An Investigation into the Current Success Factors for Small and Medium Essay

An Investigation into the Current Success Factors for Small and Medium Enterprises (SMEs) in Thailand - Essay Example The type of businesses involved in this study is small and medium business enterprises (SMEs), which are characterized by being relatively smaller than larger enterprises (LEs) in terms of the number of employees or amount of fixed assets. The geographical region in focus is the country of Thailand in South East Asia. A range of different types of SMEs will be included from various sectors so that the findings are representative of Thai SMEs in general. Thus, it includes the production, wholesale and retail sectors. We shall adopt the classification of SMEs as defined by the Thai Institute for Small and Medium Enterprises Development (ISMED, 2010) as follows: Enterprises in the production/service sectors: no more than 200 employees or no more than Baht 200 million in fixed assets. Enterprises in the wholesale trading sectors: no more than 50 employees or no more than Baht 100 million in fixed assets. Enterprises in the retail sectors: no more than 30 employees or no more than Baht 60 million in fixed assets. Similarly, the study will not be confined to SMEs in a particular area of Thailand because that would not necessarily be representative of Thai SMEs. ... These are primarily related to the areas of administration, management, finance, technology, human resources, and marketing (Garengo, and Bernardi, 2007). For example, the problem of gaining access to sources of funding is very common. Often, SMEs are unaware of potential sources of finance, lack the management skills to satisfy lenders, and are unable to meet lenders’ rigorous assessment criteria and screening process (Atrill, 2006). Even then, SMEs are often not able to receive sufficient access to credit, as do LEs. The nature of this particular problem however is not unique to Thai SMEs as it is a similar situation with SMEs elsewhere, even in developed countries such as Europe (European Commission, 2006). Other problems include lack of employee-training (Thassanabanjong et al., 2009), especially in family-owned SMEs (De Lema and Durendez, 2007) an informal approach if not negligible regard to human resource management (HRM), and consequently low productivity (Huang, 2003) . SMEs seeking to grow are often unable to cope with globalization and e-commerce challenges (Tiessen et al., 2001) and in addition have difficulty gaining access to international markets (Worthington & Britton, 2009) and in developing successful growth models to expand regionally or globally (Li & Tan, 2004). Global SMEs looking to expand into Thailand often have difficulty in establishing ties with local networks (McNamara, 2005). Managers of SMEs typically have full responsibility for the organization, so management issues tend to be more acute in SMEs than in LEs where there are typically several tiers of management. In addition, as Kotey (2005) noted, management practices in SMEs tend to be â€Å"informal, unstructured and seldom focus on strategic