Short‐ and long‐term performance in manufacturing SMEs

Stuck in short-term, daily operations, or not?: Unraveling SME's long-term orientation

Long-term orientation (LTO) is an essential strategic option for firms to shape their future success, in particular for SMEs which are often submerged by daily operations. Surprisingly, little is known about the underlying personal and contextual drivers of LTO in an SME context. To unravel why some SME entrepreneurs adopt an LTO, while others seem to be stuck in short term and daily operations, we consider the (interacting) impact of both personal and contextual drivers. We carefully select well known drivers for their impact on various other aspects of SME's LTO: Need for achievement, as a personal driver, and the entrepreneur's perception of the institutional entrepreneurial support (PIES), as a contextual driver. The latter consists of a regulative, normative and cognitive institutional dimension. Based on a study on 176 SMEs in an emerging country, Indonesia, we confirm that both personal as well as contextual drivers individually and interactively impact an SME's LTO. Specifically, when highly achievement motivated entrepreneurs perceive that institutional regulations support entrepreneurial activities, they tend to adopt a higher level of LTO. We discuss implications for SMEs and policy makers, and provide suggestions for future research.

Cultural diversity and operational performance: entrepreneurial orientation as a mediator

Purpose

The purpose of this paper is to test the mediating role of entrepreneurial orientation in the nexus between cultural diversity (CD) and firm operational performance (OP).

Design/methodology/approach

The population of the current study is foreign industrial firms listed in the tax directorate of the Kurdistan region of Iraq (KRI). A stratified random sampling technique was applied to select 136 firms in KRI, with a response rate of 57 per cent. Smart-PLS was used to examine the hypothesised relationships in the proposed framework.

Findings

The results indicate that CD is significantly related to a firm’s OP. Entrepreneurial orientation (EO) is, in turn, significantly related to a firm’s OP. Furthermore, the results provide evidence that EO plays a mediating role in the nexus between CD and a firm’s OP.

Originality/value

The study highlights the importance of CD and EO in supporting a firm’s OP. In addition, the findings will provide scholars and managers a deeper understanding of the role of EO as a mediator through which CD enhances a firm’s OP.

How organizational culture influences performance measurement systems in SMEs

Purpose

Literature highlights the impact of culture on managerial processes in general and the performance measurement system (PMS) in particular. However, understanding how organizational culture (OC) influences the PMS remains a challenge, especially in SMEs as in these companies the studies are very limited. The purpose of this paper is to investigate how OC influences PMSs in manufacturing SMEs.

Design/methodology/approach

To achieve the above purpose, a case study approach has been adopted. Four manufacturing SMEs with heterogeneous OC were investigated by means of companies’ documents reviews, participant observations and semi-structured interviews. A conceptual framework based on the competing value framework proposed by Cameron and Quinn (1999) and the PMS typology proposed by Garengo (2009) has been used to investigate the impact of OC on PMS.

Findings

According to the results, OC has a huge impact on PMS in manufacturing SMEs. The dimensions of “internal/external focus” influence strategy formalization, monitoring of the external environment and performance review. The “flexibility/control” dimensions influence the adoption of the balanced (or unbalanced) set of performance measures a company uses.

Originality/value

This paper contributes to clarifying how OC influences PMSs in manufacturing SMEs. Moreover, the study of interplay between flexibility/control dimensions and internal/external dimensions supports the identification of three theoretical propositions and four PMS types related to the four different OCs identified by Cameron and Quinn (1999).

An empirical analysis of Lean Six Sigma implementation in SMEs – a migratory perspective

Purpose

– The purpose of this paper is to investigate the migratory nature of Lean Six Sigma (LSS) implementation and adoption in manufacturing-based SMEs in the UK. The companies were surveyed at two points over a five-year period. These periods were before and after the 2008 recession point. This being done in order to identify the level of LSS adoption as a result of the tougher economic climate that has prevailed since 2008.

Design/methodology/approach

– Analysis is carried out on a sample of 96 manufacturing SMEs from a range of manufacturing sectors in the UK. Data were gathered from company CEOs via a triangulated method of questionnaire, direct observation and interviews.

Findings

– The paper provides research information into the characterisation, compatibility and innovativeness of SMEs towards LSS implementation and goes on to provide an implementation classification system and characterises the dynamical nature of LSS development in manufacturing SMEs.

Research limitations/implications

– The findings analyse the dynamic nature of LSS implementation in SMEs. Further work will include extending the LSS categorisation system to provide a wider category set that further defines the dynamical nature of LSS implementation. Also, more focused studies in to specific manufacturing sectors will yield greater understanding of the effects of LSS on those sectors.

Practical implications

– The paper provides practical research information into the characterisation, compatibility and innovativeness of SMEs towards LSS implementation. It will be of use to practitioners seeking to implement or develop LSS further in their organisations.

Originality/value

– This study compares at depth the LSS implementation issues within SMEs. It not only analyses the survey data but characterises their attitudes towards implementing LSS and as such this work makes a contribution to this under researched area.