Small and Medium-Sized Enterprises Essay -- International Development

INTRODUCTION1.1IntroductionSmall and medium-sized enterprises (SMEs) have been identified as one of the growth engines for various countries in the world, since SMEs make up all over 90 per cent of all enterprises. For instance, United States, 99.7 per cent (Heneman, Tansky, & Camp, 2000), China, 99 per cent (Cunningham & Rowley, 2008), Europe, 99 per cent (Andreas Rauch & Frese, 2000), Holland, 95 per cent, Philippines, 95 per cent and Taiwan, 96.5 per cent (C. Y.-Y. Lin, 1998) as well as Malaysia, 99.2 per cent (Man & Wafa, 2007 National SME Development Council (NSDC), 2009 Saleh & Ndubisi, 2006). The figures above fork out that countries all over the world recognized SMEs as a divulge business sector. Besides, Asia-Pacific Economic Cooperation (APEC) (2002) pointed out that SMEs are deemed as a adorer to larger enterprises as well as an important foundation in expanding business activities and sustaining economic growth. SMEs even provide more jobs than large companies (APEC, 2002 department of Statistics Malaysia (DOSM), 2007 NSDC, 2009). In sum, SMEs play a vital role and contribute to the frugality and are likely to be increasingly important as the thrift becomes more global.In Malaysia, SMEs are considered as the backbone of industrial ontogeny (NSDC, 2009) and give meaningful contributions to the national economy. Hashim (2010) stated that SMEs play a satisfying role in generating more employment, economic outputs, income generation, export capabilities, training, encouraging competition, origination and promoting entrepreneurship and supporting the large-scale industries (LSIs) as well. Moreover, Jaswant Singh, Malaysian Industrial Development imprimatur director in Australia (MIDA Australia), informed that the grow... ...t improve efficiency and effectiveness (J. Barney, 1991 Wernerfelt, 1984).However, in examining other variables, researchers found a significant kinship between HRM practices (Jimenez-Jimenez & Sanz-Valle, 2008 Nasution, Mavondo, Matanda, & Ndubisi, 2010) and EO (Nasution et al., 2010) towards organisational innovation. Other studies also found that there is an inconclusive result on the relationship between organisational innovation and organizational performance (Rosenbusch, Brinckmann, & Bausch, 2010). These findings cast that potential researchers could study the mediating effect of organizational innovation on the relationship between HRM practices, EO and organizational performance. It is also suggesting that, there also have a moderator effect (managerial ties) on the relationship between organizational innovation and organizational performance.