Small and Medium enterprises

Fiche de révision partiel SME

International trade :

 Small size doesn’t affect SMEs’ international trade, but limits the scope

 Small size = limited presence in foreign countries

 Vision of Owner/manager is a determinant factor, more than the size

Refusal to trade abroad:

o Ignorance of procedures/cultures

o Risk with export

o No international trade/marketing knowledge

Indifferent:

o Not for/against I.Trade

o Stimuli necessary to provoke outcome

Willing to go international:

o More and more leaders consider going abroad

Leader position towards going international:

o Pressure from competition

o Overstock/overproduction

o Declining local demand/sales or saturated market

o Transportation hub proximity

o Government incentives

Entrepreneurship in Québec and Canada

85% of net jobs created by SMEs

75% CA businesses employ <19 employees

Organizational knowledge ≥ speed of environmental changes

SME = company managed by its owner, less than 500 employees, usually more than 4 employees. Needs to be independent.

Definitions:

Entrepreneurs: bring some innovation

Intrapreneurs: act as entrepreneurs in their organization

Extrapreneurs: intrapreneurs that started

In a VSE, O-L manage and perform most tasks

Autonomous workers: self-employed, usually works alone, often in networks

 Mouse (Survival)

o Small and stable

o Management: continuity and sustainability

 Gazelle (Fast growth)

o Management: innovation, differentiation

and globalization

 Elephant (Conservative)

o Big and not very innovative

o Management: classic management,

focused on control. Intrapreneurs needed

Characteristics of a leader:

 In VSE and SOHO:

o Entrepreneur: adaptable, bootstrapper

o Manager: competence in sales and communication

 In a SE:

o Manager: manages and delegates

o Business person: negotiation, network builder, rain maker (multitasking)

 In a ME:

o Leader: marketing outlook, growth acumen (perspicace)

Characterization of the SME using Proximity definition

4 possible production universes for SMEs

A mix of proximity

Hierarchical Proximity = Leading role of the owner –> personalization of management

Functional proximity= Low specialization of tasks

Time proximity= ST informal strategy

IS Proximity= Direct and simple communication system

Marketing proximity= Direct contact with clients

Financial proximity= Concentration of ownership in the hands of the leader -> perso + pro limits are unclear

Space proximity = high territorial insertion

Entrepreneurial qualities = Intuitive, Risk Manager, Visionary, Confident, Negotiator, Qualified  Needs to take good decisions and master the situation

Entrepreneurial culture: Confident (feel equal), Motivation (wish for sthg), Effort (be willing to work), Responsibility (do what has to be done), Initiative (Taking action) , Perseverance (finish what is started), Solidarity (collaborate for common obj.), Team spirit (create with others, synergy), Resourcefulness (bootstrap), Determination (focus on obj. And LT vision)

Proxemic principle:

International dvpt = law of proxemic.

An SME exports  Activities start with geo/écon. Country nearby.

Internat. Exp = risk to export to further country.

Many assets are associated with the resources and competences that are anchored with experience. These relationships are not easily transferred.

The choice of the successor buyer:

- Intern Segment: close to the owner-leader, directors, employees

- Immediate segment: Client, partner, accountant, suppliers

- Extern segment: open to everyone

Growth: Majority of growth models can be interpreted as a conception of proxemic:

From small (niche) to large and risky (diversification)

Recruitment: In general, smaller comp. favour proxemic in HRM. Prefers to use his own “directory book” to recruit instead of using third parties

Financing method: self-financing, love money, bank loans, external financing/venture cap

SME favors ST financing and ST profitability. Relationship btwn owner/bankers

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