are more likely todevelop really entrepreneurial behaviour, which is characterised by the ability to create andsustain competitiveness through innovation.Strengths and Weaknesses of SMEsIn order to compete successfully with larger players, many SMEs have developedcharacteristic competences as· Close relationships with customers,· Continuous innovation,· A narrow market focus or niche strategies that allow them to specialise and excel in theirfields, and· Selected and motivated employees.- 4 -© Dagmar Recklies, March 2001The special strengths and weaknesses of SMEs that distinguish them from larger companiesare mainly determined by their typical characteristics. The most influential ones areownership, structures and size, which all have positive and negative effects.Due to their size and number of employees many SMEs have simple structures andsystems. Mintzberg (1999) describes simple structures as follows: “… it has little or no staff,#p#分页标题#e#a loose division of labour and a small managerial hierarchy. Little of its activity is formalised,and it makes minimal use of planning procedures or training routines. … Power tends tofocus on the chief executive, who exercises a high formal profile. … The creation of strategyis, of course, the responsibility of the chief executive, the process tending to be highlyintuitive.”These simple centralised systems facilitate flexibility and shorter reaction times. They are thebasis for SMEs’ ability to adapt quickly to changes in their environment. However, thesesystems are often based on the owner’s personal experience and less on objective reasons.Hence they often remain unchanged, even if circumstances would require other structuresand systems. The whole strategic direction is often completely dependent from one individualor a small group of individuals over a long period of time.SMEs are defined as independently owned, mostly by families, individuals or smallgroups of individuals. Kets de Vries (1993) states the following advantages anddisadvantages of family-owned businesses. Those are relevant to other individually ownedbusinesses as well.Positive Aspects Negative Aspects· Long-term perspective · Static thinking· Dependable culture that encourages longlastingrelationships with all businesspartners· Managerial difficulties when familyobjectives and business objectives are inconflict· Strong identification/commitment, stability · Less access to capital markets· Knowing the business · Nepotism· Family culture as a source of pride, greaterresilience in hard times· Succession problemsFigure 3 Advantages and disadvantages of family owned businessesThe issue of nepotism indicates that the overall stable relationships small businessesdevelop with their partners can turn into a weakness when they favour only relatives andfriends. This can make it very difficult for outsiders to come into the business, hence makes itmore difficult to attract outside expertise and professional management.The relatively small size of SMEs often leads to disadvantages in economies of scale.Hauser (2000) points out that this small size leads to one of the SMEs greatest strengths –their ability to offer customised and specialised goods and services. This, however, impliesthat many SMEs cannot make use of cost advantages in mass production. Furthermore,some types of costs are not variable in relationship with company size. Examples aredevices for environmental protection (e.g. gas cleaning equipment), which are often underutilisedin smaller companies, or R&D costs. R&D as the basis for SMEs’ strength ininnovation and flexibility has to be undertaken on a certain minimum scale in order to lead to#p#分页标题#e#- 5 -© Dagmar Recklies, March 2001results. In the result of lower sales and not down-sizable costs, SMEs often incur a higherproportion of fixed costs compared to larger corporations.The sum of issues illustrated above leads to a major problem for many SMEs: a lack ofresources. This comprises financial and personnel resources.SMEs have limited access to capital markets, due to owner-preferences and minimumrequirements of capital markets. Hence they are heavily reliant on bank loans and the – oftenlimited – financial means of their owners. In addition, Hauser (2000) notices, that althoughsmaller companies tend to have a higher turnover yield, larger corporations are in a betterposition to cover temporary losses. They normally have much higher financial and nonoperationalincomes and a better equity capitalisation. In the result, SMEs tend to have moredifficulties to finance investments or R&D projects.Limitations in personnel resources are relevant to management and functional experts. Inboth areas, SMEs often lack the financial resources to hire experienced specialists. Oftencompanies are too small to fully utilise a person solely employed for marketing or IT etc.Hence, other members of staff have to take over these functions, although they are notnecessarily qualified for this. The simple, less fixed structures facilitate such cross-functionalworking. The result is not only a lack of experience but also a lack of capacity in manpower,especially for one-off projects. A special problem for owner-managed enterprises is to getoutside management expertise into the company. Even if the owner is willing to share taskswith outsiders, such functions are often not attractive due to the dominance of the owner. Inthe result many companies rely solely on the owners knowledge and vision, which might belimited to his experience.Many SMEs are very much focused on the person of the owner. The businesses’ successand market position depend on the vision and the entrepreneurial talent of these persons. Awell managed small or medium sized business may be able to overcome size-specificproblems of resources by implementing and intelligent outsourcing strategy, by focussing onfew core competencies and by developing a motivating corporate culture.SummaryThere is no doubt that SMEs face some special problems that are not an issue for largerorganisations. Small size, however, is not necessary equal to disadvantages and problems.Many SMEs are much more flexible than their large counterparts, which have to meet a greatvariety of expectations and interests from various stakeholders when it comes to changes.Simple structures and few levels of hierarchy encourage a motivating community-like cultureand a steady knowledge transfer between all members of the organisation. The stable#p#分页标题#e#relationships with suppliers and customers that many SMEs have developed over years,provide a degree of continuity. Small businesses can form ad hoc partnerships, cooperationsand networks with other businesses in order to work on a particular project.- 6 -© Dagmar Recklies, March 2001Moreover, SMEs are famous for their successful niche strategies. Businesses with such astrategy operate in particular market segments. Due to this specialisation the business canperfectly serve this market. However, due to the limited market volume, these segments arefairly unattractive for larger players. In the result, the small niche player does not face asignificant competition. http://www.ukassignment.org/mgessaydx/Thus it obvious that the special characteristics of small and medium sized enterprises do notonly cause problems, but also a variety of opportunities. The most important precondition forsuccessful exploitation of these opportunities is a qualified management. It is themanagements task to make the best out of the strengths in order to overcome theweaknesses.Literature / ReferencesBridge, S. 1980. Understanding Enterprise, Entrepreneurship and Small Business. London:MacMillan Business.Hauser, H.-E. 2000. SMEs in Germany. Facts and Figures 2000. IfM Institut fürMittelstandsforschung Bonn, available under www.ifm-bonn.de/ergebnis/sme.zip.Kets de Vries, M.F.R. 1993. The dynamics of family controlled firms: The good and the badnews. Organisational Dynamics. 21(3) S. 59 ff.Mintzberg, H. 1999. The entrepreneurial organisation. In: Mintzberg, H., Quinn J.B.,美国essay写作-美国essay指导Ghosshal S. (Hrsg.). The strategy process. London: Prentice Hall.