2.6. Factors needed for
development of small and medium enterprises
Greater flexibility: small firms are
typically more flexible than large firms.
For example, they can adopt their plans quickly in response to
environmental changes. Large firms, which many layers of management, cannot
respond as quickly.
More personal attention to customers and
employees: small business owners have more direct contact with
their customers and have a better feel for what they want than very large
business. They can often respond sooner to changes in customers preferences as
well as offer more personal service.
The relationship between the owners of small
business and their employees is also often more direct
and personal than in many large business, where management tends to communicate
with employees though labor and management representatives.
Lower fixed costs: small companies often have lower
fixed costs than large firms.
Fixed costs are costs that do not vary as the volume of
business changes. Thus the small firm might be able to sell its product at
lower price than a large competitor with high fixed costs.
Greater entrepreneurial and innovative
fervor: an entrepreneur is a risk taker
who starts and operates a business in hope of making a profit. The hired
managers who run big corporations seldom hold any significant ownership in
them. They have less to gain by taking the risk, for example, of developing new
products. As result, they may tend to be overly conservative in running the
corporations.
Greater motivation of the
owners, hired managers generally do not have a
significant ownership stake in their corporations. Small business owners do,
and this in itself can motivate them to work harder.
In addition, the desire to be independent and act as one's
owner boss is a powerful motivator (NORMAN M. Scarborough, 1999 p. 103 up
to 106).
2.6.1. Ten good things ISO
standards can do for small and medium enterprises
o Standards help you compete on a level playing field with
bigger enterprises
o Standards open up export markets for your products and
services
o Standards help you discover best business practices
o Standards drive efficiency in your business operations
o Standards add credibility and confidence for your customers
Standards open new business opportunities and sales
o Standards give you the competitive edge
o Standards make your brand name internationally recognized
o Standards help your company grow
o Standards enable a common « language » to be used
across an industry sector
2.6.2. Principles of good
regulation for Small and Medium Enterprises
ü Proportionality
· The impact of regulation on small business is
identified, establishing an appropriate balance between risk and cost.
· Needless demands are not placed on regulated small
business.
ü Transparency
· Policy objectives, including the need for
regulation, are clearly defined and effectively communicated to those involved.
· Those being regulated understand their obligations
and know what to expect from the enforcing authorities.
ü Accountability
· Proposals are published and all those affected are
consulted before decisions are taken.
ü Consistency
· New regulations are consistent with existing
regulations.
· Regulations are applied consistently across the
country.
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