ArticlePDF Available

Growth Challenges of SMEs: Empirical Evidence in Sabah, Malaysia

Authors:
  • Universiti Teknologi MARA Sabah

Abstract and Figures

Small Medium Enterprises (SMEs) are currently facing a more challenging business environment due to the fast-changing customer preferences, globalization, stiff competition, limited resources, and human resources issues, among others. The failure rate of SMEs in Malaysia is alarming, whereby 60% of the new SMEs fail within five years of establishment. Additionally, only 4 out of 10 SMEs are able to successfully meet the challenges associated with growth. The SMEs barriers to growth have been a long-unsolved problem in this country. Therefore, this paper aims to explore the barriers to business growth among SMEs. Face-to-face interviews with the founders of the businesses were conducted. Eleven entrepreneurs were interviewed in Kota Kinabalu, Sabah, Malaysia. It was found that there are five main barriers to business growth namely; financial issues, human resources problems, marketing strategies, facilities, appliances and layout and problems with suppliers. This paper offers recommendations to SMEs to overcome the barriers to growth.
Content may be subject to copyright.
ASEAN Entrepreneurship Journal (AEJ) Vol 6 No 1 e-ISSN: 2637-0301
pg. 8
ASEAN Entrepreneurship Journal (AEJ)
Growth Challenges of SMEs: Empirical Evidence in Sabah, Malaysia
Sylvia Nabila Azwa Ambad1, Jasmine Vivienne Andrew2 and Dayang Haryani Diana Awang Amit3
1 Faculty of Business and Management, Universiti Teknologi MARA, Sabah, nabila1793@uitm.edu.my
2 Faculty of Business and Management, Universiti Teknologi MARA, Sabah, jasmineva@uitm.edu.my
3 Faculty of Business and Management, Universiti Teknologi MARA, Sabah, dayan457@uitm.edu.my
Abstract
ARTICLE INFORMATION
Small Medium Enterprises (SMEs) are currently facing a more challenging business environment
due to the fast-changing customer preferences, globalization, stiff competition, limited resources,
and human resources issues, among others. The failure rate of SMEs in Malaysia is alarming,
whereby 60% of the new SMEs fail within five years of establishment. Additionally, only 4 out of
10 SMEs are able to successfully meet the challenges associated with growth. The SMEs barriers
to growth have been a long-unsolved problem in this country. Therefore, this paper aims to explore
the barriers to business growth among SMEs. Face-to-face interviews with the founders of the
businesses were conducted. Eleven entrepreneurs were interviewed in Kota Kinabalu, Sabah,
Malaysia. It was found that there are five main barriers to business growth namely; financial
issues, human resources problems, marketing strategies, facilities, appliances and layout and
problems with suppliers. This paper offers recommendations to SMEs to overcome the barriers to
growth.
Received:
Revised:
Accepted:
26
19
29
Feb 2020
Mar 2020
Mar 2020
Keywords: SMEs, Micro business, entrepreneurship, growth challenges
1. INTRODUCTION
As the backbone of the Malaysian economy, SMEs
make up 98.5% of the total businesses, or approximately
907,065; SMEs provide 66% of employment, contribute
37.1% of Malaysia’s GDP, and 17.3% of the total export
(Department of Statistics, Malaysia). Undoubtedly, SMEs
are contributing significantly to the wealth of the nation.
Therefore, as a key economic contributor, the government
and its agencies have been implementing various
initiatives, such as soft loans, guarantee scheme, advisory,
technical support, grants, training, commercialization,
technology acquisition fund, e-commerce assistance, and
many more.
Despite the various programs and grants that have been
implemented by the government and its agencies to boost
their performance, the report reveals that SMEs in
Malaysia are generally still underperforming (SME
Corporation, 2016). A survey by Bank Negara reveals that
most SMEs encountered numerous constraints, which
restricted their ability to perform better.
The estimated failure rate of SMEs in Malaysia is 60%,
indicating that they are facing serious problems with many
barriers in order to stay competitive in the market (Ahmad
& Seet, 2009; Khalique, 2011). The study noted that the
major barriers for SMEs’ growth are financial difficulties,
labor shortage, lack of technological adoption, high
turnover, and difficulty in expanding the market (Hu, 2017,
SME Association of Malaysia, 2019). These hiccups impede
the growth of the SMEs, and to date, there has been no
concrete solution suggested by the government to solve
these problems (Tan, 2018). Consequently, the sector did
not grow as fast as expected. Since there were very limited
studies conducted on barriers to SMEs' growth in Kota
Kinabalu, Sabah, it is imperative to perform a qualitative
study to explore the barriers and challenges faced by SMEs.
This is to help them find a solution and to offer suggestions
to the policymakers for the formulation of the appropriate
master plan for SMEs.
1.1. Government Roles in SMEs Business Development
The government and its agencies offer various assistance
to SMEs to grow and develop their businesses. The
assistance is not only limited to financial matters, such as
grants and soft loans, but also non-financial assistance, such
as advisory, technical, marketing, management, networking,
distribution, research and development initiatives.
Basically, there are at least four phases in business
Ambad, S.N.A. et al.
pg. 9
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
development, namely, pre-startup, start-up, early growth,
and full growth and expansion (Hisrich, Peters &
Shepherd, 2014). The business development assistance
types are different according to the business phases. For
pre-startup and start-up, the government provides
assistance through Amanah Ikhtiar Malaysia (AIM),
TEKUN Nasional, PROSPER PUNB, Tabung Ekonomi
Belia, MARA loan among others. These schemes provide
easy and quick financial loans for Bumiputera
entrepreneurs looking to set up and improve their
businesses. Moreover, a grant of up to RM500,000 to
support innovative and creative business ideas is also
available under the SUPERB TERAJU Scheme. For the
early growth and expansion phases, the ministries and
agencies provide funds and other support through TERAS
TERAJU Funds, SME Business Accelerator Programme
(BAP), PUNB, Agro bank, SME Bank and many more.
2. LITERATURE REVIEW
2.1. Barriers and Challenges Face by Small Medium
Enterprises (SMEs)
Small and Medium Enterprises (SMEs) have been
facing many barriers while trying to sustain and grow.
Only four out of 10 SMEs were able to successfully meet
the challenges associated with growth (Business
Development Bank of Canada, 2015). A study conducted
in developing countries reveals the five most significant
obstacles to the growth of SMEs; access to finance, tax
rate, competition, electricity, and political factors (Wang,
2016). Yoshino and Taghizadeh-Hesary (2016) identified
four major reasons that slackened the growth of SMEs in
Asia, which include lack of finance, lack of
comprehensive databases, low level of R&D expenditures,
and insufficient use of information technology. In the
same vein, India’s SMEs also have to deal with certain
barriers, such as the absence of adequate and timely
financial aid, non-availability of suitable technology,
ineffective marketing due to limited resources, and non-
availability of skilled manpower. Similar to other
developing countries, Malaysia’s SMEs are also facing
four major barriers to growth, namely limited access to
financial resources, difficulty in finding and expanding
their market, failure in attracting and retaining great
talents and the inability to adopt technologies (Hu, 2017).
Apart from these four major barriers, there are other
issues, such as shortage of foreign workers, and some
SMEs were hesitant to step out of their comfort zone
(SME Association of Malaysia, 2019). These barriers will
be discussed in the next subsections.
2.1.1. Financial Constraints
Financial constraint or lack of financial resources has
been one of the greatest contributors to SMEs’ failure. In the
current business environment, there has been immense
competition among SMEs. To gain a competitive advantage
in the marketplace, SMEs must invest in research and
development to meet the needs of the consumers. Thus,
bigger capital investment is needed to finance these
activities. However, SMEs in Malaysia are found to have
financial shortcomings that hindered their growth. A study
by Salikin, Wahab, and Muhammad (2014) reported the
reason for SMEs financial shortcomings are mainly because
of capital insufficiency, non-systematic accounting record
and poor financial performance, difficulties in securing loan
facilities, high operational cost, and problems in debt
collection. These factors are an ongoing concern for SMEs,
which may pose a great risk towards business performance.
Financial constraint, which ensued from the difficulties in
securing loan facilities, has remained the most discussed
predicament in past literature. Smit and Watkins (2012)
stated that inaccessibility to finances or lack of access to
credit is dubbed as one of the major constraints faced by
SMEs. Addressing these concerns is crucial for the growth
and development of SMEs.
2.1.2. Human Resources Issues
Hiring the right workers at an affordable price has been a
long-standing problem faced by SMEs in Malaysia. The
lack of skilled workers is one of the main problems
hindering SMEs’ growth, whereby only 28% of the total
workforce, or 3.86 million, were skilled workers in 2015.
The government aims to increase the number of skilled
workers to 5.38 million, or 35% of the total workforce by
2020 (Kang, 2016). SMEs were unable to develop their
workers’ skills due to the limited number of workers, lack
of funding, and high turnover among staff. In relation to the
limited number of workers, it is common for SMEs to hire
minimal number of workers, and each worker is assigned
multiple tasks to cut the operational cost. SMEs also have a
low-profit margin; thus, the training cost will be a burden to
them. The high turnover among the workers in SMEs is also
a disincentive for SMEs to invest in training.
The high turnover of workers in SMEs also negatively
affects the growth of SMEs. Generally, the high turnover is
costly for SMEs because they have to spend on recruiting,
hiring, pay high cost for training of employee replacements
and additional overtime costs, deal with reduced
productivity, increased customer queue times, loss of sales
and business opportunities. The burden to the existing
employees may create additional turnover due to the extra
Ambad, S.N.A. et al.
pg. 10
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
hours of working (Ugbam, Onwumere, & Ibe, 2012). The
majority of the SMEs’ workers will leave their jobs in less
than a year of employment (Siyanbola & Gilman, 2017).
Among their reasons for resigning are the lack of rewards,
lack of training and development, unsatisfied with the line
manager, lack of promotional opportunities, and less
conducive working environments (Hu, 2017).
2.1.3. Lack of Creativity and Innovation
Creativity can be defined as the generation of ideas that
result in improved efficiency and effectiveness of a system
(Matherly & Goldsmith, 1985:9). Innovation is the
process by which entrepreneurs convert opportunities into
marketable ideas (Howell & Higgins, 1990). Creativity
and innovation are the most critical elements in business
activity (Wilson & Stokes, 2005), and a specific tool for
entrepreneurs (Drucker, 1985). Lack of innovation among
SMEs is not only a barrier to growth, but it also reduces
long-term profits and leads to a lack of competitiveness.
Among the reasons for failure to innovate are high R&D
costs, shortage of funding, lack of willingness to invest in
upskilling, training, and human resource development,
lack of knowledge, high cost of securing patents, and
others (Okellysutton, 2015). A business lacking in
creativity and innovation is unable to compete in the
marketplace because it lacks a competitive advantage.
2.1.4. Poor Marketing Strategy
In the initial years of business, small companies faced
various challenges, and one of them is a lack of marketing
strategy. Marketing plays an essential role in a company’s
success story. Without a proper marketing strategy, other
functional areas in the company will not be needed as there
is no demand for the company’s product or services. Thus,
when developing a marketing strategy for a product, the
company must first monitor and analyze the opportunities
and threats posed by factors outside the organization. This
has been the hurdle for SMEs, as some of them lack the
knowledge and skills to go about it. Others rely heavily on
conventional promotion mediums, such as giving out
printed brochures and templates to potential clients hoping
it will promote their products. In a battle for customer
attention, a company that practices conventional
promotion mediums is falling further behind. This is due
to customers’ lack of interest as it is less of an interactive
presentation of the product, and the inability of this
medium to reach out to potential customers. Thus,
customers’ indifference towards traditional marketing
tools is pushing the company to explore new opportunities
to disseminate their marketing messages that are impactful
enough to capture not only customers’ attention but also
initiate active engagement with the company (Singh, Veron-
Jackson & Cullinane, 2008).
Research has shown that the recent advances in digital
marketing have helped many companies improve their
relationship with their customers, and directly contribute to
brand building. Specifically, for SMEs to remain relevant to
the consumers, their marketing medium must evolve in line
with the changing technological environment by applying
the digital marketing concept (Wymbs, 2011).
Unfortunately, many of the SMEs in Malaysia disregarded
the advantages of digital marketing to their business that
they were eventually left far behind their competitors
(Taiminen & Karjaluoto, 2015). Some of the SMEs are
having difficulties in adapting new technologies due to
insufficient resources and the lack of know-how (Rahman,
Yaacob & Radzi, 2016). Recognizing this predicament,
there is a need for SMEs and other institutions involved in
SMEs operation to review this critical area to allow SMEs
to take advantage of the technology in the attempt to
strengthen their marketing strategy and promotional
activities.
2.1.5. Problem with the Supplier
Another issue related to the challenges faced by most
SMEs in the country is meeting the right suppliers for their
products and services. In certain situations, some SMEs
were unable to provide on-time delivery of their product to
the customer because of supplier shortage (Abdullah &
Yaakub, 2016). Thus, most SMEs in the country lack the
capacity in terms of a qualified supplier to help them seek
appropriate resources for the production of their products.
Indeed, the role of a supplier is crucial in a business as it can
make an industry more competitive and reduce the potential
profit for the buyer (Wilkinson, 2013). Furthermore,
suppliers could have an impact on the price of a product, the
quantity and quality available for purchase by their
customers (Berman, 2014). As a result, for SMEs to
continue fulfilling their customers’ demands efficiently,
they need to have full access to their supplier to carry out
their business operation and expansion. Failure to do so will
lead to SMEs’ deceleration, which could hinder their
growth.
3. METHODOLOGY
3.1. Research Design
This study aims to explore the challenges hindering
SMEs’ business growth in terms of financial and non-
financial matters. In order to achieve this aim, the study
Ambad, S.N.A. et al.
pg. 11
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
adopts a qualitative content analysis using the inductive
approach, which is more exploratory. Exploratory
research is needed when there is not enough theory
available to guide the development of a theoretical
framework. In this current study, exploratory research
needs to be done to understand what is going on
(Sekaran & Bougie, 2016:45). There is limited theory to
explain the challenges faced by entrepreneurs in
expanding their business. Therefore, conducting a study
in this area is imperative since the Malaysian economy
is heavily dependent on SMEs. Additionally, researches
in the entrepreneurship literature have highlighted that it
would be beneficial for the issue to be handled
qualitatively (Stokes, 2000; Martin, 2009).
3.2. Sampling
Due to time and funds constraint, the research was
limited to businesses operated in Kota Kinabalu, Sabah,
Malaysia. The study applies the purposive sampling
method, of which the sample’s main characteristic is
businesses that have been operating for at least a year. A
total of 11 owner-managers in Kota Kinabalu, Sabah,
Malaysia, participated in this study. Audio recorders
were used in the interviews that lasted approximately 30
to 50 minutes.
3.3. Methods of Data Analysis
The present study employs a semi-structured interview
as the principal method for data gathering. The major
questions asked were: “What are the barriers to expanding
your business? and “What are the effects of these barriers
to your business.” In order to deepen the scope of
interview, exploratory questions, such as “What do you
mean?” and “Can you give some examples and explain
more,” were also asked. Data were simultaneously
gathered and analyzed, and when the themes were
achieved, and data were saturated, the interview ended. A
total of 11 qualified respondents were interviewed
between September 2017 and January 2018. Based on the
qualitative content analysis proposed by Graneheim and
Lundman (2003), data obtained from the sound recorders
were transcribed to a written sheet and read several times
to attain the general perception of the owner-managers.
Next, semantic units were determined within the
transcription of the interviews, and primary codes were
extracted based on the data. Codes were classified based
on their similarities and differences into sub-themes, and
eventually, themes were classified.
4. RESULTS AND DISCUSSIONS
4.1. Respondents’ Profile
A detailed overview of the demographic profiles of
the respondents is presented in Table 1. Eleven
entrepreneurs participated in this study; seven females and
the rest were males. The range of age is between 30 and
58 years old. In terms of the business types, five were
restaurants, two for both boutiques and printing
businesses, and one each for bakery and hair salon
businesses. The years of operation are in the range of two
to 11 years. The number of employees is between two to
eight full-time employees.
Table 1 Entrepreneurs’ Profile
E1
E2
E3
E4
E5
E6
E7
E8
E9
E10
E11
F
F
M
F
F
F
M
F
M
F
M
42
38
30
45
58
40
39
52
47
39
34
R
B
R
P
BK
HS
R
R
R
B
P
5
4
6
2
6
3
5
11
9
6
4
4
2
5
2
8
2
6
4
5
2
2
Gender: F; Female, M; Male
Type of business: R; Restaurant, B; Boutique, P; Printing,
BK; Bakery, HS; Hair Salon
5. DISCUSSIONS ON FINDINGS
Table 2 represents the summary of results from the
interview with the entrepreneurs; the discussions of the
findings are presented in the next subsections.
Table 2 Barriers to growth-themes and sub-themes generated
from the interviews
Themes
Sub-themes
1
Financial
Issues
1. Lack of working capital
2. Lack of knowledge on managing
financial resources
3. Unaware of government financial
aids
2
Human
Resources
1. Shortage of Employees
2. High turnover
3. Poor discipline
4. Lack of skills and knowledge
3
Marketing
Strategy
1. Not using social media to promote
2. Lack of promotional strategy
brochure, business card, banner,
signboard etc.
Ambad, S.N.A. et al.
pg. 12
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
3. Lack of creative content in the
advertisement
4
Facilities,
Appliances
and Layout
1. Small space
2. Lack of commercial kitchen
appliances
3. Customer uncomfortable with the
shop layout
5
Problem with
the Suppliers
1. Difficult to find trusted suppliers
2. Late delivery by suppliers
5.1. Financial Issues
The majority of SMEs are facing financial issues,
which comprise three sub-themes: lack of working
capital, lack of knowledge on managing financial
resources, and unaware of government financial aid. The
entrepreneurs admit that they do not have enough
working capital to expand their businesses and to cover
the daily business expenses, such as payroll, supplies,
raw materials, and promotions. Due to the constraints,
they were unable to pay their staff, attract more
customers, and unable to grow their businesses. Some of
the entrepreneurs lack the knowledge of proper financial
planning. They did not keep a systematic record of
financial transactions or bookkeeping. Consequently,
the entrepreneurs encountered difficulties in tracking
their income and expenses. According to Salikin et al.
(2014), SMEs’ financial shortcomings are mainly due to
the non-systematic accounting records. Some
entrepreneurs were not aware of the financial aids
offered to SMEs at various stages of their business
development, that is, from the development of the
business idea (pre-startup) to the growth and maturity of
the business.
5.2. Second Theme: Human Resources Issues
The common problem in SMEs is human resources
issues. At least five sub-themes were mentioned by the
entrepreneurs, such as shortage of employees, high
turnover, poor discipline, lack of skills and knowledge,
and difficulty in finding dedicated employees.
Employees’ shortage negatively affects the growth of
the businesses as they were unable to keep up and serve
their customers effectively. Another issue related to
human resources is the employees’ high turnover.
During the interview, restaurant operators mentioned
that employees would quit their job within six months.
This finding is similar to the previous study conducted
by Siyanbola and Gilman (2017), where the SMEs’
workers will leave their jobs in less than a year of
employment. In this regard, business operations could
not run smoothly, or worse, they would be idle
temporarily. Workers’ poor discipline is another critical
issue. Those workers failed to comply with the company’s
rules, such as coming to work late and taking leave
without their superiors consent. On top of that, lack of
skills and knowledge of their job is another issue under
human resources. Some workers cheated about their
working experience when they actually do not have
related working experience. In addition, it is not easy to
find dedicated and committed employees.
5.3. Third theme: Marketing Strategy
Marketing strategy is another barrier, which consists of
two sub-themes: not using social media to promote, lack
of promotional strategy (i.e., brochure, business card,
banner, signboard, and discount) and lack of creative
content in advertisements. SMEs failed to fully utilize
digital marketing, which is cheaper and has a wider reach
that could benefit the promotional activities. Most of the
businesses merely rely on traditional marketing, such as
word of mouth rather than using social media networks.
Consequently, they failed to attract new customers and
had difficulty in retaining existing customers. Some of the
entrepreneurs also admitted that they never distribute any
brochures, business cards, or use banners or signboards for
business visibility. Nevertheless, several entrepreneurs set
up a social media account for their businesses but have no
idea about the appropriate content for their social media
postings or the best time to post them. These findings
supported the previous research conducted by Taiminen
and Karjaluoto (2015) that found SMEs failed to utilize
the new digital tools fully.
5.4. Fourth theme: Facilities, Appliances and Layout
Another barrier to SMEs’ growth is facilities,
appliances, and layout, which include three sub-themes:
small space, lack of commercial kitchen appliances for
restaurants, and customers’ discomfort with the shop
layout. SMEs are having difficulties in upgrading their
facilities, for example, the limited space, not having
enough commercial kitchen appliances, such as
refrigerators and cooking equipment, among others. As a
result, customers were uncomfortable with the shop
layout; hence, they lost interest in visiting the shop.
5.5. Fifth theme: Supplier
Suppliers play an important role to ensure entrepreneurs
produce a high-quality product. Therefore, based on the
findings, under the theme, supplier, there are two sub-
themes: difficult to find trusted suppliers and late delivery
Ambad, S.N.A. et al.
pg. 13
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
by suppliers. The finding indicates that the entrepreneurs
are facing problems related to suppliers, such as
difficulty in finding trusted suppliers. For example,
when the supplier promised to deliver fresh seafood,
they failed to keep their promise. Another suppliers’
issue was that they failed to deliver raw materials or
products on time.
These findings are consistent with the qualitative
study conducted by Abdullah and Yaakub (2016)
involving five SME managers from the manufacturing
and retail industry. Interviews with the entrepreneurs
reveal that this problem happened in both the restaurant
and boutique businesses, leading to the lack of raw
material for food production or delay in food
preparation. In the boutique business, delayed delivery
of clothing by the supplier could cause the clothing to be
outdated or no longer needed by customers.
6. RECOMMENDATIONS
The SMEs’ barriers to growth are a prolonged unsolved
issue in this country. SMEs should identify their problems
and find solutions. First, SMEs should identify the
appropriate financial and non-financial assistance suitable
for their business type and stage. Different types and
stages of business have their own schemes, grants, and
assistance. According to Bank Negara Malaysia (BNM)
Deputy Governor, there are ample financing sources for
entrepreneurs in Malaysia. Unfortunately, many SMEs are
still not aware of these programs, and the take-up is low at
the moment due to lack of awareness (The Star, 2018).
Consequently, entrepreneurs do not fully utilize financial
and non-financial services. As a result, they are facing
financial difficulties and other problems, such as the
inability to sustain and grow their businesses.
It is recommended that SMEs implement good Human
Resource Practices, which would increase employee
retention because failure to do so would incur high cost of
turnover and underperforming workers. Therefore, good
practices of human resource management, such as positive
relationships with superiors, reduction of formal
authority, support for employees, reasonable
compensation and benefits, alternative work schedules,
and opportunities for training, new learning, growth, and
promotion must be in place.
In the context of marketing, it is suggested that SMEs
seek more innovative marketing activities so that they are
more likely to adapt to the dynamic environment of the
market. One of the potential efforts to enhance the
marketing strategy among SMEs is by considering the
importance of digital marketing in the promotional activities
of products or brands, such as through electronic media and
applications. This function enables SMEs to ease the
dissemination of products or services information to
customers, which will result in better customer relationship
management.
In order to address the supplier problem, efforts are
needed to strengthen the relationships between suppliers
and SMEs. SMEs must create good communication
channels with the suppliers to ensure faster
communication and information sharing. Such a
coordinated effort would ensure smooth supply chain
relationships.
7. CONCLUSIONS
This study reveals five main barriers faced by SMEs in
Kota Kinabalu, Sabah, namely financial, human
resources, marketing strategy, facilities, appliances and
layout, and problems with suppliers. One of the strategies
to overcome the barriers to growth is to fully leverage the
initiatives implemented by the government and its
agencies. Awareness of and close working relationships
with government agencies and strong networking with
important stakeholders are essential to become a
successful entrepreneur. On the other hand, policymakers
should focus on the five main barriers to ensure that SMEs
are more competitive, which will enhance the wealth
creation and social well-being of the nation.
References:
Abdullah, NAHN, Yaakub, S, & ... (2016). Logistics and supply
chain related issues faced by Malaysian SMEs: A case study.
International Review of Management and Marketing. 6(3), 432-
435.
Ahmad, N. H., & Seet, P. (2009). Dissecting Behaviours Associated
with Business Failure: A Qualitative Study of SME Owners in
Malaysia and Australia. Asian Social Science, 5(9).
doi:10.5539/ass.v5n9p98
Alajoutsijärvi, K., Mannermaa, K., & Tikkanen, H. (2000).
Customer relationships and the small software firm: A framework
for understanding challenges faced in marketing. Information &
Management, 37(3), 153-159.
Berman, C. (2014). Hearst Newspaper: What effect Does the
Increase in the Bargaining Power of Suppliers Have on the Target
Market? Retrieved on June 26, 2019 from
http://smallbusiness.chron.com/effect-increase-bargaining-
power-suppliers-target-market77845.html
Business Development Bank of Canada, 2015. SMEs and Growth:
Challenges and Winning Strategies Department of Statistics,
Malaysia. https://www.dosm.gov.my/v1/
Ambad, S.N.A. et al.
pg. 14
ASEAN Entrepreneurship Journal | Vol. 6 (1), 8-14, 2020 | e-ISSN 2637-0301
Drucker, P. F. (1985). Innovation and entrepreneurship: Practice and
principles. New York: Harper & Row.
Graneheim UH, Lundman B. Qualitative content analysis in
nursing research: Concepts, procedures and measures to
achieve trustworthiness. Nurse Educ Today. 2004;24:10512.
[PubMed: 14769454]
Greer, C. R. (2001). Strategic Human Resource Management.
New York, NY: Pearson College Division.
Hisrich, R. D., Peters, M. P. & Shepherd, D.
2014, Entrepreneurship, 10 Ed., Mc-Graw Hill Education.
New York
Howell, J. M., & Higgins, C. A. (1990). Champions of
technological innovation. Administrative Science Quarterly,
35(2), 317-341
Hu, E. (2017). SME Challenges and Solutions: A Practical
Guide for SMEs to Elevate Their Business to the Next Level.
Kang, M. (2016, February 29). Time to upskill SMEs. The Star
Online.
Khalique, M. 2011. Do Malaysia and Pakistan are Suitable for
A Comparative Study Of SMEs: An Intellectual Capital
Perspective? Interdisciplinary Journal of Contemporary
Research in Business. 3(8): 98107.
Ailure: A Qualitative Study of SME Owners in Malaysia And
Australia. Asian Social Science. 5(9): 98104.
Martin, D.M., 2009. “The entrepreneurial marketing mix”,
Qualitative Market Research: An International Journal 12, No.
4, pp. 391-403.
Matherly, Timothy A. & Goldsmith, Ronald E, (1985). The two faces
of creativity, Business Horizons, Elsevier, vol. 28(5), pages 8-11.
Matherly, T. A., & Goldsmith, R. E. (1985). The two faces of
creativity. Business Horizons, 28(5), 8-11. doi:10.1016/0007-
6813(85)90061-8
Okellysutton,2015. Why a lack of innovation and R&D in SME’S
15 reasons Onwumere, J.U.J, Ibe, I.G., & Ugbam, O.C (2012). The
Impact of Labour Turnover on Survival of Small and Medium Scale
Enterprises: Evidence from Nigeria. Proceeding Paper.
Rahman, NA, Yaacob, Z, & Radzi, RM (2016). The challenges
among Malaysian SME: A theoretical perspective. World,
researchgate.net
Salikin, N., N.A. Wahab and I. Muhammad. (2014). Strengths
and weakness among Malaysian SMEs: Financial
Management perspectives. Procedia Soc. Behav. Sci., 129:
334-330
Sekaran, U., & Bougie, R. (2016). Research Methods For
Business: A Skill Building Approach. John Wiley & Sons.
Singh, T., Veron-Jackson, L., & Cullinane, J. (2008). Blogging:
A new play in your marketing game plan. Business
horizons, 51(4), 281-292.
Siyanbola, T.O., & Gilman, M.W. (2017). Extent of employee
turnover in Nigerian SMEs: Employees’-owner/managers’
standpoint, Employee Relations, Vol. 39 Issue: 7, pp.967-985,
https://doi.org/10.1108/ER-02-2016-0046.
SME Annual Report, 2016.
http://www.smecorp.gov.my/index.php/en/sme-annual-report-
2015-16
SME Corporation, 2016.
http://www.smecorp.gov.my/index.php/en/.
Smit. Y. & J.A. Watkins. (2012). A literature review of small and
medium entreprises (SME) risk management practices in South
Africa. African Journal of Business Management, Vol. 2 (21),
6324-6330.
Stokes, D., 2000. “Entrepreneurial marketing: a conceptualization
from qualitative research”, Qualitative Marketing Research. An
International Journal 3, No. 1, pp. 47-54.
Taiminen, H.M. and Karjaluoto, H. (2015). The usage of digital
marketing channels in SMEs. Journal of Small Business and
Enterprise Development, 22(4), 633-651.
Wilkinson, J. (2013). Supplier Power (one of Porter’s Five Forces)
Retrieved June 26, 2019 from
http://strategiccfo.com/wikicfo/supplier-power-one-of-porters-
five-forces/.
Wilson, N. C., & Stokes, D. (2005). Managing
creativityandinnovation. Journal of Small Business and
Enterprise Development, 12(3), 366
378.doi:10.1108/14626000510612286
Wymbs, C. (2011). Digital marketing: The time for a new
“academic major” has arrived. Journal of Marketing
Education, 33(1), 93-106.
Yao Wang (2016).What are the biggest obstacles to growth of
SMEs in developing countries? An empirical evidence from
an enterprise survey, Borsa Istanbul Review, Volume 16, Issue
3,Pages 167-176
Yoshino, N. and F. Taghizadeh-Hesary (2016). Major Challenges
Facing Small and Mediumsized Enterprises in Asia and
Solutions for Mitigating Them. ADBI Working Paper 564.
Tokyo: Asian Development Bank Institute.
Zainun, T.T. and M. Smith. (2011). The effects of changes in
competition technology and strategy on organizational
performance in small and medium manufacturing companies.
Asian Rev. Accounting, 19: 208-220
Conference Paper
Full-text available
Persekitaran reka bentuk landskap boleh dianggap sebagai elemen yang berkesan dalam membantu proses pendidikan dan pembelajaran (PdP) di sekolah. Setiap sekolah di Malaysia mempunyai reka bentuk landskap yang tersendiri. Namun begitu, kebanyakan rekabentuk landskap di sekolah kebangsaan khususnya kurang menekankan konsep semangat tempat dan hanya memperlihatkan ciri-ciri asas landskap sahaja di sekolah. Walhal, rekabentuk landskap di sekolah mempunyai potensi positif dalam membantu proses PdP secara kognitif mahupun sosioemosi. Oleh itu, makalah ini bertujuan untuk mengenal pasti ciri-ciri rekabentuk landskap di sekolah dalam membentuk semangat tempat serta membantu proses PdP di sekolah. Untuk mencapai objektif kajian ini, kaedah kualitatif dipilih sebagai asas reka bentuk kajian. Selain itu, teknik kajian kes telah diterapkan sebagai subjek untuk pengumpulan data. Data utama untuk kajian ini diperolehi daripada proses temubual mendalam separa berstruktur bersama 10 orang informan dari Sekolah Kebangsaan Bagan Pasir, Perak. Untuk mengukuhkan lagi dapatan kajian ini, data turut disokong oleh pemerhatian turut serta dan analisa dokumen. Pendekatan analisa secara tematik telah digunakan untuk menganalisa data kajian secara lebih teratur. Hasil dapatan kajian ini membuktikan bahawa rekabentuk landskap yang dihasilkan di kawasan sekolah secara tidak langsung dapat membantu proses PdP sama ada secara kognitif mahupun sosioemosi. Selain itu ciri-ciri rekabentuk landskap yang baik turut menceriakan persekitaran sekolah serta dapat membentuk semangat tempat. Persekitaran yang ceria dan cantik dapat menarik minat pelajar khususnya untuk belajar dan hadir ke sekolah. Akhir sekali, kajian ini diharapkan dapat dijadikan sumber rujukan kepada pihak sekolah dan pihak berkaitan tentang pentingnya melestarikan rekabentuk landskap di kawasan sekolah.
Article
Small and medium enterprises (SMEs) are a pillar of economic development in most national economies - both more and less developed. Enterprises of this type, being more flexible than large entities, are better able to use the opportunities created by the environment. Nevertheless, in the course of their activity, they also face numerous challenges. Thus, the purpose of the presented research is to identify the opportunities created and existing challenges in the development of SMEs in Uzbekistan in recent years. According to the opinion of 384 respondents (CAWI), the most important opportunities created by the government involved tax benefits and subsidies, preferences for export products and tax incentives for those creating new jobs. At the same time, the most important challenges were poor infrastructure, lack of skilled specialists, problems with the credit allocation system and high-interest rates.
Article
Full-text available
This paper aims at identifying the current SME challenges in Malaysia. To date, numerous studies have been conducted regarding SME challenges, with broad perspectives which includes; SME inefficiency, access to credit, survival rates, restricted banking service and many more. Current literatures on SME challenges are too specific and depends on the field. In fact, previous studies highlight SME challenges from many dimensions, but are still unable to address the reality gap that surrounds SME. Furthermore, studies that organize SME challenges according to their severity towards business is still limited. It is crucial for the start-up firms to identify such challenges so that they would be prepared mentally and financially for it. Therefore, there is an urgency to take into consideration SME challenges across discipline for a better perspective to unleash SME potentials. By using a library search and by analyzing previous literature review on the subject of SME challenges, regardless of the financial, operational or managerial aspect. This study found that access to credit; management skills; and marketing are the main challenges to Malaysian SME. The critical discussion provided in this paper would strengthen the body of knowledge on the SME challenges which affects business performance, besides acting as a reference for empirical research.
Article
Full-text available
This study uses a case study approach in order to identify the logistics and supply chain related issues faced by small and medium enterprises (SMEs) in Malaysia. Previous study revealed that the causes of the failure of SMEs are both internal and external and one of the external factors identified are non-availability or deficiency in logistics and supply chain management. Based on these findings, this study is conducted in order to further focus on the logistics and supply chain related issues. Thus, the objective of this study is to identify the logistics and supply chain issues faced by SMEs in Malaysia. Data were collected through case study interviews with five SMEs. The case study interviews reveal two most common issues confronted by these firms, namely customer service and inventory management issues. These two issues are related to one another as lack of inventory will lead to SMEs inability to fulfil their customer needs. Firms themselves need to rectify these issues as they may result in loss of sales, which will eventually result in loss of customers. The finding also indicates the important role of external supply chain members such as the supplier, carrier or third-party logistics service providers as they directly influence the level of customer services provided by SMEs.
Article
Full-text available
SMEs are drivers of economic growth and job creation in developing countries. It is paramount to determine the factors that hinder their growth. This paper uses the Enterprise Survey from the World Bank which covers data from 119 developing countries to investigate the biggest obstacles SMEs are confronting and the determinants that influence the obstacles as perceived by enterprise managers. The results show that SMEs perceive access to finance as the most significant obstacle which hinders their growth. The key determinants among firms’ characteristics are size, age and growth rate of firms as well as the ownership of the firm. The latter – the role of the state in financing SME - is particularly intriguing. External reasons for the financing dilemma are also examined. It is shown that the main barriers to external financing are high costs of borrowing and a lack of consultant support.
Article
Full-text available
Purpose – The purpose of this paper is to provide insights into the utilization and goals of digital marketing, and examines factors that influence the adoption and use of digital marketing channels in SMEs. Design/methodology/approach – The data comprises semi-structured theme interviews in SMEs among 16 managers and 421 survey respondents in Central Finland. Findings – The results of this study reveal that SMEs seem not use the full potential of the new digital tools, and so are not deriving benefit from the opportunities they provide. Furthermore, the results also raise the question of whether SMEs have understood the fundamental change in the nature of communication brought about by digitization. Research limitations/implications – The data comes from one region and thus the research context limits the generalizability of the results. Practical implications – SMEs seem not to be keeping pace with digital developments, mostly due to the lack of knowledge of digital marketing. Most of the studied SMEs do not apply the full potential of the new digital tools and hence are not benefitting fully from them. Social implications – Discussions on the future regional development of SMEs have called for training programmes to help SMEs exploit digitization. This is something that the government should take note of. Originality/value – Whereas the adoption process of new technologies such as IT in general and the internet in particular have been examined in the SME literature, this is among the first studies examining adoption and usage of digital tools from the marketing perspective.
Article
Full-text available
In Malaysia, 97.3% of business establishments are comprised of small and medium enterprises (SMEs) which account for about 52.7% of total employment that is generated in the country. Malaysian government through the Ministry of International Trade and Industry (MITI) and its agencies works hard on assisting SMEs through various activities to promote exposures on prudent financial management. This paper aims to identify the financial strengths and weaknesses face by SMEs in helping those entities to plan appropriate financial management programme. Semi- structured interviews were conducted among thirty five SMEs that are willing to participate voluntarily. This study found that capital is the key elements in both strengths and weakness among SMEs. Running the business without any external capital (loan) reducing the financial risk of the business. It will be easier for the managers to make business decisions without any constraint as there is no limitation set by fund provider. The study also revealed capital insufficiency is the crucial problems among SMEs which might due to the difficulties to obtain external fund. Although the results should be taken with caution, nevertheless financial management is vital in order to face new business challenges as well as for the survival of the business in the future.
Article
Full-text available
Intellectual capital appears as the most important and vital component of a knowledge-based economy. Present economy is known as a knowledge-based economy where, knowledge, information and soft assets have more importance rather than the physical assets. The role and importance of SMEs in a knowledge-based economy has been highly appreciated and acknowledged. Moreover, in the present economy, SMEs are facing tremendous challenges and threats to survive in a competitive environment. In a competitive environment the hightech SMEs need to upgrade their intellectual capital including knowledge, database, technological advancement and innovation in order to stay in a competitive environment. Therefore, SMEs need to focus on the exploitation and application of their intellectual capital.
Article
Purpose This article assessed the magnitude of Employee-Turnover (E-Turnover) in Nigerian Small and Medium-sized Enterprises (SMEs) with particular focus on the manufacturing and service firms adjudged as central to the growth and development of Nigerian economy. Design/methodology/approach Data from 602 employees and 94 owner/managers of SMEs located in three Southwestern Nigerian states was collected through survey questionnaire and analysed quantitatively. Findings Employees’ and management’s responses indicated that E-Turnover still pervades the Nigerian SMEs surveyed with most employees leaving their jobs in less than a year of employment. Multiple exits also occurred; additionally, employees were more prone to exiting if they were male, older, had a smaller family size, and/or worked in the manufacturing rather than service SMEs. Research limitations/implications More needs to be done to comprehend owner-managers’ apparent deliberate disguise of employee over-casualisation in the SMEs studied, an act that appeared to limit the interpretation of status-related turnover extent among employees. Practical implications 21st century businesses need to stimulate sustainable cost-effective employment relationship capable of thwarting the threat accompanying high E-Turnover in businesses. Originality/value Through this research, extant global E-Turnover literature (largely on Western businesses) is enriched by dedicated empirical data on Nigerian SMEs that this study offers.
Article
The inherent characteristics of small and medium enterprises (SMEs) afford these enterprises the potential to absorb unskilled labour and to nurture and develop entrepreneurial skills. However, in the South African economy, these benefits are not forthcoming due to the high failure rate of SMEs. The impediments to SME success includes numerous and varied obstacles. Studies conducted confirmed SME owner-managers ignorant pertaining to the risks their enterprise face with risk management techniques deployed reactively and ineffectively. By embedding a structured approach to enterprise risk management within SMEs, potential benefits such as reducing the over-management of risks and organisational alignment towards the SME’s vision can be realised.