Wednesday, May 6, 2020
Factors of Small Business Management
Question: Critically Evaluate the factors which may affect SMEs ability to establish and maintain successful relationships with business customer? Answer: Introduction The report identifies the factors affecting the small and medium sized enterprises to maintain the relationship with the business customers. The small and medium sized organizations play a major role for the economic growth of a country. Customers and the market are the essential factors affecting the business of SMEs (Chittithaworn et al., 2011). Factors affecting SMEs to maintain relationship with Business customers The small and medium sized organizations are organization with simple structures and there is access to limited resources. The factors affecting the organization to maintain successful relationship with the business customers are discussed below. 1. Social cultural background of the SME The personal characteristics of the owner of the business gives rise to error in relationship with the business customers. The failure of the small and medium sized organizations depends on the way the owner of the organization manages the performances of the organization without having social and cultural prejudices.2. Management Inadequacy Inadequacy of the management is one of the major factors affecting the business relationship of the SMEs with the customers. The inexperience of the management and the incompetence hampers the business relationships.3. Impact of globalization Globalization has enlarged the business activities. This has affected the performance of the SMEs in maintaining business relationship. There has been significant rise in the competitive pressure on the SME. It is difficult for the SMEs to adapt to the corporate culture which has adverse impact on their business relations (Factors Affecting E-Business Adoption by S MEs in Sub-Saharan Africa: An Exploratory Study from Nigeria, 2006). Conclusion The economic growth of a country is largely dependent on the performance of the SMEs. They are also the major contributors of the GDP of the country. They face certain issues in maintaining business relationship with customers in the competitive scenario of business. References Chittithaworn, C., Islam, M., Keawchana, T. and Muhd Yusuf, D. (2011). Factors Affecting Business Success of Small Medium Enterprises (SMEs) in Thailand.ASS, 7(5). Factors Affecting E-Business Adoption by SMEs in Sub-Saharan Africa: An Exploratory Study from Nigeria. (2006). 1st ed. [ebook] p.320. Available at: https://www.irma-international.org/viewtitle/18909/ [Accessed 11 Mar. 2015].